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Classic Koch: How California's Prop. 32 Could Enrich Two Billionaires

They are the moneyed heads of a sophisticated and organized political machine that serves to back one thing and one thing only—their profits.

Photo Credit: Tatiana Popova/ Shutterstock.com


On September 14 the Web exploded with news that billionaire industrialists Charles and David Koch had donated $4 million in support of Proposition 32. A  San Francisco Chronicle editorial noting the donation labeled the brothers “conservative ideologues” – a moniker often applied to the Kochs. This description, however, gives the Kochs far too much credit for their supposed philosophical purity—particularly as it relates to the Prop. 32 battle.

Despite their reputations as libertarian true believers, the Koch brothers are nothing if not practical businessmen, who have no trouble taking advantage of government subsidies when it bolsters their bottom line. (Koch Industries, for instance, was for years heavily invested in the $6 billion, federally subsidized ethanol industry.) That bottom line runs up and down the state of California, where Koch Industries has hundreds of millions of dollars invested through its subsidiary Georgia-Pacific—a gypsum, pulp paper product and packaging company that operates 11 facilities in California with more than 1,100 employees and $190 million in annual payroll and benefit expenses.

Other Koch subsidiaries, such as Flint Hills Resources—a petrochemical company–stand to make a killing should California reverse its strict carbon emission standards. Koch Industries has an array of powerful lobbyists working for its interests in Sacramento and a nearly decade-long history of major donations to California politicians in support of the Kochs’ business agenda. The brothers’ latest crusade, to pass Prop. 32 and reduce the political voice of unions in California, stands to vastly increase their personal fortunes—at the expense of the rest of us.

For years prior to becoming the piggybank of the conservative movement, Koch Industries quietly channeled money to various California lawmakers through its Georgia-Pacific subsidiary.

In February of 2005, then-California Assemblyman Greg Aghazarian introduced legislation to put a one-year statute of limitations during which people suffering disabilities resulting from asbestos exposure could sue manufacturers. Georgia-Pacific—which for decades used asbestos in its wallboard products–lobbied on the bill’s behalf and subsequently donated to Aghazarian’s reelection campaign in December of 2005, shortly after the Koch’s took control of the company. Georgia-Pacific continued to lobby for the bill throughout 2006, until it was ultimately shelved.

Between 2009 and 2010, Georgia-Pacific funneled donations of $1,000 or more to the campaigns of 25 different California state Senators and Assembly members—including the Howard Jarvis-approved Senator Sam Blakeslee, offshore oil drilling advocate Assemblyman Martin Garrick, and Assemblywoman Diane Harkey, whose  environmental voting record looks like John Galt’s Christmas list.

The company retains the services of the powerful lobbying firm  McHughKoepke & Associates. The firm spent much of the past few years attempting to gut provisions of California’s Green Chemistry Initiative–a 2008 law protecting California citizens from exposure to toxic industrial chemicals–on behalf of an Orwellian-named consortium of chemical companies (including Georgia-Pacific) called the Green Chemistry Alliance.

“Frankly, the Green Chemistry Initiative is pretty sensible,” California Sierra Club Director Kathryn Phillips, who helped lobby for the bill, tells Frying Pan News. “It’s important, but it’s not a radical departure. It’s going to be slowly implemented. It’s using a scientifically established lists of toxic chemicals. It’s not pulling new chemicals in. But now that the regulations are on the verge of being adopted they’re pick, pick, picking away at it.”

Georgia-Pacific, incidentally, is registered with the California Secretary of State’s office as a limited liability company (LLC). This means none of its political activity will be hampered by  Prop. 32’s proposed restrictions should the measure pass, as it only “[p]rohibits unions and corporations from contributing directly or indirectly to candidates and candidate-controlled committees.” An LLC is not considered a corporation nor, certainly, a union.

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