Koch Brothers Should Return $157 Million in Government Subsidies

Submitted by Mary Bottari on

The fossil fuel barons, Charles and David Koch, have long advocated for "economic freedom" and a smaller government. They have slammed "collectivism" and market distorting subsidies.

In 2012, Charles Koch decried corporate welfare and “crony capitalism” in the pages of the Wall Street Journal: “Far too many well-connected businesses are feeding at the federal trough. By addressing corporate welfare as well as other forms of welfare, we would add a whole new level of understanding to the notion of entitlement reform,” he wrote.

The Koch's “secret bank” Freedom Partners has spent hundreds of millions in elections in part to tackle “‘rent-seeking,’ ‘corporate welfare,’ and other forms of cronyism.”

In 2014, the Koch-funded American Legislative Exchange Council (ALEC) rolled out a report on the “Unseen Cost of Tax Cronyism” and the Kochs launched a public broadside against corporate subsidies in a letter to Congress. The Kochs were so upset by programs, such as the Wind Production Tax Credit, that their chief lobbyists declared: “We oppose ALL subsidies, whether existing or proposed, including programs that benefit us.”

Now Good Jobs First, a nonprofit watchdog on corporate subsidies, has provided the Kochs with an excellent opportunity to put their money where their mouth is.

Good Jobs First unveiled a new, upgraded version of the their Subsidy Tracker data base which aggregates subsidy recipient data from more than 700 state, local, and federal economic development programs.

Click on "Koch Industries" in their parent companies list and voila! $157 million in state and federal subsidies are revealed, with an additional $6.2 million in federal loan guarantees.

Louisiana has ponied up the most $77 million in subsidies for the Koch operations, followed by $25 million in Oregon, $21 million in Oklahoma, and $15 million in Iowa.

These are all states that could use the cash.

Surely Charles and David Koch don't want to sully themselves with subsidies? With a combined net worth estimated to be $82 billion dollars, they are two of richest men in the world.

Its time to ask @Koch_Industries to give it back.

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Mary Bottari
Mary Bottari

Mary Bottari is a reporter for the Center for Media and Democracy (CMD). She helped launch CMD's award-winning ALEC Exposed investigation and is a two-time recipient of the Sidney Prize for public interest journalism from the Sidney Hillman Foundation.

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Comments

joe nobody replied on

It's clear you have no clue. subsidies are meant to help a company that's struggling or short on cash for growth. the ability to compete is a farce. that's what profits are for. it use to be a company earned profits and it than reinvested, increased workers pay etc, not line their pockets and than turn around and bum money, tax payer money to do the fore mentioned things. maybe you should look at koch's short list of things they want done. right to work laws bust unions etc. what good is bringing a job if it pays minimum wage while a union job pays much more. research what ALEC has done to destroy whats left of the middle class among other things. facts do matter, even today.

Jesse replied on

Our nation is long overdue for some tax and subsidy law reform; which is the real take away from this article. As you can see from other reader's comments, it'd logical for any corporation to leverage the subsidies and tax breaks available to them. They would be amiss in their fiduciary responsibility to their shareholders not to do so. Even so, I think we can all agree that subsidies are intended to provide disenfranchised industries a leg up so that they can somehow serve a public need that the free market otherwise could not. Obviously, any company proving itself to be many times more profitable than the subsidies it receives does not need those subsidies to encourage participation in the market. I suggest we are overdue to restructure half-century-old subsidies to discourage unsustainable practices and encourage sustainable ones.

Corey replied on

These states are all getting something in exchange for their "subsidies", usually JOBS being the most important, from which they get income tax revenue and money injected into their local economies. If you want the corporations to give back the subsidies, then the states need to give back the tax revenue they received as a result, otherwise the only gain is to the states because the people are still paying taxes.... I'm all for a fair playing field, but go after campaign reform and quit whipping this dead horse. This is no different than major league teams battling with dollars over the top players, its free market, the highest bidder wins. NY state (Democratic mecca) is offering 10 years of tax free operation to draw businesses into it's state and that's cheered on. But that is corporate welfare according to your definition, but wise management according to others. As long as it's above board, full disclosure and no back room secret deals, I don't see the problem with it. It's free enterprise.

Josh M. replied on

They are simply playing the game that the gov't has created. If they didn't accept/benefit from those subsidies, other companies would, and Koch Industries would be at a disadvantage. There's a lot to be said that they are advocating for these subsidies to be destroyed, even though they benefit from them. Other companies are lobbying _for_ subsidies while Koch lobbies _against_ them. They're doing a lot to further economic freedom, and people should stop believing all they hear in the media and do some research on their own.

Robert Golden replied on

The issue is the Koch Network has created an outsized influence on "the game the government creates", by supporting voter suppression, gerrymandering, unlimited political funding, all of which are done deceptively, to insulate and magnify their undue influence. This flies in the face of the one person, one vote democratic principle. These activities do not produce economic freedom for all, only a relatively few billionaires. Mainly it's the largest corporations or privately held companies, who share disproportionately in the benefits, of which 80+% are owned by the .01-1%. Having little corporate liability more than doubles or triples some of these subsidies, which also function as unfunded, taxpayer, liabilities for the rest of us. CC is a good example. The human and economic costs of climate change expose us to human health hazards, and an existential threat to our economy, government, species, and democracy. No one would vote for these dire consequences.

Jay replied on

Very interesting history of old man Koch doing business with the Soviets. Many people and companies did - big deal. The McCarthy connection is interesting, but the author leaves out one critically important item: the release of the Venona Transcripts which showed just how heavily infiltrated out government was by communist spies and sympathizers. The other unfortunate thing about all of you Leftists is how much you denigrate Welch of the John Birch Society. What you can't stand is that he pointed out how big money interests in the western world financed the Bolsheviks and the Nazis. When you get the Left and supposed Right attacking you, as Welch was attacked, you know you have struck a chord.

Pat Ross replied on

The Koch Brothers might consider giving their excessive funds in the interests of government principles rather than in the interests of building government oligarchy. What they state they want, and what they do seems very different, and this is the problem of the Citizen's United decision that allows such protocols. It's not the speech is money problem but what the speech money is for that matters! Building oligarchies is exactly the opposite to what the Constitution claims if we intend to keep it, and rely upon it as a governing document.

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