Kochs Tied to Job Losses by Democrats Reviving 2012 Ploy

Photographer: Scott Eells/Bloomberg

Billionaire David Koch, center, listens to a speech at the Economic Club of New York in New York, on Nov. 20, 2012. Close

Billionaire David Koch, center, listens to a speech at the Economic Club of New York in... Read More

Close
Open
Photographer: Scott Eells/Bloomberg

Billionaire David Koch, center, listens to a speech at the Economic Club of New York in New York, on Nov. 20, 2012.

The corporate raider, played by Republican presidential contender Mitt Romney in 2012, is once again the Democrats’ favorite campaign villain.

This time, the party’s broadcast ads feature at least nine Republican Senate candidates whom Democrats are trying to link to the shutdown of factories and loss of jobs overseas. When the candidate has no business record, the ads attack the billionaire Koch brothers, major Republican donors in this year’s elections.

The strategy harnesses a current of national anxiety over vanishing American middle-class jobs and displaced workers, and it’s focused on battleground states that include struggling manufacturing powerhouses like North Carolina and Michigan.

Outsourcing is second only to Medicare and Social Security as a Democratic ad theme, according to Senate Majority PAC, a group tied to the party’s Senate leader, Harry Reid of Nevada.

Yet while Democratic strategists say it’s an effective fundraising tactic, it may be a harder sell to voters. Romney was depicted by Democrats as a job cutter based on his time at private equity firm Bain Capital. Many Republican candidates this year, including Joni Ernst in Iowa and Bill Cassidy in Louisiana, lack obvious ties to companies sending jobs offshore.

And while Charles and David Koch are among the biggest underwriters of Republican campaigns in this election through their network of political spending groups, polls show that many Americans don’t even know them.

It’s “awfully difficult to explain” who the Kochs are and what their relationship is to the Republican candidates, said Peter Fenn, a Democratic consultant who advised the presidential campaigns of Barack Obama and John Kerry.

‘Politically Motivated’

The Kochs and the business record of their global array of petroleum, chemical, agriculture and mineral-services companies is a theme in Senate campaigns and three House races covering 10 states, according to Kantar Media’s Campaign Media Analysis Group, which tracks political advertising.

Rob Tappan, a Koch Industries spokesman, said the ads are “politically motivated attempts to mislead voters and smear the hard-working employees of Koch Industries.” Koch has made “tough but necessary decisions to close sites due to domestic and global market conditions,” he said.

Sending jobs overseas is a Democratic theme in Colorado, where political ads say U.S. Representative Cory Gardner, a Republican challenging Democratic Senator Mark Udall, is being funded by the Kochs.

Spending Millions

“The Koch brothers; why are they spending millions on Cory Gardner? Huh, Gardner voted for tax breaks for the super wealthy, protected tax breaks for companies shipping jobs to places like China. So, Cory Gardner looks out for them; what about us?”

While Americans for Prosperity, a Koch-founded advocacy group, isn’t required to make public all of its spending, it has aired more television ads in House and Senate races than any other pro-Republican organization -- about twice as many as the Chamber of Commerce, according to Kantar’s CMAG.

Democrats have funded an ad this year against Republican Terri Lynn Land, who’s opposing Representative Gary Peters in the Michigan Senate race. Its message: The Kochs are “bankrolling” Land. It adds that the billionaires shut down a factory in the state, “laying off 200 people.”

100,000 Employees

The strategy can be effective in states that have suffered job losses, said Fenn. “If the Kochs have any direct relevance to a state’s job losses and then they’re in there for a candidate, you make that link,” he said.

About 3,000 U.S. jobs lost at Koch Industries-owned companies over the past decade can be attributed to offshoring or competition from imports. That’s according to a Bloomberg News tally based on an analysis of Department of Labor documents provided by American Bridge 21st Century, a group allied with Democrats. It includes 342 at an Invista plant in Waynesboro, Virginia, and about 258 at Georgia-Pacific facilities in Green Bay, Wisconsin, and Halsey, Oregon.

Koch Industries, based in Wichita, Kansas, employs more than 100,000 people worldwide, including 60,000 in the U.S.

The company’s record of job losses is documented by applications from U.S. employees for Trade Adjustment Assistance, a federal job-training program that provides aid to workers who have lost jobs due to imports or job exporting.

According to American Bridge, tens of thousands more jobs were shed by Invista, a textile maker, after it was purchased by Koch Industries in 2003 and Georgia-Pacific, a pulp and paper company that Koch bought in 2005.

‘Bain Us’

Mark Holden, Koch Industries senior vice president and general counsel, said any Invista job losses reflect industrywide declines in textile manufacturing because of global market conditions. Cutbacks at Georgia-Pacific’s building-products division coincided with the housing-industry slump, he said.

Both companies, Holden said, continue to “invest significantly” in the U.S. Since 2003, Koch companies have invested $65 billion in acquisitions and other capital expenditures, mostly in the U.S., he said.

“They’re trying to Bain us,” Holden said of Reid, American Bridge and other Democratic groups funded by a coalition called the Democracy Alliance.

Other Democratic ads don’t specifically mention the Kochs, though they hint at their presence in the campaigns.

In Iowa, an ad attacking Ernst, who’s running against Democrat Bruce Braley, opens with two men in a darkened conference room sounding assured that she won’t stand in the way of exporting jobs.

Signing on Line

“Joni signed on the line; the tax breaks that thing protects are gold,” one man says to his cigar-wielding companion. “More outsourcing, China, Mexico, all the way.” The pledge not to raise taxes, to which the ad refers, was crafted by Americans for Tax Reform and signed by Ernst in 2013, according to Politifact.com, which calls the ad’s claim “a stretch” because the document doesn’t specifically cite jobs.

In Montana, a spot says Representative Steve Daines “worked for years in China helping an American company build factories there at the same time Daines’s company was firing thousands of American workers here.”

Daines, who worked in management at Procter & Gamble Co. (PG), helped the consumer-products maker expand in China in the 1990s, though the company has said he wasn’t involved in strategic corporate decisions, according to Factcheck.org.

‘Heightened’ Fears

Both parties have sought to use the issue in the Wisconsin gubernatorial race, where Scott Walker is seeking re-election against Democrat Mary Burke, formerly an executive at closely held Trek Bicycle Corp.

While the U.S. has regained 9.3 million of the jobs it lost since the February 2010 low in employment, Americans have suffered “heightened” fears about job status, pay and benefits since the recession, according to the Gallup Organization’s annual Work and Education poll.

Even so, this year saw a 10 percentage point drop in the proportion of U.S. workers worried about their benefits and wages or about being laid off, to 19 percent, according to the Aug. 7-10 survey.

“That’s still a significant number of people who think they could be laid off,” said Karlyn Bowman, a public opinion specialist at the American Enterprise Institute in Washington. “Without a dominant issue” in the campaigns, she said, “it’s possible this kind of issue will play a more important role.”

‘Same Thing’

Tad Devine, a Democratic strategist who worked on the Al Gore and Kerry presidential campaigns, said the ads attempt to highlight Americans’ economic anxiety.

“It’s the same thing we did in 1994,” said Devine, who advised then-Massachusetts Senator Ted Kennedy that year in depicting Romney as a job cutter during his unsuccessful Senate run.

“The power of those issues hasn’t changed a lot,” said Devine. Using a person or individuals like the Kochs “makes it very easy to explain to people what lies behind their concerns about economic well-being.”

To contact the reporter on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net Mark McQuillan, Laurie Asseo

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.