There were two ways for a lobbyist like Bingel to get the attention of a politician. The first was to work for that politician and remain close to their staffers after leaving, as Bingel had done. The second way was to raise money for the politician. This is why lobbyists frequently host fund-raising lunches, banquet dinners, and other events. The issue of fund-raising had to be treated delicately. Bribery is illegal in the United States. If a lobbyist offered money to a legislator in return for a vote, then both people could end up in prison.
To compensate for this fact, an elaborate system of etiquette had taken root in Washington. A lobbyist showed up, made an impassioned pitch to a legislator, and then left. Later, the lobbyist called the legislator’s office to say how thrilled the lobbyist would be to hold a fund-raising dinner for the legislator. If the lobbyists mentioned fund-raising in the middle of a pitch meeting, it would be akin to going shirtless to a formal dinner. Everyone in the room would be shocked.
When Bingel brought her colleagues from Koch Industries to meet Democratic politicians, they followed the well-honed lobbyist playbook. They focused on three factors that could sway the legislator’s thinking. The factors were:
1. The Preferences of a Legislator’s Voters. This was the most important factor to a lawmaker. A legislator cares, more than anything, about winning the next election. They seek to stay safely within the zone of voter approval.
2. The Broader Political Impact of the Vote. Because every legislator belongs to a political party, they also obsess about their standing within the party and their political future. A good lobbyist points out how any given vote fits into the party’s goals.
3. The Personal Convictions and Idiosyncrasies of the Legislator. This was the most frustrating and most ambiguous factor. Legislators are only people, at the end of the day. Most of them ran for office for deeply personal, and sometimes irrational, reasons. It could not be overestimated how profoundly these personal motivations play into a legislator’s votes. Good lobbyists were intimately familiar with a lawmaker’s personal quirks and convictions.
During a typical meeting with a lawmaker, a Koch Industries lobbyist pulled all these levers of influence. To pull the first lever, the lobbyist highlighted the deep ties that Koch Industries held with the legislator’s voters by listing the jobs that Koch provided in the state or congressional district in question. To pull the second lever, the lobbyist might talk about legislative issues that were important to the lawmaker’s party. What was left unsaid, but understood among everyone in the room, was the sizable volume of Koch’s political donations, which could help any politician’s standing in their party. Finally, the good lobbyist catered to a lawmaker’s personal quirks, talking about a given issue in terms of keeping taxes fair in one office, and talking about the same issue in terms of infrastructure investment in another.
Bingel and the other Democrats for Koch helped the company understand the intricate power dynamics within the Democratic majority in Congress. It was clear that most Democrats in the House felt empowered to push the Obama agenda. But talking with staffers in the cafeterias yielded important insights about it. Obama’s chief of staff, the former congressman Rahm Emanuel, wanted Obama to push his agenda in three phases, with three major bills that would pass through the House and Senate like train cars in a row. First would be health care reform, second would be financial industry reform, and third would be climate change legislation. This was useful to Koch Industries, ExxonMobil, and other fossil fuel companies that wanted to derail the carbon control efforts. If the climate change bill was the caboose of the legislative train, then the opponents had more time to mount a fight against it.
As they worked through their long Monday morning meetings and sketched ideas on the white notepad, Koch Industries’ lobbyists crafted a plan to do just that.
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David Hoffmann worked for months on his study that explored how Koch Industries might adapt its business to a cap-and-trade bill. He was excited by his findings. Hoffmann’s committee discovered opportunities for Koch to make money in a market for carbon emissions. Invista released huge amounts of nitrous oxide into the air, a chemical that trapped heat at a magnitude of 290 times greater than carbon dioxide. If Invista cut its nitrous oxide emissions, it could reap extremely valuable carbon emission credits. The future under cap-and-trade might not be entirely bleak.
In spite of these findings, Hoffmann wasn’t sure that anyone at Koch was interested in his committee’s work. It seemed like his reports and updates were being ignored. Hoffmann realized why after he was invited to attend a senior-level meeting of Koch’s lobbying operation. The topics of the meeting were EPA enforcement of the Clean Air Act and the Waxman-Markey cap-and-trade bill.
The meeting convened in the same conference room where Koch’s lobbyists held their Monday-morning strategy sessions. Hoffmann didn’t usually attend such meetings, but was apparently invited to this one because of his role as an environmental compliance attorney. The first part of the meeting dealt largely with a new push by the EPA to strengthen air emission rules. Philip Ellender led the meeting, but the session was attended by some of the most senior people in Koch’s political operation.
This included Richard Fink, who was second only to Charles Koch in the political shop. Fink had a hand in virtually all the facets of Koch’s political influence operations, from the Cato Institute think tank, to the academic studies at George Mason University, to the registered lobbyists. Only a handful of people knew about the inner workings of all these groups, and Fink was one of them.
Also at the meeting was Laurie Sahatjian,II one of Koch’s most senior attorneys, who specialized in environmental compliance. She was joined by Don Clay, a former EPA official who had worked for Koch’s lobbying office since the 1990s.
Before he sat down in the conference room, Hoffmann believed that Koch’s approach to the Waxman-Markey bill might be to mitigate its effects on the company, as he was trying to do. As the discussion got under way, he realized his opinion was in the minority.
When the meeting turned to the cap-and-trade bill, the discussion began with some banter and small talk. Most of the attendees let it be known that they thought climate change was “a hoax,” Hoffmann recalled. This was difficult for him to absorb. The people in the room were very intelligent. Many of them had an almost encyclopedic knowledge of the emissions released from Koch’s factories and refineries and how those emissions interacted with the Earth’s atmosphere. The science of global warming was not fundamentally complex: carbon trapped heat in the atmosphere, more carbon trapped more heat, and humans were releasing unprecedented amounts of carbon into the sky.
But Hoffmann realized that most of the people in the meeting doubted the underlying problem that Waxman-Markey sought to address. If global warming wasn’t real, then there was no justification for the law to exist. The feeling in the room was that the Waxman-Markey bill posed an existential threat to Koch Industries. Koch’s lobbying team was particularly aggrieved by the bill because it seemed as if the law was specifically targeting oil refineries in an effort to replace them with wind farms and solar panels.
Koch’s lobbyists circulated a pie chart that seemed to prove their case. It highlighted a complicated provision of the cap-and-trade law that was seemingly being weaponized against Koch. The provision in question was the so-called carbon allotment. In essence, when the cap-and-trade law took effect, the government would instantly distribute allotments to the private sector that allowed companies to release a certain amount of greenhouse gases into the atmosphere. These allotments were the starting point of the carbon trading market; after a company used all its allotments, it would be forced to pay money for all the additional carbon it released.