BC&I defers Marathon Oil request for ITEP abatement

The Louisiana Board of Commerce and Industry today put off a vote on a controversial request by Marathon Oil for a property tax abatement under the state’s Industrial Tax Exemption Program, or ITEP, amid questions about the company’s application.

The BC&I decided after a heated and lengthy discussion at the more than six-hour meeting to defer action on the request by Marathon, which advocacy organizations allege appears to have falsified its ITEP application in order to skirt rules that threatened the company’s likelihood of securing the 10-year, $43 million property tax abatement.

Marathon has denied the allegation and says it followed state regulations.  

(Full disclosure: Manny Fajardo, a member of the state Board of Commerce and Industry, is an employee of Louisiana Business Inc., parent company of Business Report. He did not attend today’s meeting)

In a statement, Together Louisiana, which first alleged the fraud Thursday after discovering discrepancies in the company’s application, suggested Louisiana Economic Development was complicit in helping Marathon change its application so that it could qualify for an exemption on a 2018 capital expenditure using an application originally filed in 2014, before the state implemented stricter regulations around the incentive program.

“Who changed Marathon’s advance notice to try to get them $43 million in taxpayer funds to which they are not entitled?” Together Louisiana organizer Broderick Bagert says. “At whose direction was the change made? Who inside of LED knew about and approved it?”

At the meeting, LED officials made no admission of error or worse, but said they would look into the irregularity.

“LED will analyze the ITEP application in question and address issues appropriately so that the board may make its determination,” LED spokesman Gary Perilloux says.

Counters Bagert: “We do not have confidence LED can investigate itself on this.”

The meeting, postponed twice this fall because of tropical weather systems, was still under way at 3 p.m., as the board worked its way through some $1.8 billion in requests for corporate incentives.

Together Louisiana took issue with many of the requests, which it says amount to “corporate welfare.”

Most of the applications were approved anyway.