1) Koch Brothers give money to Scott Walker's campaign
2) Koch Brothers are in the energy business
3) Scott Walker folds a no bid process to sell the state owned power plants into the budget repair bill
4) Koch Brothers get sweet deal on said power plants as payback for campaign contributions
This is what I am gathering from my facebook friends and demonstrators and some articles I have read. Most of the usual suspects are trumpeting this black helicopter theory as the real deal. Many in the Wisconsin state assembly brought up this in the debate that finally ended on Friday morning.
So what is the deal, really? What about this Koch Brothers connection? Why on earth would they want the Wisconsin owned plants? Do they? Lets do a little digging and try to come up with some answers.
A preface, if you will. I am not an expert in power plants, or politics in general, but I do have a computer and the Google. I will do my best on this but expect to make some errors. Please correct me in the comments if you see a glaring mistake.
Before this kerfuffle at the capitol I had never heard of the Koch brothers, or their lobbying group. I saw some signs with their name on them when I went down there last Saturday and had no clue what the deal was. I honestly thought that Mayor Ed Koch was involved in some sort of protest. I am sure I was not alone in having no clue who the Koch brothers are.
Koch Industries, Inc. /ˈkoʊk/) is an American private energy conglomerate based in Wichita, Kansas, with subsidiaries involved in manufacturing, trading and investments. Koch also owns Invista, Georgia-Pacific, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals and Matador Cattle Company.
Koch companies are involved in core industries such as the manufacturing, refining and distribution of petroleum, chemicals, energy, fiber, intermediates and polymers, minerals, fertilizers, pulp and paper, chemical technology equipment, ranching, finance, commodities trading, as well as other ventures and investments.
In 2008, Forbes called it the second largest privately held company in the United States (after Cargill) with an annual revenue of about $98 billion, down from the largest in 2006. If Koch Industries were a public company in 2007, it would rank about 16 in the Fortune 500.
That, my friends, is a big, big company.
From this different wiki, here is information on their political activities:
Charles and David's father, Fred C. Koch, was a co-founder of the John Birch Society. He gave a speech in 1963 warning of “a takeover” of America in which Communists would “infiltrate the highest offices of government in the U.S. until the president is a Communist, unknown to the rest of us”.[unreliable source?]
David H. Koch was a Libertarian vice-presidential candidate in 1980 on a platform that advocated the abolition of Social Security, the FBI, the CIA, and public schools.[unreliable source?] Koch put $500,000 into the race, and he and Ed Clark, his presidential running mate, won 1% of the vote—the best libertarian showing in a U.S. presidential race to date. But the experience caused David Koch to change course: "I had enough," he said. "We are not a nation that debates issues. We vote on candidates' personalities." By 1984, David had parted company with the Libertarian party, because, he said, "they nominated a ticket I wasn't happy with" and "so many of the hard-core Libertarian ideas are unrealistic."
Since then, Charles and David Koch have adopted a much less visible strategy toward advancing their libertarian and pro-corporate agenda. Jane Mayer says that they are now so secretive that "they are not just undercover, but underground". In 1986, David Koch helped found the Citizens for a Sound Economy, and has given over $21 million to the Cato Institute.
 Charles G. KochCharles G. Koch funds and supports libertarian and free-market organizations such as the Cato Institute, which he co-founded with Edward H. Crane and Murray Rothbard in 1977, and is a board member at the Mercatus Center, a market-oriented research think tank at George Mason University. Koch supported his brother's candidacy for vice president on the Libertarian Party ticket in 1980. After the bid, Koch told a reporter that conventional politics "tends to be a nasty, corrupting business ... I’m interested in advancing libertarian ideas". In addition to funding think tanks, Charles and David also support libertarian academics and (since 1992) Koch funds the Charles G. Koch Summer Fellow Program through the Institute for Humane Studies which recruits and mentors young libertarians. Koch is also chair of the Institute's board of directors. Koch also organizes twice yearly meetings of Republican donors.
In the August 2010 New Yorker, Jane Mayer writes that "As their fortunes grew, Charles and David Koch became the primary underwriters of hard-line libertarian politics in America." The Koch brothers fund a multitude of groups opposed to fiscally left-wing policies, including Americans for Prosperity.
That is interesting stuff. I literally had no idea who these people were, yet they are very active in the Cato Institute, a place I have read from frequently.
Per Open Secrets, it looks like their PAC donates to Republicans by a ten to one margin over Democrats, at least on the federal level. They are without doubt a heavy hitter.
According to this (I know it is Mother Jones) Walker received $43,000 from the Koch Brothers in the 2010 campaign. Walker probably received some more Koch money "around the horn" from other groups that the Kochs donated to. Lets say the total, just for kicks, is $75 thousand. I have nothing to support that number, it is just a WAG.
So we have a governor who has received $75 grand in campaign donations. If I believe the heavy breathing going on all over the place I am supposed to grasp the concept that $75 grand is enough for Scott Walker to write no bid contracts of state owned power plants to the Koch Brothers companies, or subsidiaries into the budget repair bill. Sounds nice.
Lets talk about the state of Wisconsin owned power plants. Information on them isn't easy to find, believe it or not.
This article says that the state owns 34 power plants, worth $235mm. But:
Several state power plants are under scrutiny because of their air pollution, raising a question about how marketable they may be.
Last year, the Environmental Protection Agency began an investigation to determine whether plants at UW campuses and prisons were in violation of the Clean Air Act. In addition, air pollution standards being implemented by the EPA are expected to result in older coal-fired power plants' needing to add pollution controls or switch to cleaner-burning natural gas.
"The state knows darn well that it has got compliance issues with these aging coal plants, and so the violations are going to have to be corrected," said Jennifer Feyerherm of the Sierra Club in Madison. "How the governor thinks he can put lipstick on that pig and sell huge financial and environmental liabilities to someone else, good luck. Bottom line, those plants need to be cleaned up."
I wonder how well the Koch Brothers companies would play with the Sierra club. And that EPA investigation is not small potatoes. From this article:
The federal agency sent the state Department of Administration a letter Thursday requesting information about the plants. They include power plants on UW campuses at Eau Claire, La Crosse, Oshkosh, Platteville, River Falls, Stevens Point, Menonomie, Superior and Whitewater.
Three Madison plants are included: Capitol Heat and Power, Mendota Mental Health Institute, and Hill Farms. Also included in the request for information are plants at the Northern Wisconsin Center, Waupun Correctional Facility and the Winnebago Mental Health Institute.
The state Department of Natural Resources has already notified the DOA that plants at the Mendota Mental Health Institute and on the campuses at Eau Claire, La Crosse, Oshkosh and River Falls are not in compliance and that five others may also be in violation of the Clean Air Act.
At issue is whether millions of dollars worth of upgrades at some of the coal-burning plants increased the potential for the plants to emit more pollution. The Clean Air Act, passed in 1970, grandfathered existing power plants but the law also required that those plants obtain new permits and install more pollution controls to meet standards if they underwent major modifications that increased emissions.
So it is apparent that many of these power plants would require millions of dollars of upgrades to be allowed to run at all.
OK. Lets imagine that the Koch brothers decide to buy the plants and are allowed to do so by the Walker administration. They don't own the distribution! From what I have seen (I cannot find a complete list) most of these power plants are TINY and are made to power one specific institution such as Mendota Mental Health Institution here in Madison. Will M G and E, Alliant Utilities and the others in the state allow them on their grid? How much will that cost? Again, I can only imagine millions.
So I guess this all leads me to my point number five from above - why in the world would a company that has revenues of NINETY EIGHT BILLION DOLLARS A YEAR want to screw around with a bunch of broken down, out of compliance, teeny tiny power plants???
Can anyone help me out here? Or am I correct in that this will be just another lefty talking point, something that someone just spews out without any thinking or trying to make sense of, like when we blamed Halliburton for all the troubles in the world in the years 2000-2008. I think I know the answer.
Cross posted at Chicago Boyz.