Charles Koch wants to end government subsidies for the farmers who brought you Thanksgiving. He doesn’t seem to have a problem with government handouts for his own company.
A billionaire industrialist, conservative mega-donor, libertarian and free market apostle, Koch is both the head of Koch Industries, the second largest private company in the U.S., and the founder of his eponymous non-profit, the Charles Koch Institute. On Tuesday, the Institute shared a story on Facebook from leading libertarian magazine and news site Reason (funded in part by money from Koch and his brother David), decrying government subsidies for agricultural products that ended up on Thanksgiving dinner tables across the country.
“For us taxpayers, the rolls, long-grain rice, stuffing and creamed corn on our plates, as well as the cotton tablecloths we're dining on, cost us before we even went to the store,” wrote the piece’s author, Veronique de Rugy.
Criticism of farm subsidies is hardly limited to the Koch brothers or the right. But the critique from the Kochs and their libertarian allies is presented as part of a wider antipathy to subsidies more generally: They argue government subsidies are bad for consumers, as is any government intervention in the economy. The Kochs are spending their fortune advancing those ideas, along with the careers of Republican politicians — all while the company that produced that fortune has accepted hundreds of millions of dollars in government subsidies over the last decade.
Oil and gas conglomerate Koch Industries and its subsidiaries have received at least $422,796,782 in local, state and federal subsidies beginning in 2007, according to research by the Checks and Balances Project using the subsidy tracker built by Good Jobs First. The actual figure is probably even higher: Of the 231 government subsidies to Koch companies Good Jobs First found after 2006, 49, or 20 percent, had an “undisclosed” dollar value.
Much of that value is coming to Koch Industries from cash-strapped states. In 2014, Koch Nitrogen received a $148.7 million subsidy from the state of Oklahoma in the form of a tax increment financing district, the largest in state history. The subsidy helped make possible the construction of a $1.3 billion fertilizer plant in Enid, Oklahoma, which employed 143 people as of April, according to Tulsa World, a local newspaper. That’s more than a million dollars per job. Meanwhile, Oklahoma’s budget is so tight that 20 percent of the state’s school districts have shifted to four-day school weeks due to lack of funds, and the state’s K-12 funding dropped 15 percent between 2008 and 2015.
One of the largest polluters in the U.S., Koch Industries was founded in 1940 by the father of current CEO and chairman Charles. Fred Koch had achieved success in the petrochemical industry by building refineries for the Soviets and later the Third Reich. Thanks in large part to Charles’s business acumen, the Koch brothers are now two of the richest people in the world: Forbes estimates they each have a net worth of $48.3 billion; combined, they are worth more than Bill Gates.
They’ve used that wealth to advance their shared libertarian agenda. David Koch ran for vice president on the Libertarian presidential ticket in 1980 and since then they’ve funded a vast network of think tanks, non-profits, educational initiatives and political campaigns with the goal of bringing libertarian ideology mainstream. Their network has come to be known as the Kochtopus, and its reach is considerable: Their political and advocacy network employs 3 ½ times the number of people who work for the Republican National Committee and its congressional campaign arm, according to a 2015 Politico report. Hard numbers on spending are difficult to come by, as the network is largely dependent on non-profit organizations that don’t disclose their donors (so-called “dark money” groups). In January, Charles Koch said his network would spend $300 to $400 million on politics and advocacy over the next two years.
That advocacy has included decrying government subsidies and urging big business to wean itself off corporate welfare.
“Business leaders [must] recognize that their behavior is suicide, that it is suicide long term. To survive, long-term, they have to start opposing, rather than promoting, corporate welfare,” Koch told a coalition of political and business leaders at a 2015 retreat. “This means stopping the subsidies, mandates and special privileges for business that enriches the haves at the expense of the have-nots.”
A small part of the millions the brothers have spent will go to the libertarian Reason Foundation, which counts David Koch as a trustee and is the publisher of Reason magazine. The Thanksgiving piece’s author, Veronique de Rugy, is a senior research fellow at the Mercatus Center at George Mason University. Mercatus is a research center that bills itself as “the world’s premier university source for market-oriented ideas” and it includes Charles Koch as a member of its board. It has been described as a “staunchly anti-regulatory center funded largely by Koch Industries” by the Washington Post, and was called a “lobbying group disguised as a disinterested academic program” by a Koch Industries management consultant who taught history at George Mason.BusinessVerified Related Video