Smearing A Reporter And Spying On A Federal Agent — Just Another Day For The Kochs

January 25, 2016

Politico’s Ken Vogel in November reported on “The Koch Intelligence Agency,” a “secretive operation that conducts surveillance and intelligence gathering on its liberal opponents.” Though jarring, we’re not entirely shocked that the Kochs fancy themselves spymasters ordering the careful monitoring of “opposing” organizations that work to unmask how they work to advance an agenda that’s good for them but hurts American families.

What is truly breathtaking, though, is that Charles and David Koch’s self-interest-fueled hubris has them turning their clandestine intelligence gathering and intimidation tactics on the media — and even, on at least one occasion, an FBI agent working as a special investigator for a U.S. Senate committee.

In a new interview from WNYC’s The New Yorker Hour, Jane Mayer, author of Dark Money — a new book exposing previously unreported details on the Kochs’ business interests, self-enriching motivations, and political manipulations — recounts a Koch campaign to smear her reputation.

After publishing a 2010 story on the Koch brothers’ funding of the Tea Party movement, Mayer — out of nowhere — found herself having to beat back allegations of plagiarism. As she began to write that first story, she says she was warned that she “better be careful” poking around in Koch Industries business. But she could not at the time imagine the lengths to which the Kochs would be willing to go to fight back. In her own words:

What I learned was that a so-called opposition research team had been put on me in an effort to discredit my reporting…I was told by one source that whatthey were looking for was “dirt, dirt, dirt” and that if they couldn’t find it, they’d create it. I was told that the operation was led by a couple of long-time Koch operatives and that they were working with a private investigator.

The Koch muscle behind the smear campaign is further corroborated, Mayer says, by a letter Koch Industries General Counsel Mark Holden wrote to the American Society of Magazine Editors formally denouncing her story and insisting it inappropriate that it even be considered for an award given her clear biases.

As the rest of Mayer’s The New Yorker Hour interview reveals, the Koch Intelligence Agency doesn’t limit its self-imposed jurisdiction to progressive organizations and the media. It’s also turned its sights on an FBI agent working for a U.S. Senate committee. During a 1989 U.S. Senate investigation into “whether or not [Koch Industries] was stealing oil from Indian reservations” — and they were, of course — Jim Elroy was sent out to Oklahoma to investigate. Elroy, among other things, conducted interviews with a number of employees. As he drove around, he noticed a surveillance car following him. When confronted, Elroy’s pursuer identified himself as a private investigator “hired to determine which Koch employees” were being interviewed. Yes, Charles and David were running surveillance on the federal government.

What’s clear is that Charles and David Koch will stop nowhere — and pursue any means necessary — to protect their selfish agenda and keep themselves, and their political machinations, free of public scrutiny. What’s also clear: they’ve gotten a whole lot worse at it


Full Text Of Mayer’s Interview (Unofficial Bridge Project Transcript):

David Remnick: Now, let’s start with another tough minded soul who is in a very, very different line of work. Jane Mayer is an investigative reporter. She’s covered everything from the Clarence Thomas hearings to drones and the use of torture by the CIA. In 2010, she published an article in the magazine about the mega-billionaire industrialists Charles and David Koch of Koch Industries and their funding of the Tea Party. Now back then the Tea Party, as you may remember, was thought of as a populist uprising but Jane was investigating leads that the Koch brothers and other wealthy activists were sponsoring and actually instigating the movement but as Jane was borrowing away in her reporting she started to notice something odd was happening.

Jane Mayer: I began to get warnings from a number of people who had worked for Koch Industries who I wanted to interview that I better be careful. And, you know, I tend to kind of laugh off such things but people were saying they play hardball, watch out and a number of them were unable to give interviews because they’d had to sign non-disclosure agreements but some of the ones that I was able to talk to, you know, were literally looking over their shoulders the whole time I interviewed them and didn’t want to meet any place in public, didn’t want to talk on the phone… I mean it was strange. It seems humorous at first or at least overwrought I thought. It stopped being funny for me, though, on January 3rd, 2011. David Remnick sent me a strange email saying “Can you help me out with this?”

Remnick: I got an email from Keith Kelly who is the New York Post media correspondent and he’s a good reporter, and he writes this:

“Hi. We’re hearing that a right-wing blogger may be preparing to let fly some pretty serious claims against Jane Mayer. On the one hand, it may be seen as payback for her bring-down of the Koch Bros in August 2010” and then Keith goes on to list a couple of these allegations about [quote] “borrowing heavily from one story” and, you know, they’re allegations of plagiarism.

Mayer: If you want to take down a reporter, there’s pretty much nothing more lethal than charging them with plagiarism. There was no way it was true. I mean, I’d made my share of mistakes in journalism but I’ve always gone out of my way to credit my colleagues and, frankly, nobody’s ever complained about this in my entire career, but when I looked at David’s e-mail, I froze. I knew I had to give a response by the next morning. False allegations like this can haunt reporters for years. People would think “there must be something about it that’s true.” It was four in the afternoon… I had sixteen hours. By the following morning, I’d reached the authors of the four stories that I’d supposedly stolen from and luckily they were all stand-up people who were willing to go on the record saying it was not true. I got their statements and I sent them to both Daily Caller and the New York Post and both organizations dropped the story when they read it, but to the New York Post’s credit, they actually kept reporting. Now, Keith Kelly the media reporter who had emailed David looked at this and he thought “What’s going on here?”

Kelly: My first sense was “oh wow, great, a plagiarism scandal, what could be better?” You know? “This could be a big scandal involving a major magazine,” but then as we checked it out it turned out that none of the allegations were panning out so the suspicion was that there was somebody behind it who was trying to discredit a legitimate story for their own reasons.

Mayer: He started writing a couple of stories asking “Who is trying to smear Jane Mayer?”

Kelly: We never actually identified who that could be exactly but, you know, the list of suspects would be fairly short I would imagine.

Mayer: I have to say, I wondered who was behind it too but gradually I was able to piece together much of the puzzle. What I learned was that a so-called opposition research team had been put on me in an effort to discredit my reporting and that they’d worked for months in an office building a few blocks away from the White House. I was told by one source that what they were looking for was “dirt, dirt, dirt” and that if they couldn’t find it, they’d create it. I was told that the operation was led by a couple of long-time Koch operatives and that they were working with a private investigator. That firm turned out to be Vigilant Resources International. When I looked up the firm, it was run by the Safer family. Adam Safer is its president. Howard Safer, its founder, is the former NYC police commissioner. Naturally, I wanted to know more about this so I picked up the phone and called both Adam and Howard Safer to ask them about it. Both said they couldn’t discuss it. They don’t talk about their clients and they would neither confirm, nor deny, investigating me or planting the plagiarism story. It was unclear to me whether the Koch Brothers would have even known about an operation but what was clear is that they had hated my 2010 story about their political activities. They hadn’t been able to find any errors in it, but they nonetheless tried to stop it from being nominated for a National Magazine Award.

Remnick: The senior vice president and general counsel for Koch Industries, Mark Holden, said in a letter to the ASME board members, the Association of Magazine Award, that it’s “inappropriate for Jane Mayer’s piece to be considered for the National Magazine Award because her article was biased and given these facts, it would be inappropriate for ASME to give Ms. Mayer’s article an award in reporting.” But it was very clear in the aftermath that the ASME officials behaved properly and didn’t cave in.

Mayer: The Koch Brothers themselves used to joke that they were the biggest company that nobody had ever heard of. They’ve got pipelines, refineries, chemicals, tar sands… They even own Georgia Pacific Company which makes household products like Dixie Cups. They make Stainmaster Carpet. They make Lycra… it’s really a phenomenal business that they’ve got. The Koch Brothers, Charles and David, are the 6th and 7th richest Americans at this point. They’re tied for it. They’ve each got fortunes worth about $40b and they have tremendous financial interests at stake in American policy and they want to influence that government to serve their business but that is not the only reason they are donating. They are ideologues of extraordinary intensity and particularly Charles Koch. From the start, really beginning more than 40 years ago, he set out to create a movement to “destroy the current paradigm.”

Charles Koch: Theory and history have overwhelmingly demonstrated that the best way to help the poor and, for that matter, the rest of society, is through a system of economic freedom.

Mayer: That’s Charles Koch receiving an award at the philanthropy roundtable in 2011. He really believes that, as one of his mentors said, government is a disease masquerading as its own cure. After the Citizens United decision in 2010, many critics thought that corporations would pour money into American politics but what happened was actually kind of different. Instead, a number of hugely wealthy individuals like the Koch’s tapped their fortunes to become political donors. Many of whom had political agendas that helped their own bottom lines. Political reporters call this money “dark money.” It’s money that comes from undisclosed donors. Millions and millions of dollars sloshing through the American political system from people who really want to influence our democracy but don’t want anyone to know who they are. Some of this reporting, it seems like these days, requires not just a law degree but an accounting degree just to figure out what the rules are and to try and follow the money. Many of us have found ourselves at the end of the day looking not just over the tiny amount of disclosures that have to be made to the IRS and publicly, and you look over these forms and you look for names and you look for sums and they have often an address or two and you go to the address and it’s nothing but a post office box. Now, in the course of reporting this story about the Koch’s, I had stumbled across a kind of strange pattern that they had which was when outsiders tried to challenge them in ways that they found threatening to their interests, they struck back hard. For instance, in 1989, there was a Senate investigation into the Koch’s and into Koch Industries specifically and whether or not it was stealing oil from Indian reservations.

Elroy: My name is Jim Elroy. I’m a retired special agent at the FBI.

Mayer: Jim Elroy was an FBI agent who had worked in Oklahoma who became an investigator for the Senate committee that was looking into allegations that Koch Industries was stealing millions of dollars worth of oil from Indian Reservations, so Elroy started working for the committee and he started to feel that someone was watching him and that there was some kind of intimidation coming, he thought, from Koch Industries.

Elroy: I was back-gauging oil sites meaning I’m double-checking and watching the Koch Industries employees gauge oil and then I’m gauging it and I’m determining that they are not telling the truth when they’re indicating how much oil they’re taking. They’re stealing oil. I was up in North central Oklahoma and I went to the home of the employee to interview this person to determine who taught them to do this and why they’re doing it and when I left the interview, I saw a car parked down the street. I thought I’d seen the car before so I surmised that it might be surveillance. I got in the car, started driving, and making a couple of turns the car stayed with me so I was sure it was surveillance. So I pulled up at a convenience store, got out of the car, went in, went out the back, doubled back down the block and came up behind this guy. I took out my credentials and my gun and told the guy I was “FBI, put your hands up where I can see them.” I could see the butt of what turned out to be a 45 caliber semi-automatic pistol sticking out of his waistband so he put his hands up on the steering wheel, I reached in and I pulled the gun out of his waistband, I got him out of the car and I shook him down. He said he was a private investigator and he was hired to determine which Koch employees that I was interviewing. So I took the magazine out of his gun and ejected the cartridge out of the chamber and threw the gun back in the car and told him to go back and tell Charlie Koch that the next guy he sends out to run a surveillance on me will go home in a bag. So, I didn’t seem to have any more surveillances on me at that time.

Mayer: At the time, a spokesman for Koch Industries denied spying on Elroy. The Senate did release a damning report, though, which concluded that the Koch’s were stealing millions of dollars worth of oil from Native Americans in Oklahoma. It also noted that oil workers said they felt pressured by their superiors at Koch to use what was called “volume enhancement.”

Elroy: In fact, this particular system was known throughout the industry as the “Koch method” of gauging oil.

Mayer: The report also noted that a committee investigator’s ex-wife said that she was questioned by a Koch employee about their divorce. Now that’s not a common thing to see in a Senate report. When I read it, I realized that I’m not alone. As I did more digging, I found people like Wick Sollers, a former federal prosecutor who worked on the Senate investigation, and he later became managing partner at the Blue Chip Law Firm in Spalding. Sollers said that several other staff members believe that someone was going through their garbage. He told me that “we don’t know who sent them, but someone hired private investigators to dig up anything they could.” He said that he’d never experienced anything like it before or after in his law practice and he added “I’m not political, but it was troubling.” The oil theft saga went on and on. It continued for at least another decade. The Senate report led to a federal investigation but no charges were brought. Jim Elroy retired from the FBI but he then went to work for Bill Koch, the estranged brother of Charles and David, and Bill Koch brought his own whistle-blower lawsuit against his brothers with the same charges of having to do with the theft of oil, and won. After all this, Elroy retired for good and now he spends most of his time sailing.

Elroy: I’m going to do some sailing off of the coast of Italy. I’m not sure how to say that… Koch Industries might come after me there, so…

Mayer: After the whole plagiarism ploy, I began to wonder how worried I should be. When I finally had drafts of the book that were not perfect yet and that I did not really want out in public, I thought I ought to make sure they aren’t just thrown out where anyone can see them. I didn’t have a shredder at home and I wasn’t sure what to do and then I realized “Gosh, they’d make incredible kindling,” and so I took the pages and put them in the fire box and when we next had a fire in the living room, my family got to enjoy toasting marshmallows over them.

Host: Jane Mayer… Her new book “Dark Money” is a history of the Koch family’s empire and its political influence.

Paid for by American Bridge 21st Century Foundation