Triad Management

<p>A subsequent <a href="http://www.gpo.gov/fdsys/pkg/CRPT-105srpt167/pdf/CRPT-105srpt167-pt5.pdf" target="blank">investigation</a> <a href="http://www.publicintegrity.org/2004/07/15/5967/kochs-low-profile-belies-political-power" target="blank">found</a> that more than half of the Triad money came from an organization funded by David and Charles Koch, and that the money was spent disproportionately in areas where Koch Industries owned refineries and pipelines. The investigation also <a href="http://www.publicintegrity.org/2004/07/15/5967/kochs-low-profile-belies-political-power" target="_blank">found</a> that Koch Industries provided direct corporate money for the ads, an apparent violation of campaign finance law at the time.</p>

<p>

At the time of the Senate investigation, Koch Industries had been building up its lobbying muscle to <a href="http://thinkprogress.org/politics/2010/09/21/119973/koch-mike-pompeo/" target="_blank">combat charges</a> relating to over 300 oil spills caused by the corporation in the mid nineties.</p>

<p>

Just as <em>The Wall Street Journal</em> reported on many Triad-related documents, Koch received help from its allies in DC. In October of 1997, Senator Fred Thompson (R-TN)—then, the chair of the Senate Government Affairs Committee—moved to cancel hearings into the investigation.

Today, the dynamics are different, but the core issue is the same. A Koch-group was caught violating the law, and there’s a chance to uncover the truth about one of the biggest secret money efforts in American history. It’s likely that Koch and these billionaires will do anything it takes to prevent this current scandal from growing.  lee fang</p>

</div>

<p>

===</p>

<p>

<a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,Inc">http://www.sourcewatch.org/index.php?title=Triad_Management_Services,Inc</a><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.">.</a></p>

<p>

<b>Triad Management Services, Inc.</b> (D/B/A Triad Management Services) was "a for-profit corporation owned by <a href="http://www.sourcewatch.org/index.php?title=Republican_Party" title="Republican Party" class="mw-redirect">Republican</a> fundraiser <a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick" title="Carolyn Malenick">Carolyn Malenick</a>, [who] incorporated Triad in the spring of 1996 but appears to have operated the business as an unincorporated entity since at least early 1995," the Senate Committee on Governmental Affairs reported.<sup id="cite_ref-0" class="reference"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#cite_note-0" title="">[1]</a></sup></p>

<p>

"Triad holds itself out as a consulting business that provides advice to conservative donors about how to maximize their political contributions. Triad oversaw advertising in 26 campaigns for the House of Representatives and three Senate races. Triad's spending may have affected the outcome of some elections [in 1996]. Because Triad is an unusual corporation directly involved in federal campaigns, the [Senate Committee on Government Affairs] investigated its work. Despite the refusal by Triad and its lawyers to comply fully with the Committee's subpoenas for both documents and testimony, the Minority developed substantial evidence of wrongdoing by Triad."<sup id="cite_ref-1" class="reference"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#cite_note-1" title="">[2]</a></sup>

The Committee concluded that evidence suggested the following:<sup id="cite_ref-2" class="reference"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#cite_note-2" title="">[3]</a></sup></p>

<ol>

<li>"Triad exists for the sole purpose of influencing federal elections. Triad is not a political consulting business: it issues no invoices, charges no fees, and makes noprofit. It is a corporate shell funded by a few wealthy conservative Republican activists."</li>

<li>"Triad used a variety of improper and possibly illegal tactics to help Republican candidates win election in 1996 including ... free services to Republican campaigns in possible violation of the federal prohibition against direct corporate contributions to candidates. These services included raising funds for candidates, providing consulting advice on fundraising and political strategy, and providing staff to assist candidates ...</li>

<li>"Triad was involved in a scheme to direct funds from supporters who could not legally give more money directly to candidates, through <a href="http://www.sourcewatch.org/index.php?title=Political_action_committee" title="Political action committee">political action committees</a> ('PACs'), and back to candidates."</li>

<li>"Triad operated two non-profit organizations -- <a href="http://www.sourcewatch.org/index.php?title=Citizens_for_Reform&action=edit&redlink=1" class="new" title="Citizens for Reform (page does not exist)">Citizens for Reform</a> and <a href="http://www.sourcewatch.org/index.php?title=Citizens_for_the_Republic_Education_Fund" title="Citizens for the Republic Education Fund">Citizens for the Republic Education Fund</a> [i.e., Citizens for the Republic] -- as allegedly nonpartisan social welfare organizations under <a href="http://www.sourcewatch.org/index.php?title=501%28c%29%284%29" title="501(c)(4)">501(c)(4)</a> of the tax code and used these organizations to broadcast over $3 million in televised ads on behalf of Republican candidates in 29 House and Senate races. ... Triad. Neither organization has a staff or an office, and both are controlled by Triad."</li>

</ol>

<tr>

<td>

<h2>Contents</h2>

<ul>

<li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#Resources_and_articles"><span class="tocnumber">1</span> <span class="toctext">Resources and articles</span></a>

<ul>

<li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#References"><span class="tocnumber">1.1</span> <span class="toctext">References</span></a></li>

<li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#Related_SourceWatch_articles"><span class="tocnumber">1.2</span> <span class="toctext">Related SourceWatch articles</span></a></li>

<li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#External_articles"><span class="tocnumber">1.3</span> <span class="toctext">External articles</span></a></li>

</ul>

</li>

</ul>

</td>

</tr>

</tbody></table>

<h2><span class="mw-headline">Resources and articles</span></h2>

<h3><span class="mw-headline">References</span></h3>

<li id="cite_note-0"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#cite_ref-0" title="">↑</a> <a href="http://www.senate.gov/%7Egov_affairs/12chap.pdf" class="external text" title="http://www.senate.gov/_{gov_affairs/12chap.pdf}" rel="nofollow">"Role of Nonprofit Groups in the 1996 Elections," Part 2, Independent Groups: Chapter 12: "Triad,"</a> Senate Committee on Governmental Affairs, undated.</li>

<li id="cite_note-1"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#cite_ref-1" title="">↑</a> <a href="http://www.senate.gov/%7Egov_affairs/12chap.pdf" class="external text" title="http://www.senate.gov/_{gov_affairs/12chap.pdf}" rel="nofollow">"Role of Nonprofit Groups in the 1996 Elections," Part 2, Independent Groups: Chapter 12: "Triad,"</a> Senate Committee on Governmental Affairs, undated.</li>

<li id="cite_note-2"><a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc.#cite_ref-2" title="">↑</a> <a href="http://www.senate.gov/%7Egov_affairs/12chap.pdf" class="external text" title="http://www.senate.gov/_{gov_affairs/12chap.pdf}" rel="nofollow">"Role of Nonprofit Groups in the 1996 Elections," Part 2, Independent Groups: Chapter 12: "Triad,"</a> Senate Committee on Governmental Affairs, undated.</li>

</ol>

<h3><span class="mw-headline">Related SourceWatch articles</span></h3>

<ul>

<li><a href="http://www.sourcewatch.org/index.php?title=Citizens_United" title="Citizens United">Citizens United</a></li>

</ul>

<h3><span class="mw-headline">External articles</span></h3>

<ul>

<li>Justin Pritchard, <a href="http://www.washingtonpost.com/wp-srv/politics/special/campfin/stories/cf070397ls.htm" class="external text" title="http://www.washingtonpost.com/wp-srv/politics/special/campfin/stories/cf070397ls.htm" rel="nofollow">"PAC Helps Conservative Donors Spread Campaign Cash,"</a> LEGI-SLATE News Service (<i>Washington Post</i>), July 3, 1997.</li>

<li><a href="http://www.nationalreview.com/14july97/week.html" class="external text" title="http://www.nationalreview.com/14july97/week.html" rel="nofollow"><i>The National Review</i></a>, Week of July 14, 1997.</li>

<li><a href="http://www.rainbowtel.net/%7Ebryants/abbmodep_all_scans.htm" class="external text" title="http://www.rainbowtel.net/_{bryants/abbmodep_all_scans.htm}" rel="nofollow">Transcript: "In The Matter Of: Senate Committee on Governmental Affairs Special Investigation.</a> Deposition of Meredith O'Rourke, September 3, 1997: "The 174-page Meredith O'Rourke deposition explores <a href="http://www.sourcewatch.org/index.php?title=Sam_Brownback" title="Sam Brownback">Sam Brownback</a>'s relationship with Triad Management Services, a consulting firm headed by Carolyn Malenick. It is now a declassified public document, available in hardcopy by request from the Senate Committee on Governmental Affairs."</li>

<li><a href="http://www.cnn.com/ALLPOLITICS/1998/02/16/cq/campaign.finance.html" class="external text" title="http://www.cnn.com/ALLPOLITICS/1998/02/16/cq/campaign.finance.html" rel="nofollow">"Probe Reports Decry Abuses, But Overhaul Still Unlikely. Drafts depict system awash in scandal, but support on Hill for legislative remedies remains weak,"</a> CNN, February 16, 1998.</li>

<li>James Youngclaus, <a href="http://www.opensecrets.org/newsletter/ce52/52text/01legal.htm" class="external text" title="http://www.opensecrets.org/newsletter/ce52/52text/01legal.htm" rel="nofollow">"All Politics is Legal. Soft Money, Issue Ads, Non-Profits May Nationalize ’98 Local Elections,"</a> <i>Open Secrets</i>, March 15, 1998.</li>

<li><a href="http://www.fec.gov/law/litigation/mem_order_02CV1237.pdf" class="external text" title="http://www.fec.gov/law/litigation/mem_order_02CV1237.pdf" rel="nofollow">Notice of Electronic Filing,</a> Carolyn Malenick D/B/A Triad Management Services, U.S. District Court, District of Columbia, March 30, 2004.</li>

<li><a href="http://www.commongroundcommonsense.org/forums/lofiversion/index.php/t12303.html" class="external text" title="http://www.commongroundcommonsense.org/forums/lofiversion/index.php/t12303.html" rel="nofollow">"Triad and the Koch Industry Connection,"</a> <i>Common Ground Common Sense</i> Forum, December 29, 2004.</li>

<li><a href="http://www.fec.gov/law/litigation/final_judgment_and_order_02CV1237.pdf" class="external text" title="http://www.fec.gov/law/litigation/final_judgment_and_order_02CV1237.pdf" rel="nofollow">Final Judgement and Order: Federal Election Commission v. Malenick et al.,</a> Carolyn Malenick D/B/A Triad Management Services, U.S. District Court, District of Columbia, July 26, 2005.</li>

<li><a href="http://mediamatters.org/items/200706190012" class="external text" title="http://mediamatters.org/items/200706190012" rel="nofollow">"<i>Newsweek</i> touted Thompson's</a> 'willing[ness] to buck his party' in committee investigation, but not his later reported capitulation," <a href="http://www.sourcewatch.org/index.php?title=Media_Matters_for_America" title="Media Matters for America">Media Matters for America</a>, June 19, 2007. re <a href="http://www.sourcewatch.org/index.php?title=Fred_Thompson" title="Fred Thompson">Fred Thompson</a></li>

</ul>

<div id="mw-normal-catlinks"><a href="http://www.sourcewatch.org/index.php?title=Special:Categories" title="Special:Categories">Categories</a>: <span dir="ltr"><a href="http://www.sourcewatch.org/index.php?title=Category:Politics%28U.S.%29" title="Category:Politics (U.S.)">Politics (U.S.)</a></span> | <span dir="ltr"><a href="http://www.sourcewatch.org/index.php?title=Category:Elections%28U.S.%29" title="Category:Elections (U.S.)">Elections (U.S.)</a></span> | <span dir="ltr"><a href="http://www.sourcewatch.org/index.php?title=Category:Political_dirty_tricks" title="Category:Political dirty tricks">Political dirty tricks</a></span></div>

</div>

<p>

<b>Carolyn S. Malenick</b> is the sole owner of <a href="http://www.sourcewatch.org/index.php?title=Triad_Management_Services,_Inc." title="Triad Management Services, Inc.">Triad Management Services, Inc.</a> "According to Malenick’s public statements, she personally conceived the idea for Triad and started the business from her home, most likely in 1995. The stated purpose of Triad is to provide advice to maximize the effectiveness of contributions from <a href="http://www.sourcewatch.org/index.php?title=Conservative&action=edit&redlink=1" class="new" title="Conservative (page does not exist)">conservatives</a>."<sup id="cite_ref-0" class="reference"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#cite_note-0" title="">[1]</a></sup></p>

<hr />

<tr>

<td>

<h2>Contents</h2>

<ul>

<li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#Profiles"><span class="tocnumber">1</span> <span class="toctext">Profiles</span></a></li>

<li class="toclevel-1"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#Resources_and_articles"><span class="tocnumber">2</span> <span class="toctext">Resources and articles</span></a>

<ul>

<li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#References"><span class="tocnumber">2.1</span> <span class="toctext">References</span></a></li>

<li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#Resources"><span class="tocnumber">2.2</span> <span class="toctext">Resources</span></a></li>

<li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#Profiles_2"><span class="tocnumber">2.3</span> <span class="toctext">Profiles</span></a></li>

<li class="toclevel-2"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#External_articles"><span class="tocnumber">2.4</span> <span class="toctext">External articles</span></a></li>

</ul>

</li>

</ul>

</td>

</tr>

</tbody></table>

<h2><span class="mw-headline">Profiles</span></h2>

<p>Malenick is "a graduate of <a href="http://www.sourcewatch.org/index.php?title=Jerry_Falwell" title="Jerry Falwell"><span style=" background-color: #FFF200;">Jerry Falwell</span></a><span style=" background-color: #FFF200;">'s </span><a href="http://www.sourcewatch.org/index.php?title=Liberty_University" title="Liberty University"><span style=" background-color: #FFF200;">Liberty University</span></a><span style=" background-color: #FFF200;">, </span>and press reports have indicated that she has remained personally close to Falwell and his family. Malenick appears to have spent her entire professional career in conservative <a href="http://www.sourcewatch.org/index.php?title=Republican_Party" title="Republican Party" class="mw-redirect">Republican</a> politics, primarily in the fundraising arena. Malenick initially worked for the 'conservative direct mail king' <a href="http://www.sourcewatch.org/index.php?title=Richard_Viguerie" title="Richard Viguerie">Richard Viguerie</a>. Subsequently, she raised funds for <a href="http://www.sourcewatch.org/index.php?title=Oliver_North" title="Oliver North">Oliver North</a>'s <a href="http://www.sourcewatch.org/index.php?title=Freedom_Alliance" title="Freedom Alliance">Freedom Alliance</a>, a nonprofit organization founded by North in the wake of the <a href="http://www.sourcewatch.org/index.php?title=Iran-Contra" title="Iran-Contra" class="mw-redirect">Iran-Contra</a> scandal that has been criticized for raising millions of dollars in undisclosed funding for North's political activities. Malenick went on to raise funds for North’s losing 1994 bid for <a href="http://www.sourcewatch.org/index.php?title=U.S._Senate" title="U.S. Senate">U.S. Senate</a>. Malenick is also a member of the <a href="http://www.sourcewatch.org/index.php?title=Council_for_National_Policy" title="Council for National Policy">Council for National Policy</a>, an organization of ultra-conservative political activists who work to further their agenda within the Republican Party."<sup id="cite_ref-1" class="reference"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#cite_note-1" title="">[2]</a></sup>

In 2002, Malenick was president of <a href="http://www.sourcewatch.org/index.php?title=National_Capital_Strategies,_Inc.&action=edit&redlink=1" class="new" title="National Capital Strategies, Inc. (page does not exist)">National Capital Strategies, Inc.</a> (2002)<sup id="cite_ref-2" class="reference"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#cite_note-2" title="">[3]</a></sup>

<h2><span class="mw-headline">Resources and articles</span></h2>

<h3><span class="mw-headline">References</span></h3>

<li id="cite_note-0"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#cite_ref-0" title="">↑</a> <a href="http://www.senate.gov/%7Egov_affairs/12chap.pdf" class="external text" title="http://www.senate.gov/_{gov_affairs/12chap.pdf}" rel="nofollow">"Role of Nonprofit Groups in the 1996 Elections," Part 2, Independent Groups: Chapter 12: "Triad,"</a> Senate Committee on Governmental Affairs, undated.</li>

<li id="cite_note-1"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#cite_ref-1" title="">↑</a> <a href="http://www.senate.gov/%7Egov_affairs/12chap.pdf" class="external text" title="http://www.senate.gov/_{gov_affairs/12chap.pdf}" rel="nofollow">"Role of Nonprofit Groups in the 1996 Elections," Part 2, Independent Groups: Chapter 12: "Triad,"</a> Senate Committee on Governmental Affairs, undated.</li>

<li id="cite_note-2"><a href="http://www.sourcewatch.org/index.php?title=Carolyn_Malenick#cite_ref-2" title="">↑</a> <a href="http://www.iidb.org/vbb/archive/index.php/t-40758.html" class="external text" title="http://www.iidb.org/vbb/archive/index.php/t-40758.html" rel="nofollow">More on Newdow v. U.S. Congress,"</a> IIDB.org, December 2002.</li>

</ol>

<h3><span class="mw-headline">Resources</span></h3>

<ul>

<li>C. Lewis, "The Buying of the President 2000."</li>

</ul>

<h3><span class="mw-headline">Profiles</span></h3>

<ul>

<li><a href="http://www.seekgod.ca/cnp.m.htm#malenick" class="external text" title="http://www.seekgod.ca/cnp.m.htm#malenick" rel="nofollow">Carolyn Malenick</a>, Council for National Policy profile, <i>SeekGod</i> (Canada).</li>

</ul>

<h3><span class="mw-headline">External articles</span></h3>

<ul>

<li>Ruth Marcus, <a href="http://www.washingtonpost.com/wp-srv/politics/special/campfin/stories/cf121297.htm" class="external text" title="http://www.washingtonpost.com/wp-srv/politics/special/campfin/stories/cf121297.htm" rel="nofollow">"Funds Consultant Helped Senator Behind Scenes,"</a> <i>Washington Post</i>, December 12, 1997.</li>

<li><a href="http://archives.cnn.com/2002/LAW/08/10/pledge.of.allegiance/" class="external text" title="http://archives.cnn.com/2002/LAW/08/10/pledge.of.allegiance/" rel="nofollow">"'Under God' opponent claims personal affront,"</a> CNN, August 11, 2002. Malenick was spokeswoman for the <a href="http://www.sourcewatch.org/index.php?title=Pledge_Defense_Fund&action=edit&redlink=1" class="new" title="Pledge Defense Fund (page does not exist)">Pledge Defense Fund</a>/"legal defense fund".</li>

<li>Paul Kiel, <a href="http://www.tpmmuckraker.com/archives/000066.php" class="external text" title="http://www.tpmmuckraker.com/archives/000066.php" rel="nofollow">"Ronnie Earle Heads Back into the Past,"</a> <i>TPMmuckraker</i>, March 8, 2006.</li>

</ul>

<p>

-===</p>

<p>

 </p>

<p>

nyer</p>

<p>

In 1997, another Senate investigation began looking into what a minority report called “an audacious plan to pour millions of dollars in contributions into Republican campaigns nationwide without disclosing the amount or source,” in order to evade campaign-finance laws. A shell corporation, Triad Management, had paid more than three million dollars for attack ads in twenty-six House races and three Senate races. More than half of the advertising money came from an obscure nonprofit group, the Economic Education Trust. The Senate committee’s minority report suggested that “the trust was financed in whole or in part by Charles and David Koch of Wichita, Kansas.” The brothers were suspected of having secretly paid for the attack ads, most of which aired in states where Koch Industries did business. In Kansas, where Triad Management was especially active, the funds may have played a decisive role in four of six federal races. The Kochs, when asked by reporters if they had given the money, refused to comment. In 1998, however, the <i>Wall Street Journal</i> confirmed that a consultant on the Kochs’ payroll had been involved in the scheme. Charles Lewis, of the Center for Public Integrity, described the scandal as “historic. Triad was the first time a major corporation used a cutout”—a front operation—“in a threatening way. Koch Industries was the poster child of a company run amok.”</p>

Read more <a href="http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer?printable=true#ixzz0xjmxNBrV" style=" color: rgb(0, 51, 153);">http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer?printable=true#ixzz0xjmxNBrV</a>

</div>

<p> 

</p>

<p>

Palast

whole book online</p>

<p>

<a href="http://www.ethosworld.com/library/Greg-Palast-The-Best-Democracy-Money-Can-Buy-%282003%29.pdf" style=" text-decoration: none; font-weight: bold; color: rgb(0, 51, 153); outline: none;">http://www.ethosworld.com/library/Greg-Palast-The-Best-Democracy-Money-Can-Buy-%282003%29.pdf</a></p>

<p>

But if Starr was lost in a nutty cavort with Clinton's slick willy, the Senate Governmental

Affairs Committee was looking into the serious stuff: six-figure payments to Hillary's

former law partners by the Riady family of Indonesia and Entergy International of Little

Rock, Arkansas, Hillary's former client. (We'll get to those guys in the next chapter.)

Then, in 1998, just as the Republicans on the Senate committee were closing in on the

evidence that could, if borne out, pull down the Clintons . . . the committee closed its

investigation.

Why? The answer is:<span class="Apple-converted-space"> </span><b>T<span style=" color: #ED1C24;">riad.</span></b>

Clinton was saved from the truly threatening inquiry about his Indonesian money, an

impeachable offense, by two of America's wealthiest oil and gas barons, Charles and

David Koch. They had not set out to rescue Clinton. The Koch brothers despise Clinton

with a passion.

Koch Industries is the biggest company you've never heard of-and their owners like it

that way. Estimates of its annual turnover, at $35 billion a year, make it bigger than

Microsoft or Boeing Aircraft. We can only estimate because Koch (pronounced "coke,"

like the cola) is a private corporation, the second largest in the United States. David and

Charles Koch, who own nearly all of it, are reported to have a combined net worth of $4

billion. If you've never head of the Kochs, the politicians have. Among the Big Oil that

funded the Republican party during George W. Bush's run for the White House, Koch

Industries pumped in more than any corporation except Enron and Exxon-Mobil.

The Koch clan's fortune originated in Russia, where daddy Fred Koch built oil refineries

for Stalin's regime. In 1946, Koch returned from the Soviet Union to Wichita, Kansas,

and founded the ultra-right John Birch Society. David and Charles have rejected their

father's politics, preferring to back ultra-ultra rightwing causes. In 1980, as a Libertarian

Party candidate, David campaigned against Ronald Reagan.

Secrecy is the Kochs' trademark. From headquarters in Wichita, they operate the nation's

only private, secure telephone network outside the CIA to control their core business as

America's largest purchaser of oil and gas from small farmers and Indian reservations.

As owners of a private company, the Kochs answer to no one about their expenditures.

No little old ladies query them at stockholder meetings. Unconstrained, the Koch brothers

can indulge their singular dream. Where other U.S. corporations throw a few million

dollars into the political arena in the hopes of obtaining a few special favors, the Kochs

have spent close to $100 million to change the entire tone of political discourse in

America.

And they succeeded. With $21 million spent to establish the Cato Institute in

Washington, OC, $30 million to start the Citizens for a Sound Economy and tens of

millions more for think tanks, political action committees and the like, they constructed a

nonpareil policy apparatus that reinvigorated the antigovernment movement with a new

intellectual legitimacy backed by fearsome political clout.<span class="Apple-converted-space"> </span><b>From Cato and the Koch

machine came Newt Gingrich's "Contract for America" and the funds to put Gingrich in

power in the 1994 elections.</b>

Not that the Kochs don't call in special favors. In 1989, the U.S. Senate Special

Committee on Investigations concluded that "Koch Oil, a subsidiary of Koch Industries,

is the most dramatic example of an oil company stealing by deliberate mismeasurement

and fraudulent reporting." FBI agents had watched Koch Industries truckers appearing to

take, but not fully paying for, oil from small gathering tanks on Indian reservations. An

<b>expert for Indian tribes calculates that $1.5 billion of Koch Industries' wealth comes from

pilfered oil. Koch denies it.</b>

Action against Koch for stealing from the Indians stalled until 1995 when an FBI agent

on the Senate investigation, Richard Elroy, charged in a letter to the Justice Department

that criminal prosecution had been declined "for political reasons" during the first Bush

presidency. So Clinton's Justice Department followed up on the FBI's evidence,

concentrating on environmental crimes, and filed civil lawsuits charging Koch Industries

with 315 willful acts of pollution. Clinton also impaneled two grand juries to consider

criminal indictments.

<b>Newt Gingrich raced to the Kochs' rescue. If one clause of Newt Gingrich's "Contract for

America," the Regulatory Reform Act, had become law, the Justice Department case

against the Kochs-which sought big money and portended jail time-would have been

doomed. Proposed changes in law included eliminating some environmental controls and

decriminalizing violations.</b>

<b>Passage of the Koch-saving legislation depended upon the Republicans holding their

majority in Congress. In the 1996 election cycle, Republican control was in jeopardy.

Crucial to their ultimate narrow victory in that campaign was a multimillion dollar

television advertising blitz in key districts paid for by the Coalition for Our Children's

Future, a registered charity. The action was extraordinary for a child protection society-as

was their choice of candidates to assist. Only weeks before CCF purchased the adverts,

everyone of the incumbent congressmen they helped, all Republicans, voted to abolish

food stamps for children of the poor.</b>

The politicians supported by the "Children's" fund had something in common besides an

antipathy to free meals for youngsters. Their districts contained Koch operations.

It may surprise you to learn that u.s. law prohibits corporate payments in aid of political

campaigns. Officially, donations must come through individuals or political action

committees.

Investigators with the Senate Governmental Affairs Committee located bank records

linking the children's "charity" and other political front groups to<span class="Apple-converted-space"> </span><b>Triad Management,<span class="Apple-converted-space"> </span></b>an

operation funded by the Kochs. Democratic senators threatened to subpoena Koch

Industries' chiefs to question whether they funded Triad and manipulated its related

groups. Democrats could drag the tycoons before the same public tribunal on campaign

finances skewering Clinton.

A key Senate insider, who must remain anonymous, says Republicans then offered a

straightforward trade: "A truce--you don't do Triad, we don't do Clinton." Other sources

inside the committee confirm that the Republicans, under the direction of Senators Trent

Lott and Don Nickles, rather than risk exposure of the Kochs' web of mega-dollar

funding operations, agreed to shut down the money probe and let Clinton off the hook.

The true, unreported reason for the collapse of the inquiry most threatening to Clinton-the

Indonesia money chain, which could have knocked him out of office-reveals the ultimate

measure of Koch influence: that Republicans sacrificed their case against the president to

keep their secret benefactors under wraps.

Both parties were content with their mutual protection agree ment. Each party's

billionaires were safe. With this sub-rosa deal in place, important fund-raising allegations

became off-limits. And that's how we ended up with Republican investigators with

nothing left to do--except rummage through Monica Lewinsky's dirty laundry and sniff at

the president's zipper.

What Every Billionaire Wants

I discovered. the billionaire-donor deal not because I was on some kind of hunt for the

goods on Clinton or on Newt Gingrich, but because, in my old day job as an investigator

and government adviser, I'd been tracking the Koch brothers, the Riadys and their

partner, Entergy International of Little Rock (we'll get to these guys in the next chapter).

That Entergy and Koch, both master deal makers, popped up in the middle of a Senate

inquiry that suddenly stopped dead gave off the smell of a bit too much bipartisan

cooperation.

The Kochs, by the way, are a real piece of work. These are the owners of the company

the FBI agent says skimmed oil out of the gathering tanks of poor Indians in Oklahoma.

In 1999, Koch Industries paid $25 million to settle claims after a civil jury found the

company liable for underpayments. Maybe the top guys at Koch Industries, the billionaire

brothers themselves, didn't know about the skimming game; maybe there was a good

explanation. But not according to Roger Williams, former executive in their oil-gathering

operation.

Williams kept records of the filching-a couple of dollars' worth of oil here, a couple

there-hardly the kind of petty cash that billionaires would seem to bother with. But

Williams (on tape I've obtained) was asked how Charles Koch reacted to a paper that

"showed how much 'overage' they had and how many dollars." Of billionaire Koch and

another executive with him at the time, Williams said: "They would just giggle and nudge

each other, you know, it's kind of a fun time."

Williams, who did not know he was being recorded, could have repeated Koch's words

wrongly, or heard Koch wrong. But what Williams reportedly heard was a phrase that

explains the success of some of America's wealthiest corporate chiefs. Williams was

surprised at the billionaire's concern over these small-change scams, but Williams said

<b>Charles Koch told him, "I want my fair share and that's all of</b></p>

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Triad Management

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