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Steve Contorno
By Steve Contorno April 11, 2014

Senate Dem group claims Koch brothers support tax breaks for outsourcing jobs

As we’ve noted, Democrats are hellbent on bringing up the Koch brothers as often as possible during this election cycle. They’ve sought to criticize the billionaire brothers and conservative backers on a number of issues — even when the connection appears to be a stretch.

Such is the case with an ad from the Senate Majority PAC, a Democratic outfit going toe-to-toe on the airwaves with the Koch-supported Americans for Prosperity in a handful of heavily contested Senate races, including Louisiana.

"Out-of-state billionaires spending millions to rig the system and elect (Louisiana Republican candidate for Senate) Bill Cassidy," a narrator says as a picture of David and Charles Koch appears on the screen. "Their goal: Another politician bought and paid for. Their agenda: Protect tax cuts for companies that ship our jobs overseas. Cut Social Security and end Medicare as we know it. They even tried to kill relief for hurricane victims. Cassidy’s billion-dollar backers: They’ve got a plan for him. It’s not good for Louisiana."

This ad first came out about a month ago, and it has already earned Four Pinocchios from the Washington Post Fact Checker, the lowest rating on their scale. But given the recent focus on the Koch brothers and the staying power of Democratic attacks on them, we thought we should review the ad ourselves to see if we reached the same conclusion.

We’re looking at the claim that the Koch brothers are protecting "tax cuts for companies that ship our jobs overseas."

The Senate Majority PAC said this is in reference to a 2012 bill called the Bring Jobs Home Act. The measure had two key components.

The first was to create a tax break for companies that chose to repatriate jobs, meaning bring them back to the United States from overseas. The second part was to bar companies from using a standard tax deduction for moving expenses if they were for work outsourced to other countries.

The ad makes it seem like companies that move jobs overseas have a special tax preference carved out for them that grants privileges not awarded other companies. It’s actually a standard business expense deduction used for companies moving 10 blocks or 10,000 miles. The Senate bill would have put overseas moving expenses into a new category by eliminating their ability to claim this standard deduction.

The merits of this policy can be debated. (For what it’s worth, the bill failed to pass the Senate. Twice.) But to imply this is a tax cut or special loophole for only businesses that move jobs overseas is misleading.

Follow the money

Regardless of what the bill does, let’s get to the other issue: Did the Koch brothers try to block it?

We asked Senate Majority PAC for their evidence because none was presented in the ad. If what follows sounds like a game of Six Degrees of Kevin Bacon, that’s because it kind of is.

The source for the claim is a blog post written by Americans for Tax Reform, a conservative group that advocates for a flat tax.

Featured Fact-check

When you think of Americans for Tax Reform, the first name that pops into mind is Grover Norquist, not the Koch brothers. Norquist for years has famously collected signatures from Republicans on a pledge not to raise taxes and he first started Americans for Tax Reform in 1985.

It turns out Americans for Tax Reform receives some funding from an organization close to the Koch brothers, the Center to Protect Patient Rights. The Center for Responsive Politics, a nonpartisan watchdog of campaigns spending, described this organization as one of three "dark money groups tied to the Kochs that did nothing but give out checks."

The Center to Protect Patient Rights has given Americans for Tax Reform about $4 million since 2010. Of that, $350,000 came in 2012, the year the Bring Jobs Home Act came up for a vote. The group reported about $30.9 million in contributions that year.

While $4 million represents one of Americans for Tax Reform’s largest donations from a single benefactor, it pales in comparison to the amount of money the group has received from another conservative group, Crossroads GPS, an organization run by Republican strategist Karl Rove. Crossroads GPS gave Americans for Tax Reform $30 million since 2010, an overwhelming chunk of the group’s funding.

Americans for Tax Reform has "been around a long time and doesn't seem to be a central part of the Koch network," said Viveca Novak, a spokeswoman for the Center for Responsive Politics. "That said, it has received millions in the last few years from a group that is a hub of that network, the Center to Protect Patient Rights."

Back to the blog post written by Americans for Tax Reform. The author was not speaking directly about the Bring Jobs Home Act, but rather was "fact-checking" President Barack Obama’s State of the Union speech, in which he said "companies get tax breaks for moving jobs and profits overseas." The blog post said Obama’s claim wasn’t true.

That blog passage coupled with Norquist’s anti-tax pledge is evidence enough that the group opposed the Bring Jobs Home Act, Senate Majority PAC said. But we think that’s pretty flimsy ground to stand on.

We asked Americans for Tax Reform for their official stance on the Bring Jobs Home Act. A spokesman said they did not take one — a notable development since the organization vocalizes positions on dozens of bills each year and often grades lawmakers on how closely they align their votes with the organization.

Americans for Prosperity, which is closely affiliated with the Koch brothers, also said they took no position on the legislation. "We did nothing to try to oppose that bill," said Christopher Neefus, a spokesman for the organization. "We favor lower, simpler corporate taxation without special treatment for favored interests — that would be much broader than what this bill set out to do."

Neefus said Americans for Prosperity in the past has supported tax incentives for companies to bring jobs back into the United States.

Our ruling

Senate Majority PAC claimed the Koch brothers sought to "protect tax cuts for companies that ship our jobs overseas." The ad is misleading in two ways.

For starters, there are no carved-out tax cuts for companies that outsource work. There is a standard deduction companies can utilize when they move, but it can be used at home and abroad.

Secondly, the organization pinned the Koch brothers’ opposition to a statement from Americans for Tax Reform, a conservative group that has received only limited funding from the Koch network and never took an official position on the legislation. Americans for Prosperity, a group closer to the Koch brothers, also took no position.

A note to ad makers: Supporting negative claims with flimsy evidence won’t win you points on the Truth-O-Meter. We rate the statement False.

Our Sources

Senate Majority PAC ad "Agenda," accessed April 10, 2014

Email interview with Ty Matsdorf, spokesman for Senate Majority Pac, April 9-10

Washington Post Fact Checker, "Democrats claim the Koch brothers want to ‘protect tax cuts for companies that ship our jobs overseas,’" March 14, 2014

The Library of Congress, S.3364 — Bring Jobs Home Act, accessed April 10, 2014

U.S. Senate, Roll Call Vote: S. 3364, July 19, 2012

The Library of Congress, S.337, accessed April 10, 2014

Email interview with John Kartch, spokesman for Americans for Tax Reform, and Ryan Ellis, policy director for Americans for Tax Reform, April 10, 2014

Email interview with Christopher Neefus, spokesman for Americans for Prosperity

Email interview with Viveca Novak, spokeswoman for Center for Responsive Politics

Center for Responsive Politics, Americans for Tax Reform donor summary page, accessed April 10, 2014

Center for Responsive Politics, "At Least 1 in 4 Dark Money Dollars in 2012 Had Koch Links," Dec. 3, 2013

Internal Revenue Service, 2012 tax return for Americans for Tax Reform, accessed on April 10, 2014

Internal Revenue Service, 2012 tax return for Center to Protect Patient Rights, accessed on April 10, 2014

Internal Revenue Service, 2010 tax return for Center to Protect Patient Rights, accessed on April 10, 2014

Americans for Prosperity, "Letter of Support: Foreign Earnings Reinvestment Act, S. 1671," Oct. 12, 2011

Americans for Tax Reform, "State of Obama's Tax Assertions —  ATR Fact Check," Jan. 24, 2012

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Senate Dem group claims Koch brothers support tax breaks for outsourcing jobs

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