Bloomberg's Exposé on Koch Industries Reveals ... What Exactly?

Working for six months, 14 reporters around the world found eight ugly incidents in the last six decades -- all of which already resulted in fines or settlements, if applicable. Is that it?

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All reporters have bias. It's unavoidable: bias results even through as simple an action as deciding what to write an article about. Much of that bias isn't necessarily a problem. If you report facts in a fair-and-balanced manner, then readers can judge the story for themselves based on those facts. But at other times, some reporters' bias cuts so deep that it causes them to produce an article that squints too hard to see smoke when there is no fire. Unfortunately, such an article was produced this week by Bloomberg Markets Magazine on Koch Industries.

The article purports to be a hard-hitting exposé on the giant multinational, run by billionaire brothers Charles and David Koch. According to Bloomberg, 14 reporters around the globe worked for six months on the story. What did they turn up? Really, shockingly little. And what's worse: from the very outset, the reporters' bias against the Koch brothers is utterly clear.

When Political Bias Clouds the Facts

Let's start with the bias, because it's pretty striking. Instead of focusing squarely on the alleged wrongdoing of Koch Industries, the article spend its first two sections after its introduction focusing on the Koch brothers' free market politics. But here's the thing: their philosophy has nothing -- nothing -- to do with the alleged criminal activity.

To say that you believe in small government is completely different from calling oneself an anarchist, or worse, a criminal. A responsible business owner who believes in the free market can go ahead and do whatever he or she chooses to further that view in Washington without breaking any laws. Indeed, most free marketeers have very extreme views about the importance of the rule of law and contracts. If a business knowingly and aggressively breaks the law, its doing so has nothing to do with its executives' politics; instead, this shows a blatant disregard for the law.

Despite its efforts, the article does not manage to prove that the Koch brothers have any such disregard for the law -- but I'll get to that in the next section when I consider all of the issues it raises. All that an article accomplishes by dwelling on the Koch brothers' dislike for excessive regulation at the onset is to bias any pro-regulation readers against the company early on. I would challenge those same reporters to find many business executives who welcome excessive regulation, unless it manages to give them an advantage over their smaller competitors, as so much regulation does.

To further attempt to sway the reader before explaining the facts, the reporters reveal the following fact that someone not familiar with politics and lobbying might find shocking: " Koch Industries has spent more than $50 million to lobby in Washington since 2006." My reaction to reading this was, "$50 million? That's it?"

That might sound like a lot, but let's compare that to, say, General Electric. Over the same period, GE has spent more than $136 million lobbying, according to the Center for Responsive Politics. And of course, GE's CEO Jeffrey Immelt serves as the head of President Obama's Council on Jobs and Competitiveness. Immelt is the same man who once urged businesses to find ways to profit from government subsidies, saying: "It's never been a free market; it's never gonna be a free market. That's just the way it is."

The reporters provide no such perspective or comparison. Instead, they rely on misleading rhetoric to sway the reader before details on Koch Industry's alleged misdeeds are provided.

Eight Issues Over Six Decades

Now let's talk about those details. They're explained in the article after the sections that describe the Koch brothers' political views. Unfortunately, the article's allegations are tough to follow. Even writing this post, I had trouble identifying the discreet allegations that the reporters intend to explain. Ironically, Koch Industries' response to the article does a better job of laying out these allegations than the article itself. The article provides eight examples of regulatory missteps or questionable decisions by Koch Industries spanning six decades. I'll try to break them down as clearly and succinctly as possible. You can try to trudge through the sprawling Bloomberg article if you want more detail.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

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