Waxman's interest in bringing somebody from Koch Industries in for a chat began after an investigative article written by David Sassoon of InsideClimate News (then called SolveClimate News) that stated Koch Industries would financially benefit if the pipeline were approved by the Obama administration. The irony in such an approval, Sassoon implied, would be that the owners of Koch Industries, David and Charles Koch, are bitter foes of the Obama administration, climate-change deniers and tea party angels who have spent more than $50 million lobbying Congress since 2006. To further their right-wing political agenda, they have also funded an array of activist groups and advocacy think tanks, including the American Legislative Exchange Council and the astroturf group Americans for Prosperity, which recently passed out high grades to members of Congress based on how rightwingy they are.
Sassoon's article pointed out that one Koch Industries' subsidiaries is Flint Hills Resources Canada LP. InsideClimate said it “supplies about 250,000 barrels of tar sands oil a day to a heavy oil refinery in Minnesota, also owned by the Koch brothers,” and “operates a crude oil terminal in Hardisty, Alberta, the starting point of the proposed Keystone XL pipeline.” Sassoon further wrote that Koch Industries would "snare some of the windfall" from what consultants for the pipeline's builder, TransCanada, said would be an increase in oil prices of up to $3 a barrel.
The article was picked up by Reuters. Waxman saw it and instructed his staff to query Koch Industries, was unhappy with the answers he received and sent a letter to Upton and Subcommittee on Energy and Power Chairman Ed Whitfield (R-KY) seeking "documents from Koch Industries related to the company’s interest in Canadian tar sands and the extent to which it will benefit if the Keystone XL pipeline is constructed.” Waxman wrote:
The Koch representatives said that the Keystone XL pipeline has “nothing to do with any of our businesses” and that Koch had “no financial interest” in the pipeline. They also stated that the company neither supports nor opposes the legislation we will be considering next week.
However, Koch’s representatives refused to answer questions about Koch’s activities or interests in the Canadian tar sands. They refused to confirm or deny reports that the company is developing tar sand projects. They also refused to say whether Koch Industries owns—through a wholly owned subsidiary—a terminal involved in the tar sands business.There appears to be a significant discrepancy between the published reports that Koch Industries would be “big winners” if the pipeline is approved and the statement of the Koch representatives that the pipeline has “nothing to do” with Koch’s businesses. We do not presume that Koch’s representations are inaccurate. But we were dismayed by the company’s lack of candor in responding to staff’s questions and believe additional inquiry is warranted.David and Charles Koch
InsideClimate subsequently ran another article titled Koch Bros. Accused of Stonewalling Congress on Their Keystone XL Pipeline Interest.
And that sent the Koch Industries PR machine into action. Not only did it deny it had any financial interest in Keystone XL and that it would not be shipping oil through the pipeline if it were built, it also attacked InsideClimate as an advocacy organization and complained to Reuters about carrying the articles, which it claimed distorted the record. Included in its campaign in October were ads on Facebook and Google in which Koch Industries claims the InsideClimate investigation “misleads readers and asserts outright falsehoods.”
Reuters refused to back down. Sassoon called the campaign "intimidation."
The whole affair came to the attention of the Columbia Journalism Review, which, in November published a thorough examination of the back and forth written by Curtis Brainard. You can read all the ins and outs here. The upshot? InsideClimate didn't prove its case against Koch Industries and made a few relatively minor errors:
These quibbles notwithstanding, Koch’s suggestion to Reuters (via Ellender’s e-mails) and to readers (via the online ad campaign) that InsideClimate News is a deceptive advocacy site that ought to be abandoned is spurious and unwarranted, and Reuters should be commended for defending the integrity of its content partner.
In a comment thread appended to Brainard's article, "Kochfacts" replied:
We are not a proposed shipper or customer of oil delivered by this pipeline. These core facts have been omitted from the reporting and instead, we are presented — in headline and content — as though we are a central party to the issue. As the CEO of TransCanada, the company that actually owns the project recently said in a widely reported conference call, “[Regarding] collusion with the Koch brothers, I can tell you that Koch isn’t a shipper and I’ve never met the Koch brothers before.” Mr. Sassoon’s misstatements need to be formally corrected and clarified for readers, as the journalism rulebook would have it.
Although Koch made public on October 20 a detailed account of those falsehoods, omissions, and other journalistic distortions by Mr. Sassoon and InsideClimate, it is only now, nearly three weeks later, that Mr. Sassoon can muster the effort to reply. And he chose to do so in the comment thread of an independent journalism review that faults his work on those same counts. That indifference to standards speaks volumes about InsideClimate’s and his unreliability.
In the same comment thread, Sassoon replied:
There are facts, and then there are KochFacts.
These are the facts.
Never, ever in any of the pieces InsideClimate News has published on the Kochs did we say that the Kochs have a financial interest in the Keystone XL pipeline itself, or are a party to its design and construction. Never.
Never, ever did we say that the Kochs have entered into a contract with TransCanada to ship or receive diluted bitumen through the Keystone XL pipeline. Never.
And never, ever have the Kochs asked InsideClimate News to issue any corrections. Never.
We would like to accommodate any legitimate concerns the Kochs may have, but it is impossible for us to issue corrections that were never requested to statements we have never made.
What we have said is that the Kochs are well-positioned to benefit from the Keystone XL pipeline, and we stand by that statement.
The Kochs themselves claim on one of their own websites to be “among Canada’s largest crude oil purchasers, shippers, and exporters.” And they told Canada’s National Energy Board in an official regulatory filing that they have “a direct and substantial interest in the application” TransCanada filed to build the Keystone XL pipeline.
The Kochs could make a great contribution to public understanding if they would simply disclose the nature and extent of their business interests in Canada’s oil sands/tar sands, and how they anticipate the Keystone XL pipeline, if it gets built, would influence these direct and substantial interests.
CJR and Curtis Brainard are encouraging us to find out with greater detail and precision.
Would the Kochs care to help us by providing some simple facts?
And if not to David Sassoon, how about supplying some facts to the Energy and Commerce Committee? The Koch Brothers are eager to present their case in just about every other forum they can, especially those they pay big bucks to support. Surely these billionaires aren't afraid whoever they send to testify can't handle a little questioning from Congressmen Waxman and Whitfield and other members of the committee? Or does saying things under oath complicate their usual methodology where the truth is a non-participating bystander at best?