Statement and Fact Check: AFP ad distorts President Obama’s record in order to protect big oil

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DES MOINES – Iowa Democratic Party Chairwoman Sue Dvorsky released the following statement today after the Koch-backed special interest group Americans for Prosperity launched a $6 million advertising campaign in swing states, including Iowa, to distort the president’s record:

“Today, we see another shady group taking undisclosed donations putting up ads in Iowa that distorts the truth to protect their own special interests.  It’s clear why a group being run by big oil executives would want to tear down the clean energy economy, because they know the tax breaks and loopholes for the wealthiest individuals and biggest corporations will only be protected by GOP candidates like Mitt Romney.”

FACT CHECK – AFP Ad Distorts President Obama’s Record

The Koch-funded Americans for Prosperity is out with another false attack to distort President Obama’s record in order to protect big oil. The truth is Americans for Prosperity is founded by David and Charles Koch, the leaders of one of the largest oil and gas conglomerates in America. The Koch brothers have spent millions of dollars to oppose President Obama, who is working to grow the economy by investing in clean energy and reduce our dependence on foreign oil. All the while they protect tax breaks for oil companies that have reaped billions in profits.




David Koch:  “My Brother Charles And I Provided The Funds To Start The Americans For Prosperity.”  “Americans for Prosperity, or AFP, has long been rumored to be financed by David Koch, of the family that owns Koch Industries. That’s one of the biggest privately held companies in America, and the family has a long history of underwriting conservative causes.   David Koch confirmed the rumors at an AFP convention last fall. ‘Five years ago my brother Charles and I provided the funds to start the Americans for Prosperity. And it’s beyond my wildest dreams how the AFP has grown into this enormous organization,’ David Koch said, according to audio from the online news site The Washington Independent.”  [NPR, 2/19/10]


The Kochs Are Worth $21.5 Billion As A Result Of Their Stakes In Their Oil And Chemical Company, Koch Industries. “The Kochs – each of whom is worth a reported $21.5 billion as a result of their stakes in Koch Industries, the family owned oil, chemical and consumer products business – have been donating millions of dollars to small-government conservative causes and candidates for decades.” [Politico, 3/28/11]


·         Koch Industries Is The Second Largest Privately Held Company In The United States With $100 Billion In Annual SalesFrom Its Stake In Industries Like Oil And Gas Exploration, Fuel Pipelines, And Coal Trading.  “Koch Industries is the second-largest privately-held company in the United States, a conglomerate of more than twenty companies with $100 billion in annual sales, operations in nearly 60 countries and 70,000 employees. Koch’s industry areas span petroleum refining, fuel pipelines, coal supply and trading, oil and gas exploration, chemicals and polymers, fertilizer production, ranching and forestry products.” [Greenpeace report, March 2010]




Americans For Prosperity And Koch Industries Target Politicians Who Will Protect Their Bottom Line.  “Earlier this year, the Los Angeles Times noted that Koch Industries and its employees together were the largest single oil and gas donor to members of the House Energy and Commerce Committee, contributing $279,500 to 22 of the committee’s 31 Republicans, and $32,000 to five Democrats. Gardner is on the committee, along with Rep. Diana DeGette, D-Colo., who the Kochs don’t sponsor.  The CATO Institute, which Charles Koch founded and continues to fund, is a consistent critic of climate science and its senior fellows are regularly interviewed on talk shows and in newspapers.  Nine of the 12 new Republicans on the House Energy and Commerce Committee signed a pledge distributed by Americans for Prosperity to oppose legislation designed to regulate greenhouse gases.  […]   ‘It’s hard to prove quid pro quo but clearly businesses – whether it is Koch Industries or other businesses – aren’t making these donations out of altruism,’ said Steve Ellis, vice president for Taxpayers for Common Sense. ‘They are trying to either sway someone’s position or get people re-elected who already support their position. That’s the challenge when you look at these issues: Is it the chicken or the egg? Clearly they aren’t going to give to someone that doesn’t support their interests. The Kochs are certainly not naïve to the way the game is played. And they’re not alone.’”  [Colorado Independent, 10/31/11]


Koch Industries Spends Millions Lobbying To Protect Tax Breaks For Oil And Gas. “Koch Industries, the oil and industrial conglomerate run by the conservative-activist Koch brothers, has multiplied its spending to lobby for tax breaks and lax environmental regulation in recent years, according to a report published Wednesday.  The report, from the Washington-based Center for Public Integrity (CPI), says Wichita, Kansas-based Koch raised its lobbying budget by more than 23-fold between 2004 and 2008, when it spent $20 million. That year marked a major push by Koch to convince Congress to limit EPA’s mandate to regulate greenhouse gas emissions, the report said.  ‘(T)he company’s lobbyists and officials sought to mold, gut or kill more than 100 prospective bills or regulations,’ CPI reported, drawing on public lobbying disclosures and other sources. Koch declined comment for the report, CPI said.  […]  Since 2008, Koch has cut its direct lobbying budget to an average $10.25 million a year, the report said. But the Koch brothers have spent additional millions to back anti-regulation U.S. lawmakers and politicians, and to fund groups whose lobbying dovetails with Koch’s money-making agenda, CPI said.”  [Reuters, 4/6/11]


·         Koch Industries Lobbied To Extend Tax Breaks For Oil And Gas Production. “In the oil patch, Koch has lobbied for the United States to maintain some tax breaks and credits for oil and gas producers that the Obama administration wants to end, CPI said. As a major trader of financial derivatives, Koch has also lobbied against regulations that could curb derivatives trade.” [Reuters, 4/6/11]


Koch Industries Lobbies To Protect Subsidies And Accounting Loopholes For Oil And Gas Producers. “Koch lobbyists spend much of their time, according to their disclosure reports, fighting attempts by members of Congress to curb price-gouging, windfall profit-taking and speculation in the oil industry. To this same end, Koch officials worked to dilute a 2009 Federal Trade Commission rule governing manipulation of the energy markets.  Meanwhile, Koch has lobbied to preserve some of the oil industry’s coveted tax breaks and credits.  One benefit is known as the Section 199 deduction, approved by Congress several years ago to help the hard-pressed U.S. manufacturing sector. In light of the oil and gas industry’s hearty profits, the Obama administration and members of Congress have sought to end the Section 199 subsidy for energy firms and save the U.S. Treasury $14 billion over 10 years. But Koch lobbyists and trade associations have worked to preserve the deduction.  Another industry tax break that drew the support of Koch representatives is the venerable ‘LIFO’ (last-in, first-out) accounting rule. It allows energy companies effectively to raise the value of their existing inventory (and thus pay lower taxes on profits from sales) when the price of oil soars.  Under LIFO, the oil in a company’s inventory, no matter what it actually cost, is valued at the cost of the last-acquired (usually highest-cost) barrel. The LIFO rule has been a target in recent years for both Democrats and Republicans in Washington, who would like to raise revenue without raising taxes.”  [iWatch, 8/25/11]




Americans For Prosperity President Tim Phillips Said Their Influence Led To Lawmakers Doubting Climate Science. “Among the most influential of the new breed of so-called super PACs is the tea party group Americans for Prosperity, founded by David and Charles Koch, the principal owners of Koch Industries, a major U.S. oil conglomerate. As Koch Industries has lobbied aggressively against climate-change policy, Americans for Prosperity has spearheaded an all-fronts campaign using advertising, social media, and cross-country events aimed at electing lawmakers who will ensure that the oil industry won’t have to worry about any new regulations.  Tim Phillips, president of Americans for Prosperity, says there’s no question that the influence of his group and others like it has been instrumental in the rise of Republican candidates who question or deny climate science. ‘If you look at where the situation was three years ago and where it is today, there’s been a dramatic turnaround. Most of these candidates have figured out that the science has become political,’ he said. ‘We’ve made great headway. What it means for candidates on the Republican side is, if you … buy into green energy or you play footsie on this issue, you do so at your political peril. The vast majority of people who are involved in the [Republican] nominating process—the conventions and the primaries—are suspect of the science. And that’s our influence. Groups like Americans for Prosperity have done it.’” [National Journal, 12/2/11]


The Koch Brothers Have Fought To Preserve Tax Breaks For Big Oil Companies. “Oil is the core of the Koch business empire, and the company’s lobbyists and officials have successfully fought to preserve the industry’s tax breaks and credits, and to defeat attempts by Congress to regulate greenhouse gases.” [iWatchNews, 4/6/11]




Americans For Prosperity Used The Solyndra Scandal To Attack A Plan To Boost Deployment OF Natural Gas Vehicles. “Conservative groups are using the Solyndra controversy as a weapon against Senate Majority Leader Harry Reid’s (D-Nev.) new legislation that provides tax credits to boost deployment of natural-gas-powered vehicles.  More than a dozen groups — including Americans for Prosperity, Heritage Action for America and the Club for Growth — sent a letter to lawmakers Monday criticizing the legislation that Reid is championing alongside billionaire energy magnate T. Boone Pickens.  ‘If we’ve learned anything from the Solyndra debacle it’s that politicians do a terrible job trying to prop up their favored energy industries,’ the letter states.”  [The Hill, 11/21/11]


Politifact Rated Americans for Prosperity’s Earlier Solyndra Ad “Mostly False.”  “A new TV ad airing in Florida and other states portrays President Barack Obama as a politician who showered millions of taxpayer dollars on ‘his friends at Solyndra,’ a once-hot solar company now in bankruptcy court.  Americans for Prosperity, a group that works closely with tea party activists and has been funded by the conservative Koch family, released the ad, which uses news clips and e-mail snippets to support an ominous voiceover.  […]The TV ad says ‘(President Barack Obama gave) half a billion in taxpayer money to help his friends at Solyndra, a business the White House knew was on the path to bankruptcy.” Some of this is correct, while some isn’t supported by the existing evidence.  First, the money wasn’t Obama’s to give. Solyndra’s request predated his administration, and career Energy Department officials handled the deal.  Second, e-mails so far don’t show an administration pushing through a loan to help Obama’s ‘friends at Solyndra.’ Rather, it appears the administration asked the Energy Department officials to hurry the regular process, so the administration could burnish its stimulus efforts.   Third, while e-mails raised doubts about Solyndra’s liquidity as the Energy Department finalized the loan, those questions were answered by an official who argued investors would step in to protect the project — red flags, yes. But awareness in the White House the company would dissolve? No.  The government wasn’t the only blindsided investor — private investors put up far more, and stand to lose more, than taxpayers.  The Solyndra story might be one of the poor design of the Energy Department’s loan guarantee program — something the Government Accountability Office has pointed out since 2008.  And with the congressional investigation ongoing, we may learn more about the Obama administration’s role in the loan program — perhaps better supporting the ad’s claims. For now, though, information in the public record does not support the ad’s claim that the Obama White House is a pay-to-play cash machine for the politically well-connected. We rate this ad’s claim Mostly False.”  [PolitiFact, 11/15/11]




Rep. Fred Upton (R-MI)


2009: Rep. Fred Upton Sent A Letter To Energy Secretary Chu Recommending Auburn Hills-Based United Solar Ovonics For An Energy Loan Guarantee Under President Obama’s Economic Stimulus Bill. [Washington Post, 11/16/11]


Ø  Washington Post: United Solar’s Parent Company, Energy Conversion Devices, Has Struggled To Stay Afloat And It Has Faced Similar Financial Pressures To Those That Brought Down Solyndra. [Washington Post, 11/16/11]


Ø  2009: Energy Conversion Devices Announced A Restructuring Plan To Turn Around The Company, Including Laying Off 400 Employees. [Washington Post, 11/16/11]


o   2009: Two Weeks After Energy Conversion Devices Announced 400 Layoffs, Rep. Upton Requested The Loan Guarantee From Energy Sec. Chu. [Washington Post, 11/16/11]


Washington Post: Energy Conversion Devices “Once Looked So Promising That President George W. Bush Visited The Company’s Headquarters In 2006 As He Pitched New Energy Initiatives For The Country.” [Washington Post, 11/16/11]


Rep. Cliff Stearns (R-FL)


NY Times: Stearns Praised The Opening Of A Lithium-Ion Battery Manufacturing Plant Which Relied Upon An Energy Department Loan. [NY Times, 9/20/11]


Ø  Rep. Stearns Attended A Groundbreaking Ceremony For Saft America Inc.’s New Lithium-Ion Battery Plant In Jacksonville, FL. [AP, 9/19/11]


Ø  AP: Saft America Inc. Received A $95.5 Million Grant From The Energy Department Through The Stimulus Law.[AP, 9/19/11]

Stearns Backed New Planet BioEnergy LLC’s Loan Application To Receive Assistance In Building A Biofuel Refinery Plant In Central Florida. [AP, 9/19/11]


Republican Reps. Poser, Mica, Buchanan, Mario Diaz Balart, Roslehtinen And Stearns Sent A Letter To Secretary Chu In December 2010 To Support Florida Power & Light’s Bid For A $200 Million Grant For A Smart Grid. [Think Progress, 10/1/11]





“In 2006, The U.S. Department Of Energy Invited [Solyndra] To Apply For A New Loan Guarantee Program, A Program Created With The Support Of A Majority Of Republicans, Who Controlled Congress At The Time.” [Politifact, 11/15/2011]


“The Energy Department During The Bush Administration Rejected More Than 100 Other Applications While Inviting Solyndra And 15 Other Companies To Continue Their Applications.” [The Huffington Post, 9/14/2011]


PolitiFact: “The Money Wasn’t Obama’s To Give. Solyndra’s Request Predated His Administration, And Career Energy Department Officials Handled The Deal.” [PolitiFact, 11/15/2011]


Solyndra Received Funding Through The Department Of Energy Loan Guarantee Program, Which Was Authorized Under The Energy Policy Act Of 2005. [Department Of Energy Press Release, 10/4/2007]





The Bush Administration Credit Committee Said The Solyndra Project “Appears To Have Merit” and “Without Prejudice,” Remanded The Project “For Further Development Of Information.” [Memorandum on Credit Committee Recommendation For Solyndra Fab 2 LLC, 1/9/2009]


Before President Obama Took Office, The Loan Guarantee Program Office Developed A “Schedule To Complete Solyndra Due Diligence That Would Bring The Project To Approval In March 2009.” [Department Of Energy, Timeline of DOE’s Review Of Solyndra Loan Guarantee Application, accessed 11/2/2011]


Solyndra’s Conditional Loan Guarantee Was Offered In March 2009. “Obama Administration Offers $535 Million Loan Guarantee To Solyndra, Inc.” [Department Of Energy Press Release, 3/20/2009]



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