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Powerful Message From An Imperfect Messenger

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Powerful Message From An Imperfect Messenger


Earlier this month, billionaire Charles Koch had a surprising message: In a speech to his fellow conservatives, he said politicians must end taxpayer-funded subsidies and preferential treatment for corporations.

Why is this surprising? Because the demand came from an industrialist whose company and corporate subsidiaries have raked in tens of millions of dollars’ worth of such subsidies.

The Koch-organized conference at a luxury resort in Southern California reportedly attracted roughly 450 conservative donors who have committed to spending nearly $900 million on the 2016 presidential election. The event included appearances by Republican presidential candidates such as former Florida Gov. Jeb Bush, Texas Sen. Ted Cruz, Wisconsin Gov. Scott Walker, and Florida Sen. Marco Rubio.

“Where I believe we need to start in reforming welfare is eliminating welfare for the wealthy,” said Koch, who, along with his brother David, is among the biggest financiers of conservative political causes. “This means stopping the subsidies, mandates and preferences for business that enrich the haves at the expense of the have nots.”

Yet, in the last 15 years, Koch’s firm Koch Industries and its subsidiaries have secured government subsidies worth more than $166 million, according to data compiled by the watchdog group Good Jobs First. The group says since 1990, Koch-owned properties have received 191 separate subsidies worth a total of $195 million.

Koch Industries and its subsidiaries, which are a privately held, are involved in everything from oil refining to manufacturing to high finance. In 2012, Charles Koch issued a similar jeremiad against government-sponsored subsidies for corporations. In a Wall Street Journal op-ed, he said, “We are on dangerous terrain when government picks winners and losers in the economy by subsidizing favored products and industries.” In his essay, he specifically derided tax credits — yet even after the op-ed, Koch-owned properties accepted more than $77 million worth of such taxpayer-funded preferences from governments, according to Good Jobs First.

Among the biggest subsidies received by Koch-owned companies was a $62 million Louisiana property tax abatement for Georgia Pacific — a paper and chemical conglomerate that was acquired by Koch Industries in 2005. Georgia Pacific also received a separate $11 million tax credit from Louisiana in 2014 to upgrade its facilities.

Since 2007, Good Jobs First says Koch Industries itself has received more than $20 million in subsidies through an Oklahoma program designed to incentivize investment and job creation. Oklahoma’s government website lists more than $28 million in such tax credits to the firm and its subsidiaries.

Koch, it should be noted, is not like other top executives of major corporations. His company is not publicly traded — it is privately held, with most of the company owned by him and his brother, David. That means the Kochs could reject subsidies and not have to justify the move to hordes of shareholders. Instead, though, they have accepted the government support, even as they fund conservative campaigns that deride the influence of government on the economy.

Of course, Koch’s speech certainly did identify a growing trend in America. As Big Business has used campaign cash to secure more control over politics, elected officials have been approving more and more taxpayer subsidies for corporations. Conservative opposition to those expenditures will no doubt be key to reining them in.

However, it is difficult to believe that the head of a company that has benefited from so much taxpayer support is really going to use his political power to end the largesse. In other words: The message may be compelling, but the messenger is not particularly credible.

David Sirota is a senior writer at the International Business Times and the best-selling author of the books Hostile Takeover, The Uprising, and Back to Our Future. Email him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.

Illustration: Caricature of Charles Koch (DonkeyHotey via Flickr)

David Sirota

David Sirota is International Business Times' senior editor for investigations. He is also a nationally syndicated newspaper columnist and a bestselling author. He lives in Denver, Colorado and covers the intersection of money, politics and finance. He appears periodically on national television shows and is a "real guy represented by the character on ABC's The Goldbergs," according to Twitter.

In 2014, he was the winner of the Society of American Business Editors and Writers' investigative journalism award, and the winner of the Izzy Award for Journalism from Ithaca College's Park Center for Independent Media.

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  1. robertblair3174 August 14, 2015

    I guess even if you’re at the top of the game, you can still complain about the rules

  2. Grannysmovin August 14, 2015

    Translation – your taking taxpayer money away from my oil subsidies – that is not acceptable. Remember who owns you…..

  3. John Murchison August 14, 2015

    I applaud Mr. Koch, if he he really means us well. Rather than crowing about a system he doesn’t mean to change, though. He do us all a favor and pack up all that SUPER PAC money and stop twisting elections.

  4. Carl Sdano August 14, 2015

    Koch’s hidden message? “The government shouldn’t be subsidizing renewable sources of energy. That’ a direct threat to my oil business.”

    1. Michael Ross August 16, 2015

      This. Koch’s objection is not to corporate welfare. It’s to any future corporate welfare that may go to any other company besides his own.

  5. RED August 14, 2015

    I’d be willing to bet that Koch, like all Con morons, doesn’t think the welfare he received is welfare. You gotta remember the symptoms of the Con sickness. It makes the slow witted believe that government largesse to others is welfare but a deserved, earn benefit to themselves.

    1. Michael Ross August 16, 2015

      A much more common symptom of Con sickness is self-servitude: Of wanting all the benefits of a liberal socialist government while they are up-and-coming and then, once they are in, immediately wanting to slam the door on everyone behind them.

      Just as Marco Rubio, who would not be an American had we not accepted immigrants in the past, wants to tighten America’s borders and prevent any more immigrants from coming to the U.S. in the future, the Kochs, now that they have had the full benefit of corporate welfare to push them all the way to the top financially, now want to gut the system before anyone has a chance to surpass them.

  6. pjm19606 August 14, 2015

    Could the Kochs be trying to get into heaven now?

  7. S.J. Jolly August 14, 2015

    Maybe like the famous prayer by some noted religious figure: “God, grant me poverty, chastity, and obedience. But not yet ! ” ?

  8. highpckts August 15, 2015

    Who is he kidding????? Is he trying to get right with Jesus because frankly Leopards don’t change their spots!

  9. Terese Wolfe August 16, 2015

    here is the way you can refill your bank-account wíth addítíonal money every week – check for more ìnformatìon in my profìle


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