-By Charles Lewis, Eric Holmberg, Alexia Campbell & Lydia Beyoud
July 1, 2013- Koch Industries, one of the largest privately held corporations in the world and principally owned by billionaires Charles and David Koch, has developed what may be the best funded, multifaceted, public policy, political and educational presence in the nation today.
From direct political influence and robust lobbying to nonprofit policy research and advocacy, and even increasingly in academia and the broader public “marketplace of ideas,” this extensive, cross-sector Koch club or network appears to be unprecedented in size, scope and funding. And the relationship between these for-profit and nonprofit entities is often mutually reinforcing to the direct financial and political interests of the behemoth corporation — broadly characterized as deregulation, limited government and free markets.
The cumulative cost to Koch Industries and Charles and David Koch for this extraordinary alchemy of political and lobbying influence, nonprofit public policy underwriting and educational institutional support was $134 million over a recent five-year period. The global conglomerate has 60,000 employees and annual revenue of $115 billion and estimated pretax profit margins of 10 percent, according to Forbes.
An analysis by the Investigative Reporting Workshop found that from 2007 through 2011, Koch private foundations gave $41.2 million to 89 nonprofit organizations and an annual libertarian conference. Koch Industries and Charles and David Koch contributed $8.7 million to candidates and the Republican Party in the three election cycles between 2007 through 2012. In addition, Koch private foundations contributed $30.5 million to 221 U.S. colleges and universities and $46.3 million to the arts and other more traditionally charitable purposes during this period.
And while Koch Industries’ lobbyists were spending $53.9 million to further the giant corporation’s federal and state policy agenda, the nonprofits it funded were simultaneously “educating” the public and lawmakers about energy, the environment and other issues in public testimony on Capitol Hill.
For example, in 2011 and 2012, Koch Industries Public Sector LLC, the lobbying arm of Koch Industries, advocated for the Energy Tax Prevention Act, which would have rolled back the Supreme Court’s ruling that the Environmental Protection Agency (EPA) could regulate greenhouse gases. The bill was sponsored by Rep. Fred Upton, R-Mich., and co-signed by 92 Republicans (and three Democrats), 61 of whom signed an anti-climate tax “pledge.” An economist with the American Council for Capital Formation — a nonprofit group that receives Koch money — testified about that same bill before the House Energy and Commerce Committee. Margo Thorning told members of the House in February 2011 that regulation of greenhouse gas emissions “makes little economic or environmental sense,” according to her testimony.
There were similar confluences of interest, with Koch foundation-funded, tax-exempt nonprofits and Koch’s commercial lobbyists saying similar things about the same pending legislation on Capitol Hill — such as in 2007-2008 on the proposed America’s Climate Security Act. In 2011 and 2012, Koch Industries and one of its supported nonprofits, the Heritage Foundation, “educated” lawmakers and their staff in their respective ways regarding the proposed New Alternatives Transportation to Give Americans Solutions Act legislation.