Big Money Fuels Health Care Battle

Published on
by
the Toronto Star/Canada

Big Money Fuels Health Care Battle

by
Joanna Smith

Charles Koch, 71, chairman and CEO of Koch Industries, Inc., is seen in his office in Wichita, Kan. The world's largest privately owned firm has been increasing its lobbying efforts recently. (MIKE BURLEY, TOPEKA CAPITAL-JOURNAL/AP PHOTO)

OTTAWA-She might be an ordinary woman from small-town Ontario, but there is an extraordinary line that flows from her ubiquitous television ad to billionaire oil tycoons with fierce faith in the free market and environmental disasters in their past.

"I survived a brain tumour, but if I had relied on my government for health care I'd be dead," Shona Holmes says as she stares, unsmiling, at the viewer in a television spot at the centre of the bitterly divisive debate on health-care reform in the United States.

There are no strings hidden beneath her dark brown hair, but the woman from Waterdown, Ont., is nonetheless associated with a big-money machine that has done this kind of thing before.

"We are Americans just like you," says a page on the website of the group calling itself Patients United Now that is behind the campaign featuring Holmes.

But Patients United Now is also a project of the tax-exempt non-profit organization Americans for Prosperity Foundation. They share the same address. They share the same telephone number. They share the same director of communications, who did not respond to repeated requests for comment.

Americans for Prosperity Foundation is affiliated with another non-profit organization called Americans for Prosperity. They share some employees and various administrative expenses. They have separate governing boards but share one director. They also share the same national office telephone number and the 10th floor of a building on M Street in Washington, D.C.

They both have tax-exempt status but in two different ways.

Americans for Prosperity Foundation is a charitable organization that can receive tax-deductible contributions - about $5.5 million in 2007 according to an Internal Revenue Service document - but is not allowed to spend very much time or money trying to influence legislation.

Americans for Prosperity is exempt from tax as a social welfare organization. It received $3.4 million in direct public support in 2007. It exists to promote the common good and can lobby as much as it wishes.

Its campaigns focus on right-wing ideals such as limited government and lower taxes - with property rights and freedom permeating arguments against everything from smoking bans to cap-and-trade - and they tend to have a populist feel.

The website for Patients United Now features snapshots from rallies and speaking events across the country and describes participants as concerned citizens and grassroots activists.

Holmes declined to be interviewed but authorized John Carpay, executive director of the Calgary-based Canadian Constitution Foundation that is bankrolling her court challenge against the Ontario government's health laws, to speak to the Toronto Star on her behalf.

Carpay said Holmes agreed to join the campaign "to clarify misconceptions about Canadian health care" and received "not one dime" to do so.

Critics call this type of publicity campaign "Astroturf lobbying" and the seeds of these plasticized lawns were planted in oil.

Koch Industries Inc. is the largest privately owned corporation on the planet. Its website says the Wichita, Kans.-based group, which spreads across diverse industries from petroleum and paper to resin and ranching, has approximately $100 billion in revenues.

Ten of its subsidiaries have locations in Canada. It also makes Dixie cups.

It is also still struggling with its image as the company behind some environmental misdeeds, including 300 oil spills in six states that led the U.S. Environmental Protection Agency to impose a $30 million (U.S.) civil fine, the largest environment-related civil penalty in American history at the time.

"We continue to be surprised and chagrined that a nine-year-old data point is the primary focus of stories written today about Koch Industries Inc.," company spokesperson Melissa Cohlmia wrote in an email yesterday.

The company CEO is Charles G. Koch (pronounced "coke") and its vice-president is his brother, David H. Koch.

Together they have majority ownership of Koch Industries and they tied for 19th-place on Forbes' world's-richest list this year, with personal fortunes of $14 billion each.

David Koch co-founded the now-defunct Citizens for a Sound Economy, predecessor of Americans for Prosperity. He sits on the board of directors for the Americans for Prosperity Foundation.

Charles Koch is a director at the Claude R. Lambe Charitable Foundation, which is a major benefactor of the Americans for Prosperity Foundation.

According to IRS documents, the Lambe foundation gave a total of just over $3.17 million in grants to the Americans for Prosperity Foundation from 2005 to 2007 to cover general operating costs.

That represents a quarter of the $12.7 million the Americans for Prosperity Foundation received in monetary contributions over the same period and also about 25 per cent of what the Lambe foundation gave out in grants during those three years.

A telephone call to a spokesperson at the Lambe foundation was not returned.

Charles Koch is a really big fan of free-market philosophy. He loves it so much he developed a market-based management philosophy (which actually has a "TM" symbol after its name) that gives employees significant decision-making freedom. His brother, who has been described as reclusive, might not have trademarked a management style, but his political and philanthropic choices show the same values. He even ran for president in 1980 as the Libertarian candidate.

Together, the Koch brothers have donated millions to Republican candidates and political committees over the years and they both have eponymous charitable foundations that promote economic freedom as a means to social progress. Koch Industries itself appears to be ramping up its lobbying efforts in recent months.

The Washington-based lobbyist watchdog Center for Responsive Politics says the company and its subsidiaries spent about $20 million lobbying legislators mostly on energy, environment and taxation issues in 2008, after having spent no more than a quarter of that in each of the preceding 10 years.

The company is on track to spend as much this year with $5.6 million already having gone to lobbying efforts in 2009.

 

Share This Article

More in: