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Enter Koch business; politics too?

The sale announced Sunday of timber-producing Georgia-Pacific Corporation to Koch Indistries may not jolt the region as much as it should, since G-P moved its headquarters from Portland to Atlanta 23 years ago.

But it should draw attention, for two reasons, one economic and one political.

Koch logoOn its face, the deal seems to change little; the official Koch statements say, “Koch has confirmed that Georgia-Pacific will be operated as a privately held, wholly owned subsidiary of Koch Industries. Georgia-Pacific will continue to do business worldwide under the Georgia-Pacific name and continue to operate its businesses from its Atlanta headquarters as an independently managed company.” The impression is one of status quo.

But such deals seldom result in status quo: Where, ultimately, would be the big advantage to anyone in that? This could mean a positive. Koch, being privately rather than publicly held, doesn’t have to worry about quarterly stock price reports, and can reinvest much more heavily than a public-traded company can. That could be very good news for G-P. Alternatively, it could do the dismemberment-by-sale thing so popular on Wall Street these days. Also alternatively, it could keep G-P and even heavily reinvest, but change its practices in some dramatic way.

All of that is of some significance because George–Pacific still has substantial operations in the Northwest, including plants at Camas, Washington, and Toledo, Oregon. It is still a major regional timber player.

The political side to this is semi-related, since Koch has not been a big figure in the Northwest but now will be.

The transition statement describes Koch Industries this way: “Koch Industries, Inc., based in Wichita, Kan., owns a diverse group of companies engaged in trading, operations and investments worldwide, including a presence in 50 countries in such core industries as trading, petroleum, chemicals, energy, fibers, fertilizers, pulp and paper, ranching, securities and finance.”

That description doesn’t mention the extent to which Koch’s leaders, brothers David and Charles, is heavily involved in financing conservative Republican causes around the country.

The Center for Public Integrity describes them this way:

Koch Industries (pronounced “coke”) is a huge oil conglomerate controlled by brothers Charles and David Koch, two of the country’s richest men and among the biggest backers of conservative and libertarian causes. With estimated revenue of about $40 billion last year, Koch is bigger than Microsoft, Merrill Lynch and AT&T.

Koch is the leading campaign contributor among oil and gas companies for the 2004 election cycle, giving $587,000 so far. Next came Valero Energy at $568,000.

Since 1998, Koch is the fourth biggest campaign oil and gas industry giver, behind ChevronTexaco, El Paso Corp. and Enron Corp.

Despite its size and political largesse, Koch is able to dodge the limelight because it is privately-held, meaning that nearly all of its business dealings are known primarily only by the company and the Internal Revenue Service. In fact, it is the second largest private company in the country, trailing only food processing giant Cargill.”

More specfically, the Center notes,

Although it is both a top campaign contributor and spends millions on direct lobbying, Koch’s chief political influence tool is a web of interconnected, right-wing think tanks and advocacy groups funded by foundations controlled and supported by the two Koch brothers.

Among those groups are some of the country’s most prominent conservative and libertarian voices including the Cato Institute, the Reason Foundation, Citizens for a Sound Economy and the Federalist Society. All regularly beat the drum in official Washington for the causes the Koch’s hold dear—minimal government, deregulation, and free market economics.

For the Kochs, conservative and libertarian views are a family tradition. Fred Koch, who founded the company’s predecessor in 1940, helped establish the ultra right-wing John Birch Society.

Are we about to see heightened interest on their part in the Northwest? The next two or three years will tell.

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