Basic elements of oil giant’s governance, structure and financial disclosures remain unresolved
The difficulty of quickly turning a behemoth that functions largely to support the Saudi budget into a company accountable to shareholders has crystallized over the past couple of months.
.. The prince has said the company could be valued at more than $2 trillion when it is listed.
.. Currently, about 90% of Aramco’s profit goes to the Saudi government and members of the royal family, say five people familiar with the finances. The rest, they say, gets reinvested in the company.
.. the government and Aramco have brought in a host of foreign advisers, including banks; accounting firms PricewaterhouseCoopers LLP and Ernst & Young LLP; and law firms
.. The IPO is part of his plan to wean Saudi Arabia’s economy of its dependence on oil.
.. would put IPO proceeds and much of Aramco’s stock into a giant sovereign-wealth fund. That fund would then sink tens of billions of dollars into international and domestic companies outside the oil industry.
.. Prince Mohammed also met dignitaries including former British Prime Minister Tony Blair.
.. Aramco and the government are also trying to figure out how to handle vast subsidies on Aramco’s books, including natural gas that it sells at a loss to government-owned power plants
.. In some cases plants pay about two-thirds of the cost of pumping the gas; at other times the utilities don’t pay at all
.. The company currently requires that 80% of employees in each division be Saudi nationals, which is a challenge in some areas, like accounting, where there is a dearth of trained Saudis
Scalia Took Dozens of Trips Funded by Private Sponsors
Though that trip has brought new attention to the justice’s penchant for travel, it was in addition to the 258 subsidized trips that he took from 2004 to 2014. Justice Scalia went on at least 23 privately funded trips in 2014 alone to places like Hawaii, Ireland and Switzerland, giving speeches, participating in moot court events or teaching classes. A few weeks before his death, he was in Singapore and Hong Kong.
Picking Up the Tab for Low Wages
Low-earner tax credits, for instance, create an incentive to work by tying cash assistance to earnings. Other programs enable people to work by subsidizing health care, child care and transportation.
The problem is that as labor standards have eroded, allowing profitable corporations to pay chronically low wages, taxpayers are not only supporting the working poor, as intended, but also providing a huge subsidy for employers by picking up the difference between what workers earn and what they need to meet basic living costs. The low-wage business model has essentially turned public aid into a form of corporate welfare.
.. In 2016, California will start publishing the names of employers that have more than 100 employees on Medicaid and how much these companies cost the state in public aid.
The Nature of Poverty
The problem is not lack of attention, and it’s not mainly lack of money. Since 1980 federal antipoverty spending has exploded. As Robert Samuelson of The Washington Post has pointed out, in 2013 the federal government spent nearly $14,000 per poor person. If you simply took that money and handed it to the poor, a family of four would have a household income roughly twice the poverty rate.
.. In addition, American public spending on schools is high by global standards. As Peter Wehner pointed out in Commentary, in 2011 Baltimore ranked second among the nation’s largest 100 school districts in how much it spent per pupil, $15,483 per year.