Koch industries web of influence

Koch spends tens of millions trying to shape federal policies that affect their global business empire.  The Center for Public Integrity digs deep into the Koch's influence and finds it extends beyond  the highest levels of U.S. government to Canada and Europe.

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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.

“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.

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.

Koch’s lobbying efforts on climate change are matched by a public campaign. Via three foundations — the Claude R. Lambe Foundation, the Charles G. Koch Foundation and the David H. Koch Foundation — funded and administered by Koch family members and employees, the Kochs have donated several million dollars in recent years to think tanks and groups that have sought to discredit climate science and EPA’s efforts to reduce greenhouse gases.

 “Why are such unproven or false claims promoted?” the Koch Industries company newsletter, Discovery, asked in an article on global warming entitled, “Blowing Smoke.”

“Scientists have … perverted the peer review process, doing everything possible to prevent opinions contrary to the alarmist view from being heard,” the article said. Humans should adapt to global warming, not try to slow or stop it, the newsletter recommended. “Since we can’t control Mother Nature, let’s figure out how to get along with her changes.”

In early March, members of the Republican-led House Energy and Commerce Committee — many of whom had received campaign contributions from Koch employees and PACs last fall — voted to bar the EPA from regulating greenhouse gases under the Clean Air Act. Their action has been endorsed by Speaker John Boehner and Republican House leaders.

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.

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.”

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.

Energy industry tax breaks

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. 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.

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.

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