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The Washington Post's Suspect Attack on the Koch Brothers

1:27 PM, Mar 22, 2014 • By MARK HEMINGWAY
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Thursday, the Washington Post published a piece titled "The biggest lease holder in Canada’s oil sands isn’t Exxon Mobil or Chevron. It’s the Koch brothers."

Over at Powerline, John Hinderaker dismantled the Post article brick by brick. The blog contains maps and graphs of the leaseholders involved, showing that Koch Industries owns leases worth less than three percent of the total. The number of leases Koch Industries holds has declined to 1.1 million acres from 2 million last year. The Post's entire report is sourced from a two-page document produced by the far-left International Forum on Globalization, which was then reproduced on the website "kochcash.org." When the same organization wrote about Keystone XL last year, Powerline noted at the time the International Forum on Globalization concluded that construction of the pipeline could cost Koch $120 billion over 50 years:

Using our modest estimate that KXL will prevent on average a $20 discount to the price of a barrel of tar sands crude, FHR’s [Flint Hills Resources, a Koch subsidiary] Pine Bend refinery will miss out on $120 billion in profit ($20 x 6 billion barrels = $120 billion).

This report and the organization that produced it don't seem credible, and that's being charitable. So why is this misleading info being pushed out there? It could be just incompetence and/or media bias, but there are a couple of other things worth considering. One, Democrats are caught between a rock and a hard place with their donors on the Keystone XL pipeline. And two, with Obamacare cratering, a sluggish economy, and the possibility of a wave election shaping up, Democrats can't run on their records. So they are already gearing up to run against the Koch brothers as an external threat that is buying the GOP -- the same playbook they used in 2010 when Democrats tried a ridiculous campaign to make the Chamber of Commerce out to be pulling Republican strings and using foreign money to buy elections.

Stopping the Keystone XL pipeline, which would carry oil from Canada to refineries in Texas, has become a cause célèbre among radical environmentalists. Anything that could help them tie it to the Koch brothers who have been made out to be left-wing bogeyman is politically helpful to motivating the broader Democratic base to oppose the pipeline, since Democrats have spent the last several years claiming the Tea Party is a Koch conspiracy.

The problem is that the Democrats biggest campaign donors want the pipeline built as it would create tens of thousands of union jobs. Just before the 2012 election, AFL-CIO head Richard Trumka told me he thought that the pipeline would be built in Obama's second term. Given that unions spent $4.4 billion on politics between 2005 and 2011 -- nearly all of which went to Democrats -- they certainly feel they are owed. But now that Obama's in his second term and doesn't need the money, he's not as forthcoming with the union favors regarding Keystone XL, Obamacare, and a host of other union wishes. Unions have been pretty open about their frustration with Democrats and how it may affect their political donations and turnout efforts.

At the same time, we see that a host of other "green energy" firms and global warming ideologues have been donating heavily to Democrats. Berkshire Hathaway, the company of Obama-booster Warren Buffet, owns a rail line that is responsible for transporting much of the oil from the Canadian sands and could be a lot less profitable if the pipeline is built. (Interestingly, Buffet said earlier this month he was in favor of the pipeline.) But it's hedge fund billionaire Tom Steyer who has emerged as the Democratic donor of the moment. Steyer is a big climate change activist, despite profiting off of traditional energy sources he professes to abhor. His campaign cash made a difference in the tight Virginia gubernatorial election. And vulnerable Senate Democrats recently hosted an all-night global warming "talkathon" on the floor of the Senate in a bid to impress Steyer with their commitment to the cause.

Being stuck between unions and environmentalists is a terrible spot to be in for Congressional Democrats up for election this year. Enter the Koch brothers, who are villains to unions for supporting organizations that defended Scott Walker in Wisconsin and helped pass right-to-work legislation in Michigan. And Koch Industries is an energy company, so naturally they are hated by the radical environmentalists who raise money for and agitate on behalf  of Democrats. Consequently, Democrats have a big incentive to campaign against the Kochs directly and portray them as far more influential than they are. They can scare unions into not easing away from writing checks too much and keep the powerful environmental interests close.

Which brings us back to the Post's shoddy report on the Koch brothers. What could have possibly motivated it? While the Post was misleading readers about the Koch's interest in the Keystone XL pipeline, the New York Times reported this yesterday:

Senate Majority PAC, a group that supports Democratic Senate candidates, is preparing a $3 million advertising campaign against Charles G. Koch and David H. Koch, the libertarian-minded billionaire brothers who support conservative causes and have already poured millions of dollars into the 2014 midterm elections.

And all month long, Senate Majority Leader Harry Reid has been railing against the Kochs in slanderous fashion, calling them "un-American" among other things. This is, again, eerily reminiscent of 2010 when Democrats tried to make GOP fundraising interests the central issue of the campaign. Aside from demonizing the Chamber of Commerce, then Speaker of the House Nancy Pelosi promised to tie the GOP to corporate campaign cash “like doggy-doo stuck on your shoe,” and at one point Democrats circulated a memo claiming that outside spending groups affiliated with Republicans had outspent Democratic groups $200 million to $7 million. In the end, money was not an issue in the campaign. Republicans were outspent and still won a historically large number of congressional seats. “Overall, Democratic candidates in the 63 races that flipped to the GOP had $206.4 million behind them, a tally that includes candidate fundraising and spending by parties and interests,” reported the Washington Post on November 3, the day after the 2010 midterms. “That compares to only $171.7 million for their GOP rivals.” The demonize-GOP-funders playbook is not only hypocritical -- if didn't succeed in 2010, it seems unlikely to succeed in 2014.

Finally, Powerline also reported this interesting tidbit about one of the two authors of the Washington Post's Koch piece:

Who is Post reporter Juliet Eilperin? Among other things, she is married to Andrew Light, who writes on climate policy for the Center for American Progress. The Center for American Progress is an Obama administration front group headed by John Podesta, who is a “special advisor” to the Obama administration. CAP’s web site, Think Progress, has carried out a years-long vendetta against the Koch brothers that has focused largely on the environment. Ms. Eilperin’s conflict in writing about environmental issues has already been a subject of controversy at the Post.

Maybe it's a coincidence that this particular reporter is blowing the Koch brothers influence all out of proportion on a hot button environmental issue, right as the Democratic Party is ramping up a multi-million dollar ad campaign against them. Maybe it's also a coincidence that Tom Steyer sits on the board of the Center For American Progress where her husband works. But the response of Eilperin and her co-author to Powerline's devastating critique is less than inspiring:

First, regarding the political leaning of the group that brought this story to our attention, our article makes clear its left-wing origins, the controversial nature of its earlier claims, and its political agenda. Second, regarding whether Koch would benefit from the construction of the Keystone XL pipeline, we make clear that many of Koch’s leases pre-date the pipeline plan, that Koch has not bid for space in the pipeline, and that Koch would not be a customer. Third, if Koch’s lease holdings are 1.1 million acres, that would make it one of the region’s largest, rivaled only by Shell (1 million net acres through an Athabasca joint venture and perhaps 1.3 million net acres altogether), Cenovus Energy (1.5 million net acres), and perhaps Canadian Natural Resources (717,000 net undeveloped acres plus an undetermined number of developed acres). ... The Powerline article itself, and its tone, is strong evidence that issues surrounding the Koch brothers’ political and business interests will stir and inflame public debate in this election year. That’s why we wrote the piece.

After outlining a number of reasons why their own report was unjustifiably inflammatory, they then have the temerity to justify what they wrote by noting the understandably annoyed "tone" of someone who ably pointed out just how bad their report is. The Post owes its readers a much stronger mea culpa.

UPDATE: John Hinderaker at Powerline has now put up a strong response to the Washington Post's inadequate backtracking. Hinderaker hits some of the same themes about the Democratic campaign finance predicament as I do above, but his post is well worth reading in full:

Let me offer an alternative explanation of why the Washington Post published their Keystone/Koch smear: 1) The Washington Post in general, and Mufson and Eilperin in particular, are agents of the Left, the environmental movement and the Democratic Party. 2) The Keystone Pipeline is a problem for the Democratic Party because 60% of voters want the pipeline built, while the party’s left-wing base insists that it not be approved. 3) The Keystone Pipeline is popular because it would broadly benefit the American people by creating large numbers of jobs, making gasoline more plentiful and bringing down the cost of energy. 4) Therefore, the Democratic Party tries to distract from the real issues surrounding the pipeline by claiming, falsely, that its proponents are merely tools of the billionaire Koch brothers–who, in fact, have nothing to do with Keystone one way or the other. 5) The Post published its article to assist the Democratic Party with its anti-Keystone talking points.

UPDATE II: Writing at the Washington Post's Volokh Conspiracy blog, Jonathan Adler also finds the Post reporters's response to Powerline lacking:

Perhaps it is true that the Kochs really are the largest lease holder, and really own close to 2 million acres, but Eilperin and Mufson aren’t willing to stand behind this claim. Their original charge was based upon the Kochs owning 1.1 million acres, and yet others own more (as they now acknowledge).  As in the original story, the follow-up cites unnamed “industry sources we consider highly authoritative” claiming that the Koch holdings are larger, but there’s a big difference between saying the Koch brothers are the largest lease holder and saying that they might be if the unconfirmed claims of unnamed sources about some indeterminate amount of additional lease holdings are accurate. If the larger number can be substantiated, then let’s see it. If not, and if Mufson and Eilperin are no longer willing to attest that the Kochs are the largest lease holder in the oil sands, then it seems a true correction is in order. A follow-up defending the reporters’ choice of subject matter, while interesting, does not suffice.

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