Know, the chief spokesman for industries, talked about kochnfluence of the brothers on american politics. He took questions at the New Hampshire institute of politics at Saint Anselm College in manchester. This is 45 minutes. Good morning. Koch brothers on american politics. On behalf of faculty, staff, and students, i would like to welcome you and thank you for joining us this morning. The institutes mission is to engage and empower citizens to engage in the civic and political community. Speaker, steve lombardo, is a graduate of saint and some college, class of 1981. He went on to achieve his esters of public policy. He serves as chief communication and marketing officer at Koch Industries, a politically active company with annual revenue of 115 billion dollars. Mr. Lombardo will be presenting a talk entitled, the ugly isitical spin, how koch driving freedom, fairness, and prosperity. We will have a brief questionandanswer period. Please wait until the Student Ambassador with the microphone reaches you before answering your question. Please welcome steve lombardo. [applause] lombardo thank you. Its a pleasure to be here with everyone. I understand donald trump will be here tomorrow. It will be maybe a similar size audience for that. In the spirit of donald trump, i will estimate this audience at 5000 people. Is everybody ok with that . Here, and it be was maybe 30 years ago are so that i walked across a stage on this campus and accepted a diploma from Saint Anselm College, much to my professors it my parents dismay, but was a special place, its great to be back, its incredible to see what has gone on here. Size, the scope, the facilities are just amazing and its really terrific to be back. I graduated with a degree in Political Science and the lessons that i learned from that and from the experience, the professors i learned from, the ethics classes, the integrity that they instilled on young people like myself really has stayed with a my entire life and career. Its been a few years since ive been back, but the amazing growth on campus and the people are as vibrant as ever. I have worn a number of hats in my life and career, and i currently serve as communications and marketing industries, and our principal shareholders are charles and david koch. Dont lie, that name will either cause you to shudder or smile depending on your political perspective. But i want to do today is talk to you about the company i work for, the people i work for, and what they stand for, what we do, and have a discussion about that. I do encourage questions afterwards and i know ive got some Friendly Faces in the crowd and perhaps some not so friendly, but i look forward to that discussion. Tv,d on what youve read on youve come in with a perception, a preconceived notion. Perhaps what youve heard over the years may or may not be accurate. What i hope to do today is kind of fill in some of that information gap that you might have an talk a little bit about what we do. To kick things off, let me ask you a question. If i ask you, do you want to live in a country that maximizes peace and stability and wellbeing for all its citizens, im pretty sure your answer would be yes. Believe inu, do you integrity, respect, responsibility and tolerance, and that they are important qualities to have, both as a person and as a nation, again, im pretty sure your answer would be yes. If i ask you what was the best way for us to promote and preserve these qualities, my guess is the answers would start to vary. Thats because there are remarkably different and competing views on how to achieve those goals. Thats what i want to talk to you a bit about this morning. For example, one vision is a vision that believes in life, liberty, and the pursuit of with minimal interference from government. Another vision leaves most decisionmaking within reasonable limits to the individual. Believesfferent vision that government must actively intervene. Its a vision that believes government usually knows better than the individual. 200 years ago, Thomas Jefferson predicted which of these two visions would have the upper hand. He said, quote, that the natural progress of things is for liberty to yield and government to gain ground. It is sad to say that that prediction pretty much has come true. Extreme oround perhaps extremely inaccurate to you . Consider a few facts about our nation. Occupational licensing is extremely burdensome. Braidingl states, hair license requires more training, time and investment that is required for than is required for emts and those same states. On average it takes 372 days to become a licensed cosmetologist, while it only takes 33 days to become an emergency medical technician. Consider also the governments threateninguber, the longstanding monopoly and stranglehold on pricing that municipal taxi systems have enjoyed for generations in various cities across the country. Consider our criminals just him our criminal Justice System which will send someone to jail for life because hes been busted for possessing and selling small amounts of pot three times, three strikes and youre out rule. Another one off the hook for the same one crime due to his or her standing in society. Consequencesllife of a topdown command and control system where politicians try to protect their supporters from competition. Its this mentality, this reluctance for government to allow people to succeed by helping others improve their lives, that fuel charles koch and the company hes been running since the 1960s. Want to go down that path, but i want to stop for you tot understand a little bit about the company i work for and what it does. Yes, were in the energy business, and that includes oil refining. But we also invest in innovate heavily in biofuels, like ethanol and biodiesels. Building and consumer products, including dixie cups and plates, paper towels and toilet paper that come from our georgiapacific plants. Another Company Makes electronic components, including the connectors in all of your iphones that make it work. You ever hear of lycra or stain master . That helps to too. Nylon and spandex and polyester are used to produce clothing, carpet, car parts, and countless other everyday products. We also produce fertilizers, we handle minerals, and develop pollution control equipment. We make pollution control devices. Wichita, kansas and employ 100,000 people globally and 60,000 in the United States. We are in 60 countries. These are good, skilled manufacturing jobs. They also include engineering, i. T. , and other jobs critical to operating a business. No matter what industry we find ourselves in, we strive to be the best among the best in our competitive set. We work to deliver the best possible products to our customers while using the fewest resources and protecting the environment. Here are a few facts about koch that you might not know if you just listen to harry reid on the floor of the senate. Koch5 pepa report ranked the best usbased Parent Company for implementing pollution invention initiatives. Koch invests heavily in Energy Efficiency and our plans in our plans to drive down consumption by hundreds of millions of dollars per year. Thats not to mention great work our companies have as they come together and earned over 1000 awards for safety, environmental excellence, community stewardship, innovation, and Customer Service since 2009. They are doing great things to really impact the world for the better. Agronomice, koch services is focused on biological Crop Solutions that increase crop yield and reduce pollution or hazardous runoff. This will help feed the estimated 9 billion people who will inhabit earth by the year 2050 by growing food on roughly the same amount of land used for farming today. There are many similar stories to this throughout koch, too many to name here, but i hope these examples begin to illustrate that theres more to being a Successful Company that just dollar signs. In fact, what makes Koch Industries different is how its run. Charles koch decided early on to look at business through a one a businessmindset, framework he began to develop in the 1960s. This philosophy has enabled koch to grow tremendously and it was a key to turning a Company Valued at 21 million in 1961 into one valued at over 100 billion in 2014. You can see here an investment of 1000 in koch in 1960 would have a book value of 5 million today, a return 27 times higher than a similar investment in the s p 500. Its this mbm framework that has moreed coke koch to do to keep pace with the dramatic changes that occurred over the past several decades. Energy prices have resigned and fallen in repeated cycles, global competition has intensified, the geopolitical map of the world has been redraw in and then redrawn again, the volume of regulation and litigation has saored, so ared, new technologies have transformed businesses, and the pace of innovation has accelerated. Marketbased management enabled koch to do it all while learning what we call good profit. I will repeat that phrase again, good profits. Its good because they benefit everyone involved because they are voluntary and cooperative. Good profit is also the title of Charles Kochs latest book. We believe good profit exists when you create value for others so that both you and they benefit. Created by market manipulation, cheating and subsidies, is the opposite. Theexample, when you go to supermarket, you have a choice of which brand of paper towel to buy. Chooseis forcing you to one over the other. Its up to the company producing the product to earn your business by providing the best option and the greatest value while using the fewest resources. These types of transactions are winwin. Value is created for the buyer and seller and this generates good profit. What we see all too often in washington today and really at all levels of government is that politicians are rigging the system to benefit a few. Profits earned that way are anything but good, they are really bad. I remember solyndra, the american taxpayer saw first hand what happens when government intervenes to pick winners. Solyndra has been politicized. That doesnt matter. When government chooses to reward this particular Solar Panel Company with hundreds of millions of dollars in government subsidies, it distorted market prices, resulting in hundreds of lions of dollars in loss, lost taxpayer money when the company ultimately failed. Politicians have created a culture that encourages businesses to seek out political favors, when those businesses should be developing products and services that succeed on their own merits. Welfare,orporate welfare for the rich, and thats why were speaking out about it. Whats outrageous about this relationship is that the largest beneficiaries of federal subsidies and tax credits are wellestablished corporations. For example, like ge and boeing, who would do perfectly fine on their own. What sense does it make to force taxpayers to provide Huge Companies like these with tens of millions of dollars in subsidies and tax credits . It really doesnt. When government imposes excessive regulations on taxes or taxes sometimes at the behest of those with the biggest lobbying presence or political clout, it becomes harder for new competitors in the market and with less competition, consumers pay more. In the end, you are left with a system of corporate welfare that stifles innovation, undermines prosperity, and destroys opportunities for the disadvantaged. Koch that is whykoch thats why Koch Companies oppose subsidies even when we partake of them. We do take subsidies and our ethanol business, for example. We do that to maintain our competitive environment. We oppose them, we lobby against them at every opportunity we can. We oppose this bad profit because we believe people should only succeed by creating value for consumers and society as a whole. Instead, our government is encouraging a system that creates corporate welfare for the rich. The not only corrupts business community, it simultaneously destroys opportunities for the disadvantaged. In other words, government is enriching the haves at the expense of the havenots. This is leading us down a path towards a twotiered society. Its a recognition of this corrupting mentality that spurred our interest in reforming the criminal Justice System and eliminating barriers to low income people starting a business or even getting a job. Let me talk about that for a moment. At one point over the last several months you might have gone huh, did i hear that right . When president obama or Valerie Jarrett or van jones praised Koch Industries. You heard it right. Charles koch likes to quote Frederick Douglass in saying, i will unite with anyone and do good and with no one to do harm. Its that view which has led us to work with the Obama Administration and the aclu and the coalition for public safety, among others, to reform the criminal Justice System, and address the issue of occupational licensing, both of which are obstacles to opportunity for the most disadvantaged. If we really want citizens to play a meaningful role in society, improve the lives of others and ultimately succeed, we cant lock them up and throw away the key and forget they exist. Released, we cannot treat them like secondclass citizens. Consider these sobering statistics. Spent 80 billion a year on incarceration and the United States, which is 3 to 4 times per capita what we spend on education. The federal prison population. As grown 870 since 1980 the United States currently imprisons 25 of the worlds prison population, even though we only make up 5 of the worlds population, making the u. S. The largest jailer in the world. A proximally 35 of federal offenders are firsttime and moret offenders, than half of the federal offenders are in prison for drug crimes. African americans, who make up 13 of the United States population, account for almost 40 of inmates. To bring about a transformation on this issue we must all set aside partisan politics and collaborate on solutions. Why for more than 10 years we have partnered with the National Association of criminal defense lawyers to bring about positive change. One of our focuses is on restoring all rights to youthful nonviolent offenders. Such as those involved in personal drug use violations. ,f x offenders cant get a job education or housing, how can we possibly expect them to lead a productive life in society . Why should we be surprised than more than half when more than half of these people released from prison are getting incarcerated within three years of their release . Congress is mobilizing around the issue as well. The senate is moving a bill of their own, both with bipartisan support. Were cautiously optimistic that 2016 will see a bill signed into law that will surely help most help the disadvantaged in society. We cant just sit around and wait for government to act. They play an important role, but Companies Like koch, individuals like yourself need to walk the walk and talk the talk. Earlier this year Koch Industries took an important step to reform its hiring practice by deciding to remove questions about prior criminal convictions from our job applications. What this means is that companies who decide to quote unquote ban the box will now wait until prospective employees are being interviewed or have tentative job offers before asking about criminal history straight this gives someone with a criminal record a better shot at employment if theyre not rejected at the very start of the process. It gives them the chance to explain what happened. We think this is the right move and we encourage other employers to follow suit. We cant stop criminal Justice Reform alone. Thats not the only thing that needs fixing if we are truly going to help the disadvantaged. Just important is helping people improve their lives, addressing how government is making it difficult to gain employment or start a business to begin with, because of burdensome occupational licensing requirements. I mentioned the example of cosmetologists and emts at the beginning, but there are hundreds of these occupations and the government is helping establish businesses keep down the up and comers. Big about taxi commissions versus uber. Think about taxi commissions versus uber. Up with their friends and government for special treatment by imposing insane fees and training requirements on these individuals trying to work hard to make a living. Governments at every level have prevented the creation of merely 3 million jobs and lowered entrepreneurship rates harming low income communities the most. Like our focus on criminal Justice Reform, were getting ready to address these issues in the coming months. Weve heard the white house echo similar sentiments in recent months, so were eager to carve out a pathway to reform on this front as well. From all that youve heard, clearly theres a lot more to koch then you may have thought when you walked in this morning. You are probably thinking, mission accomplished. Done a good job. I will bet you have another question. Steve,e you are saying, everything youre saying is well and good. Im happy you care about the environment and all doing things there. Im happy youre trying to help people get jobs and stay out of jail, but you are still trying to take over the country by spending hundreds of millions of dollars on elections. Well, its a fair question. Its an important one and i want to address it this morning. What most people dont know and i did not know until i started srking with koch is that koch coal foray into politics started as a result of dissatisfaction with president george w. Bushs policies. The outofcontrol spending, the growth in size and scope of government, and the counterproductive wars. Familyinar that the koch started was a gathering of likeminded individuals who were and are worried about the country, the trajectory of the auntry, and it wasnt partisan gathering either. It was about ideas. Its less about republicans versus democrats then its about working to promote policies that will help people improve their lives. s you saw charles koch interview recently with Anthony Mason on cbs a few weeks back, you may remember him saying that the democrats are taking us over the financial cliff and towards at 100iered society Miles Per Hour and republicans are doing it at 70 Miles Per Hour. Political involvement had less to do nothing to do with attaining Republican Party supremacy. Withxample, and more so electing those individuals more aligned with policies that will help people improve their lives, whether they are republicans or democrats or whatever. Charles koch describes himself as a Classical Liberal. I saw some Media Outlets report that charles koch considers himself a liberal, in other words a progressive in todays politics. Because of the fundamental misunderstanding of what the term actually means, a Classical Liberal is someone who wants a society that maximizes peace, stability, tolerance, and wellbeing for everyone. To do so, that requires equal treatment for everybody under the law. It requires a system that opens opportunities for everyone and does not inhibit innovation. It promotes a society and Business Environment in which people succeed by helping others improve their lives. Regarding spending specifically, we talk about that. The Donor Network in which the kochs are part of projects to spend 250 million through a super pac and other advocacy groups in 2016. It all depends on how much the contributors actually decide to give. That is still a good chunk of change but its far less than the almost 1 billion figure often thrown around in the media reports. Super pac money is often referred to as dark because you dont have to disclose the donors. Considering the heat that the kochs received for their political involvement, including 153 Death Threats alone, not all donors are willing to put their names out there, and i get that. Its also their right. 40 years ago, Justice William comesn wrote that when it to money in politics, the First Amendment considers political contributions to be the exercise of free speech. The Supreme Court has repeatedly recognized this. Just as important as the 1995 ruling in mcintyre versus ohio, Election Commission which speeched and anonymous and prevented the government from mandating the disclosure of identity in order to speak or support a cause. Some may not like it and are free to debate the pros and cons of such a system, but the Supreme Court has been steadfast in its affirmation of the role and money in politics, specifically ones right to remain anonymous. To that point, charles koch deserves a little bit of credit. He personally remains transparent in his spending. All of what he gives personally to his foundations and to the , and thats not most of what he gives. Most of what he gives goes to his foundation, which funds multiple philanthropic endeavors throughout the country, including contributions for organizations like the United Negro College fund, youth entrepreneurs, salvation army. He also finds the charles koch institute, an Educational Organization dedicated to giving others the opportunity to learn the principles that transform charless life and enabled him to accomplish more than he ever dreamed possible. In other words, he supports ideas over politics. I dont say these things to make excuses. Theres a lot of money on both ends of the political spectrum. The worst of it is the corporate money that is crippling this country. We believe the only prophet is beneficial that results from , asting value for others weve seen through government mandates, but through mutually beneficial transactions. In short, we need a principle driven framework that focuses on creating freedom, opportunity and wellbeing for everyone, especially the least worst net. This is the key to unleashing a free society and making America Everything that it can and should be. As saint anselm can play a pivotal role in this effort by ensuring that tomorrows leaders are educated and inspired by the ideas of freedom, and that science, not partisan politics, provides the intellectual foundation for change. Whether we like it or not, we have a choice to make here. Do we want control and dependency to define our nation or cooperation and competition. Would we rather have a culture of entitlement among the rich as well as the poor, or a culture of accomplishment. Im confident that if we want to expand opportunity for everyone, we must help people their dreams, achieve those dreams rather than dictate how they should live their lives. As charles koch wrote in his book, for individuals to develop and have a chance of happiness, they must be free to make their ratherices and mistakes than be forced to accept choices made by others. Of the the essence difference between north korea and south korea. Hong kong and mainland china, and in the past, east germany versus west, and countless other examples. History has repeatedly shown that protecting individual rights and promoting Economic Freedom does more than create a higher standard of living. Enjoysocieties also cleaner environments, hire literacy rates, and Less Government and business corruption. That is why i believe a free, fair, and Prosperous Society is worth pursuing. I believe it is a future worth fighting for. Its up to you to decide if you want to do something about it. Thats all i have and im happy to take questions, as many as we have time for. Thank you. [applause] yes. Whats the difference between the Koch Brothers and george soros . Way . Ombardo in what just from my perspective, i malignedoch brothers and i see george soros as a media, i in the dont. As you look at them and what they represent, what is the difference between the two of them on what they may be seeking . Maybe you cant speak to what george soros is seeking, but im. Urious mr. Lombardo if youre talking about how they each use money and politics, i dont believe there is much of a difference going on there. Theres a lot of organizations on the left, the democracy which has dozens and dozens of groups that support a progressive agenda, and thats a lot of quote unquote dark money, and thats been going on for years and that is fine. They have a right to do that, george soros has a right to do that. Its interesting that when other organizations that dont match ie ideology start doing that, think some people take exception to that, and you cant just have one standard for one side and one for the other. I am a democrat, but not a progressive. Some of us still exist. A lot of us know that the wasronmental movement coopted by a lot of marxists. They use the environmental moment to get their agenda passed. You probably are in the trenches. Im wondering if you can give me some specific example of where thats happened where you that runsing energy against this coalition of marxism and environmentalism. Mr. Lombardo im going to take a tax here that i think the environmental movement, talk about the Informal Movement in general in general has been good in some respects. When i was a kid some people were throwing trash out the window. Thats gone now. People respect the environment and treated as something that you may need to take care of. Wantke industries koch to make the best products using the fewest resources possible, so conservation is a huge part of the entire company across the globe and what we do. When you manufacture things, stuff goes up in the air. We are trying to reduce that every year as much as possible. All the things we use every day requires manufacturing, virtually everything. There are ways you can do that and do it better that is less harmful to the environment, and that is what koch is trying to do. We produce pollution control devices that other companies are using. We are proud of our record there. This isnt about being against the environmental movement. When you start harming some peoples lives, then im not sure we are making some of the right decisions. Interview,ent charles koch claimed that politicians are beholden to corporations and cronyism to get reelected and deemed that welfare for the wealthy. The koch network has poured millions of dollars into our political system. Do the kochs agreed that the candidates are beholden to them . Mr. Lombardo the last part of your question was s duty koch do the koch agree that the candidates are beholden to them . Mr. Lombardo thats a great question. Im going to answer it the way charles recently has answered that, and that is, beholden is the wrong word in that charles is frustrated right now, to be honest with you, very frustrated that a lot of the candidates, the network that hes a part of along with a lot of other donors, hundreds of donors, thousands, have not done a lot things they said they were going to do, ok . Hes quite frankly very frustrated and we have not at this point in time supporting any president ial candidate, mr. Koch believes is worried right now that none of them are going to do what they say theyre going to do. The folks we supported in 2014, frankly, a lot of them have not lived up to the things that i have been talking about in terms of fighting corporate welfare, in terms of supporting criminal Justice Reform among other things. Beholden everybody who votes for someone or contributes money you are hoping that they are going to do what they said they were going to do. If you call it beholden, you can call it a holden, but to me its i give five dollars to a candidate because they said they were going to do something, and i go wow, i agree with that, i want them to do that, and giving them five dollars. You can call that beholden, or 500 million dollars, whatever it might be we are expecting them to do the things they say they were going to do, and frankly, a lot of them were. Brothers1997, the koch have poured close to 80 million into Climate Change denial groups. Climate change really threatens everyone on this planet that predominately poor communities of color, which it seems you are suggesting koch cares as deeply about and if they really do care deeply about these communities, how does Climate Change denial to protect kochs bottom line drive fairness and prosperity for these communities . Mr. Lombardo did question. Good question. The Climate Change issue is a complex one. Charles has said recently in a lot of interviews that the climate is changing, that the data that has been shown over the last 100 years or so is that the temperature has increased by thatdegree centigrade, and carbon is up and there is probably some correlation. Etween the two what concerns us is the politicize asian in some of these respects. You talk about the most is advantaged in society, some of the solutions being offered are going to harm the very people that we purport to want to help, especially when you look at the disadvantage throughout the globe and in other parts of. Hird world countries we think its an important issue. The environment is important to us. But the solutions that people talk about, we need to think about the actual people. [inaudible] yes . On local television, im seeing advertisements from some group with an innocuous subsidies andanol maybe need to moderate or end the mandates for them. What is the koch position on that issue . We oppose all ethanol subsidies. We are in ethanol manufacturer. An ethanol manufacturer. We think its a great product and it should stand on its own. The subsidies and these sorts of things really disrupt the markets, these products should stand on their own if there economically viable, if they provide value for people, then theyre going to work and theyre going to survive and they will thrive. Any alternative out there, we support all forms of energy, these all forms of energy have to stand on their own, and they have to provide economic value, they have to provide value to people in their everyday lives. We oppose ethanol subsidies. Business. In the one difference between george soros and the Koch Brothers is that the conservatives in this country have not defamed george soros from the United States senate floor as harry reid has. That gets to the question that i want to ask. Im very impressed with the industries that the Koch Brothers run, but i think that the one issue that you failed to address is the news Media Entertainment stranglehold in this country, and i wonder why with all their money the Koch Brothers dont buy abc, cbs, or nbc. Ask them. If i had one to choose, i would go with espn. Listen, i think we can spend hours and hours talking about quote unquote media bias in the country. Im not sure quite frankly thats the biggest problem we in terms of being maligned on the floor of the senate, that is senator reids prerogative. Hes protected by the u. S. Constitution to do that. He knows hes protected when hes on the floor of the senate and he can say whatever he wants. I think a lot of people in this country just wish that he would try and help people improve their lives rather than going after u. S. Citizens. My name is sheila. I have a quick question about the kochs clinical involvement. While the kochs claimed they did not enter the political sphere until the bush administration, david coke did run for vice resident on the libertarian ticket in 1980 and koch ofustries spent hundreds thousands on political contributions during each president ial cycle since the 1990s. I was wondering why the kochs are trying to hide their long involvement in politics, and if you could answer that for me. Mr. Lombardo i would argue with that these is that anyone is trying to hide their political involvement. Wasughout the years koch involved in politics through their contributions. David koch did run for Vice President in 1980 on the libertarian ticket, and so what i was referring to was that the seminars that started by charles and david with a group of donors actually started in 2003, but both of those facts are correct. Network has made Climate Change denial litmus tests for supporting political candidates. If its truly sincere about criminal Justice Reform, will to only network pledged support procriminal Justice Reform candidates . Guess is the i question that if we support a political candidate who has a changent view on climate that that makes that support a Climate Change denier. Hypothesis, wehe have supported a lot of different candidates over the years and we will continue to do that to some extent, although as i said, i think theres some level of frustration of people getting things done. The support that we will do moving forward, is a lot going to depend on their positions, political candidates positions on the issues ive laid out today. And have very little to do with their support on some of these other issues. We have time for one more. s positionthe koch on means testing for certain government benefits . Mr. Lombardo we dont have one right now on means testing. That is not something that weve talked about. Its clearly something that i think candidates are going to start talking, i hope the political candidates will get into that. Some of the substantive policy issues, this is a fun election cycle and i think people are hope itstertained, i some point it starts to migrate to important issues like that, but we dont have a position right now. Thank you very much. I appreciate it. [applause] all campaign long, cspan takes you on the road to the white house. Unfettered access to the candidates at town hall meetings, news conferences, rallies, and speeches