Koch Industries could win big in Wisconsin

Wisconsin has been in political turmoil since 14 Senate Democrats left the state last week in protest over a bill by Gov. Scott Walker (R) that would eliminate collective bargaining rights for most public employees. Their absence has left Republicans without the quorum needed to vote on the plan. Meanwhile protestors have continued to fill the Capitol for a second week.

Mike Konczal at Rortybomb points out  that while significant attention has been given to the issue of collective bargaining rights, there has been little attention paid to what the bill would actually do. From the legislation (emphasis added):

16.896 Sale or contractual operation of state−owned heating, cooling, and power plants. (1) Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state−owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).

In other words, the bill allows the state to sell state-owned heating, cooling, and power plants without going through a bid process and without concern for the public interest. Conveniently, there is a private interest already acquiring Wisconsin energy companies and infrastructure and poised to continue doing so, Koch Industries, Inc.

According to Forbes magazine, Koch Industries is one of the largest private companies in America, completing over $32 billion in acquisitions and investments, and almost $11 billion in capital expenditures, since 2003. The company already owns a coal subsidiary and a network of pipelines in Wisconsin and their Pine Bend Refinery in Minnesota supplies 30 to 40 percent of Wisconsin’s transportation fuel. Much of what the Koch refinery processes is the heavy crude coming from Alberta’s oil sands.

Koch Industries is owned by Charles and David Koch, the conservative brothers who infamously use their wealth to fight legislation they hate. Reports are now emerging that Wisconsin Gov. Walker received his second-largest contribution of $43,000 from the Koch Industries PAC. The PAC also gave significant money to the Republican Governors Association, which spent $65,000 on independent expenditures to support Walker during his election race as well as buying $3.4 million in TV ads and mailers to attack Walker’s opponent. With legislation pending that would allow Koch Industries to snap up state-owned power plants, it looks like those contributions have resulted in significant benefits.

Mike Konczal points out that it is important to consider the role of the state in light of these revelations. Is it in the “public interest” to break labor and sell off state utilities to political cronies under the guise of balancing a state budget?   Additionally, how much will Koch Industries stand to gain from their energy acquisitions if there is a significant increase in the amount of oil flowing out of Canada and into the upper midwestern United States? We’ll continue to watch this developing story.

UPDATE: Since this story was posted, a number of pieces have appeared around the blogosphere. Politico’s Ben Smith quoted a statement from Koch Industries spokeswoman Melissa Cohlmia, who said, “Any suggestion that Koch Industries has some financial interest in the outcome of the legislation at issue in Wisconsin is false.” Smith went on to note the following:

Of course, Americans for Prosperity — a Koch group — is pushing the bill. Of course Koch, a conservative outfit, backs Walker. But the combined desire of AfP to take credit and of Democrats to give it to them shouldn’t be mistaken for actual causation. The Koch group is, in a way, like the DNC: Rushing to aide — and to seek credit for — a conflict that clearly developed organically.

You can read the entire article here. It should be noted that the Koch-backed Americans for Prosperity launched a website, Stand With Walker supporting the governor.

As reported in a New York Times article, U.S. Rep. Gwen Moore (D-Wis) was claiming, “The Koch brothers are the poster children of the effort by multinational corporate America to try to redefine the rights and values of American citizens.” Meanwhile another spokesman for Koch Industries scoffed at the idea and responded, “This is a dispute between public-sector unions and democratically elected officials over how best to serve the public interest.” Again we have to wonder, what is the “public interest” in this case?

UPDATE 2: Eric Lach at talkingpointsmemo.com has written a good counterpoint to the rumors of big wins for Koch Industries. In a nutshell, the people he’s interviewed aren’t that worried about the provision since Wisconsin’s power assets might be more of a liability than an asset. Moreover, a similar provision came up in the Wisconsin budget under Gov. Jim Doyle (D). Read the entire article here.

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