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Kultur Dokumente
Table of Contents
Section 1Introduction ......................................................................................................... 3 Section 2Koch Money in Politics ..................................................................................... 5
2.1 Background ................................................................................................................................... 5 2.2. Analysis of Congressional Contributions ........................................................................... 7 2.3 Lobbying Expenditures .......................................................................................................... 11
Section 4Corporate Strength ......................................................................................... 17 Section 6Conclusion ......................................................................................................... 19 Section 7Works Cited ....................................................................................................... 21
Section 1Introduction
Politics has always been a money game; those with the most money have always had an edge over their less wealthy competitors. However, following the 2010 Supreme Court decision in Citizens United vs. Federal Election Commission, which threw out part of the 2002 Bipartisan Campaign Reform Act (BCRA) the influence of money in politics was exponentially increased since the ruling struck down regulations on political spending as a violation of free speech and sparked the creation of political action committees (PACs). Different corporations have responded in different ways to the removal of limits on their involvement in politics, but those that have received the most media attention are those using the Citizens United ruling to funnel millions of dollars into elections deemed favorable to them. While it is prohibitively difficult to pinpoint or define the groups that benefitted most from the Citizens United decision, it is possible to examine those that are most notoriously taking advantage of the ruling since they cast a greater shadow. However, it is important to note that not all corporate spending in the political arena is related to the election of particular candidates. Since corporate actions exist within a sphere of government regulation and influence, a large amount of corporate spending is also directed towards a more direct advancement of their economic interests in the form of lobbying or other support for particular policies or bills, often with very distant, but nonetheless significant links to a corporations economic interests. Furthermore, it makes no sense to discount the influence of non-economic measures, such as ownership, in tracking and defining spheres of corporate influence. In fact, all of these different variables come together 3
in a complex ways in order to piece together a picture of corporate power and influence. All major corporations have some influence on society, political, socially or economically, so labeling one corporation as particularly influential is simply to make a statement of relative degree of this influence. Moreover, since the specific nature of a particular corporations relationship to the rest of society differs vastly from that of another corporation, it is necessary, for the sake of specificity and completeness, to examine structures of corporate power on a case by case basis. While there are certainly generalizations that can be made, rarely, if ever, do all of these generations apply in their entirety to any particular corporation due to unique organizational or managerial styles, ownership, market share, political or economic interests etc. Although, following the financial crisis of 2008, many corporations have become household names. Yet, despite their notoriety, for the most part, discussion of these corporations remains one for dinner table political conversations. While people may curse the name of Goldman Sachs, or AIG, it takes a special kind of corporation to be the not-so-subtle subject of a Will Ferrell and Zach Galifianakis satire film. Neither Goldman, AIG, nor any of other players in the 2008 financial crisis were featured, and yet, Wichita, Kansas based corporation, Koch Industries managed to be the antagonists of the 2012 film The Campaign. In the film, brothers Glen and Wade Motch, modeled after brothers David and Charles Koch, attempt to use their seemingly inexhaustible wealth to determine the results of a North Carolinian congressional race in order to further their own economic
interests. The comparison is so unsubtle that leading actor Zach Galifianakis openly admitted in a Daily News interview that [he] think[s] it is pretty obvious that the Motch brothers represent the Koch brothers (Daily News, 2012). While Charles Colton may have been correct when he said, imitation is the sincerest form of flattery, Hollywood satire is much more negative, and there is no doubt that Charles and David Koch werent terrible flattered by John Lithgow and Dan Aykroyds portrayals of them. This essay will comprise of a holistic analysis of Koch Industries in which the political contributions, leadership and relative strength will be examined in order to construct an understanding of the role of Koch Industries that elucidates structures of corporate power in their relationship to the rest of society.
corporate donors since 1990, having spent a total of $14,057,348 on political campaigns (OpenSecrets). Furthermore, Koch Spending is not merely on contributions for indirect purposes, but also they have spent $71,412,700 in the same period of time lobbying congress on bills, almost exclusively in relation to energy policy (which will be discussed in more depth later)(OpenSecrets).
$ Spent On Lobbying
$7,800,000 $8,360,000 $8,070,000 $12,450,000 $20,023,000 $5,068,750 $3,968,750 $2,185,000 $857,200 $610,000 $840,000 $500,000 $240,000 $240,000 $200,000 N/A N/A N/A N/A N/A N/A N/A N/A $71,412,700
$ Spent on Campaigns
$2,577,113 0 $2,174,363 0 $1,964,064 0 $1,511,855 0 $847,772 0 $1,454,676 0 $1,074,906 0 $1,013,080 0 $843,570 0 $404,559 0 $152,190 0 $39,200 $14,057,348
In the 2012 campaign cycle, Koch Industries gained particular notoriety due to a pledge on the part of brothers David and Charles Koch to donate $400 million to political campaigns in order to aid (mostly) republic candidates in their bids for reelection and to aid in the similar goal of preventing the (re)election of democratic candidates, particularly president Barack Obama (Allen & VandeHei, 2012). In the 6
election cycle, Koch industries itself gave approximately $2,577,113 in campaign contributions, to 197 different candidates, making it one of the most significant corporate players in the 2012 elections (OpenSecrets). If there is one rule that be applied to any successful corporation, public or private, it is that one cannot spend money frivolously and remain competitive in the free-market. Thus, it seems logical that there must be a concrete explanation behind the large financial investment of Koch industries in the 2012 election cycle. The necessary first step for any examination of Koch Industries political involvement is the determination of its political goals and interests. However, due to the complex nature of both inter-corporate and American politics defining such ends can prove to be extremely difficult when the numerous agendas and motivations of each actor are taken into account. In the case of Koch Industries, such complexity is magnified since, although many corporations are limited in the nature and scope of their political contributions by the presence of shareholders, Kochs status as a private company gives it more freedom than its publically traded counterparts. Thus in order to attempt to pinpoint Kochs political interests, it is important to examine the pattern of donations in relation to the beliefs, committee membership and voting records of candidates who received the most financial support. Once these data are compiled it then becomes possible to construct a fairly accurate picture Kochs political agendas by cross-referencing donations with the political affiliation and records of recipients.
At the highest level, any analysis of contribution data would show a clear Republican favoritism in Koch donations. For example, in the current election cycle, the total of $2,177,313 in direct financial contributions to federal political campaigns, $2,132,101 or 98% was given to Republican candidates (OpenSecrets). There are two possibly explanations for such an action either (a) the chief executives of Koch Industries, Charles and David Koch, are ideologically positioned in such a way that would make them more inclined to support conservative candidates regardless of corporate interests or (b) the stance taken by republican candidates aligns more closely to the economic interests of Koch Industries and its subsidiaries. While (a) is almost certainly true, as the Koch brothers are selfadmitted longtime libertarians (New Yorker, 2010), such a position would only explain the lack of contribution to Democratic candidates but not explain the reason for Kochs hefty political involvement. Moving down from general into specific, data obtained via OpenSecrets shows the specific interests of the Koch industries by examining contribution distribution in congress in relation to committee membership and seems to lend further support to the thesis that Kochs political contributions follow a set of concrete economic interests. Given Koch Industrys involvement in the energy sector it comes as little surprise that Kochs donations to members of the House Energy and Commerce committee, totaling $291,750, more than double their total contribution to the members of any other congressional committee. This trend in donation continues when data from other committees in considered, for instance the House Financial Services committee was the second largest recipient ($135,353)
and in the Senate the top recipient was the Committee on Health, Education and Labor ($35,250) followed closely by the Energy Committee ($34,000) (Open Secrets). Although specific donation amounts will vary based on who is due for reelection (probably one of the reasons why substantially less money was spent in the senate), the data shows a general trend towards interests in issues of energy and market regulation; a trend which becomes even more concrete as data concerning specific candidates and legislation is examined.
Total
$346,750 $184,250 $164,353 $154,750 $140,000
Democrats
$16,000 $0 $0 $2,000 $1,000
Republicans
$330,750 $184,250 $164,353 $152,750 $139,000
Total
$35,250 $34,000 $32,500 $31,250 $30,000
Democrats
$0 $1,000 $0 $0 $0
Republicans
$35,250 $33,000 $32,500 $31,250 $30,000
If party and committee donations can help to unveil the political interests of Koch Industries, examining specific candidates and the legislation and amendments that they propose can tear the mask right off. Unsurprisingly, considering Koch Industries headquarters in Wichita, Kansas and focus in the energy sector, the top recipient of Koch money in Congress has been Kansas Republican and member of
the Energy and Commerce Committee, Mike Pompeo ($90,000), followed by Texas Republican and member of the House of the Energy and Commerce Committee, Pete Olson ($35,000). Pompeo, who represents the congressional district in which Koch Industries is headquartered, is probably the most visible sign on Koch influence on the 2012 election cycle, having consistently backed legislated to loosen environmental regulation on the emission of greenhouse gases and was one of the sponsors of the Stop the War on Coal Act which would reduce EPA regulative authority to allow for increased carbon emission. Moreover, Pompeo has sponsored legislation to eliminate funding for a database cataloguing consumer complaints about unsafe products and an Environmental Protection Agency registry of greenhouse-gas polluters, both of which Olson has supported, and represent top legislative priorities for Koch industries based on disclosure records which indicate Koch has spent $37 million on lobbying for these and similar amendments since 2008. Obtaining support in Congress is only one part of Koch Industries involvement in politics; they also have shown a definite interest in the 2012 presidential election, giving $38,450 to Republican challenger Mitt Romney with an additional $30,800,720 spent by Koch affiliated PAC, Americans for Prosperity, on anti-Obama measures (OpenSecrets). Once again, Kochs financial involvement in the Romney Campaign can be linked to concrete interests in energy and corporate policy. Not only is Obama an advocate of tighter corporate regulation and investment in alternative energy, but also Romneys own energy policy emphasizes energy independence, which, considering Kochs presence in the North American
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energy sector, would be economically beneficial to Koch Industries as it would remove foreign competition from the markets and hence increase their market share (Romney Platform).
In 2011, the most lobbied bill was actually H.R. 901, however it was omitted in favor of the second most lobbied bill, H.R. 910 to avoid data repetition that would have failed to elucidate Koch political interest.
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Bill Number
H.R.901
Year
Bill Title
Chemical Facility Anti-Terrorism Security Authorization Act of 2011 Energy Tax Prevention Act of 2011 Chemical and Water Security Act of 2009 American Clean Energy and Security Act of 2009
No. of Reports
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Koch's Support
Opposed
Status
In House Committee
2012
9 15 25
H.R. 901 Chemical Facility Anti-Terrorism Security Authorization Act/ H.R.2868 Chemical and Water Security Act of 2009 In 2009, congress passed the Chemical and Water Security Act (H.R. 2868), which required facilities to assess the costs of potentially safer chemicals or processes and, potentially, convert to meet safety guidelines. However, if the facility would be forced to relocate or be hurt economically, it would avoid the requirement to convert (OmbWatch.org). As of July 2011, the Department of Homeland Security (DHS) had listed 4,069 domestic chemical facilities as being high risk, 57 of which are operated by Koch Industries (Greenpeace, No Date Given). However, H.R. 901 would not only require the enforcement of current safety regulations, but would also remove numerous exemptions which would, in turn, force either closure of high risk chemical facilities (H.R. 901). Thus, the reasons for Kochs opposition seem pretty clear, they have a vested economic interest in preventing the closure or costly upgrading of 57 chemical facilities
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Currently, the Clean Air Act of 1970, authorizes the Environmental Protection Agency to regulate emissions of hazardous air pollutants, especially greenhouse gases (EPA.gov) . H.R. 910 would eliminate the EPAs authority promulgate any regulation concerning, take action relating to, or take into consideration the emission of a greenhouse gas to address climate change (H.R. 910). Koch Industries, founded as a petroleum company, and having been named by University of Massachusetts at Amhersts Political Economy Research Institute, one of the top ten air polluters in the United States (New Yorker 2010), has an obvious vested interest in ending the enforcement capability of the EPA under the clear air act, especially considering that between 2000-2006 along Koch Industries has paid over $50 million in fines for violations of the Clean Air Act (Public Integrity, 2006).
H.R. 2454 American Clean Energy and Security Act The American Clean Energy and Security Act of 2009, proposes a cap and trade system, under which the government sets a cap on national greenhouse gas emission. The way the system would work is that the act would allocate 85% of total carbon allowances to industry for free and then allowing companies to buy or sell permits to emit greenhouse gases such that the amount would always remain finite (Forbes, 09). Kochs opposition to H.R. 2454 is thus pretty clear for the same reasons why it supports the Energy Tax Prevention Act of 2011 (H.R. 910) in addition to the perception that a cap and trade program would increase the operating costs of Koch factories which would, in turn, cut corporate profits (MacKinder, 2010).
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success through what he refers as market-based management, which is composed of a set of ideas he constructed during his leadership of Koch. In order to successfully lead a corporation such as Koch industries, Charles argues for the necessity of (1), Vision: determining where and how the organization can create the greatest longterm value, (2), Virtue and Talents: helping ensure that people with the right values, skills and capabilities are hired, retained and developed, (3) Knowledge Processes: creating, acquiring, sharing and applying relevant knowledge, and measuring and tracking profitability, (4) Decision Rights: ensuring the right people are in the right roles with the right authority to make decisions and holding them accountable, and (5) Incentives, Rewarding people according to the value they create for the organization (Koch, p23). Charles has also been subject to numerous criticisms for his perceived attempts at political indoctrination among the employees of Koch Industries and its subsidiaries. Such attempts of supposed indoctrination range from required business seminars on the harms of market regulation and the power of free-market capitalism to direct attempts on the part of Charles to influence the way in which Koch employees vote by sending out a message to employees making hints that an Obama reelection would be harmful to the economic wellbeing of Koch Industries and may require the elimination of jobs. Moreover, reports from employees suggest that success at Koch industries is limited unless one is willing to drink Charless libertarian Kool-Aid. It is due to policies and actions such as these that Charles Koch is seen as a CEO who intentionally obfuscates the line between business and politics
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to the point where the Koch Super Pac is essentially just another subsidiary, no different from any other (New Yorker, 11).
organizations, such as think tanks, that produce research that justifies policies that are of interest to the corporate sector (Domhoff p80, 180).
relative obscurity of Koch compared to other large conglomerates such as General Electric is to the lack of corporate publicity regarding its business decisions, financial status and tax liability. While publically traded companies are required by the 2002 Sarbanes-Oxley act to disclose financial records, Koch, as a private company, is not required to do so and statements made by Koch attorneys indicate that the Koch policy is to make information about its structure and tax liability not publicly available (Klink 2004, CNN Money). This lack of public information allows Koch to operate in the proverbial shadows, away from public scrutiny, allowing it to, as laid out by the definition of a strong corporation, asserts its agenda regardless of competing interests. Despite the apparent strengths of Koch industries, its environmental track record has made it a target for government regulatory agencies, which, on face, could be evidence of an aspect of weakness. Since 2000, Koch has been one of the corporations most frequently sued by the EPA for violations of environmental restrictions of dumping, pollution, and pipeline spills. These fines seem like evidence of relative government power weakening Koch, but in fact this may not be the case (Desmog) . In late 2000, as the Clinton Administration was preparing to leave, Koch was served by the federal government for covering up the discharge of more than fifteen times the legal limit of Benzene is Corpus Christi, Texas. The company faced penalties of more than $350 million and four employees were criminally charged and faced up to 35 years in prison, however, once the Bush Administration took office, the case was settled out of court with Koch paying $20 million in fines and pleading guilty to one count of concealment and, in return, the 18
Justice Department dropped all criminal charges against Koch and its employees (Desmog). Circumstances such as the one of Corpus Christi are evidence of a different kind of corporate strength, the ability to break the rules without actually being held accountable. Koch Industries, despite the struggles of other corporations on tough economic times, which require them to make concessions to government regulators in the interest of remaining afloat, remains strong. Its relationship to the financial market is unshakably stable, even as the markets crashed Kochs revenue held consistent at $100 Billion and it proved itself to be an economic juggernaut, unaffected or unphased by traditional sources of corporate weakness.
Section 6Conclusion
Setting out on an examination of Koch Industries, the eventual goal was to construct an image of corporate power as it related to Koch. What is the nature of the relationship between Koch and the rest of non-corporate society? The difficulty with asking such questions is that answering them seems merely to be a restatement of arguments already advanced in different terms; saying that Koch is a strong corporation that supports generally conservative policies in order to advance its own interests fails to elucidate anything not already laid out in greater detail. So, in questioning corporate power as it relates to Koch, it seems necessary to break down the social and political actions of Koch and find the essence that defines corporate power as it relates to Koch.
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Power can either be defined as the ability to act in a certain or the ability to direct others to act in a certain way. Regardless of the exact conception of power, once thing remains true, power is means to achieve some kind of end; either in the power to resist regulation or to shape the actions of others, both are causes to some effect. For instance, as established in section 2, when Koch gives money to a political campaign or lobbying effort, the monetary contribution is a means to the end of furthering some concrete economic goal. Similarly, the funding or organizations such as Americans for Prosperity or the CATO institutes are a means are disseminating favorable information for some end, either economic or, in the case of C. Kochs funding of cancer or economic research, ideological. Returning to the introductory discussion of the satirical film, The Campaign, one thing seems abundantly clear, whether or not the humorous portrayal of the Motch Brothers and their fictional corporation was justified, the thematic elements of their relationship to the story remain consistent with the idea of Koch power. While government power might be in the creation of laws to regulate society in whatever way, corporate power is the ability to push forwards, using economic means to further economic ends.
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Farrell, John. 2011. Kochs Web of Influence Public Integrity. http://www.publicintegrity.org/2011/04/06/3936/kochs-web-influence Accessed 12/14/12 Glassman, James. 2011. Market Based Man. Philanthropy Magazine http://www.philanthropyroundtable.org/topic/excellence_in_philanthropy/market _based_man Accessed 11/23/12 Johnson, Brad (2011) Mike Pompeo (R-Koch) Attacks Radical Environmental Justice, Global Warming Internships. Think Progress http://thinkprogress.org/climate/2011/09/12/316752/mike-pompeo-r-kochattacks-radical-environmental-justice-global-warming-internships/ Klimko, Justin. 2004. Sarbanes-Oxely- Possible Impacts on Privately Held Companies Michigan Bar Journal. Retrieved 12/12/12 www.michbar.org/journal/pdf/pdf4article696.pdf Forbes: The 400 Richest Americans. 2008 Charles Koch. Forbes Magazine. http://www.forbes.com/profile/charles-koch/ Accessed 10/24/12 Mackinder, Evan. 2010. Pro-Environment Groups Outmatched, Outspent in Battle Over Climate Change Legislation Opensecrets. http://www.opensecrets.org/news/2010/08/pro-environment-groups-wereoutmatc.html Accessed 12/14/12 Mayer, Jane. 2010 Covert Operations The New Yorker http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer#ixzz2F J6U8ttB Accessed 11/20/12 New Netherland Project. No Date Frederick Chase Koch New http://www.nnp.org/nni/Publications/Dutch-American/kochf.htm Accessed 11/24/12 Ombwatch. 2009. House Passes Chemical Security Bill Ombwatch Blog. http://www.ombwatch.org/node/10554 Accessed 12/14/12 Osterhouse, Jacob. (2012) Koch brothers fire back at Galifianakis over Daily News interview New York Daily News. http://articles.nydailynews.com/2012-0808/news/33104774_1_koch-brothers-koch-industries-political-process Accessed 12/16/12 Project Vote Smart. Stop The War on Coal Act of 2012 Public Statements: Pompeo http://votesmart.org/public-statement/745815/stop-the-war-on-coal-act-of2012#.UJHpbYUtuO5
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Romney Campaign. Mitt Romney Sets Goal Of North American Energy Independence By 2020. http://www.mittromney.com/blogs/mitts-view/2012/08/mitt-romneysets-goal-north-american-energy-independence-2020 Skousen, Mark. 2007. Charles Koch: My Lunch With the Worlds Much Successful Billionaire Investmentu. http://www.investmentu.com/2007/February/20070225.html Accsessed 11/21/12 Stone, Andy. 2009. A Winner In The New Climate Legislation Forbes Magazine. http://www.forbes.com/2009/06/24/climate-carbon-cap-and-trade-businessenergy-carbon.html Accessed 12/14/12 Schouten, Fredreka. 2012. Who are the Kochs? USA Today. http://usatoday30.usatoday.com/NEWS/usaedition/2012-08-24-Who-are-theKochs_ST_U.htm Accessed 12/13/12 U.S. House. 111th Congress. H.R.2868 - Chemical Facility Anti-Terrorism Act of 2009 Fulltext Available: http://www.opencongress.org/bill/111-h2868/ Accessed 12/14/12 U.S. House. 112th Congress. "H.R. 901, Chemical Facility Anti-Terrorism Security Authorization Act of 2011." Fulltext Available: www.gpo.gov/fdsys/pkg/BILLS112hr901ih/pdf/BILLS-112hr901ih.pdf Accessed 12/14/12 U.S. Senate. 112th Congress. H.R.910 -- Energy Tax Prevention Act of 2011 Version 4. Fulltext Available: http://thomas.loc.gov/cgibin/query/D?c112:4:./temp/~c112veHmoJ Voters Legislative Transparency Project (VLTP). 2012. Charles Koch cofounded the Cato Institutethe First Major Libertarian Think Tank http://www.vltp.net/tag/charles-koch-cofounded-the-cato-institute-the-firstmajor-libertarian-think-tank Accessed 12/10/12 VandeHei, Jim and Allen, Mike. (2012). GOP groups plan record $1 billion blitz Politico. http://dyn.politico.com/printstory.cfm?uuid=0F866DCD-F8DC-436EB46D-504340FEB315 Last Accessed: 12/14/12
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