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Koch Industries Lawyer to White House: How Did You Get Our Tax Information?

1:31 PM, Sep 20, 2010 • By JOHN MCCORMACK
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Lately, the White House and its allies have been drawing attention to the political activities of libertarian billionaires Charles and David Koch. In an August 9 speech, President Obama singled out Americans for Prosperity, a free-market political group founded by David Koch in 2004. In the wake of the Citizens United Supreme Court decision, Obama said: 

Right now all around this country there are groups with harmless-sounding names like Americans for Prosperity, who are running millions of dollars of ads against Democratic candidates all across the country.  And they don't have to say who exactly the Americans for Prosperity are.  You don't know if it’s a foreign-controlled corporation.  You don't know if it’s a big oil company, or a big bank.  You don't know if it’s a insurance company that wants to see some of the provisions in health reform repealed because it’s good for their bottom line, even if it’s not good for the American people.

"Using a great deal" of research by the left-wing Center for American Progress, the New Yorker's Jane Mayer reported in the magazine's August 30 issue that the Kochs are "waging a war against Obama." Reason's Nick Gillespie argued that Mayer's report was nothing more than "sly innuendo and revelations as lame as they are breathless," but that hasn't stopped top Democrats from blasting the Kochs for funding the Democrats' political opposition.

Democratic Congressional Campaign Committee chairman Chris Van Hollen said in a September 10 TV appearance that "Americans for Prosperity which are the Koch Industries ... did well under the Bush administration economic policies," which is why AFP is opposing the Democrats. In a September 16 speech, President Obama again singled out Americans for Prosperity. Even Jimmy Carter took a whack at the Kochs last week.

While the attention is unwanted for the Kochs, if somewhat expected, a lawyer for Koch Industries now tells THE WEEKLY STANDARD that the administration may have crossed a line by revealing tax information about Koch Industries. According to Mark Holden, senior vice president and general counsel of Koch Industries, a senior Obama administration official told reporters at an August 27 on-the-record background briefing on corporate taxes:

So in this country we have partnerships, we have S corps, we have LLCs, we have a series of entities that do not pay corporate income taxSome of which are really giant firms, you know Koch Industries is a multibillion dollar businesses. So that creates a narrower base because we've literally got something like 50 percent of the business income in the U.S. is going to businesses that don't pay any corporate income tax. They point out [in the report] you could review the boundary between corporate and non-corporate taxation as a way to broaden the base.

Holden tells THE WEEKLY STANDARD that this quotation from a senior administration official "came to our attention from different avenues.  We are very concerned about why this would be said about us, particularly in this setting.  We are concerned where this information would have been obtained from. We also are concerned in light of recent events that we have been singled out by the government and others as a campaign against us because of our political views."

THE WEEKLY  STANDARD asked White House press office officials in an email on Friday to verify the quotation's accuracy, but 72 hours later they have not replied. A White House press aide reached this morning on the phone said she would look into whether a transcript of the call exists. The aide has not yet responded. (Correction: The press aide replied just prior to publication of this report to say, "I haven’t been able to track a transcript down.")

But an independent source who participated in the briefing confirms to THE WEEKLY STANDARD that the quotation matches the source's careful notes from the briefing.

Holden claims that the revelation of tax information could have been improper, depending on how the information was obtained by the White House:

"I’m not accusing any one of any illegal conduct. But it’s my understanding that under federal law, tax information, is confidential and it’s not to be disclosed or obtained by individuals except under limited circumstances. ... I don’t know what [the senior administration official] was referring to. I'm not sure what he's saying. I'm not sure what information he has. But if he got this information--confidential tax information--under the internal revenue code ... if he obtained it in a way that was inappropriate, that would be unlawful. But I don't know that that's the case."

Holden says that to his knowledge the tax status of Koch Industries has not been previously reported in the press.

So, questions remain: Why won't White House officials say if the quotation about Koch Industries is accurate--or even if a transcript of the briefing exists?

And, if the quotation is accurate, why won't they say how the White House obtained tax information on Koch Industries?

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