Tag Archives: power

Methods Of Control Oligarchs Use to Gain Power

By Kourosh Behnam
March 28, 2012

Using the Koch Brothers as a symbol of oligarchic power.

Astroturf Organizations: Bankrolling the radical rights economic agenda has been a tradition in the Koch family for decades. In 1958 Fred Koch was one of the founders of the John Birch Society, an American political advocacy organization that “supports anti-communism, limited government, a Constitutional Republic, and personal freedom.” In 1984 David Koch established Citizens for a Sound Economy, whose sole mission is to fight for less government, lower taxes, and less regulation. However, in 2004 Citizens for a Sound Economy split into two entities: Freedom Works and Americans for Prosperity. The Koch’s remain active in Americans for Prosperity and the individual in charge of FreedomWorks is Dick Armey (Republican Party GOP House majority Leader from 2003 to 2005). The Koch brothers use Americans for Prosperity to stimulate the Tea Party, and AFP organized the first national Tea Party movements in 2009. These organizations have the ability to mobilize, educate, and train people. From Koch donations, American for Prosperity was able to create a $5 million anti-healthcare campaign.

Wealth Defense Industry: A political action committee of Koch Industries, KochPAC (Koch Political Action Committee), has played a tremendous role lobbying in Washington D.C. Lobbyists of Koch Industries have spent much of their time shaping new policy for financial regulation. The Dodd-Frank Act was passed by Congress under the Obama Administration “to craft new rules to subject traders in the energy industry to increased regulation and transparency” according to the Koch Web of Influence by John Farrell. Congress and regulators are still detailing the necessary changes to implement this new law and Koch lobbyists have spent a considerable amount of time shaping the bill. A few weeks, after the bill was passed, Koch lobbyist Gregory Zerzan held a covert meeting with SEC Commissioner Troy Paredes and his counsel, Gena Lai to see how the government would apply the law. According to Greenpeace’s 2011 update report of Koch Industries, the KochPAC spent $2,645,589 in 2009-2010. KochPAC is also the number one oil and gas contributor in the U.S., out spending Exxon Mobil. American oligarchs use many specialized professionals to prevent wealth from being taken, and their wealth defense industry is comprised of lawyers, accountants, wealth management consultants, tax avoidance consultants, and lobbyist. When oligarchs hire them, their main purpose is to defend as much wealth as possible, and only oligarchs would have enough wealth to purchase these services. The industry is global, some of the key players are Whithers, Clifford Chance, Linklaters, White & Case, Milbank Tweed Hadly and McCloy, Weil Gotshal and Manges, and Freeman Freeman and Smiley are known as the “magic circle” firms.

Legislatures and Elected Officials: Mike Morgan, the previous Director of Public and Governmental Affairs of Koch Industries, played a significant role in promoting legislation for the Koch brothers. As of December 2011, Mike Morgan still sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC). ALEC is an organization that promotes limited government, free markets, and federalism. According to the American Association for Justice “ALEC campaigns have covered many issues, but all have either protected or promoted a corporate revenue stream.” ALEC has proposed legislation that benefits Koch Industries and is undermining climate change proponents. Major campaign contributions from the billionaire brothers can be seen in the makeup of the House Energy and Commerce Committee. Koch Industries is the largest oil and gas donor, giving $279,500 to 22 Republicans on the committee and $32,000 to five of its Democrats, according to the Los Angeles Times. In 2010 KochPAC gave political donations to freshman members of Congress, such as Gardner Cory (R-CO) $10,000, Griffith Morgan (R-VA) $5,000, and Pompeo Mike (R-KS) $10,000.

Courts and Judges: Citizens United v Federal Elections Commission is a landmark case that will go down in history for poisoning our electoral process. This case has allowed corporations to flood our political marketplace and corrupt our democracy and the Koch Brothers themselves played a significant role in enabling this case to advance. Three years ago, Supreme Court Justices Thomas and Scalia attended a political retreat organized by Charles and David Koch in Palm Spring California for wealthy conservatives. There is more speculation that Justice Thomas stayed on a four-day retreat which was paid by the Federalist Society. The Citizens United case that was supported by Justice Scalia allowed corporations to spend limitless amounts of money on elections with little public disclosure.

Read More: Oligarchy, IFG Wealth and Power , Kochtopus: Koch Cash Influence

 

 

How to Reduce Gas Prices and Remove Barriers to Clean Energy: Ban Oil Derivatives

By: IFG
March 21, 2012

Some say higher oil prices are essential to ending our addiction to fossil fuels.

While true in principle, the reality of recent rising costs to consumers has so far been the exact opposite, with political barriers bigger then ever. IFG research shows it can only get worse if current trends continue.

That’s because a major force driving gas prices upward is rampant speculation in unregulated oil derivativesCharles and David Koch are dominant players who in turn plow their profits back in to preventing the phase out of fossil fuels having outspent Exxon and the American Petroleum Institute to kill climate legislation.

While the Koch’s family fortune has steadily expanded with the use of fossil fuels, not until recently did their net worth grow exponentially.  That’s due in large part to their inventing oil derivatives, and then deregulating their trade on Wall Street, and the worldwide.

IFG charts (below) the Kochs’ combined net worth over the past 25 years. It shows how their wealth skyrocketed as speculation on oil markets went wild, with the Kochs making money even when the price of oil goes down.

 Koch wealth for the years 1989, 1995-2000, 2002, 2012-2015 are estimates.

You can see that oil price and Koch wealth are very strongly correlated with a correlation coefficient of 0.94.

With no rules against insider trading, it’s no wonder that the guys who own so much oil infrastructure through which the commodity moves, and also invented the instrument by which traders gamble, can game the system to cash in on such a grand scale.  The Kochs’ combined wealth now ranks them third richest in the world, according to Forbes.

Goldman Sachs recently reported that oil speculation imposes an extra cost of as much as $.56 per gallon of gasoline in the US, an incredible irony when one thinks that this money is then spent to stop the costs of climate change from being included in the price at the pump paid by consumers.

The true price of oil must ultimately reflect its full ecological and social costs, and achieving that requires reducing, if not removing, the role of money in politics. Climate campaigners are currently unable to do that alone, and therefore must work with other movements whose interests are also being bulldozed by these billionaire brothers.

The trajectory of their profits today implies that the undue influence of the Koch brothers is set to soar even higher. Assuming that koch wealth continues in its exponential path their combined wealth will be $82.4 billion in 2015.  Their “shrink government” agenda—which comes amidst calls for massive market interventions to address today’s converging economic and ecological crises—is attacking the very right to clean air, the right to fair wages, and even the right to vote.

Unless key constituencies can come together to counter Koch cash, the implications for people and the planet could be devastating given the Kochs’ control over the current Congress has radically shifted US politics to the right and upcoming elections or ever more driven by cold hard cash.  The Citizens United ruling has spun open the spigot so Koch cash can flow even more freely.

The premise of IFG’s Plutonomy Program is that globalization has, as predicted, upwardly redistributed wealth, where Ultra High Net Worth Individuals are increasingly enabled to exert their own political power and economic ideologies on democratic decision-making everywhere.  Nowhere are the results more clearly expressed than in the rise of the Koch’s wealth and their increasing power over our lives.

Read More: How The Koch Are Fracking America, Charles And David Koch File Suit To Take Over The Cato Institute, Kochtopus Empire