by Jane Mayer
Part Three
Privatizing Politics
Total Combat, 2011–2014
There’s class warfare all right.
But it’s my class, the rich class, that’s making war, and we’re winning.
—Warren Buffett
CHAPTER ELEVEN
The Spoils: Plundering Congress
The official opening of the 112th Congress took place on January 5, 2011, when Nancy Pelosi, the Speaker of the House, handed off an oversized ceremonial gavel to her successor, John Boehner. But a new era of ultraconservative billionaire influence had already begun. Before the public swearing-in ceremony got under way, David Koch, whose donor network had spent at least $130.7 million on winning a Republican majority, was in the new Speaker-to-be’s ornate office, chatting amiably with his staff. “The People’s House” was under new management and, critics would suggest, new ownership.
While Koch was a very public presence in the Capitol, his political adjutant, Tim Phillips, the president of Americans for Prosperity, was deep in the inner sanctum of the congressional committee that mattered most to the bottom line of Koch Industries. Phillips’s most important destination that day was the House Energy and Commerce Committee, which under the new Republican majority had now increased its power to block President Obama’s environmental agenda in Congress. The committee could bury progress on climate change and harass the Environmental Protection Agency for the foreseeable future.
David Koch’s public appearance that day signified a remarkable transformation. The Kochs had come far from their days as Libertarian losers. As the Los Angeles Times noted a month later, “Charles and David Koch no longer sit outside Washington’s political establishment, isolated by uncompromising conservatism.” Instead, their “uncompromising conservatism” now dominated one of Congress’s two legislative chambers, as well as one of the country’s two major political parties. As the paper’s headline put it, “Koch Brothers Now at Heart of GOP Power.”
That afternoon, after Boehner was sworn in, Koch donned a herringbone tweed overcoat and a camel-colored cashmere muffler and strode out across the Capitol grounds toward Independence Avenue to celebrate. Before he could get far, though, he was stopped by Lee Fang, the dogged liberal blogger for ThinkProgress who had been chronicling the Kochs’ rise to power for months. After Fang introduced himself, he and a videographer stuck a microphone in the billionaire’s face and asked, “Mr. Koch, are you proud of the Tea Party movement, and what they’ve achieved in the past few years?”
“Yeah,” Koch said, looking a little befuddled. Phillips, who was at his side, tried to cut the questioning off. “Hey, David, Lee here is a good blogger on the LEFT,” he warned his boss with a nervous smile. But Koch, who had impaired hearing in his left ear, either didn’t grasp the warning or didn’t care, because he kept talking. “There are some extremists there,” he acknowledged, “but the rank and file are just normal people like us. And I admire them. It’s probably the best grassroots uprising since 1776 in my opinion!”
Phillips by this point was trying to drown out the interview without appearing rude on camera, insistently repeating, “Lee—Lee—I’m very disappointed in you—Lee—you’re better than this—Lee, LEE—THE INTERVIEW IS OVER!”
Fang soldiered on nonetheless, asking Koch what he wanted from the new Congress under Speaker Boehner. “Well,” Koch answered, with growing animation, licking his lips as he habitually did, “cut the hell out of spending, balance the budget, reduce regulations, and uh, support business!”
Later, in a round of image-repairing interviews, the Kochs would portray themselves as disinterested do-gooders and misunderstood social liberals who championed bipartisan issues such as criminal justice reform. But when put on the spot and stripped of public relations help, David Koch made his priorities clear. He regarded his self-interest and the public interest as synonymous.
In Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else, the journalist Chrystia Freeland describes how those with massive financial resources almost universally use them to secure policies beneficial to their interests, often at the expense of the less well-off. In the United States, a number of studies have shown that in recent years this tendency has distorted politics in very specific ways. In a study he conducted for the nonpartisan Sunlight Foundation, the political scientist Lee Drutman found that increasingly concentrated wealth in America resulted in more polarization and extremism, especially on the right. Very rich benefactors in the Republican Party were far more opposed to taxes and regulations than the rest of the country. “The more Republicans depend upon 1% of the 1% donors, the more conservative they tend to be,” he discovered.
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The 112th Congress soon unfolded as a case study of what David Frum, an adviser to the former president George W. Bush, described as the growing and in his view destructive influence of the Republican Party’s “radical rich.” The “radicalization of the party’s donor base,” he observed, “propelled the party to advocate policies that were more extreme than anything seen since Barry Goldwater’s 1964 presidential campaign.” It also “led Republicans in Congress to try tactics they would never have dared use before.”
Hard data supported this. Harvard’s Theda Skocpol found that the House “took the biggest leap to the far right” since political scientists began recording quantitative measurements of legislators’ positions. There was no better example than the Kochs’ newly won influence over the House Energy and Commerce Committee.
In the previous Congress, the panel had been chaired by Henry Waxman, the liberal Democrat from California who had quarterbacked the House’s successful passage of the cap-and-trade bill, only to see it die in the Senate. Now the new Republican leadership stocked the committee with oil industry advocates, many of whom owed huge campaign debts to the Kochs. Koch Industries PAC was the single largest oil and gas industry donor to members of the panel, outspending even ExxonMobil. It had donated to twenty-two of the committee’s thirty-one Republican members and five of its Democratic members, too. In addition, five out of the six Republican freshmen on the committee had received “outside” support from Americans for Prosperity.
Meanwhile, many of the new committee members had signed an unusual pledge swearing fealty to the Kochs’ agenda. They promised to vote against any kind of carbon tax unless it was offset by comparable spending cuts—an unlikely scenario. The “No Climate Tax” pledge was invented by Americans for Prosperity in 2008 when the Supreme Court cleared the way for the EPA to regulate greenhouse gases, as it did other pollutants. The Kochs’ pledge was modeled on the enormously successful one that the antitax crusader Grover Norquist had used to intimidate Republican lawmakers from raising taxes, but in this instance it served not a cause so much as a company.
By the start of the legislative session in 2011, fully 156 members of Congress had signed the Kochs’ “No Climate Tax” pledge. Many returning members of the House Energy and Commerce Committee had already taken the pledge, and of the twelve new Republicans on the panel nine were signatories, including five of the six freshmen.
A prime example of the symbiotic relationship between the Kochs and the committee was Morgan Griffith, who had defeated Rick Boucher in the district that represented Saltville, Virginia, and was among the wave of new appointees to the Energy and Commerce Committee who were openly indebted to the Kochs for their seats. Americans for Prosperity’s operatives were guests of honor at a victory rally soon after the election, at which Griffith gushed, “I’m just thankful that you all helped me in so many ways.”
The Kochs’ investment soon paid off. Once in office, Griffith became an outspoken skeptic of mainstream climate science, drawing national ridicule for lecturing scientific experts, as they testified in Congress, that they needed to consider the possibility that Mesopotamia and the Vikings owed their success to global warming and that melting ice caps on Mars showed that humans were not its cause on Earth.
Cong
ressman Griffith also became a lead player in the House Republicans’ “war on the EPA,” demanding that the agency be “reined in.” Within a month after he took office, he and other House Republicans gutted the EPA’s budget by a punishing 27 percent. The Senate objected but eventually agreed to cut 16 percent from the agency that had halted the flow of mercury into Saltville’s streams. By then, the 1980 Superfund law that had charged polluters like the Olin Corporation for the cleanup costs had expired, and the $3.8 billion that had accumulated in the fund had run out. Nearly half of America’s population lived within ten miles of a toxic waste site, according to one study, but in towns like Saltville, taxpayers rather than corporations were left to clean up the mess.
Koch Industries could breathe a bit freer, but the same couldn’t be said of those living near its plants. On just one short street, South Penn Road in the blue-collar town of Crossett, Arkansas, eleven of the fifteen households had been stricken with cancer. Many residents were convinced their plight was caused by chemical waste dumped by the nearby Georgia-Pacific paper mill, owned by Koch Industries. The air stank so badly that young and old residents stayed indoors, breathing from respirators. The company denied responsibility and pointed out that the cancer claims had earlier been “rejected in a class action suit.” But David Bouie, a black minister who lived on the street, was trying desperately to get the EPA involved. “All along our street here we have case after case of cancer,” he told the liberal investigative filmmaker Robert Greenwald. “We have a problem in this community, for this many people to be sick or dead. Why is the cancer rate so high? Does the paper mill have anything to do with it?” Two years earlier, USA Today had published a devastating investigative report based on EPA air pollution data that pinpointed a school in Crossett as among the most toxic 1 percent in the country and identified the Georgia-Pacific plant as a major cause. Lisa Jackson, the EPA’s administrator, vowed action, but the congressional budget cuts were huge constraints on doing anything.
The numbers regarding Koch Industries’ pollution were incontrovertible. In 2012, according to the EPA’s Toxic Release Inventory database, which documents the toxic and carcinogenic output of eight thousand American companies, Koch Industries was the number one producer of toxic waste in the United States. It generated 950 million pounds of hazardous materials that year. Of this total output, it released 56.8 million pounds into the air, water, and soil, making it the country’s fifth-largest polluter. The company was also among the largest emitters of greenhouse gases in America, spewing over twenty-four million tons of carbon dioxide a year into the atmosphere by 2011, according to the EPA, as much as is typically emitted by five million cars.
Company officials didn’t dispute the statistics but argued that they merely reflected the size of its operations and the kinds of products it made. They stressed that they had achieved a record of compliance that compared favorably with other manufacturers of their ilk. As Steve Tatum, president of Koch Minerals, put it, “The investment banks, they don’t pollute very much, because they don’t make anything. We make stuff.”
Another defender on the committee was Mike Pompeo, a freshman Republican from Koch Industries’ hometown of Wichita, Kansas, who was so closely entwined with the billionaire brothers that he became known as the “congressman from Koch.” The Kochs had once invested an undisclosed amount of money in an aerospace company that Pompeo founded. By the time he ran for office, the Kochs were no longer investors in his business but had become major backers of his candidacy. Their corporate PAC and Americans for Prosperity also weighed in on his behalf. After his election, Pompeo turned to the company for his chief of staff, choosing Mark Chenoweth, a lawyer who had worked for Koch Industries’ lobbying team. Within weeks, Pompeo was championing two of Koch Industries’ legislative priorities—opposition to Obama’s plans to create a public EPA registry of greenhouse gas polluters and a digital database of consumer complaints about unsafe products. Without publicly accessible data, of course, it would be extremely difficult to track any company’s toxic output. (Ultimately, the Kochs lost the battle, and the database was created.)
Koch Industries’ lobbying disclosures showed that the company spent over $8 million lobbying Congress in 2011, much of it on environmental issues. The best measure of its new congressional clout might have been the “naked belly crawl,” as the political reporter Robert Draper termed it, performed by the Michigan congressman Fred Upton in hopes of snaring the Energy and Commerce Committee’s chairmanship. Prior to 2010, Upton had been known as an environmental moderate. In fact, in 2009, before the Tea Partiers and their patrons took charge, he had said, “Climate change is a serious problem that necessitates serious solutions,” adding, “I strongly believe that everything must be on the table as we seek to reduce carbon emissions.” In 2010, however, Upton, like many Republican moderates, faced a potentially career-killing primary challenge from the right. Upton survived, but others who accepted the growing scientific consensus on climate change, such as Robert Inglis of South Carolina, were defeated, serving as cautionary warnings to the rest. Inglis became convinced of the reality of global warming on a congressional trip to Antarctica during which scientists showed him polar ice samples containing rising amounts of carbon dioxide following the Industrial Revolution. He was a Christian conservative, but he couldn’t in good conscience deny the reality. In the deep red state of South Carolina, his scientific awakening proved his political downfall. “It hurts to be tossed out,” he conceded afterward. “But I violated the Republican orthodoxy.”
In contrast, Upton became a born-again doubter. By 2010, he had renounced his previous climate apostasy and co-authored an op-ed piece in The Wall Street Journal with Tim Phillips, the president of Americans for Prosperity, in which they called the EPA’s plans to regulate carbon emissions “an unconstitutional power grab that will kill millions of jobs unless Congress steps in.” Upton also joined lawsuits ginned up by Americans for Prosperity aimed at stopping the EPA. The belly crawl paid off. As the new session of Congress began, Upton secured the chairmanship, promising to drag the EPA administrator, Lisa Jackson, to testify before his committee so often, he bragged, that she would need her own congressional parking space.
Soon after, Republicans in the House were proposing measures that Representative Norm Dicks, a Democrat from Washington, called “a wish list for polluters.” In addition to halting action on global warming, they tried to prevent the protection of any new endangered species, permit uranium mining adjacent to the Grand Canyon, deregulate mountaintop mining, and prevent coal ash from being designated a form of air pollution. In an effort to subvert the EPA’s core mission, they also proposed legislation requiring it to consider the costs of its regulations, without regard to the scientific and health benefits, which the editorial page of the Los Angeles Times said “rips the heart out of the 40-year-old Clean Air Act.”
Two months into their tenure, Republicans on the House Energy and Commerce Committee also led a crusade against alternative, renewable energy programs. They successfully branded the government’s stimulus support for Solyndra, a California manufacturer of solar panels, and other clean energy firms an Obama scandal. In fact, the loan guarantee program in the Energy Department that extended the controversial financing to the company began under the Bush administration. Contrary to the partisan hype, it actually returned a profit to taxpayers. Moreover, while Solyndra’s investors were portrayed as Obama supporters, among its biggest backers were members of the conservative Walton family, the founders of Walmart. A huge investor in another solar company that went bust after taking the same Energy Department loans was the venture capitalist Dixon Doll, a major contributor to the Kochs’ donor network. But as the House held hearings and various conservative front groups whipped up outrage about “crony capitalism,” the facts were buried in favor of a narrative that helped the fossil fuel industry.
Congressman Upton insisted that he hadn’t changed his position on environmental issues. But Je
remy Symons, then a senior vice president of the nonpartisan National Wildlife Federation, said that the transformation was “like night and day.” He continued, “In the past the committee majority viewed the Clean Air Act as an effective way to protect the public. Now the committee treats the Clean Air Act and the EPA as if they are the enemy. Voters didn’t ask for this pro-polluter agenda, but the Koch brothers spent their money well and their presence can be felt.”
At the end of 2011, only twenty of the sixty-five Republican members of Congress who responded to a survey were willing to say that they believed climate change was causing the planet to warm. Tim Phillips gladly took credit for the dramatic spike in expressed skepticism. “If you look at where the situation was three years ago and where it is today, there’s been a dramatic turnaround,” he told the National Journal. “Most of these candidates have figured out that the science has become political,” he said. “We’ve made great headway. What it means for candidates on the Republican side is, if you…buy into green energy or you play footsie on this issue, you do so at your political peril. The vast majority of people who are involved in the [Republican] nominating process—the conventions and the primaries—are suspect of the science. And that’s our influence. Groups like Americans for Prosperity have done it.”
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Fred Koch, the family patriarch, had a saying, according to a former associate, which was that “the whale that spouts is the one that gets harpooned.” As he had warned, the downside to the brothers’ increasing visibility was growing public scrutiny. As the donors gathered for their January summit outside Palm Springs at the beginning of 2011, protesters swarmed the hitherto-secret meeting for the first time. Greenpeace, the theatrical environmental group, flew its 135-foot-long “airship” over the resort. Its Day-Glo green blimp was emblazoned with huge blowups of Charles and David’s faces along with the words “Koch Brothers: Dirty Money.”