THEY’D LIKE TO BUY THE WORLD WITH KOCH Companies Tied to Koch Donor Network Spent At Least $35 Million Lobbying in 2014 Companies closely tied to donors who fund the Koch brothers’ political network are spending millions of dollars to influence policymakers, according to new research by Citizens for Responsibility and Ethics in Washington (CREW). These companies spent at least $35 million lobbying the federal government in 2014 alone, although the actual number is almost certainly much higher as most of the members of the Koch network remain secret. Over the last several years, the political network spearheaded by billionaire brothers Charles and David Koch has spent hundreds of millions on election campaigns and sham issue ads, and the network’s donors plan to collectively spend close to $1 billion before Election Day 2016.1 Many of these donors represent major companies with significant interests before the federal government. At least 22 companies with ties to the network, including , have a lobbying presence in Washington, DC. Combined, the companies spent more on lobbying in 2014 than all but two special interests, the U.S. Chamber of Commerce and the National Association of Realtors. 2 The donors in the Koch political network fund several politically active nonprofit groups, including , the LIBRE Initiative, and Generation Opportunity. In the wake of the Supreme Court’s Citizens United decision, these types of groups, along with super PACs, have become a regular part of efforts to influence policy in Washington, often with lobbyists working behind the scenes.3 Some of the lawmakers who seek the support of the deep-pocketed Koch network claim there is no link between the campaign spending and lobbying to benefit special interests. At the most recent Koch network conference in January 2015, Jonathan Karl of ABC News asked three Republican senators who are now running for president if “there is too much influence in our politics by super wealthy political donors on both sides.”4 After defending spending money to influence elections as free speech, Sen. Marco Rubio (R-FL) denied that any of the major donors in the room expected anything in return from the politicians they aided. “I don’t know a single

1 Matea Gold, Koch-Backed Network Aims to Spend Nearly $1 Billion in Run-Up to 2016, Washington Post, January 26, 2015. 2 https://www.opensecrets.org/lobby/top.php?indexType=s&showYear=2014. 3 Paul Blumenthal and Ryan Grim, The Inside Story of How Citizens United has changed Washington Lawmaking, Huffington Post, February 26, 2015. 4 TRANSCRIPT: Freedom Partners Forum: , and Marco Rubio in Conversation with ABC’s Jonathan Karl, ABC News, January 26, 2015. person in this room has ever been to my office,” said Sen. Rubio, adding he doesn’t think any of the Koch network’s members are “asking from government any special access.”5 The lobbying numbers revealed by CREW’s analysis make clear, however, that many of the donors in the Koch network represent financial interests that are working to sway government outcomes in their favor, whether they have ever been to Sen. Rubio’s office or not. Donors Working Together The semi-annual Koch network donor conferences debuted in 2003 with 17 people meeting together in Chicago.6 The number of participants has exploded over the last 12 years. The group’s most recent conference, held in January 2015 at a resort near Palm Springs, CA, featured 450 attendees, including a large number of first-time contributors.7 Though the conferences were initially organized through Koch Industries, they are now hosted by Freedom Partners Chamber of Commerce, the business league set up by Koch operatives to act as a central hub for their activities.8 CREW has previously argued in a complaint to the IRS that Freedom Partners does not actually function as a business league or a chamber of commerce, and is abusing its tax status.9 Koch Industries describes the conferences as “seminars” that “bring together some of America’s greatest philanthropists and most successful business leaders” to “discuss solutions to our most pressing issues and strategies to promote policies” favored by the attendees.10 At the conferences, attendees “are gently pressured to give while the invited operatives jockey to impress the Kochs and their donors with presentations on campaign and legislative strategy,” according to .11 For the most part, money raised at the events is directed to nonprofit organizations blessed by the network, many of which go on to spend millions of dollars in an effort to influence both elections and policies.12 During the 2012 election cycle, 17 nonprofit groups considered part of the network raised at least $407 million, much of which was first routed through other nonprofits.13 At a conference in January 2015, the Koch network announced a goal of spending $889 million across all of its

5 Id. 6 Bill Wilson and Roy Wenzl, The Kochs’ Quest to Save America, Wichita Eagle, October 13, 2012. 7 Gold, Washington Post, Jan. 26, 2015. 8 Kenneth P. Vogel and Darren Goode, Kochs Launch New Super PAC for Midterm Fight, Politico, June 16, 2014; Kenneth P. Vogel, Koch World 2014, Politico, January 24, 2014. 9 http://www.citizensforethics.org/legal-filings/entry/crew-irs-petition-rules-501c6-groups-investigate-freedom- partners. 10 http://www.kochfacts.com/kf/koch_seminars/. 11 Kenneth P. Vogel and Tarini Parti, Inside Koch World, Politico, June 15, 2012. 12 Vogel, Politico, Jan. 24, 2014; Gold, Washington Post, Jan. 26, 2015. 13 Matea Gold, Koch-Backed Political Network, Built to Shield Donors, Raised $400 Million in 2012 Elections, Washington Post, January 5, 2014. groups during the 2016 election cycle, a third of which would be spent directly on electoral politics.14 Donors in the network have already pledged at least $249 million towards that goal.15 Methodology CREW’s examination of lobbying by companies connected to the Koch political network is limited by the fact that many of the members of the network remain secret. Most of the network’s activities are run through nonprofit groups that are not required to publicly disclose the names of donors. Indeed, one of the main organizers of the network’s donor summits has acknowledged that “the confidentiality of members is a major priority for us.” 16 CREW could only examine the lobbying records of a fraction of the companies with ties to the Koch donor network. As a result, the total spent on lobbying by companies with ties to the Koch network is likely much higher than reported here. CREW’s analysis is based on leaked documents and recordings from Koch donor conferences as well as campaign finance records of the network’s super PAC, which publicly discloses its donors. In particular, CREW examined the list of participants for the June 2010 conference in Aspen, CO,17 and a list of attendees who had one-on-one meetings with Koch network representatives during the January 2014 conference in Palm Springs, CA.18 CREW also looked at donors identified by during a speech at the June 2011 conference in Vail, CO, audio of which was obtained by Mother Jones.19 CREW further relied on reporting by The Nation and the Orange County Register based on a leaked draft agenda for the June 2014 conference in Dana Point, CA.20 In addition, CREW looked at any individual or corporation that donated more than $100,000 to Freedom Partners Action Fund, the Koch network super PAC.21 In each case, CREW searched for any businesses that those individuals owned or worked for in an executive role. CREW generally did not include companies on which these individuals only serve on the board of directors, unless the person was the board’s chair. In some cases, an individual serving on the board may have a significant legacy with the company, such as founding it or recently stepping down from an executive role. CREW included these individuals as their experience suggests a continuing stake in the company’s success. CREW then checked

14 Gold, Washington Post, Jan. 26, 2015; Fredreka Schouten, Charles Koch: We Like 5 GOP Candidates in Primaries, USA Today, April 21, 2015. 15 Andy Kroll, The Koch Brothers Raised $249 Million at Their Last Donor Summit, Mother Jones, February 10, 2015. 16 Peter H. Stone, Sean Noble, ‘Wizard’ Behind Koch Brothers’ Donor Network, Now on the Outs, Huffington Post, October 2, 2013. 17 http://images2.americanprogressaction.org/ThinkProgress/secretkochmeeting.pdf. 18 Andy Kroll and Daniel Schulman, The Koch Brothers Left a Confidential Document at Their Donor Conference, Mother Jones, February 5, 2014. 19 Gavin Aronsen, Exclusive: The Koch Brothers’ Million-Dollar Donor Club, Mother Jones, September 6, 2011. 20 Lauren Windsor, Exclusive: Inside the Koch Brothers’ Secret Billionaire Summit, The Nation, June 17, 2014; Martin Wisckol, Koch Brothers Quietly Brought Their Show to O.C., Orange County Register, June 23, 2014. 21 Vogel and Goode, Politico, June 16, 2014. each company against lobbying records maintained by the Secretary of the Senate to determine if the company lobbies the federal government and how much they spent on lobbying. Millions Spent on Lobbying Companies with ties to the Koch network span a wide array of business interests. The energy industry is well-represented by companies such as Occidental Petroleum, Devon Energy, and Koch Industries itself. Major financial institutions like the Blackstone Group and TCF Financial also have connections to the network as do manufacturers like KapStone and W.L. Gore & Associates. The level of lobbying engagement of the connected companies also varies. On average, the companies identified by CREW spent $1.41 million on lobbying in 2014. Several maintain a lobbying presence in Washington, DC, but did not report spending any money on lobbying in 2014. Other companies spent millions. In all, CREW’s analysis identified seven companies associated with the network that spent more than $1 million lobbying the federal government in 2014. Koch Industries, the second-largest private company in America,22 is far and away the largest lobbying spender in the Koch network. In 2014, the company spent $13.8 million on lobbying, making it the 19th largest spender in the country on federal lobbying last year.23 The conglomerate’s lobbying interests are diverse, ranging from chemical safety to intellectual property.24 The company has also lobbied on campaign finance issues that would affect the nonprofit groups supported by the Koch donor network, including the DISCLOSE Act, the Follow the Money Act, and the Stop Targeting of Political Beliefs by the IRS Act.25 Top Five Non-Koch Spenders Occidental Petroleum Stephen Chazen, the CEO of Occidental Petroleum Corporation,26 gave $125,000 to Freedom Partners Action Fund in September 2014.27 Occidental is a Houston-based oil and gas exploration and production firm with around $20 billion in annual revenue.28 In 2014, the firm spent $9,198,798 lobbying Congress and the executive branch.29 The firm’s efforts focused on numerous energy and environment-related issues, including carbon capture, greenhouse gas permits, fracking, oil and gas exports, clean air and water acts, federal oil and gas lease issues,

22 http://www.forbes.com/companies/koch-industries/. 23 https://www.opensecrets.org/lobby/top.php?indexType=s&showYear=2014. 24 Koch Companies Public Sector, LLC, Fourth Quarter 2014 Lobbying Disclosure Report, Secretary of the Senate, Office of Public Records. 25 Koch Companies Public Sector, LLC, Third Quarter 2014 Lobbying Disclosure Report, Secretary of the Senate, Office of Public Records. 26 http://www.bloomberg.com/research/stocks/people/person.asp?personId=293292&ticker= OXY. 27 Freedom Partners Action Fund, Inc., FEC Form 3 X, 2014 October Quarterly Report, October 15, 2014. It is unknown if Mr. Chazen contributed to the Freedom Partners Chamber of Commerce. 28 http://www.nasdaq.com/symbol/oxy/revenue-eps; http://www.oxy.com/aboutOccidental/Pages/default.aspx. 29 Occidental Petroleum Corporation, Lobbying Disclosure Reports, First Quarter 2014-Fourth Quarter 2014, Secretary of the Senate, Office of Public Records. and changes to the Toxic Substances Control Act.30 The company lobbied on the Endangered Species Act in an effort to keep the lesser prairie chicken and the sage grouse from being listed as threatened under the act, which could make it harder to drill on the land where the birds live.31 The firm also maintained a broader portfolio, lobbying on issues as diverse as Dodd-Frank regulation, cybersecurity, and tax reform.32 Charles Schwab Corporation Charles Schwab is the founder and chairman of the Charles Schwab Corporation, a major investment brokerage firm.33 Mother Jones obtained recordings of Charles Koch mentioning the Schwab family as among those who gave more than a million dollars in support of their causes during their 2011 summer seminar.34 In 2014, the company spent $2,520,000 on federal lobbying.35 The company weighed in on legislation relating to money market funds and other investment tools, as well as the Tax Reform Act of 2014.36 According to , Charles Schwab Corporation was an “important source of input” as the Securities and Exchange Commission drafted new rules on money market funds, and proposed limiting the floating share price rule to certain funds.37 The proposal found its way into the final rules, which the company praised. 38 In addition, the firm lobbied on issues related to the implementation of the Dodd- Frank Act.39 Charles Schwab Corporation further weighed in on legislation and regulation related to cybersecurity.40 Allergan Gavin Herbert is the founder of Allergan and was Chairman and CEO of the company from 1977 to 1991, and retains the title of Chairman Emeritus.41 Mr. Herbert hosted a dinner for “top partners” in the donor network at his California home, a former residence of President , on the eve of the June 2014 donor conference.42 The company spent $2,380,000

30 Id. 31 Id.; Corbin Hiar, Bikers, Baritones Join the Crowd Lobbying on ESA, Greenwire, February 12, 2015. 32 Occidental Petroleum Corporation, Lobbying Disclosure Reports, First Quarter 2014-Fourth Quarter 2014, Secretary of the Senate, Office of Public Records. 33 http://aboutschwab.com/home/is-it-time-to-consider-a-modern-approach-to-wealth-management; http://finance.yahoo.com/q/pr?s=schw. 34 Brad Friedman, TRANSCRIPT: 'Inside the Koch Brothers' 2011 Summer Seminar' - Charles Koch's Remarks, Brad Blog, September 6, 2011; Brad Friedman, Exclusive Audio: Inside the Koch Brothers' Secret Seminar, Mother Jones, September 6, 2011; Aronsen, Mother Jones, Sept. 6, 2011. 35 The Charles Schwab Corporation, Lobbying Disclosure Reports, First Quarter 2014-Fourth Quarter 2014, Secretary of the Senate, Office of Public Records. 36 Id. 37 William Adlen, After Split Vote, S.E.C. Approves Rules on Money Market Funds, The New York Times, July 23, 2014. 38 Id. 39 The Charles Schwab Corporation, Lobbying Disclosure Reports, First Quarter 2014-Fourth Quarter 2014, Secretary of the Senate, Office of Public Records. 40 Id. 41 http://www.bloomberg.com/research/stocks/private/person.asp?personId=546356&privcapId=111061 42 Wisckol, Orange County Register, June 20, 2014; https://www.scribd.com/doc/230108736/The-Koch-B rothers- Secret-Billionaire-Summit. on lobbying in 2014,43 mostly in an effort to fend off a hostile takeover attempt by hedge fund manager William A. Ackman and Valeant Pharmaceuticals.44 In addition, the company lobbied the Food and Drug Administration over regulation of two different medicines, cyclosporine and restasis.45 Devon Energy J. Larry Nichols is the co-founder and executive chairman of Devon Energy, an oil and gas exploration and production company.46 He attended the June 2010 Koch network conference in Aspen, CO.47 The firm spent $1,980,000 on lobbying in 2014.48 That year, Devon lobbied on oil and gas issues, including drilling on federal lands, the Keystone pipeline, and the export of liquefied natural gas.49 Other focuses included tax reform, trucking safety and hours of service restrictions.50 Devon lobbied on the Environmental Protection Agency’s guidance for diesel fuel and its study on fracking, also urging the White House to not proceed with a final rule regulating the practice on federal lands.51 Alpha Natural Resources Kevin Crutchfield is the chairman and chief executive officer of Alpha Natural Resources, a global coal company.52 He attended the June 2010 Koch network conference in Aspen, CO.53 In 2014, Alpha Natural Resources spent $1,222,335 on lobbying, mainly on coal and mining related issues.54 The company’s lobbyists weighed in on federal regulation of coal production and use, amendments to the Clean Water Act, appropriations relating to the enforcement of mandated reductions in carbon-dioxide emissions by the EPA, and the treatment of the mining industry in any potential comprehensive tax reform.55 In July 2014, the company notified 1,100 employees of pending layoffs and said that the EPA’s new carbon pollution

43 Allergan, Inc., Lobbying Disclosure Reports, First Quarter 2014-Fourth Quarter 2014, Secretary of the Senate, Office of Public Records. 44 Id.; David Gelles, Allergan Escapes Valeant’s Pursuit, Agreeing to Be Bought by Actavis, The New York Times, November 17, 2014. 45 Allergan, Inc., Lobbying Disclosure Reports, First Quarter 2014-Second Quarter 2014, Secretary of the Senate, Office of Public Records. 46 http://www.devonenergy.com/about-us; http://www.devonenergy.com/about-us/board-of-directors. 47 http://images2.americanprogressaction.org/ThinkProgress/secretkochmeeting.pdf. Mr. Nichols was listed as a presenter on the conference’s agenda. 48 Devon Energy Production Company, L.P., Lobbying Disclosure Reports, First Quarter 2014-Fourth Quarter 2014, Secretary of the Senate, Office of Public Records. 49 Id. 50 Id. 51 Id.; Ari Natter, Oil, Gas Companies Lobby White House to Block Hyrdaulic Fracturing Rule, Daily Environment Report, October 16, 2014. 52 http://www.alphanr.com/about/Pages/default.aspx; http://www.alphanr.com/bios/Pages/KevinCrutchfield. aspx. 53 http://images2.americanprogressaction.org/ThinkProgress/secretkochmeeting.pdf. 54 Alpha Natural Resources, Inc., Lobbying Disclosure Reports, First Quarter 2014-Fourth Quarter 2014, Secretary of the Senate, Office of Public Records. 55 Id. standards for power plants were partly to blame.56 Alpha Natural also lobbied on labor issues, including safety standards at coal production and processing facilities.57

56 Laura Barron-Lopez, W. Va. Coal Company Says EPA Regs Partially to Blame for 1.1K Layoffs, The Hill, August 1, 2014. 57 Alpha Natural Resources, Inc., Lobbying Disclosure Reports, First Quarter 2014-Fourth Quarter 2014, Secretary of the Senate, Office of Public Records. Company Koch Network Partner Source 2014 Reported Federal Lobbying Koch Industries Charles and David Founders $13,800,000 Koch Occidental Petroleum Stephen Chazen Freedom Partners $9,198,798 Action Fund Charles Schwab Charles Schwab June 2011 conference $2,520,000 Corporation Allergan Gavin Herbert June 2014 conference $2,380,000 Devon Energy J. Larry Nichols June 2010 conference $1,980,000 Production Company Alpha Natural Kevin Crutchfield June 2010 conference $1,222,335 Resources Blackstone Group Steve Schwarzman June 2010 conference $1,090,000 Citadel Ken Griffin June 2010 conference $640,000 Renaissance Robert L. Mercer Freedom Partners $460,000 Technologies Action Fund Alticor Rich DeVos Freedom Partners $440,000 Action Fund Quintana Corbin Robertson June 2011 conference $390,000 Elliot Management Paul Singer June 2011 conference $230,000 TCF Financial Bill Cooper June 2010 conference $175,000 Hubbard Broadcasting Stanley Hubbard Freedom Partners $170,000 Action Fund WL Gore & Susan Gore June 2010 conference $165,000 Associates Cintas Corporation Bob Kohlhepp and Freedom Partners $160,000 Dick Farmer Action Fund Bechtel Group Steve Bechtel June 2010 conference $100,000 Werner Enterprises Clarence L. Werner Freedom Partners $100,000 Action Fund KapStone Roger W. Stone Freedom Partners $36,258 Action Fund Laredo Petroleum Randy Foutch June 2010 conference $10,000

Anschutz Company Phil Anschutz June 2010 conference $0* Bollinger Shipyards Boysie Bollinger June 2010 conference $0* * Companies retained official representation despite not reporting any spending on lobbying in 2014.