The Koch Brothers don’t like subsidies yet receive plenty of them

by Guest Blogger

July 30, 2014

Crosspost from Lukas Ross, Climate and energy campaigner at Friends of the Earth

Earlier this month, billionaire siblings Charles and David Koch made it publicly clear that they hate subsidies of all kinds — even the ones they benefit from as oil producers. Although it is refreshing to hear that even oilmen are now against oil subsidies, it would be even more refreshing if the Kochs were willing to lead by example — that is, if the Kochs were willing to return their share of the billions that fossil fuel companies receive every year in government largesse.

Thats the message Friends of the Earth is sending today.

The controversy began this July when a mouthpiece for Koch Industries,, took umbrage with a League of Conservation Voters ad that aired in New Hampshire against Senate candidate Scott Brown, the Republican who won Ted Kennedys seat in 2009 and then lost to Elizabeth Warren in 2012.

What are [the Koch brothers] doing in New Hampshire?the ad asks. Backing ads to elect Scott Brown[who] voted to keep giving billions in special taxpayer funded subsidies to oil companies.

This didnt sit well with the Kochs. A representative of the longtime libertarianstersely repliedthat the brothers have been consistently against all forms of subsidiesfor oil or anything else — and that suggestions otherwise were inaccurate and false.

But for a family that claims to hate subsidies, the brothers have had their hands in some very strange pockets over the years. Both directly through corporate lobbying and indirectly through their vast political apparatus, the Kochs have sought to protect some of the most egregious giveaways on the books.

One of the worst is a tax break from 2004 that was designed to protect the manufacturing sector from outsourcing. Even though oil and gas producers are not really manufacturers and certainly not subject to the same outsourcing pressures, thedeliberately broadstatute allows them to claim a hefty deduction that is expected to cost taxpayers$17.3 billionover the next decade.

The tax break, which somehow manages to include software designers and movie producers as manufacturers as well, is everything small government conservatives are supposed to hate: a special interest goody-bag that distorts the market by privileging some industries over others.

None of that stopped Koch Industries fromlobbyingfor the tax deduction and defending it inpublic. Even some of the organizations they fund are in on the action. Americans for Prosperity, the Tea Party-affiliated group that is widely seen as the Kochs attack dog in Washington, has alsopublicly supportedit, claiming that people who call for its repeal are simply against energy independence.

If the Kochs and their surrogates spent half as much time lobbying against fossil fuel subsidies as they did lobbying against renewables, the US might have a very different energy mix. As it stands, they are mum on the destructive role of government support for oil, and yet surprisingly articulate on the evils of government support for renewables. Hence the brothers ongoing war against things like theproduction tax credit for wind and state-levelrenewable energy portfolios.

There will always be plenty of room for progressives and the Kochs to argueon everything fromclimate changetowomens healthbut the allocation of billions to already profitable companies could become a rare area of agreement. The only thing Charles and David need to do is take one small step towards bridging some of their past actions supporting oil subsidies with their newly clarified public stance. All they need to do is give the money back.

According toOil Change International, the oil and gas industry received $10.5 billion in federal subsidies in 2013. Koch Industries could tally up its share of the winnings and return them to the IRS.

Nothing would make a more powerful statement or silence their critics more quickly. Nothing would be quicker at dispelling the claim that they support crony capitalism and corporate welfare.


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