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Koch 'Philanthropy' Advances Koch Business, Political Agendas

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By Aaron Dorfman and Bob Edgar.

This week, a few hundred people who lead foundations will gather in Scottsdale, Arizona., for the annual meeting of Philanthropy Roundtable, an organization that promotes independent giving to solve America's challenges while encouraging laws and regulations that make it easy for wealthy people to engage in private philanthropy with little oversight.

At this meeting, the organization will pay homage to Charles Koch who, along with brother, David, is owner of Koch Industries, the second largest privately held company in America. The firm runs oil refineries and owns consumer brands like Lycra fabric and Brawny paper towels. The brothers are the fourth- and fifth-richest men in America; each has a net worth of $25 billion.

According to Philanthropy Roundtable, the principles that govern Charles Koch's philanthropy are simple: "He wants to sustain and strengthen America as a land of freedom and prosperity. He wants to give others the same opportunity to succeed that he has had. Having benefited from the capitalist system, he wants others to prosper in the same way."

But closer examination suggests that Charles Koch's "philanthropy" is mostly about influencing our political systems to promote and strengthen domestic policies that favor Koch Industries, while at the same time, hurting the rest of us.

The Kochs and their corporations are players in an informal alliance of business executives and conservative theorists who promote an ambitious political agenda. The Kochs use their vast corporate resources to fund an entire political network that includes think tanks, elected officials and undisclosed front groups to advocate for public policies and the dismantling of regulations that help their bottom line, but are bad for the public. They favor dramatically lower personal and corporate income taxes, less government oversight of industry -- particularly environmental regulations that impact their businesses. They have spent millions to fight health care reform, energy independence and combating global warming,

The Charles G. Koch Charitable Foundation has made multimillion-dollar investments in the Institute for Humane Studies (IHS), which Charles Koch chairs; the Mercatus Center; and George Mason University in Virginia, which houses both of these free market institutes. Koch gave $1.1 million in 2006 and $2.4 million in 2009 to IHS. The university received more than $2.8 million in 2008 and nearly $5 million in 2009.

The Wall Street Journal called the Mercatus Center "the most important think tank you've never heard of." The Journal reported that when George W. Bush first took office, his "hit list" of 23 regulations to be repealed or modified included 14 suggested by Mercatus, including EPA pollution regulations and energy efficiency standards. Koch gave $3.9 million in 2006, nearly $2.7 million in 2007 and $1.7 million in 2008 to the center.

Other notable grants in 2009 include $67,556 to the Americans for Prosperity Foundation, started by his brother David and closely involved with the Tea Party movement; and $75,858 to the American Legislative Exchange Council, known for peddling industry-friendly "model" legislation to state legislatures.

Companies controlled by Koch Industries have rigged prices with competitors, lied to regulators and repeatedly run afoul of environmental regulations, resulting in five criminal convictions since 1999 in the U.S. and Canada. Common Cause has highlighted the Kochs' ties to Supreme Court Justices Antonin Scalia and Clarence Thomas, who were "featured" guests at two political fundraising and strategy sessions sponsored by the company. Koch Industries was a major beneficiary of the court's decision in the landmark campaign finance case, Citizens United v. Federal Election Commission, which overturned longstanding regulations limiting corporate spending around elections. Both justices sided with the position benefiting the Kochs.

When a wealthy person like Charles Koch creates a private tax-exempt foundation, he or she is indirectly diverting a portion of tax revenue that goes to pay for things like supporting the military, building and maintaining roads and public transportation and public schools to projects of his or her liking.

When that happens, the rest of us -- especially the lower and middle-class -- who don't have foundations and fancy tax lawyers shoulder more of the cost of public services.

Philanthropy, at its best, involves selfless giving by individuals and foundations to advance equity and democracy and promote the common good. It reaches down to serve the poor and powerless, such as by assuaging homelessness, hunger and illiteracy and through advocacy for public policies aimed at solving those problems. Paying for policy reform that harms the public good and benefits one's own economic interests isn't consistent with the spirit and history of philanthropic giving in this nation.

Given his self-interested giving, Charles Koch seems an odd choice to become philanthropy's poster boy. It says a lot about the Philanthropy Roundtable that they chose Koch over the many other outstanding philanthropists in the country to receive this year's award.

Aaron Dorfman is executive director of the National Committee for Responsive Philanthropy in Washington, D.C. Bob Edgar is president and CEO of Common Cause in Washington, D.C.

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