acknowledgments did give thanks to Rob Hall, a lobbyist for Koch’s Invista division, thanking him for “his support in helping us conceive of and design Third Way’s trade project,” without disclosing Koch or Invista’s funding. Third Way was not obligated to disclose its support from Koch Industries in its tax filings, and did not. Koch successfully pushed its view on trade while barely leaving a fingerprint.
In 2009, Koch’s use of the echo chamber was more targeted and better amplified. The operation began at Koch’s lobbying office, where a senior manager directed lobbyists to pay for a third-party economic report that would undermine support for the Senate’s cap-and-trade bill, according to a person familiar with Koch’s political operations.
To produce the report, Koch’s lobbyists selected a reliably conservative economic think tank called the American Council for Capital Formation. The ACCF didn’t hide its free-market leanings, and tax filings showed that it was funded by ExxonMobil and other corporate interests. But Koch Industries took pains to hide its involvements in the report it commissioned in 2009. Koch enticed another lobbying group, called the National Association of Manufacturers, to “sponsor” the report, with the understanding that Koch Industries would pay for it.
The Koch network had funded the ACCF for years, although it disguised its contributions by using the Claude R. Lambe Charitable Foundation, which the Koch family controlled. In 2006, the Lambe Foundation gave ACCF $40,000. It gave $50,000 in 2007. Koch hired the ACCF to produce a study looking at the economic damage that a cap-and-trade bill would cause the US economy. A person familiar with the arrangement said that a study of this kind would cost roughly $100,000. In both 2008 and 2009, the Claude R. Lambe Charitable Foundation gave $100,000 to the ACCF. Then its contribution dropped back to $50,000 in 2010.
The report was released in August of 2009. It carried the kind of dry academic title that conveyed a sense of credibility and seriousness in Washington, DC: Analysis of the Waxman-Markey Bill “The American Clean Energy and Security Act of 2009.” The report’s lead author was a long-time ACCF economist named Margo Thorning.
The study was announced with a press release from the National Association of Manufacturers. The announcement made no mention of Koch Industries’ involvement. Instead, the study appeared to have the backing of a trade group with the interests of a wide range of manufacturing companies at heart.
The study was brutal in its assessment of Waxman-Markey. “Unfortunately, this study confirms that the Waxman-Markey Bill is an ‘anti-jobs, anti-growth’ piece of legislation,” NAM’s executive vice president, Jay Timmons, said in the press release.
The study’s predictions were dire, in part because the ACCF used a set of economic assumptions underlying its analysis that most other studies did not use. The group, for example, predicted that renewable sources of energy would be slower to come online than many analysts predicted, which would leave the United States in an energy crunch. The ACCF estimated that the Waxman-Markey bill would destroy 2.4 million jobs between 2012 and 2030 if it was passed. It estimated that electricity prices would jump 50 percent by 2030, while $3.1 trillion in economic activity would be lost.
Once the ACCF’s study was published, Koch Industries carried out the next phase of its echo chamber system. The study was quickly promoted by a think tank called the Institute for Energy Research, which sent out a press release on August 13 that highlighted the study’s findings. The IER was an outgrowth of the Institute for Humane Studies, the libertarian think tank cofounded by Charles Koch.IV By 2009, the IER was funded by Koch Industries and other companies, and a former Koch Industries lobbyist named Wayne Gable sat on IER’s board of directors.
After the study was promoted by the IER, it was then recycled by another Koch Industries–affiliated think tank. This one was called the American Energy Alliance, and it was essentially the political action arm of the IER. The AEA was organized under the tax code in a way that it could be directly involved in politics, while the IER was organized as an “education” foundation that could not lobby or get involved in political campaigns. Where the IER was high minded, the AEA was something more of a street brawler. The AEA was headed by a former Koch Industries lobbyist named Thomas Pyle, who remained in close contact with his former colleagues at Koch’s lobbying shop.
The AEA produced a series of political radio advertisements that were based on the new ACCF