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6 Reasons the Koch Brothers Had a Very Bad Week

An FBI investigation, a new documentary, and a negative court ruling: here's a look inside the Kochs' worst week in a while.

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The ads come after the Kochs’ primary political group, Americans for Prosperity, earlier this year launched a $6 million ad campaign calling out Obama over the now-defunct, government-subsidized maker of solar power components, Solyndra.

The following day, the  New Yorker's Jane Mayer followed up with a closer look at the American Energy Alliance:

So who is behind the advertising campaign to push the line that Obama is to blame? Bill Burton, senior strategist at the pro-Obama Super PAC Priorities USA believes that it comes from a familiar source. “The Koch brothers and other oil barons are using profits from high gas prices to fund false political attacks benefitting Governor Romney,” he says.

[American Energy Alliance Communications Director Benjamin] Cole retorts that there is “not a single penny of Koch money” paying for the two-week ad campaign. But he declined to confirm or deny reports, including one by Politico, that the Koch brothers, whose privately owned conglomerate, Koch Industries, is a major domestic-oil refiner, have steered funds to both the American Energy Alliance and the Institute for Energy Research. A spokesperson at Koch Industries did not respond to questions on the Kochs’ ties to the groups.

3. Federal Court Sets Stage for Revelation of Americans For Prosperity Donors

The Koch brothers are notoriously secretive about where they put their money when it comes to their influence on the political process. Their vehicles of choice are a particular sort of nonprofit organization -- those that fall under either 501(c)(3) or 501(c)(4) of the Internal Revenue Service tax code. Under current Federal Election Commission regulations, organizations sponsoring so-called "issue" ads -- even those with with the (c)(3) or (c)(4) designation -- have not been required to reveal their donors. Americans for Prosperity, the Americans for Prosperity Foundation and the American Energy Alliance all fall under one of these designations. In her report on the anti-Obama ads discussed above, Mayer explains it on the New Yorker's Web site:

Technically, the ads have been produced and aired by the Washington-based American Energy Alliance, a 501c-4 social-welfare organization under the Internal Revenue Service’s tax code, whose activities, under the law, have to be largely non-political. This group shares office space and personnel with a sister organization, the Institute for Energy Research, a 501c-3, whose tax status is typically reserved for charities. Its activities have to be strictly non-partisan and non-political.

Even though the American Energy Alliance and Americans for Prosperity are rather blatantly political in their activities, lax enforcement has allowed the groups to get away with their ads and political rallies while shielding their donors from disclosure.

A decision made on Friday by the U.S. District Court for the District of Columbia could change all that, laying before the eyes of the world the extent of the Koch brothers' spending through such organizations.

As the Huffington Post's Paul Blumenthal reported:

Friday's court ruling could reverse a trend started by the FEC rules, and aggravated by the Supreme Court's 2010 Citizens United decision, that led to an explosion in undisclosed contributions to electoral efforts. The percentage of independent spending that went undisclosed jumped from 1 percent in 2006 to 43.8 percent in 2010, according to the Center for Responsive Politics.

Advertisements falling under the rubric of "electioneering communications" include those run against President Barack Obama by the American Energy Alliance and Americans for Prosperity, both non-profits linked to the Koch brothers. All ads run by the U.S. Chamber of Commerce are classified as "electioneering communications." The ruling would require for the first time that contributions to these groups, and many more, be disclosed.

The FEC, whose nondisclosure rules were challenged by Rep. Chris Van Holland, D-Md., could appeal the ruling if four of the six FEC commissioners vote to do so. 

4. Recall This: A Legal Defeat for Koch-Funded Wisconsin Gov. Walker

 
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