Archive for Thursday, September 9, 2010

Profile of Koch brothers misguided

September 9, 2010


The Aug. 30 issue of The New Yorker Magazine ran an article called “Covert Operations: The Billionaire Brothers Who Are Waging a War Against Obama.” The article, of course, is about the Koch family from Wichita, and primarily about brothers Charles, who runs Koch Industries from its Wichita headquarters, and David, who lives in New York and spends much of his time involved in philanthropy.

The author of the article obviously doesn’t like the Kochs and, more importantly, doesn’t like their politics, their privacy or their philanthropy. She portrays the Kochs as sinister figures hiding behind a plethora of companies and foundations and supporting political and social groups who oppose the liberal/progressive agenda. Undoubtedly, the purpose of the article is to be a “wake-up” call to the American public about the “evil” Koch family.

Personally, I find that the article is rather “ho-hum” and that most Kansans involved in political and financial affairs already know about the Kochs and their support for causes they believe in. David Koch’s run for the vice presidency on the Libertarian ticket several years ago was hardly a secret. I also think that unless the Kochs have acted illegally in some way in their political and philanthropic activities, then they’ve done absolutely nothing wrong.

The whole idea that a desire for privacy, even anonymity, when one makes donations is sinister is one I reject wholly. Although I can hardly claim to be a major donor to any cause, I do give what I can to various causes I believe in and I almost always stipulate that gifts I give be anonymous. I do that not because I have something to hide. I just believe that true charity should by anonymous.

As a result of The New Yorker article and follow-ups in various media around the United States, there seems to be a movement intent on portraying the Kochs as part of a sinister, wealthy, elite conspiracy aimed at taking over the world. I have two answers to that.

First, if there is such a conspiracy and it has been so badly concealed that a reporter from The New Yorker was able to uncover it, then we’ve nothing to worry about because the conspirators are incompetent.

If, on the other hand, there is a group of wealthy industrialists who are using their wealth to support a political agenda they favor, then, so long as they are in compliance with state and federal laws, they are fully entitled to do so. If there are folks out there who don’t want this to happen, then change the law. But until the law changes or people like the Kochs break the law, I think that they, just like you and I, have a right to give their money to whomever they want, and if they wish to maintain their privacy, that’s their right as well. It’s a free country, isn’t it?

— Mike Hoeflich, a distinguished professor in the Kansas University School of Law, writes a regular column for the Journal-World.


AnnaUndercover 7 years, 5 months ago

"First, if there is such a conspiracy and it has been so badly concealed that a reporter from The New Yorker was able to uncover it, then we’ve nothing to worry about because the conspirators are incompetent."


cato_the_elder 7 years, 5 months ago

Excellent column in all respects. The far left today (personified by the New Yorker, once a highly respected publication that many more people used to read before it went completely batty some years ago) can't ever seem to come to grips with the fact that those who disagree with them have the right to express their own views and support their own causes too.

I was also quite pleased to see Professor Hoeflich's take on the old adage that "any charitable gift not given anonymously isn't a charitable gift at all." How true that still is.

Fugu 7 years, 5 months ago

"The far left today can't ever seem to come to grips with the fact that those who disagree with them have the right to express their own views and support their own causes too."

Is the reason why the right so passionately supports Cordoba? Oh wait...

cato_the_elder 7 years, 5 months ago

Fugu, relatively few opponents of the mosque project have questioned the legality of its being built where it is planned. Those disagreeing with it question the wisdom of doing so at that site, many strenuously. It's the sizeable majority of people who vigorously disagree with the mosque being built at that site who get skewered by the Left simply for exercising their right to protest it, proving the precise accuracy of what I said in my first comment.

Flap Doodle 7 years, 5 months ago

The current regime has to demonize somebody to divert attention from its own failings.

cowboy 7 years, 5 months ago

Haven't heard anyone say they have broken a law but it is totally legit to expose the source of "campaigns". With the lines being blurred these days between news and propaganda filtered thru so many " Organization to protect citizens rights for progressive conservatives who are for and against everything" type groups there needs to be daylight showered upon these efforts.

I personally find these org's terribly destructive and misleading. I would much rather have some true debate in our country but realize that moment is probably long gone , due to these type of special interest efforts and the outright sale of our government to these same folks.

Tim Quest 7 years, 5 months ago

Political contributions are not charitable donations. Your attempt to conflate the two is either woefully misguided or deliberate obfuscation. Since you're a lawyer, I'm going with the latter.

brandx 7 years, 5 months ago

Ha! Leave it to the New Yorker to have balanced reporting. Why don't they do a piece about the opposite end of the spectrum of billionaires funding personal causes, e.g. George Soros. He's a lot more dangerous than the Kochs.

Scott Drummond 7 years, 5 months ago

So, I suppose we can all assume the Koch brothers also support KU Law.

Fair enough points, but the point of the article was to publicize the political contributions and influence these folks have. The public knowing the depth and reach of their influence is a good thing. Anonymous influence and power in politics rarely is.

Ken Lassman 7 years, 5 months ago

Scott, I suppose if the Koch brothers don't contribute to KU Law, then Hoeflich is shrewdly positioning himself to getting some dough from them in the future, no?

Good points on all fronts, tho: Koch brothers aren't doing anything illlegal, Soros isn't doing anything illegal, Hoeflich is conflating political contributions with charitable contributions, the best charitable contribution is the anonymous one.

Richard Heckler 7 years, 5 months ago

This is something the Koch brothers like:

Beware: TABOR Is Coming | Dollars & Sense ... White House insider and intellectual author of the Bush tax cuts, or brothers Charles and David Koch of oil pipeline conglomerate Koch Industries, ...

I recently viewed a news article comparing the Koch crew to someone like George Soros.

Soros it was said was likely to fund campaigns and such that do him no good personally and would increase his taxes.

The Koch crew on the other hand are consistently seeking tax favors at a cost to the upper middle class,middle class and the poor.

Koch brothers do in fact support the Tea Party/repub party and are certainly against any type of medical insurance relief that which help most all in america and small business people.

The Koch crew and their very large oil dollars certainly do influence our politicians and I've never read or heard of them taking a position against the mideast oil war which is nothing but a tax dollar money hole as USA oil giants take control of Iraq oil fields. The oil war is a huge chunk of corporate welfare for the war profiteers.

jonas_opines 7 years, 5 months ago

The Koch's and their company have very strong ties with the University, yes.

Cowboy and Autie pretty much said what I would say.

independant1 7 years, 5 months ago

cowboy, yup wish there was more true debate rather than the canned stuff. I liked what Fred, the former senator and Law and Order guy, said "we need more thoughtfull debate". I like that idea!

Politics, no matter which party you prefer is influenced by many special interests.

just_another_bozo_on_this_bus 7 years, 5 months ago

Are columns like this the price of admission to hobnobbing with the Kochs?

jafs 7 years, 5 months ago

Uh oh.

You've reverted to your former self.

jafs 7 years, 5 months ago

I haven't ever seen any post of yours that includes any criticism at all of Fox.

But if you are really more even-handed, I applaud you for it.

Scott Drummond 7 years, 5 months ago

Actually, Babboy, you are wrong about KU Law profs being ivory tower blowhards. To a greater degree than many other places the profs are approachable and many bring significant real world experience to their jobs.

jafs 7 years, 5 months ago

If we are going to allow the unlimited influence of money in politics (which I think is a horribly bad idea), then we should at least be able to know who's paying for what.

Keith 7 years, 5 months ago

Wow, a libertarian writing an article defending other libertarians, what a stretch.

jafs 7 years, 5 months ago

How about starving because they laid you off, and you can't find another job?

pz5g1 7 years, 5 months ago

If you can't find a job you're not looking too hard. May not pay great but you won't starve.

jafs 7 years, 5 months ago

Well, let's see.

Conservatives want to limit, if not eliminate unemployment, and all social programs that help people.

At the same time, the private sector is laying people off, and we have an approximately 20% unemployment rate, if you include under employed people and those who have just given up.

The North See apparently think that the Koch's are the good guys and government is the bad guy.

If we follow the conservative approach, we won't regulate business, and we won't have the government help people.

What's the outcome there? Businesses that can do whatever they want, and people who are in big trouble if they can't find work.

bad_dog 7 years, 5 months ago

I take it you've never worked for or around them, then... While it is their right to do so in an employment at will state, they have been known to give "or else" directives to employees in what appears to be a very self-serving fashion. For example, the spouse of one of my legal secretaries was fired because he wanted to have the weekend to ponder/discuss a transfer to an operation in the Texas panhandle with his family. It was literally take it without question or you're gone. Unfortunately for this family, he was terminated without the issue even being presented as an ultimatum. When he said he wanted to think it over during the weekend, they called security to escort him out.

So much for their committment to that American family's prosperity. More like corporate totalitarianism, it seems. I'm surprised they don't pay employees with script currency and force them to purchase goods from the company store.

pz5g1 7 years, 5 months ago

Sounds like a lousy company to work for. He's probably better off elsewhere.

Joe Blackford II 7 years, 5 months ago

I applied @ Koch in 1972 for a lawn maintenance position (w/6 month's exp. @ a Wichita golf course condo as directed by a KSU landscape architect).

There was only 1 problem, I'd have to cut off my beard IF I WANTED TO WORK FOR KOCH. Guess they don't have many Mennonite employees, either.

I took a similar job working for Bishop (then Father) Gerber . . . . another, German, Priest told me I looked Mennonite.

Glad to see I took the Right job. 8<)=

thusspokezarathustra 7 years, 5 months ago

Pretty poorly written article and weak defense. If the David Koch really thinks that charitable donations should be anonymous then why did he allow them to name the wing created by his donation at the American Museum of Natural History the David H. Koch Dinosaur Wing or the National Museum of Natural History's David H. Koch Hall of Human Origins? Why did the Massachusetts Institute of Technology name the 350,000 square foot research and technology facility the David H. Koch Institute for Integrative Cancer Research? It would seem he's only trying to hide his involvement with Political Action Committees and front groups like Americans for Prosperity and Patients United Now.

OzD 7 years, 5 months ago

How is David ever going to enjoy any privacy if you keep repeating all the things that have been named after him for his donations? How will he get his reward in heaven if people keep noticing his charity that he has tried to keep only between himself and his maker?

Clark Coan 7 years, 5 months ago

They own and control the operations of a private corporation and thus are accountable for all malfeasance. They have committed crimes and their state corporate charter should be revoked by the attorney-general.

Robert F. Kennedy, Jr. in his article “Crimes Against Nature” in the Dec. 11, 2003 issue of Rolling Stone states: “While peddling influence to energy tycoons, the White House quietly dropped criminal and civil charges against Koch Industries, America's largest privately held oil company. Koch faced a ninety-seven-count federal felony indictment and $357 million in fines for knowingly releasing ninety metric tons of carcinogenic benzene and concealing the releases from federal regulators. Koch executives contributed $800,000 to Bush's campaign.”

Project on Government Oversight Should Oil and Gas Companies Be Trusted to Pay Royalties In Kind? February 8, 2001

A federal jury in Oklahoma decided that Koch Industries, "purposely falsified oil measurements on federal and Indian lands, a practice that allowed it to collect more oil than it paid for...Several Koch employees testified that they were instructed to alter their measurements...Koch Industries admitted it received about $170 million worth of oil it didn't pay for." The judge, "will determine the penalty, which could be as high as $214 million."

1983Hawk 7 years, 5 months ago

Glad to see KU Law still on its knees in front of its right-wing corporate masters. Maybe the Dean needs to take Scalia on another all-expense-paid hunting trip.

thusspokezarathustra 7 years, 5 months ago

Another sign of disconnect for Hoeflich is this line,

'David Koch’s run for the vice presidency on the Libertarian ticket several years ago was hardly a secret."

His run for Vice President was in 1980 thirty years ago not several. I would imagine most of Hoeflich's Law School students were born nearly 10 years after this happened.

1983Hawk 7 years, 5 months ago

Maybe Hoeflich can invite his buddy Scalia in for some good shootin' action again:

independant1 7 years, 5 months ago

Wow! There's sure a lot of hate out there.

Have been on the receiving end of royalty payments for producing wells and from time to time get adjustments for various reasons over the years. Some due to lawsuits and then others for mistakes without litigation. Don't think businesses are in the business of pillaging, plundering and raping stakeholders and others. That's not good business.

Reasonable people can accept differing political opinions, socioeconmic status and mistakes in stride. Criticism is one thing, vitriol is another.

signed, not a rich man

bad_dog 7 years, 5 months ago

"Don't think businesses are in the business of pillaging, plundering and raping stakeholders and others. That's not good business."

You're joking, right? Ever hear of shareholders derivative suits? Enron, Worldcom, etc.?

While they may not be in the "business" of pillaging, etc., many businesses do engage in such activities. Sometimes it's at the expense of shareholders, sometimes the public at large. Many corporations are very philanthropic, but to claim that businesses don't often indulge their self-interests at the expense of others is just silly.

bad_dog 7 years, 5 months ago

Global Crossing, Adelphia, Tyco, Arthur Anderson.....

independant1 7 years, 5 months ago

I can't accept your exception taken as the rule premise, all business is bad and by extension profit motive (call it greed) is likewise bad.

A 'business' is a tax id number, there is no way to assign evil to a business tax id.

People on the other hand have free agency to conduct business in an honest and forthright manner or quite the opposite. There are many more honest people running and employed by 'busineses' than your favorite examples.

And one more thing, "the family" is the basic economic unit and likewise files taxes as a tax id number. There are many similarities between the basic unit and the more complex.

bad_dog 7 years, 5 months ago

"There are many similarities between the basic unit and the more complex."

Yes, like certain businesses, some families cheat on their taxes. Human nature is what it is, regardless of scale.

independant1 7 years, 5 months ago

that my friend depends on your view of humanity.

The other side of that = people left to their own devices tend to do good. In my 50 year consumer/worklife maggot feeding off the corpse of a mixed capitalist economic experience I am still an optimist. I marvel at the honesty of the american worker/businessperson.

bad_dog 7 years, 5 months ago

I think my perspective of humanity is a little more realistic than yours. Everything isn't always going to come up roses. Just look to the KU ticket scandal for a recent example of how the dark and greedy side of human nature can work. I'm still an optimist too, however, I'm realistic enough to recognize and expect a certain portion of humankind to do self-serving and/or bad things.

If you think people left to their oiown devices are always going to do the right or honorable thing, you are more naive than I thought. That is why we have laws and regulations-to incentivize people to do the right thing. Even with the presence of these obstructions to bad behavior, people still lie, cheat, steal, murder, etc., etc. Thinking otherwise isn't going to change that fact.

independant1 7 years, 5 months ago

your bad,

I said "tend", you paraphrased "always".

Wrong my friend

bad_dog 7 years, 5 months ago

Nowhere did I claim all businesses are bad, nor did I state that profitable businesses are the result of greed or are somehow inherently evil. I applaud any form of business enterprise that obtains profits in an ethical, transparent manner. If you are not profitable, you likely won't exist long. I am employed by one of the largest Fortune 500 companies in the country, so I'd have to be either a hypocrite or ethically challenged to remain employed by this company if your conclusion regarding my beliefs were accurate.

I merely provided several examples of business entities and their leaders that challenges your sweeping generalization that businesses don't engage in fraudulent, dishonest or morally appalling behavior because doing so is "bad business". That statement is ludicrous in my opinion. Likewise, your attempt to dismiss the economic harm resulting from malfeasance by differentiating business leaders from "the business" itself is disingenuous IMHO. Keep in mind it was your statement that businesses don't engage in certain practices because it is bad business, not mine. I believe everyone can acknowledge that a business doesn't commit fraud, cheat on expense accounts, embrace shady accounting practices, etc. It is the individuals employed by those businesses that commit the heinous acts.

Somewhat ironically, you indicated above that you've received royalty adjustments as the result of litigation that forced Koch to pay you more. Do you think Koch gave you the adjustments out of the goodness of their hearts or because a Court found they were liable? Some of that litigation, no doubt arose from honest disputes about the terms of "take or pay" clauses, lease terms, etc. I'd have to examine each judgment to determine whether misconduct or fundamental misunderstandings led to the litigation. Your objectivity with respect to Koch, however, does seem a bit suspect given you are getting yours from them in the form of periodic royalty payments.

While there are without question many more businesses run in ethically acceptable manners, my "favorite examples" as you characterized them are the exception that by virtue of their size alone can and do create enormous economic harm to their shareholders and taxpayers. The harm they cause is completely disproportionate to their numeric representation in the total number of businesses, per se.

independant1 7 years, 5 months ago

It wasn't Koch. I've also received my share of class action lawsuit against HP for deceptive available memory hard drive suit. And about 6 others, most notably cell phone company. In other cases laws changed (taxes) and production adjustments made. When the root of problem is examined it is human error or bad judgement at the kernal.

Business entities can't be bad, they are just a tax id. People, from leadership down to janitor can make bad decisions.

Good business survives, bad business has less chance to survive. Consumers/shareholders can vote with their dollar.

The gist of what i get from your post? business inherently bad

independant1 7 years, 5 months ago

It cost ACME Oil Exploration LLC to settle and cut my $.97 check - I received notifications to opt out of class etc. along the way, didn't opt out, a year later they made me whole with a business letter that did not apologize nor admit wrongdoing. But then I am a small fish in a large pond.

bad_dog 7 years, 5 months ago

"The gist of what i get from your post? business inherently bad."

The gist of what I get from your post is you have poor reading comprehension skills. Again, nowhere have I stated either business or profits are inherently evil. Comprende? I hope so because I'm not wasting any more time explaining that to you.

independant1 7 years, 5 months ago

Your negativism conflicts with optimism. I receive no royalties from Koch, I receive them from 4 other Corp/LLC's. None in the Fortune 500. Got lucky when I picked the royalties up in the 80's.

bad_dog 7 years, 5 months ago

See my comments above and keep trying, although I'm not optimistic...

It's not negativity, it's reality. You can chooss to understand and accept that or keep blowing smoke. Doesn't matter to me.

pace 7 years, 5 months ago

Koch industries has one of the highest level of not getting their money to their stock holders and oil investors. |Absolutely worst public contact of any similar company. "They lose your address. You don't even have to move. They are that careless with their records. Check the various state's lost money sites Koch's name leads. My aunt called, wrote, for years, she kept finding her husbands funds reported to various state lost money funds, It was like trying to communicate with a squirrel cage. I figure they keep a lot of it. like the waitress who gets your ticket wrong, but it is always to high.

independant1 7 years, 5 months ago

Humans not tax id's make keystroke errors. Do you suppose it was Harry or David that botched your aunts records?

independant1 7 years, 5 months ago

Thus far I've not had any proceeds go to land of 'lost money funds'. Others in same ownership sections do have money held by state till claimed/found.

Like I said, the rules are arcane, I am amateur owner/shareholder but have been diligent enough to recoup my share.

pace 7 years, 5 months ago

It was both Harry and David that settled for a system that made it a night mare to communicate with the company and get errors corrected,.

independant1 7 years, 5 months ago

There is a stiff set of regulatory law for reporting production. It has it's own speciality/specialists in accounting and law. Typing, oops I mean word processing, on the other hand requires what? 100wpm with 3 or less errors, I contend those 3 errors can cause a whole lot of trouble for someone.

Is it evil? If done on purpose, yes. Mistakes are not evil. Business is not inherently evil nor is our gulash economic system.

Am I evil if I start a zero wealth and die and leave unspent wealth behind? Enough bullion to provide for 1, 4, 6 or 600 survivors and they increase rather than spend that accumulated wealth? I am certain someone somewhere along the line perceives I didn't earn my wealth. ( I knew I shoulda looked for the owner of that $20 I found/pocketed in the Union back in '69)

independant1 7 years, 5 months ago

When my address changes or I miss my biannual $5.67 check from Checkers Oil Exploration LLC in Oklahoma City I write the department of Division for mineral rights affairs and Owner Services for stocks. I must include my SS# and succint statement of purpose of letter to get stuff straightened out. Not fun, my problem gets resolved in 6 months or less. They do not have drive up windows or phone banks to conduct this sort business, it doesn't pass regulatory muster. It approaches dealing with the government in nature and is arcane stuff.

independant1 7 years, 5 months ago

Else, nothing gets done right? Is it evil?

Richard Heckler 7 years, 5 months ago

A Tax Cut Republicans Don't Like

— By Kevin Drum

Ezra Klein makes some phone calls:

I've asked a number of Republican offices whether they'd be willing to work with the Democrats on a payroll-tax holiday. Without fail, they've told me no, that they no longer support a payroll-tax holiday given the size of the deficit.

The scale of the cynicism here is pretty spectacular. Republicans don't support payroll tax cuts because it would increase the deficit, but they do support extending Bush's tax cuts on the rich because, you know, cutting taxes is really important during a recession. The effect on the deficit, needless to say, is about the same for both proposals.

Are there any Republican economic policies left that aren't just thin covers for handing out goodies to corporations and the rich? Even just one or two for show? Not that I can think of. And they all come packaged with a well-honed and well-rehearsed intellectual superstructure that's carefully designed to keep the chumps from figuring things out and to keep liberals like me busy arguing over ephemera. Where are the pitchforks when you need them?

Richard Heckler 7 years, 5 months ago

Economically, repeal would cut $700 billion off the federal deficit over the next decade.

Nobody wants to repeal George Bush's tax cuts for the middle class. Especially in a bad economy, this is a no-brainer, both politically and economically.

But what about tax cuts for high earners? This should be an easy question to answer, too. On the political side, a CBS poll earlier this week found that repeal is supported by 56% and opposed by only 36%.

Economically, repeal would cut $700 billion off the federal deficit over the next decade and, because consumption by the wealthy doesn't depend very much on small changes in income, it wouldn't noticeably affect consumer spending, either.

Allowing tax rates on the rich to rise back to their pre-Bush levels, therefore, should also be a no-brainer, both politically and economically.

More details:

Lindsey Buscher 7 years, 5 months ago

"...most Kansans involved in political and financial affairs already know about the Kochs and their support for causes they believe in. "

Yeah, most of us are aware of their general beliefs, but most of us are not investigative journalists who have the time to dig up the Kochs' reach. I had no idea that they provided the capital to so many of the right-wing nutso think-tanks with autonomous sounding names that's sole purpose is to undermine progressivism. That is part of why Jane Mayer's piece is important. I want to know how the Cato Institute and Americans for Prosperity and the Americans for Prosperity Foundation, a "charitable" foundation, which, by law, "must conduct exclusively nonpartisan activities that promote the public welfare." Mayer cites a 2004 report by the National Committee for Responsive Philanthropy, a watchdog group, which "described the Kochs’ foundations as being self-serving, concluding, “These foundations give money to nonprofit organizations that do research and advocacy on issues that impact the profit margin of Koch Industries.”

So yeah, there are nefarious implications a plenty in Mayer's article, but it is well researched and informative, whereas Hoeflich's piece reads like a whiny knee-jerk reaction, eg, saying the "the article is rather “ho-hum”".

Richard Heckler 7 years, 5 months ago

Union of Concerned Scientists

Oil magnate billionaire Koch brothers join two Texas oil companies in spending millions to spread misinformation, exploit economic anxiety, and protect their profits in a bid to block implementation of California's clean energy law. UCS urges Californians to defend their public health and economic well-being against Big Oil interests by voting no on Proposition 23.

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