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Koch Lawyer Names Austan Goolsbee As W.H. Official Who Talked About Company's Tax Status

Fight between White House and libertarian billionaires escalates.

12:09 PM, Sep 22, 2010 • By JOHN MCCORMACK
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Mark Holden, a lawyer for Koch Industries, tells THE WEEKLY STANDARD that Austan Goolsbee is the "senior administration official" who discussed the private company's tax status during an August 27 press briefing. As THE WEEKLY STANDARD reported on Monday, at the briefing, a senior Obama administration official singled out Koch Industries, which has drawn the ire of the White House and media for funding right-leaning causes. Said the official at the August 27 briefing on a report by the President's Economic Recovery Advisory Board 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.

"The official who started this all--it’s Austan Goolsbee," Holden tells me. "They don’t want to admit it but that’s who it is." 

How does Holden know it was Goolsbee, who directed the President's Economic Recovery Advisory Board and now chairs the Council of Economic Advisers?

"It came to our attention through a couple different avenues," Holden says. "One of the avenues was through someone who was present when Mr. Goolsbee made this statement on August 27." Holden showed THE WEEKLY STANDARD a copy of an email from the source present at the August 27 briefing claiming that the quote came from Goolsbee. (THE WEEKLY STANDARD did not participate in the August 27 briefing.)

In Monday's report at TWS, Holden laid out his concerns regarding the administration official's comments:

"We are concerned where this [tax] 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. [...] 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."

Since then, Congressman Devin Nunes (R, Calif.) has issued a statement, as well as a letter to the chairman of the House Ways and Means Committee, asking that the committee look into whether the White House "misused confidential tax information."

Meanwhile, a top House Republican aide tells THE WEEKLY STANDARD that White House officials may be called to testify over this matter. "House Republicans are paying attention," says the aide. "When Republicans take the majority, we'll be sure to provide the level of oversight necessary to hold the Obama administration accountable for any potential acts of intimidation against private citizens who are lawfully expressing their First Amendment rights."

Prior to publication of the report at TWS on Monday, White House press officials did not respond to repeated requests for comment on how the tax information was obtained. After the report was published, an anonymous White House official emailed Politico's Ben Smith to claim that the information came from publicly available sources:

No senior administration officials have any access to anyone's tax returns--individual or business.  The administration official was discussing the section of the [President's Economic Recovery Advisory Board's] tax report that argued we should look at the rising importance of pass through entities that do not pay corporate income tax. 

This issue was raised repeatedly by outside experts that testified before the PERAB and Koch was cited to the PERAB as an example by outside commenters to the group.  We assume it came up from publicly available information such as the Forbes magazine annual report listing Koch as one of the largest private companies in the nation or the fact that a high fraction of the largest companies within Koch Industries are listed on the Koch website as LLCs, LPs or other frequent pass-through entities.  If this information is incorrect, we are happy to revise statements. 

Mark Holden of Koch tells TWS that the White House's response leaves a number of questions unanswered. "My primary concern is, Why does our name keep coming up, why do they single us out?" says Holden. "They don’t respond to that. That leads me to believe that it is part of a campaign against us because of our political views."

The White House official's claim that "No senior administration officials have any access to anyone's tax returns" is less than an absolute denial of wrongdoing. Is it possible that a junior administration official had access to Koch's tax information and relayed it to a senior administration official? We don't know for sure. White House press officials still refuse to respond to requests for comment from THE WEEKLY STANDARD.

Holden also expresses doubt that the administration official based his claim merely on publicly available information. "The White House’s statement doesn’t cite anything particular or specific" on Koch's tax status in the PERAB report. "And what we’ve seen in the publicly available documents thus far, we have not seen anything referring to us and our corporate tax payment issues.... Even if [experts who testified to PERAB] did address that issue, it wouldn’t make that information publicly available necessarily."

In a statement just released to the press, Holden says:

contrary to the administration official's statement on what sources were used by the administration, neither the Koch website nor Forbes' list of private companies has information regarding Koch's tax filing status.  This is confidential information.  Given these facts, one must wonder why the White House is anonymously commenting on the confidential tax status of Koch Industries.

While Koch's website does list a number of LLCs or LPs within Koch Industries, Holden tells me, “a lot of companies have LLCs or LPs and that really has nothing to do with whether they’re paying corporate income taxes.”

Holden also says: " Koch Industries does pay corporate income taxes and is compliant with all its tax obligations. ... we ask that the administration clarify that it was in error to insinuate that Koch does not pay corporate income taxes." 

But if the White House official was in error, doesn't that indicate that no one obtained information from Koch's tax returns? "I don't know if he got it wrong, don't know if he stretched things a bit," says Holden. "It doesn't necessarily mean that they didn't look at our income tax returns and doesn't necessarily mean that they didn't access our confidential information improperly."

When asked specifically about whether Koch Industries pays any taxes as a C corporation, rather than an S corporation, Holden declined to say, explaining that that's some of the confidential information Koch Industries wants to keep private.

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