“Calling In Their Chips”: Americans For Prosperity Announces Legislative Agenda, Mirrors Koch Industries’ Corporate Wishlist
Americans for Prosperity, the grassroots organizing group founded by billionaire industrialists Charles and David Koch, spent $125 million in the midterm elections last year. Now, they’re calling in their chips.
At the National Press Club yesterday, AFP president Tim Phillips and several officers with the group laid out their agenda. The group is calling for legalizing crude oil exports, a repeal of the estate tax, approval of the Keystone XL pipeline, blocking any hike in the gas tax, a tax holiday on corporate profits earned overseas, blocking the EPA’s new rules on carbon emissions from coal-burning power plants, and a repeal of the Affordable Care Act, along with a specific focus on the medical device tax.
The announcement was touted by NPR as a “conservative agenda for Congress.” But it’s also a near-mirror image of Koch Industries’ lobbying agenda. Koch Industries — the petrochemical, manufacturing and commodity speculating conglomerate owned by David and Charles — is not only a financier of political campaigns, but leads one of the most active lobbying teams in Washington, a big part of why the company has been such a financial success.
Koch Industries transports both crude oil and coal, making the AFP’s work to legalize crude oil exports and to block the EPA from rules that would diminish the coal market in the U.S. particularly important to Koch Industries’ bottom line. As multiple news outlets have reported, Koch also owns a substantial stake of Canadian tar sands, positioning the company to benefit from approval of the Keystone XL pipeline. Indeed, on EPA and other issues, Koch Industries’ lobbying office in D.C. has instructed its influence peddlers to work many of the same issues as AFP.
And what makes the AFP agenda almost a self-parody is its focus on the estate tax, which it called the “death tax” during the press event yesterday. In reality, this tax only affects the wealthiest 0.15 percent of Americans because only those who stand to inherit from family members with $5.43 million in wealth are impacted. Couple this with AFP’s focus on a corporate overseas tax holiday, again only an issue that impacts wealthy global companies, and AFP’s purported goal of helping regular Americans loses all credibility.
Charles Koch has made headlines in recent weeks over his claim that he will devote significant energy to criminal justice reform. But curiously, no issues relating to such reforms — even though over-prosecution of petty crimes and abuses such as asset forfeiture clearly fall under the umbrella of economic concerns AFP purports to champion — will be addressed by Charles Koch’s marquee advocacy group, AFP. The issues that are part and parcel of Koch’s bottom line, however, appear to take priority.
By: Lee Fang, Republic Report, January 19, 2015
“The Battle Of The Oil Barons”: Like Kids Playing With Gasoline In A Burning Schoolyard
It’s a very exciting time in the world of oil geopolitics, if you’re a fan of juvenile saber-rattling in the service of making billionaires even richer:
The fracking boom has driven US output to the highest in three decades, contributing to a global surplus that Venezuela has estimated at 2 million barrels a day. That’s equal to or more than the production of six OPEC members…
Conventional oil producers in OPEC can no longer dictate prices, United Arab Emirates Energy Minister Suhail Al-Mazrouei said in an interview in Vienna this week. Newcomers to the market who have the highest costs and created the glut should be the ones to determine the price, he said.
“That is what OPEC is hoping for,” said Carsten Fritsch, a commodity analyst at Commerzbank in Frankfurt. “It’s the question of who will blink first.”
OPEC will feel pressure too, with prices now below the level needed by nine member states to balance their budgets.
The United States has been making it a matter of public policy to poison its own groundwater and stress its fault lines by fracking, steaming and acidizing for oil. This is partly in order to enrich its own oil magnates, and partly to stick its thumb in the eye of Russia, Venezuela and OPEC. The Hillary Clinton-led state department has only been too happy to strongly encourage shale gas fracking in Europe in order to frustrate Russian ambitions as well.
So OPEC has been flooding the world with cheap oil partly out of revenge, partly in a regional power play against Iran and others, and partly to disincentivize Western fracking by making it economically unfeasible.
It’s all good fun, and I’m sure the players feel like they’re doing great work to advance the interests of their “good people” against all those other “bad people” in those nasty other countries.
Of course, what almost no one is paying attention to in the middle of all this is the impact on climate change and the planet. We now know beyond a doubt that if all of this new shale oil comes out of the ground and gets burned into the atmosphere as CO2, the world’s youngest inhabitants may not have many habitable places left to live by their retirement age.
But that’s not so important compared to frustrating the economic ambitions of that rival nation-state, right?
By: David Atkins, Political Animal, The Washington Monthly, November 29, 2014
“The Pipeline From Hell”: There’s No Good Reason To Build Keystone XL
The Senate will vote Tuesday on whether to authorize the construction of the Keystone XL Pipeline. The Republican-led House approved the initiative Friday by a wide margin. The Senate’s still-Democratic majority will bring the bill to the floor for the first time because of newfound support for the initiative within the party, mostly to boost Sen. Mary Landrieu’s bid for reelection in Louisiana as she heads into a runoff with Rep. Bill Cassidy, a Republican. Cassidy leads in every poll of likely voters in that race by an average of 5 percentage points.
Support for the pipeline has surged among Democratic legislators in the wake of the midterm elections, when Democratic senators in red states were swept out of office. Those that remain—among them Sens. Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota, and Claire McCaskill of Missouri—are eager to boost their pro-energy, pro-business bona fides.
If Democratic support is new, Republicans’ enthusiasm for the project is not. Friday’s vote was the ninth time the House has approved the pipeline under a Republican majority. As soon as the midterm results had rolled in, the victorious party’s messaging shifted en masse. Republican National Committee Chairman Reince Priebus made the TV rounds on Election Night, and by the time he arrived on The Daily Show’s live edition, he had his message down to a T: “I think that what we’re going to see is that the president’s got to come to the table, and both parties are going to have to work together to get things done… It’s going to take the president saying ‘I want to work with you, I want to pass some of these jobs bills, I want to pass the Keystone Pipeline and get things done.”
It’s a well-worn, exceedingly vague message. From his phrasing, it seems that the pipeline is a no-brainer, a job-creation machine that enjoys support from Republicans and Democrats alike. Priebus mentioned it in seemingly every post-election appearance, references made their way into victory speeches from the GOP’s biggest power players, and they’ve since declared the project’s approval a top priority.
It seems America’s two major parties are finally coming together in favor of a significant legislative initiative. But should they be?
Keystone XL would be an addition to the existing Keystone Pipeline System. It would be built by TransCanada Corp. and would run from Alberta’s tar-sands fields through Montana and South Dakota to link up with the system in Steele City, Nebraska. It would transport bitumen and liquefied natural gas drawn from the tar sands to refineries on the Gulf Coast, mainly in Texas.
The XL addition was proposed in 2008, and studies on the project’s potential economic and environmental impact were commissioned in 2010 and 2011. President Obama rejected the project’s application in 2012 amid protests that it would hurt Nebraska’s Sand Hills region. An adjusted route through Nebraska has since been proposed, and a State Department report declared the project’s environmental effect was “not significant,” but the Obama administration announced in April 2014 that the review of the project has been extended indefinitely.
Why, if the project will create a lot of jobs and have little environmental impact, does it continue to be met with opposition? To begin with, it won’t actually create many jobs. According to a George Mason University study, via Bloomberg, the pipeline’s construction could create between 2,500 and 20,000 jobs. More likely (PDF), it’ll be between 2,500 and 4,650, assuming that a huge chunk (as much as 50 percent) of steel production will be outsourced to China, Canada, and India. Moreover, when construction ends, the number of permanent jobs could fall to 20. Yes, 20.
A rosier estimate, from the State Department’s report and Newsweek, puts the number of permanent jobs at 35. A study by Cornell’s Global Labor Institute claims that the project may actually kill more American jobs than it creates due to pipeline spills, additional fuel costs in the Midwest, and other factors. It also claims that 85-90 percent of people hired for the line’s construction will not be from the areas through which the pipeline is running.
So, it won’t create that many jobs. After all, it’s merely taking oil drilled in Canada to pre-existing refineries on the Gulf Coast. But it’s a $7 billion project, and the State Department has said it will have a minimal negative effect on the environment. Plus, it could increase America’s energy independence and strengthen our position in the Middle East and beyond. These are all good reasons to move ahead with the plan, but unfortunately, none of them are actually true.
The pipeline is a $7 billion project, but only $3 billion-$4 billion of that would be headed to the U.S. The rest is going to wherever that steel is getting outsourced. The claim of reduced dependence on foreign oil suppliers is also suspect. China has already invested billions in Canada’s oil sands, and Chinese corporations are upping their stakes all the time. Much of the oil transported by the pipeline will be refined in Port Arthur, Texas, where the main refinery is half-owned by the state-owned oil company of Saudi Arabia (PDF). The Keystone project is not an American one, but a global one, financed and favored by major multinational oil interests. Besides, real domestic oil production—oil drilled and refined in the U.S. by nominally American companies—has already increased 70 percent under the Obama administration.
All of this means that the pipeline’s approval would essentially be a continuation of the status quo, with a few billion dollars kicked the U.S. economy’s way. Except that the project would, in spite of the State Department’s claims, have drastic effects on the environment on both local and global levels. That study published by the State Department was conducted by Environmental Resources Management (ERM), a firm that listed TransCanada, the would-be pipeline builder, as a client in its marketing materials a year before it began the Keystone contract.
Both ERM and TransCanada told the State Department at the time that they had not worked together for at least five years, a term of the contract meant to limit conflict of interest. Of course, any doubts about a conflict of interest evaporated when it emerged that up until the summer of 2013, a division of ERM had been “working alongside TransCanada on the Alaska Pipeline Project.” These are two in a laundry list of troubling connections between the two companies.
Considering, then, that the State Department study was conducted by TransCanada’s business partner, it’s little surprise that it failed to find any environmental consequences for the project. The reality is far different. On a local level, pipeline leaks and spills could have a number of drastic effects. Recent leaks from similar lines have been bad. Really bad. A New York Times article cites a 2010 leak of 840,000 gallons of bitumen into Michigan’s Kalamazoo River. The cleanup has cost $1 billion so far, and continues today.
It also mentions an Arkansas leak that sent 210,000 gallons of bitumen running through the streets of small-town Mayflower and left local residents with respiratory problems, nausea, and headaches. The proposed Keystone route would see it “pass over the Ogallala Aquifer, the lifeblood of Great Plains agriculture,” where the water table is close to the surface. A major leak could poison the water supply of large swaths of the Midwest that add up to one quarter of the nation’s farmland.
The pipeline also has environmental consequences on a larger scale. The pipeline would encourage accelerated extraction of Canada’s tar sands, which have greenhouse gas emissions 81 percent greater than those of conventional oil. By most measures, it is the dirtiest fossil fuel on the planet. James Hansen, formerly of NASA, claimed in a 2012 op-ed that the tar sands contain twice the amount of carbon dioxide emitted by global oil use in our entire history. If true, its exploitation along with our continued use of fossil fuels at present levels would bring carbon concentration in the atmosphere above the 500 parts per million threshold often discussed by climatologists as the point of no return. That would create an irreversible cycle wherein the climate is beyond our control. Hansen describes it as “game over for the environment.”
Even if that’s an alarmist prediction, and Canada will exploit their tar sands with or without the Keystone XL Pipeline, there is no question that its construction will not help with controlling emissions, boosting energy independence, or creating jobs. The only people it will benefit are TransCanada, the Canadian oil companies (many part-owned by Chinese and Mideast interests) working in the tar sands, the multinational oil companies who will refine what it brings to the Gulf Coast, and a few thousand workers. Temporarily.
So why, you might ask, are many of our leaders so eager to build it? The answer is straightforward: money and political gain. The Democrats, feeling vulnerable after a midterm rout, are eager to move to the pro-business center and push through a “jobs plan.” A Nov. 12 Pew Research poll shows 59 percent of Americans favor building the pipeline, which provides some political cover from the backlash Democrats will likely get from environmentalists and other sections of the party’s base.
It also conveniently caters to the interests of Big Energy, some of the biggest campaign donors to both parties. Republicans, in the House especially, have been pushing Keystone for some time and raking in donations in the process. Now, Blue Dog Democrats like Mary Landrieu are happy to hop on board. After all, some of the world’s biggest energy firms, like Exxon Mobil, have been paying her campaign bills for some time.
An initiative most thought would be pushed by the Republican majorities in the next Congress will come to the floor in the current lame-duck session. In a rather pathetic political maneuver, the Senate Democrats will try to force the president’s hand before the new Republican majority gets the chance, apparently to help in a single Senate runoff election that will not in any way alter the upper chamber’s political landscape. After all, the Democrats have no chance of keeping their majority even if Landrieu wins.
For his part, Obama has said he will veto the measure. Pundits widely expected that he would insist on the need to wait for the results of further studies and the Supreme Court ruling on land use in Nebraska. Instead, he came out Thursday with an unequivocal rejection of the premise on which the argument for the pipeline is built: “Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn’t have an impact on U.S. gas prices. If my Republican friends really want to focus on what’s good for the American people in terms of job creation and lower energy costs, we should be engaging in a conversation about what we are doing to produce more homegrown energy.”
The president is right in his criticisms, but wrong to reserve them only for the Republican Party. Many from his side of the aisle are now just as wrong on this issue as his opponents are.
By: Jack Holmes, The Daily Beast, November 15, 2014
“Cliven Bundy And The Entitlement Of The Privileged”: What He Learned From The Koch Brothers
Nevada rancher Cliven Bundy’s 15 minutes of fame are up. He was a Fox News poster boy when he refused to pay fees for grazing his cows on federal land and greeted federal rangers with the threat of armed resistance. But when he voiced his views on the joys of slavery for “the Negro,” his conservative champions fled from his side.
What is interesting about Bundy, however, is not his tired racism but rather his remarkable sense of entitlement. His cattle have fed off public lands for two decades while he refused to pay grazing fees that are much lower than those he would have to pay for private land (and lower even than the government’s costs). “I’ll be damned if this is the property of the United States,” he says, claiming he won’t do business with the federal government because the Constitution doesn’t prohibit Americans from using federal lands.
As we’ve seen in recent years, this sense of entitlement pervades the privileged. Billionaire hedge fund operator Stephen Schwarzman feels so entitled to his obscene hedge fund tax dodge – the “carried interest” exemption – that he viewed Obama’s call to close the loophole as “a war. It’s like when Hitler invaded Poland in 1939.” Tom Perkins, co-founder of venture capital fund Kleiner Perkins Caufield & Byers, considers mere criticism of the wealthiest Americans akin to the persecution of the Jews in Nazi Germany.
When Republican Dave Camp, the chairman of the House Ways and Means Committee, had the temerity to propose a surcharge on the biggest financial houses (those with $500 billion in assets or more), to correct for the subsidy and competitive advantage provided by being “too big to fail,” Wall Street went ballistic. Republicans were told the spigot of political fundraisers would be closed until they recanted their heresy. “We’re going to beat this like a rented mule,” boasted Cam Fine, head of the Independent Community Bankers of America.
Big Oil feels so entitled to its multibillion-dollar annual subsidies, that Jack Gerard, president of the American Petroleum Institute, even denies their existence: “The oil and gas industry gets no subsidies, zero, nothing.” The more than $4 billion that the most profitable companies in the history of the world receive annually from U.S. taxpayers are apparently entitlements, not subsidies.
No one exemplifies this sense of entitlement more than the billionaire Koch brothers, self-proclaimed libertarians who pour hundreds of millions of dollars into supporting think tanks, lobbies and candidates who will protect their right to pollute our air and water while leaving taxpayers to pay billions of dollars to repair damage done. Owners of companies that have serially violated environmental, health and safety laws, the Koch brothers have played a major role in propogating the views adopted by rancher Bundy.
Mitt Romney, the Republican candidate for president, infamously denounced the 47 percent as “takers,” even while revealing that he paid a low 14.1 percent income tax rate. As Bundy dramatized, the real “takers” aren’t the poor and the vulnerable. Indeed, worse-off Americans are so disabused of any sense of entitlement that millions don’t jump the hurdles needed to receive the benefits for which they are eligible.
No, the real “takers” with a stunning sense of entitlement are the biggest corporations and banks, the richest Americans. They view their tax dodges as an inherent right, their inherited estates as a birthright. They treat the public commons as a resource that they should be free to plunder and regard any regulations that would protect those resources as an infringement on their liberty. Corporations are now arguing in court that that the First Amendment gives them the right to evade the law.
But, as Sen. Elizabeth Warren (D-Mass.) noted in her speech to the Democratic National Convention in 2012, the entitlements of the elite are increasingly under question:
“People feel like the system is rigged against them. And here’s the painful part: They’re right. The system is rigged. Look around. Oil companies guzzle down billions in subsidies. Billionaires pay lower tax rates than their secretaries. Wall Street CEOs — the same ones who wrecked our economy and destroyed millions of jobs — still strut around Congress, no shame, demanding favors and acting like we should thank them. Anyone here have a problem with that? Well, I do.”
And, as polls show, so do the vast majority of Americans. Just as Bundy discovered his casual racism was unacceptable, he will learn that his privileged sense of entitlement earns similar scorn.
By: Katrina vanden Heuvel, Opinion Writer, The Washington Post, April 29, 2014
“Because Corporations Lie”: Voluntary Political Transparency Is Just Not Enough
The Securities and Exchange Commission took a bold step in considering new rules that would require publicly traded companies to disclose political donations. This is a good idea because since the Citizens United decision, corporate entities have moved away from disclosed campaign committees, and instead have begun funneling cash into secret campaign funds, mostly 501c nonprofits.
Last year, The Nation published an investigation that debunked the idea that corporate money has flowed mostly to so-called Super PACs in the wake of Citizens United. Rather, big business has embraced nonprofit trade associations and issue advocacy groups to pour hundreds of millions into direct campaign advocacy. The distinction is important because Super PACs, for all their problems, at least disclose their donors and spending records; trade associations and issue advocacy groups do not.
To the credit of reformers, particularly the Center for Political Accountability and several investor groups, many large corporations have voluntarily adopted transparency measures. While we should applaud corporations that go beyond the letter of the law in disclosing these funds, a system based on voluntary participation does not come close to solving the problem of secret political slush funds. In some cases, voluntary disclosure actually obscures the truth.
Take health insurance companies. Aetna, Aflac and WellPoint are among several that have adopted voluntary disclose rules to provide the public and shareholders with a window into their giving patterns. There’s one problem: they aren’t truthful.
In 2009, the major health insurers, including the aforementioned companies, secretly funneled over $86.2 million to the US Chamber of Commerce, a trade association, using another trade association as a proxy to move the money, to run television and radio advertisements against health reform. Aetna’s disclosures that year only revealed $100,000 to the Chamber. WellPoint and Aflac failed to report those donations, as well. The following year, during the midterm elections, Aetna again secretly provided $7 million to “American Action Network,” a social welfare nonprofit used to run partisan attack ads against Democrats, along with the Chamber, which spent over $50 million on a partisan campaign to elect mostly Republicans that year. Again, Aetna’s voluntary disclosure report made no mention of the money, which became public through an inadvertent regulatory filing.
Similarly, several major oil companies have adopted voluntary disclosure guidelines that are fairly useless. ExxonMobil and Valero Energy are two examples: Both firms proudly produce annual reports on which candidates and political parties they fund. The problem? That data can be found already on the Federal Elections Commission website and related state-level disclosure websites, so there’s nothing new. As The Nation has reported, oil companies often work through secretive trade associations like the American Petroleum Institute, which has become more active in financing campaign-related advertisements and grants to other dark money groups.
As Senator John McCain and others have noted, the hundreds of millions slushing in secret money is bound to lead to another major scandal. And that scandal will likely to produce a lot of liability for the corporations involved. Moreover, as attorney Jerry Goldfeder noted in a letter to the New York Times this week, the I.R.S. has sent a questionnaire to 1,300 nonprofit groups questioning their tax exempt status. The increased scrutiny could lead to new questions that could increase liability for corporations: Are these groups being used to violate the Foreign Corrupt Practices Act, by funneling cash to foreign governments? Are consumer brands secretly funding ads that could harm the perception of their product (as was the case with Target and their donations to an anti-gay politician in Minnesota)?
Under the current system, only corporate executives, their lobbyists, and certain politicians really understand where the money is flowing. Shareholders, the public, and reporters have a right to know, too.
By: Lee Fang, The Nation, March 29, 2013
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