Alex Constantine - September 12, 2010
By Dan Morain
The Sacramento Bee | September 9, 201o
David and Charles Koch, billionaire oil men from Kansas, can't stop dabbling in California politics.
David lives in New York, where he donates to museums and opera. Charles lives in Wichita, and doles out millions to colleges.
But the Kochs are not your run-of-the-mill billionaire philanthropists. They are heavily involved in an unusual brand of conservative, free-market, libertarian politics, which draws them to California.
Koch Industries' wholly owned subsidiary Flint Hills Resources, based in Kansas, tossed in $1 million to help win passage of Proposition 23, the initiative to roll back California's 2006 law to reduce greenhouse gases.
It makes perfect sense. Koch Industries is deep into fossil fuel. To the extent the Kochs can bring about their regulation-less vision, they and their corporation would become richer still.
Like other big-money players in Proposition 23, Koch Industries runs the risk that it no longer would be the massive corporation it is today if Californians were to vote down the initiative on Nov. 2, and permit regulators to implement AB 32 and reduce carbon emissions.
Like other California ideas that no doubt seem strange in Kansas, the wacky concept of taking the initiative on global warming has the potential of spreading to other states and in time to Washington, D.C.
That wouldn't be good for the Kochs' oil and gas business.
"They're concerned that similar job-busting, economy-harming laws might travel to their own state," Yes-on-23 spokeswoman Anita Mangels said.
The Kochs have witnessed California wildfires spread before. They even fanned some of those flames, and would rather not get burned.
Koch (pronounced coke) Industries is the second-largest privately held company in the United States, controlling oil wells, refineries, pipelines, and production of chemicals and fertilizers. It sells such consumer products as Brawny paper towels and Quilted Northern toilet paper.
Its holdings include Georgia- Pacific, the forest products firm. Georgia-Pacific lobbied the federal government on rules seeking to limit emissions of cancer-causing formaldehyde from wood products.
Those ruled emanated directly from California.
In 2007, California adopted regulations that by 2012 are expected to slash formaldehyde emissions by more than half. The California Air Resources Board is the very same agency that would implement AB 32, the greenhouse gas law, if voters turn down Proposition 23.
California's role in the formaldehyde rule singed Koch Industries, but a Koch-backed group, Citizens for Congressional Reform, helped spread the term limits movement from California to other states.
In 1990, the Koch-funded group dumped $280,000 into the Proposition 140 campaign, the California initiative that limits legislators' terms. Then-Assembly Speaker Willie Brown and Senate President Pro Tem David A. Roberti vastly outraised the Yes-on-140 forces. But late-hour radio spots funded by the Koch infusion helped push the measure to victory, 52-48 percent.
"I was very delighted with the results," David Koch told me in 1993, the year when the Kochs hoped for a repeat by helping finance an initiative to permit tax-funded vouchers for private school tuition.
"If you can win the voucher initiative in California, it can win elsewhere," Koch said. "It is such a highly visible state."
The initiative was trounced. But the Kochs remained involved, spending millions annually on free-market, libertarian think tanks including Cato in Washington, the Pacific Research Institute in San Francisco and Reason Foundation in Los Angeles.
One of their latest projects is Americans for Prosperity, a group that has helped fund the tea party movement nationall, and has pushed candidates to sign a "No climate tax pledge."
Several California Republicans have signed the pledges, including Rep. Wally Herger of Chico, Rep. Tom McClintock of Elk Grove, state Sen. Jeff Denham, seeking a congressional seat from Merced, and Doug LaMalfa, a candidate for the California state Senate from Richvale.
The issue plays out in several races including the one between U.S. Sen. Barbara Boxer, who opposes Proposition 23, and Republican Carly Fiorina, who embraces it. David Spady, the California director for Americans for Prosperity, plans to campaign on behalf of Proposition 23.
"Prop. 23 is our highest priority," Spady said.
Lately, the Kochs have been getting lots of attention, and not the good kind. The New Yorker carried a pointed profile of the brothers and their company on Aug. 30.
"The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry – especially environmental regulation," author Jane Mayer writes in the New Yorker.
President Barack Obama offered the back of his hand to Americans for Prosperity, noting the group has a "harmless sounding name." "You don't know if it's a big oil company, or a big bank," Obama said at a Democratic rally last month in Texas.
Obama was engaging in a bit demonization. Americans for Prosperity responded in kind, offering adherents a T-shirt that read: "You wanted to know who AFP is; I am not a foreign corporation; I am not an Insurance Lobbyist, I am not a front for Big Oil; but I am grassroots."
Like the Yes-on-23 campaign, those "grass roots" are oil-stained and pickled in formaldehyde.