Have you drunk from a Dixie cup recently? Set your picnic table with Mardi Gras napkins? Cleaned a kitchen spill with Brawny? Stocked your guest bathroom with Angel Soft? Perhaps you wear Lycra Spandex at the gym, or when cycling. Or you laid Stainmaster when you recarpeted the kids' playroom.
If you've done any of these things, Charles and David Koch thank you for your business - and for their profits. They own all of those name brands, and more. They own Matador Cattle, which supplies five million pounds of American beef to consumers each year. Reiss Coal and Reiss Viking, which supplies magnetite for production of electricity. (Do you know where your electric utilites buy your electric power from?) And that doesn't begin to address their holdings in crude oil (three percent share of the Trans-Alaska Pipeline alone), oil refineries (literally from the North Pole to Corpus Christi, Texas), fertilizer (six million metric tons of nitrogen products a year), steel and asphalt.
(Print this and take it with you to read later. You'll be glad you did.)
Yes, if in a bad dream, you find yourself in a setting from George Orwell's "1984" and you're asked to name "Big Brother," ask your inquisitor whether he wants Charles or David. (As in the case of Orville or Wilbur, either answer will be [W]right.)
In Part I of our Koch survey, we learned a little more about Charles and David Koch, the low-profile, multi-billionaire owners of Koch Industries, their family, their history in business and in Libertarian ideology; their penchant for opening special-issue think tanks, institutes and centers with Roman and Latin names; and their long, invisible reach across the nation, around the world, throughout our government, and in a lot of corners of American society's consumer culture.
To review those notes, check out our introduction here http://www.dailykos.com/... and Part I proper here http://www.dailykos.com/.... All ready and up-to-speed?
Today, we'll take a brief peek at which political candidates, parties and causes are supported by Charles and David Koch - with only a couple of surprises - and what they're well-known for BESIDES counting their money by the metric ton and shoveling it to conservative interests.
If your name carries an honorific title before it and an (R) behind it, and you ran for election or re-election to federal public office recently, it is more likely that you received a handy check from the Koch brothers, or their family members, or their senior employees and their family members, or their business associates and their family members, than if your name does not include the honorific title or if a (D) is appended to it.
If you happen to be the Republican representing the home district of Koch Industries, their love for you may have totaled almost $121,000 in 2004. (Good work, Rep. Todd Tiahrt.) If you're the senior Republican Senator from North Carolina whose husband was once the Senate Majority Leader from Kansas, the Kochs may love you second-best only to Mr. Tiahrt, with largess totaling $115,000. (But God loves you more than that, Liddy Dole. Remind yourself of it between those increasingly tedious fundraising calls. And please call Alan Schlesinger back; he's frantic.)
If you're the incumbent U.S. president whose popularity is in the dump for an unpopular war and for being, well, let's say "inarticulate," you shouldn't feel bad that the Kochs only loved you $109,000 much. That's $109,000 more than they loved your opponent, and he actually SERVED in an unpopular war.
Sen. Sam Brownback of Kansas, you deserved more than $64,000. The Kochs likely spent more than that on maintenance at their private jetport, Million Air, near Wichita in 2004. But don't fret; you were still ahead of then-House Majority Leader Tom DeLay, who only collected $53,000 from them, and HE was only two years away from losing his cover, his dignity and his job. It appears better to be a Kansan than a Texan, slightly. And you were running laps in Koch-love around Rep. Cal Dooley of California, the only one of the top 20 Koch-money recipients in 2004 who wasn't a Republican. Cal collected about $26,000. Go, Cal. Really, go.
"All told, Koch and its employees have made about $3.9 million in campaign contributions for national offices since 1998. By comparison, ChevronTexaco--which had revenue of almost $121 billion last year--topped all oil and gas companies with campaign contributions of about $4.6 million since 1998. ExxonMobil--which with revenue of $242 billion is about six times the size of Koch--gave about $3.8 million. About 79 percent of Koch's contributions went to Republican candidates, totaling roughly $3 million for the GOP compared to about $694,000 for Democrats, in transactions where a party affiliation could be identified.
(PublicIntegrity.org, July 2004, reposted March 2006)
That was in 2004. Mother Jones tells us what the Kochs did in 2000. "David Koch and his wife Julie gave every penny of their $487,500 in campaign contributions during the last election cycle to the Republican Party, its candidates, and conservative political action committees. If President Bush follows through on his campaign promises to loosen environmental protections and limit jury awards against corporations found guilty of wrongdoing, the money that Koch Industries saves on fines and legal damages could make those political contributions look like pocket change." (Mother Jones, March 5, 2001)
Did someone say jury awards, wrongdoing, fines? Let's pace ourselves. We've not yet covered the Kochs' massive lobbying machine: "Koch Industries has spent another $2.4 million `lobbying' on more than 50 pieces of legislation before Congress, helping shape the debate on everything from limiting class action lawsuits to repealing the estate tax." (PublicIntegrity.org, July 2004, reposted March 2006)
And we haven't peeped at the Koch's affairs with 527 committees, the mistress-on-the-side versions of political action committees. "Named after the section of the Internal Revenue Service code under which they're organized, these political committees can raise unlimited amounts of money to influence elections. They are also allowed to claim tax-exempt status as political committees while at the same time avoiding regulation by state or federal election authorities. David Koch has given $165,000 to such committees, dividing the money between three Republican groups: the Republican Governor's Association, Americans for a Republican Majority and the Majority Leader's Fund. Koch Industries gave a total $138,200 to 527 committees. Of that amount, $82,200 went to Democratic groups that mostly support moderate and conservative candidates, while $56,000 went to Republican groups." (PublicIntegrity.org, July 2004, reposted March 2006)
Wait - did he say Democratic groups? I think he meant group, singular, the one called the Democratic Leadership Council, but I could be wrong. If someone has better data, send me a note below.
In the interest of time, we'll let that stand an answer to what political candidates, parties and causes are supported, and we'll move onto the larger of today's two questions: What else are the Kochs known for? As we'll see, today's two topics are actually entwined.
Shall we take this chronologically? We shall, and we'll begin for the sake of expedience in 1995, which wasn't so good a year. Indeed, it was the year J. Howard Marshall died, making Anna Nicole Smith a widow at age 32. (Lest you think that's unimportant to our story, we'll award extra credit to the careful reader who knows how J. Howard Marshall figured into the Koch family enterprise, and how wrangling between the Marshalls and the Kochs left one Marshall with less than a mess of potage and another one wrangling with the former Playboy Playmate in the U.S. Supreme Court. See answer below. AFTER we finish today's story, mind you.)
So in 1995, the Environmental Protection Agency AND the U.S. Coast Guard AND Janet Reno's Justice Department filed a $54 million lawsuit against the Kochs over oil spills at Koch-owned refineries. Things looked grim. But the Kochs hired C. Boyden Gray, who had been counsel to George H.W. Bush and had worked in the Reagan administration before that, to write federal legislation called the Comprehensive Regulatory Reform Act of 1995. According to Public Integrity, "a clause was inserted that would have allowed companies being sued to challenge the government by finding a conflicting or contradictory rule and to prove that the regulation had not been enforced uniformly. If any companies had gotten leniency in the past on any regulations, companies such as Koch facing big government lawsuits could use the proposed law to make sure they weren't given tougher sentences or higher fines." And they got Sen. Bob Dole of (come on, you know this one) Kansas to push it through the Senate. So things were looking up! But despite Dole's heavy lifting, the legislation died. Things looked grim again.
And yes, there were some other lawsuits filed that year, and two years later, talking about some 300 oil spills, and asking for between $71 million and $214 million in penalties. But that's to be expected when you're a huge, successful company. You dumped an estimated three million gallons of oil into lakes and streams across six states and suddenly you're a target for all sort of suits. You'd think a family could make a little money in this country without being hounded by environmentalists. On balance, 1995 was grim indeed.
Probably only because of 1995's bad karma, 1996 didn't turn out so well either. "In 1996, a faulty pipeline caused an explosion outside of Dallas in which two teenagers were killed. In a lawsuit related to the deaths, a trial court returned a judgment of $376.69 million against the company." (Mother Jones, March 5, 2001)
There was that. But then there was also some federal investigation. "Charles Koch found himself under investigation by the U.S. Senate for his alleged role in funding so-called `issue ads' that helped conservative Republican congressional candidates in 1996." (PublicIntegrity.org, July 2004, reposted March 2006)
Then THAT dragged into 1997, when a whole lot of stuff came out. Apparently, there was this "for-profit corporation called Triad Management Inc., which was owned by Carolyn Malenick, a Republican fundraiser. In 1996, according to `The Buying of the President 2000,' Triad was responsible for pro-Republican advertising in 26 House races and three Senate races. Triad was connected to two not-for-profit organizations, Citizens for Reform and Citizens for the Republic Education Fund. Neither group had a staff or office, but they ran $3 million in television ads paid for by Triad-related entities in the closing days of the 1996 campaign."
So how did all this Triad business involved the Kochs? You have to pay attention to catch it. "More than half of the Triad-connected money--$1.79 million - came from a group called the Economic Education Trust, which the Democratic Staff of the Senate committee suggested had been funded by Charles and David Koch. The Senate investigators found that much of the money spent by Triad and another group called the Coalition for Our Children's Future helped Republican candidates in states where Koch has refineries, pipelines, or offices, including Arkansas, Kansas, Louisiana, Minnesota and Oklahoma."
Oh, so only because this Triad company did business where the Kochs also had business interests, the Kochs were automatically implicated? Come on. You said yourself it was "suggested" by committee staffers, not proven by them. So there wasn't a single scrap of evidence? "While the Senate committee did not officially charge Koch with campaign law violations, the investigation did uncover a $2,000 Koch Industries corporate check made out to Triad. In 1998, the Wall Street Journal reported that it had discovered documents the paper said confirmed a direct link between Charles Koch and the ads. Specifically, the Journal report said Republican political consultant Kenneth Barfield, who was on Koch's payroll in 1996, relayed information between Triad and the Economic Education Trust, which ultimately financed the ads."
Oh. Never mind.
Well, while the Democrats on Capitol Hill were busy "investigating" and holding "hearings," the Kochs were trying to run a company, and not getting much help from the Clinton administration. It was in 1997 that Clinton issued new air quality regulations that made it a lot harder for working entrepreneurs like the Kochs to do business in America. Whatever happened to encouraging a good business climate. (And don't say global warming. That's too easy.) Luckily, the Kochs had C. Boyden Gray. Oops - I should say, Citizens for Sound Economy had C. Boyden Gray, and Citizens for a Sound Economy thought Clinton's new air quality regulations were nuts. So CSE put CBG on the case. It was just a matter of time.
(Uh-oh. For those who thought there was no relationship between the Kochs and CSE, here's some clarification from Public Integrity. It's not real pretty. "The think tank that appears to have the most incestuous relationship with Koch is the Washington-based Citizens for a Sound Economy. CSE was founded in 1984 by Charles and David Koch and Richard Fink, the group's first president. Fink would go on to become a director and executive at Koch. Reagan Office of Management and Budget Director James Miller became a board member of CSE in 1988. Wayne Gable, who replaced Fink as CSE President in 1989, is now Managing Director of Federal Affairs at Koch. Former House Majority Leader Dick Armey, R-Texas, is the current co-chairman of CSE. The other co-chairman is C. Boyden Gray, who was counsel to George H. W. Bush, during his terms as president and vice president. He was also counsel to the Presidential Task Force on Regulatory Relief during the Reagan Administration. In 1999, Gray prepared an amicus brief that underpinned a decision by a U.S. Court of Appeals in Washington that suspended air quality regulations issued by the Clinton-Gore administration in July 1997. CSE says it helped fund Gray's brief.") (PublicIntegrity.org, July 2004, reposted March 2006)
(Sigh.)
1998 belonged to Monica. The Kochs minted money and maybe watched CNN like the rest of us.
But in 1999, they were back. See, there was this problem with Bill Koch, David's twin brother. (Those paying attention will recall from Part I that Bill took the side of oldest brother Frederick in the great Koch-family war in the 1980s. Bill and Frederick sold out their shares of the company for more than a billion dollars to Charles and David.) Well, in the late 1980s, Bill filed an embarrassing suit against the dynamic duo. Here's the scoop from Public Integrity, again: "Bill Koch, best known for bankrolling a yacht racing team that won the 1992 America's Cup, and another plaintiff filed the suit under the False Claims Act, which allows private plaintiffs to sue on behalf of the government companies and individuals that are defrauding it. Plaintiffs get to keep a part of any money recovered in a successful suit." Aha - so if Bill knows of wrongdoing that harmed someone ELSE, and he filed a suit on THEIR behalf against the wrongdoers, then he gets to collect tips. Hm. Wonder what Thanksgiving is like at their house.
Okay, so who did wrong? Who was done wrong?
Mother Jones tells it: "Bill Koch alleged that Koch Industries underreported the amount and quality of oil it garnered from drilling operations on federal and tribal lands. In December 1999, a jury found the company guilty and recommended a penalty of $553,504." (Mother Jones, March 5, 2001)
O, no. Not tribal lands. Not Native Americans. Was Ralph Reed a part of this too? Jack Abramoff? Was Grover laundering the money and skimming the cream? It's almost too much to bear. And here's brother against brother, tattling, bringing suit in federal court. What's anyone to do? They're to keep reading, that's what. That jury only RECOMMENDED a penalty of a half-million dollars, they didn't actually award one. So keep reading.
Oh, and one more thing about 1999. If you didn't catch it in Public Integrity's novella above, our buddy CBG delivered that year. "In 1999, Gray prepared an amicus brief that underpinned a decision by a U.S. Court of Appeals in Washington that suspended air quality regulations issued by the Clinton-Gore administration in July 1997. CSE says it helped fund Gray's brief." (PublicIntegrity.org, July 2004, reposted March 2006)
So 2000 brought in the new millennium. There was no Y2K. We still lived in a pre-9/11 mindset. Dubya and the Dark One - and Karl Rove too - criss-crossed the land in a plane called "Great Expectations" with no sense of irony whatsoever, as they likely had no knowledge of how Charles Dickens's classic turned out.
For a while, things looked up for the Kochs in January 2000, if you agree that settling those old oil-spill suits with the government and paying $35 million in fines is a good thing. There was that whole election thing taking up everyone's time and money.
Then, out of the blue, another pothole. In the fall, "Koch Industries and four employees were indicted on 97 counts of violating federal clean air and hazardous waste laws. Government prosecutors accuse the company of intentionally releasing fumes from benzene -- a suspected carcinogen -- into the atmosphere and then lying about it to state regulators in Texas. If convicted, the company could be fined up to $352 million." (Mother Jones, March 5, 2001)
Teacher always said those carcinogens would catch up to you.
Luckily, the guy who won the presidential election was sent home by the Supreme Court and Dubya was selected president. Whew. Talk about dodging a bullet. For the full report, we go to Public Integrity once more: "In late 2000--as the Clinton Administration was preparing to leave office--Koch was hit with a 97-count indictment for covering up the discharge of more than 15 times the legal limit of benzene, a carcinogen, from a refinery in Corpus Christi, Texas. The company faced penalties of more than $350 million. Four Koch employees were also charged individually and faced up to 35 years in prison. Three months after the Bush administration took office--and just before the lawsuit went to trial--the Justice Department abruptly settled the case. Koch agreed to pay $20 million and plead guilty to a single count of concealment of information. In return, the Justice Department dropped all criminal charges against Koch and the four employees." (PublicIntegrity.org, July 2004, reposted March 2006)
Thank you, Public Integrity. And now... oh, I'm sorry, excuse me for interrupting. You say there's more about the Kochs' adventure through 2001? Please, go on.
"In a December 2001 report, the White House's Office of Management and Budget singled out eight major Environmental Protection Agency rules for review. Five of them, including a linchpin of the Clean Air Act called the New Source Review, came from public interest comments filed by the group. John Graham, once an advisory board member of the Mercatus Center, is now a senior OMB official. His office has been particularly receptive to Mercatus's public comments. According to a recent report from the Government Accountability Office, the think tank submitted more comments than any other organization for OMB's review. OMB marked 23 suggestions as `high priority,' the majority of which were submitted by Mercatus, essentially guaranteeing their passage into White House policy." (PublicIntegrity.org, July 2004, reposted March 2006)
Whoa. So this guy who used to work for the Kochs' think tank at George Mason University went to work for Dubya's Office of Management and Budget, and that think tank submitted a bunch of recommended environmental policy changes, and this guy marked them as high priorities? Pfft. That just goes to show what happens when people aren't paying attention to who is hired into their federal government. Can you imagine what would happen if there was more than just one of these guys jumping from private-sector policy advocacy to real, live, actual federal-government policy advocacy?
Lucky for us, it's rare, right?
I'm sorry, Public Integrity. You were saying something about December 2003?
"Last December [2003], Alex Beehler left Koch to become assistant deputy under secretary of defense for Environment, Safety and Occupational Health. In his new role, Beehler will be a top advisor on environmental, safety and occupational health policies and programs throughout the Defense Department. A Pentagon press release said those programs include `clean-up at active and closing military bases, compliance with environmental laws, conservation of natural and cultural resources, pollution prevention, environmental technology, fire protection, safety and explosive safety, and pest management and disease control for Defense activities worldwide'."
What? This guy who had no previous government experience, but had worked for Koch Industries, went to work as assistant secretary to Donald Rumsfeld to advise Rumsfeld on environmental, safety and occupational health policies throughout our nation's defense forces?
"While at Koch, Beehler served as director of environmental and regulatory affairs and concurrently served at the Charles G. Koch Foundation as vice president for environmental projects. Prior to joining Koch, Beehler served in the Department of Justice as a senior trial attorney for environmental enforcement and at the Environmental Protection Agency as a special assistant for legal and enforcement counsel." (PublicIntegrity.org, July 2004, reposted March 2006)
Ohhh, so he DID have prior government experience. He worked at EPA, THEN went to work for Koch, THEN went back to work for the Department of Defense. Thanks for clearing that up.
Okay, so there are two examples of this revolving door through Koch and the Bush White House. But Dubya brought honor and dignity back to the White House. I'm sure these were flukes. Dare you to find a third example.
Anyway, if the Kochs are busy helping to staff the Bush administration, then at least they're not dabbling in electoral politics. After reading about their ups and downs of the past decade, I might get a little paranoid if they were actually playing in something as important as a presidential election.
Oh. You weren't finished, you say. There's more, you say? Nader? Ralph Nader? The Kochs helped Ralph Nader get on the ballot in Oregon? Why would they do that? He's not a Libertarian. And it was Nader, for God's sake, who arguably threw the Florida debacle to Dubya in 2000. He's radioactive. Nobody would vote for him again. Are you sure they helped him? Are you sure your source didn't say, "Having a Coke helped Nader get onto the Oregon ballot?"
"On June 30 [2004], Citizens for Responsibility and Ethics in Washington filed a complaint with the Federal Election Commission alleging that groups, including Citizens for a Sound Economy, the Bush/Cheney campaign and the Nader campaign, had violated federal campaign laws through the use of prohibited in-kind contributions. In its complaint, CREW said CSE directed employees to call members, using prepared scripts, to encourage them to sign a petition that allowed Ralph Nader to put his name on the November ballot in the presidential election. According to CREW, CSE's script stated `Liberals are trying to unite in Oregon and keep Nader off the ballot to help their chances of electing John Kerry. We could divide this base of support.' Since CSE is a corporation, it is prohibited from making contributions to federal campaigns, CREW said in its complaint. The costs of creating the scripts as well as the costs of the telephone calls constitute prohibited in-kind contributions. CREW said the Oregon situation is part of a `pattern and practice of using tax-exempt corporations to provide substantial illegal assistance to presidential campaigns. As the names of the donors to tax exempt organizations are not reported, this allows campaigns to avoid the transparency called for by the Bi-Partisan Campaign Reform Act'." (PublicIntegrity.org, July 2004, reposted March 2006)
Ah, but that was Citizens for a Sound Economy, and the Kochs don't really control what goes on over there.
Oh, you checked with Wikipedia. And it said?
"Americans For Prosperity Foundation (AFP) is a section 501(c)(3) organization `committed to educating citizens about economic policy and a return of the federal government to its Constitutional limits.' [1] (http://www.americansforprosperity.org/...) AFP was established in 2003 with money from the Charles G. Koch Charitable Foundation as a successor to Citizens for a Sound Economy Foundation, following an internal rift at the organization."
Okay. There's a connection. I see it. Thanks.
I notice, though, that you didn't take up my dare to find a third example of a so-called revolving door between the Kochs and Dubya's White House. So you're accepting that the first two are flukes?
"These days, Koch's sphere of influence also reaches directly into the White House and other parts of the executive branch. Once an in-house lobbyist for Koch, Elizabeth Stolpe is now an associate director at the White House's Council on Environmental Quality. Stolpe as well as Graham were copied on an e-mail sent to the White House by Bracewell & Patterson, a K Street lobby shop pushing for reform of the New Source Review section of the Clean Air Act. In fact, the White House team behind Clear Skies included Graham and Stolpe, as well as valued Bush advisors Karen Hughes and Karl Rove." (PublicIntegrity.org, July 2004, reposted March 2006)
Ahem.
Say, you never told me how that thing between Bill Koch and the two brothers turned out. Bill sued on behalf of Native American tribes, claming Charles and David had cheated them out of proceeds, the jury found in Bill's favor and recommended a half-million dollar award. And then?
"In a settlement of that case in May 2001, the company agreed to pay $25 million to the U.S. government to dismiss charges of false claims estimated at about $170 million in oil purchases on federal and Native American lands. The company had faced potential penalties of $214 million in the case. Bill Koch and his co-plaintiff shared $7.4 million; Koch told reporters that Koch Industries would also pay his legal fees." (PublicIntegrity.org, July 2004, reposted March 2006)
See, the charges of false claims were dismissed. Case closed.
I think we've sufficiently answered the questions of who gets the Kochs' support and what else they're known for. We're going to take Koch break (ahem) for a day or so and then bring Part III, in which Charles and David embark on a journey from Georgia to the Pacific. (Heh heh.) As a reminder, there will be a trivia quiz question to follow: Among the many aspects of this particular inquiry, what do the states of Maine and Oregon have in common?
Reading is fundamental. To learn more about these and other topics, visit your local library, or log onto the Internet and click on these important links. You'll be glad you did.
http://www.motherjones.com/...
http://www.publicintegrity.org/...
http://www.forbes.com/...
http://www.opinionjournal.com/...
http://www.buildernewsmag.com/...
http://www.newsbull.com/...
http://www.wweek.com/...
http://www.mediatransparency.org/...
http://www.ncrp.org/...
Yes, sharp readers. I didn't forget. Here's the answer to today's extra credit question: J. Howard Marshall turned his investment in Great Northern Oil Co. with Koch family patriarch Fred Koch during the 1950s into a 16% stake in Koch Industries, now the nation's largest privately-held company. When eldest son J. Howard Marshall III sided with sons Bill and Fred Koch in a failed attempt to take over Koch Industries from Charles and David Koch, the senior Marshall stripped J. Howard III of his inheritance, making E. Pierce Marshall his primary heir, so says Wikipedia. Pierce, you may remember, was Anna Nicole Smith's sextagenarian stepson and legal nemesis until his demise earlier this year.