Journalism in the Public Interest

Koch Industries Fought the Health Care Law, But Sought Funds From It


The Koch Industries Inc. headquarters is shown Monday, Nov. 14, 2005, in Wichita, Kan. (Larry W. Smith/AP Photo)

Sept. 1: This post has been updated.

In a post last week, we noted that David Koch, an American businessman and philanthropist, has given millions to cancer research while his company, Koch Industries, lobbied against formal recognition of formaldehyde as a carcinogen.

In a post today, Think Progress’ Wonk Room pointed out another seeming contradiction:

Today, the Department of Health and Human Services announced the “first round of applicants accepted into the Early Retiree Reinsurance Program,” a $5 billion program established by the new health care law to help employers and states “maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare.” According to the agency, “nearly 2,000 employers, representing large and small businesses, State and local governments, educational institutions, non-profits, and unions” applied and have been accepted into the program and “will begin to receive reimbursements for employee claims this fall.”

Ironically, one of those employers is the oil, chemicals, and manufacturing conglomerate Koch Industries.

Koch Industries, on its website, took a public position opposing health care reform:

Koch Industries' point of view regarding health care has nothing to do with political parties and everything to do with our fundamental principles. As a matter of principle, should government mandate prices and control access to doctors and hospitals? Is government an efficient health-care administrator? What's more, is it morally right to run up billions of dollars in unfunded liabilities by promising entitlements for everyone? The principled, market-based answer is no.

So did David Koch, a co-owner of the company. In an editorial posted on the company website, he warned that the U.S. health care system was “under fierce attack,” and cautioned against “a government takeover of health care,” “further socialization of our health care system,” and “an over-reaching government that insists on encroaching into every aspect of our personal lives – especially health care.” (We've invited Koch Industries to comment and will update if the company has a response.)

Criticism of the health care law, however, does not seem to have prevented Koch Industries from applying for funds under the law--but that’s nothing new.

As The Associated Press reported today, more than a half-dozen states that are suing the federal government to overturn the health care law are also claiming its subsidies for covering retired state government employees.

Update: Koch Industries came back to us with a response. Here it is, in full:

History shows that when people get to decide to spend their resources on products and services they value, you get innovation, efficiency, and the greatest quality-of-life improvements in a society. That's why we consistently favor market-based policy solutions and oppose mandates and subsidies.

However, once laws or programs are enacted we will not place ourselves or our employees at a disadvantage by turning our back on incentives offered to our competitors.

Phoney as a virtue….......

Put your money where your mouth is Koch - you have plenty of it already.

I don’t get what the big deal is.  Are they supposed to spite themselves and turn down free money when their competitors are receiving it?  They and their employees will end up paying for the program in their taxes eventually.

You’ve got to deal with the world as it exists, not as you want it to be.  Think of the Bush tax cuts.  I didn’t support them, but I didn’t send them my refunds back since no one else was doing so, either!

The United States may be approaching the tipping point on sovereign solvency from a ) its massive healthcare costs, b ) actuarily insolvent Social Security liabilities and c ) our macro inability to develop the quantity and quality of scientific and technical talent for the next generation to sustain global leadership in innovation of new products.

We need to examine means of training and empowering individuals to master their own wellness via preventative protocols, rather than our current practice of allowing illnesses to advance until ailments are at an advanced and thus very expensive level to treat.

20% if GDP is not sustainable, especially as we are nearing a perfect storm in registered nurse availability.  We will be seeing quite a few hospitals having to close their doors if the current supplies of RNs are not demonstrably enhanced.

According to scientific studies at the Cooper Institute in Dallas, it takes very little exercise and only moderate alterations of dietary protocols for one to greatly improve one’s health profile.

There were a few typos in their reply. I think it was supposed to read:

“When consumers are kept as separate and individual actors their negotiating clout is diminished which is to our advantage.  When those same consumers band together as a buying club they demand concessions from large vendors like us and our profits suffer as a result. ”

Smarter than Nebraska’s Guv’ner.

Smarter than Nebraska’s Gun’ner.

Did I hear someone state that we got free tax cut money. the tax cuts added over 1 trillion dollars to the national dept, after interest you will pay back in over twice what you got. Koch industries lacks integrity.

I agree with Paul. It is entirely possible to be against the concept and even policy of something, like more gov. in health care, but use it.
I am opposed to roads in my area, but once built I used them. I was against stamp price increases but use them. I do not think teens should drive at 16 but mine is studying for a permit (not sure she will have the keys.)
I think this is story a miss. Right or wrong, they are entitled as a corporation to stake out positions, and argue for them. But that would not give them the right to make a decision on behalf of their employees and retirees that involves money and health care.
In this case, both can be true. I am positive this is the case for many companies. Go thru the list of those opposed to the health care bill. (Or fin. reg.!) You will find “hypocrites” if you use this measuring stick. But in this case it would be incorrect.
A rare Fail, propublica.

I agree with Paul. The company can have a position on an issue, right or wrong, but still participate. Look at most companies with positions against this healthcare bill.
They can’t make decisions on behalf of their employees, and thus use the program.
In that case, it is not a problem. I am against many programs and laws I must or choose to use. I do not like the student loan program requirements, the postage stamp cost increase, etc.
But I abide by these things. Koch is the same in this case.

“I don’t get what the big deal is.”

The “big deal” is called “ethical conduct”, something which is absent in the ethos of big business today and is, in a large part, the reason this country is in the financial mess it is in today.

By the way, President Obama said he would abide by the federal fund-raising law that has been in use for two decades if he ran for president.
He ‘shifted’ his position, and ended up raising a record amount of money outside the purview of the federal election commission. (Including the most money Goldman Sachs had even given one candidate.)
Is he a ‘hypocrite’ for this? Presumably he believed what he said at first, and then did a 180-degree turn.
This happens all the time, like it or not.

Paul and his supporters are absolutely correct…as long as you refuse to let ethical standards or principles guide your behavior. Maybe you have an argument if this is an issue and corresponding action of minor significance, however Koch makes it clear this is about “fundamental principles”...except it truly can’t be because they don’t actually have any principles.

Perhaps saddest is the “well everyone else is doing it” nonsense. Amazing how we don’t accept this line of ‘argument’ from children and teenagers, yet when we’re adults it’s perfectly acceptable. Awesome.

Aside from this their argument misses the point. “Government” and “Regulation” is bad when it costs the company/individual money, yet that doesn’t stop them from sticking their hand out like everyone else.

I fail to see what is unethical about accepting an evenly offered benefit that you are paying for in the long run!  I believe you are mistaking idealism for ethics.  It’s not like they are robbing the government or misleading anyone—they are accepting the same treatment and operating under the same constraints as anyone else.  Again, they are supporting how they want the world to be but they must operate their company in the world that we live in.  The same goes for all of us.  We all have a view for how we want the world to be but we have to live in the world as it exists.

Many of you are asking Koch to act irrationally and act as it if is in the world that it wants to be in.  This is something from Fantasy Island, not the real world. 

Let’s remember ethics are practices and guidelines for how you should act in the world you actually exist in, not how you would act in your idea of utopia.

RJM—I recognize I will owe the money back someday, but I am not going to receive extra credit on my taxes in the future for refusing the benefits of the Bush tax cuts now.  Thus, I accept them like everyone else.  To do otherwise would be idiotic.  That is my point.

Unfortunately you are correct about this being the “real world” because excuses and unprincipled behavior have made it such. It goes to show how amoral our society and culture is that somehow acting according to stated principles is thought of as “utopian”. If the “government takeover” is as dangerous and wrong as Koch believes, then they should have as little to do with it as possible, not jump in line with their hand out. I find it distressing that people like Paul do not find something fundamentally wrong with this:

“That’s why we consistently…oppose mandates and subsidies.”

“However, once laws or programs are enacted we will not place ourselves or our employees at a disadvantage by turning our back on incentives offered to our competitors.”

You cannot consistently oppose, or oppose in any real meaningful sense, subsidies when you take them whenever they are available. You can’t seriously be against theft yet steal whenever the opportunity presents itself. Yet such a standard is what Paul defends.

On a more philosophical level there is the fact that you will never have a world you want to live in when you are too busy entrenching the world you do live in.


Well said!

Principals mean absolutely nothing unless acted upon.

The Koch brothers are billionaires who have supported and backed every republican attack on the policies that President Obama has accomplished for America. These billionaires are working to keep the country in the hands of republicans who they know will kowtow to them.  Republicans like these Koch brothers are nothing if not hypocritical for being so anti-Health Care Reform and now wanting the benefits.  These are the funders of all the republican candidates who will keep America from prospering. Thank you Propublica for doing a great job of reporting on this.

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