Background
The New York Times: During 1980 Campaign for Vice President, David Koch Gave Speeches Against Overregulation As Koch Industries Was “Subpoenaed As Part Of A Federal Criminal Investigation Into Fraudulently Obtained Oil And Gas Leases,” Filed Suit “To Block Federal Regulators From Applying A Rule That Would Have Cut Output At The Firm’s Lucrative Minnesota Refinery.” According to The New York Times: “Koch Industries’ clashes with the federal government were also intensifying. The Department of Energy continued to audit the company for violating federal oil price controls and overcharging retail energy customers. In June 1980, The Wall Street Journal reported that Koch Industries had been subpoenaed as part of a federal criminal investigation into fraudulently obtained oil and gas leases in Wyoming and other Western states. That August, Koch Industries sued to block federal regulators from applying a rule that would have cut output at the firm’s lucrative Minnesota refinery. In an energy policy speech that May in Portland, Ore., David Koch railed against what he saw as overregulation. Presidents Nixon and Carter had bequeathed an “Alice in Wonderland” energy policy, he argued, a mix of subsidies and price controls that had stymied market forces and caused high prices and shortages.” [The New York Times, 5/17/14]
New York Times: As Koch Family Became Primary Funders of Libertarian Party, Koch Industries Began to Clash With Federal Regulators. According to The New York Times: “The family would become the Libertarian Party’s most important donors. But their other consuming interest was business: Charles Koch, then in his first decade as president of Koch Industries, had aggressively expanded the firm’s holdings in oil refineries, petroleum products and commodities, while David Koch worked as an executive at the company’s engineering subsidiary. As the brothers became more politically active, Koch Industries repeatedly butted against the federal government’s new energy regulations.” [The New York Times, 5/17/14]
The New York Times: One Month Before Charles Gave Speech Arguing In Favor of Free Enterprise and Against Price Controls, Federal Audit Found That Koch Industries Had Broken Federal Oil Price Controls. According to The New York Times “Politics was a dangerous game for those in business, Charles Koch argued in a 1974 speech to libertarian thinkers and business leaders in Dallas. Subsidies and special treatment demanded by corporations had helped turn Americans against free enterprise. Business had colluded with the Nixon administration to design price controls and other “socialistic measures….One month before Charles Koch’s speech in Dallas, a federal audit found that Koch and two other companies had broken federal oil price controls. In 1975, a Koch subsidiary was cited for $10 million in overcharges on propane gas.” [The New York Times, 5/17/14]
Center for Public Integrity: Kochs’ Public Pose as Libertarians, Role as “Financial Angels for Conservative Movement” are “At Times In Conflict” With Koch Industries “Lobbying Steamroller for the Company’s Interests.” According the Center for Public Integrity, “Charles and David Koch, the owners of the country’s second-largest private corporation, are libertarians of long standing, who contend that government regulations, taxes and subsidies stifle individual initiative and hamper American competitiveness. In recent years, the Kochs have played an increasingly public role as financial angels for conservative causes, politicians and foundations. What’s not so well-known is the activity of Koch Industries in the trenches in Washington, where a Center for Public Integrity examination of lobbying disclosure files and federal regulatory records reveals a lobbying steamroller for the company’s interests, at times in conflict with its public pose.” [Center for Public Integrity, 4/6/11]
CPI: Koch Industries Uses Trade Associations Like The National Petrochemical & Refiners Association, And The National Environmental Development Association “To Represent Its Interests In Washington.” According to The Center for Public Integrity, “These totals do not include the work of the trade associations that Koch uses to represent its interests in Washington. There’s a major industry group called the National Petrochemical & Refiners Association, and obscure organizations like the green-sounding National Environmental Development Association’s Clean Air Project, whose membership lists Koch and two of its subsidiaries (Georgia-Pacific and Invista) with a dozen industrial giants like ExxonMobil Corp., General Electric Co. and Alcoa Inc.” [Center for Public Integrity, 4/6/11]
Center for Public Integrity: “It’s In The Kochs’ Commercial Interest To Preserve America’s Reliance On Carbon-Based Energy Sources.” According to The Center for Public Integrity, “It’s in the Kochs’ commercial interest to preserve America’s reliance on carbon-based energy sources. Despite recent diversification, Koch remains a major petrochemical company with refineries in North Pole, Alaska; Corpus Christi, Texas; Rosemount, Minn., and Rotterdam in the Netherlands; an array of chemical plants; a coal subsidiary (the C. Reiss Coal Co.) and 4,000 miles of pipelines. So it is not surprising that, when the Obama administration and the Democrats on Capitol Hill proposed to regulate the emission of greenhouse gases in recent years, Koch Industries responded with a fervent counteroffensive.” [Center for Public Integrity, 4/6/11]
CPI: Koch Industries Has Worked “To Dilute Or Halt Tighter Federal Regulation Of Several Toxic Byproducts That Could Affect Its Bottom Line, Including Dioxin, Asbestos And Formaldehyde.” According to The Center for Public Integrity, “Koch has since worked, on Capitol Hill and in various regulatory proceedings, to dilute or halt tighter federal regulation of several toxic byproducts that could affect its bottom line, including dioxin, asbestos and formaldehyde, all of which have been linked to cancer.” [Center for Public Integrity, 4/6/11]
Center for Public Integrity: Kochs’ Public Pose as Libertarians, Role as “Financial Angels for Conservative Movement” are “At Times In Conflict” With Koch Industries “Lobbying Steamroller for the Company’s Interests.” According the Center for Public Integrity, “Charles and David Koch, the owners of the country’s second-largest private corporation, are libertarians of long standing, who contend that government regulations, taxes and subsidies stifle individual initiative and hamper American competitiveness. In recent years, the Kochs have played an increasingly public role as financial angels for conservative causes, politicians and foundations. What’s not so well-known is the activity of Koch Industries in the trenches in Washington, where a Center for Public Integrity examination of lobbying disclosure files and federal regulatory records reveals a lobbying steamroller for the company’s interests, at times in conflict with its public pose.” [Center for Public Integrity, 4/6/11]
CPI: Koch Industries Uses Trade Associations Like The National Petrochemical & Refiners Association, And The National Environmental Development Association “To Represent Its Interests In Washington.” According to The Center for Public Integrity, “These totals do not include the work of the trade associations that Koch uses to represent its interests in Washington. There’s a major industry group called the National Petrochemical & Refiners Association, and obscure organizations like the green-sounding National Environmental Development Association’s Clean Air Project, whose membership lists Koch and two of its subsidiaries (Georgia-Pacific and Invista) with a dozen industrial giants like ExxonMobil Corp., General Electric Co. and Alcoa Inc.” [Center for Public Integrity, 4/6/11]
CPI: Gregory Zerzan, Former Acting Assistant Secretary And Deputy Assistant Secretary At The U.S. Treasury Department, Works As A Lobbyist For Koch. According to The Center for Public Integrity, “Gregory Zerzan is a good example. Zerzan was a senior counsel for the House Financial Services Committee before serving as an acting assistant secretary and deputy assistant secretary at the U.S. Treasury Department during the George W. Bush administration. Zerzan then worked as counsel and head of global public policy for the International Swaps and Derivative Association before joining Koch Industries as a lobbyist.” [Center for Public Integrity, 4/6/11]
Carbon Standards
Center for Public Integrity: “It’s In The Kochs’ Commercial Interest To Preserve America’s Reliance On Carbon-Based Energy Sources.” According to The Center for Public Integrity, “It’s in the Kochs’ commercial interest to preserve America’s reliance on carbon-based energy sources. Despite recent diversification, Koch remains a major petrochemical company with refineries in North Pole, Alaska; Corpus Christi, Texas; Rosemount, Minn., and Rotterdam in the Netherlands; an array of chemical plants; a coal subsidiary (the C. Reiss Coal Co.) and 4,000 miles of pipelines. So it is not surprising that, when the Obama administration and the Democrats on Capitol Hill proposed to regulate the emission of greenhouse gases in recent years, Koch Industries responded with a fervent counteroffensive.” [Center for Public Integrity, 4/6/11]
Center for Public Integrity: Koch Companies Lobby Heavily Against Use of Low-Carbon Fuel, Which Contribute Less Than Other Fuels to Global Warming. According to the Center for Public Integrity, “Of particular concern to Koch lobbyists in Washington, according to their disclosure forms, are measures to encourage or require the use of low-carbon fuels. These sources of energy, in their manufacture and use, contribute less than other fuels to global warming.” [Center for Public Integrity, 4/6/11]
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Center for Public Integrity: Koch Refinery In Minnesota Processes Large Amount of “High Carbon” Canadian Crude Oil; Opposed Low Carbon Standards Because “Canadian Crude Generates More Greenhouse Gas Emissions” And So Low-Carbon Standards “Would Cripple Refiners That Rely On Heavy Crude Feedstocks.” According to The Center for Public Integrity, “The Koch refinery in Minnesota is designed to process heavy ‘high-carbon’ Canadian crude oil, and is fed by a pipeline from Canada. Koch ‘is among Canada’s largest crude oil purchasers, shippers and exporters,’ the company says, with a trading and supply office in Calgary and a terminal in Hardisty, Alberta. Much of the oil comes from the mining of oil sands, which have a particularly heavy carbon footprint because the process releases greenhouse gases from peat lands and boreal forest, and requires a great deal of energy to heat and sweat the oil out. ‘Canadian crude generates more greenhouse gas emissions’ and so low-carbon standards ‘would cripple refiners that rely on heavy crude feedstocks,’ the Koch Industries website notes. ‘It would be particularly devastating for refiners that use heavy Canadian crude.’” [Center for Public Integrity, 4/6/11]
CPI: Kochs Opposed Efforts in Washington, California to Introduce Low-Carbon Standards, Other Measures to Slow Global Warming. According to The Center for Public Integrity, “When lawmakers in Washington and states like California sought to address global warming by requiring the use of low carbon fuels, Koch Industries responded. Koch lobbyists listed the legislation as a lobbying priority on Capitol Hill. And in California, where a wide-ranging series of measures to slow climate change were launched by former Gov. Arnold Schwarzenegger, Koch joined the fight to defeat them. A Koch subsidiary, Flint Hills Resources, donated a million dollars in support of Proposition 23, an unsuccessful attempt funded by Koch and other energy companies last year to stall implementation of the low-carbon standards and other remedial climate measures in California.” [Center for Public Integrity, 4/6/11]
CPI: Koch Lobbyist Disclosed He Was Lobbying To “Oppose Government Mandates On Carbon Reduction Provisions … [And] Provisions Related To Climate Change, And Oppose Entire Bill.” According to The Center for Public Integrity, “‘Oppose government mandates on carbon reduction provisions … [and] provisions related to climate change, and oppose entire bill,’ Koch lobbyist Robert P. Hall wrote, listing his goals on the 2008 lobbying disclosure form. The firm’s lobbying expenditures soared in 2008 as Koch Industries and its subsidiaries — Georgia-Pacific, Invista, Flint Hills Resources, Koch Carbon, Koch Nitrogen — peppered the EPA and members of Congress with objections. Several worked on measures that would strip the EPA of the power to regulate greenhouse gases through the Clean Air Act.” [Center for Public Integrity, 4/6/11]
CPI: Koch Representatives Joined “ExxonMobil, ConocoPhillips, Eli Lilly And Other NEDA-CAP Members To Register Concerns With EPA Officials Over The Proposed Mandatory Reporting Rule For Greenhouse Gas Emissions.” According to The Center for Public Integrity, “Koch-supported groups like the National Environmental Development Association’s Clean Air Project joined the effort. In a recent meeting, five Koch representatives joined colleagues from ExxonMobil, ConocoPhillips, Eli Lilly and other NEDA-CAP members to register concerns with EPA officials over the proposed mandatory reporting rule for greenhouse gas emissions, the record shows.” [Center for Public Integrity, 4/6/11]
Toxic Chemicals
CPI: Koch Industries Has Worked “To Dilute Or Halt Tighter Federal Regulation Of Several Toxic Byproducts That Could Affect Its Bottom Line, Including Dioxin, Asbestos And Formaldehyde.” According to The Center for Public Integrity, “Koch has since worked, on Capitol Hill and in various regulatory proceedings, to dilute or halt tighter federal regulation of several toxic byproducts that could affect its bottom line, including dioxin, asbestos and formaldehyde, all of which have been linked to cancer.” [Center for Public Integrity, 4/6/11]
Center For Public Integrity: “Koch Industries Argued That Moderate Levels Of The Toxic Chemical Dioxin Should Not Be Designated As A Cancer Risk.” According to The Center for Public Integrity, “At an EPA hearing last summer, representatives from Koch Industries argued that moderate levels of the toxic chemical dioxin should not be designated as a cancer risk for humans.” [Center for Public Integrity, 4/6/11]
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CPI: Georgia-Pacific Claimed To Have “A Significant Interest In” And “To Be Significantly Impacted,” By The EPA’s Decisions On Dioxin. According to The Center for Public Integrity, “Dioxin is released from incinerators, hazardous waste treatment, pesticide manufacturing, paper plants and other sources. With 165 manufacturing facilities across the United States, Georgia-Pacific ‘has a significant interest in and will be significantly impacted,’ by the EPA’s decisions on dioxin, Koch officials told the agency in April 2010.” [Center for Public Integrity, 4/6/11]
CPI: Georgia-Pacific “Strongly Disagreed” With The National Toxicology Program’s Decision To List Formaldehyde As A Human Carcinogen. According to The Center for Public Integrity, “‘GP strongly disagrees with the [National Toxicology Program] panel’s conclusion to list formaldehyde, a natural component of every cell in the body, as a human carcinogen,’ wrote Traylor Champion, the firm’s vice president for environmental affairs, in a February 2010 letter.” [Center for Public Integrity, 4/6/11]
CPI: Georgia-Pacific Became A Target For More Than 340,000 Claims By Plaintiffs Because Of Their Use Of Asbestos In Their Products. According to The Center for Public Integrity, “When Koch Industries purchased Georgia-Pacific, it inherited a titanic liability regarding asbestos. Georgia-Pacific had used asbestos to make gypsum-based drywall products, and starting in the 1980s the firm became a target for more than 340,000 claims by plaintiffs who said they suffered lung and other diseases, including mesothelioma, a deadly cancer. By 2005, the company was spending $200 million a year and had to build a $1.5 billion reserve fund for asbestos liabilities and defense costs.” [Center for Public Integrity, 4/6/11]
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CPI: Koch Industries General Counsel Mark Holden Griped That “Many Of Those Claims Are An Outright Abuse Of The Legal System … That Often Involve People Who Are Not Sick.” According to The Center for Public Integrity, “In a 2008 Koch Industries publication, General Counsel Mark Holden griped that ‘many of those claims are an outright abuse of the legal system … that often involve people who are not sick … all because of over-zealous litigators and a legal system that gives them perverse incentives.’” [Center for Public Integrity, 4/6/11]
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CPI: Koch Industries Has Lobbied Against “Legislative Proposals Intending To Restrict The Use Of Asbestos And Improve Public Knowledge.” According to The Center for Public Integrity, “The number of new claims has dropped with tougher federal safety standards. But in the 110th Congress Koch lobbyists still sought to sway members on legislative proposals intending to restrict the use of asbestos and improve public knowledge, even Senate Resolution 462, which called for a ‘National Asbestos Awareness Week.’” [Center for Public Integrity, 4/6/11]
Koch Opposed Legislation “That Would Toughen” Standards, And Require Manufacturers “To Use Safer Chemicals And Processes” To Prevent And Minimize The Effects Of Toxic Releases From Terrorist Attacks. According to The Center for Public Integrity, “Another major preoccupation of Koch Industries lobbyists during recent sessions of Congress was the Chemical Facility Anti-Terrorism Standards, a federal effort to identify and regulate chemical facilities that could be vulnerable to terrorist attacks. In 2009, the House passed legislation that would toughen the standards, and require manufacturers like Koch to use safer chemicals and processes to add another level of protection and minimize the effects of toxic releases from terrorist attacks or catastrophic accidents. Koch opposed the changes, claiming they ‘increase cost and regulatory burden while shifting focus away from security and toward environmental considerations.’ The chemical security provisions were listed as lobbying targets by Koch representatives in 2007, 2008, 2009 and 2010.” [Center for Public Integrity, 4/6/11]
Ethanol
Center For Public Integrity: “The Kochs Bought Four Ethanol Plants… With A Combined Annual Capacity Of 435 Million Gallons.” According to The Center for Public Integrity, “In Iowa As its corporate officials and publicists decried ethanol as a costly government boondoggle, the Kochs bought four ethanol plants in Iowa in recent months, with a combined annual capacity of 435 million gallons. In Washington (where ethanol tax subsidies cost the Treasury some $6 billion annually) Koch representatives lobbied Congress on ethanol and other biofuel subsidies.” [Center for Public Integrity, 4/6/11]
CPI: Koch Industries’ Subsidiaries, Flint Hills And Koch Supply & Trading, “Currently Buy And Market About One-Tenth Of All The Ethanol Produced In The United States.” According to The Center for Public Integrity, “Koch Industries’ status as an ethanol player goes beyond its new Iowa plants. Koch blends ethanol and gasoline nearby, in its Minnesota refinery. By its own account, the company’s subsidiaries, Flint Hills and Koch Supply & Trading, currently buy and market about one-tenth of all the ethanol produced in the United States.” [Center for Public Integrity, 4/6/11]
CPI: Koch Industries Accept Ethanol Subsidies Even Though They Claim To Be Opposed To Them Because They Did Not Want To “Place Our Company And Our Employees At A Competitive Disadvantage.” According to The Center for Public Integrity, “The Kochs seem to have recognized that their actions might seem hypocritical and in a January 2011 newsletter the company tried to explain things to employees who have been ‘scratching their heads and wondering: what is going on? After all, ethanol production is heavily subsidized, mandated and protected,’ Koch Industries acknowledged, ‘while Koch companies openly oppose such government programs. […] ‘We are not going to place our company and our employees at a competitive disadvantage by not participating in programs that are available to our competitors,’ Razook assured Koch employees.” [Center for Public Integrity, 4/6/11]
Oil/Taxes
Center For Public Integrity: “Oil Is The Core Of The Koch Business Empire.” According to The Center for Public Integrity, “Oil is the core of the Koch business empire, and the company’s lobbyists and officials have successfully fought to preserve the industry’s tax breaks and credits, and to defeat attempts by Congress to regulate greenhouse gases.” [Center for Public Integrity, 4/6/11]
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CPI: “Koch Was A Pioneer Importer Of Russian Oil To The United States.” According to The Center for Public Integrity, “The company has a history of pragmatism in commercial affairs. Koch was a pioneer importer of Russian oil to the United States, including a 2002 shipment of Russian crude that Koch sold to the U.S. government to help fill the U.S. Strategic Petroleum Reserve. And though it opposes a cap-and-trade solution to global warming for the United States, Koch makes money trading emissions credits under a similar program in Europe.” [Center for Public Integrity, 4/6/11]
CPI: Koch Lobbyists “Spend Much Of Their Time” Fighting Attempts To “Curb Price-Gouging, Windfall Profit-Taking And Speculation In The Oil Industry.” According to The Center for Public Integrity, “Koch lobbyists spend much of their time, according to their disclosure reports, fighting attempts by members of Congress to curb price-gouging, windfall profit-taking and speculation in the oil industry.” [Center for Public Integrity, 4/6/11]
CPI: Koch Officials Worked To “Dilute A 2009 Federal Trade Commission Rule Governing Manipulation Of The Energy Markets” And Lobbied To Preserve Oil Industry Tax Breaks. According to The Center for Public Integrity, “To this same end, Koch officials worked to dilute a 2009 Federal Trade Commission rule governing manipulation of the energy markets. Meanwhile, Koch has lobbied to preserve some of the oil industry’s coveted tax breaks and credits.” [Center for Public Integrity, 4/6/11]
CPI: Industry Tax Breaks Koch Has Lobbied For Include The Section 199 Subsidy And The “LIFO” Rule. According to The Center for Public Integrity, “One benefit is known as the Section 199 deduction, approved by Congress several years ago to help the hard-pressed U.S. manufacturing sector. In light of the oil and gas industry’s hearty profits, the Obama administration and members of Congress have sought to end the Section 199 subsidy for energy firms and save the U.S. Treasury $14 billion over 10 years. But Koch lobbyists and trade associations have worked to preserve the deduction. Another industry tax break that drew the support of Koch representatives is the venerable ‘LIFO’ (last-in, first-out) accounting rule. It allows energy companies effectively to raise the value of their existing inventory (and thus pay lower taxes on profits from sales) when the price of oil soars.” [Center for Public Integrity, 4/6/11]
CPI: “Koch Lobbyists Listed The Expiring Bush Tax Cuts As A Lobbying Objective.” According to The Center for Public Integrity, “Koch lobbyists listed the expiring Bush tax cuts as a lobbying objective last year, and the Koch brothers were among an elite, relatively few Americans who profited when the income tax cuts for those earning more than $250,000 a year were extended in a year-end deal.” [Center for Public Integrity, 4/6/11]
CPI: “Koch Lobbyists Labored To Preserve The Exemption, Known As The ‘Enron Loophole,’ That Excused Energy Commodity Contracts From Regulation.” According to The Center for Public Integrity, “In that time, the market for trading derivatives and swaps in the energy industry has gone largely unregulated. And in past Congresses, Koch lobbyists labored to preserve the exemption, known as the ‘Enron Loophole,’ that excused energy commodity contracts from regulation.” [Center for Public Integrity, 4/6/11]