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Charles and David Koch, the deep-pocketed, libertarian industrialists, seem to be all over the airwaves these days. If it’s not campaign ads being run by such Koch-supported affiliates as Americans for Prosperity, then it’s ads run by Democrats attacking candidates favored by the Koch brothers.
One ad from a pro-Democratic group, the Senate Majority PAC, attacks Rep. Bill Cassidy, R-La., who is challenging incumbent Democratic Sen. Mary Landrieu in 2014.
The ad features images of storm devastation -- a hot-button issue for Louisiana residents, who faced several deadly hurricanes in the past decade. Here’s the narration:
"We’ve been battered by hurricanes, lost everything to floods. And for thousands of Louisianans, flood insurance and hurricane relief are our only protection. But the out-of-state billionaire Koch brothers funded the fight to let flood insurance premiums soar, helping the insurance companies and cut off hurricane relief for Louisiana families. Now they’re spending millions to buy a Senate seat for Bill Cassidy so he can fight for them. If the Kochs and Cassidy win, Louisiana loses."
That’s a lot of information to weigh on the Truth-O-Meter, so we decided to zero in on this claim -- that the Koch brothers "funded the fight to let flood insurance premiums soar" and "now they’re spending millions to buy a Senate seat for Bill Cassidy so he can fight for them."
We’ll start by offering a hat-tip to the Washington Post Fact Checker, who gave this ad Four Pinocchios, saying that "individual lines may be true, but the net effect is highly misleading."
Did the Koch brothers fund "the fight to let flood insurance premiums soar"?
While the money flowing in and out of such groups as Americans for Prosperity is hard to pin down, it’s pretty clear that the group took a strong stance in a congressional debate over flood insurance.
Here’s the background. The Biggert-Waters Flood Insurance Act of 2012 overhauled the National Flood Insurance Program, a federal program that provides insurance in a market -- flood insurance -- that has been historically neglected. The 2012 bill sought to bring risk and premiums into closer balance, so that flood insurance would become less of a drain on the federal treasury.
It did this in part by phasing out subsidies to a portion of policyholders, at least until a policy lapses or a property is sold. For some policyholders, this meant premium rises -- a problem particularly acute in states with heavily populated coastlines. After it was passed and the size of the increases became clearer, lawmakers in these states -- including Louisiana -- felt pressure from constituents to modify the Biggert-Waters law.
So lawmakers put together legislation that capped annual individual property rate increases at 18 percent, restored a grandfather rule, and refunded some premiums already paid. On March 21, 2014, President Barack Obama signed the Homeowner Flood Insurance Affordability Act into law.
So how do the Koch brothers fit into this? Their affiliate, Americans for Prosperity, joined a wide range of other conservative groups in signing a letter opposing some of the proposed changes to Biggert-Waters.
"Americans for Prosperity is proud to join a coalition urging Congress not to pass the Homeowners Flood Insurance Affordability Act," the group said in a post on its website. "The bill delays many of the critical reforms of the Biggert-Waters Flood Insurance Reform Act of 2012 that puts the National Flood Insurance Program in a better position going forward."
The joint letter signed by AFP said the proposed legislation permitted the return of "subsidies that distort the market, belie the foundation of the NFIP, and expose taxpayers to further debt. Conservative organizations should oppose this legislation and educate and activate their supporters in opposition."
Levi Russell, director of public affairs with Americans for Prosperity, disputes the notion that opposition to the legislation means allowing "flood insurance premiums to soar," saying the group supported an alternative proposed by Sen. Pat Toomey, R-Pa., that would have offered Louisiana policyholders some relief. But that was earlier in the process. The Toomey proposal was dead by the time the group signed the letter cited above, and it only talks about blocking the proposed overhaul, not presenting an alternative.
Ultimately, a prominent advocacy groups funded by the Koch brothers, AFP, took a strong stance against House legislation to curb premium increases for flood-insurance policyholders.
Are the Koch brothers "spending millions to buy a Senate seat for Bill Cassidy so he can fight for them"?
It’s worth noting some legal caveats. Americans for Prosperity is a 501(c)(4) group, meaning that it can advocate for political issues but cannot urge votes for or against a specific candidate. This is why its ads typically urge viewers to "tell" Landrieu that they oppose this issue or that or to call her office, rather than suggesting they vote for her opponent.
In addition, the group’s legal status means that it cannot coordinate with the Cassidy campaign (or with the campaign of any other Landrieu opponent). So even if it’s true that the Koch brothers want to "buy" a Senate seat for Cassidy, it’s not the kind of support Cassidy can actively court.
Still, Cassidy hasn’t exactly renounced them, either. The Baton Rouge Advocate reported that in January, Cassidy and AFP held events at the same restaurant in Covington, La., within 30 minutes of each other, and that between the events, Cassidy told someone from AFP, "Thank y’all for the ads you’re running. Obviously, you care deeply about our country, and Obamacare is a bad thing."
So, viewed in isolation, both of these claims contain a lot of truth. Case closed?
Not so fast. There’s a gaping omission in the Senate Majority PAC ad that undercuts the suggestion that Cassidy is simply a puppet of the Kochs.
The Senate Majority PAC ad ignores that the bill so strongly opposed by AFP and other conservative groups was, to a large degree, shepherded by none other than Rep. Bill Cassidy. In fact, the measure was officially known as the "Grimm-Cassidy substitute amendment."
The "Grimm" in the bill’s name -- Rep. Michael Grimm, R-N.Y. -- wrote a letter to the New Orleans Times-Picayune touting Cassidy’s role.
"I am extremely grateful to Dr. Cassidy for being such a dedicated partner in our efforts to protect homeowners throughout the country," Grimm wrote. "Without his contributions, the House's ability to forestall the catastrophic effects of Biggert-Waters and pass a far-reaching relief bill for the hard-working folks from the Big Apple to the Big Easy may never have been realized at all."
Cassidy provided an exhaustive timeline of his involvement in the flood-insurance legislation in a news release here.
So, in the case of flood insurance, Cassidy was working hard to enact the proposal that Koch-affliliated groups opposed.
The Senate Majority PAC ad said the Koch brothers "funded the fight to let flood insurance premiums soar ... Now they’re spending millions to buy a Senate seat for Bill Cassidy so he can fight for them."
Two major Koch-funded groups opposed the legislative rewrite of the flood-insurance law, and AFP has been airing a lot of ads attacking Cassidy’s opponent. But the ad’s message is significantly undermined by its suggestion that Cassidy is a puppet of the Kochs, particularly on flood insurance. The reality is that Cassidy sided with constituents and against the AFP position on flood insurance as recently as last month.
The statement contains an element of truth but ignores critical facts that would give a different impression. We rate it Mostly False.
Correction: The initial version of this story incorrectly stated that FreedomWorks receives funding from the Koch brothers. While FreedomWorks and Americans for Prosperity were both split off from Citizens for a Sound Economy, a now-defunct group founded and funded in part by the Koch brothers, there is no evidence that FreedomWorks receives any Koch brothers funding today. This change does not affect our ruling of Mostly False.
Senate Majority PAC, "Loses" (ad), March 26, 2014
Americans for Prosperity, "Coalition to Congress: Support Toomey Amendment to Flood Insurance Bill," Jan. 28, 2014
Americans for Prosperity, "Coalition to Congress: Reject the Homeowners Flood Insurance Affordability Act," Feb. 25, 2014
Bill Cassidy, "Cassidy Praises Grimm-Cassidy Flood Insurance Reform Becoming Law" (news release), March 22, 2014
FactCheck.org, "Americans for Prosperity," Feb. 7, 2014
FactCheck.org, "Senate Majority PAC," Feb. 7, 2014
Washington Post Fact Checker, "Senate Majority PAC’s nonsensical attack ad in Louisiana," April 8, 2014
Baton Rouge Advocate, "Washington Watch: Senate attracts outsider dollars," Jan. 11, 2014
New Orleans Times-Picayune, "Bill Cassidy a key architect of flood insurance legislation, Grimm says: Letter," March 22, 2014
New Orleans Times-Picayune, "President Obama signs flood insurance bill into law," March 21, 2014
WDSU-TV, "Obama signs bill into law preventing flood insurance rate hikes," March 21, 2014
Email interview with Levi Russell, director of public affairs for Americans for Prosperity, April 8, 2014
Email interview with Ty Matsdorf, spokesman for Senate Majority PAC, April 8, 2014
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