In August 2010, Austan Goolsbee, serving at the time as economic adviser to President Obama, told reporters during an anonymous background briefing that Koch Industries doesn't pay corporate income taxes. That statement was made at the same time that top Democrats, including President Obama himself, were demonizing Charles and David Koch, the owners of Koch Industries, for giving money to Tea Party groups. Goolsbee's remark led to a federal investigation, the results of which have never been released.
In a September 2010 WEEKLY STANDARD interview, Mark Holden, a lawyer for Koch Industries, disputed Goolsbee's claim and asked how Goolsbee came up with the idea that Koch Industries doesn't pay corporate taxes. Holden raised the question of whether someone in the Obama administration might have looked at Koch Industries' tax returns--which would be a violation of a federal law that was enacted in 1976 in response to Watergate.
The White House never formally explained how it came up with the claim, but an anonymous White House official told Ben Smith, then a reporter at Politico, that the claim was based on testimony to President's Economic Recovery Advisory Board and publicly available sources, such as Forbes magazine and Koch Industries' website. Koch lawyer Mark Holden said the White House's explanation didn't make sense: "[C]ontrary 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."
A letter from Republican senators led to an investigation by Treasury inspector general J. Russell George. But after the investigation was completed, George wrote in an October 2011 letter to Senator Charles Grassley that, due to confidentiality provisions of the law, he could not tell Grassley if anyone had illegally accessed Koch Industries tax returns or if the inspector general had taken any actions following his investigation. The inspector general wrote that the only members of Congress who can access confidential tax information are the chairman of the Senate Finance Committee and chairman of the House Ways and Means Committee. Spokesmen for the Senate Finance Committee did not reply to a WEEKLY STANDARD inquiry about whether Chairman Max Baucus has the authority to release the report.
Without the inspector general's report, we don't know where the White House came up with the claim that Koch Industries doesn't pay corporate income taxes. But earlier this month, Austan Goolsbee offered a new explanation in light of the unfolding IRS scandal. Goolsbee wrote on Twitter:
@joerepublic1 there was no secret info on koch bros. It came fr/heresptimes.com/2003/12/28/Sta… but was a mistake--one of the other Koch bros.
— Austan Goolsbee (@Austan_Goolsbee) May 14, 2013