Shortly after helping to elect Gov. Scott Walker (R-WI), Koch Industries opened a new lobbying office in Madison near the state capitol. However, little has been disclosed about the Koch lobbying agenda in Madison. The New York Times reported that Koch political operatives privately pressured Walker to crush public employee unions. But Walker’s major payback to Koch relates to environmental deregulation.

ThinkProgress has learned that the Walker administration, along with state Supreme Court judge David Prosser, has quietly worked to allow Koch’s many Georgia Pacific paper plants to pollute Wisconsin by pouring thousands of pounds of phosphorus into the water.

Koch’s Georgia Pacific plants are well known for releasing large amounts of phosphorus into Wisconsin’s waterways. A report by the state government showed that Georgia Pacific is responsible for about 9% of total phosphorus pollution in the Lower Fox River near Green Bay.

In 2005, the Wisconsin Department of Natural Resources’ (DNR) issued a permit to Koch’s Georgia Pacific company to nearly double its phosphorus pollution in the Fox River. A group of Wisconsin citizens challenged the permit the following year, claiming the DNR’s permit violated the Clean Water Act. In 2010, the Wisconsin Third District Court of Appeals ruled that the public has a right to challenge the permit, and that the DNR did not appropriately hold public hearings. Around the same time, the Wisconsin Natural Resources Board adopted “sweeping regulations” to control phosphorus pollution to slow down “runaway algae growth.”

To fight the challenge to the permit, as well as new regulations on phosphorus, Koch’s close allies in the Walker administration and the Wisconsin Supreme Court went into action:

– Rewriting Environmental Regulations For Koch: Last year, the Wisconsin Natural Resources Board called for strict numeric limits on phosphorus pollution. The regulations, which were supposed to be implemented in January, were delayed by Walker’s administration. Hidden inside his infamous budget bill passed in March, Walker then inserted a provision to revise and reduce the phosphorus limits proposed by the Natural Resources Board. Walker’s budget bill was rushed through the legislative process without public hearings.

– Ruling In Favor Of Koch And Other Polluters: In March, the Wisconsin Supreme Court, with Justice David Prosser voting with the majority, overturned the lower court decision allowing a public challenge to the permit giving Koch’s Georgia Pacific plants more leeway in dumping phosphorus into waterways.

– Delaying Environmental Regulations For Koch: Earlier this month, the Walker administration announced a two year delay of all phosphorus regulations passed last year. Not only has Walker’s administration called for reduced phosphorus dumping rules, they now have made it clear that no rules will be implemented until 2013.

During this three month period of Koch-enriching policy and legal action, the Koch political largesse has flowed to both Walker and Prosser. The Koch political machine spent hundreds of thousands of dollars in ads supporting Walker during the budget showdown, organized pro-Walker Tea Party rallies, and mobilized a pro-Walker bus tour. During his recent reelection campaign, Prosser too was boosted by two Koch-linked groups, Citizens for a Strong America and Wisconsin Manufacturers & Commerce, which ran about $1 million in advertising. A top Georgia Pacific executive overseeing plants responsible for dumping phosphorus in the Fox River sits on the board of the pro-Posser group, Wisconsin Manufacturers & Commerce.

Today, President Obama delivered a budget address during which he introduced his vision for getting the nation’s budget back into balance, while also, importantly, noting the reasons for the nation’s precarious long-term fiscal position. “After Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program — but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts,” Obama said.

Indeed, the nation’s $14 trillion debt is largely a result of “the cost of two wars, a runaway defense budget, the Bush tax cuts for the wealthiest Americans, taxes on the richest Americans being the lowest in a generation, and a recession caused by the lack of regulation of Wall Street.” The Bush administration followed wars with huge regressive tax cuts and an unpaid for prescription drug benefit.

But in his first major address to Congress, President George W. Bush promised that his “responsible” budget would pay off the national debt in ten years:

My budget has funded a responsible increase in our ongoing operations. It has funded our Nation’s important priorities. It has protected Social Security and Medicare. And our surpluses are big enough that there is still money left over.

Many of you have talked about the need to pay down our national debt. I listened, and I agree. We owe it to our children and our grandchildren to act now, and I hope you will join me to pay down $2 trillion in debt during the next 10 years. At the end of those 10 years, we will have paid down all the debt that is available to retire. That is more debt repaid more quickly than has ever been repaid by any nation at any time in history.

Of course, the opposite occurred, with debt held by the public increasing from $3.5 trillion to nearly $6 trillion and gross federal debt going from $5.6 trillion to nearly $10 trillion. In fact, conservatives argued in 2001 that the very existence of a budget surplus was a valid reason to enact large, regressive tax cuts. But this is precisely what happens when you have an administration that believes “deficits don’t matter.”

Our guest blogger is Desmond Brown, a consultant for the Half in Ten campaign at the Center for American Progress Action Fund.

Last week, House Budget Committee Chairman Paul Ryan (R-WI) released his fiscal 2012 budget. While Ryan couches his proposal in nice language, his plan would erode the health care safety net for seniors and low-income Americans, eliminate employment and training programs for millions of workers, shrink access to higher education for low-income students, and enforce harsh restrictions on nutrition assistance for families struggling to find employment during this fragile economic recovery.

His plan would do more to push fragile families into poverty than promote the type of prosperity that it rhetorically claims. The Wonk Room has assembled this chart showing where Ryan’s rhetoric doesn’t match his budget’s reality:

Ryan’s plan will not lead to prosperity. The plan would further expand the gap between wealthy Americans and those trying to get a foothold on the middle class. At a time when our country should be focusing on investments for jobs in new innovative industries, strengthening our health care system, and rebuilding our infrastructure, the plan attacks all of these progressive strategies by scaling back access to higher education, workforce training, and demolishing the nation’s health care safety net.

As ThinkProgress has been reporting, while Main Street Americans are having their services gutted and public investment is being slashed, some of the country’s most profitable corporations are getting away with paying little to nothing in taxes.

A new report by Public Campaign examines how these major corporations have influenced Congress to craft a tax code that lets them get away with making so much money and paying so little taxes in return. In its report, “The Artful Dodgers,” Public Campaign juxtaposes the limited tax liability of dozen major corporations with the companies’ campaign contributions and lobbying expenditures, which amount to more than a billion dollars over the last decade:

EXXON MOBIL: The oil giant that was the world’s most profitable corporation in 2008 has spent $5.7 million in campaign contributions over the last ten years and $138 million in lobbying expenditures. Its federal corporate income tax liabilities for 2009? Absolutely nothing. Not only did it pay nothing, but it also received a tax rebate the same year of $156 million.

CHEVRON: Chevron spent $4.4 million in campaign contributions and $91 million in lobbying expenditures over the last decade. It received a tax refund of $19 million in 2009 while making $10 billion in profits and $324 million in government contracts in 2008.

CONOCOPHILLIPS: The Texas-based gasoline giant spent $2.5 million in campaign contributions and $63 million in lobbying expenditures over the last decade. It received “$451 million through the oil and gas manufacturing deduction,” a special tax break, between 2007 and 2009, despite $16 billion in profits over the same period of time.

VALERO ENERGY: Valero spent $4.1 million in campaign contributions and $4.8 million in lobbying expenditures from 2001 to 2010. It received a $157 million tax rebate in 2009 despite $68 billion in sales during the same year. It received “$134 million through the oil and gas manufacturing deduction” over the last three years.

BANK OF AMERICA: Bank of America employees contributed $11 million to federal political campaigns from 2001 to 2010 and spent $24 million lobbying over the same period of time. It made $4.4 billion in profits in 2010 while receiving a tax refund of $1.9 billion.

CITIGROUP: Citigroup employees contributed $15 million to federal political campaigns from 2001 to 2010 and spent $62 million lobbying over the same period of time. It made $4 billion in profits in 2010 while paying absolutely nothing in federal corporate income taxes. It also received a $1.9 billion tax refund.

GOLDMAN SACHS: The mega-bank Goldman Sachs, which is often called “Government Sachs” in insider circles because of its clout over Washington, spent $22 million in campaign contributions and $21 million in lobbying over the last decade. It paid an ultra-low tax rate of 1.1 percent in 2008, while also receiving $800 billion in governmentloans to help weather the financial crisis.

BOEING: The aviation and defense contractor giant gave $10 million in contributions and $115 million in lobbying expenditures over the last decade. It paid a grand total of nothing in federal corporate income taxes in 2010 and received a $124 million tax refund.

FEDEX: FedEx spent $8.7 million in campaign contributions and $71 million in lobbying expenditures from 2001 to 2010. It paid a .0005 percent effective tax rate recently, actually spending 42 times as much on lobbying Congress as it did paying taxes. To do this it utilizes 21 tax havens.

CARNIVAL: The cruise line paid $1.7 million in campaign contributions and $1.6 million in lobbying over the past ten years. Despite the relatively low amount of money it spent influencing Washington, it has gotten away with a super-low tax rate. Over the past five years, its federal corporate income tax rate has been an effective 1.1 percent.

VERIZON: Verizon spent $12 million in campaign contributions and $131 million in lobbying expenditures over the past decade. It paid absolutely nothing in federal corporate income taxes over the past two years and $488 million in government contracts in 2008; in 2010, it made $12 billion in profits.

GENERAL ELECTRIC: General Electric spent $13 million in campaign contributions and $205 million in lobbying expenditures over the last decade while netting a tax refund of $4.1 billion over the past five years. It made $26 billion in profits over the same time period.

The amount of money that taxpayers are losing from the tax dodging by these major corporations is enormous. For example, if five of the nation’s biggest banks paid their taxes at the full rate, we could re-hire every single one of the 132,000 teachers laid off during the recession — twice.

In recent weeks, gas prices around the country have surged to levels unseen since the 2008 oil spike. However, market fundamentals are not driving the nearly $4.00/gallon gas prices. In fact, under the Obama administration, oil production is at record highs and there is adequate global supply of crude. As Commodity Futures Trading Commission (CFTC) commissioner Bart Chilton has explained, rampant oil speculation, which is at its highest level on record right now, is to blame for current prices.

Currently, the public knows very little about the oil speculation industry because a conservative majority on the CFTC has refused to implement a mandate from the Dodd-Frank Wall Street reform bill to curb abuses. Meanwhile, Republicans are pushing steep cuts to the CFTC, hampering any new rules on oil speculation that may be released later this summer. Fortunately, both the Securities and Exchange Commission and the CFTC have so far survived the latest round of budget cuts.

While much of the attention on oil speculators has rested on the backs of investors and commodity traders, the petrochemical conglomerate Koch Industries occupies a unique role in manipulating the oil market. Koch has little business in the extraction process. Instead, Koch focuses on shipping crude oil, refining it, distributing it to retailers — then speculating on the future price. With control of every part of the market, Koch is able to bet on future prices with superior information. As Yasha Levine notes, Koch along with Enron pioneered a number of complex financial products to leverage its privileged position in the energy industry.

In 2008, Koch called attention to itself for “contango” oil market manipulation. A commodity market is said to be in contango when future prices are expected to rise, that is, when demand is expected to outstrip supply. Big banks and companies like Koch employ a contango strategy by buying up oil and storing it in massive containers both on land and offshore to lock in the oil for sale later at a set price. In December of 2008, Koch leased “four supertankers to hold oil in the U.S. Gulf Coast to take advantage of rising prices in the months ahead.” Writing about Koch’s contango efforts to artificially drive down supply, Fortune magazine writer Jon Birger noted they could be raising “gasoline prices by anywhere from 20 to 40 cents a gallon” at the time. Speaking with the Business Times, Koch executive David Chang even boasted that falling crude prices in 2008 provided an opportunity remove oil from the market for future delivery:

CHANG: The drop in crude oil prices from more than US$145 per barrel in July 2008 to less than US$35 per barrel in December 2008 has presented opportunities for companies such as ours. In the physical business, purchases of crude oil from producers and storing offshore in tankers allow us to benefit from the contango market where crude prices are higher for future delivery than for prompt delivery.

A recent presentation from Koch Supply & Trading, the Koch unit devoted to selling financial products, confirms that Koch has taken advantage of a lax regulatory environment to aggressively trade on future oil prices. “The return of speculators to Oil, the ‘macro trade’ is alive and well,” reads slide 36:

The slideshow, given to an industry association for oil speculators, describes Koch as the “world’s top five crude oil traders and actively trades about 50 types of crude oil around the world.” Notably, Koch “has trading operations in London, Geneva, Singapore, Houston, New York, Wichita, Rotterdam, and Mumbai.”

As a recent Center for Public Integrity report uncovered, Koch lobbied aggressively against Obama’s financial reform bill, particularly on provisions related to transparency in the energy trading market. Is Koch again buying up supply in expectation of higher crude prices during the summer or beyond — as many analysts have predicted? No one knows, especially when the energy speculation and trading industry currently operates with virtually no regulation.