Koch Brothers thread

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Re: Koch Brothers thread

Postby seemslikeadream » Tue Sep 30, 2014 10:44 am

By Charles P. Pierce on September 29, 2014

What people should be talking about today, but won't be, is Tim Dickinson's report on the lush criminal history of Koch Industries. Up until recently, the Kochs have been seen as a couple of plutocrats who, aided and abetted by a pliable Supreme Court and by politicians who would take money from serial murderers as long as they were anonymous, are seeking to buy the American political system for the purposes of getting even richer and promoting the Birchite nonsense they've imbibed since childhood. However, the sources of their great wealth have gone largely unexamined, and, as Dickinson points out, the only real difference between the Kochs and the Gambinos is that the latter dressed a lot better.

Under the nearly five-decade reign of CEO Charles Koch, the company has paid out record civil and criminal environmental penalties. And in 1999, a jury handed down to Koch's pipeline company what was then the largest wrongful-death judgment of its type in U.S. history, resulting from the explosion of a defective pipeline that incinerated a pair of Texas teenagers. The volume of Koch Industries' toxic output is staggering. According to the University of Massachusetts Amherst's Political Economy Research Institute, only three companies rank among the top 30 polluters of America's air, water and climate: ExxonMobil, American Electric Power and Koch Industries. Thanks in part to its 2005 purchase of paper-mill giant Georgia-Pacific, Koch Industries dumps more pollutants into the nation's waterways than General Electric and International Paper combined. The company ranks 13th in the nation for toxic air pollution. Koch's climate pollution, meanwhile, outpaces oil giants including Valero, Chevron and Shell. Across its businesses, Koch generates 24 million metric tons of greenhouse gases a year.
This, of course, should be no surprise. Behind every great fortune is a great crime, Balzac warned us, but old Honore has been misunderstood by people who low-ball his warning. It is not that the great fortune begins with the great crime. It is that behind the great fortunes are great ongoing crimes. In the case of the Kochs, in fact, the great fortune is the great crime.

Almost from the beginning, Koch Industries' risk-taking crossed over into recklessness. The OPEC oil embargo hit the company hard. Koch had made a deal giving the company the right to buy a large share of Qatar's export crude. At the time, Koch owned five supertankers and had chartered many others. When the embargo hit, Koch had upward of half a billion dollars in exposure to tankers and couldn't deliver OPEC oil to the U.S. market, creating what Charles has called "large losses." Soon, Koch Industries was caught overcharging American customers. The Ford administration in the summer of 1974 compelled Koch to pay out more than $20 million in rebates and future price reductions. Koch Industries' manipulations were about to get more audacious. In the late 1970s, the federal government parceled out exploration tracts, using a lottery in which anyone could score a 10-year lease at just $1 an acre - a game of chance that gave wildcat prospectors the same shot as the biggest players. Koch didn't like these odds, so it enlisted scores of frontmen to bid on its behalf. In the event they won the lottery, they would turn over their leases to the company. In 1980, Koch Industries pleaded guilty to five felonies in federal court, including conspiracy to commit fraud.
The great crime that begins the great fortune never truly goes away. The corruption that the great crime embeds in the great fortune is never excised because it cannot be. It can be glossed over, camouflaged in fancy legalisms, alibi-ed by politicians that the great fortune allows the great crime to sublet, or perfumed by charitable donations that spring from a river fouled centuries ago. But the great crime -- and the corruption it spawned -- is eternal in the great fortune. Nobody ever gets clean.

In late 1980, with Frederick's backing, Bill launched an unsuccessful battle for control of Koch Industries, aiming to take the company public. Three years later, Charles and David bought out their brothers for $1.1 billion. But the speed with which Koch Industries paid off the buyout debt left Bill convinced, but never quite able to prove, he'd been defrauded. He would spend the next 18 years suing his brothers, calling them "the biggest crooks in the oil industry." Bill also shared these concerns with the federal government. Thanks in part to his efforts, in 1989 a Senate committee investigating Koch business with Native Americans would describe Koch Oil tactics as "grand larceny." In the late 1980s, Koch was the largest purchaser of oil from American tribes. Senate investigators suspected the company was making off with more crude from tribal oil fields than it measured and paid for. They set up a sting, sending an FBI agent to coordinate stakeouts of eight remote leases. Six of them were Koch operations, and the agents reported "oil theft" at all of them...The Senate committee concluded that over the course of three years Koch "pilfered" $31 million in Native oil; in 1988, the value of that stolen oil accounted for nearly a quarter of the company's crude-oil profits. "I don't know how the company could have figures like that," the FBI agent testified, "and not have top management know that theft was going on."
The Kochs made the great fortune, the one that's poisoning American politics as surely as its byproducts poison the land, the water, and the sky, because they decided years ago that laws and regulations are for ordinary people, and not for them. This is how great criminals justify their great crimes. This is how great fortunes are made.

Inside the Koch Brothers' Toxic Empire

Illustration by Victor Juhasz
Together, Charles and David Koch control one of the world's largest fortunes, which they are using to buy up our political system. But what they don't want you to know is how they made all that money

By Tim Dickinson | September 24, 2014
The enormity of the Koch fortune is no mystery. Brothers Charles and David are each worth more than $40 billion. The electoral influence of the Koch brothers is similarly well-chronicled. The Kochs are our homegrown oligarchs; they've cornered the market on Republican politics and are nakedly attempting to buy Congress and the White House. Their political network helped finance the Tea Party and powers today's GOP. Koch-affiliated organizations raised some $400 million during the 2012 election, and aim to spend another $290 million to elect Republicans in this year's midterms. So far in this cycle, Koch-backed entities have bought 44,000 political ads to boost Republican efforts to take back the Senate.

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What is less clear is where all that money comes from. Koch Industries is headquartered in a squat, smoked-glass building that rises above the prairie on the outskirts of Wichita, Kansas. The building, like the brothers' fiercely private firm, is literally and figuratively a black box. Koch touts only one top-line financial figure: $115 billion in annual revenue, as estimated by Forbes. By that metric, it is larger than IBM, Honda or Hewlett-Packard and is America's second-largest private company after agribusiness colossus Cargill. The company's stock response to inquiries from reporters: "We are privately held and don't disclose this information."

But Koch Industries is not entirely opaque. The company's troubled legal history – including a trail of congressional investigations, Department of Justice consent decrees, civil lawsuits and felony convictions – augmented by internal company documents, leaked State Department cables, Freedom of Information disclosures and company whistle­-blowers, combine to cast an unwelcome spotlight on the toxic empire whose profits finance the modern GOP.

Under the nearly five-decade reign of CEO Charles Koch, the company has paid out record civil and criminal environmental penalties. And in 1999, a jury handed down to Koch's pipeline company what was then the largest wrongful-death judgment of its type in U.S. history, resulting from the explosion of a defective pipeline that incinerated a pair of Texas teenagers.

The volume of Koch Industries' toxic output is staggering. According to the University of Massachusetts Amherst's Political Economy Research Institute, only three companies rank among the top 30 polluters of America's air, water and climate: ExxonMobil, American Electric Power and Koch Industries. Thanks in part to its 2005 purchase of paper-mill giant Georgia-Pacific, Koch Industries dumps more pollutants into the nation's waterways than General Electric and International Paper combined. The company ranks 13th in the nation for toxic air pollution. Koch's climate pollution, meanwhile, outpaces oil giants including Valero, Chevron and Shell. Across its businesses, Koch generates 24 million metric tons of greenhouse gases a year.

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For Koch, this license to pollute amounts to a perverse, hidden subsidy. The cost is borne by communities in cities like Port Arthur, Texas, where a Koch-owned facility produces as much as 2 billion pounds of petrochemicals every year. In March, Koch signed a consent decree with the Department of Justice requiring it to spend more than $40 million to bring this plant into compliance with the Clean Air Act.

The toxic history of Koch Industries is not limited to physical pollution. It also extends to the company's business practices, which have been the target of numerous federal investigations, resulting in several indictments and convictions, as well as a whole host of fines and penalties.

And in one of the great ironies of the Obama years, the president's financial-regulatory reform seems to benefit Koch Industries. The company is expanding its high-flying trading empire precisely as Wall Street banks – facing tough new restrictions, which Koch has largely escaped – are backing away from commodities speculation.

It is often said that the Koch brothers are in the oil business. That's true as far as it goes – but Koch Industries is not a major oil producer. Instead, the company has woven itself into every nook of the vast industrial web that transforms raw fossil fuels into usable goods. Koch-owned businesses trade, transport, refine and process fossil fuels, moving them across the world and up the value chain until they become things we forgot began with hydrocarbons: fertilizers, Lycra, the innards of our smartphones.

The company controls at least four oil refineries, six ethanol plants, a natural-gas-fired power plant and 4,000 miles of pipeline. Until recently, Koch refined roughly five percent of the oil burned in America (that percentage is down after it shuttered its 85,000-barrel-per-day refinery in North Pole, Alaska, owing, in part, to the discovery that a toxic solvent had leaked from the facility, fouling the town's groundwater). From the fossil fuels it refines, Koch also produces billions of pounds of petrochemicals, which, in turn, become the feedstock for other Koch businesses. In a journey across Koch Industries, what enters as a barrel of West Texas Intermediate can exit as a Stainmaster carpet.

Koch's hunger for growth is insatiable: Since 1960, the company brags, the value of Koch Industries has grown 4,200-fold, outpacing the Standard & Poor's index by nearly 30 times. On average, Koch projects to double its revenue every six years. Koch is now a key player in the fracking boom that's vaulting the United States past Saudi Arabia as the world's top oil producer, even as it's endangering America's groundwater. In 2012, a Koch subsidiary opened a pipeline capable of carrying 250,000 barrels a day of fracked crude from South Texas to Corpus Christi, where the company owns a refinery complex, and it has announced plans to further expand its Texas pipeline operations. In a recent acquisition, Koch bought Frac-Chem, a top provider of hydraulic fracturing chemicals to drillers. Thanks to the Bush administration's anti-regulatory­ agenda – which Koch Industries helped craft – Frac-Chem's chemical cocktails, injected deep under the nation's aquifers, are almost entirely exempt from the Safe Drinking Water Act.

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A 1996 explosion of a Koch-owned pipeline in Texas killed two teens. (Photo: National Transportation Safety Board)
Koch is also long on the richest – but also the dirtiest and most carbon-polluting – oil deposits in North America: the tar sands of Alberta. The company's Pine Bend refinery, near St. Paul, Minnesota, processes nearly a quarter of the Canadian bitumen exported to the United States – which, in turn, has created for Koch Industries a lucrative sideline in petcoke exports. Denser, dirtier and cheaper than coal, petcoke is the dregs of tar-sands refining. U.S. coal plants are largely forbidden from burning petcoke, but it can be profitably shipped to countries with lax pollution laws like Mexico and China. One of the firm's subsidiaries, Koch Carbon, is expanding its Chicago terminal operations to receive up to 11 million tons of petcoke for global export. In June, the EPA noted the facility had violated the Clean Air Act with petcoke particulates that endanger the health of South Side residents. "We dispute that the two elevated readings" behind the EPA notice of violation "are violations of anything," Koch's top lawyer, Mark Holden, told Rolling Stone, insisting that Koch Carbon is a good neighbor.

Over the past dozen years, the company has quietly acquired leases for 1.1 million acres of Alberta oil fields, an area larger than Rhode Island. By some estimates, Koch's direct holdings nearly double ExxonMobil's and nearly triple Shell's. In May, Koch Oil Sands Operating LLC of Calgary, Alberta, sought permits to embark on a multi-billion­dollar tar-sands-extraction operation. This one site is projected to produce 22 million barrels a year – more than a full day's supply of U.S. oil.

Charles Koch, the 78-year-old CEO and chairman of the board of Koch Industries, is inarguably a business savant. He presents himself as a man of moral clarity and high integrity. "The role of business is to produce products and services in a way that makes people's lives better," he said recently. "It cannot do so if it is injuring people and harming the environment in the process."

The Koch family's lucrative blend of pollution, speculation, law-bending and self-righteousness stretches back to the early 20th century, when Charles' father first entered the oil business. Fred C. Koch was born in 1900 in Quanah, Texas – a sunbaked patch of prairie across the Red River from Oklahoma. Fred was the second son of Hotze "Harry" Koch, a Dutch immigrant who – as recalled in Koch literature – ran "a modest newspaper business" amid the dusty poverty of Quanah. In the family legend, Fred Koch emerged from the nothing of the Texas range to found an empire. But like many stories the company likes to tell about itself, this piece of Koch­lore takes liberties with the truth. Fred was not a simple country boy, and his father was not just a small-town publisher. Harry Koch was also a local railroad baron who used his newspaper to promote the Quanah, Acme & Pacific railways. A director and founding shareholder of the company, Harry sought to build a rail line across Texas to El Paso. He hoped to turn Quanah into "the most important railroad center in northwest Texas and a metropolitan city of first rank." He may not have fulfilled those ambitions, but Harry did build up what one friend called "a handsome pile of dinero."

Harry was not just the financial springboard for the Koch dynasty, he was also its wellspring of far-right politics. Harry editorialized against fiat money, demanded hangings for "habitual criminals" and blasted Social Security as inviting sloth. At the depths of the Depression, he demanded that elected officials in Washington should stop trying to fix the economy: "Business," he wrote, "has always found a way to overcome various recessions."

In the company's telling, young Fred was an innovator whose inventions helped revolutionize the oil industry. But there is much more to this story. In its early days, refining oil was a dirty and wasteful practice. But around 1920, Universal Oil Products introduced a clean and hugely profitable way to "crack" heavy crude, breaking it down under heat and heavy pressure to boost gasoline yields. In 1925, Fred, who earned a degree in chemical engineering from MIT, partnered with a former Universal engineer named Lewis Winkler and designed a near carbon copy of the Universal cracking apparatus – making only tiny, unpatentable tweaks. Relying on family connections, Fred soon landed his first client – an Oklahoma refinery owned by his maternal uncle L.B. Simmons. In a flash, Winkler-Koch Engineering Co. had contracts to install its knockoff cracking equipment all over the heartland, undercutting Universal by charging a one-time fee rather than ongoing royalties.

It was a boom business. That is, until Universal sued in 1929, accusing Winkler­Koch of stealing its intellectual property. With his domestic business tied up in court, Fred started looking for partners abroad and was soon doing business in the Soviet Union, where leader Joseph Stalin had just launched his first Five Year Plan. Stalin sought to fund his country's industrialization by selling oil into the lucrative European export market. But the Soviet Union's reserves were notoriously hard to refine. The USSR needed cracking technology, and the Oil Directorate of the Supreme Council of the National Economy took a shining to Winkler-Koch – primarily because Koch's oil-industry competitors were reluctant to do business with totalitarian Communists.

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Outside its London offices, protesters gather. (Photo: P.Wolmuth/REPORT DIGITAL-REA/Re)
Between 1929 and 1931, Winkler-Koch built 15 cracking units for the Soviets. Although Stalin's evil was no secret, it wasn't until Fred visited the Soviet Union, that these dealings seemed to affect his conscience. "I went to the USSR in 1930 and found it a land of hunger, misery and terror," he would later write. Even so, he agreed to give the Soviets the engineering know-how they would need to keep building more.

Back home, Fred was busy building a life of baronial splendor. He met his wife, Mary, the Wellesley-educated daughter of a Kansas City surgeon, on a polo field and soon bought 160 acres across from the Wichita Country Club, where they built a Tudor­style mansion. As chronicled in Sons of Wichita, Daniel Schulman's investigation of the Koch dynasty, the compound was quickly bursting with princes: Frederick arrived in 1933, followed by Charles in 1935 and twins David and Bill in 1940. Fred Koch lorded over his domain. "My mother was afraid of my father," said Bill, as were the four boys, especially first-born Frederick, an artistic kid with a talent for the theater. "Father wanted to make all his boys into men, and Freddie couldn't relate to that regime," Charles recalled. Frederick got shipped East to boarding school and was all but disappeared from Wichita.

With Frederick gone, Charles forged a deep alliance with David, the more athletic and assertive of the young twins. "I was closer with David because he was better at everything," Charles has said.

Fred Koch's legal battle with Universal would drag on for nearly a quarter-century. In 1934, a lower court ruled that Winkler-Koch had infringed on Universal's technology. But that judgment would be vacated, after it came out in 1943 that Universal had bought off one of the judges­ handling the appeal. A year later, the Supreme Court decided that Fred's cracker, by virtue of small technical differences, did not violate the Universal patent. Fred countersued on antitrust grounds, arguing that Universal had wielded patents anti-competitively. He'd win a $1.5 million settlement in 1952.

Around that time, Fred had built a domestic oil empire under a new company eventually called Rock Island Oil & Refining, transporting crude from wellheads to refineries by truck or by pipe. In those later years, Fred also became a major benefactor and board member of the John Birch Society, the rabidly anti-communist organization founded in 1958 by candy magnate and virulent racist Robert Welch. Bircher publications warned that the Red endgame was the creation of the "Negro Soviet­ Republic" in the Deep South. In his own writing, Fred described integration as a Red plot to "enslave both the white and black man."

Like his father, Charles Koch attended MIT. After he graduated in 1959 with two master's degrees in engineering, his father issued an ultimatum: Come back to Wichita or I'll sell the business. "Papa laid it on the line," recalled David. So Charles returned home, immersing himself in his father's world – not simply joining the John Birch Society, but also opening a Bircher bookstore. The Birchers had high hopes for young Charles. As Koch family friend Robert Love wrote in a letter to Welch: "Charles Koch can, if he desires, finance a large operation, however, he must continually be brought along."

But Charles was already falling under the sway of a charismatic radio personality named Robert LeFevre, founder of the Freedom School, a whites-only­ libertarian boot camp in the foothills above Colorado Springs, Colorado. LeFevre preached a form of anarchic capitalism in which the individual should be freed from almost all government power. Charles soon had to make a choice. While the Birchers supported the Vietnam War, his new guru was a pacifist who equated militarism with out-of-control state power. LeFevre's stark influence on Koch's thinking is crystallized in a manifesto Charles wrote for the Libertarian Review in the 1970s, recently unearthed by Schulman, titled "The Business Community: Resisting Regulation." Charles lays out principles that gird today's Tea Party movement. Referring to regulation as "totalitarian," the 41-year-old Charles claimed business leaders had been "hoodwinked" by the notion that regulation is "in the public interest." He advocated the "barest possible obedience" to regulation and implored, "Do not cooperate voluntarily, instead, resist whenever and to whatever extent you legally can in the name of justice."

After his father died in 1967, Charles, now in command of the family business, renamed it Koch Industries. It had grown into one of the 10 largest privately owned firms in the country, buying and selling some 80 million barrels of oil a year and operating 3,000 miles of pipeline. A black-diamond skier and white-water kayaker, Charles ran the business with an adrenaline junkie's aggressiveness. The company would build pipelines to promising oil fields without a contract from the producers and park tanker trucks beside wildcatters' wells, waiting for the first drops of crude to flow. "Our willingness to move quickly, absorb more risk," Charles would write, "enabled us to become the leading crude-oil­gathering company."

Charles also reconnected with one of his father's earliest insights: There's big money in dirty oil. In the late 1950s, Fred Koch had bought a minority stake in a Minnesota refinery that processed heavy Canadian crude. "We could run the lousiest crude in the world," said his business partner J. Howard Marshall II – the future Mr. Anna Nicole Smith. Sensing an opportunity for huge profits, Charles struck a deal to convert Marshall's ownership stake in the refinery into stock in Koch Industries. Suddenly the majority owner, the company soon bought the rest of the refinery outright.

Almost from the beginning, Koch Industries' risk-taking crossed over into recklessness. The OPEC oil embargo hit the company hard. Koch had made a deal giving the company the right to buy a large share of Qatar's export crude. At the time, Koch owned five supertankers and had chartered many others. When the embargo hit, Koch had upward of half a billion dollars in exposure to tankers and couldn't deliver OPEC oil to the U.S. market, creating what Charles has called "large losses." Soon, Koch Industries was caught overcharging American customers. The Ford administration in the summer of 1974 compelled Koch to pay out more than $20 million in rebates and future price reductions.

Koch Industries' manipulations were about to get more audacious. In the late 1970s, the federal government parceled out exploration tracts, using a lottery in which anyone could score a 10-year lease at just $1 an acre – a game of chance that gave wildcat prospectors the same shot as the biggest players. Koch didn't like these odds, so it enlisted scores of frontmen to bid on its behalf. In the event they won the lottery, they would turn over their leases to the company. In 1980, Koch Industries pleaded guilty to five felonies in federal court, including conspiracy to commit fraud.

koch family
The Koch family, mid-1950s. (Photo: Wichita State University Libraries)
With Republicans and Democrats united in regulating the oil business, Charles had begun throwing his wealth behind the upstart Libertarian Party, seeking to transform it into a viable third party. Over the years, he would spend millions propping up a league of affiliated think tanks and front groups – a network of Libertarians that became known as the "Kochtopus."

Charles even convinced David to stand as the Libertarian Party's vice-presidential candidate in 1980 – a clever maneuver that allowed David to lavish unlimited money on his own ticket. The Koch-funded 1980 platform was nakedly in the brothers' self-interest – slashing federal regulatory agencies, offering a 50 percent tax break to top earners, ending the "cruel and unfair" estate tax and abolishing a $16 billion "windfall profits" tax on the oil industry. The words of Libertarian presidential candidate Ed Clark's convention speech in Los Angeles ring across the decades: "We're sick of taxes," he declared. "We're ready to have a very big tea party." In a very real sense, the modern Republican Party was on the ballot that year – and it was running against Ronald Reagan.

Charles' management style and infatuation with far-right politics were endangering his grip on the company. Bill believed his brothers' political spending was bad for business. "Pretty soon, we would get the reputation that the company and the Kochs were crazy," he said.

In late 1980, with Frederick's backing, Bill launched an unsuccessful battle for control of Koch Industries, aiming to take the company public. Three years later, Charles and David bought out their brothers for $1.1 billion. But the speed with which Koch Industries paid off the buyout debt left Bill convinced, but never quite able to prove, he'd been defrauded. He would spend the next 18 years suing his brothers, calling them "the biggest crooks in the oil industry."

Bill also shared these concerns with the federal government. Thanks in part to his efforts, in 1989 a Senate committee investigating Koch business with Native Americans would describe Koch Oil tactics as "grand larceny." In the late 1980s, Koch was the largest purchaser of oil from American tribes. Senate investigators suspected the company was making off with more crude from tribal oil fields than it measured and paid for. They set up a sting, sending an FBI agent to coordinate stakeouts of eight remote leases. Six of them were Koch operations, and the agents reported "oil theft" at all of them.

One of Koch's gaugers would refer to this as "volume enhancement." But in sworn testimony before a Texas jury, Phillip Dubose, a former Koch pipeline manager, offered a more succinct definition: "stealing." The Senate committee concluded that over the course of three years Koch "pilfered" $31 million in Native oil; in 1988, the value of that stolen oil accounted for nearly a quarter of the company's crude-oil profits. "I don't know how the company could have figures like that," the FBI agent testified, "and not have top management know that theft was going on." In his own testimony, Charles offered that taking oil readings "is a very uncertain art" and that his employees "aren't rocket scientists." Koch's top lawyer would later paint the company as a victim of Senate "McCarthyism."

By this time, the Kochs had soured on the Libertarian Party, concluding that control of a small party would never give them the muscle they sought in the nation's capital. Now they would spend millions in efforts to influence – and ultimately take over – the GOP. The work began close to home; the Kochs had become dedicated patrons of Sen. Bob Dole of Kansas, who ran interference for Koch Industries in Washington. On the Senate floor in March 1990, Dole gloatingly cautioned against a "rush to judgment" against Koch, citing "very real concerns about some of the evidence on which the special committee was basing its findings." A grand jury investigated the claims but disbanded in 1992, without issuing indictments.

Arizona Sen. Dennis DeConcini was "surprised and disappointed" at the decision to drop the case. "Our investigation was some of the finest work the Senate has ever done," he said. "There was an overwhelming case against Koch." But Koch did not avoid all punishment. Under the False Claims Act, which allows private citizens to file lawsuits on behalf of the government, Bill sued the company, accusing it of defrauding the feds of royalty income on its "volume­enhanced" purchases of Native oil. A jury concluded Koch had submitted more than 24,000 false claims, exposing Koch to some $214 million in penalties. Koch later settled, paying $25 million.

Self­interest continued to define Koch Industries' adventures in public policy. In the early 1990s, in a high-profile initiative of the first-term Clinton White House, the administration was pushing for a levy on the heat content of fuels. Known as the BTU tax, it was the earliest attempt by the federal government to recoup damages from climate polluters. But Koch Industries could not stand losing its most valuable subsidy: the public policy that allowed it to treat the atmosphere as an open sewer. Richard Fink, head of Koch Company's Public Sector and the longtime mastermind of the Koch brothers' political empire, confessed to The Wichita Eagle in 1994 that Koch could not compete if it actually had to pay for the damage it did to the environment: "Our belief is that the tax, over time, may have destroyed our business."

To fight this threat, the Kochs funded a "grassroots" uprising – one that foreshadowed the emergence, decades later, of the Tea Party. The effort was run through Citizens for a Sound Economy, to which the brothers had spent a decade giving nearly $8 million to create what David Koch called "a sales force" to communicate the brothers' political agenda through town hall meetings and anti-tax rallies designed to look like spontaneous demonstrations. In 1994, David Koch bragged that CSE's campaign "played a key role in defeating the administration's plans for a huge and cumbersome BTU tax."

Despite the company's increasingly sophisticated political and public-relations operations, Charles' philosophy of regulatory resistance was about to bite Koch Industries – in the form of record civil and criminal financial penalties imposed by the Environmental Protection Agency.

Koch entered the 1990s on a pipeline-buying spree. By 1994, its network measured 37,000 miles. According to sworn testimony from former Koch employees, the company operated its pipelines with almost complete disregard for maintenance. As Koch employees understood it, this was in keeping with their CEO's trademarked business philosophy, Market­Based Management.

For Charles, MBM – first communicated to employees in 1991 – was an attempt to distill the business practices that had grown Koch into one of the largest oil businesses in the world. To incentivize workers, Koch gives employees bonuses that correlate to the value they create for the company. "Salary is viewed only as an advance on compensation for value," Koch wrote, "and compensation has an unlimited upside."

To prevent the stagnation that can often bog down big enterprises, Koch was also determined to incentivize risk-taking. Under MBM, Koch Industries books opportunity costs – "profits foregone from a missed opportunity" – as though they were actual losses on the balance sheet. Koch employees who play it safe, in other words, can't strike it rich.

On paper, MBM sounds innovative and exciting. But in Koch's hyperaggressive corporate culture, it contributed to a series of environmental disasters. Applying MBM to pipeline maintenance, Koch employees calculated that the opportunity cost of shutting down equipment to ensure its safety was greater than the profit potential of pushing aging pipe to its limits.

The fact that preventive pipeline maintenance is required by law didn't always seem to register. Dubose, a 26-year Koch veteran who oversaw pipeline areas in Louisiana, would testify about the company's lax attitude toward maintenance. "It was a question of money. It would take away from our profit margin." The testimony of another pipeline manager would echo that of Dubose: "Basically, the philosophy was 'If it ain't broke, don't work on it.'"

When small spills occurred, Dubose testified, the company would cover them up. He recalled incidents in which the company would use the churn of a tugboat's engine to break up waterborne spills and "just kind of wash that thing on down, down the river." On land, Dubose said, "They might pump it [the leaked oil] off into a drum, then take a shovel and just turn the earth over." When larger spills were reported to authorities, the volume of the discharges was habitually low-balled, according to Dubose.

Managers pressured employees to falsify pipeline-maintenance records filed with federal authorities; in a sworn affidavit, pipeline worker Bobby Conner recalled arguments with his manager over Conner's refusal to file false reports: "He would always respond with anger," Conner said, "and tell me that I did not know how to be a Koch employee." Conner was fired and later settled a wrongful-termination suit with Koch Gateway Pipeline. Dubose testified that Charles was not in the dark about the company's operations. "He was in complete control," Dubose said. "He was the one that was line-driving this Market-Based Management at meetings."

Before the worst spill from this time, Koch employees had raised concerns about the integrity of a 1940s-era pipeline in South Texas. But the company not only kept the line in service, it increased the pressure to move more volume. When a valve snapped shut in 1994, the brittle pipeline exploded. More than 90,000 gallons of crude spewed into Gum Hollow Creek, fouling surrounding marshlands and both Nueces and Corpus Christi bays with a 12-mile oil slick.

By 1995, the EPA had seen enough. It sued Koch for gross violations of the Clean Water Act. From 1988 through 1996, the company's pipelines spilled 11.6 million gallons of crude and petroleum products. Internal Koch records showed that its pipelines were in such poor condition that it would require $98 million in repairs to bring them up to industry standard.

Ultimately, state and federal agencies forced Koch to pay a $30 million civil penalty – then the largest in the history of U.S. environmental law – for 312 spills across six states. Carol Browner, the former EPA administrator, said of Koch, "They simply did not believe the law applied to them." This was not just partisan rancor. Texas Attorney General John Cornyn, the future Republican senator, had joined the EPA in bringing suit against Koch. "This settlement and penalty warn polluters that they cannot treat oil spills simply as the cost of doing business," Cornyn said. (The Kochs seem to have no hard feelings toward their one-time tormentor; a lobbyist for Koch was the number-two bundler for Cornyn's primary campaign this year.)

Koch wasn't just cutting corners on its pipelines. It was also violating federal environmental law in other corners of the empire. Through much of the 1990s at its Pine Bend refinery in Minnesota, Koch spilled up to 600,000 gallons of jet fuel into wetlands near the Mississippi River. Indeed, the company was treating the Mississippi as a sewer, illegally dumping ammonia-laced wastewater into the river – even increasing its discharges on weekends when it knew it wasn't being monitored. Koch Petroleum Group eventually pleaded guilty to "negligent discharge of a harmful quantity of oil" and "negligent violation of the Clean Water Act," was ordered to pay a $6 million fine and $2 million in remediation costs, and received three years' probation. This facility had already been declared a Superfund site in 1984.

In 2000, Koch was hit with a 97-count indictment over claims it violated the Clean Air Act by venting massive quantities of benzene at a refinery in Corpus Christi – and then attempted to cover it up. According to the indictment, Koch filed documents with Texas regulators indicating releases of just 0.61 metric tons of benzene for 1995 – one-tenth of what was allowed under the law. But the government alleged that Koch had been informed its true emissions that year measured 91 metric tons, or 15 times the legal limit.

koch brothers
Charles Koch (Photo: Larry W. Smith / Polaris)
By the time the case came to trial, however, George W. Bush was in office and the indictment had been significantly pared down – Koch faced charges on only seven counts. The Justice Department settled in what many perceived to be a sweetheart deal, and Koch pleaded guilty to a single felony count for covering up the fact that it had disconnected a key pollution-control device and did not measure the resulting benzene emissions – receiving five years' probation. Despite skirting stiffer criminal prosecution, Koch was handed $20 million in fines and reparations – another historic judgment.

On the day before Danielle Smalley was to leave for college, she and her friend Jason Stone were hanging out in her family's mobile home. Seventeen years old, with long chestnut hair, Danielle began to feel nauseated. "Dad," she said, "we smell gas." It was 3:45 in the afternoon on August 24th, 1996, near Lively, Texas, some 50 miles southeast of Dallas. The Smalleys were too poor to own a telephone. So the teens jumped into her dad's 1964 Chevy pickup to alert the authorities. As they drove away, the truck stalled where the driveway crossed a dry creek bed. Danielle cranked the ignition, and a fireball engulfed the truck. "You see two children burned to death in front of you – you never forget that," Danielle's father, Danny, would later tell reporters.

Unknown to the Smalleys, a decrepit Koch pipeline carrying liquid butane – literally, lighter fluid – ran through their subdivision. It had ruptured, filling the creek bed with vapor, and the spark from the pickup's ignition had set off a bomb. Federal investigators documented both "severe corrosion" and "mechanical damage" in the pipeline. A National Transportation Safety Board report would cite the "failure of Koch Pipeline Company LP to adequately protect its pipeline from corrosion."

Installed in the early Eighties, the pipeline had been out of commission for three years. When Koch decided to start it up again in 1995, a water-pressure test had blown the pipe open. An inspection of just a few dozen miles of pipe near the Smal­ley home found 538 corrosion defects. The industry's term of art for a pipeline in this condition is Swiss cheese, according to the testimony of an expert witness – "essentially the pipeline is gone."

Koch repaired only 80 of the defects – enough to allow the pipeline to withstand another pressure check – and began running explosive fluid down the line at high pressure in January 1996. A month later, employees discovered that a key anti­corrosion system had malfunctioned, but it was never fixed. Charles Koch had made it clear to managers that they were expected to slash costs and boost profits. In a sternly worded memo that April, Charles had ordered his top managers to cut expenditures by 10 percent "through the elimination of waste (I'm sure there is much more waste than that)" in order to increase pre-tax earnings by $550 million a year.

The Smalley trial underscored something Bill Koch had said about the way his brothers ran the company: "Koch Industries has a philosophy that profits are above everything else." A former Koch manager, Kenoth Whitstine, testified to incidents in which Koch Industries placed profits over public safety. As one supervisor had told him, regulatory fines "usually didn't amount to much" and, besides, the company had "a stable full of lawyers in Wichita that handled those situations." When Whitstine told another manager he was concerned that unsafe pipelines could cause a deadly accident, this manager said that it was more profitable for the company to risk litigation than to repair faulty equipment. The company could "pay off a lawsuit from an incident and still be money ahead," he said, describing the principles of MBM to a T.

At trial, Danny Smalley asked for a judgment large enough to make the billionaires feel pain: "Let Koch take their child out there and put their children on the pipeline, open it up and let one of them die," he told the jury. "And then tell me what that's worth." The jury was emphatic, awarding Smalley $296 million – then the largest wrongful-death judgment in American legal history. He later settled with Koch for an undisclosed sum and now runs a pipeline-safety foundation in his daughter's name. He declined to comment for this story. "It upsets him too much," says an associate.

The official Koch line is that scandals that caused the company millions in fines, judgments and penalties prompted a change in Charles' attitude of regulatory resistance. In his 2007 book, The Science of Success, he begrudgingly acknowledges his company's recklessness. "While business was becoming increasingly regulated," he reflects, "we kept thinking and acting as if we lived in a pure market economy. The reality was far different."

Charles has since committed Koch Industries to obeying federal regulations. "Even when faced with laws we think are counterproductive," he writes, "we must first comply." Underscoring just how out of bounds Koch had ventured in its corporate culture, Charles admits that "it required a monumental undertaking to integrate compliance into every aspect of the company." In 2000, Koch Petroleum Group entered into an agreement with the EPA and the Justice Department to spend $80 million at three refineries to bring them into compliance with the Clean Air Act. After hitting Koch with a $4.5 million penalty, the EPA granted the company a "clean slate" for certain past violations.

Then George W. Bush entered the White House in 2001, his campaign fattened with Koch money. Charles Koch may decry cronyism as "nothing more than welfare for the rich and powerful," but he put his company to work, hand in glove, with the Bush White House. Correspondence, contacts and visits among Koch Industries representatives and the Bush White House generated nearly 20,000 pages of records, according to a Rolling Stone FOIA request of the George W. Bush Presidential Library. In 2007, the administration installed a fiercely anti-regulatory academic, Susan Dudley, who hailed from the Koch-funded Mercatus Center at George Mason University, as its top regulatory official.

Today, Koch points to awards it has won for safety and environmental excellence. "Koch companies have a strong record of compliance," Holden, Koch's top lawyer, tells Rolling Stone. "In the distant past, when we failed to meet these standards, we took steps to ensure that we were building a culture of 10,000 percent compliance, with 100 percent of our employees complying 100 percent." To reduce its liability, Koch has also unwound its pipeline business, from 37,000 miles in the late 1990s to about 4,000 miles. Of the much smaller operation, he adds, "Koch's pipeline practice and operations today are the best in the industry."

But even as compliance began to improve among its industrial operations, the company aggressively expanded its trading activities into the Wild West frontier of risky financial instruments. In 2000, the Commodity Futures Modernization Act had exempted many of these products from regulation, and Koch Industries was among the key players shaping that law. Koch joined up with Enron, BP, Mobil and J. Aron – a division of Goldman Sachs then run by Lloyd Blankfein – in a collaboration called the Energy Group. This corporate alliance fought to prohibit the federal government from policing oil and gas derivatives. "The importance of derivatives for the Energy Group companies . . . cannot be overestimated," the group's lawyer wrote to the Commodity Futures Trading Commission in 1998. "The success of this business can be completely undermined by . . . a costly regulatory regime that has no place in the energy industry."

Koch had long specialized in "over-the-counter" or OTC trades – private, unregulated contracts not disclosed on any centralized exchange. In its own letter to the CFTC, Koch identified itself as "a major participant in the OTC derivatives market," adding that the company not only offered "risk-management tools for its customers" but also traded "for its own account." Making the case for what would be known as the Enron Loophole, Koch argued that any big firm's desire to "maintain a good reputation" would prevent "widespread abuses in the OTC derivatives market," a darkly hilarious claim, given what would become not only of Enron, but also Bear Stearns, Lehman Brothers and AIG.

The Enron Loophole became law in December 2000 – pushed along by Texas Sen. Phil Gramm, giving the Energy Group exactly what it wanted. "It completely exempted energy futures from regulation," says Michael Greenberger, a former director of trading and markets at the CFTC. "It wasn't a matter of regulators not enforcing manipulation or excessive speculation limits – this market wasn't covered at all. By law."

Before its spectacular collapse, Enron would use this loophole in 2001 to help engineer an energy crisis in California, artificially constraining the supply of natural gas and power generation, causing price spikes and rolling blackouts. This blatant and criminal market manipulation has become part of the legend of Enron. But Koch was caught up in the debacle. The CFTC would charge that a partnership between Koch and the utility Entergy had, at the height of the California crisis, reported fake natural-gas trades to reporting firms and also "knowingly reported false prices and/or volumes" on real trades.

One of 10 companies punished for such schemes, Entergy-Koch avoided prosecution by paying a $3 million fine as part of a 2004 settlement with the CFTC, in which it did not admit guilt to the commission's charges but is barred from maintaining its innocence.

koch brothers
David Koch (Photo: Alexis C. Glenn /Landov)
Trading, which had long been peripheral to the company's core businesses, soon took center stage. In 2002, the company launched a subsidiary, Koch Supply & Trading. KS&T got off to a rocky start. "A series of bad trades," writes a Koch insider, "boiled over in early 2004 when a large 'sure bet' crude-oil trade went south, resulting in a quick, multimillion loss." But Koch traders quickly adjusted to the reality that energy markets were no longer ruled just by supply and demand – but by rich speculators trying to game the market. Revamping its strategy, Koch Industries soon began bragging of record profits. From 2003 to 2012, KS&T trading volumes exploded – up 450 percent. By 2009, KS&T ranked among the world's top-five oil traders, and by 2011, the company billed itself as "one of the leading quantitative traders" – though Holden now says it's no longer in this business.

Since Koch Industries aggressively expanded into high finance, the net worth of each brother has also exploded – from roughly $4 billion in 2002 to more than $40 billion today. In that period, the company embarked on a corporate buying spree that has taken it well beyond petroleum. In 2005, Koch purchased Georgia Pacific for $21 billion, giving the company a familiar, expansive grip on the industrial web that transforms Southern pine into consumer goods – from plywood sold at Home Depot to brand-name products like Dixie Cups and Angel Soft toilet paper. In 2013, Koch leapt into high technology with the $7 billion acquisition of Molex, a manufacturer of more than 100,000 electronics components and a top supplier to smartphone makers, including Apple.

Koch Supply & Trading makes money both from physical trades that move oil and commodities across oceans as well as in "paper" trades involving nothing more than high-stakes bets and cash. In paper trading, Koch's products extend far beyond simple oil futures. Koch pioneered, for sale to hedge funds, "volatility swaps," in which the actual price of crude is irrelevant and what matters is only the "magnitude of daily fluctuations in prices." Steve Mawer, until recently the president of KS&T, described parts of his trading operation as "black-box stuff."

Like a casino that bets at its own craps table, Koch engages in "proprietary trading" – speculating for the company's own bottom line. "We're like a hedge fund and a dealer at the same time," bragged Ilia Bouchouev, head of Koch's derivatives trading in 2004. "We can both make markets and speculate." The company's many tentacles in the physical oil business give Koch rich insight into market conditions and disruptions that can inform its speculative bets. When oil prices spiked to record heights in 2008, Koch was a major player in the speculative markets, according to documents leaked by Vermont Sen. Bernie Sanders, with trading volumes rivaling Wall Street giants like Citibank. Koch rode a trader-driven frenzy – detached from actual supply and demand – that drove prices above $147 a barrel in July 2008, battering a global economy about to enter a free fall.

Only Koch knows how much money Koch reaped during this price spike. But, as a proxy, consider the $20 million Koch and its subsidiaries spent lobbying Congress in 2008 – before then, its biggest annual lobbying expense had been $5 million – seeking to derail a raft of consumer-protection bills, including the Federal Price Gouging Prevention Act, the Stop Excessive Energy Speculation Act of 2008, the Prevent Unfair Manipulation of Prices Act of 2008 and the Close the Enron Loophole Act.

In comments to the Federal Trade Commission, Koch lobbyists defended the company's right to rack up fantastic profits at the expense of American consumers. "A mere attempt to maximize profits cannot constitute market manipulation," they wrote, adding baldly, "Excessive profits in the face of shortages are desirable."

When the global economy crashed in 2008, so did oil prices. By December, crude was trading more than $100 lower per barrel than it had just months earlier – around $30. At the same time, oil traders anticipated that prices would eventually rebound. Futures contracts for delivery of oil in December 2009 were trading at nearly $55 per barrel. When future delivery is more valuable than present inventory, the market is said to be "in contango." Koch exploited the contango market to the hilt. The company leased nine supertankers and filled them with cut-rate crude and parked them quietly offshore in the Gulf of Mexico, banking virtually risk-free profits by selling contracts for future delivery.

All in, Koch took about 20 million barrels of oil off the market, putting itself in a position to bet on price disruptions the company itself was creating. Thanks to these kinds of trading efforts, Koch could boast in a 2009 review that "the performance of Koch Supply & Trading actually grew stronger last year as the global economy worsened." The cost for those risk-free profits was paid by consumers at the pump. Estimates pegged the cost of the contango trade by Koch and others at up to 40 cents a gallon.

Artificially constraining oil supplies is not the only source of dark, unregulated profit for Koch Industries. In the years after George W. Bush branded Iran a member of the "Axis of Evil," the Koch brothers profited from trade with the state sponsor of terror and reckless would-be nuclear power. For decades, U.S. companies have been forbidden from doing business with the Ayatollahs, but Koch Industries exploited a loophole in 1996 sanctions that made it possible for foreign subsidiaries of U.S. companies to do some business in Iran.

In the ensuing years, according to Bloomberg Markets, the German and Italian arms of Koch-Glitsch, a Koch subsidiary that makes equipment for oil fields and refineries, won lucrative contracts to supply Iran's Zagros plant, the largest methanol plant in the world. And thanks in part to Koch, methanol is now one of Iran's leading non-oil exports. "Every single chance they had to do business with Iran, or anyone else, they did," said Koch whistle-blower George Bentu. Having signed on to work for a company that lists "integrity" as its top value, Bentu added, "You feel totally betrayed. Everything Koch stood for was a lie."

Koch reportedly kept trading with Tehran until 2007 – after the regime was exposed for supplying IEDs to Iraqi insurgents killing U.S. troops. According to lawyer Holden, Koch has since "decided that none of its subsidiaries would engage in trade involving Iran, even where such trade is permissible under U.S. law."

These days, Koch's most disquieting foreign dealings are in Canada, where the company has massive investments in dirty tar sands. The company's 1.1 million acres of leases in northern Alberta contain reserves of economically recoverable oil numbering in the billions of barrels. With these massive leaseholdings, Koch is poised to continue profiting from Canadian crude whether or not the Keystone XL pipeline gains approval, says Andrew Leach, an energy and environmental economist at the business school of the University of Alberta.

Counterintuitively, approval of Keystone XL could actually harm one of Koch's most profitable businesses – its Pine Bend refinery in Minnesota. Because tar-sands crude presently has no easy outlet to the global market, there's a glut of Canadian oil in the midcontinent, and Koch's refinery is a beneficiary of this oversupply; the resulting discount can exceed $20 a barrel compared to conventional crude. If it is ever built, the Keystone XL pipeline will provide a link to Gulf Coast refineries – and thus the global export market, which would erase much of that discount and eat into company profit margins.

Leach says Koch Industries' tar-sands leaseholdings have them hedged against the potential approval of Keystone XL. The pipeline would increase the value of Canadian tar-sands deposits overnight. Koch could then profit handsomely by flipping its leases to more established producers. "Optimizing asset value through trading," Koch literature says of these and other holdings, is a "key" company strategy.

The one truly bad outcome for Koch would be if Keystone XL were to be defeated, as many environmentalists believe it must be. "If the signal that sends is that no new pipelines will be built across the U.S. border for carrying oil-sands product," Leach says, "that's going to have an impact not just on Koch leases, but on everybody's asset value in oil sands." Ironically, what's best for Koch's tar-sands interests is what the Obama administration is currently delivering: "They're actually ahead if Keystone XL gets delayed a while but hangs around as something that still might happen," Leach says.

The Dodd-Frank bill was supposed to put an end to economy­endangering speculation in the $700 trillion global derivatives market. But Koch has managed to defend – and even expand – its turf, trading in largely unregulated derivatives, once dubbed "financial weapons of mass destruction" by billionaire Warren Buffett.

In theory, the Enron Loophole is no longer open – the government now has the power to police manipulation in the market for energy derivatives. But the Obama administration has not yet been able to come up with new rules that actually do so. In 2011, the CFTC mandated "position limits" on derivative trades of oil and other commodities. These would have blocked any single speculator from owning futures contracts representing more than a quarter of the physical market – reducing the danger of manipulation. As part of the International Swaps and Derivatives Association, which also reps many Wall Street giants including Goldman Sachs and JPMorgan Chase, Koch fought these new restrictions. ISDA sued to block the position limits – and won in court in September 2012. Two years later, CFTC is still spinning its wheels on a replacement. Industry traders like Koch are, Greenberger says, "essentially able to operate as though the Enron Loophole were still in effect."

Koch is also reaping the benefits from Dodd-Frank's impacts on Wall Street. The so-called Volcker Rule, implemented at the end of last year, bans investment banks from "proprietary trading" – investing on their own behalf in securities and derivatives. As a result, many Wall Street banks are unloading their commodities-trading units. But Volcker does not apply to nonbank traders like Koch. They're now able to pick up clients who might previously have traded with JPMorgan. In its marketing materials for its trading operations, Koch boasts to potential clients that it can provide "physical and financial market liquidity at times when others pull back." Koch also likely benefits from loopholes that exempt the company from posting collateral for derivatives trades and allow it to continue trading swaps without posting the transactions to a transparent electronic exchange. Though competitors like BP and Cargill have registered with the CFTC as swaps dealers – subjecting their trades to tightened regulation – Koch conspicuously has not. "Koch is compliant with all CFTC regulations, including those relating to swaps dealers," says Holden, the Koch lawyer.

That a massive company with such a troubling record as Koch Industries remains unfettered by financial regulation should strike fear in the heart of anyone with a stake in the health of the American economy. Though Koch has cultivated a reputation as an economically conservative company, it has long flirted with danger. And that it has not suffered a catastrophic loss in the past 15 years would seem to be as much about luck as about skillful management.

The Kochs have brushed up against some of the major debacles of the crisis years. In 2007, as the economy began to teeter, Koch was gearing up to plunge into the market for credit default swaps, even creating an affiliate, Koch Financial Products, for that express purpose. KFP secured a AAA rating from Moody's and reportedly sought to buy up toxic assets at the center of the financial crisis at up to 50-times leverage. Ultimately, Koch Industries survived the experiment without losing its shirt.

More recently, Koch was exposed to the fiasco at MF Global, the disgraced brokerage firm run by former New Jersey Gov. Jon Corzine that improperly dipped into customer accounts to finance reckless bets on European debt. Koch, one of MF Global's top clients, reportedly told trading partners it was switching accounts about a month before the brokerage declared bankruptcy – then the eighth-largest in U.S. history. Koch says the decision to pull its funds from MF Global was made more than a year before. While MF's small-fry clients had to pick at the carcass of Corzine's company to recoup their assets, Koch was already swimming free and clear.

Because it's private, no one outside of Koch Industries knows how much risk Koch is taking – or whether it could conceivably create systemic risk, a concern raised in 2013 by the head of the Futures Industry Association. But this much is for certain: Because of the loopholes in financial-regulatory reform, the next company to put the American economy at risk may not be a Wall Street bank but a trading giant like Koch. In 2012, Gary Gensler, then CFTC chair, railed against the very loopholes Koch appears to be exploiting, raising the specter of AIG. "[AIG] had this massive risk built up in its derivatives just because it called itself an insurance company rather than a bank," Gensler said. When Congress adopted Dodd-Frank, Gensler added, it never intended to exempt financial heavy hitters just because "somebody calls themselves an insurance

In "the science of success," Charles Koch highlights the problems created when property owners "don't benefit from all the value they create and don't bear the full cost from whatever value they destroy." He is particularly concerned about the "tragedy of the commons," in which shared resources are abused because there's no individual accountability. "The biggest problems in society," he writes, "have occurred in those areas thought to be best controlled in common: the atmosphere, bodies of water, air. . . ."

But in the real world, Koch Industries has used its political might to beat back the very market-based mechanisms – including a cap-and-trade market for carbon pollution – needed to create the ownership rights for pollution that Charles says would improve the functioning of capitalism.

In fact, it appears the very essence of the Koch business model is to exploit breakdowns in the free market. Koch has profited precisely by dumping billions of pounds of pollutants into our waters and skies – essentially for free. It racks up enormous profits from speculative trades lacking economic value that drive up costs for consumers and create risks for our economy.

The Koch brothers get richer as the costs of what Koch destroys are foisted on the rest of us – in the form of ill health, foul water and a climate crisis that threatens life as we know it on this planet. Now nearing 80 – owning a large chunk of the Alberta tar sands and using his billions to transform the modern Republican Party into a protection racket for Koch Industries' profits – Charles Koch is not about to see the light. Nor does the CEO of one of America's most toxic firms have any notion of slowing down. He has made it clear that he has no retirement plans: "I'm going to ride my bicycle till I fall off."

Koch Industries Responds to Rolling Stone – And We Answer Back
"Koch Facts" calls our story "dishonest and misleading." A point-by-point rebuttal.

Paul Zimmerman/WireImage; Bo Rader/Wichita Eagle/MCT via Getty Images
David and Charles Koch.
BY TIM DICKINSON | September 29, 2014
Koch Industries has written a lengthy response to our feature story on the company in the latest issue of Rolling Stone. In tweets the company apparently paid to promote, Koch bills this write-up as a "point-by-point response to Rolling Stone writer Tim Dickinson's dishonest and misleading story." The salient feature of Koch's response is that the company does not argue the core facts of our 9,000-word expose. Instead, Koch targets the messenger. Koch's top target here is not even Rolling Stone, but me, Tim Dickinson.

I find it, frankly, amusing that a company that has been convicted of six felonies and numerous misdemeanors; paid out tens of millions of dollars in fines; traded with Iran, and been so reckless in its business practices that two innocent teenagers ended up dead, attempts to impugn my integrity, and on the basis of my association with Mother Jones — where I worked as an editor in the late 1990s and early 2000s, on a team that was twice nominated and once awarded a National Magazine Award for General Excellence.

Koch, in particular, takes umbrage with my reporting practices.

For the record: In the weeks prior to publication, beginning September 4th, Rolling Stone attempted to engage Koch Industries in a robust discussion of the issues raised in our reporting. Rolling Stone requested to interview CEO Charles Koch about his company's philosophy of Market Based Management; Ilia Bouchouev, who heads Koch's derivatives trading operations, about the company's trading practices; and top Koch lawyer Mark Holden about the company's significant legal and regulatory history.

The requests to speak to Charles Koch and Bouchouev were simply ignored. Ultimately, only Holden responded on the record, only via e-mail and only after Holden baselessly insinuated that I had been given an "opposition research" document dump from the liberal activist David Brock. (This is false.) From my perspective as a reporter, Koch Industries is the most hostile and paranoid organization I've ever engaged with — and I've reported on Fox News. In a breach of ethics, Koch has also chosen to publish email correspondence characterizing the content of a telephone conversation that was, by Koch's own insistence, strictly off the record.

In an attempt to negotiate an on-the-record interview, Rolling Stone had sent Holden a series of discussion topics. Holden and the Koch communications team treated these general topics, instead, as though they were specific questions and provided the voluminous responses they have reproduced, inventively, as a Q&A on their website.

These responses were not "ignored," as Koch suggests. In part, they contain useful background information, and they informed my reporting of the story. But in the main, the Koch responses attempt to re-litigate closed cases — incidents where judges, juries, and, in one case, a Senate Select Committee, have already had a final say. They only muddy waters that have been clarified by a considered legal process.

Where Koch attempted to provide additional context, it was frequently hairsplitting and obfuscatory. For example, in the case of the felony conviction at the Corpus Christi refinery, Holden insisted: "the case did not involve any penalty for benzene emissions." However the count that Koch pleaded guilty to April 2001 reads, in part: "defendant KOCH PETROLEUM GROUP, L.P., did knowingly and willfully falsify, conceal and cover up by trick, scheme and device material facts in a matter within the jurisdiction of the Texas Natural Resources Conservation Commission and the United States Environmental Protection agency, to wit... the fact that the defendant had failed to measure the level of benzene entering the aeration basin at the West Plant." [Emphasis added.] Rolling Stone readers are not served by reprinting, in full or in part, what can kindly be called Koch Industries' distortions.

Ironically, it is now Koch that accuses me of having written a "blatantly dishonest and misleading article." But in attempting to make that case, Koch itself continues to distort the record.

The chief "gotcha" point in Koch's write up regards the leak at the refinery it owns in North Pole, Alaska, contributing to the facility's shuttering this year. Koch writes: "He deceptively omits the undisputed facts that the off-site contamination existed long before Koch bought the refinery in 2004, that the contamination was not disclosed to Koch by the prior owner, and that once discovered Koch quickly and voluntarily began providing alternative water to the community."

The clear implication, in Koch's telling, is that the company is not the responsible party for the pollution in North Pole. This precisely contradicts two rulings by a state judge in Alaska, that Koch is solely responsible for the 2.5- by 3-mile plume of the refining solvent sulfolane that has fouled the groundwater for hundreds of residents there.

It is true, as Koch notes, that the refinery's sulfolane leak began under the previous owner. But the sulfolane leak continued under the ownership of Koch's refining subsidiary, Flint Hills, with the company's own documents reportedly estimating that 10,616 gallons of "high sulfolane-laden wastewater" leaked from a faulty sump system at the refinery from 2004, when Koch bought the plant, to 2009.

Koch's attempts to pin the refinery's pollution problem on the previous owner have gone nowhere in court. Contrary to Koch's claim that it took swift action to remediate the problem, the Alaska judge wrote that Koch had been warned of potential groundwater pollution and "failed to heed the advice it was given and failed to conduct a reasonable inquiry into the scope of the sulfolane contamination." The judge ruled that Koch's failure to seek redress from the previous owner within the statute of limitations have made the pollution at North Pole Koch's problem, alone.

Koch also does not mention that it has pressured state regulators to increase the acceptable amount of sulfolane pollution in groundwater — a move that would hugely reduce Koch's cleanup liability.

Koch is correct that there is more to the story at North Pole, but these facts do not weigh in Koch's favor.

Let's now address Koch's bullet-points, in order:

Number One:

Mr. Dickinson makes a number of broad negative claims about Koch's environmental record, but only passing reference to the more than 900 awards for safety, environmental excellence, and community stewardship Koch has received since 2009 alone - information that we provided to Mr. Dickinson. In an article ostensibly about Koch's relationship with regulators, the fact that EPA has repeatedly praised Koch for a productive and collaborative approach is surely relevant to Rolling Stone readers. In addition, he excised our explanation of the long and continuing path to improve and enhance our environmental, health, and safety performance. He also ignored the discussion about our ongoing efforts to ensure we understand and meet the expectations of the EPA and other regulators, our communities, and our shareholders.
Here Koch appears to be criticizing me for not adequately doing their own PR for them. The story clearly remarks on the culture change, circa 2000, that made environmental compliance a focus at Koch Industries and quotes Holden about the company's quest for "10,000 percent" compliance. Given the company's recent pollution woes it seems that Koch is falling far short of that standard.

Number Two:

While he never raised the issue with us, Mr. Dickinson refers to a University of Massachusetts-Amherst report from a radical group that names Koch as an alleged major "polluter" in the United States. Here again he omits key context to mislead readers. As we detailed here in a statement readily available to Mr. Dickinson, that report included virtually every major manufacturer in the United States today, which combined form the lifeblood of the economy and provide good-paying manufacturing jobs to millions of Americans. Moreover, the emissions cited in the report are legal and regulated by the Environmental Protection Agency (EPA). EPA itself notes that Toxic Release Inventory (TRI) information alone does not indicate that the use or release of these chemicals poses a risk. EPA has compiled TRI data for facilities with the same U.S.-based parent company. A parent company is defined as the highest-level company, located in the U.S., which owns at least 50 percent of the voting stock of the manufacturer. These parent companies are ranked by EPA based upon the total volume of production-related waste managed by those facilities. Koch Industries, Inc. is the parent company for the Koch companies. Due to the size and nature of our U.S.-based manufacturing presence, Koch has been among the top 10 parent companies for the last three years. More than 100 Koch company sites submit TRI reports—significantly more than the other top-10 parent companies, which have between 1 and 65 sites reporting.
Koch here characterizes The Political Economy Research Institute at the University of Massachusetts, Amherst as "a radical group." The only radical thing that PERI does is compile facility-by-facility pollution data published by the Environmental Protection Agency and add it up. Based on a simple ranking of this federal data, Koch is, factually, one of America's top air, water, and climate polluters.

Number Three:

The article states that Koch made the difficult decision to convert a Flint Hills Resources refinery in North Pole, Alaska to a terminal, after "the discovery that a toxic solvent had leaked from the facility, fouling the town's groundwater." Mr. Dickinson ignored all the information we provide him on this topic. He deceptively omits the undisputed facts that the off-site contamination existed long before Koch bought the refinery in 2004, that the contamination was not disclosed to Koch by the prior owner, and that once discovered, Koch quickly and voluntarily began providing alternative water to the community. He also ignores that Alaskan public officials like Senator Mark Begich and Governor Sean Parnell empathized with Flint Hills' difficult decision and that Flint Hills has worked to retain as many of the affected employees as possible at other Koch companies.
This is the North Pole discussion, see above.

Number Four:

The article falsely claims that Koch's petroleum coke business at its KCBX North facility in Chicago is endangering the "health of South Side residents," despite the fact that we provided Mr. Dickinson the Congressional Research Service research, findings from the city of Chicago that "there are no known illnesses or health effects associated with pet coke dust," and EPA's own conclusion that "petroleum coke itself has a low level of toxicity and that there is no evidence of carcinogenicity." Nor does Mr. Dickinson note that KCBX was honored with the Good Neighbor award from the Southeast Environmental Task Force in 2001 and again in 2005.
Here Koch disputes that petcoke poses a health risk. The characterization of harmful health effects in the piece comes directly from the Notice of Violation EPA sent Koch in June, citing micro-particulate air pollution emanating from Koch's Chicago terminals — which sit near a little league baseball field and urban homes. It reads, in part, "Environmental Impact of Violations… • irritation of the airways, coughing, and difficulty breathing; • decreased lung function; • aggravated asthma; • chronic bronchitis; • irregular heartbeat; • nonfatal heart attacks; and • premature death in people with heart or lung disease."

Number Five:

Mr. Dickinson rehashes regulatory and legal issues from the 1970s and 1980s regarding Nixon Administration price controls and oil lotteries that have long since been settled. In some instances, Mr. Dickinson fails to note the responses we provided him.
Koch disputes nothing here. Their unpublished responses were not quote worthy.

Number Six:

The article falsely declares that Koch "stole" oil from American Indian lands in the 1970s and 1980s. In fact, no oil was "stolen" and there was no finding of theft of any kind in this case. We detailed this to Mr. Dickinson before publication and provided him with a statement and substantiation explaining the issue. He ignores all of it.
This regards Koch's purchases of Native oil. Koch mischaracterizes and misquotes the piece here. In describing accusations of theft, the piece quotes directly either from the government record — including conclusions of a Senate Select Committee investigation — or sworn court testimony of a former Koch employee. The piece goes on to detail that Koch was never prosecuted criminally, but that a related civil case produced a large judgement against the company. This description is consistent with the factual record and with Koch's prepublication remarks to Rolling Stone on the matter.

Number Seven:

In discussing Koch facilities in Minnesota, Mr. Dickinson accuses us of "treating the Mississippi [River] as a sewer" during the 1990s. This is inaccurate and one-sided. In fact, between 1998 and 2001, Koch Petroleum Group entered into a series of agreements with the Minnesota Pollution Control Agency and EPA to resolve issues at Koch's Rosemount, Minnesota refinery, taking full responsibility for past discharges from an aviation fuel tank leak, part of which reached a wetland adjacent to the Mississippi River, though not the river itself. We pointed Mr. Dickinson to the fact that our Minnesota refinery is recognized for its exemplary environmental performance, and its cooperative and productive relationships with regulators, environmental groups, and neighbors. His story omits these facts.
Here Koch is discussing its pollution record in Minnesota, although it seems fuzzy on the facts. The description of Koch using the Mississippi as a sewer comes not from the spill of aviation fuel in marshlands near the river, but from unmonitored wastewater dumps into the river. As recalled by the EPA: "In a separate offense, Koch dumped a million gallons of wastewater with high ammonia content on the ground between November 1996 and March 1997 and also increased its flow of wastewater into the Mississippi River on weekends when Koch did not monitor its discharges."

Number Eight:

Mr. Dickinson says Koch was convicted of a "felony count for covering up the fact that it had disconnected a key pollution-control device" at a Corpus Christi facility. In fact, in 1995 an individual Koch employee filed a false report in this case, was terminated for doing so, and Koch voluntarily disclosed the incident to the Texas environmental regulatory agency. We provided Mr. Dickinson with this information in detail, including information demonstrating that someone altered evidence during the grand jury process. The official Texas state government meeting record showed when Koch first learned of the issues in 1995, our employees openly and directly told the state regulator that the refinery was out of compliance and advised they would come back to the regulator when they better understood all the details. In fact, later government records show that our employees did just as they promised. The meeting record that was used by the federal grand jury had that key exculpatory information excised. Ultimately, the 97-count indictment Mr. Dickinson mentions was dismissed after the government's case cratered when Koch finally had a chance to challenge the evidence in front of the trial judge. As part of a settlement, Koch pled guilty to the incident stemming from the event we voluntarily disclosed back in 1995. The government required the four individuals who were wrongly accused to waive their rights to sue for malicious prosecution as part of this settlement. We gave Mr. Dickinson all this information and provided him copies of the documents, which are in our responses above. He intentionally ignores all of this to repeat the same dishonest and misleading story that many others have written about over the past 13 years.
This bullet point disputes our accurate characterization of what began, in the Clinton administration, as a 97-count criminal indictment over pollution controls at the Corpus Christi refinery, and concluded, in the W. Bush years, with a single felony conviction, as discussed in detail earlier. There is nothing dishonest or misleading about our reporting here.

Number Nine:

The article shamefully uses the circumstances of a tragic 1997 fatal accident—the only such accident of its kind in the history of Koch Pipeline Company—in a cowardly effort to smear Koch as more concerned with a "10 percent" increase in profit than with human lives. [Ed Note: The accident occurred in 1996.] As with so many other issues, Mr. Dickinson omits our point of view, even though we have publicly addressed the accident on multiple occasions since it happened–the only such accident of its kind in the history of Koch Pipeline Company) and have always accepted responsibility for this tragedy.
Koch here complains that Rolling Stone omitted their response to the Danielle Smalley case. But Koch provided Rolling Stone with no comment on Smalley's death. It was listed along with the other topics the company treated as questions and responded to vigorously. If there was any error of omission, here, it was Koch's.

Number 10:

Mr. Dickinson quotes former EPA administrator Carol Browner negatively on Koch, and seems to suggest that Koch's 2000 Clean Air agreement with the EPA is evidence of misdeeds. In fact, Ms. Browner described that very agreement as "innovative and comprehensive" and praised the "unprecedented cooperation" of Koch in stepping forward ahead of its industry peers. The agency also deemed the agreement as a "major step in fulfilling the promise of the Clean Air Act."
Koch misleadingly conflates two incidents here. The negative Carol Browner quote — "They simply did not believe the law applied to them." — stems from the case involving Koch's extensive pipeline spills. It is accurate. The story clearly places the 2000 Clean Air agreement with the EPA in the context of Charles Koch's come-to-Jesus moment on compliance. The evidence of past misdeeds, however, is clear in EPA's concurrent imposition of a $4.5 million fine with this settlement.

Number 11:

Mr. Dickinson never raised with us many of the issues in Koch's financial and trading operations that he later addresses in the article, and on other issues he again fails to note the responses we provided. In discussing a legal settlement with Commodity Futures Trading Commission (CFTC) over energy trading, for instance, Mr. Dickinson fails to note that CFTC praised Koch for full cooperation with its investigation (and also omits that it was a 50-50 joint venture between Entergy and Koch Trading). This was an industry-wide effort by CFTC, Mr. Dickinson fails to mention, and not focused solely on Entergy-Koch Trading (EKT). And in a lengthy discussion of futures trading issues, Mr. Dickinson appears to rely heavily on an article published by left-wing activists in the spring of 2011, despite the fact that the article and its author, Lee Fang, were thoroughly and utterly debunked at the time by multiple independent sources.
Here Koch complains that I did not raise questions about their financial and trading operations. This is not true. I requested multiple times to speak with the head of Koch's derivatives trading operations. Those requests were ignored. Specific questions about Koch's trading practices and profit and loss were stonewalled. For example:

Q: Can you provide a rough breakdown of Koch profits last year from trading, refining, and other operations?

RESPONSE: We are privately held and don't disclose this information.

Q: How much exposure did subsidiary Koch Financial have to credit default swaps at the time of Lehman Brothers bankruptcy?

RESPONSE: We don't disclose this type of information.

To other Koch points here: I clearly acknowledge Koch's partnership with Entergy, so I do not understand their objection here. The fact that other industry players were also punished for wrongdoing at the same is not mitigating. "Everyone else was doing it" is a child's defense.

Koch also evidently has deep issues with Lee Fang, a fine reporter in my estimation, that it should work out with him.

Number 12:

Despite providing Mr. Dickinson with links to the many mainstream media pieces that mocked, discredited, and criticized a Bloomberg Markets article on a Koch foreign subsidiary's lawful business in Iran, he fails to include any of that information. Koch directly addressed the rank falsehoods emerging from the story multiple times, a repetition made necessary by political partisans and agenda-driven activists who spread known falsehoods in much the same way Mr. Dickinson does here. If he would have bothered to include our statement or link to our responses or other media coverage, he would have seen key information that impeaches the credibility of Bloomberg Market's key source for his story – a former European employee who praised the company previously and never raised any issue about trade with Iran before he left. In any event, the fact that last decade a European subsidiary did some limited business in Iran is irrelevant since, as we have explained multiple times, that was permissible under the law at that time. We ultimately made a voluntary decision not to do business in Iran even when U.S. law allowed it. If Mr. Dickinson had any desire to be open and honest with his readers, he might have noted that many companies continued to do business in Iran long after Koch ceased doing so voluntarily, and that some still do business there.
This details Koch's foreign subsidiary trading with Iran. If you read closely, Koch does not dispute any of the facts as we reported them. We noted that the trade was not illegal, and included Koch's declaration that it has ceased such trade. Koch refused to answer follow up questions about its trade with a member of the "Axis of Evil," including: "Why did any subsidiary business of Koch — regardless of the legality — engage in trade with Iran?"

Number 13:

Mr. Dickinson's discussion of the Keystone XL pipeline is inaccurate and contradictory. He implies that Koch stands to gain from approval of the pipeline—a claim refuted here and more than a dozen times since such as here, here, here, and here. Yet in the next breath Mr. Dickinson admits that the approval of Keystone XL would actually "eat into [Koch] profit margins." He then offers a third distinct claim, that uncertainty over whether Keystone XL will be approved benefits Koch.
Regarding Keystone XL, we quoted a noted economics professor in Alberta who observed that Koch has conflicting financial interests when it comes to the completion of the pipeline — interests that, on balance, might be best served by a continuation of the status quo. Koch calls this inaccurate, but does not explain why. It refused to answer questions about its oil sands lease-holdings in Canada.: "RESPONSE: We don't disclose our business plans or strategies."

Number 14:

Other bizarre internal contradictions emerge throughout the article. For instance, Mr. Dickinson first implies Koch was guilty of patent infringement nearly a century ago, then pages later notes that the patent decision against Koch was thrown out when it was discovered the other party had illegally bribed the judge in the case, and that Koch in fact won at the Supreme Court and successfully countersued for anti-trust violations. Elsewhere in the article, Fred Koch is criticized for being both too soft on Stalinism and too "rabidly anti-Communist."
Here Koch takes issue with our characterizations of company founder Fred Koch. The story takes pains to describe the decades-long progression of Fred Koch's legal saga, including the court reversals and bribery scandal Koch refers to. Separately, the fact that Fred Koch made millions enabling the industrialization of the bloody regime of Stalin and later then became a rabid anti-communist does have a contradictory element to it, but that speaks to a complexity within Fred Koch, not a flaw of our reporting.
Mazars and Deutsche Bank could have ended this nightmare before it started.
They could still get him out of office.
But instead, they want mass death.
Don’t forget that.
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Re: Koch Brothers thread

Postby 82_28 » Tue Sep 30, 2014 12:44 pm

Fletch Lives totally called this in the 1990s.
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Re: Koch Brothers thread

Postby seemslikeadream » Tue Feb 10, 2015 4:10 pm

bump for the pure evil that is the Koch brothers

Koch Cartel Blocking Medicaid Expansion, Denying Hundreds of Thousands Care
Tennessee, Wyoming blocked. Utah, Montana may be next.
By Steven Rosenfeld / AlterNet February 9, 2015

Radical right-wingers in a series of red states are punishing hundreds of thousands of low-income people by blocking efforts by Republican governors to expand Medicaid—state-run health care—by modifying Obamacare to include Republican ideas.

Last week, Tennessee Gov. Bill Haslam’s alternative plan to expand Medicaid to an estimated 250,000 uninsured adults died in a state Senate committee after opponents with deep ties to the Koch brothers won a 7-4 vote. Haslam, chair of the Republican Governors Association, included GOP proposals like creating health reimbursement accounts to help individuals pay for out-of-pocket expenses, premiums and co-pays. Tennessee’s Hospital Association, Business Roundtable and Medical Association all supported his reforms, yet senior GOP legislators fell under the libertarian extremists’ spell that the federal government could not be trusted with its funds or red tape.

“We’re the third-worst state in the country for accepting federal dollars,” Andrew Ogles, Americans for Prosperity’s state director said during the debate. “It’s time for us to stop. Anytime we have a problem, instead of coming up with a Tennessee solution, we run to the federal government with our hands out. No more.”

Of course, the clamor for a state-based solution—a talking point repeatedly cited by Tea Partiers across the country who oppose Medicaid expansion—is no solution at all. It is a return to the status quo where thousands upon thousands lack reliable health care.

That dynamic could be seen in the anti-Obamacare crusade that last week also lead to the death of Wyoming’s Medicaid expansion bill, which was supported by Republican Gov. Matt Mead and would have helped more than 17,000 low-income residents. That bill’s demise also occurred in the early legislative process. Right-wing activists told lawmakers that many had won office opposing Obamacare. It didn’t matter that the bill’s sponsors created a “revenue-neutral proposal,” as Senate President Phil Nicholas said after its defeat, responding to critics who said it would lead to fiscal doomsday.

“While I respect different views, the fact is today we are left with working poor without coverage,” Gov. Mead said, after the naysayers blocked legislation, underscoring there are no ready state-based solutions to the problem of providing health care for the poor.

So far in 2015, Indiana—where Republican Gov. Mike Pence is eyeing a presidential run—has been the only red state to expand its Medicaid program under Obamacare, making it the 28th state to do so. But Pence added conditions that federal regulators grudgingly approved—allowing it to “to lock residents out of the program for six months if they fail to pay premiums,” according to Advisory.com’s summary. Still, 350,000 previously uninsured state residents will now have access to health care.

Meanwhile, AFP has been threatening lawmakers in other states where Medicaid expansion is being considered. Take Montana, where Democratic Gov. Steve Bullock wants to help 70,000 residents. At grassroots meetings, AFP organizers have been threatening Republican legislators who refuse to sign no-expansion pledge cards. “Part of the reason we are doing this is because some legislators are not acting like adults in the Capitol,” Montana AFP Director Zach Lahn told the Great Falls Tribune, before absurdly adding that AFP was not engaged in electoral politics but public education.

In Utah, Gov. Gary Herbert wants to expand Medicaid to help 90,000 state residents. The Salt Lake Tribune reported there are competing GOP plans, where the sticking point is how many people will get covered. Tennessee, Wyoming and Utah are the three states that were being most closely watched in 2015 for possible Medicaid expansion. There are similar debates in other red states, such as Idaho and Alaska, but advocates are not optimistic.

Meanwhile, there are other worries on the Medicaid front. In other states, such as Ohio, there are GOP-led efforts to possibly roll back Medicaid expansion or impose conditions that would take away coverage from large numbers of people. Last Friday, Ohio sent letters to 107,000 Medicaid recipients telling them they could lose their coverage by Feb. 28 unless they verified their incomes.

The Columbus Dispatch reported that 500,000 Ohians will receive similar notices in the next six months. The state has 2.9 million Medicaid recipients, including 450,000 who were added last year when Republican Gov. John Kasich expanded the program. He’s been criticized by the same cadre of right-wingers blocking expansion in other states.

In Arkansas, Republican legislators decided to fund their expansion for another two years, which helps recipients buy private health plans. Meanwhile, in Illinois, the newly elected Republican governor is said to be eyeing a Medicaid roll-back, citing higher than expected near-term costs.

While it is not a surprise that the Republican war on Obamacare continues, it is new to see a handful of Republican governors push for Medicaid expansion while the GOP's Koch wing is essentially intimidating state lawmakers into voting no. That suggests there might be a growing split in the party as 2016 looms on the horizon and presidential candidates acknowledge inequality is an issue.

In the short run, however, those political currents do nothing for poor people who can't get the health care they need, or might lose recently acquired coverage, such as in Ohio, should the state mistakenly send their renewal paperwork to wrong addresses.
Mazars and Deutsche Bank could have ended this nightmare before it started.
They could still get him out of office.
But instead, they want mass death.
Don’t forget that.
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Re: Koch Brothers thread

Postby seemslikeadream » Thu Jun 18, 2015 2:28 pm

Mazars and Deutsche Bank could have ended this nightmare before it started.
They could still get him out of office.
But instead, they want mass death.
Don’t forget that.
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Re: Koch Brothers thread

Postby stillrobertpaulsen » Mon Aug 03, 2015 2:27 pm

I remember 10 years ago (Billionaires for Bush?) how Billionaire Liberation Fronts were satire.

Charles Koch invokes fight for civil rights as model for political activism

By Matea Gold and James Hohmann August 2 at 10:54 PM

DANA POINT, Calif. — Billionaire industrialist Charles Koch on Sunday compared the efforts of his political network to the fight for civil rights and other “freedom movements,” part of a growing effort by the organization to emphasize its commitment to the plight of the disenfranchised.

During remarks to 450 wealthy conservatives assembled in the ballroom of a lavish oceanfront resort, Koch urged his fellow donors to follow the lead of figures such as Frederick Douglass, Susan B. Anthony and the Rev. Martin Luther King Jr.

“Look at the American revolution, the anti-slavery movement, the women’s suffrage movement, the civil rights movement,” Koch said. “All of these struck a moral chord with the American people. They all sought to overcome an injustice. And we, too, are seeking to right injustices that are holding our country back.”

The theme of helping the lower class was echoed throughout the weekend conference as network officials laid out their plans to spend $889 million by the end of 2016 on issue advocacy, higher-education grants and political activity. Huge banners positioned around the halls of the resort featured quotes from donors describing their commitment to helping the poor. Mark Holden, the general counsel of Koch Industries, led a 40-minute discussion Sunday afternoon on the network’s push for criminal justice reform at the state and federal levels.

The emphasis appears to be driven by a sense among network officials that they need to do more to win the public over to their cause, including what they call “the middle third” of the electorate that does not identify with their libertarian ideology. It underscores one of the remaining challenges for the Koch political network, one of the most potent forces in American politics: to recast its image of being a political organ for the rich.

On Sunday, Koch cited the need to be “to be much more effective in articulating” the group’s mission.

“If we cannot unite the majority of Americans behind the vision, then we’re done for,” he added. “So that to me has to be our number one objective. But to do so, we’ve got to do a much better job of understanding what matters most to people, and then to demonstrate that a free society gives them the best opportunity of achieving that.”

He cited criminal-justice reform as an issue that has resonated because it “strikes the same chord as past successful freedom movements.”

The network is looking at other policies related to poverty, he said, such as “a failing educational system.”

“What we’ve been doing in the past is not sufficient,” Koch added. “We are going to have to raise our efforts to the next level.”

Several donors said they admire the Kochs because they’re playing “the long game,” stressing that they focus on winning elections only as a means to an end.

“It’s the last thing that most Americans would think would go on here,” said Pete Snyder, a tech entrepreneur who ran unsuccessfully for lieutenant governor of Virginia two years ago.

He called the Koch meeting “an ideas factory” for the conservative movement, a contrast to more political cattle calls.

“A lot of the innovations and big ideas are going to be coming from here,” Snyder said.

Twelve years after Koch hosted a small gathering of like-minded libertarians frustrated by the growth of government, the political and policy network he and his brother David Koch helped launch now resembles a quasi-political party.

Network-backed advocacy groups such as Americans for Prosperity are expanding their efforts to mobilize a national, data-driven ground operation. A super PAC supported by the Kochs and their allies plans to spend an estimated $100 million this cycle.

And the donor network the brothers created — now overseen by Freedom Partners, a Virginia-based business chamber — continues to swell. This weekend’s conference drew a record number of attendees, including 146 first-
timers, officials said.

“We’re really excited about the movement that you all are helping us to build,” Kevin Gentry, a Koch Industries official who serves on the board of Freedom Partners, told the donors at the welcome reception. “Anything you can do to take up the reins of leadership and to expand our ranks and build this movement — it’s the only way we’re going to accomplish our goals.”

Five presidential contenders — former Florida governor Jeb Bush, Sen. Ted Cruz (Tex.), former Hew­lett-Packard chief executive Carly Fiorina, Sen. Marco Rubio (Fla.) and Wisconsin Gov. Scott Walker — made appearances at the weekend retreat, held on the grounds of the St. Regis Monarch Beach, with dazzling views of the misty-blue Pacific Ocean.

Seven sitting governors, six ­incumbent senators and three House members also were in attendance.

“I wish the whole world could see what goes on here,” Walker said when it was his turn on the stage. “So many of you here aren’t here because of any interest on behalf of your personal finances. You’re here because you love America.”

For the first time, news organizations were allowed in to cover the traditionally private confab, on the condition that the donors present not be named without their permission. The gathering — which took over much of the Spanish-style resort — had the feel of a lavishly produced wedding held under tight security.

Only registered attendees were allowed down the drive of the resort, and men with earpieces hovered in the front lobby. Donors had to surrender their mobile phones before going into strategy sessions.

Out on the grand lawn, waiters circulated with trays of chilled Evian through the crowd of men in blue sports coats and women in cocktail dresses. There were crystal chandeliers dangling from tall metal poles and meticulous arrangements of votive candles and cacti on the tables.

The move toward more openness comes after the Kochs were vilified on the left by critics including Senate Minority Leader Harry M. Reid (D-Nev.), who spent much of the 2014 elections castigating them as “shadowy billionaires.”

On Saturday, Charles Koch made a sly reference to his Democratic nemesis. Stumbling as he stepped up onto a riser, he quipped: “That was Harry Reid that was trying to trip me there. I didn’t see him, but I know he’s watching.”

“No, he’s got the bad eye. He’s probably not even watching us anymore,” Koch added, referring to the injury Reid sustained in an exercise accident.

But otherwise, Koch steered clear of political talk, emphasizing the network’s focus on creating a “truly free society.” He ticked off several goals, such as reducing irresponsible government spending and doing away with corporate welfare, and he lambasted big banks for their reliance on government bailouts.”

“Will you stand with us to help save our country?” Koch implored Saturday night at the opening cocktail reception, calling their cause “a life-or-death struggle for our country.”

Although the Freedom Partners network is not expected to get behind a single candidate in the crowded GOP presidential primary, it is helping elevate a select group through invitations to network-backed events.

The candidates who traveled to Dana Point, where they participated in separate question-and-answer sessions with Politico’s Mike Allen, made sure to praise the organization for its deep investments.

“The men and women in this room spilled gallons of blood and spent your fortunes retaking the Senate,” Cruz said.

Walker, who received strong network backing in his fight with labor unions in Wisconsin, called himself “proud” to talk to the group. He compared the donors to people without “a lot of net worth” at tea party rallies “who care deeply about the future.”

“David and Charles have harnessed that frustration and said, ‘Instead of being angry about it, let’s do something about it,’ ” he said.

Fiorina said the organization was “supported by people of great accomplishment and intellect and patriotism.”

“These are people who care deeply about our nation,” she said when asked why she came. “The foundation that the Koch brothers have built has invested in the power of ideas. They’ve invested in the power of ground games. They’ve invested in the power of lifting people up.”

Bush’s appearance was his first before the network, which began largely in response to frustration with federal spending by then-President George W. Bush, Jeb’s brother.

“I am truly honored to be here,” he told attendees, who received him with warm applause. “I really appreciated the invitation.”

For all of the interest in hearing from the candidates in attendance, much of the talk throughout the weekend was about one of the contenders who had not been invited: real estate impresario Donald Trump. In hallway conversations and strategy meetings, attendees fretted about the effect he was having on the GOP primary race, according to attendees.

“People are alarmed that he has some staying power,” said one person familiar with donor views, speaking on the condition of anonymity to discuss private conversations. “But there is an understanding that you don’t want to overdo the response.”

Indeed, if there was any question about whether Trump would go after the Kochs, he answered that with a tweet Sunday morning.

“I wish good luck to all of the Republican candidates that traveled to California to beg for money etc. from the Koch Brothers,” he wrote. “Puppets?”

Oh Donald, jealous of the guys 10 times as rich as you? Actually one of the rare times I'll agree with him.
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Re: Koch Brothers thread

Postby MinM » Wed Nov 18, 2015 2:12 pm

@billmon1: Ishmael Reed wrote (tongue in cheek) that "The history of the world is the history of the warfare between secret societies."

@billmon1: Well, future history of U.S. politics may be the history of warfare between secretive societies of plutocrats...
http://www.politico.com/story/2015/11/t ... ncy-215943

ImageBillmon ‏@billmon1: Koch CIA is actually headed by hack GOP oppo researcher, paid $286k a year. But connection with REAL CIA (PT) is classic "deep state" stuff.

@billmon1: And so we have a kind of oligarchical Cold War in progress, fought out across the decaying political structures of the Old Republic.

Telling detail about Koch CIA -- doesn't focus on grassroots orgs, left unions, etc, but on "Democracy Alliance"


To be sure, some of it sounds like play acting by wannabe spooks.


But idea of a privatized political intel agency -- controlled directly by Kochs, not the US govt, not even the GOP, seems...inevitable.

Inevitable both for development of a fully oligarchical republic & as cover for any involvement by elements of official govt intel agencies.

Or if a future Koch-backed POTUS ever needs a personal, off-the-books intel capability (a political Plumbers Unit) -- there it is.

Koch CIA clearly sees rival group of liberal billionaire donors as its KGB. Primary target of intel efforts, including acquiring "lost" docs.

Not saying there is any "official" involvement in the Koch CIA, but if "rogue" RW career apparatchiks ever want a vehicle -- there it is.
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Re: Koch Brothers thread

Postby seemslikeadream » Thu Dec 03, 2015 2:17 pm

Clinton-aligned group claims to have mole in Koch machine

Greg Nash
By By Jonathan Swan - 12/03/15 06:00 AM EST
Hillary Clinton’s well-financed ally David Brock has a team that claims to be coordinating with moles inside the corporate and political empire of the billionaire brothers Charles and David Koch.

During a rare tour of its Washington office on Tuesday, the anti-Koch unit within the Bridge Project told The Hill it has covert channels feeding information from within the private world of the Kochs, the most influential donors in conservative politics.

Eddie Vale, who oversees the investigative unit, was tight-lipped about how the operation works.

“This is the part I’m trying to keep vague. ... We get information from people in their network.”
Vale said the informants are both current and former Koch Industries employees and that the information generally comes from what he described as “old-fashioned” means instead of email and phone calls, “because I know that [Koch Industries] have crazy internal surveillance of their employees.

“I would say [our sources] have a decent level of fear,” Vale added.

A spokeswoman for American Bridge’s nonprofit arm — the place where the Koch work is done — declined to provide proof that the moles exist, citing the need for confidentiality.

“To protect the identities of the people who come to us, we can’t provide any more details,” said Regan Page, communications director of the Bridge Project, the name for Brock’s anti-Koch team.

Still, Vale’s claim is a new indication that the left may be countering what Politico recently reported was a “secretive” Koch operation that “conducts surveillance and intelligence gathering on its liberal opponents,” partly with help from a former CIA analyst.

The Koch brothers have built an expansive network of donors who are dedicated to promoting conservative causes and electing Republicans to Congress and the White House. The network plans to spend $889 million during the 2016 campaign cycle alone.

Asked about the alleged mole operation, Koch network spokesman James Davis jabbed at Brock.

“Very few people outside of David Brock believe attacking private citizens and job creators is a good strategy,” the spokesman said, referring to the Kochs.

The Bridge Project has so far published very little of the material it claims to have covertly obtained.

It alerted The New York Times to archival material that resulted in an investigative story on David Koch’s 1980 campaign on the Libertarian Party ticket.

The unit also published leaked recordings from gatherings of two right-wing groups linked to the Kochs: The Heartland Institute, where the speaker attacked the Pope for his advocacy of the “left-wing political craze” of global warming, and the Wichita Chamber of Commerce, whose 2015 annual meeting featured a panel conversation with Charles Koch.

Brock was part of the conservative movement in the 1990s, writing articles and books that fueled scandals involving Bill and Hillary Clinton.

But in the 2000s, he published a book renouncing that work, saying he had been a hatchet man for the right. Now, Brock has transformed himself into an aggressive defender and supporter of the Clintons.

The Democratic Party, in Brock’s judgment, has been playing politics too meekly. He believes it needs to match up more fiercely against what he has described as a “sophisticated” and well-financed “right-wing conglomerate.”

Supported by his own donor network, Brock has created a menagerie of liberal opposition and attack groups that fill two floors of warehouse-style office space in D.C.

The downtown space includes the American Bridge super-PAC, its nonprofit arm; the press watchdog Media Matters; and the pro-Clinton super-PAC Correct the Record.

In all, the groups are employing more than 60 full-time staffers, with 10 of them spending all their time investigating the business and political interests of the Kochs.

American Bridge also deploys another 26 full-time “trackers” who shadow Republican candidates and people connected to the Kochs. Some of the trackers are middle-aged men who are cast to blend into wealthy donor functions and make secret recordings on their phones, said the head of the tracking unit, who declined to give her name.

The Bridge Project has a $4 million budget for the 2016 election cycle. It is a relatively new outfit — it became fully operational in the summer of 2014 — and its nonprofit status conceals the identities of its donors.

Brock conceived of the group after conversations with Senate Minority Leader Harry Reid (D-Nev.), with both agreeing that the Kochs are corrupting U.S. politics, Vale said.

During the 2014 midterms, the Bridge Project led an assault on Republican candidates, portraying them as “puppets” of the Kochs. They also highlighted pollution from the Kochs’ carbon-intensive chemical businesses and say they have focus group evidence that these messages resonate with voters.

But despite that ad barrage and Reid’s repeated denunciation of the Kochs, Democrats lost the Senate majority in 2014 and saw their numbers in the House shrink to a historic low.

Brock’s team said it has a long-term plan to defeat the Kochs and will not be deterred by perceived setbacks.

“Fighting back against the Kochs is a long-term challenge,” said Brock, “which is why we’re investing in research that connects how the Kochs’ anti-government agenda benefits their bottom line and how their businesses hurt workers and families.”

Vale argued the anti-Koch effort was “undercooked” in 2014 and said the Kochs have had a several-decade head start on influencing American policy and politics.

“I think obviously there was some skepticism after 2014,” Vale said.

“[But] the case that we made to folks … is that 2014 was a very hard Senate map, so I think that whether you talked about Kochs … or anyone,” it would not be enough to save Democratic incumbents in Republican-leaning states such as Arkansas.

Vale pointed to Democratic Senate victories in Michigan and New Hampshire — states where he says they made “heavy use of the Koch theme” — as evidence that their strategy is working.

These points are debatable, especially in Michigan, which was always going to be a heavy lift for Republicans given that President Obama won the state decisively in both 2008 and 2012.

Brock’s team is now redoubling its efforts for the 2016 presidential and Senate races, operating a website called “Real Koch Facts,” issuing hundreds of anti-Koch press releases to journalists, running digital ads and focus groups, publishing issue papers analyzing the Koch agenda and even printing books attacking the Kochs on their business activities and pet projects.

Vale has hired attorneys and a former financial analyst, who are skilled at examining complex documents, to sift through the Kochs’ vast network of political and charitable spending.

The Koch brothers, meanwhile, have recently made an attempt to push back on the caricature of them as “shadowy” agents of corporate greed, sitting down for media interviews where they talk more openly about the political views and their philanthropy.

Page said there is little risk of the Kochs winning over the public.

“They’re doing [the public relations drive] to improve their image,” Page said, but the video footage it has produced has “given us so many good things.”
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Re: Koch Brothers thread

Postby seemslikeadream » Tue Jan 12, 2016 12:45 pm

Father of Koch Brothers Helped Build Nazi Oil Refinery, Book Says

JANUARY 11, 2016
The father of the billionaires Charles G. and David H. Koch helped construct a major oil refinery in Nazi Germany that was personally approved by Adolf Hitler, according to a new history of the Kochs and other wealthy families.

The book, “Dark Money,” by Jane Mayer, traces the rise of the modern conservative movement through the activism and money of a handful of rich donors: among them Richard Mellon Scaife, an heir to the Mellon banking fortune, and Harry and Lynde Bradley, brothers who became wealthy in part from military contracts but poured millions into anti-government philanthropy.

But the book is largely focused on the Koch family, stretching back to its involvement in the far-right John Birch Society and the political and business activities of the father, Fred C. Koch, who found some of his earliest business success overseas in the years leading up to World War II. One venture was a partnership with the American Nazi sympathizer William Rhodes Davis, who, according to Ms. Mayer, hired Mr. Koch to help build the third-largest oil refinery in the Third Reich, a critical industrial cog in Hitler’s war machine.

The episode is not mentioned in an online history published by Koch Industries, the company that Mr. Koch later founded and passed on to his sons.

David H. Koch, left, and Charles G. Koch.
Ken Spain, a spokesman for Koch Industries, said company officials had declined to participate in Ms. Mayer’s book and had not yet read it.

“If the content of the book is reflective of Ms. Mayer’s previous reporting of the Koch family, Koch Industries or Charles’s and David’s political involvement, then we expect to have deep disagreements and strong objections to her interpretation of the facts and their sourcing,” Mr. Spain said.

Ms. Mayer, a staff writer at The New Yorker, presents the Kochs and other families as the hidden and self-interested hands behind the rise and growth of the modern conservative movement. Philanthropists and political donors who poured hundreds of millions of dollars into think tanks, political organizations and scholarships, they helped win acceptance for anti-government and anti-tax policies that would protect their businesses and personal fortunes, she writes, all under the guise of promoting the public interest.

The Kochs, the Scaifes, the Bradleys and the DeVos family of Michigan “were among a small, rarefied group of hugely wealthy, archconservative families that for decades poured money, often with little public disclosure, into influencing how the Americans thought and voted,” the book says.

Many of the families owned businesses that clashed with environmental or workplace regulators, come under federal or state investigation, or waged battles over their tax bills with the Internal Revenue Service, Ms. Mayer reports. The Kochs’ vast political network, a major force in Republican politics today, was “originally designed as a means of off-loading the costs of the Koch Industries environmental and regulatory fights onto others” by persuading other rich business owners to contribute to Koch-controlled political groups, Ms. Mayer writes, citing an associate of the two brothers.

Mr. Scaife, who died in 2014, donated upward of a billion dollars to conservative causes, according to “Dark Money,” which cites his own unpublished memoirs. Mr. Scaife was driven in part, Ms. Mayer writes, by a tax loophole that granted him his inheritance tax free through a trust, so long as the trust donated its net income to charity for 20 years. “Isn’t it grand how tax law gets written?” Mr. Scaife wrote.

In Ms. Mayer’s telling, the Kochs helped bankroll — through a skein of nonprofit organizations with minimal public disclosure — decades of victories in state capitals and in Washington, often leaving no fingerprints. She credits groups financed by the Kochs and their allies with providing support for the Tea Party movement, along with the public relations strategies used to shrink public support for the Affordable Care Act and for President Obama’s proposals to mitigate climate change.

The Koch network also provided funding to fine-tune budget proposals from Representative Paul D. Ryan, such as cuts to Social Security, so they would be more palatable to voters, according to the book. The Kochs were so influential among conservative lawmakers, Ms. Mayer reports, that in 2011, Representative John A. Boehner, then the House speaker, visited David Koch to ask for his help in resolving a debt ceiling stalemate.

“Dark Money” also contains revelations from a private history of the Kochs commissioned by David’s twin brother, William, during a lengthy legal battle with Charles and David over control of Koch Industries.

Ms. Mayer describes a sealed 1982 deposition in which William Koch recalled participating in an attempt by Charles and David to blackmail their fourth and eldest brother, Frederick, into relinquishing any claim to the family business by threatening to tell their father that he was gay.

David Koch has since described himself as socially liberal and as a supporter of same-sex marriage
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Re: Koch Brothers thread

Postby seemslikeadream » Sun Jan 24, 2016 7:14 pm

Climate Denier David H. Koch Leaves American Museum of Natural History’s Board

By Claire Landsbaum

USA - Defending the American Dream Summit 2015
So many boards, so little time. Photo: Amy Harris/Corbis
After 23 years, David H. Koch has decided to quit the board of the American Museum of Natural History. Although groups like Greenpeace and the Sierra Club have called for Koch's dismissal for months — "There's no place for the agenda of people like David Koch and others trying to undermine science for their own financial gain in our country's top museums," Greenpeace declared back in March — the decision is more likely his than the museum's. His spokesperson told the Times that Koch simply "does not have time to attend the board meetings," and is focusing his charity time on medical research.

Still, his departure is a symbolic victory for activist groups who've been saying that a scientific institution can't accept funding from a climate-change denier. The Koch brothers, after all, have given a reported $70 millions to organizations that attempt to refute climate studies, mostly through Americans for Prosperity. (The Natural History Museum, a small group that "highlights socio-political forces that shape nature" via exhibitions in a rolling science-mobile, has been behind much of the activism.) A spokesperson for the actual American Museum of Natural History told the Times, "He was not swayed by that at all, and it absolutely did not factor into his decision."

In August 2010, a New Yorker profile by Jane Mayer highlighted a vagueness in the captions of one installation in AMNH's Hall of Human Origins, for which Koch donated $15 million. A portion of the exhibition devoted to changing climate conspicuously leaves out a mention of the cause, and implies that rising global temperatures may be merely a natural phenomenon. Randall Kremer, director of public affairs for the museum, swore Koch has no influence on the exhibit, telling the Times, "He signed our standard gift agreement, which prohibits donor or sponsor involvement in content."

Koch remains on the board of the Smithsonian National Museum of Natural History, although activists have called for his departure there as well.
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Re: Koch Brothers thread

Postby seemslikeadream » Sun Feb 21, 2016 8:31 pm

Koch Brothers Plotting Multimillion Dollar War on Electric Vehicles

Lorraine Chow | February 19, 2016 2:45 pm

Looks like the extremely wealthy and politically influential Koch Brothers are waging a multimillion dollar war against the burgeoning electric vehicle (EV) market, notably frustrating none other than EV titan Elon Musk.

Death to the electric car? Charles and David Koch are reportedly backing a new group that will use millions to promote petroleum and fight against government subsidies for electric vehicles. Photo credit: Flickr
In an effort to strike back at record-breaking EV sales, the fossil fuel industry is allegedly funding a new organization that will spend $10 million a year to push petroleum-based transportation fuels and attack government subsidies on EVs, refining industry sources told the Huffington Post.

According to HuffPo, a Koch Industries board member and a veteran Washington energy lobbyist will be involved in the purported EV-squashing initiative.

“I think they (are) approaching all the major independent refiners,” one industry source explained to HuffPo.

The mission of the still-unnamed group will be to “make the public aware of all the benefits of petroleum-based transportation fuels,” the source said, adding that “the current administration has a bias toward phasing out” these fuels.

“(The Kochs are) worried about state and community subsidies,” the source said. “In 20 years, electric vehicles could have a substantial foothold in the U.S. market.”

Oil baron brothers Charles and David Koch of are two of the four richest Americans according to Forbes, holding more than $80 billion combined in net worth. It’s an open secret that the conservative oil barons have funneled eye-popping sums of money to curry influence in their favor, including nearly $1 billion to GOP candidates for the 2016 presidential election as well as vicious campaigns against climate change and renewable energy.

“The Kochs have invested heavily in a pugnacious defense of fossil fuel consumption,” a conservative energy analyst told HuffPo. “They’ve done this in the electricity sector, and as the debate shifts to transportation they’re behaving true to form.”

One source claimed that the new Koch-backed organization “may be doing work that’s now being done by the Institute for Energy Research.” The Institute for Energy Research (IER), registered by Charles Koch and energy expert Robert L. Bradley Jr., pushes for deregulation of utilities, climate change denial and claims that conventional energy sources are virtually limitless, according to SourceWatch.

Incidentally, the IER is behind an attack on Tesla’s Powerwall, Autoblog reported. The IER claims that it will take nearly 40 years to pay off. Tesla responded, calling the report “elementary, at best, and completely misses the value of the Powerwall.” The IER also responded to Tesla.

Tesla CEO Elon Musk—who believes electric cars “are the future”—breathed digital dismay over news of the Koch’s latest assault, tweeting “Sigh … ” and linking the HuffPo report.

Musk followed with another tweet of a Guardian report that shockingly revealed $10 million a minute from global subsidies goes to fossil fuel companies, according International Monetary Fund (IMF) estimates.

“Worth noting that all gasoline cars are heavily subsidized via oil company tax credits & unpaid public health costs,” Musk wrote.
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Re: Koch Brothers thread

Postby seemslikeadream » Thu May 19, 2016 1:13 pm

Neocon-Bashers Headline Koch Event as Political Realignment on Foreign Policy Continues

Zaid Jilani
May 18 2016, 5:21 p.m.
IN THE LATEST example of how foreign policy no longer neatly aligns with party politics, the Charles Koch Institute — the think tank founded and funded by energy billionaire Charles Koch — hosted an all-day event Wednesday featuring a set of speakers you would be more likely to associate with a left-wing anti-war rally than a gathering hosted by a longtime right-wing institution.

At the event, titled “Advancing American Security: The Future of U.S. Foreign Policy,” prominent realist and liberal foreign policy scholars took turns trashing the neoconservative worldview that has dominated the foreign policy thinking of the Republican Party — which the Koch brothers have been allied with for decades.

Most of the speakers assailed the Iraq War, nation building, and regime change. During a panel event also featuring former Obama Pentagon official Kathleen Hicks, foreign policy scholar John Mearsheimer brought the crowd to applause by denouncing American military overreach.

“We need to pull back, stop fighting all these wars. Stop defending rich people who are fully capable of defending themselves, and instead spend the money at home. Period. End of story!” he said, in remarks that began with a denunciation of the dilapidated state of the Washington Metrorail system.

“I completely agree on infrastructure,” Hicks said. “A big footprint in the Middle East is not helpful to the United States, politically, militarily, or otherwise.”

Chas Freeman, a former ambassador to Saudi Arabia, decried U.S. thinking on toppling foreign governments. “One has to start questioning the basic premise of regime change, whether it is to be accomplished by invasion and occupation or by covert action or the empowerment of NGO activity on the ground or other means,” he reflected. “Frankly, it generally doesn’t go well.”

“If you want to know why our bridges are rickety … our children are educationally malnourished, think of where we put the money,” concluded Freeman, pointing to the outsized military budget.

Over lunch, Stephen Walt, the Foreign Policy columnist and Harvard realist foreign policy scholar, said the presidential election is providing evidence that the military-restraint camp is starting to make progress. “On the campaign trail, both Bernie Sanders and Donald Trump have gotten receptive audiences when they questioned certain aspects of foreign policy. Really, Hillary Clinton is the only candidate defending the status quo,” he boasted. “I think those public doubts are not surprising because … our current policy has been a costly failure.”

Walt dubbed his own prescription for foreign policy “offshore balancing” — a middle ground between full-scale military engagement and isolationism, where the U.S. would engage diplomatically and economically first and foremost, and retain the capacity to militarily intervene only when major power imbalances occur, where one state would be able to threaten global security.

Mearshiemer, Walt, and Freeman are particularly despised by neocons, and not simply for their starkly different policy prescriptions. Walt and Mearsheimer’s 2006 book The Israel Lobby and U.S. Foreign Policy was critical of the U.S.-Israel relationship, arguing that it was overly influenced by domestic interest groups. Freeman’s nomination to an intelligence post in the Obama White House was derailed by behind-the-scenes accusations that he wasn’t sufficiently pro-Israel.

Bloomberg View columnist Eli Lake, a hawkish supporter of Israeli government policies, expressed horror at their appearance on institute panels in a column on Wednesday, writing that “the Kochs have stayed away from the uglier fringes that blame Israel and its supporters for hijacking U.S. foreign policy. That is, until now.”

The lone prominent hawk among the panelists was Michael O’Hanlon, the Brookings Institute scholar and liberal interventionist. But perhaps in deference to the audience’s skepticism of nation building and sustained military engagement, even O’Hanlon said we need to be “very selective about when we actually employ military force,” insisting that he preferred utilizing economic sanctions rather than war in possible future confrontations with Russian and Chinese spheres of influence.

Still unresolved is whether the institute intends to take on neoconservative orthodoxy on a regular basis. “Part of what the Charles Koch Institute can do is to help increase the range of arguments on the table, have that marketplace of ideas, so the best ideas can win so that our country can flourish,” said William Ruger, the institute’s vice president for research and policy. Ruger told The Intercept that numerous additional foreign policy-centric events are planned.

“I certainly think we’re uneasy with the status quo. It doesn’t seem like the status quo is making us safer, especially given the cost of this to our soldiers, especially given the high expense in terms of our fiscal situation. Also in terms of some of the ways it affects our civil liberties as well as our standing in the world. We want to make sure that we’re not missing opportunities for ideas to be added to this conversation.”
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Re: Koch Brothers thread

Postby NeonLX » Thu May 19, 2016 1:50 pm

Wow. Weird what came up at that Koch event re: US "foreign policy". I'm more in agreement with the sentiments expressed there than I am with the mainstream soon-to-be-installed & coronated Democratic candidate for preznit ( a person who scares the mortal shit out of me).
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Re: Koch Brothers thread

Postby seemslikeadream » Thu Sep 01, 2016 6:49 pm

New Koch-Funded Campaign to Kill the Electric Car and Squash Clean Energy
Submitted by PR Watch Admin on August 30, 2016 - 5:53pm

By Kevin Grandia
With reports out that every month so far in 2016 has been the hottest on record, it seems a little unbelievable that even the oil-rich Koch Brothers would have the audacity to launch a new multimillion dollar campaign to kill clean energy initiatives and promote the use of fossil fuels that are at the heart of the climate change crisis.

But launch they have in the from of a new organization called Fueling U.S. Forward — a cheeky double entendre presumably meant to inspire both national and personal pride in the glories of oil and gas.

In launching the Fueling U.S. Forward at the Red State Gathering in Denver, Colorado, the group’s President and CEO, Charles Drevna told the audience that, “[w]e’ve got to take this to the emotional and personal level. Oil and natural gas, they’re not the fuels of the past and maybe the present or a necessary evil. They are the future.”

Fossil fuels just might have been the future if wasn’t for that pesky greenhouse gas they emit, trapping more and more heat in our atmosphere and causing unprecedented environmental disasters like the catastrophic flooding we are seeing this week in Louisiana.

But someone like Charles Drevna appears not willing to accept this reality and instead will look to use Fueling U.S. Foward to battle back against State and Federal regulations aiming to boost new clean energy solutions. The most insidious part of Drevna’s plan is to attempt once again kill the electric car. The renowned 2006 documentary, Who Killed the Electric Car? explored the idea that it was the fossil fuel industry and the U.S. auto sector that led a stealth campaign to ensure the electric vehicles never took hold in the marketplace.

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Flash forward 10 years and we now know the answer to that question more clearly than ever. It will be the Koch Brothers, Charles Drevna and their network of think tanks, with Fueling U.S. Forward at the helm, who if successful will kill the electric car this time around. However, I suspect Drevna and his oil-soaked backers will find a very different state of public opinion today than they would have a decade ago. Ten years ago, the electric car seemed a novelty and its necessity was not considered as imperative given there was much less attention paid by the public to the issue of climate change.

But that was then.

Today, with charismatic leaders like Elon Musk behind his hot-selling Tesla electric cars, and a public more aware than ever about the disastrous impacts of climate change that are no longer theory, but playing out in America’s backyards, the Koch’s Fueling U.S. Forward has a very real risk of flying back in their faces with a resounding smack.

Let’s hope so.

http://www.prwatch.org/news/2016/08/131 ... ean-energy
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Re: Koch Brothers thread

Postby seemslikeadream » Wed Sep 28, 2016 8:05 am

BY EMILY CADEI ON 9/28/16 AT 7:36 AM

David Koch, left, and his brother Charles Koch, run Koch Industries and an assortment of PACs and advocacy groups.

Midmorning on a Monday is not peak time for door-to-door politicking, and in the leafy Philadelphia suburb of King of Prussia, most doors are locked and windows shuttered. But for members of the Koch army, the campaigning never stops.Local field director Jeremy Baker and brothers Chris and Ed Saterstad are one of several teams out in Montgomery County and neighboring Bucks County on this sunny September day. Each of them is equipped with an iPad mini, strapped to their wrist, and they refer to them constantly—to review their digital “walk books” and determine the doors on which to knock, to bring up the script they read to the people who open those doors, and to tabulate the responses they get. All this creates ever more data points for the vast trove of voter information the Kochs are building. For Newsweek’s benefit, the three 20-something men are walking through this Upper Merion neighborhood. Usually, they run.“Field teams are at close to 3,000 doors a week, between staff and volunteers,” boasts Beth Anne Mumford, Pennsylvania state director for Americans for Prosperity (AFP), a conservative grass-roots advocacy group funded by the billionaire industrialists Charles and David Koch and their allies. Koch Industries is the second-largest private company in the country, according to Forbes, a $100 billion conglomerate of oil refiners, fertilizer makers, paper products producers and equipment manufacturers. The brothers also are a virtual ATM for a vast network of conservative organizations reshaping American politics. As they have for many years, the Kochs are once again pouring money into a few Senate races in 2016, bolstering their GOP allies. But this time around, they have refused to bankroll the party’s presidential nominee.

David Koch and his brother have refused to support Trump, but that message hasn't always translated to their supporters who continue to stump for Trump.

It’s no secret the Koch brothers don’t dig Donald Trump and have made it clear, despite repeated entreaties, that they will not be unleashing their formidable political network on his behalf. Mark Holden, the general counsel for Koch Industries, told Politico in May that the brothers would support only a candidate who “did not engage in personal attacks and mudslinging.” Not only does Trump not fit that bill, but he also mocks some of the central tenets of their free-market, libertarian-leaning philosophy, most notably on trade and entitlements.Some activists within the Kochs’ network of advocacy groups, however, do not appear to have gotten the memo. “We’re Muslim, me and my family, but we’re voting for Trump, because I just have a gut feeling,” Mary Khalaf recently told me at the annual conference held by AFP. “My gut just says, ‘This is the person.’” Khalaf, who runs what she calls a “wellness house” in Ogden, Utah, to help those suffering from stress or mental illness, caucused for Trump in Utah during the GOP primary and then started volunteering with AFP after visiting its booth at the Republican convention in July.She’s not an outlier. Newsweek spoke to more than a half-dozen AFP conference attendees, and not one expressed strong opposition to Trump. And these are the Koch network die-hards—volunteers who took buses from places like North Carolina down to Orlando, Florida, to hear speakers extol the cause of “advancing freedom.” The Kochs and their allies have not explicitly condemned Trump, nor have they directed their supporters to vote against him. Still, his popularity among rank-and-file conservatives is a vexing problem for the Koch boys and their crusade to shrink government. And it’s not just his abrasive style that has them worried.
As Trump has laid bare during this campaign, “the ideology of the extreme free market”—slashing the social safety net, getting government out of health care and the like—is “not actually the core interests of rank-and-file conservatives,” says Vanessa Williamson, a Brookings Institution fellow who has spent years studying the Tea Party and other conservative movements. At the grass-roots level, conservatives are apt to defend their government-funded Medicare and in the same breath lament Obamacare’s “socialism.” Abstract small government principles don’t excite them nearly as much as demagoguery on immigration. And they don’t see any contradiction in attending an event underwritten by the Koch brothers and then rushing home to plant a yuge Trump sign in their front yard.Members of the Koch network acknowledge the challenge. “One thing that the last 15 months has taught us: Just when you think you’ve won an issue within the base, you realize no issue is really ever won,” AFP President Tim Phillips says with a wry smile. On free trade, which has come under attack from not just Trump but also liberals like Democratic presidential primary candidate Bernie Sanders, “we were complacent,” he says. The mindset, as he describes it, was, “Oh, this stuff isn’t going to work…. This was a battle that was won over two or three decades. We’re fine.” Entitlement reform is another area where there’s been backsliding, Phillips says. “We thought it was settled orthodoxy; suddenly, it’s not anymore!”
But if the leaders of the Koch-backed entities are panicking about Trump’s ascent, they’re doing a damn good job of tucking it in. They’re playing the long game. Phillips seems confident that his organization will engage and train conservatives in a way that can “build a deeper reservoir of support for core issues,” like trade, entitlements and tax cuts. That, in a sentence, is the whole ethos behind AFP and the rest of the Koch outreach efforts. And it puts them in a strong position to steer the Republican Party after the election, even if Trump wins.

AFP is changing tactics, going for a more truly grass-roots campaign to steer the political debate and control the Republican Party.
No One Escapes From Trump Island
In his approach to politics, Donald Trump in many ways represents the inverse of the Koch brothers. The Kochs and their allies have sought to cloak their identities with layers of organizational subterfuge; Trump has built an entire presidential campaign around his personal brand. The brothers shy from bravado and media exposure (a Koch representative declined a Newsweek request for an interview); Trump thrives on it. And where the Kochs have built an extensive operation at the state and local levels, recruiting volunteers in 35 states and building alliances across the country, Trump is an island, with little infrastructure, few like-minded political allies and nothing in the way of a doctrine that might live on once this campaign is decided.Trump’s field operations are so absurdly bad, in fact, that in most battleground states he’s relying on the Republican Party’s staff and infrastructure to do all the basic outreach. Regardless, the real estate tycoon has been remarkably successful, but the Trump model is not easy to replicate, as would-be followers have learned. Frank Bruni detailed in The New York Times in August that not one Trump supporter running in a Republican primary this year won. The first member of Congress endorsed by Trump, North Carolina Republican Renee Ellmers, got thumped in her June primary.Contrast that with the Koch network. Led by AFP, it has canvassers on the ground year-round in nearly three-dozen states, knocking on the doors of carefully targeted households. Those targets are dictated by a massive data operation built up in recent years under the aegis of Freedom Partners, the main funnel for money from Koch charities and affiliated donors to advocacy groups such as AFP. In 2014, the most recent year for which reports are available, the 501(c)6 nonprofit group made $88 million in grants to the group, its sister organizations and other Koch allies, such as the U.S. Chamber of Commerce, the National Rifle Association Institute and the anti-tax Club for Growth. In 2015, the network created its Grassroots Leadership Academy, a boot camp on activism and Koch governing philosophy, run by another AFP affiliate, the Americans for Prosperity Foundation.In Florida, home to one of AFP’s largest chapters, the group now counts 14 field offices, nearly double what it had in 2014, and more than 200,000 volunteers (although an AFP representative says that includes everything from door knockers to people who’ve signed a petition on its website). “Our activist count has swelled since 2014, and a lot of that is because we didn’t just focus on federal issues. We really engaged on the state level, on the county level, on things that mattered to folks, things that they could touch and smell and taste,” says Chris Hudson, the AFP state director.Indeed, that “all politics is local” mentality is a big part of its strategy to remake government. “I’m already more focused on the 2017 legislative session than I have even stopped to think about this federal election,” says Hudson. That may be a nice way of saying the Koch brothers are willing to concede this battle to Trump, because they’re confident they’ll win the war for conservative hearts, minds and ballots.

American for Prosperity supporter Janet Stark waves an American flag during a rally, Wednesday, Sept. 16, 2015 at the Missouri State Capitol, during a hearing for a controversial bill lead by Missouri's Republican-led House which would limit cities from raising the minimum wage.

Your Grass Roots Are ShowingFor decades, Charles and David Koch intervened in politics from the top down—doling out millions to foundations, think tanks and politicians that espoused their small-government philosophy. During election years, they poured money into groups that ran “issue ads”—typically thinly veiled attacks against Democratic candidates. It gave them sizable influence among the elites, shaping the beliefs of conservative leaders and commentators, but not much cred among the masses. In a 2010 New Yorker article, Jane Mayer documented the Kochs’ history of funding so-called grass-tops organizations—groups designed to look like they were fueled by grass-roots activists when they were actually fronts for corporate interests.The Kochs have gone to great lengths over the years to conceal the nature of their vast political operations, which has riled critics. One of the most relentless of those, Senate Democratic Leader Harry Reid, went after the brothers earlier this month yet again, complaining that “the Kochs and their dark money empire are flooding the airwaves with misleading and false advertisements” to push their “crooked oligarchy agenda.” The “dark money” epithet refers to the fact that the Koch network is made up almost entirely of 501(c)3 and 501(c)4 nonprofit organizations that can accept unlimited funds and do not have to disclose their donors. So when most people see ads funded by groups such as AFP, they don’t realize that a coterie of wealthy donors and corporate behemoths with billions of dollars to gain or lose from policy decisions was behind it.Making things even more complicated, the Kochs have constructed a maze of nonprofits and trust funds with many different purposes and focuses, some which are not real organizations but essentially just conduits for cash, says Robert Maguire, an investigator with the Center for Responsive Politics, a political spending watchdog . Millions of dollars are funneled between them. “There is no other network of politically active nonprofit groups and super PACs that is as convoluted and concentrated as the Koch network,” he says. “It was very clearly constructed by lawyers to make everything the network is doing as difficult as possible to track.”Maguire says AFP started out as just another Koch-funded purveyor of attack ads. Before 2008, he says, AFP “was this little organization with like seven million dollars.” Fast-forward to 2014, when the group spent nearly $100 million, much of it on the midterm elections. AFP’s growth was soon followed by the emergence of sister groups like the Libre Initiative, which is focused on Latinos; Generation Opportunity, targeting millennials; and Concerned Veterans for America, for former service members. “At first, these were just sort of other vessels to put money into, and then they would run ads,” says Maguire, with no staff or physical footprint to speak of, just post office box addresses. But since 2014, they’ve shifted emphasis and started hiring employees, writing policy papers and building communities on social media. On Twitter, “it’s no longer just the standard preprogrammed Reagan quotes four times a week,” he says. Instead, it’s “here’s a picture of our volunteers in San Antonio knocking on doors.”That, he says, is a major shift in strategy: Win big by going small.

Charles Koch, head of Koch Industries, talks passionately about his new book on Market Based Management.

It’s Their Party, and They’ll Blow It Up If They Want ToWill it work? The Koch network has enjoyed some sizable victories at the state and local level. “We’ve had more progress on ‘right to work’ in the last five years than in the previous five decades,” Phillips boasts. “We’ve seen a dozen and a half states do dramatic tax cuts.” But it’s unclear if the grass-roots operations are really what’s behind those gains, or if it has more to do with conservatives’ success in getting like-minded politicians elected as state legislators and governors. Since 2008, Democrats have lost nearly 1,000 legislative seats and a dozen governors’ mansions around the country.Incoming Florida House Speaker Richard Corcoran says AFP’s activists in that state reinforced his colleagues’ stand against the expansion of Medicaid in 2015 and against spending on corporate tax incentives this past spring. Corcoran says his members were “being pounded” by editorial boards, special interests and even other Republicans, but they weathered the onslaught with the help of AFP mailing and policy literature defending their stands.Florida Chamber of Commerce President Mark Wilson, however, says the Koch grassroots influence in the state is exaggerated. The chamber is one of the state’s largest political players, with scores of lobbyists on retainer, and Wilson says the state’s legislators “don’t really care about what AFP has to say,” and regard it as “a heavily funded group that’s not from Florida.”But that’s not to say things won’t change. Wilson knows the Koch network leaders are focusing on 2020 and 2024, not this election. That gives the network time to further build up its ground game and data operations, using its local interactions to identify who cares about what issues and to mobilize people.

Protesters demonstrate outside of the Rancho Las Palmas Resort where a closed meeting with the Koch brothers was being held.

The Koch-funded technology firm i360 manages all that data and produces those apps AFP canvassers rely on when they’re knocking on doors. Its database is a vault of voting records, consumer data, census information and social media profiles on more than 250 million adults, i360 says, 190 million of whom are registered to vote. In today’s high-tech politics, this kind of granular data is crucial for conducting the kind of targeted campaigns that win elections.“They’ve been very transparent about what they’re trying to do, and I think a lot of people don’t believe them,” Wilson muses. “They want to replace political parties.”
http://www.newsweek.com/2016/10/07/char ... 03496.html
Mazars and Deutsche Bank could have ended this nightmare before it started.
They could still get him out of office.
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Re: Koch Brothers thread

Postby MinM » Fri Nov 18, 2016 10:26 am

Koch puppet Pompeo to be the new CIA Director...

*researches new head of the CIA Rep. Mike Pompeo for 1 minute* Nice nice!

AlicetheKurious » Sat Nov 12, 2011 7:42 am wrote:Links in original:

    11 November 11
    Koch Brothers Behind Push To Dismantle EPA

    During last week’s Americans For Prosperity (AFP) event, a common theme kept creeping into the speakers’ presentations: Dismantle the EPA. And as the major funders of AFP, Charles and David Koch are the ones pulling the strings of the American elected officials who keep clamoring for an end to all environmental protections.

    Since the new Republican-controlled Congress took over earlier this year, calls for the EPA to be disbanded and general attacks on the agency have been constant. In the last 11 months, we have covered those stories here, here, here, here, here, here, and here. Those in favor of saying goodbye to the EPA include presidential candidates like Newt Gingrich and Mitt Romney, elected officials like Republican Representatives Mike Rogers and David McKinley, and even media figures like Fox News’s John Stossel. The attacks include false claims that the agency is destroying jobs, or just general claims that the agency’s usefulness has run its course.

    But when you look past those claims, the money from the Koch brothers and their organizations is all that you can see.

    In addition to GOP presidential hopeful Herman Cain pledging his loyalty to the Kochs at last week’s event, we were also privy to a rousing anti-EPA speech by Republican representative Mike Pompeo of Kansas. As Think Progress reports, Pompeo told the crowd the following about his efforts to completely strip the EPA of their funding:

      “We’re trying. Indeed, I personally tried. … We’ve got a Senate that has a deeply different worldview, and there my bill sits. We won’t be able to slow down the growth of the EPA dramatically until we change the view of folks in Congress, and I speak mostly of the Senate here, and we get a new leader in the White House.”

    Lee Fang from Think Progress has detailed Rep. Pompeo’s connections to the Kochs, who have personally been involved with helping Pompeo climb his way into the top 1% of income earners:

      Pompeo developed much of his wealth from a firm he founded, Thayer Aerospace, which he ran with investment funds from Koch Industries. According to a December 11, 1998 article in the Wichita Business Journal, “[Pompeo's] company’s capital base is drawn in part from Wichita’s Koch Venture Capital, a division of Koch Industries.” Pompeo sold Thayer in 2006.

      Pompeo still relies on Koch for his private wealth. After the sale of Thayer, Pompeo became the President of Sentry International, a business specializing in the manufacture and sale of equipment used in oilfields. Sentry International is a partner to Koch Industries through its Brazilian distributor, GTF Representacoes & Consultoria.

      Pompeo won his Republican primary largely with the support of Koch Industries’ PAC
      , which gave him one of his largest endorsements in March. Despite the fact that Koch Industries is the recipient of tens of millions in federal contracts, Pompeo boasted about the endorsement: “The employees of the Koch Companies have jobs here in the Wichita because of their own hard work and creativity, not because a federal agency deemed it to be so.”

    With $31,400 in contributions from KOCHPAC, Koch Industries is by far the greatest contributor to Pompeo’s campaign.

    So to be clear, Congressman Pompeo owes not only his election but his personal fortune to the Koch brothers, and now that he is in a position of power, he is doing his best to push their agenda within the chambers of Congress.

    The money in politics database organization Open Secrets has a lengthy list of specific legislation that Koch Industries has lobbied for and against. On the "against" list, you’ll find legislation such as the American Clean Energy and Security Act of 2009 – a bill that would have put Americans to work building a green energy infrastructure; the Clean Energy Jobs and American Power Act – again, a bill that would have created green energy jobs and infrastructure; and the Clean Air Protection Act – a bill that would limit the amount of acceptable emissions into our atmosphere.

    The Koch brothers, through their PACs and other organizations, have funded numerous efforts to defeat legislation aimed at reducing pollution or protecting the environment. After all, their companies don't pay the real cost for the pollution they release.

    That’s why it is important to follow the money on these stories, especially when dealing with Congress members who are attempting to dismantle the few environmental protections that are currently in place, like Mike Pompeo. Because more often than not, these efforts are supported by fat cat checks from a member of the Koch family. Link

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