Rumors of Koch Industries' "undue influence" in Topeka have circulated for years. It now appears that Koch affiliates are the nexus of support for the "Kansas LLC Law" that is directly responsible for Kansas' budget woes. And, this isn't the first time they've been exposed for secretly influencing Kansas politics to benefit themselves.

In 2014, the Wichita Eagle asked Kansas Governor Sam Brownback directly whether he thought Koch Industries had “undue influence” in state politics. It also asked Koch Industries directly, whether it was lobbying for the “Kansas LLC law,” which financially benefits shareholders of Koch Industries-affiliated LLCs while costing the state an estimated $261 million a year in lost revenue. Koch Industries spokeswoman Melissa Cohlmia issued an e-mail statement:

“No. Koch did not lobby or advocate for a change in the Kansas LLC law,” she said. “We didn’t lobby on the tax plan in 2012; we don’t know whether we will lobby to maintain it.”

As we have previously reported, affiliates of Koch Industries, Charles Koch, and/or David Koch appear to be the nexus of support behind the “Kansas LLC Law.” This law is now facing considerable opposition from both Kansas citizens and the small businesses that the law was purportedly benefiting.

In March, it appears there were 53 pieces of written testimony submitted in response to HB 2444, a Kansas bill which would reduce sales taxes on food and eliminate the “LLC Loophole” that allows certain businesses to pay no state income tax. Only four expressed their support for the “Kansas LLC Law” in opposition to the bill:

Since that time, editorials in three of the major newspapers in Kansas have called for the “LLC Loophole” to be closed in the face of Kansas worsening budget woes:

Even Kansas small businesses seem overwhelmingly opposed to the “Kansas LLC Law” that was sold as a “small business tax cut.” One survey of Wichita small businesses found that 80% supported paying higher taxes. Two local chambers of commerce took the extraordinary step of coming out publicly and explicitly against the “Kansas LLC Law”:

In fact, while other chambers of commerce in Kansas may broadly support “lower business taxes” or a “favorable tax environment for businesses,” we found one that seemed vocal and unequivocating in its support for the “Kansas LLC Law,” the Wichita Chamber of Commerce (which both explicitly “oppose[s] increases in business taxes” and supports “continued business tax reform”).

It might seem strange that the Wichita Chamber would take that position given the aforementioned survey of Wichita businesses. However, their position can be explained by the fact that their membership directory includes local company “Koch Industries, Inc.”, and Mark Nichols, VP Government & Public Affairs at Koch Companies Public Sector, LLC sits on the Executive Committee.

Past is Prologue

This is not the first time that Koch Industries has allegedly used proxies like the Kansas Chamber of Commerce to secretly lobby for legislation that benefits only Koch Industries. Back in 2014, ThinkProgress reported on the Kansas Chamber’s advocacy against renewable energy. As one legislator put it:

[Republican Kansas State Representative Scott] Schwab claims that his position on the proposed weakening of Kansas’ renewable energy portfolio standard and a dispute with lobbyists for Koch Industries Inc. cost him the Chamber PAC’s support. The Kansas Chamber of Commerce is the state’s leading business lobbying group and is funded by petrochemical billionaires Charles and David Koch. In his email, Schwab recounts his experience serving on the Kansas House Committee on Energy and Environment as the panel considered a bill in 2013 that would have weakened the state’s renewable energy portfolio (RPS). According to Schwab, many businesses in areas with wind farms and wind-related jobs testified against the bill, while the only groups speaking out in support of the bill were out of state think tanks. After the committee hearing, Schwab says that Koch lobbyist Jonathan Small informed him Koch Industries was pushing the bill. “I told him if he wanted me to vote for the bill, then we needed some Kansas businesses to advocate it,” Schwab wrote in his email. “Because right now it looked as an anti-business vote.” Schwab wrote that Small told him that it was just Koch Industries supporting the move. When Schwab told Small that Koch should testify, Small said that if they did that, people would not like them. “My response was that people don’t like them anyway, so just be honest,” wrote Schwab.

Conclusion

Koch affiliates appear to believe that they can drown out Kansas citizens’ voice with AstroTurf, while using misdirection to channel anger away from their benefactors. Their gambit may work.

Governor Brownback has made his intentions clear; he does not even want to discuss the “Kansas LLC Law.”

Meanwhile, the Kansas state legislature faces a difficult choice. Do they side with Koch Industries and its proxies, or their actual constituents: the people of Kansas? The stakes could not be higher. The budget shortfall announced on April 20 can either be closed by repealing the “Kansas LLC Law”, or with a combination of painful cuts to highway funding and education and borrowing against a tobacco settlement originally earmarked for children’s programs.

The silence of the national media regarding Kansas’ curious and extraordinary predicament is deafening. Meanwhile, the political spin machine continues to run. Kansas Democrats are trying to pin the blame for Kansas’ woes on Republicans, while republicans tried blaming the Affordable Care Act.

Meanwhile, at Koch Industries...

x Koch celebrating #HighFiveDay while #KSleg copes with Kansas' massive budget shortfalls caused by Koch LLC loophole. https://t.co/2nSwx4oQes — WeAreKochs (@WeAreKochs) April 21, 2016