By Mark Ames and Mike Elk
On the eve of the November midterm elections, Koch Industries sent an urgent letter to most of its 50,000 employees advising them on whom to vote for and warning them about the dire consequences to their families, their jobs and their country should they choose to vote otherwise.
The Nation obtained the Koch Industries election packet for Washington State—which included a cover letter from its president and COO, David Robertson; a list of Koch-endorsed state and federal candidates; and an issue of the company newsletter, Discovery, full of alarmist right-wing propaganda.
Legal experts interviewed for this story called the blatant corporate politicking highly unusual, although no longer skirting the edge of legality, thanks to last year’s Citizens United Supreme Court decision, which granted free speech rights to corporations.
“Before Citizens United, federal election law allowed a company like Koch Industries to talk to officers and shareholders about whom to vote for, but not to talk with employees about whom to vote for,” explains Paul M. Secunda, associate professor of law at Marquette University. But according to Secunda, who recently wrote in The Yale Law Journal Online about the effects of Citizens United on political coercion in the workplace, the decision knocked down those regulations. “Now, companies like Koch Industries are free to send out newsletters persuading their employees how to vote. They can even intimidate their employees into voting for their candidates.” Secunda adds, “It’s a very troubling situation.”
The Kochs were major supporters of the Citizens United case; they were also chief sponsors of the Tea Party and major backers of the anti-“Obamacare” campaign. Through their network of libertarian think tanks and policy institutes, they have been major drivers of unionbusting campaigns in Wisconsin, Michigan and elsewhere.
“This sort of election propaganda seems like a new development,” says UCLA law professor Katherine Stone, who specializes in labor law and who reviewed the Koch Industries election packet for The Nation. “Until Citizens United, this sort of political propaganda was probably not permitted. But after the Citizens United decision, I can imagine it’ll be a lot more common, with restrictions on corporations now lifted.”
The election packet starts with a letter from Robertson dated October 4, 2010. It read: “As Koch company employees, we have a lot at stake in the upcoming election. Each of us is likely to be affected by the outcome on Nov. 2. That is why, for the first time ever, we are mailing our newest edition of Discovery and several other helpful items to the home address of every U.S. employee” [emphasis added].
For most Koch employees, the “helpful items” included a list of Koch-approved candidates, which was presented on a separate page labeled “Elect to Prosper.” A brief introduction to the list reads: “The following candidates in your state are supported by Koch companies and KOCHPAC, the political action committee for Koch companies. We believe these candidates will best advance policies supporting economic freedom.”
What the Kochs mean by “economic freedom” is explained on the next page. As the mailer makes clear, Koch Industries tailored its election propaganda to the state level, rather than focusing on national elections. Of the nineteen candidates that Koch Industries recommended in its Washington State list, sixteen were Republicans. The three Democratic candidates approved by the Kochs included two members of the “Roadkill Caucus,” Washington’s version of the conservative Blue Dogs.
Only two of the nineteen races on the list were for national office, and in both cases Koch Industries backed Tea Party–friendly Republicans: Dino Rossi, an antilabor candidate, who lost to incumbent Democratic Senator Patty Murray; and Jaime Herrera-Beutler, who ran in the Republican primary as a moderate, but who came out recently as a Tea Party radical, much to her constituency’s surprise.
After guiding employees on how they should vote, the mailer devoted the rest of the material to the sort of indoctrination one would expect from an old John Birch Society pamphlet (the Koch Brothers’ father, Fred Koch, was a founding member of the JBS). It offers an apocalyptic vision of the company’s free-market struggle for liberty against the totalitarian forces of European Union bureaucrats and deficit-spending statists.
The newsletter begins with an unsigned editorial preaching familiar Tea Party themes, repackaged as Koch Industry corporate philosophy:
For more than 40 years, Koch Industries has openly and consistently supported the principles of economic freedom and market-based policies. Unfortunately, these values and principled point of view are now being strongly opposed by many politicians (and their media allies) who favor ever-increasing government…. Even worse, recent government actions are threatening to bankrupt the country…. And the facts are that the overwhelming majority of the American people will be much worse off if government overspending is allowed to bankrupt the country.
Further into the company newsletter is an article headlined “What’s a Business to Do?” It portrays corporate titans like the Kochs as freedom-fighting underdogs, modern-day Sakharovs and Mandelas targeted for repression by Big Government statists: “Citizens who are openly critical of the European Union bureaucracy in Brussels or the out-of-control government of the United States are being shouted down by politicians, government officials and their media and other allies.”
In this scenario, Big Government wants to muzzle the Kochs before they can spread their message to the people. That message comes down to preaching the benefits of lower wages:
If the government insists that someone should be paid $50 per hour in wages and benefits, but that person only creates $30 worth of value, no one will prosper for long…. Anything that undermines the mobility of labor, such as policies that make it more expensive and difficult to change where people are employed, also increases unemployment…. Similar policies that distort the labor market—such as minimum wage laws and mandated benefits—contribute to unemployment.
Easily the strangest and most disturbing article of all comes from the head of Koch Industries himself, Charles Koch, who offers an election-season history lesson to his employees. Koch’s essay sets out to rank the best and worst US presidents in terms of their economic policies. Charles—who with his brother David is worth $44 billion, putting them fifth on the 2010 Forbes 400 list—warns his readers that his history lesson may surprise them. And to his credit, Koch doesn’t disappoint.
Koch glorifies Warren G. Harding and his successor Calvin Coolidge for producing “one of the most prosperous [eras] in U.S. history.” Koch explains that what made Harding great was his insistence on “cutting taxes, reducing the national debt and cutting the federal budget,” all policies that Congressional Republicans are proposing in today’s budget negotiations. What made Harding so great, in other words, is what made radical Republican candidates so great in November 2010.
Koch’s pick for worst president is Herbert Hoover, whom he accuses of undermining “economic freedom” and thus precipitating the Great Depression. “Under Hoover,” he writes, “federal spending roughly doubled and personal income tax rates jumped from 25 percent to 63 percent. He raised corporate taxes, too, and doubled the estate tax. Hoover also pressured business leaders to keep wages artificially high, contributing to massive unemployment.”
According to most historians, the Harding and Coolidge administrations’ free-market romp was one of the key factors that led to the Great Depression. Their time in office was marked by obscene corruption, racial violence, unionbusting, feudal wealth inequalities and, shortly thereafter, the total collapse of the American economy.
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Legal experts say that this kind of corporate-sponsored propagandizing has been almost unheard-of in America since the passage of New Deal–era laws like the National Labor Relations Act, which codified restrictions on political activism and pressure in the workplace. NYU law professor Samuel Estreicher, director of the Center for Labor and Employment Law, told The Nation in an e-mail interview that such overt politicking to employees is still rare. “I am not aware of it happening with many employers,” he wrote.
According to UCLA’s Stone, although Citizens United frees Koch Industries and other corporations to propagandize their employees with their political preferences, the same doesn’t hold true for unions—at least not in the workplace. “If a union wanted to hand out political materials in the workplace not directly relevant to the workers’ interests—such as providing a list of candidates to support in the elections—the employer has the right to ban that material,” says Stone. “They could even prohibit its distribution on lunch breaks or after shifts, because by law it’s the company’s private property.”
Stone points to a landmark Supreme Court ruling in 1915, Coppage v. Kansas, which protected employers’ right to draw up contracts forbidding employees from joining unions. Justice William Day’s dissent in that case pointed out that if the state was ready to enforce the employers’ contractual bans on union activity, then it was opening the way for the state to enforce employers’ legal right to control their employees’ political and ideological activities:
Would it be beyond a legitimate exercise of the police power to provide that an employee should not be required to agree, as a condition of employment, to forgo affiliation with a particular political party, or the support of a particular candidate for office? It seems to me that these questions answer themselves.
With Citizens United, it seems, the country is heading back to the days of court-enforced corporatocracy. Already, workers at a Koch subsidiary in Portland, Oregon, are complaining about being subjected to political and ideological propaganda. Employees at Georgia-Pacific warehouses in Portland say the company encourages them to read Charles Koch’s The Science of Success: How Market-Based Management Built the World’s Largest Private Company and to attend ideological seminars in which Koch management preaches their bosses’ “market-based management” philosophy.
Travis McKinney, an employee at a Portland Georgia-Pacific distribution center, says, “They drill into your head things like ‘The 10 Guiding Principles of Koch Industries.’ They even stamp the ten principles on your time card.”
McKinney, a fourth-generation employee of Georgia-Pacific, says relations have sharply deteriorated since Koch Industries bought the company in late 2005. He and fellow employees at three Georgia-Pacific distribution centers are locked in a yearlong contract battle with the new Koch Industries management. Workers there, members of the Inlandboatmen’s Union of the Pacific (an affiliate of the International Longshore and Warehouse Union) recently voted unanimously to reject management’s contract and voted overwhelmingly to authorize a strike if management continues to try to impose cuts in benefits and job security in the new contracts.
Political propagandizing is a heated issue in Oregon, which passed SB-519 in the summer of 2009, a bill placing restrictions on corporations’ ability to coerce employees to attend political meetings and vote the way the corporation tells them to vote. In late December 2009—just before SB-519 was to go into effect—the US Chamber of Commerce filed a lawsuit with Associated Oregon Industries to block the bill from becoming law. A similar bill in Wisconsin was struck down in November in a federal court. However, the Chamber’s lawsuit in Oregon was thrown out in May 2010 by US District Court Judge Michael Mosman on procedural grounds, leaving open the possibility that it could still be struck down.
In the meantime, workers across the country should start preparing for a future workplace environment in which political proselytizing is the new normal.