An incomplete interview: The Wichita Business Journal chats with billionaire industrialist Charles Koch

March 2, 2014

By Matthew E. Milliken
MEMwrites.wordpress.com
March 2, 2014

The Wichita Business Journal is launching a new design this week. To serve as the linchpin for the remodeled publication, the editors snagged an interview with an important local businessman: Charles Koch.

Koch and his brother, David, control Koch Industries, which is estimated to have $115 billion in annual revenues. Because the business is privately held, it’s ineligible for the Fortune 500; if it qualified, it would rank 17th, according to CNN. The conglomerate is reportedly the second-largest private company in America.

More to the point, the Koch brothers have become heavy hitters in the political world. The Center for Responsive Politics reports that their company and its affiliates have given $2.6 million in the current election cycle, which ranks 11 out of all donors. Last year, the business spent $10.3 million on lobbying, making Koch Industries 31st on the overall list.

But that, to borrow the cliché, is just the tip of the iceberg. The Koch brothers helped fund the Tea Party — and so much more…

Matea Gold of The Washington Post reported in January about the network of politically active nonprofit groups backed by the Koch brothers:

Its funders remain largely unknown; the coalition was carefully constructed with extensive legal barriers to shield its donors.

But they have substantial firepower. Together, the 17 conservative groups that made up the network raised at least $407 million during the 2012 campaign, according to the analysis of tax returns by The Washington Post and the Center for Responsive Politics, a nonpartisan group that tracks money in politics.

A labyrinth of tax-exempt groups and limited-liability companies helps mask the sources of the money, much of which went to voter mobilization and television ads attacking President Obama and congressional Democrats, according to tax filings and campaign finance reports.

In early October, during the first week of the government shutdown, Sheryl Gay Stolberg and Mike McIntire reported that the Kochs were intimately tied to efforts to repeal the Patient Privacy and Affordable Care Act, colloquially known as Obamacare. Freedom Partners Chamber of Commerce, which is run by a longtime Koch Industries executive, “disbursed more than $200 million last year to nonprofit organizations involved in the fight” against the law.

The largest recipient of Freedom Partners cash — about $115 million — was the Center to Protect Patient Rights, according to the groups’ latest tax filings. Run by a political consultant with ties to the Kochs and listing an Arizona post office box for its address, the center appears to be little more than a clearinghouse for donations to still more groups…

The Koch brothers distributing money for various political efforts isn’t necessarily a problem. As Gold noted, generally left-leaning labor unions paid about $400 million to fund national, state and local elections in 2012, and wealthy liberal donors organized by the group Democracy Alliance contributed another $100 million or so in the same time period. So even though having all this money flowing through the political system isn’t necessarily beneficial, it’s not problematic on its face.

In mid-February, Kim Barker and Theodoric Meyer profiled Sean Noble, the Koch moneyman who ran the Center to Protect Patient Rights. This passage highlights a key issue with the Koch brothers’ donations:

Koch money also poured into efforts that didn’t surface until long after Election Day: To a political committee backing Wisconsin Gov. Scott Walker against a recall attempt; to a group blaming President Obama for high gas prices; even to a legal challenge to Arizona’s redistricting plan.

The Center to Protect Patient Rights, it turned out belatedly, gave all the money ($80,000) raised by a group that tried to get Pennsylvania’s electoral votes redistributed in ways that would boost GOP candidates. It was a major funder of an organization that worked to register Americans living in Israel to vote in U.S. elections; the initiative resisted efforts to disclose its donors in the run-up to 2012 balloting.

The Center also gave most of the half-million dollars donated to the Coalition for American Values Action. Most of this was funneled to a political action committee that backed Walker in the recall election. (This PAC received no other donations.)

ProPublica:

The day of the recall vote, Noble’s blog linked to one of the ads, calling it “a fascinating approach to a unique situation.” “If the good people of Wisconsin think like the folks in this ad, it’s going to be Walker by double digits,” he wrote.

He didn’t mention the Center’s role in funding the effort.

How secretive was the Center to Protect Patient Rights? Barker and Meyer write that when Noble was quoted by an Arizona political blog, his work at the center wasn’t mentioned; instead, he was described as working on “a national campaign opposed to President Barack Obama’s healthcare initiative.”

In 2010, he was participated in a panel discussion at a Koch brothers–sponsored retreat. “Noble was the only panelist of the four listed without an affiliation — there was no mention of his role at the Center to Protect Patient Rights,” the ProPublica reporters found. And in a sworn deposition that Noble gave in 2013, he refused to say who hired him because of confidentiality agreements.

Let’s get back to that Wichita Business Journal interview with Charles Koch. The Q&A was conducted by David McCoy, the publication’s aviation, automotive and manufacturing correspondent.

Nine of McCoy’s 13 questions deal with strictly local or business matters — Koch Industries’ expansion, why the conglomerate is staying in Wichita, the recent appointment of Charles Koch’s son as president of Koch Fertilizer.

The answers here are of varying levels of interest; I care not a whit for (or against) Wichita, and I’ve got zero inclination to read pablum about how Midwesterners have “honesty, integrity and desire to contribute to create value.” (Does Koch really think Kansans have en masse qualities that people in other areas lack because all Southerners are lazy, or all Californians depraved?) And while  organizational mission statements have their place, I’m generally bored by talk about them. (Charles Koch on how Koch Industries keeps focused on innovation: “One way is to put it in our Vision as a core capability.” Zzzzzz…)

Four questions — the last four — deal with the Kochs’ political activities, and the answers here are more interesting. Charles Koch portrays himself as working “to save the country and preserve a system of opportunity” and decries “rampant cronyism where all these large companies are into smash and grab, short-term profits.” He also criticizes corporate welfare and advocates “making money honorably.” (Now that’s controversial!) Koch further claims that his top focus now is “to change the national conversation from name calling to a real debate on what policies will best create opportunities to improve their own lives.”

That’s all interesting as far as it goes. But, alas, it doesn’t go far enough.

McCoy doesn’t bring up the Kochs’ secretive donations. Reading between the lines, one might conclude that either (A) the Kochs are trying to keep their political giving on the down-low because they dislike being singled out for far-fetched public criticism or (B) the Kochs are simply writing checks to organizations that are deciding on their own to disburse money in oblique ways.

Not a single question is asked about Koch-funded opposition to regulations that are intended to slow climate change. (The New Yorker’s Jane Mayer wrote that in 2011, Koch Industries facilities, including oil refineries in three staes, “emitted over twenty-four million tons of carbon dioxide, as much as is typically emitted by five million cars.”) The words “environment,” “climate” and “pollution” aren’t mentioned at all in the Q&A, which spans nearly 3,800 words.

Also unmentioned by McCoy: The fact that the Wichita Business Journal had to agree to “some terms” in order to get the interview with Koch. The existence of conditions was vaguely disclosed by the Journal’s editor, Bill Roy, in a separate note.

It fell to Erik Wemple of The Washington Post to reveal the terms of the agreement. He contacted Koch Industries and Roy and found out that the Journal was required to submit questions in advance.

Koch didn’t place any restrictions on the topics to be addressed during the conversation. Which — to resort to the obvious language — begs the question of why the Business Journal didn’t ask about the Kochs’ secrecy.

The Koch brothers are important people actively working to exert major influence over American politics, business and society. That someone had the chance to query why they so often attempt to do so out of the public eye and failed to do so is disappointing.

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