The Koch Brothers

[things you might want to hear from a Centrist, not a liberal]

(July 2024 update:   David Koch died in August 2019)

OK, so I'm not a Democrat. But I'm still going to lay it in on the line with the sneaky, snarky Koch Brothers' Take-over of Democracy (TM).  You don't have to be a Democrat, and certainly not a Bernie-phile, to dislike their actions.  I dislike their actions so much that I would like to get personal about them, but that's not really my style. Besides, it makes for weak ad hominem ("personal attack") arguments. Right now our public debate is over-stuffed with weak ad hominem arguments.

There's a reason I'm singling them out over other bazillionaire political donors:  they seem to directly buy off more candidates, they've wrecked more havoc on the world through their businesses than have others, and they've pretty much bought off the Republican Party.  (Neither Soros nor Weinstein got that far with the DNC.)

So, in partial time-line format, here goes:

Mid-1900s:  Old Man Koch (the father of these current old men, that is) dealt with the Soviet Communist leader Stalin, one of the most evil, murderous dictators ever.  He and a partner did this by helping Stalin set up oil refineries.   That's a big part of how the Koch fortune was made.  To his credit, the old man did back down when he saw some of the suffering Stalin perpetrated.  But, still...

1974-- Some of you will remember the infamous gas lines of the 1970s.  Koch was one of four oil companies accused of overcharging customers. They were fined $50,000.  (That was a heftier sum back then.) 

1980-- David Koch was the Libertarian Vice Presidential candidate in 1980.  They thought Reagan was too liberal. 

1980s and beyond.  There are four Koch brothers.  Two of them are less ruthless, and there was a lawsuit between the brothers in the past.  Their father left them the petrochemical business.  The other two brothers felt the infamous David and Charles were spending too much of the family/corporate earnings on their own political aspirations.  The other two felt that David and Charles should have been paying out more to family members in dividends.  The feud finally ended, but the other brothers have not thought of David and Charles as being very fraternal.  Brother William ("Bill", David's twin) has been one of the whistleblowers on the infamous two.

1990s-- The Koch Pine Bend Refinery in Minnesota dumped 600,000 gallons of jet fuel into a river throughout the decade.  The bros were fined $6 million, $2 million of it in remediation for violating the Clean Water Act.  (Any wonder why there's such a call now for "deregulation" and shrinking the EPA?)

1990s-- A Koch refinery vented massive amounts of benzene into Corpus Christi, Texas, five times the legal limit.  They did this knowingly, having taken pollution control devices off their equipment. They would wait until evenings or weekends, when there were fewer regulators on staff to observe them, to dump out fumes.
      The Kochs plead guilty to a single felony to avoid criminal prosecution.  They were to have paid $20 million in fines, but George W. Bush came into office and largely let them off.
     On April 9th, 2001, the US Department of Justice weighed in. There was a five year probationary period.  There was to be strict new environmental compliance program.  You can find record of the DOJ briefing on-line.
    (Benzene, in excessive amounts, causes anemic conditions by damaging bone marrow.)

1994-- The Koch Brothers were accused of covering up issues with a faulty pipeline in south Texas.  (The pipeline had been built in the 1940s.)  90,000 gallons of crude oil leaked into Gum Hollow Creek.  Employees had warned leadership, but they were ignored.

1995-- The EPA & U.S. Coast Guard filed a civil suit against the brothers' companies.  They were accused of unlawfully discharging millions of gallons of oil into the waters of six states.

Mid 1990s-2005. The Koch Bros invested in Bernie Madoff's Ponzi scheme, which ripped off savings of many individuals.  The Kochs pulled out three years before the collapse of the scheme.  The moved the money from the Madoff venture overseas, so it is untouchable for paying back lower level investors who were ripped off. A judge recently ruled that since the money is offshore, it can't be touched for legal remedies to those ripped-off.

1999-- A whistleblower reported that the Kochs had cheated on Indiana oil leases.  They were fined in 2001 and paid $25 million to settle this.  (Bro Bill brought this up in the on-going feud.)

2008--  I guess we should feel sorry for them. At this time, their $19 billion net worth each dropped to $16 billion each.  Now they espouse deregulation, but they more than made their fortunes back during the regulated times of 2008-2016.  They're up to a net worth of $41 billion each.

2008-ish- 2016-ish.  The Koch Brothers railed against "corporate welfare."  (Great way to make themselves look like "great guys", right?)  They criticized the bail-outs after the financial meltdown of 2008.  It's still debatable, but it does seem like this prevented a worse melt-down, which would have affected everyone worse.  (Although the rich got a lot better return on this, while the middle class still struggles to find its footing.)
      While publicly decrying corporate welfare, they were big financial backers of the U.S. Chamber of Commerce, which was all about supporting the bail-outs and corporate welfare.
       2013-- they took economic development monies the federal government had sent to the states for improvements.

2009--  The Koch Brothers were responsible for a superfund site in Michigan, you know, one of those mega-environmental disasters that cost a super-large amount of funds to clean up?  The DOJ and the EPA brought up issues.  The Koch Brothers got away with paying only $7 million for the clean-up by settling in a "sweetheart deal."  (Interesting, as you'll see below, that they fund something called "The Goldwater Institute."  Yet Senator Barry Goldwater had actually been very concerned about environmental issues.)

2009 & beyond--  The Kochs financially assisted big banks in their lobbying blitz against Wall Street reform.

2012-- The Koch Brothers spend ~$400 million on Republican candidates.

~2012-Present--  The Kochs were among other supply side & Libertarian-type advisors encouraging the State of Kansas to keep lowering their taxes.  (The Kochs are more-or-less headquartered in Wichita.)  Governor Brownback went along with this, despite seeing how similar policies had ruined Louisiana under Governor Jindal.  Kansas has faced bankruptcy.  Several schools couldn't finish their 2016-17 school year. And the promised growth in business and income never came.

2017--  The Kochs have told Fox News that they're spending $400 million for the 2018 mid-term elections.

On-going--  The Kochs truly believe that there should be -0- taxes. Can you imagine trying to run a modern nation like that?

On-going-- The Koch Bros. believe there should be NO minimum wage.

On-going-- They give money to the National Right to Life organization, even though they're pro-choice. They know this is one of the surest ways to buy off a segment of conservative voters.  (David Koch is actually pro-choice and pro-LGBT.  But they pay to put socially conservative candidates in office to get the benefits of lowered taxes, less regulation.)

On-going-- the bros call Social Security a threat to the future stability of society.  They have said it's a worse threat than nuclear war. (Great. Add to the inflammatory rhetoric, though usually decrying it.)  Think about that when you have to pay all of Grandma's bills.  Or when a North Korean nuke is flying over your head. Yeah.  Real sensible.

On-going--  While I applaud Senator Jeff Flake for speaking up courageously on the Senate floor regarding current bad behavior in politics, I cannot agree with his close cooperation with the Koch Brothers.  He's taken money from them, and gone to many of their seminars.  Another prominent Arizonan doing likewise?  Governor Doug Ducey.  (And the poor education and infrastructure spending in AZ reflect this.)

On-going-- The Kochs fund the Goldwater Institute in Arizona. One of the recent things the institute did was agree to provide a lawyer to FIGHT the wishes of the electorate of Arizona!  Arizonans did not want the school voucher program expanded, but the Koch-controlled legislature and Koch-controlled governor did it anyway.  A legitimate petition was signed by enough voters to get it on the ballot to override elected lawmakers, a right enshrined in the AZ constitution.  (One which the Legislature has attempted to curtail by reducing the ways in which signatures can be gathered.)  Interestingly, the institute and state leadership backed down on this one.

On-going--  Charles Koch is the Director of the Mercatus Center.  Congress increasingly draws their information and findings for reports and bills from Mercatus.

On-going--  The Kochs have managed to plant "schools" within public universities and have managed to get state legislatures to fund most of the costs. These "schools" are indoctrination programs for Koch thinking. Arizona leaders claim we never have enough for K-12 nor higher education, but they set aside $5 million for ASU and U of A Koch-backed foundations.  To recap:  The state is paying the vast majority of Koch-implemented university programs, not the Kochs.  (Arizona is not the only state to do so, but probably the most egregious example.)

On-going-- Koch College at the College of Charleston obtained personal information about students.

On-going-- They say they believe in prison reform. But they're perfectly willing to shell out big bucks to (White) Republican candidates who use Black inmate imagery as scare tactics to get elected.  (One commentator wryly asked whether the Koch Brothers interest in prison reform and willingness to hire inmates has to do with the 2001 legal finding against them regarding benzene, noted above.)

On-going--  The Kochs want all schools privatized. They're big movers behind the charter school movement.  Problem is, it's inappropriate to always put charters on a pedestal. Charters don't have use licensed teachers.  (This is what the Kochs like, though; no pensions for retired teachers. Why should they have to pay for someone put out to pasture?)  There has been fraud among many charter schools. And, if it's really about better choices for disadvantaged students, there would be a free & safe transportation component.

On-going-- They're Trump "frenemies."  They refused to give Trump money, and he refused to come begging.  They don't like his independence. (All the other GOP primary candidates went groveling.)  They part ways on free-trade  immigration.  But they're lock-step in making sure corporations* & rich people have lower taxes and that we deregulate things---the consequences be d****d!!! 
    (*see other posts with tag "economy"; I'm not totally opposed to restructuring corporate taxes, if it's done right; there is also some room for loosening regulations on loans to homebuyers) 

**************************************

On-going-- Vice President Pence is in the act.  He's been bought-off for a while. Take a look at the VP's recent activity:
                 Pence Meets with Koch Brother in Colorado

This is from The Hill, a centrist to slightly right-of-center news agency.

If the Kochs would just be responsible citizens and pay their taxes, it might cost them less in legal fees & settlements and election buy-offs.  And leave them a better legacy. I mean, these dudes are getting old. One of them is pushing 80.  It's not like they can take it with them!!!  

October in Northern Arizona

Article II, Section 8 U.S. Constitution

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare [emphasis mine] of the United States... "

The conservative, "narrow" constitutionalists of our day do not have a "lock" on the Constitution.  It was meant to be a living, growing document.  The provision for "general welfare" encompasses many things.   In other words, sometimes the government helps those less off to promote everyone's "general welfare."  Societal unrest destroys the general welfare.

It *IS* Fair to Tax the Rich More

First of all, is "fair" exactly the right lens to look through when discussing broad political policies?  It seems the right measure would be "what does the most good while doing the least harm for most people?"

Overall, the best coupling of economic-political systems seems to be democracy and capitalism with appropriate "safety valves" in place.

The "fairness" question has a lot to do with "safety valves" among other things.  Without some checks on rampant greed, government officials can just be "bought out", and you end up with an oligarchy,  rule by the wealthy, over time.

Another safety valve involves the stock market.  As I've said elsewhere in this blog, too low of taxes on the rich leaves too much money for stock market speculation at the top. The market crashes, and we ALL end up saddled with the increases to national debt that come with this.  This debt saddles our descendents, too.  Debt pay-off is a far higher percentage of middle class resources than upper class resources. 

After the first shock waves of the 2008 crash passed, the wealthy regained their wealth quickly. The middle class, which had already been struggling to maintain its place, keeps falling further behind. We really did bail out the rich more than the poor did.

Returning to the national debt:  if we don't pay it down, our country's ability to borrow money will be impacted negatively.  We will have to pay more interest to borrow money.  One prong in paying down the national debt involves raising taxes on the wealthy.  We could someday leave our children or grandchildren with the harsh austerity measures of Greece.  This would hit the middle harder than the wealthy at first, of course.  Over time, though, as the middle was squeezed more and could not be extended personal credit in the way it has been, they will not be able to support the wealthy through buying from the companies and corporations of the wealthy as much.  (I have also made this point elsewhere.)

The wealthy either outright own or own more stock in corporations that damage or negatively affect the environment.  Frequently, these companies/corporations would rather pay fines than fix the problems that hurt the environment or workers.  So we all get saddled with the eventual costs of clean-up or medical bills.  (The corporation may pay some costs in lost productivity.) While corporations pay part of the clean-up costs, we need an active Environmental Protection Agency (EPA) to make this happen. This costs money.  As the wealthy are profiting more from corporations, it seems "fair" to make them pay a larger share in ensuring the negative impact is limited or addressed.

When poorer people don't have insurance, they use emergency rooms later into their illnesses.  Emergency rooms cannot turn people away.  The hospitals recoup their costs via charging everyone more.  That drives everyone's health insurance up more.  The costs for insurance are a far lower percentage of the wealthy's compensation packages than it is for the middle class.  (The poor figure in differently, due to subsidies.)

There are other ways that the health industry benefits the wealthy out of all of this.  Hospitals keep being allowed to merge, although it is not necessarily good for the public.  Hospitals frequently operate, technically, by non-profit rules that benefit their ability to rake in the money.  But being non-profits doesn't stop them from paying their boards and their managing staff (roughly the equivalents of "CEOs") enormous salaries.  Additionally, health insurance companies and their CEOs, which are for profit, rake in big $$$.

(As an aside, the German system does not allow insurance companies to make a profit from basic policies.  The companies make their profits from the high-end "designer" policies.  Maybe a thought for here?)

The argument comes up that the wealthy are "job creators."  Not so fast. When greed became fashionable in the 80s (a fashion that has not died), a lot of corporate muckety-mucks accelerated the pace of moving jobs overseas to cheaper labor.  There is nothing written into current federal tax-lowering schemes that makes the wealthy produce more high-paying jobs in exchange for lowered taxes.  Besides which, some of the wealthy inherited their wealth.  Others are CEOs, who managed to get themselves into a "sweet deal." And they don't always lead their companies to better earnings. Even when they don't, they get obnoxiously high salaries, or at least the "golden parachute" to just leave and let another CEO give it a try.  And they have no obligation to create more high-paying jobs here. Their only obligations are to helping the shareholders get higher returns on their stocks.

There are those entrepreneurs who have created companies and wealth in their own generation. But, generally, they relied on strength, talents and resources of others. And a lot of the people in this category are very generous and give away a lot of their earnings.

Another reason raising federal taxes on the wealthy is fairer than you think is that state and local taxes tend to even out the percentages everyone pays in taxes.  State taxes are less graduated (everyone pays "closer" to the same percentage) and sales taxes take a far higher percentage of your money, the less you earn (or take home in disability or retirement pay).

Wars and the costs of caring for Veterans are another reason to tax the rich more. We're given all sorts of "noble reasons" why we've gone to war. And sometimes those noble reasons are true, though sometimes there are reasons to be skeptical.  Either way, the wealthy benefit off of wars. They disproportionately own stocks in companies that make military supplies and equipment.  VP Cheney's Halliburton connections appear to have benefitted from the Iraq war. Yet, servicemembers come disproportionately out of lower classes.  And we all have to pay the high financial and social costs of injured Veterans.

Some states have tried ridiculous tax-lowering, as I've also mentioned elsewhere.  There have been some states that kept cutting to the point of ridiculous.  Kansans went out to warn other states trying these policies that Kansas has tried that the policies didn't work.  Some of these states did couple corporate tax cuts with the requirement to provide jobs with certain salary levels.  Others did not. Still, Kansas and Louisiana, as mentioned elsewhere, ran into serious problems.  It looks like Wisconsin is going that way; the programs are beginning to be very unpopular there.  It seems only a matter of time until Arizona learns the hard way. 

Another reason I don't like this is how much this line of thinking is bought out directly by the Koch Brothers.  When you trace all the ways they funnel money to candidates to promote this, it's scary.  I won't list them all here right  now.  But there are a couple points worth making.

As an aside, I will mention a couple of the glaring improprieties of how the Kochs are setting too much of the national agenda.  First of all, their constant interference makes democracy a farce.  Secondly, the Kochs aren't terribly honest.  They're very willing to "use" conservatives who are pro-life, while the Kochs are decidedly pro-choice.  At some point, when they've gotten their way on economic matters, will they buy out the public thinking on abortion?  (There are other social conservative preferences that are the opposite of what the Kochs want.  I will not discuss all that here.  Suffice it to say, it looks like they're using people.)

As mentioned in my post on libertarianism, the Kochs literally want -0- taxes. That's not realistic at all in a modern society.  (see that post for more details) 

The Kochs bring out a great deal of cynicism in me.  There are so many things deserving another post at another time on the Kochs' operations.  But that's not the main point of this post.  The reason they came up in this post is their constant pushing of the opposite of what would be helpful for the U.S. to move forward. And I wanted to point out that they buy politicians' intentions.  

I agree that there's a point at which taxes are too high on the wealthy.  I'm no "Bernie, Jr.", either.  (I think his use of "socialism" was misapplied.  And it risks letting people like me get labelled as "socialist", which I'm not.  The correct definition of socialism is, according to Merriam-Webster: "1) any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods. 2) a system of society or group living in which there is no private property."  Even Bernie doesn't believe this.)  The "sweet spot" seems to be setting federal taxes on the wealthy somewhere between 40 to 45% and more fully graduating state taxes, to have more brackets.  (I realize I mentioned how having them less graduated equalizes things more, but they would still not likely end up fully graduated in most states.)

Think for yourself.  Don't follow straight ideologies.

Reason 1000 (on "Why We Need a New TR")

And, yes, this is a real quote.  I found it and made the meme.

In Business We Trust....

"Business ethics":  an oxymoron.

No Duh!

Well, this was a "No 'doo-doo', Sherlock" moment.  The street ends in a T-intersection, with a mountain looming behind.  Yet, the city apparently needed the "Dead End" sign!!!  😆😄😃