Charles Koch assails banking industry for embracing ‘corporate welfare’

By Matea Gold August 1 at 10:19 PM

Charles Koch, shown in his Wichita office at Koch Industries, called for the elimination of welfare for the rich. (Bo Rader/The Wichita Eagle via AP)

DANA POINT, Calif. -- Conservative benefactor Charles Koch assailed the banking industry Saturday for accepting “corporate welfare,” saying that financial bailouts have left big banks controlled by government regulators.

As he welcomed a gathering of donors here who support a political network he helped launch, the billionaire industrialist departed from his prepared remarks and held up the country’s major financial institutions as examples of the risks of government subsidies.

“The big banks have been among the biggest proponents of corporate welfare,” Koch said, standing before hundreds of wealthy contributors assembled on palm tree-ringed lawn of a luxury oceanfront resort. “They’ve got massive bailouts, virtually free money from the Fed, and regulations that are crushing the smaller banks, the community banks.”

“Now the chickens are coming home to roost,” he added. “The Fed has taken control of these banks. The Fed now decides what businesses they can be in and how they can run those business, and they’ve implanted, whatever you want to call them – regulators, auditors, controllers – to make sure the banks follow these rules. And when they deviate at all, guess what? They get multibillion-dollar fines. In return, the banks then make big political contributions to the very groups that have set up these controls in the first place, so this destructive cycle goes on and on.”

Koch called for “eliminating welfare for the wealthy,” saying there should be no more “subsidies, mandates and special preferences for business.” He noted that “these prescriptions will not be an easy pill for many business people to swallow.”

Some companies, including his Wichita-based Koch Industries, will lose profit in the short term.

But he said that eschewing corporate welfare was essential to allowing people to have the freedom to own and run their own businesses.

Koch’s remarks underscore the theme of the policy-heavy weekend, dubbed “Unleashing Our Free Society.”

He made a sly nod at the enmity that he and his brother David Koch have triggered on the left -- particularly from Senate Minority Leader Harry Reid, who spent much of 2014 lambasting the Koch network’s influence. Tripping slightly as he stepped up onto a riser, he quipped: “That was Harry Reid that was trying to trip me there. I didn’t see him, but I know he’s watching."

"No, he’s got the bad eye, he’s probably not even watching us anymore," Koch added.

Koch steered clear of any mention of the 2016 presidential race, although five of the Republican contenders are addressing the donor group during the conference: former Florida governor Jeb Bush, Sen. Ted Cruz of Texas, former Hewlett-Packard chief executive Carly Fiorina, Sen. Marco Rubio of Florida and Wisconsin Gov. Scott Walker.

The Washington Post is one of nine news organizations allowed in to cover the traditionally private confab, on the condition that the donors present not be named without their permission.