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Koch Industries GC on Politics and the Keystone Pipeline

As House Republicans are pushing for a committee vote on a bill to move the Keystone XL pipeline project forward, opponents keep dragging Koch Industries, Inc., into the controversy—even though it claims no interest in the bill.

“It’s political theater,” complains Koch general counsel Mark Holden, as a vote on the bill was scheduled for Tuesday before the House Energy and Commerce committee. Wichita-based Koch operations include refineries, chemicals, and related technology.
Holden, a 17-year veteran with the company, said in an interview with on Monday, “As Koch has stated consistently since last year when the issues first arose, Koch is not involved in the Keystone Pipeline XL project, it has no ownership interest in the proposed pipeline, and it is not a proposed shipper or customer of the proposed pipeline.”

So why does Representative Henry Waxman, a Democrat from California and ranking member of the committee, keep insisting it does have an interest? Holden says it all started with a blogger’s false statement last year. Waxman picked up the statement and has perpetuated it, over Koch’s objections.

Last week Waxman accused Congressional Republicans of granting Koch “special treatment” when they refused Waxman’s demand that Koch send a representative to last Friday’s hearing on the pipeline. Waxman cited a form signed by a Koch subsidiary in Canada. The subsidiary had submitted an “intervener” form citing “substantial interest” in the pipeline in order to receive automatic updates on a Canadian board’s approval process.

Holden said the subsidiary’s “interest” in the pipeline was general, and not financial or ownership interests. The Sierra Club, for example, signed an intervener form as well.

Last week, Waxman urged committee chairman Fred Upton, a Republican from Michigan, to press Koch about whether it has invested in oil sands projects that would benefit from TransCanada Corp.’s proposed pipeline. When Upton refused, Waxman accused him of favoritism.

“It’s just political gamesmanship by Waxman and the Democrats,” Holden said. “They’re trying to make it about us.”

Whatever it is, the rhetoric grew hot on both sides. Koch’s outside counsel, Theodore Olson, wrote an op-ed piece in the Wall Street Journal last week accusing the Obama administration of trying to “demonize and stigmatize” the company and its owners, brothers Charles and David Koch.

Olson, a former U.S. solicitor general and now a partner with Gibson, Dunn & Crutcher in Washington, D.C., compared the attacks on Koch to Richard Nixon’s “enemies list,” which the former President used “to single out private individuals for investigation and abuse by agencies of government.”

Other groups have noted that Koch has contributed large amounts (including CorpCounsel, in an article last week) to various political campaigns, including those of some Congress members who support the pipeline.

But Holden argued that the company supports any candidates “regardless of political affiliation, that we believe will be champions for fiscal responsibility, limited government, and free markets.”

He said Koch has not contributed to secret Super PACs, and has been transparent in its political contributions.

The bill before the committee on Tuesday is called the North American Energy Access Act [PDF]. It seeks to remove President Obama’s authority over the pipeline and allow construction to begin. Many environmental groups oppose the pipeline, and Obama has, at least for the moment, rejected it.

Republicans hope to fold the legislation into the Energy and Infrastructure Jobs Act when it comes to the House floor for a vote later this month.