Special Report

Washington’s Thriving Grand Inquisitors

Getting rich at everybody else's expense.

By 4.1.14

UPI
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I’ve reading about Italy and the Papacy during the Renaissance lately and can’t help but be struck by the similarities to today’s Washington, D.C.

The Renaissance Church and its world were a place where everybody was leveling charges of heresy at each other and issuing orders of excommunication. (There were three Popes at the time. Reformer John Huss was guaranteed safe passage to the Council of Constance, then double-crossed, jailed for a year, and burned at the stake.) Everything was a struggle for power, based on doctrine, and nobody ever even pretended to be doing anything productive. Yet the church prospered by selling indulgences — i.e., granting permission for people to do things. True, the rest of Italy was beginning to prosper as well, but if anything the constant clash of cymbals coming out of Rome impeded things.

How is Washington any different? By now you’ve probably heard, for instance, of the story about how the Washington Post tried to take the lead in perpetuating the economic stagnation by announcing the Keystone Pipeline is actually a secret plot of the Koch Brothers.

Let’s set the stage for a moment. According to the latest Gallup Poll, Americans now favor building the pipeline by a 2-to-1 margin. We’re in the midst of a confrontation with a revived Russia where it’s obvious the former Soviet Empire’s willingness to develop its own energy resources has played the key role in its ascendancy. It’s also obvious that a tide is mounting against Democratic control of the government in Washington. Almost all the key Senate races in November are in energy-producing, middle-of-the-country states where the bureaucracy-and-welfare model of the East and West Coasts has minimal appeal. People are sick of having Washington tell them what they can and can’t do.

So what to do? Well, enterprising reporters Steven Mufson and Juliet Eilperin of that hometown newspaper, the Washington Post, believe they have found the answer. On March 20 they published a “Wonk Blog” under the startling headline: “The biggest lease holder in Canada’s oil sands isn’t Exxon Mobil or Chevron. It’s the Koch brothers:”

You might expect the biggest lease owner in Canada's oil sands, or tar sands, to be one of the international oil giants, like Exxon Mobil or Royal Dutch Shell. But that isn't the case. The biggest lease holder in the northern Alberta oil sands is a subsidiary of Koch Industries, the privately-owned cornerstone of the fortune of conservative Koch brothers Charles and David.…

The finding about the Koch acreage is likely to inflame the already contentious debate about the Keystone XL Pipeline and spur activists and environmentalists seeking to slow or stop planned expansions of production from the northern Alberta oil sands, or tar sands. Environmental groups have already made opposing the pipeline their leading cause this spring and Senate Majority Leader Harry Reid has called the Koch brothers Charles and David “un-American” and “shadowy billionaires.” 

How’s that for setting things up? Now environmentalists can shuck off the charge that they are elitists surfeited with prosperity who don’t want anyone else to advance economically. Instead they are now members of the proletariat fighting the plutocracy!

Fortunately, John Hinderaker of PowerLine has been keeping track of these things. “The article was based on a newly-issued two-page report by the far-left International Forum on Globalization [IFG],” he wrote two days later. Hinderaker had critiqued the earlier, longer version last November and found it ludicrous.

IFG compared Koch’s ostensible holdings with those of three American oil companies [Conoco, Exxon and Chevron}, none of which is a major tar sands player.… The IFG folks apparently were too lazy to check on any other companies’ leaseholds, and the Post reporters obviously don’t understand that the big oil companies (Koch is not a big oil company) are not the biggest players in Alberta.… [T]he Post story itself acknowledges that the tar sands encompass 35 million acres, so Koch’s 1.1 million comprise less than 3% of the total.

Moreover, the Koch Brothers’ refining interests in the Midwest will actually be disadvantaged by Keystone:

Keystone would create competition for Alberta oil, raising the price of oil that Koch buys in the Midwest for its Pine Bend refinery. The original IFG report admitted that this would cost Koch $120 billion! Now, that is a stupid number based on a 50-year projection. But still, the basic point is correct: the Keystone Pipeline would hurt Koch Enterprises economically, which is why Koch has never come out in favor of the pipeline or lobbied on its behalf.

When Hinderaker publicly challenged Mufson and Eilperin, their response said it all: “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.” In other words, look, we’re campaigning for Democrats here. What business is it of yours?

No matter, this is Washington. Right on cue, retiring Democratic stalwart Henry Waxman issues his own Torquemada-type manifesto complete with homemade subpoenas:

At the same time that Koch Industries has been denying any connection to the pipeline, Koch-backed groups have launched extensive campaigns to support the construction of the pipeline. One of these groups, Americans for Prosperity, which was founded by David Koch, has run a multi-year pressure campaign in favor of the Keystone XL pipeline, including airing ads against members of Congress for opposing the pipeline.

[W]e ask that you provide us with responses to the following questions and document requests:…

2. How many exploratory wells have Koch Industries or its subsidiaries or their contractors drilled on their leased land in Alberta? How many production wells have Koch Industries or its subsidiaries or their contractors drilled on their leased land in Alberta? Please provide documents sufficient to demonstrate the accuracy of your responses.…

11. Since 2009, how much funding has Koch Industries, the Koch Affiliated Foundations, their subsidiaries or related entities provided to organizations or individuals that conduct or support climate science research? What are the names of those organizations or individuals? During that same time period, has Koch Industries, the Koch Affiliated Foundations, their subsidiaries or related entities funded or made contributions to Donors Trust/Capital? If so, what conditions, if any, were place on the investment and future distributions of those funds?

Let’s ask a simple question here. What business is it of Henry Waxman what the Koch Brothers do? Is he suggesting that there is anybody in Washington who isn’t pursuing their economic interest through political means? Trying taking a walk down K Street.

The unfortunate thing is that Hinderaker, in what is becoming the default style in Washington, fires back at Mufson and Eilperin with his own Inquisitor-like manifesto:

Relying on your thoroughly-debunked March 20 article, Waxman and Whitehouse posed a long series of questions to Koch and requested various documents. I have the same right to request information that they do, and therefore I ask that the Washington Post answer the following questions and produce the following documents:

1) Prior to publication of the referenced article on or about March 20, 2014, did either Juliet Eilperin or Steven Mufson have any conversation or exchange any written documents relating to the subject matter of the article with Sheldon Whitehouse, Henry Waxman, any other Democratic member of the House or Senate, or any member of the staff of any Democratic Senator or Representative, or the staff of any House or Senate committee? If so, please state the time and place of all such conversations, identify all participants, describe the conversations in detail, and identify all responsive documents.…

Washington has become a madhouse where everybody plays the same game of self-righteousness while nothing ever gets done. The Environmental Protection Agency can take seven years reviewing a permit to open a gold mine in Alaska or a copper mine in Arizona and still not come to a decision. The Obama Administration has kicked around Keystone for five years and would postpone it into the next century if it had its druthers. Is it any wonder we are in the most prolonged economic slump in history?

So is there anyone who benefits from this? I invite you to take a look. The attached table from the Bureau of Business and Economic Research represents “gross domestic product per capita by state” — in other words the amount of money each state gets in exchange for its goods and services, divided equally among its population. In 2005, dollars, the national average for 2012 was $42,784. The entire 50 states are on a continuum, from Delaware ($61,183) to Mississippi ($28,944).

You will notice, however, that there is one outlier. The per capita GDP in the District of Columbia $145,663 — more than double the highest state and more than triple the national average. And remember, this is a city/state where 20.7 percent of the population is living in poverty, higher than any state in the nation!

So do you think those Congressmen and bureaucrats aren’t getting rich by holding up progress for everybody else? I’d say we’ll be lucky if they don’t impose their rich-government-bureaucrats-and-hangers-on, poor-everybody-else vision on the rest of America. They’re already doing a pretty good job of it. 

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About the Author
William Tucker is news editor for RealClearEnergy.org.