BC&I revisiting Marathon Oil’s controversial ITEP request

The Louisiana Board of Commerce & Industry on Wednesday will again consider whether to grant Marathon Oil’s controversial request for a property tax abatement at its Garyville refinery under the state’s Industrial Tax Exemption Program.

It’s been two months since the BC&I deferred action on the request by Marathon, which came under fire amid advocacy organizations’ allegations that the company falsified its ITEP application in order to skirt rules that threatened Marathon’s likelihood of securing the 10-year, $43 million property tax exemption. Marathon continues to deny the allegations.

“Unless there’s some unexpected explanation, we’ll be opposing this request,” says Rick Moreland of Together Baton Rouge.

Specifically, TBR alleges the company is attempting to defraud the state by submitting an exemption request on a capital investment Marathon made in 2018 under an older, advance notification the company submitted to the state in 2014, prior to rule changes by the state.

In 2016, Gov. John Bel Edwards issued an executive order tightening ITEP regulations and giving local governments a voice in approving the tax breaks in their respective jurisdictions; however, the order grandfathered in companies that had filed advance notice with the state of their intention to do a capital project prior to the rule change, thereby allowing those companies to receive the tax break under the old, more generous rules.

At the board’s meeting in November, TBR’s parent organization, Together Louisiana, found discrepancies in Marathon’s request that seemingly indicate the company is trying to get an ITEP abatement on the 2018 work using the 2014 application—which appears to have been changed, potentially fraudulently.

“This looks to us like it’s a teenager using a fake ID to get into a bar, where both his name and birthday have been changed,” Moreland says. “But in this case, he’s not just getting into the bar, but also a $43 million exemption over the next 10 years.”

Some TBR members are also concerned about Marathon’s environmental record, says Moreland, especially regarding the company’s particulate matter emissions. However, Moreland is unsure if this will come up during Wednesday’s meeting, saying TBR will be reviewing other ITEP requests over the next two days.

In a prepared statement, Marathon’s corporate spokesperson, Jamal Kheiry, says the company “filed advanced notifications for the projects as required under the program guidelines” and buckled down on Marathon’s past claims that the company is submitting the applications “in full compliance with the rules of the program.”

Considering the issues Together Louisiana raised with Marathon’s request at the November meeting, Moreland says he’s personally surprised to see the item reappear on the board’s agenda. He says his organization also has “general concerns about the way [the BC&I] operates,” but declined to comment further. 

In November, Together Louisiana went so far as to suggest Louisiana Economic Development was complicit in helping Marathon change its application. At the time, LED officials made no admission of error or worse, but said they’d look into the irregularity.

An LED spokesperson did not respond to a request for comment before this afternoon’s deadline.

The board is meeting Wednesday at 9:30 a.m. in the LaSalle building on North 3rd Street. Check out the full agenda.