E-mail from Schwab campaign address criticizes Koch Industries, Kansas Chamber

06/16/2014 2:20 PM

08/08/2014 10:24 AM

An e-mail that appears to be from a Republican lawmaker describes a confrontation with lobbyists from Koch Industries and accuses the company of using its influence in the Kansas Chamber of Commerce to punish him for asking questions.

Rep. Scott Schwab, R-Olathe, did not receive an endorsement for the Aug. 5 primary election from the Kansas Chamber PAC last week despite consistently voting with the chamber on most major issues.

An e-mail sent from Schwab’s campaign address with his name on it late Thursday asserts the snub has to do with his breaking with the chamber by voting against a bill to repeal the state’s renewable energy standards and questioning the policy’s rationale.

The e-mail also asserts that Koch Industries was behind efforts to repeal the renewable portfolio standard, or RPS, which requires utility companies to obtain 20 percent of their power from renewable sources by 2020.

Schwab did not respond to multiple requests by phone and e-mail asking for confirmation that he wrote the e-mail, which spread quickly among lobbyists, lawmakers and political activists.

Chamber President Mike O’Neal, a former House speaker, dismissed the assertions. A spokeswoman for Koch said it would have no comment.

The e-mail came from Schwab’s campaign e-mail address, schwab@scottschwab.com, and was forwarded to The Eagle by two sources, both with ties to the Kansas Republican Party.

The Eagle also spoke with a lobbyist who received it directly from Schwab’s e-mail address. All three asked to remain anonymous.

Clay Barker, executive director of the Kansas Republican Party, said he had not received the e-mail but that Schwab was upset about not receiving an endorsement from the chamber.

During a floor debate this year, Schwab expressed frustration that at a 2013 hearing on a bill to repeal the standards, Kansas businesses opposed the bill while out-of-state think tanks supported it.

The e-mail repeats and elaborates on this criticism. It then asserts the policy was being pushed by Wichita-based Koch Industries.

“After the meeting, Jonathan Small asked if I was supportive of the bill. I responded by asking who was pushing it, and he admitted it was Koch Industries. I told him if he wanted me to vote for the bill, then we needed some Kansas businesses to advocate it, because right now it looked as an anti-business vote,” the e-mail states.

“He told me at the time only Koch wanted the measure. I recommended that Koch testify then. Jon said if they did that, people would not like them. My response was that people don’t like them anyway, so just be honest,” the e-mail continued.

Small, a Topeka attorney who works as a contract lobbyist for Koch Companies Public Sector could not be reached by phone Friday. His secretary said he was stuck in meetings Monday.

Melissa Cohlmia, a spokeswoman for Koch Industries, wouldn’t comment on the claim.

The RPS repeal has been primarily pushed by the Kansas Chamber of Commerce and Americans For Prosperity. Koch Industries is a member of the chamber and David Koch chairs AFP’s foundation.

Both organizations have contended that repealing the standards would reduce electric rates to the benefit of consumers and businesses.

The RPS repeal passed the Senate, but was defeated in the House this past session.

Schwab supported the measure when it came up in 2013, despite reservations, according to the e-mail.

The e-mail describes a confrontation between him and Michael Morgan and Mark Nichols, two lobbyists for Koch Companies Public Sector, at a reception held by the American Legislative Exchange Council in Topeka.

“Mike then aggressively let me know how horrible I was for not voting for the RPS bill (which I did vote for). I informed him it is hard to vote for a bill where Kansas businesses don’t want it passed, and only think tanks do. I needed the Kansas business community to say they really wanted this.

“He then said that I would vote to keep hookers working in Kansas if it meant no businesses ask for it. To which I said, ‘Are you equating your self to hookers?’ ” the e-mail states. “Needless to say, Mike’s tone spiraled. He made mention of the number of companies Koch Industries owned. I let him know I was looking forward to hearing from them in committee. Jon Small and his wife then stepped in to prevent Mike’s aggression from escalating further.”

“I have not voted for the bill since,” the e-mail adds.

Morgan, who sits on the chamber’s board, did not return a request for comment.

O’Neal responded on behalf of the chamber with a short e-mail Friday night.

“The recent Chamber PAC endorsements reflect the judgment of the PAC committee as to who will be receiving financial assistance in the balance of the Primary cycle,” O’Neal said. “Rep. Schwab received a check from Chamber PAC as recently as December and he is aware of the reasons he will not receive additional funds in this current cycle. We are sorry and disappointed that he feels he should receive more funds than he has already received.”

The chamber did not endorse Schwab’s primary opponent, J.H. Wilson, either, skipping the District 49 race altogether.

Christie Kriegshauser, the chamber’s vice president of political affairs, explained the rationale for the organization’s picks last week, a day before the Schwab e-mail was sent out.

“Incumbent legislators are scored on their support of Chamber agenda items. The Chamber PAC supports candidates who are committed to the limited-government, free-market principles highlighted in the Chamber agenda that will make Kansas the best state in the country to do business,” Kriegshauser wrote in an e-mail.

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