Koch Industries, a giant oil and energy conglomerate, has InsideClimate News, a four-year-old online news startup, in its crosshairs.

In October, the company launched an online ad campaign via Google, Facebook, and its KochFacts.com website (which rebuts coverage it finds unsatisfactory) claiming that InsideClimate “misleads readers and asserts outright falsehoods” about Koch’s interest in the proposed Keystone XL pipeline. The pipeline would transport crude oil from the tar sands of Alberta, Canada, to Gulf Coast refineries in the US, and has drawn vigorous opposition from environmentalists. Koch’s ads feature a jaundiced image InsideClimate’s founder and publisher, David Sassoon, calling him the “activist/owner” of the site. Sassoon calls the ads “media intimidation.”

It is not the first time that Koch Industries—one of the largest private companies in the country—has targeted a news outlet. In recent months, the company has employed a nearly identical strategy to criticize reporting by Bloomberg News and the Center for Public Integrity. InsideClimate’s battle with the firm is more complicated than a hackneyed David-and-Goliath story, however, revealing both the strengths and weaknesses of a young news site trying to prove its mettle.

Round One

The saga began with an investigative article by Sassoon that InsideClimate News (then called SolveClimate News) published last February. Based on publicly available records, the site reported that “Koch Industries is already responsible for close to 25 percent of the oil sands crude that is imported into the United States, and is well-positioned to benefit from increasing Canadian oil imports.”

Koch Industries owns an Alberta-based subsidiary called Flint Hills Resources Canada LP, whose website says it is “among Canada’s largest crude oil purchasers, shippers, and exporters.” According to InsideClimate, it “supplies about 250,000 barrels of tar sands oil a day to a heavy oil refinery in Minnesota, also owned by the Koch brothers,” and “operates a crude oil terminal in Hardisty, Alberta, the starting point of the proposed Keystone XL pipeline.”

“Although the pipeline, if approved, would increase the supply of oil reaching the U.S., a 2009 market analysis conducted by TransCanada, builder of the pipeline, forecast higher prices,” InsideClimate reported. “The analysis, which TransCanada conducted as part of its Canadian permit application, projected that prices would increase about $3 per barrel as a result of the pipeline,” putting at least a $2 billion in Canadian oil producers’ pockets.

“Given its deep involvement in the Canadian petroleum industry, the Koch brothers’ operation stands to snare some of the windfall,” Sassoon concluded.

Reuters and other major outlets syndicated the article, which eventually caught the attention of Representative Henry Waxman. His staff contacted Koch Industries to ask about its role in the Keystone XL pipeline and Canadian tar sands. It did not receive satisfactory answers, however, so the California Democrat sent a letter to leaders of the House Energy and Commerce Committee in May urging them “to request documents from Koch Industries related to the company’s interest in Canadian tar sands and the extent to which it will benefit if the Keystone XL pipeline is constructed.”

In the letter, Waxman described his staff’s interaction with the company:

The Koch representatives said that the Keystone XL pipeline has “nothing to do with any of our businesses” and that Koch had “no financial interest” in the pipeline. They also stated that the company neither supports nor opposes the legislation we will be considering next week.

However, Koch’s representatives refused to answer questions about Koch’s activities or interests in the Canadian tar sands. They refused to confirm or deny reports that the company is developing tar sand projects. They also refused to say whether Koch Industries owns—through a wholly owned subsidiary—a terminal involved in the tar sands business.

There appears to be a significant discrepancy between the published reports that Koch Industries would be “big winners” if the pipeline is approved and the statement of the Koch representatives that the pipeline has “nothing to do” with Koch’s businesses. We do not presume that Koch’s representations are inaccurate. But we were dismayed by the company’s lack of candor in responding to staff’s questions and believe additional inquiry is warranted.

Five days later, InsideClimate News ran an article by Elizabeth McGowan headlined, “Koch Bros. Accused of Stonewalling Congress on Their Keystone XL Pipeline Interest.” When Reuters carried that piece, too, the company decided it was time to go on the offensive.

Phillip Ellender, whom Politico called “the Koch brothers’ enforcer” in a June profile, sent an e-mail to the wire service’s managing editor, Jack Reernick in May, which began:

For the second time in recent weeks, Reuters has permitted an agenda-driven advocacy organization, SolveClimate [referring to InsideClimate’s original name], to run an article on your news agency about Koch Industries that is factually inaccurate and beneath Reuters’ standards.

Curtis Brainard is the editor of The Observatory, CJR's online critique of science and environment reporting. Follow him on Twitter @cbrainard.