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Why Koch Industries Is Speaking Out:

Crony capitalism and bloated government prevent entrepreneurs from producing the products and services that make people's lives better. .

By CHARLES G. KOCH

Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay.

Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.

Because every other company in a given industry is accepting market-distorting programs, Koch companies have had little option but to do so as well, simply to remain competitive and help sustain our 50,000 U.S.-based jobs. However, even when such policies benefit us, we only support the policies that enhance true economic freedom.

Koch Industries, (pronounced "coke"), is the largest privately owned company in the United States with 70,000 employees and annual sales of $100 billion in the fiscal year ending December of 2008.[1] Cargill comes in second for privately owned companies. Operations include refining, chemicals, process and pollution control equipment, technologies, fibers and polymers, commodity and financial trading and consumer products. The company operates crude gathering systems and pipelines across North America. One subsidiary processes 800,000 barrels of crude oil daily in its three refineries.

Koch also owns ranches with a total of 15,000 head of cattle in Kansas, Montana and Texas. Though diversified, the company amassed most of its fortune in oil trading and refining.[2] The company was started in 1927 by Fred Koch, a charter member of the John Birch Society, with an oil delivery business in Texas.

LobbyingThe company spent $3,528,750 for lobbying in 2006. $820,000 was to outside lobbying firms with the remainder being spent using in-house lobbyists. [41]

In February 2005, the Hill reported, "Top White House official Matt Schlapp is joining the Washington office of oil-and-gas conglomerate Koch Industries, the latest example of high-level administration and congressional staffers making post-election leaps to the lobbying world." Schlapp had headed the White House’s Office of Political Affairs. At Koch, Schlapp will be the executive director of federal affairs, directing Washington lobbying. [3]

Elizabeth Stolpe, previously in-house lobbyist for Koch Industries, is now Associate Director For Toxics & Environmental Protection at the White House Council on Environmental Quality.


Political ContributionsKoch Industries is the single largest oil company contributor to both Republican and Democratic candidates for Congress. These contributions total $1,065,750 to the 110th US Congress (as of the third quarter), the largest of which has been to Rep. Todd Tiahrt (R-KS) for $42,950. Rep. Tiahrt, for his part, has consistently voted with the oil industry on energy, war and climate bills. [4]

Contributions like this from fossil fuel companies to members of Congress are often seen as a political barrier to pursuing clean energy. More information on oil industry contributions to Congress can be found at FollowtheOilMoney.org, a project created by the nonpartisan, nonprofit organization Oil Change International.

Koch Industries gave $948,000 to federal candidates in the 05/06 election cycle through its political action committee (PAC) - 17% to Democrats, 82% to Republicans. [42]

Koch Industries Inc. and its employees and subsidiaries spent $1.2 million in the last election helping to elect Republican governors who are now trying to take away bargaining rights of state workers.

Republicans Scott Walker of Wisconsin and John Kasich of Ohio, who won election last November with Koch support, are pushing to limit the ability of public-employee unions to negotiate for salaries and benefits. Senate Democrats in Wisconsin walked out in protest, preventing a quorum in the Republican-controlled chamber.

The Koch-backed advocacy group Americans for Prosperity helped organize a rally on Feb. 19, set up a website and today announced a $342,200 ad campaign in support of Walker.

GannonFan wrote:Wait a minute - they spent $1.2M in the past election? That's it? That's all that we're complaining about? Didn't overall spending in the 2010 election amount to something like $4B? These guys have this much sway with only spending a pittance of money in the grand scheme of things?

In addition, Americans for Prosperity spent $1.2 million in support of Republican candidates for Congress last year, Federal Election Commission records show. Koch Industries’ federal political action committee contributed $1.3 million to candidates for the 2010 elections, 90 percent of it to Republicans, according to the Center for Responsive Politics.

kalm wrote:

GannonFan wrote:Wait a minute - they spent $1.2M in the past election? That's it? That's all that we're complaining about? Didn't overall spending in the 2010 election amount to something like $4B? These guys have this much sway with only spending a pittance of money in the grand scheme of things?

That's just direct funding from Koch Industries to the Republican Governors Association. They also founded and operate the $60 million Koch Family Foundation and Americans for Prosperity which spent $6.8 million in 2007 alone. They are playas.

In addition, Americans for Prosperity spent $1.2 million in support of Republican candidates for Congress last year, Federal Election Commission records show. Koch Industries’ federal political action committee contributed $1.3 million to candidates for the 2010 elections, 90 percent of it to Republicans, according to the Center for Responsive Politics.

http://www.bloomberg.com/news/2011-02-2 ... nions.html" onclick="window.open(this.href);return false;

http://www.sourcewatch.org/index.php?ti ... s#Finances" onclick="window.open(this.href);return false;

GannonFan wrote:

kalm wrote:
That's just direct funding from Koch Industries to the Republican Governors Association. They also founded and operate the $60 million Koch Family Foundation and Americans for Prosperity which spent $6.8 million in 2007 alone. They are playas.



http://www.bloomberg.com/news/2011-02-2 ... nions.html" onclick="window.open(this.href);return false;

http://www.sourcewatch.org/index.php?ti ... s#Finances" onclick="window.open(this.href);return false;

Again, isn't that small potatoes? I mean, it's more than a normal person could put up, but it's not so big as to buy absolute devotion. Even if they spent all the $60M from that foundation, that would still just be 1.5% of what was spent in the last election. It ain't nothing, but it's not overwhelming either.

kalm wrote:

GannonFan wrote:
Again, isn't that small potatoes? I mean, it's more than a normal person could put up, but it's not so big as to buy absolute devotion. Even if they spent all the $60M from that foundation, that would still just be 1.5% of what was spent in the last election. It ain't nothing, but it's not overwhelming either.

It would be interesting to see their total direct and indirect contributions. A snap shot of how big their propaganda empire really is compared with other large campaign financiers. Do you think they're not somewhere near the top in political influence? Do you think their success as the nations largest privately owned company is not related?

They at least wield enough power to affect what's going on in Wisconsin which has the potential to affect what happens elsewhere. Of course any normal person has that ability, don't they?

GannonFan wrote:

kalm wrote:
It would be interesting to see their total direct and indirect contributions. A snap shot of how big their propaganda empire really is compared with other large campaign financiers. Do you think they're not somewhere near the top in political influence? Do you think their success as the nations largest privately owned company is not related?

They at least wield enough power to affect what's going on in Wisconsin which has the potential to affect what happens elsewhere. Of course any normal person has that ability, don't they?

I already said that a normal person doesn't have that ability by themselves - why pretend that's what we're talking about here? All I did was point out that even if they used the entirety of the foundation that you listed, which they didn't, they didn't even use a fraction of that, that they would still be a fairly small part of a hugely expensive election cycle. Are they one of the largest campaign financiers? I'm sure they are, but at those levels, apparently there are a lot of people and organizations that have the same sway in terms of money spent. You're making it seem like these Koch guys are a whole new animal on the political front and that they wield un-thought-of-to-now political power to shape events. They're just one more of a long list of special interests that injects money, a lot of money together, into the political venue. You make it seem like we've never seen this before and these guys have trumped the game. You'll have to show more than just spending $1.2M (million, with an M) in this past campaign.

TwinTownBisonFan wrote:The deal with the Koch's isn't their overall money - which is comparable to many "whales" in the business...

the deal with the Koch's is their ability to selectively target key races and flood them with money. they are bundlers of the highest order... they recruit direct donations from hundreds of donors who all max out to the candidate... that kind of funding ability is rare indeed.

most big money moves in to independent groups (C4's and 527's) and the impact is generally not felt by the campaigns or the candidate directly. however, when you have a bundler... they often have a level of access that is very significant.

kalm wrote:

GannonFan wrote:
I already said that a normal person doesn't have that ability by themselves - why pretend that's what we're talking about here? All I did was point out that even if they used the entirety of the foundation that you listed, which they didn't, they didn't even use a fraction of that, that they would still be a fairly small part of a hugely expensive election cycle. Are they one of the largest campaign financiers? I'm sure they are, but at those levels, apparently there are a lot of people and organizations that have the same sway in terms of money spent. You're making it seem like these Koch guys are a whole new animal on the political front and that they wield un-thought-of-to-now political power to shape events. They're just one more of a long list of special interests that injects money, a lot of money together, into the political venue. You make it seem like we've never seen this before and these guys have trumped the game. You'll have to show more than just spending $1.2M (million, with an M) in this past campaign.

I've pointed out many times how the banking industry financed it's own deregulation in the 90's. The only time I came close here at hinting that this was something new was claiming that they've figured it out. Of course the Koch family has been around forever and obviously figured this out long ago.

All I'm really trying to point out Gannon is the awesome hypocrisy of Charles Koch pining on about free market principles and fairness. The Koch brothers are a terriffic example of how to manipulate the system and voters through the campaign process. It's kind of like the commie attempts in youth basketball to eliminate steals and score keeping while encouraging more passing. Let the loser kids play by those rules and make sure your's steal the ball whenever they can get away with it, never give up a shot in favor of passing, and know damn well what the score is. It's the American Way, they'll be better prepared for the real world.

GannonFan wrote:

TwinTownBisonFan wrote:The deal with the Koch's isn't their overall money - which is comparable to many "whales" in the business...

the deal with the Koch's is their ability to selectively target key races and flood them with money. they are bundlers of the highest order... they recruit direct donations from hundreds of donors who all max out to the candidate... that kind of funding ability is rare indeed.

most big money moves in to independent groups (C4's and 527's) and the impact is generally not felt by the campaigns or the candidate directly. however, when you have a bundler... they often have a level of access that is very significant.

And again, how are they any different or any more powerful than the other people out there doing exactly the same thing? I don't say this to defend these guys, I'm sure they are manipulators and denizens of the political process. I just want to know and see proof that these guys are really all that different than what's already out there. People target specific elections all the time. People bundle donations all the time. Is there something else these guys have done or is it just that they happen to have good access to the one governor who is now center stage in the news?

TwinTownBisonFan wrote:

GannonFan wrote:
And again, how are they any different or any more powerful than the other people out there doing exactly the same thing? I don't say this to defend these guys, I'm sure they are manipulators and denizens of the political process. I just want to know and see proof that these guys are really all that different than what's already out there. People target specific elections all the time. People bundle donations all the time. Is there something else these guys have done or is it just that they happen to have good access to the one governor who is now center stage in the news?

they aren't different other than in their breadth - and their ability to pour more resources than all but the biggest whales in to a race. more than that - their "demands" generally appear to be a bit more specific and ambitious when compared with many other whales.

in this case, what makes them different is their level of access to this specific office based upon that giving - and what it appears they are demanding of the Governor of the state. Now I would contend that this is less the Koch Brothers pushing and more the RGA (which the Koch's are HUGE investors in) and by extension, the RNC. This is part of a long-term strategy that has very little to do with state budgets, or even collective bargaining - what this is, is pure politics - attacking unions who support their political opponents.

GannonFan wrote:

kalm wrote:
I've pointed out many times how the banking industry financed it's own deregulation in the 90's. The only time I came close here at hinting that this was something new was claiming that they've figured it out. Of course the Koch family has been around forever and obviously figured this out long ago.

All I'm really trying to point out Gannon is the awesome hypocrisy of Charles Koch pining on about free market principles and fairness. The Koch brothers are a terriffic example of how to manipulate the system and voters through the campaign process. It's kind of like the commie attempts in youth basketball to eliminate steals and score keeping while encouraging more passing. Let the loser kids play by those rules and make sure your's steal the ball whenever they can get away with it, never give up a shot in favor of passing, and know damn well what the score is. It's the American Way, they'll be better prepared for the real world.

I think we've gone over the free market points before - there is not perfect free market and probably won't ever be. All there are are degrees of freedom in terms of markets, and we happen to be in one of the most free times ever. Doesn't mean we are close to the pure definition of free markets, but I don't think anyone seriously believes that.

As for Koch, he's a special interest just like the thousands of other special interests out there. Just because he has the ear of the Wisconsin governor doesn't make him that much more powerful. There are people and groups that have the ear of more prominent governors and more prominent office holders.

GannonFan wrote:

TwinTownBisonFan wrote:
they aren't different other than in their breadth - and their ability to pour more resources than all but the biggest whales in to a race. more than that - their "demands" generally appear to be a bit more specific and ambitious when compared with many other whales.

in this case, what makes them different is their level of access to this specific office based upon that giving - and what it appears they are demanding of the Governor of the state. Now I would contend that this is less the Koch Brothers pushing and more the RGA (which the Koch's are HUGE investors in) and by extension, the RNC. This is part of a long-term strategy that has very little to do with state budgets, or even collective bargaining - what this is, is pure politics - attacking unions who support their political opponents.

Well, if it's just politics, then what is the concern? I'm pretty sure that unions are doing the same thing. Which politicking is better, just the one you happen to support?

kalm wrote:

GannonFan wrote:
Well, if it's just politics, then what is the concern? I'm pretty sure that unions are doing the same thing. Which politicking is better, just the one you happen to support?

Well if you believe in a strong middle class there's cause for concern.

TwinTownBisonFan wrote: they aren't different other than in their breadth - and their ability to pour more resources than all but the biggest whales in to a race. more than that - their "demands" generally appear to be a bit more specific and ambitious when compared with many other whales.

in this case, what makes them different is their level of access to this specific office based upon that giving - and what it appears they are demanding of the Governor of the state. Now I would contend that this is less the Koch Brothers pushing and more the RGA (which the Koch's are HUGE investors in) and by extension, the RNC. This is part of a long-term strategy that has very little to do with state budgets, or even collective bargaining - what this is, is pure politics - attacking unions who support their political opponents.

GannonFan wrote:

kalm wrote:
Well if you believe in a strong middle class there's cause for concern.

That depends on what you mean by a strong middle class - what makes it strong, where do you draw the income levels to determine what's middle, etc. Like I said, it probably just depends on which side you happen to support. In your other post you say that manipulation of government stifles free markets - the thing is, more than one side can manipulate government. From my perspective, neither the Koch brothers or the state unions are fighting for me when they fight in Wisconsin - they're both just two sides fighting for their slice of the pie.