Lee Fang has been on a roll lately with his expose´ of the Koch empire and the various tentacles of the Kochtopus. But his latest may be the one with the most pain attached. It seems that not only does Koch Industries avail itself of the profit-taking available by speculating on oil prices, but they were the authors of the whole damn scam.
Writing on his political blog, an attorney working for Koch’s law firm angrily replied to our initial investigation by claiming that Koch is solely a bonafide hedger, meaning that it only participates in speculative markets to reduce risk for the oil the company refines (he also bizarrely argued that speculation has no relation to the price of oil). The spin obscures reality: much of Koch’s oil trading business is actually akin to a hedge fund, buying and selling financial products based on oil with little interest in the actual delivery of the product. In fact, Koch pioneered the risky speculation industry that dominates the world’s oil markets today, first by inventing oil derivatives back in the ’80s, then by working to kill off regulations. ThinkProgress has delved into the history of Koch’s oil speculation business and the following timeline spells out Koch’s leading role:
The timeline is particularly interesting. In a nutshell, the very first oil derivatives were born in 1986, during the Reagan presidency. With the help of Phil Gramm in the Senate, and his wife Wendy Gramm, oil speculation was deregulated and the Kochs were laughing all the way to the bank. Wendy deregulated oil derivatives on the very last day of the George HW Bush administration, just before Bill Clinton took the oath of office.
This is so representative of how Republicans and their corporate masters conduct themselves. In public, they cry out about how rotten government is while in private they work hard to create proof for their claim, with voters' help.
Rick Perlstein wrote a great article recently about the corrupt media and how it has evolved into one that not only overlooks right wing lies; it actually perpetuates them. As I considered that article against the revelation that the Kochs were the architects and authors of oil speculation, I heard all the various "pain at the pump" stories echo through my head. They didn't come only from Fox News. They were on ABC, NBC, CBS, MSNBC, and CNN.
Not one of them paid more than a casual nod to speculators' dirty business and the effect on gas prices. Not one. Instead we get garbage like this Washington Post headline, "wondering" whether President Obama is intentionally driving up gas prices (the author answers the question with a big "no", but the link bait was enough). Or we get Rick Santorum whining that it's all that mean Democrat's fault that we're paying more at the pump, and the media just nods and drools while writing it all down on their little notepads.
While I give Lee Fang a ton of credit for the outstanding work he's doing unmasking the Kochs' malfeasance, where is our media in this? When do they start to do even a modicum of investigative reporting. For that matter, why the heck isn't Andrew Breitbart all over it, now that he thinks he has been forever inducted into the "legitimate media" category?
And what are we going to do about it? That's really the question.