The big businesses behind the FACT Act

In November 2013 the U.S. House of Representatives passed the Furthering Asbestos Claim Transparency (FACT) Act. The bill then was referred to the Senate Committee on the Judiciary, which is expected to hold hearings on it sometime in 2014.

FACT is billed as the remedy for an epidemic of fraudulent asbestos-related damages claims. However, evidence of this alleged epidemic is a bit scarce. “Before plunging ahead with this misguided attempt to protect asbestos companies from lawsuits, Congress ought to commission an objective study of whether there is even a problem that needs fixing,” wrote the Editorial Board of the New York Times.

FACT would affect the 60 or so trust funds set up by bankruptcy courts to handle damage claims. It would require the trust funds to publicly disclose, on websites, private information about claimants, including where they live and work and personal medical and financial information. FACT’s real purpose, opponents say, is to intimidate mesothelioma patients and other victims of asbestos exposure from filing claims at all.

How did this bill come about?

When you look closely at who is behind the FACT Act, three organizations keep turning up — Koch Industries, the U.S. Chamber of Commerce, and the American Legislative Exchange Council (ALEC).

ALEC describes itself as an organization that “provides a constructive forum for state legislators and private sector leaders to discuss and exchange practical, state-level public policy issues.”More than 2,000 state legislators from all 50 states are members. ALEC also has about 300 corporate and other private sector members that together pour millions of dollars into the organization.

ALEC’s primary function is to generate “model” bills beneficial to the big corporate and private donors. These bills are introduced to state legislatures through the state legislator members. The FACT Act, although federal, also was based on an ALEC model bill.

Koch Industries is a huge privately owned company whose principal owners are Charles and David Koch, sons of the company founder. The Koch brothers have invested considerable funds into ALEC. According to Lisa Graves in The Nation, “No one knows how much the Kochs have given ALEC in total, but the amount likely exceeds $1 million—not including a half-million loaned to ALEC when the group was floundering.”

Further, Graves wrote, Koch Industries has been a select member of ALEC’s corporate board for about twenty years, and the company’s top lobbyist was once ALEC’s chairman.

Of the organizations registered to lobby for the FACT Act, at the top of the list is the U.S. Chamber of Commerce. Koch Industries Senior Vice President, General Counsel and Secretary, Mark V. Holden, also sits on U.S. Chamber of Commerce’s legal council, the Institute for Legal Reform.

Further, the Chamber participates in several of ALEC’s task forces, and Chamber executives are regular guest speakers at ALEC meetings, according to SourceWatch.

Under current law, organizations such as ALEC and the Chamber do not have to disclose publicly who is donating to them. But both of these organizations have put personal injury law —“tort reform” — at the tops of their agendas. This means protecting corporations from liability by making it harder for sick and injured Americans to file for damages. With FACT, this effort is reaching to the federal level.

One more item: The sponsor of FACT in the House was Blake Farenthold, a Republican who has represented Texas’s 27th district, which includes Corpus Christi, since 2011. Rep. Farenthold’s single biggest campaign donor during the last election cycle was Koch Industries, which contributed $10,000 to Farenthold’s campaign according to OpenSecrets.org.

None of this is illegal, although under current law a lot of it isn’t transparent, either. What this illustrates is how a relatively small number of people (with a lot of money) can amplify their influence by coordinating the work of several organizations that they control.