The Koch's Tea Party libertarianism is actually a thin veneer for the company's long running history of manipulating the market to pad Koch profits.
March 2, 2011 |
Koch Industries, the international conglomerate owned by Charles and David Koch, is not only the second largest private company in America, it is the most politically active. As ThinkProgress has carefully documented over the last three years, Koch groups have spent tens of millions to influence government policy — from
financing the Tea Parties, to funding
junk academic studies, to undisclosed
attack ads against Democrats, to
groups promoting climate change denial, to a large network of state-based and national think tanks. In an
opinion column for the Wall Street Journal Tuesday, Koch Industries CEO Charles Koch fired back at his critics, who have grown more vocal as it has become clear that Koch groups are providing the political muscle for Gov. Scott Walker’s (R-WI) union-busting power grab.
In his piece, Charles portrays himself as simply an ideological advocate, and says his money to political groups is only meant to “enhance true economic freedom.” He chides special interests that have “successfully lobbied for special favors,” claiming “crony capitalism is much easier than competing in an open market.” But in reality, the focus of the Koch political machine is geared towards “crony capitalism” — corrupting government to make Charles and his brother David Koch richer. Koch’s Tea Party libertarianism is actually a thin veneer for the company’s long running history of winning special deals from the government and manipulating the market to pad Koch profits:
– The
dirty secret of Koch Industries is its birth under the centrally-planned Soviet Union.
Fred Koch, the founder of the company and father of David and Charles, helped construct fifteen oil refineries for Joseph Stalin before expanding the business in the United States. – As Yasha Levine has
reported,
Koch exploits a number of government programs for profit. For instance, Georgia Pacific, a timber company subsidiary of Koch Industries, uses taxpayer money provided by the U.S. Forestry Service to provide their loggers with taxpayer-funded roads and access to virgin growth forests. “Logging companies such as Georgia-Pacific strip lands bare, destroy vast acreages and pay only a small fee to the federal government in proportion to what they take from the public,”
according to the Institute for Public Accuracy. Levine also
notes that Koch’s cattle ranching company, Matador Cattle Company, uses a New Deal program to profit off federal land for free.
–
Koch Industries won massive government contracts using their close relationship with the Bush administration. The Bush administration, in a deal even conservatives
alleged was a quid pro quo because of Koch’s campaign donations, handed Koch Industries a
lucrative contract to supply the nation’s Strategic Petroleum Reserve with 8 million barrels of crude oil. The SPR deal, done initially in 2002, was
renewed in 2004 by Bush administration officials. During the occupation of Iraq, Koch won
significant contracts to buy Iraqi crude oil.
– Although Koch campaigned vigorously against health reform — running
attack ads,
sponsoring anti-health reform Tea Parties, and
comparing health reform to the Holocaust —
Koch Industries applied for health reform subsidies made possible by the Obama administration. – The Koch brothers have claimed that they oppose government intervention in the market, but Koch Industries lobbies aggressively for taxpayer handouts. In Alaska, blogger Andrew Halcro
reported that a Koch subsidiary in Fairbanks
asked Gov. Sarah Palin’s administration to use taxpayer money to bail out one of their failing refinery.
October 15, 2010: An article written by the New Yorker's Jane Mayer, ties the billionaire Koch brothers to the funding behind the Tea Party Express movement.
In her August 30, 2010 column, Mayer
writes, "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."
The money bombs dropped by the Tea Party Express that attacked incumbent Lisa Murkowski in the August GOP U.S. Senate primary, was the sole reason Joe Miller won a close race.
Score one for the Koch boys, or should we?
What is interesting about the Koch brothers strong support of the Tea Party, which assails government bail outs, is that eighteen months ago the Koch brothers were asking Alaskan taxpayers to bail out their Fairbanks refinery.
From andrewhalcro.com January 19, 2009...
The Koch brothers own Koch Industries. A company that boasts annual sales of $90 billion in the United States. The company’s sectors include forest products, energy, plastics, ranching, and finance, with such well-known brands as Dixie Cups and Lycra. If it were a public company, Koch would rank about 16th on the Fortune 500, ahead of such behemoths as Procter & Gamble and Boeing
These are bothers who have established themselves as staunch Libertarians. Defenders of the free market and generous benefactors to such notable free market advocacy groups as the Cato Institute, to whom together, the brothers have donated over $21 million.
As David Koch explained to National Journal (May 16, 1992): "My overall concept is to minimize the role of government and to maximize the role of private economy and to maximize personal freedoms."
Today, the billionaire brothers appear to be trying to maximize the role of government in looking for a helping hand from the State of Alaska.
The Koch's own a few refineries in the United States including the Flint Hills Refinery in Fairbanks. In 2003, they paid $265 million in purchasing the refinery from the Williams Companies.
Less than three years later, Flint Hills began asking for relief from the Murkowski administration. In Februrary of 2006, Flint Hills sent a letter to the state asking for a change to their oil supply contract with the state so that payments owed wouldn't be required.
In an immediate response, State's Oil & Gas Director Bill Van Dyke responded by saying that all parties, including Flint Hills, knew the oil supply contract was negotiated in early 2004, that disputes before federal regulatory agencies over pipeline tariffs were likely and could affect the oil price retroactively.
One Fairbanks lawmaker even introduced legislation (SB314) in April of 2006 to prohibit such retroactive billing adjustments in order to help out the home team refinery. The bill died in committee.
Today the refinery is back, asking the Palin administration for relief.
Returning to the well
On December 10, 2008, then Governor Sarah Palin released a statement announcing a "Cooperative effort aimed at positioning the North Pole Refinery for success."
The governor's announcement came quickly on the heels of a statement issued by the refinery that they had decided it was not economically feasible to invest the necessary money to upgrade the refinery.
A quick side note; not economically feasible? Doesn't that seem at odds with the accusation that Alaska refineries have been price gouging?
I digress...back to the issue.
Flint Hills was looking at a major investment needed to bring their refinery up to EPA standards by a June 2010 deadline. These upgrades to promote low sulfer diesel could run well over $100 million.
Flint Hills was considering three options; to make the needed investments in the refinery, to sell the refinery or to shut the refinery down. After publicly announcing they would not sink anymore money into the refinery, the panic spread throughout the railbelt as both consumers and commercial interests started to panic.
The refineries impact is significant.
It provides home heating fuel to the Fairbanks market, aviation fuel used at the Anchorage International Airport and some gasoline. The aviation fuel segment of the refineries business accounted for 36%of the Alaska Railroad's combined freight and passenger revenue in 2007.
In a press interview on December 12, 2008, the governor's special assistant Joe Balash said one possibility under consideration is for the state to take ownership.
State ownership? It's way too early to even speak of such extreme action.
While saving Flint Hills is important, there is a private sector solution that hasn't even been discussed.
One of Flint Hills declared options was to sell the refinery. But according to my sources there have been no such discussions with suitable buyers here in Alaska.
I'm sure if Flint Hills is willing to toss the keys to the refinery to the state or take the radical third option of simply shutting the refinery down, others would be willing to step in.
A quick look at Flint Hills competitors show companies who have dealt with increased cost of operating as well as having to invest in bringing their refineries up to EPA standards.
On the Kenai Peninsula, the Tesoro plant at Nikiski has already made the necessary investments to bring their refinery up to code. In Valdez, the Petro Star refinery, owned and operated by ASRC, recently received board approval to invest $100 million in refinery upgrades to meet 2010 EPA standards.
Due to the economic importance and the sense of urgency put off by the Flint Hills Refinery, there will be significant political pressure from interested groups which will create the environment for a risky move by the state.
All private sector options must be considered first.
In press interviews, the Palin administration has stated they have retained a Dallas energy consulting firm to help analyze the financials from Flint Hills refinery and expects the process to take three to six months.
Lawmakers need to scrutinize this deal carefully and remember the words of two of the countries richest men who also happen to own the Flint Hills refinery
In a 1992 interview with the National Journal, David Koch said, we need "to minimize the role of government and to maximize the role of private economy."
Maximizing the role of the private economy is not accomplished by a state sponsored bailout.
In a 2007 interview with the American, Charles Koch said, "One of the big problems with government activities is that if something does not work, rather than applying analysis to see why and eliminating it or changing it, the answer’s always, “Well, the reason it did not work is we did not put enough money into it.” That is crazy. It would be like having an experiment that failed and then building a full-scale plan."
Today it seems like Flint Hills is asking government to put more money into something they say does not work.
Lawmakers and state officials must be aware of the downside economics facing the Flint Hills refinery. The refinery gets 100% of its oil from the state's royalty share, that will continue to decline as North Slope production declines.
In fact when you look at the same legislative voices that are supporting state involvement is assisting the refinery, they are the same voices that voted to jack up taxes on production in 2007 which will do nothing to help generate additional production for the refinery.
Any idea to put state dollars at risk, should under go stringent scrutiny.
And so it goes it comes full circle.
No hay comentarios:
Publicar un comentario