Bloomberg News

Koch’s Iran Link Causes Democrat to Send Donation to Charity

October 19, 2011

(Updates with Tester comment in paragraphs 18 and 19.)

Oct. 19 (Bloomberg) -- Dan Maffei, a New York congressional candidate and former member of the U.S. House, said he is giving $3,500 in political donations from Koch Industries Inc. to charity because the company profited from business in Iran.

“I not only will never take another cent from them, but I am giving their past donations away to charity,” said Maffei, a Democrat, in a statement e-mailed by his campaign yesterday. He said he would donate the funds from Koch’s political action committee to the Families of Freedom Scholarship Fund, which helps families of the victims of the Sept. 11 terror attacks.

Maffei cited a report this month in Bloomberg Markets that Koch sold millions of dollars of petrochemical equipment to Iran, considered by the U.S. to be a sponsor of global terrorism. Internal company documents show that Wichita, Kansas- based Koch, one of the world’s largest closely held companies, used foreign subsidiaries to make the sales, getting around a U.S. ban on domestic companies selling materials to Iran.

Democrats have been criticizing Republicans who took money from the company’s political action committee. While the company and top executives David and Charles Koch mostly give to Republicans, Koch’s PAC has also contributed to Democrats. The PAC gave $30,000 to the Democratic Senatorial Campaign Committee in each of the previous two elections.

‘Singling Out Koch’

Koch said in a statement late yesterday that Maffei is hypocritical because many Democrats have taken money from companies that did business in Iran. Koch’s general counsel, Mark Holden, said the company stopped all sales to Iran voluntarily several years ago. Democrats “are singling out Koch for political purposes,” he said in an Oct. 14 statement.

Maffei called on his opponent, Republican Representative Ann Marie Buerkle, to also reject the company’s money. She has received $1,000 from Koch’s PAC for next year’s election, according to the Center for Responsive Politics in Washington, a nonpartisan group that tracks political giving. Maffei received donations from the PAC for the 2008 and 2010 elections, the center’s data show.

Liza Lowery, a spokeswoman for Buerkle, didn’t respond to a phone message and e-mail yesterday.

Koch-Glitsch offices in Germany and Italy continued selling to Iran as recently as 2007, Bloomberg Markets reported.

U.S. Law

Koch spokeswoman Melissa Cohlmia told Bloomberg Markets that “during the relevant time frame covered” in the article, “U.S. law allowed foreign subsidiaries of U.S. multinational companies to engage in trade involving countries subject to U.S. trade sanctions, including Iran, under certain conditions.”

During the 2010 midterm elections, Koch’s PAC gave $618,000 to Republican Party committees and politicians’ leadership PACs, compared with $120,500 that went to Democrats, according to the Center for Responsive Politics. The PAC gave more than $1.1 million to individual Republican candidates, compared with $112,500 to Democrats.

The National Republican Congressional Committee, which has received donations from the Koch brothers and the company PAC, declined to comment. The National Republican Senatorial Committee and the Republican National Committee both said they have no plans to return the Koch donations and noted that the company employs tens of thousands of Americans.

Democrats are displaying “breathless hypocrisy” by attacking “Koch with one hand while accepting hundreds of thousands of dollars in campaign contributions from them with the other,” said Brian Walsh, the NRSC’s spokesman.

Governors’ Group

The DSCC also doesn’t plan to return the money, said spokesman Matt Canter. Still, the committee says Republican are “willing to look the other way as these allegations emerge.”

The Republican Governors Association has benefited from more than $1 million in donations from the company and employees for both the 2010 and 2012 elections, according to the Center for Responsive Politics. The RGA plans to keep the contributions and put them “to good use,” said Mike Schrimpf, a spokesman for the association.

Schrimpf also criticized Senator Jon Tester, a Montana Democrat, for citing Koch last week when saying the U.S. should stop American companies circumventing sanctions against Iran.

“It’s clear we need to tighten the screws,” Tester told a Senate Banking Committee hearing on potential threats from Iran.

Schrimpf said Tester and other Democrats “who attack this good American company need to take a hard look at who funds their own campaigns.”

Iran Business

Tester has received donations in the past from General Electric Co. and Honeywell International Inc., two companies that also have histories of dealing with Iran. Tester doesn’t plan to return any contributions, he said in response to e- mailed questions.

“My concern is more specific to businesses that are actively circumventing imposed sanctions,” Tester said.

GE decided to stop doing business in Iran in 2005, except for the completion of some contracts and humanitarian work, the company says on its website.

“Honeywell complies with all laws in every country in which we operate,” said Rob Ferris, a spokesman for that company. “In 2010, the company voluntarily committed to accepting no new projects in Iran.”

Maffei also has taken PAC donations from both Fairfield, Connecticut-based GE and Morris Township, New Jersey-based Honeywell, according to the Center for Responsive Politics.

“The singling out of Koch by Mr. Maffei for political purposes is similar to the hypocrisy displayed by Senator Jon Tester’s attack on us,” Koch said. “It is also evidence of Mr. Maffei’s and the DCCC’s hypocrisy, which you will find if you do the straightforward and simple research we did.”

--With assistance from Catherine Dodge in Washington. Editors: Justin Blum, Jeanne Cummings

To contact the reporter on this story: Kristin Jensen in Washington at kjensen@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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