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2010-08-25

The New Yorker: Billionaire Brothers Charles & David Koch Have Quietly Given More Than $100 Million to Right-Wing Causes

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An article in the latest issue of The New Yorker magazine by Jane Mayer profiles billionaire brothers Charles and David Koch, two of the richest men in America who have quietly given more than a hundred million dollars to right-wing causes. Mayer writes, "The [Koch] brothers have funded opposition campaigns against so many Obama Administration policies — from health-care reform to the economic-stimulus program — that, in political circles, their ideological network is known as the Kochtopus." [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Well, I’m going to talk about another piece now, Chuck.

CHARLES LEWIS: Sure.

AMY GOODMAN: Chuck Lewis, you’re quoted in this major article in the latest issue of The New Yorker magazine by Jane Mayer —-

CHARLES LEWIS: Yeah.

AMY GOODMAN: —- that profiles billionaire brothers Charles and David Koch, who have quietly given more than $100 million to right-wing causes. Jane Mayer writes, quote, "In Washington, [David] Koch is best known as part of a family that has repeatedly funded stealth attacks on the federal government, and on the Obama Administration in particular.

"With his brother Charles, who is seventy-four, David Koch owns virtually all of Koch Industries, a conglomerate, headquartered in Wichita, Kansas, whose annual revenues are estimated to be a hundred billion dollars...The Kochs operate oil refineries in Alaska, Texas, and Minnesota, and control some four thousand miles of pipeline. Koch Industries owns Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpet, and Lycra, among other products. Forbes ranks it as the second-largest private company in the country, after Cargill, and its consistent profitability has made David and Charles Koch — who, years ago, bought out two other brothers — among the richest men in America. Their combined fortune of thirty-five billion dollars is exceeded only by those of Bill Gates and Warren Buffett."

The New Yorker piece goes on to say, "The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry — especially environmental regulation."

Jane Mayer goes on to write, quote, "Indeed, the brothers have funded opposition campaigns against so many Obama Administration policies — from health-care reform to the economic-stimulus program — that, in political circles, their ideological network is known as the Kochtopus."

Koch Industries has a response to the New Yorker article on its website. It reads, quote, "We submitted extensive facts and background information to the magazine. Given that all we provided did not change the publication’s negative, unbalanced tone and agenda, we declined their requests to speak to Koch executives. The story dredges up issues resolved long ago and mischaracterizes our business philosophy and principles, our practices and performance record, and the education efforts and policies we support." It then goes on to address specific points like their environmental record, climate change, the groups Americans for Prosperity and Citizens for a Sound Economy, healthcare reform, and so on.

Well, Chuck Lewis, talk about the significance of these oil billionaires, the Koch brothers, and what their money, what more than $100 million funneled into right-wing causes, including climate change-denying groups, has meant.

CHARLES LEWIS: Well, yeah, I have been following the Koch brothers now — unofficially, I guess you’d say —- I mean, when I ran the Center for Public Integrity for fifteen years, I first brushed up against them because they were one of Bob Dole’s top ten career patrons. And then I wanted to see what -—

AMY GOODMAN: We should say Koch, by the way, is spelled K-O-C-H, for people who’ve seen it, but didn’t know how it’s pronounced.

CHARLES LEWIS: Yeah, K-O — yeah, right, not the soft drink, yeah.

Anyway, I started noticing this company some years ago. It is true, they have — I think the $100 million number may be a very conservative number by The New Yorker and by Jane Mayer. And by the way, the Koch Industries company and the Koch brothers essentially planted a very fawning profile of the Koch brothers in the New York Magazine days before as a way of preempting the New Yorker article. And they never consent to interviews. (Editor’s note: After the broadcast Charles Lewis sent Democracy Now! an email to clarify his remarks about the New York magazine article. His clarification is pasted below at the end of this transcript.) I tried to interview them for two different Buying of the President books, and they had no interest whatsoever in talking. And in one case, they mildly threatened to sue. So they are — these are very aggressive brothers and, of course, among the wealthiest people on planet earth.

What makes them different — we have seen rich people try to influence politics in America since the beginning of the republic. What makes them unusual —- and I’ve been around Washington since roughly around Watergate in the mid—'70s. What makes the Koch brothers unusual is the amount of money that they have spent, and done it in a stealthy, undisclosed manner. But we have — folks have found out over the years how much the money is: over $100 million, and it's probably much larger. That is almost entirely spent to further the interest of the Koch Industries. They are ideologues. Their father, Fred Koch, who started the company, was part of the John Birch Society. And so, we’re talking extreme right-wing ideologues. And to say that they believe in free enterprise is almost too mild to describe their politics. But what they have done is they have tried to subvert legislation that they saw would impact on their company.

Let me give you an example. And this is where I discovered their activities in the mid-'90s. I noticed not only that they were one of Robert Dole — then-Senate Majority Leader running for president against Bill Clinton — not only were they among his biggest donors ever in his long forty-four-year career, but I also noticed that they funded this thing called the Citizens for a Sound Economy, which there was no disclosure of the donors, but it was obvious they had given huge amounts of money, millions of dollars. They were being prosecuted for 300 oil spills by the Customs and EPA and Justice Department, parts of the federal government. And they asked the Senate Majority Leader to insert in the so-called regulatory reform legislation a clause that would get rid of any current prosecutive effort by the US government against Koch Industries. And it was — the person writing the draft for that legislation was the chair of the board of Citizens for a Sound Economy, former White House counsel in the first Bush administration Boyden Gray. This did not work, because several people died from bad hamburgers from an E. coli outbreak, and the public started to realize that maybe we do need regulation. And the whole idea for regulatory reform kind of eased, and that thing kind of went away. But the fact that this company tried to manipulate things to that extent just astonished me. I've never seen a bare-knuckles move like that quite so obvious. It was then discovered that they had cutout groups called Triad, and they were running attack ads in sixteen states, running it through a third party, another third party cutout, that were nonprofits running these outside group attack ads. And all the people being attacked were Democrats running against free enterprise Republicans in places where they had manufacturing facilities. And so, their activities are not only substantial and almost entirely undisclosed, in terms of how much they spend and where, but it’s virtually entirely for the furtherance of Koch Industries. And that’s what makes them so extraordinary, in my experience. I’ve never seen anything quite like these guys. And I did say in the Jane Mayer New Yorker article that Koch Industries is the Standard Oil of our time. This is a very powerful, almost entirely unknown company that is exceedingly aggressive in its tactics and its political maneuverings.

AMY GOODMAN: I mean, it’s very interesting, because, on the one hand, they’re funding the Tea Party and Tea Party organizations around the country that are growing.

CHARLES LEWIS: Right.

AMY GOODMAN: And on the other hand, they’re funding for the arts. The article by Jane Mayer, called "Covert Operations: The Billionaire Brothers Who Are Waging a War Against Obama," begins with a scene at the Metropolitan Opera House in New York, where they’re honoring — it’s the seventieth annual spring gala of the American Ballet Theatre. David Koch is being honored. He had recently given two-and-a-half million to the company’s upcoming season. He was standing next to Caroline Kennedy Schlossberg. Only Michelle Obama wasn’t there, who was supposed to be there, and maybe we now know why, though they said a scheduling conflict. The Kochs have donated a million dollars to modernize Lincoln Center’s New York State Theatre building, which now bears its name, David Koch’s name. He’s given $20 million to the American Museum of Natural History, whose dinosaur wing is named for him. This spring, after noticing the decrepit state of fountains outside the Metropolitan Museum of Art, he pledged $10 million to renovate them. And he serves on the board of Memorial Sloan-Kettering Cancer Center, where, after he donated more than $40 million, an endowed chair and research center were named for him.

Now, later in the piece, it’s very interesting, because it talks about the fact that Koch Industries became a major producer of formaldehyde after it bought Georgia-Pacific, the paper and wood products company, for $21 billion. So Jane Mayer asked James Huff, an associate director at the National Institute for Environmental Health Sciences, a division of the NIH, about this. He said it was "disgusting" for Koch to be serving on the National Cancer Advisory Board. Huff said, "It’s just not good for public health. Vested interests should not be on the board." He went on, "Those boards are very important. They’re very influential as to whether N.C.I. goes into formaldehyde or not. Billions of dollars are involved in formaldehyde.”

And then she quotes Harold Varmus, the director of the National Cancer Institute, who knows David Koch from Memorial Sloan-Kettering, which he used to run. He said, at Sloan-Kettering, "a lot of people who gave to us had large business interests. The one thing we wouldn’t tolerate [in our board members is] tobacco.” When told of Koch Industries’ stance on formaldehyde, Varmus said he was "surprised."

Charles Lewis, talk about the link between the chemical companies that they’re involved with and also just the Koch brothers’ funding of Tea Party movements and organizations.

CHARLES LEWIS: Right. You know, the chemical companies, my — the Center for Public Integrity investigated formaldehyde and the chemical companies. And the industry, in general, has always tried, of course, to avoid regulation, to keep formaldehyde legal, so they can continue to make money. And they have infiltrated groups like the American Cancer Society and all kinds of other groups. So, industries getting in the face of and in penetrating inside the federal worlds of these regulatory agencies is, as you know, a long and old and very sad story.

That article also mentions the Smithsonian has an exhibit that basically has clearly anti-climate change, you know, sort of conservative-slash-oil industry rhetoric about that whole subject of how the world has evolved and how warm is it getting and all that stuff. And the idea that there’s the Koch — this the Koch wing of the Smithsonian, but then you find out that the exhibits kind of reflect the Koch Industries’ view of the world. This oil company’s view of the world is, I think, incredibly disturbing. If I was a trustee at the Smithsonian or these other places, or Congress, having oversight, I think these are significant issues. I don’t know the extent to which anything will happen, but it’s outrageous.

You know, I have followed Koch pretty closely, but I didn’t actually know about the Tea Party involvement, really, to the extent that Jane Mayer lays it out. It’s totally predictable, now that I think about it, because they also helped to fund the term limit movement and the Libertarian Party as far back as 1980. Libertarians, of course, don’t believe in any environmental regulation. And so, the Tea Party thing is just the latest example, but, as Jane points out, is the most populist one. It’s got — they’ve actually found a public out there, so it’s not a top-down. It’s actually — it starts to have the public appearance of being grassroots. What most Americans don’t know is that these folks are trained by and taught, "educated," quote-unquote, by Americans for Prosperity, a Koch Industry group. So now we know who’s funding the Tea Party movement, and I think this article is a very constructive thing for the public to get the truth about what’s really going on with these folks.

AMY GOODMAN: And you have President Obama actually naming them. Jane Mayer says, "The Kochs have long depended on the public’s not knowing [all the] details about them. They have been content to operate what David Koch has called 'the largest company that you’ve never heard of.' But with the growing prominence of the Tea Party, and with increased awareness of the Kochs’ ties to the movement, the brothers may find it harder to deflect scrutiny." Recently, President Obama, in Austin, at a Democratic National Committee fundraiser, said — he warned supporters that the Supreme Court’s recent ruling in the Citizens United case, which struck down laws prohibiting direct corporate spending on campaigns, had made it even easier for big companies to hide behind what Obama said were “groups with harmless-sounding names like Americans for Prosperity.” Obama said, “They don’t have to say who, exactly, Americans for Prosperity are. You don’t know if it’s a foreign-controlled corporation,” or even, he added, “a big oil company.”

Last thirty seconds, Charles Lewis?

CHARLES LEWIS: Well, this is a problem we have, and it’s a problem we have with both parties, of these cutout groups that have nice-sounding names and we have no idea what they’re doing. It’s dangerous for a president, in a way, to single out a group, because Bill Clinton tried it during the healthcare debate, and it brought the president of the United States down to the level of a trade association or a nonprofit. But what Obama said is correct. We don’t know who these people are. We don’t know what they’re about. There should be disclosure about these groups, and there isn’t. And, you know, we have a wild and untenable atmosphere when it comes to political discourse in this country, because money is going to rule everything here. It already has for years, and it’s going to get worse.

AMY GOODMAN: Charles Lewis, thanks so much for joining us, founder and former president of the Center for Public Integrity, now teaching Investigative Reporting Workshop at American University. We will link to Jane Mayer’s very important piece in The New Yorker called "Covert Operations: The Billionaire Brothers Who Are Waging a War Against Obama."


Editor’s Note: After the broadcast Charles Lewis sent Democracy Now! the following message to clarify remarks he made the during the interview: "I mentioned that New York magazine recently had published a story about the Koch brothers in which the writer surprisingly had been granted access to David Koch, which I suggested seemed suspiciously like a PR ploy to deflect the impact of the impending investigative New Yorker piece. I had not actually read Andrew Goldman’s story, nor did I know that he had worked on this story for two years, and had first talked to David Koch in 2008. I honestly don’t know how exactly the timing of the two NY magazine stories about the Koch brothers occurred, how one came out weeks before the other, why access to the principal was granted in one case and not another, etc. Nonetheless, I shouldn’t have assumed that it was merely a PR maneuver to deflect Jane Mayer’s New Yorker story. And I certainly meant no disparagement personally of the journalist Andrew Goldman or of his magazine. I regret my offhand comments about this."

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