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Billionaires for bitumen: The real foreign radicals behind tar sands debate

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Stephen Harper's Conservatives have courageously chosen to expose and confront foreign interests that have surreptitiously been infiltrating the Canadian oil industry - and they don't mean their Chinese Communist partners. They are apparently in possession of revelations about these extremists and criminals that, in the words of Senator Nicole Eaton, "would make your blood boil."

Launching a much-needed Senate inquiry into "interference of foreign foundations in Canada's domestic affairs" and their "abuse" of registered charitable status, Ms. Eaton stated: "There is political manipulation. There is influence peddling. There are millions of dollars crossing borders masquerading as charitable donations." I am glad to contribute to their work.

Welcome to the world of American brothers David and Charles Koch. According to Forbes, in 2011 Koch Industries was the second-largest privately held company in the United States with annual revenue of about $98-billion; the total revenue for the government of Canada for 2011-12 was $248-billion. The brothers each had a net worth of $25-billion, more than the Walton family of Wal-Mart fame. Among the most powerful men in the world whose holdings included major commercial investments in the Alberta oil sands, for years the Kochs have moved heaven and earth to protect the unrestrained pursuit of oil from environmental considerations.

You can learn a great deal about the Koch's business dealings that they don't want known from, of all sources, Bloomberg Markets. It's a glossy monthly magazine "aimed at global financial professionals" and last November its cover was ablaze with the cheeky title of its main story: "The Secret Sins of Koch Industries." Fifteen Bloomberg journalists contributed to what the Daily Kos called a "bombshell", "a fine piece of investigative reporting" and "a bold and spectacular move." The article is long, thoroughly documented and quite devastating, fully justifying its lurid title. Let me give merely the gist, quoting directly:

"Charles and David Koch, billionaire brothers and major Tea Party backers, run a corporate empire that has made illicit payments to win contracts, sold chemical equipment to Iran in defiance of a US trade ban, stolen oil on federal land and lied to regulators about toxic [cancer-causing]emissions. ... For six decades around the world, Koch Industries has blazed a path to riches - in part, by making illicit payments to win contracts, trading with a terrorist state , fixing prices, neglecting safety and ignoring environmental regulations. At the same time, Charles and David Koch have promoted a form of government that interferes less with company actions."

An accompanying graphic is called, even more scathingly, "Crimes and Misdeeds: Koch's history of flouting rules covers more than two decades." You can check out the full report here. The specifics will make your blood boil.

It's only two years ago really that the Koch brothers lost their long struggle to keep their affairs private, mostly thanks to a major profile called "Covert Operations" by Jane Mayer in The New Yorker. Suddenly the two men were ubiquitous, having abruptly moved from obscurity to either fame or notoriety, depending on your politics. Theirs is not in doubt, as Ms. Mayer meticulously showed and as thousands of news stories have since confirmed.

The perfect archetypes of the 1 per cent, the Kochs now fund everything from the government-hating Tea Party to the far right wing of the Republican Party, to a vast labyrinth of think tanks, foundations, not-for-profits and political front groups. All are designed with two related objectives: to oppose any government regulation that limits the unrestricted operations of the oil industry, the basis of their fortune, and to discredit climate science and clean energy while denying global warming.

The brothers practice what they preach: In 2010 a University of Massachusetts research institute named Koch Industries as one of the top 10 air polluters in the United States. According to the non-partisan Center for Responsive Politics, Koch Industries has spent more than $50-million to lobby in Washington since 2006.

But the Kochs are equally at home in the Alberta oil patch, as has now been comprehensively brought to light by InsideClimate News, an America-based non-profit organization dedicated to a clean environment. But their very long, impressively documented report cannot for a moment be dismissed as the biased work of tree huggers.

Titled "Koch Brothers' Activism Protects their 50-year Stake in Canadian Heavy Oils," it carefully details their "long and deep investments in the tar sands," investments that have been "central to the company's initial growth and subsequent diversification since 1959." Researching every conceivable source to uncover the holdings of this once ultra-secret family, the story lists Koch Industries interests in Canada:

» The company is one of Canada's largest crude oil purchasers, shippers and exporters, with more than 130 crude oil customers.

» It is among the largest U.S. refiners of oil sands crude, responsible for about 25 percent of imports.

» It is one of the largest holders of mineral leases in Alberta, where most of Canada's tar sands deposits are located.

» It has its name attached to hundreds of well sites across Alberta tracked by Canadian regulators.

» It owns pipelines in Minnesota and Wisconsin that import western Canadian crude to U.S. refineries and also distribute finished products to customers.

» It owns and operates a 675,000 barrel oil terminal in Hardisty, Alberta, a major tar sands export hub.

»And this year it kicked off a 10,000 barrel-a-day mining project in Alberta that could be the seed of a much larger project.

So far as I can see, all these statements are thoroughly backed up in this scrupulous piece of investigative journalism.

The report also notes the Kochs' political activities in Canada, based on Canadian news sources. Last year the Edmonton Journal reported that Koch Industries had hired a Calgary lobbyist with good local Conservative connections to lobby the provincial government on its behalf.

Then last month, the Vancouver Observer reported the Kochs were contributors to the Fraser Institute, a self-declared charity that some see as an unabashed political advocacy group for unregulated private enterprise and a zealous foe of environmental regulation. Its former chief executive, Michael Walker, confirmed to the Observer that the brothers had contributed $500,000 to the Fraser Institute between 2007 and 2010 for undefined "international work."

Since the Canadian Revenue Agency is busy hunting down non-profits who are abusing their charitable status, it will no doubt be interested in the $1.7-million the Fraser Institute received from "sources outside Canada," nearly 16 per cent of its funding.

I know that Conservative Senator Nicole Eaton's inquiry will welcome these leads and that its findings will truly make the blood boil of all who honour Canada's ethical oil.


This article was originally printed in the Globe and Mail and is reprinted with permission. 


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