DEFROCKING THE KOCH BROTHERS
This is one of the best written expose
of a family that I've ever read. These Koch's are not very good guys
as you will see in reading this missive. However they do defend
themselves and I have added that to this blog also for fairness sake.
Tim Dickinson's
fantastic
expose of the Koch brothers in the latest issue of
Rolling
Stone has gotten plenty of attention. For very good reason: it's
a well-sourced, deep dive into the very toxic—literally
toxic—business that earned the Kochs enough money to buy up an
entire political party. That and the wrongful death judgement, six
felony and numerous misdemeanor convictions, the tens of millions of
dollars in fines, and the trading with Iran are all included in the
story, well worth your time.
No one has given it more attention, it seems, than the
notoriously
thin-skinned Kochs. In typical Koch fashion, they don't argue the
facts of Dickinson's story. They attack Dickinson,
who
responds here. Here's the nut of his detailed response.
Koch, in particular, takes umbrage with my reporting
practices.
For the record: In the weeks prior to publication,
beginning September 4th, Rolling Stone attempted to engage Koch
Industries in a robust discussion of the issues raised in our
reporting. Rolling Stone requested to interview CEO Charles Koch
about his company's philosophy of Market Based Management; Ilia
Bouchouev, who heads Koch's derivatives trading operations, about the
company's trading practices; and top Koch lawyer Mark Holden about
the company's significant legal and regulatory history.
The requests to speak to Charles Koch and Bouchouev were
simply ignored. Ultimately, only Holden responded on the record, only
via e-mail and only after Holden baselessly insinuated that I had
been given an "opposition research" document dump from the
liberal activist David Brock. (This is false.) From my perspective as
a reporter, Koch Industries is the most hostile and paranoid
organization I've ever engaged with—and I've reported on Fox News.
In a breach of ethics, Koch has also chosen to publish email
correspondence characterizing the content of a telephone conversation
that was, by Koch's own insistence, strictly off the record. […]
[I]n the main, the Koch responses attempt to re-litigate
closed cases — incidents where judges, juries, and, in one case, a
Senate Select Committee, have already had a final say. They only
muddy waters that have been clarified by a considered legal process.
Dickinson then provides an exhaustive, 14-point taken down of each
of the Kochs' complaints about his story, including every instance in
which the Kochs do not actually dispute the facts that he has
reported, but attempt to obfuscate them and whine about that fact
that he reported them. They also don't acknowledge that Dickinson
attempted to give them the opportunity to talk to him about his story
while reporting, but they refused.
The Kochs clearly do not stand up well to close scrutiny, and
clearly are not prepared for it. For some reason, probably because
they're richer than god, they seem to assume that they should be able
to swoop into our political system and attempt to buy it without
being subject to close examination. That attitude, along with their
long history of abusing people, the environment, and the political
system, is doing them no favors. They've made themselves the subject
of this election, and if Democrats hold the Senate, it will largely
be because the Kochs have made themselves such good enemies.
he enormity of the Koch
fortune is no mystery. Brothers Charles and David are each worth more
than $40 billion. The electoral influence of the Koch brothers is
similarly well-chronicled. The Kochs are our homegrown oligarchs;
they've cornered the market on Republican politics and are nakedly
attempting to buy Congress and the White House. Their political
network helped finance the Tea Party and powers today's GOP.
Koch-affiliated organizations raised some $400 million during the
2012 election, and aim to spend another $290 million to elect
Republicans in this year's midterms. So far in this cycle,
Koch-backed entities have bought 44,000 political ads to boost
Republican efforts to take back the Senate.
What is less clear is where all that money comes from.
Koch Industries is headquartered in a squat, smoked-glass building
that rises above the prairie on the outskirts of Wichita, Kansas. The
building, like the brothers' fiercely private firm, is literally and
figuratively a black box. Koch touts only one top-line financial
figure: $115 billion in annual revenue, as estimated by Forbes.
By that metric, it is larger than IBM, Honda or Hewlett-Packard and
is America's second-largest private company after agribusiness
colossus Cargill. The company's stock response to inquiries from
reporters: "We are privately held and don't disclose this
information."
But Koch Industries is not entirely opaque. The company's troubled
legal history – including a trail of congressional investigations,
Department of Justice consent decrees, civil lawsuits and felony
convictions – augmented by internal company documents, leaked State
Department cables, Freedom of Information disclosures and company
whistle-blowers, combine to cast an unwelcome spotlight on the
toxic empire whose profits finance the modern GOP.
Under the nearly five-decade reign of CEO Charles Koch, the
company has paid out record civil and criminal environmental
penalties. And in 1999, a jury handed down to Koch's pipeline company
what was then the largest wrongful-death judgment of its type in U.S.
history, resulting from the explosion of a defective pipeline that
incinerated a pair of Texas teenagers.
The volume of Koch Industries' toxic output is staggering.
According to the University of Massachusetts Amherst's Political
Economy Research Institute, only three companies rank among the top
30 polluters of America's air, water and climate: ExxonMobil,
American Electric Power and Koch Industries. Thanks in part to its
2005 purchase of paper-mill giant Georgia-Pacific, Koch Industries
dumps more pollutants into the nation's waterways than General
Electric and International Paper combined. The company ranks 13th in
the nation for toxic air pollution. Koch's climate pollution,
meanwhile, outpaces oil giants including Valero, Chevron and Shell.
Across its businesses, Koch generates 24 million metric tons of
greenhouse gases a year.
For
Koch, this license to pollute amounts to a perverse, hidden subsidy.
The cost is borne by communities in cities like Port Arthur, Texas,
where a Koch-owned facility produces as much as 2 billion pounds of
petrochemicals every year. In March, Koch signed a consent decree
with the Department of Justice requiring it to spend more than $40
million to bring this plant into compliance with the Clean Air Act.
The toxic history of Koch Industries is not limited to physical
pollution. It also extends to the company's business practices, which
have been the target of numerous federal investigations, resulting in
several indictments and convictions, as well as a whole host of fines
and penalties.
And in one of the great ironies of the Obama years, the
president's financial-regulatory reform seems to benefit Koch
Industries. The company is expanding its high-flying trading empire
precisely as Wall Street banks – facing tough new restrictions,
which Koch has largely escaped – are backing away from commodities
speculation.
It is often said that the Koch brothers are in the oil business.
That's true as far as it goes – but Koch Industries is not a major
oil producer. Instead, the company has woven itself into every nook
of the vast industrial web that transforms raw fossil fuels into
usable goods. Koch-owned businesses trade, transport, refine and
process fossil fuels, moving them across the world and up the value
chain until they become things we forgot began with hydrocarbons:
fertilizers, Lycra, the innards of our smartphones.
The company controls at least four oil refineries, six ethanol
plants, a natural-gas-fired power plant and 4,000 miles of pipeline.
Until recently, Koch refined roughly five percent of the oil burned
in America (that percentage is down after it shuttered its
85,000-barrel-per-day refinery in North Pole, Alaska, owing, in part,
to the discovery that a toxic solvent had leaked from the facility,
fouling the town's groundwater). From the fossil fuels it refines,
Koch also produces billions of pounds of petrochemicals, which, in
turn, become the feedstock for other Koch businesses. In a journey
across Koch Industries, what enters as a barrel of West Texas
Intermediate can exit as a Stainmaster carpet.
Koch's hunger for growth is insatiable: Since 1960, the company
brags, the value of Koch Industries has grown 4,200-fold, outpacing
the Standard & Poor's index by nearly 30 times. On average, Koch
projects to double its revenue every six years. Koch is now a key
player in the fracking boom that's vaulting the United States past
Saudi Arabia as the world's top oil producer, even as it's
endangering America's groundwater. In 2012, a Koch subsidiary opened
a pipeline capable of carrying 250,000 barrels a day of fracked crude
from South Texas to Corpus Christi, where the company owns a refinery
complex, and it has announced plans to further expand its Texas
pipeline operations. In a recent acquisition, Koch bought Frac-Chem,
a top provider of hydraulic fracturing chemicals to drillers. Thanks
to the Bush administration's anti-regulatory agenda – which
Koch Industries helped craft – Frac-Chem's chemical cocktails,
injected deep under the nation's aquifers, are almost entirely exempt
from the Safe Drinking Water Act.
Koch
is also long on the richest – but also the dirtiest and most
carbon-polluting – oil deposits in North America: the tar sands of
Alberta. The company's Pine Bend refinery, near St. Paul, Minnesota,
processes nearly a quarter of the Canadian bitumen exported to the
United States – which, in turn, has created for Koch Industries a
lucrative sideline in petcoke exports. Denser, dirtier and cheaper
than coal, petcoke is the dregs of tar-sands refining. U.S. coal
plants are largely forbidden from burning petcoke, but it can be
profitably shipped to countries with lax pollution laws like Mexico
and China. One of the firm's subsidiaries, Koch Carbon, is expanding
its Chicago terminal operations to receive up to 11 million tons of
petcoke for global export. In June, the EPA noted the facility had
violated the Clean Air Act with petcoke particulates that endanger
the health of South Side residents. "We dispute that the two
elevated readings" behind the EPA notice of violation "are
violations of anything," Koch's top lawyer, Mark Holden, told
Rolling
Stone,
insisting that Koch Carbon is a good neighbor.
Over the past dozen years, the company has quietly acquired leases
for 1.1 million acres of Alberta oil fields, an area larger than
Rhode Island. By some estimates, Koch's direct holdings nearly double
ExxonMobil's and nearly triple Shell's. In May, Koch Oil Sands
Operating LLC of Calgary, Alberta, sought permits to embark on a
multi-billiondollar tar-sands-extraction operation. This one
site is projected to produce 22 million barrels a year – more than
a full day's supply of U.S. oil.
Charles
Koch, the 78-year-old CEO and chairman of the board of Koch
Industries, is inarguably a business savant. He presents himself as a
man of moral clarity and high integrity. "The role of business
is to produce products and services in a way that makes people's
lives better," he said recently. "It cannot do so if it is
injuring people and harming the environment in the process."
The Koch family's lucrative blend of pollution, speculation,
law-bending and self-righteousness stretches back to the early 20th
century, when Charles' father first entered the oil business. Fred C.
Koch was born in 1900 in Quanah, Texas – a sunbaked patch of
prairie across the Red River from Oklahoma. Fred was the second son
of Hotze "Harry" Koch, a Dutch immigrant who – as
recalled in Koch literature – ran "a modest newspaper
business" amid the dusty poverty of Quanah. In the family
legend, Fred Koch emerged from the nothing of the Texas range to
found an empire. But like many stories the company likes to tell
about itself, this piece of Kochlore takes liberties with the
truth. Fred was not a simple country boy, and his father was not just
a small-town publisher. Harry Koch was also a local railroad baron
who used his newspaper to promote the Quanah, Acme & Pacific
railways. A director and founding shareholder of the company, Harry
sought to build a rail line across Texas to El Paso. He hoped to turn
Quanah into "the most important railroad center in northwest
Texas and a metropolitan city of first rank." He may not have
fulfilled those ambitions, but Harry did build up what one friend
called "a handsome pile of dinero."
Harry was not just the financial springboard for the Koch dynasty,
he was also its wellspring of far-right politics. Harry editorialized
against fiat money, demanded hangings for "habitual criminals"
and blasted Social Security as inviting sloth. At the depths of the
Depression, he demanded that elected officials in Washington should
stop trying to fix the economy: "Business," he wrote, "has
always found a way to overcome various recessions."
In the company's telling, young Fred was an innovator whose
inventions helped revolutionize the oil industry. But there is much
more to this story. In its early days, refining oil was a dirty and
wasteful practice. But around 1920, Universal Oil Products introduced
a clean and hugely profitable way to "crack" heavy crude,
breaking it down under heat and heavy pressure to boost gasoline
yields. In 1925, Fred, who earned a degree in chemical engineering
from MIT, partnered with a former Universal engineer named Lewis
Winkler and designed a near carbon copy of the Universal cracking
apparatus – making only tiny, unpatentable tweaks. Relying on
family connections, Fred soon landed his first client – an Oklahoma
refinery owned by his maternal uncle L.B. Simmons. In a flash,
Winkler-Koch Engineering Co. had contracts to install its knockoff
cracking equipment all over the heartland, undercutting Universal by
charging a one-time fee rather than ongoing royalties.
It was a boom business. That is, until Universal sued in 1929,
accusing WinklerKoch of stealing its intellectual property. With
his domestic business tied up in court, Fred started looking for
partners abroad and was soon doing business in the Soviet Union,
where leader Joseph Stalin had just launched his first Five Year
Plan. Stalin sought to fund his country's industrialization by
selling oil into the lucrative European export market. But the Soviet
Union's reserves were notoriously hard to refine. The USSR needed
cracking technology, and the Oil Directorate of the Supreme Council
of the National Economy took a shining to Winkler-Koch – primarily
because Koch's oil-industry competitors were reluctant to do business
with totalitarian Communists.
Between
1929 and 1931, Winkler-Koch built 15 cracking units for the Soviets.
Although Stalin's evil was no secret, it wasn't until Fred visited
the Soviet Union, that these dealings seemed to affect his
conscience. "I went to the USSR in 1930 and found it a land of
hunger, misery and terror," he would later write. Even so, he
agreed to give the Soviets the engineering know-how they would need
to keep building more.
Back home, Fred was busy building a life of baronial splendor. He
met his wife, Mary, the Wellesley-educated daughter of a Kansas City
surgeon, on a polo field and soon bought 160 acres across from the
Wichita Country Club, where they built a Tudorstyle mansion. As
chronicled in
Sons of Wichita, Daniel Schulman's
investigation of the Koch dynasty, the compound was quickly bursting
with princes: Frederick arrived in 1933, followed by Charles in 1935
and twins David and Bill in 1940. Fred Koch lorded over his domain.
"My mother was afraid of my father," said Bill, as were the
four boys, especially first-born Frederick, an artistic kid with a
talent for the theater. "Father wanted to make all his boys into
men, and Freddie couldn't relate to that regime," Charles
recalled. Frederick got shipped East to boarding school and was all
but disappeared from Wichita.
With Frederick gone, Charles forged a deep alliance with David,
the more athletic and assertive of the young twins. "I was
closer with David because he was better at everything," Charles
has said.
Fred Koch's legal battle with Universal would drag on for nearly a
quarter-century. In 1934, a lower court ruled that Winkler-Koch had
infringed on Universal's technology. But that judgment would be
vacated, after it came out in 1943 that Universal had bought off one
of the judges handling the appeal. A year later, the Supreme
Court decided that Fred's cracker, by virtue of small technical
differences, did not violate the Universal patent. Fred countersued
on antitrust grounds, arguing that Universal had wielded patents
anti-competitively. He'd win a $1.5 million settlement in 1952.
Around that time, Fred had built a domestic oil empire under a new
company eventually called Rock Island Oil & Refining,
transporting crude from wellheads to refineries by truck or by pipe.
In those later years, Fred also became a major benefactor and board
member of the John Birch Society, the rabidly anti-communist
organization founded in 1958 by candy magnate and virulent racist
Robert Welch. Bircher publications warned that the Red endgame was
the creation of the "Negro Soviet Republic" in the
Deep South. In his own writing, Fred described integration as a Red
plot to "enslave both the white and black man."
Like his father, Charles Koch attended MIT. After he graduated in
1959 with two master's degrees in engineering, his father issued an
ultimatum: Come back to Wichita or I'll sell the business. "Papa
laid it on the line," recalled David. So Charles returned home,
immersing himself in his father's world – not simply joining the
John Birch Society, but also opening a Bircher bookstore. The
Birchers had high hopes for young Charles. As Koch family friend
Robert Love wrote in a letter to Welch: "Charles Koch can, if he
desires, finance a large operation, however, he must continually be
brought along."
But Charles was already falling under the sway of a charismatic
radio personality named Robert LeFevre, founder of the Freedom
School, a whites-only libertarian boot camp in the foothills
above Colorado Springs, Colorado. LeFevre preached a form of anarchic
capitalism in which the individual should be freed from almost all
government power. Charles soon had to make a choice. While the
Birchers supported the Vietnam War, his new guru was a pacifist who
equated militarism with out-of-control state power. LeFevre's stark
influence on Koch's thinking is crystallized in a manifesto Charles
wrote for the
Libertarian Review in the 1970s, recently
unearthed by Schulman, titled "The Business Community: Resisting
Regulation." Charles lays out principles that gird today's Tea
Party movement. Referring to regulation as "totalitarian,"
the 41-year-old Charles claimed business leaders had been
"hoodwinked" by the notion that regulation is "in the
public interest." He advocated the "barest possible
obedience" to regulation and implored, "Do not cooperate
voluntarily, instead, resist whenever and to whatever extent you
legally can in the name of
justice."
After his father died in 1967, Charles, now in command of the
family business, renamed it Koch Industries. It had grown into one of
the 10 largest privately owned firms in the country, buying and
selling some 80 million barrels of oil a year and operating 3,000
miles of pipeline. A black-diamond skier and white-water kayaker,
Charles ran the business with an adrenaline junkie's aggressiveness.
The company would build pipelines to promising oil fields without a
contract from the producers and park tanker trucks beside
wildcatters' wells, waiting for the first drops of crude to flow.
"Our willingness to move quickly, absorb more risk,"
Charles would write, "enabled us to become the leading
crude-oilgathering company."
Charles also reconnected with one of his father's earliest
insights: There's big money in dirty oil. In the late 1950s, Fred
Koch had bought a minority stake in a Minnesota refinery that
processed heavy Canadian crude. "We could run the lousiest crude
in the world," said his business partner J. Howard Marshall II –
the future Mr. Anna Nicole Smith. Sensing an opportunity for huge
profits, Charles struck a deal to convert Marshall's ownership stake
in the refinery into stock in Koch Industries. Suddenly the majority
owner, the company soon bought the rest of the refinery outright.
Almost from the beginning, Koch Industries' risk-taking crossed
over into recklessness. The OPEC oil embargo hit the company hard.
Koch had made a deal giving the company the right to buy a large
share of Qatar's export crude. At the time, Koch owned five
supertankers and had chartered many others. When the embargo hit,
Koch had upward of half a billion dollars in exposure to tankers and
couldn't deliver OPEC oil to the U.S. market, creating what Charles
has called "large losses." Soon, Koch Industries was caught
overcharging American customers. The Ford administration in the
summer of 1974 compelled Koch to pay out more than $20 million in
rebates and future price reductions.
Koch Industries' manipulations were about to get more audacious.
In the late 1970s, the federal government parceled out exploration
tracts, using a lottery in which anyone could score a 10-year lease
at just $1 an acre – a game of chance that gave wildcat prospectors
the same shot as the biggest players. Koch didn't like these odds, so
it enlisted scores of frontmen to bid on its behalf. In the event
they won the lottery, they would turn over their leases to the
company. In 1980, Koch Industries pleaded guilty to five felonies in
federal court, including conspiracy to commit fraud.
With
Republicans and Democrats united in regulating the oil business,
Charles had begun throwing his wealth behind the upstart Libertarian
Party, seeking to transform it into a viable third party. Over the
years, he would spend millions propping up a league of affiliated
think tanks and front groups – a network of Libertarians that
became known as the "Kochtopus."
Charles even convinced David to stand as the Libertarian Party's
vice-presidential candidate in 1980 – a clever maneuver that
allowed David to lavish unlimited money on his own ticket. The
Koch-funded 1980 platform was nakedly in the brothers' self-interest
– slashing federal regulatory agencies, offering a 50 percent tax
break to top earners, ending the "cruel and unfair" estate
tax and abolishing a $16 billion "windfall profits" tax on
the oil industry. The words of Libertarian presidential candidate Ed
Clark's convention speech in Los Angeles ring across the decades:
"We're sick of taxes," he declared. "We're ready to
have a very big tea party." In a very real sense, the modern
Republican Party was on the ballot that year – and it was running
against Ronald Reagan.
Charles' management style and infatuation with far-right politics
were endangering his grip on the company. Bill believed his brothers'
political spending was bad for business. "Pretty soon, we would
get the reputation that the company and the Kochs were crazy,"
he said.
In late 1980, with Frederick's backing, Bill launched an
unsuccessful battle for control of Koch Industries, aiming to take
the company public. Three years later, Charles and David bought out
their brothers for $1.1 billion. But the speed with which Koch
Industries paid off the buyout debt left Bill convinced, but never
quite able to prove, he'd been defrauded. He would spend the next 18
years suing his brothers, calling them "the biggest crooks in
the oil industry."
Bill also shared these concerns with the federal government.
Thanks in part to his efforts, in 1989 a Senate committee
investigating Koch business with Native Americans would describe Koch
Oil tactics as "grand larceny." In the late 1980s, Koch was
the largest purchaser of oil from American tribes. Senate
investigators suspected the company was making off with more crude
from tribal oil fields than it measured and paid for. They set up a
sting, sending an FBI agent to coordinate stakeouts of eight remote
leases. Six of them were Koch operations, and the agents reported
"oil theft" at all of them.
One of Koch's gaugers would refer to this as "volume
enhancement." But in sworn testimony before a Texas jury,
Phillip Dubose, a former Koch pipeline manager, offered a more
succinct definition: "stealing." The Senate committee
concluded that over the course of three years Koch "pilfered"
$31 million in Native oil; in 1988, the value of that stolen oil
accounted for nearly a quarter of the company's crude-oil profits. "I
don't know how the company could have figures like that," the
FBI agent testified, "and not have top management know that
theft was going on." In his own testimony, Charles offered that
taking oil readings "is a very uncertain art" and that his
employees "aren't rocket scientists." Koch's top lawyer
would later paint the company as a victim of Senate "McCarthyism."
By this time, the Kochs had soured on the Libertarian Party,
concluding that control of a small party would never give them the
muscle they sought in the nation's capital. Now they would spend
millions in efforts to influence – and ultimately take over – the
GOP. The work began close to home; the Kochs had become dedicated
patrons of Sen. Bob Dole of Kansas, who ran interference for Koch
Industries in Washington. On the Senate floor in March 1990, Dole
gloatingly cautioned against a "rush to judgment" against
Koch, citing "very real concerns about some of the evidence on
which the special committee was basing its findings." A grand
jury investigated the claims but disbanded in 1992, without issuing
indictments.
Arizona Sen. Dennis DeConcini was "surprised and
disappointed" at the decision to drop the case. "Our
investigation was some of the finest work the Senate has ever done,"
he said. "There was an overwhelming case against Koch." But
Koch did not avoid all punishment. Under the False Claims Act, which
allows private citizens to file lawsuits on behalf of the government,
Bill sued the company, accusing it of defrauding the feds of royalty
income on its "volumeenhanced" purchases of Native
oil. A jury concluded Koch had submitted more than 24,000 false
claims, exposing Koch to some $214 million in penalties. Koch later
settled, paying $25 million.
Selfinterest continued to define Koch Industries' adventures
in public policy. In the early 1990s, in a high-profile initiative of
the first-term Clinton White House, the administration was pushing
for a levy on the heat content of fuels. Known as the BTU tax, it was
the earliest attempt by the federal government to recoup damages from
climate polluters. But Koch Industries could not stand losing its
most valuable subsidy: the public policy that allowed it to treat the
atmosphere as an open sewer. Richard Fink, head of Koch Company's
Public Sector and the longtime mastermind of the Koch brothers'
political empire, confessed to
The Wichita Eagle in 1994
that Koch could not compete if it actually had to pay for the damage
it did to the environment: "Our belief is that the tax, over
time, may have destroyed our business."
To fight this threat, the Kochs funded a "grassroots"
uprising – one that foreshadowed the emergence, decades later, of
the Tea Party. The effort was run through Citizens for a Sound
Economy, to which the brothers had spent a decade giving nearly $8
million to create what David Koch called "a sales force" to
communicate the brothers' political agenda through town hall meetings
and anti-tax rallies designed to look like spontaneous
demonstrations. In 1994, David Koch bragged that CSE's campaign
"played a key role in defeating the administration's plans for a
huge and cumbersome BTU tax."
Despite the company's increasingly sophisticated political and
public-relations operations, Charles' philosophy of regulatory
resistance was about to bite Koch Industries – in the form of
record civil and criminal financial penalties imposed by the
Environmental Protection Agency.
Koch entered the 1990s on a pipeline-buying spree. By 1994, its
network measured 37,000 miles. According to sworn testimony from
former Koch employees, the company operated its pipelines with almost
complete disregard for maintenance. As Koch employees understood it,
this was in keeping with their CEO's trademarked business philosophy,
MarketBased Management.
For Charles, MBM – first communicated to employees in 1991 –
was an attempt to distill the business practices that had grown Koch
into one of the largest oil businesses in the world. To incentivize
workers, Koch gives employees bonuses that correlate to the value
they create for the company. "Salary is viewed only as an
advance on compensation for value," Koch wrote, "and
compensation has an unlimited upside."
To prevent the stagnation that can often bog down big enterprises,
Koch was also determined to incentivize risk-taking. Under MBM, Koch
Industries books opportunity costs – "profits foregone from a
missed opportunity" – as though they were actual losses on the
balance sheet. Koch employees who play it safe, in other words, can't
strike it rich.
On paper, MBM sounds innovative and exciting. But in Koch's
hyperaggressive corporate culture, it contributed to a series of
environmental disasters. Applying MBM to pipeline maintenance, Koch
employees calculated that the opportunity cost of shutting down
equipment to ensure its safety was greater than the profit potential
of pushing aging pipe to its limits.
The fact that preventive pipeline maintenance is required by law
didn't always seem to register. Dubose, a 26-year Koch veteran who
oversaw pipeline areas in Louisiana, would testify about the
company's lax attitude toward maintenance. "It was a question of
money. It would take away from our profit margin." The testimony
of another pipeline manager would echo that of Dubose: "Basically,
the philosophy was 'If it ain't broke, don't work on it.'"
When small spills occurred, Dubose testified, the company would
cover them up. He recalled incidents in which the company would use
the churn of a tugboat's engine to break up waterborne spills and
"just kind of wash that thing on down, down the river." On
land, Dubose said, "They might pump it [the leaked oil] off into
a drum, then take a shovel and just turn the earth over." When
larger spills were reported to authorities, the volume of the
discharges was habitually low-balled, according to Dubose.
Managers pressured employees to falsify pipeline-maintenance
records filed with federal authorities; in a sworn affidavit,
pipeline worker Bobby Conner recalled arguments with his manager over
Conner's refusal to file false reports: "He would always respond
with anger," Conner said, "and tell me that I did not know
how to be a Koch employee." Conner was fired and later settled a
wrongful-termination suit with Koch Gateway Pipeline. Dubose
testified that Charles was not in the dark about the company's
operations. "He was in complete control," Dubose said. "He
was the one that was line-driving this Market-Based Management at
meetings."
Before the worst spill from this time, Koch employees had raised
concerns about the integrity of a 1940s-era pipeline in South Texas.
But the company not only kept the line in service, it increased the
pressure to move more volume. When a valve snapped shut in 1994, the
brittle pipeline exploded. More than 90,000 gallons of crude spewed
into Gum Hollow Creek, fouling surrounding marshlands and both Nueces
and Corpus Christi bays with a 12-mile oil slick.
By 1995, the EPA had seen enough. It sued Koch for gross
violations of the Clean Water Act. From 1988 through 1996, the
company's pipelines spilled 11.6 million gallons of crude and
petroleum products. Internal Koch records showed that its pipelines
were in such poor condition that it would require $98 million in
repairs to bring them up to industry standard.
Ultimately, state and federal agencies forced Koch to pay a $30
million civil penalty – then the largest in the history of U.S.
environmental law – for 312 spills across six states. Carol
Browner, the former EPA administrator, said of Koch, "They
simply did not believe the law applied to them." This was not
just partisan rancor. Texas Attorney General John Cornyn, the future
Republican senator, had joined the EPA in bringing suit against Koch.
"This settlement and penalty warn polluters that they cannot
treat oil spills simply as the cost of doing business," Cornyn
said. (The Kochs seem to have no hard feelings toward their one-time
tormentor; a lobbyist for Koch was the number-two bundler for
Cornyn's primary campaign this year.)
Koch wasn't just cutting corners on its pipelines. It was also
violating federal environmental law in other corners of the empire.
Through much of the 1990s at its Pine Bend refinery in Minnesota,
Koch spilled up to 600,000 gallons of jet fuel into wetlands near the
Mississippi River. Indeed, the company was treating the Mississippi
as a sewer, illegally dumping ammonia-laced wastewater into the river
– even increasing its discharges on weekends when it knew it wasn't
being monitored. Koch Petroleum Group eventually pleaded guilty to
"negligent discharge of a harmful quantity of oil" and
"negligent violation of the Clean Water Act," was ordered
to pay a $6 million fine and $2 million in remediation costs, and
received three years' probation. This facility had already been
declared a Superfund site in 1984.
In 2000, Koch was hit with a 97-count indictment over claims it
violated the Clean Air Act by venting massive quantities of benzene
at a refinery in Corpus Christi – and then attempted to cover it
up. According to the indictment, Koch filed documents with Texas
regulators indicating releases of just 0.61 metric tons of benzene
for 1995 – one-tenth of what was allowed under the law. But the
government alleged that Koch had been informed its true emissions
that year measured 91 metric tons, or 15 times the legal limit.
By
the time the case came to trial, however, George W. Bush was in
office and the indictment had been significantly pared down – Koch
faced charges on only seven counts. The Justice Department settled in
what many perceived to be a sweetheart deal, and Koch pleaded guilty
to a single felony count for covering up the fact that it had
disconnected a key pollution-control device and did not measure the
resulting benzene emissions – receiving five years' probation.
Despite skirting stiffer criminal prosecution, Koch was handed $20
million in fines and reparations – another historic judgment.
On the day before Danielle Smalley was to leave for college, she
and her friend Jason Stone were hanging out in her family's mobile
home. Seventeen years old, with long chestnut hair, Danielle began to
feel nauseated. "Dad," she said, "we smell gas."
It was 3:45 in the afternoon on August 24th, 1996, near Lively,
Texas, some 50 miles southeast of Dallas. The Smalleys were too poor
to own a telephone. So the teens jumped into her dad's 1964 Chevy
pickup to alert the authorities. As they drove away, the truck
stalled where the driveway crossed a dry creek bed. Danielle cranked
the ignition, and a fireball engulfed the truck. "You see two
children burned to death in front of you – you never forget that,"
Danielle's father, Danny, would later tell reporters.
Unknown to the Smalleys, a decrepit Koch pipeline carrying liquid
butane – literally, lighter fluid – ran through their
subdivision. It had ruptured, filling the creek bed with vapor, and
the spark from the pickup's ignition had set off a bomb. Federal
investigators documented both "severe corrosion" and
"mechanical damage" in the pipeline. A National
Transportation Safety Board report would cite the "failure of
Koch Pipeline Company LP to adequately protect its pipeline from
corrosion."
Installed in the early Eighties, the pipeline had been out of
commission for three years. When Koch decided to start it up again in
1995, a water-pressure test had blown the pipe open. An inspection of
just a few dozen miles of pipe near the Smalley home found 538
corrosion defects. The industry's term of art for a pipeline in this
condition is Swiss cheese, according to the testimony of an expert
witness – "essentially the pipeline is gone."
Koch repaired only 80 of the defects – enough to allow the
pipeline to withstand another pressure check – and began running
explosive fluid down the line at high pressure in January 1996. A
month later, employees discovered that a key anticorrosion
system had malfunctioned, but it was never fixed. Charles Koch had
made it clear to managers that they were expected to slash costs and
boost profits. In a sternly worded memo that April, Charles had
ordered his top managers to cut expenditures by 10 percent "through
the elimination of waste (I'm sure there is much more waste than
that)" in order to increase pre-tax earnings by $550 million a
year.
The Smalley trial underscored something Bill Koch had said about
the way his brothers ran the company: "Koch Industries has a
philosophy that profits are above everything else." A former
Koch manager, Kenoth Whitstine, testified to incidents in which Koch
Industries placed profits over public safety. As one supervisor had
told him, regulatory fines "usually didn't amount to much"
and, besides, the company had "a stable full of lawyers in
Wichita that handled those situations." When Whitstine told
another manager he was concerned that unsafe pipelines could cause a
deadly accident, this manager said that it was more profitable for
the company to risk litigation than to repair faulty equipment. The
company could "pay off a lawsuit from an incident and still be
money ahead," he said, describing the principles of MBM to a T.
At trial, Danny Smalley asked for a judgment large enough to make
the billionaires feel pain: "Let Koch take their child out there
and put their children on the pipeline, open it up and let one of
them die," he told the jury. "And then tell me what that's
worth." The jury was emphatic, awarding Smalley $296 million –
then the largest wrongful-death judgment in American legal history.
He later settled with Koch for an undisclosed sum and now runs a
pipeline-safety foundation in his daughter's name. He declined to
comment for this story. "It upsets him too much," says an
associate.
The official Koch line is that scandals that caused the company
millions in fines, judgments and penalties prompted a change in
Charles' attitude of regulatory resistance. In his 2007 book,
The
Science of Success, he begrudgingly acknowledges his company's
recklessness. "While business was becoming increasingly
regulated," he reflects, "we kept thinking and acting as if
we lived in a pure market economy. The reality was far different."
Charles has since committed Koch Industries to obeying federal
regulations. "Even when faced with laws we think are
counterproductive," he writes, "we must first comply."
Underscoring just how out of bounds Koch had ventured in its
corporate culture, Charles admits that "it required a monumental
undertaking to integrate compliance into every aspect of the
company." In 2000, Koch Petroleum Group entered into an
agreement with the EPA and the Justice Department to spend $80
million at three refineries to bring them into compliance with the
Clean Air Act. After hitting Koch with a $4.5 million penalty, the
EPA granted the company a "clean slate" for certain past
violations.
Then George W. Bush entered the White House in 2001, his campaign
fattened with Koch money. Charles Koch may decry cronyism as "nothing
more than welfare for the rich and powerful," but he put his
company to work, hand in glove, with the Bush White House.
Correspondence, contacts and visits among Koch Industries
representatives and the Bush White House generated nearly 20,000
pages of records, according to a
Rolling Stone FOIA request
of the George W. Bush Presidential Library. In 2007, the
administration installed a fiercely anti-regulatory academic, Susan
Dudley, who hailed from the Koch-funded Mercatus Center at George
Mason University, as its top regulatory official.
Today, Koch points to awards it has won for safety and
environmental excellence. "Koch companies have a strong record
of compliance," Holden, Koch's top lawyer, tells
Rolling
Stone. "In the distant past, when we failed to meet these
standards, we took steps to ensure that we were building a culture of
10,000 percent compliance, with 100 percent of our employees
complying 100 percent." To reduce its liability, Koch has also
unwound its pipeline business, from 37,000 miles in the late 1990s to
about 4,000 miles. Of the much smaller operation, he adds, "Koch's
pipeline practice and operations today are the best in the industry."
But even as compliance began to improve among its industrial
operations, the company aggressively expanded its trading activities
into the Wild West frontier of risky financial instruments. In 2000,
the Commodity Futures Modernization Act had exempted many of these
products from regulation, and Koch Industries was among the key
players shaping that law. Koch joined up with Enron, BP, Mobil and J.
Aron – a division of Goldman Sachs then run by Lloyd Blankfein –
in a collaboration called the Energy Group. This corporate alliance
fought to prohibit the federal government from policing oil and gas
derivatives. "The importance of derivatives for the Energy Group
companies . . . cannot be overestimated," the group's
lawyer wrote to the Commodity Futures Trading Commission in 1998.
"The success of this business can be completely undermined
by . . . a costly regulatory regime that has no place in the
energy industry."
Koch had long specialized in "over-the-counter" or OTC
trades – private, unregulated contracts not disclosed on any
centralized exchange. In its own letter to the CFTC, Koch identified
itself as "a major participant in the OTC derivatives market,"
adding that the company not only offered "risk-management tools
for its customers" but also traded "for its own account."
Making the case for what would be known as the Enron Loophole, Koch
argued that any big firm's desire to "maintain a good
reputation" would prevent "widespread abuses in the OTC
derivatives market," a darkly hilarious claim, given what would
become not only of Enron, but also Bear Stearns, Lehman Brothers and
AIG.
The Enron Loophole became law in December 2000 – pushed along by
Texas Sen. Phil Gramm, giving the Energy Group exactly what it
wanted. "It completely exempted energy futures from regulation,"
says Michael Greenberger, a former director of trading and markets at
the CFTC. "It wasn't a matter of regulators not enforcing
manipulation or excessive speculation limits – this market wasn't
covered at all. By law."
Before its spectacular collapse, Enron would use this loophole in
2001 to help engineer an energy crisis in California, artificially
constraining the supply of natural gas and power generation, causing
price spikes and rolling blackouts. This blatant and criminal market
manipulation has become part of the legend of Enron. But Koch was
caught up in the debacle. The CFTC would charge that a partnership
between Koch and the utility Entergy had, at the height of the
California crisis, reported fake natural-gas trades to reporting
firms and also "knowingly reported false prices and/or volumes"
on real trades.
One of 10 companies punished for such schemes, Entergy-Koch
avoided prosecution by paying a $3 million fine as part of a 2004
settlement with the CFTC, in which it did not admit guilt to the
commission's charges but is barred from maintaining its innocence.
Trading,
which had long been peripheral to the company's core businesses, soon
took center stage. In 2002, the company launched a subsidiary, Koch
Supply & Trading. KS&T got off to a rocky start. "A
series of bad trades," writes a Koch insider, "boiled over
in early 2004 when a large 'sure bet' crude-oil trade went south,
resulting in a quick, multimillion loss." But Koch traders
quickly adjusted to the reality that energy markets were no longer
ruled just by supply and demand – but by rich speculators trying to
game the market. Revamping its strategy, Koch Industries soon began
bragging of record profits. From 2003 to 2012, KS&T trading
volumes exploded – up 450 percent. By 2009, KS&T ranked among
the world's top-five oil traders, and by 2011, the company billed
itself as "one of the leading quantitative traders" –
though Holden now says it's no longer in this business.
Since Koch Industries aggressively expanded into high finance, the
net worth of each brother has also exploded – from roughly $4
billion in 2002 to more than $40 billion today. In that period, the
company embarked on a corporate buying spree that has taken it well
beyond petroleum. In 2005, Koch purchased Georgia Pacific for $21
billion, giving the company a familiar, expansive grip on the
industrial web that transforms Southern pine into consumer goods –
from plywood sold at Home Depot to brand-name products like Dixie
Cups and Angel Soft toilet paper. In 2013, Koch leapt into high
technology with the $7 billion acquisition of Molex, a manufacturer
of more than 100,000 electronics components and a top supplier to
smartphone makers, including Apple.
Koch Supply & Trading makes money both from physical trades
that move oil and commodities across oceans as well as in "paper"
trades involving nothing more than high-stakes bets and cash. In
paper trading, Koch's products extend far beyond simple oil futures.
Koch pioneered, for sale to hedge funds, "volatility swaps,"
in which the actual price of crude is irrelevant and what matters is
only the "magnitude of daily fluctuations in prices." Steve
Mawer, until recently the president of KS&T, described parts of
his trading operation as "black-box stuff."
Like a casino that bets at its own craps table, Koch engages in
"proprietary trading" – speculating for the company's own
bottom line. "We're like a hedge fund and a dealer at the same
time," bragged Ilia Bouchouev, head of Koch's derivatives
trading in 2004. "We can both make markets and speculate."
The company's many tentacles in the physical oil business give Koch
rich insight into market conditions and disruptions that can inform
its speculative bets. When oil prices spiked to record heights in
2008, Koch was a major player in the speculative markets, according
to documents leaked by Vermont Sen. Bernie Sanders, with trading
volumes rivaling Wall Street giants like Citibank. Koch rode a
trader-driven frenzy – detached from actual supply and demand –
that drove prices above $147 a barrel in July 2008, battering a
global economy about to enter a free fall.
Only Koch knows how much money Koch reaped during this price
spike. But, as a proxy, consider the $20 million Koch and its
subsidiaries spent lobbying Congress in 2008 – before then, its
biggest annual lobbying expense had been $5 million – seeking to
derail a raft of consumer-protection bills, including the Federal
Price Gouging Prevention Act, the Stop Excessive Energy Speculation
Act of 2008, the Prevent Unfair Manipulation of Prices Act of 2008
and the Close the Enron Loophole Act.
In comments to the Federal Trade Commission, Koch lobbyists
defended the company's right to rack up fantastic profits at the
expense of American consumers. "A mere attempt to maximize
profits cannot constitute market manipulation," they wrote,
adding baldly, "Excessive profits in the face of shortages are
desirable."
When the global economy crashed in 2008, so did oil prices. By
December, crude was trading more than $100 lower per barrel than it
had just months earlier – around $30. At the same time, oil traders
anticipated that prices would eventually rebound. Futures contracts
for delivery of oil in December 2009 were trading at nearly $55 per
barrel. When future delivery is more valuable than present inventory,
the market is said to be "in contango." Koch exploited the
contango market to the hilt. The company leased nine supertankers and
filled them with cut-rate crude and parked them quietly offshore in
the Gulf of Mexico, banking virtually risk-free profits by selling
contracts for future delivery.
All in, Koch took about 20 million barrels of oil off the market,
putting itself in a position to bet on price disruptions the company
itself was creating. Thanks to these kinds of trading efforts, Koch
could boast in a 2009 review that "the performance of Koch
Supply & Trading actually grew stronger last year as the global
economy worsened." The cost for those risk-free profits was paid
by consumers at the pump. Estimates pegged the cost of the contango
trade by Koch and others at up to 40 cents a gallon.
Artificially constraining oil supplies is not the only source of
dark, unregulated profit for Koch Industries. In the years after
George W. Bush branded Iran a member of the "Axis of Evil,"
the Koch brothers profited from trade with the state sponsor of
terror and reckless would-be nuclear power. For decades, U.S.
companies have been forbidden from doing business with the
Ayatollahs, but Koch Industries exploited a loophole in 1996
sanctions that made it possible for foreign subsidiaries of U.S.
companies to do some business in Iran.
In the ensuing years, according to Bloomberg Markets, the German
and Italian arms of Koch-Glitsch, a Koch subsidiary that makes
equipment for oil fields and refineries, won lucrative contracts to
supply Iran's Zagros plant, the largest methanol plant in the world.
And thanks in part to Koch, methanol is now one of Iran's leading
non-oil exports. "Every single chance they had to do business
with Iran, or anyone else, they did," said Koch whistle-blower
George Bentu. Having signed on to work for a company that lists
"integrity" as its top value, Bentu added, "You feel
totally betrayed. Everything Koch stood for was a lie."
Koch reportedly kept trading with Tehran until 2007 – after the
regime was exposed for supplying IEDs to Iraqi insurgents killing
U.S. troops. According to lawyer Holden, Koch has since "decided
that none of its subsidiaries would engage in trade involving Iran,
even where such trade is permissible under U.S. law."
These days, Koch's most disquieting foreign dealings are in
Canada, where the company has massive investments in dirty tar sands.
The company's 1.1 million acres of leases in northern Alberta contain
reserves of economically recoverable oil numbering in the billions of
barrels. With these massive leaseholdings, Koch is poised to continue
profiting from Canadian crude whether or not the Keystone XL pipeline
gains approval, says Andrew Leach, an energy and environmental
economist at the business school of the University of Alberta.
Counterintuitively, approval of Keystone XL could actually harm
one of Koch's most profitable businesses – its Pine Bend refinery
in Minnesota. Because tar-sands crude presently has no easy outlet to
the global market, there's a glut of Canadian oil in the
midcontinent, and Koch's refinery is a beneficiary of this
oversupply; the resulting discount can exceed $20 a barrel compared
to conventional crude. If it is ever built, the Keystone XL pipeline
will provide a link to Gulf Coast refineries – and thus the global
export market, which would erase much of that discount and eat into
company profit margins.
Leach says Koch Industries' tar-sands leaseholdings have them
hedged against the potential approval of Keystone XL. The pipeline
would increase the value of Canadian tar-sands deposits overnight.
Koch could then profit handsomely by flipping its leases to more
established producers. "Optimizing asset value through trading,"
Koch literature says of these and other holdings, is a "key"
company strategy.
The one truly bad outcome for Koch would be if Keystone XL were to
be defeated, as many environmentalists believe it must be. "If
the signal that sends is that no new pipelines will be built across
the U.S. border for carrying oil-sands product," Leach says,
"that's going to have an impact not just on Koch leases, but on
everybody's asset value in oil sands." Ironically, what's best
for Koch's tar-sands interests is what the Obama administration is
currently delivering: "They're actually ahead if Keystone XL
gets delayed a while but hangs around as something that still might
happen," Leach says.
The Dodd-Frank bill was supposed to put an end to
economyendangering speculation in the $700 trillion global
derivatives market. But Koch has managed to defend – and even
expand – its turf, trading in largely unregulated derivatives, once
dubbed "financial weapons of mass destruction" by
billionaire Warren Buffett.
In theory, the Enron Loophole is no longer open – the government
now has the power to police manipulation in the market for energy
derivatives. But the Obama administration has not yet been able to
come up with new rules that actually do so. In 2011, the CFTC
mandated "position limits" on derivative trades of oil and
other commodities. These would have blocked any single speculator
from owning futures contracts representing more than a quarter of the
physical market – reducing the danger of manipulation. As part of
the International Swaps and Derivatives Association, which also reps
many Wall Street giants including Goldman Sachs and JPMorgan Chase,
Koch fought these new restrictions. ISDA sued to block the position
limits – and won in court in September 2012. Two years later, CFTC
is still spinning its wheels on a replacement. Industry traders like
Koch are, Greenberger says, "essentially able to operate as
though the Enron Loophole were still in effect."
Koch is also reaping the benefits from Dodd-Frank's impacts on
Wall Street. The so-called Volcker Rule, implemented at the end of
last year, bans investment banks from "proprietary trading"
– investing on their own behalf in securities and derivatives. As a
result, many Wall Street banks are unloading their
commodities-trading units. But Volcker does not apply to nonbank
traders like Koch. They're now able to pick up clients who might
previously have traded with JPMorgan. In its marketing materials for
its trading operations, Koch boasts to potential clients that it can
provide "physical and financial market liquidity at times when
others pull back." Koch also likely benefits from loopholes that
exempt the company from posting collateral for derivatives trades and
allow it to continue trading swaps without posting the transactions
to a transparent electronic exchange. Though competitors like BP and
Cargill have registered with the CFTC as swaps dealers – subjecting
their trades to tightened regulation – Koch conspicuously has not.
"Koch is compliant with all CFTC regulations, including those
relating to swaps dealers," says Holden, the Koch lawyer.
That a massive company with such a troubling record as Koch
Industries remains unfettered by financial regulation should strike
fear in the heart of anyone with a stake in the health of the
American economy. Though Koch has cultivated a reputation as an
economically conservative company, it has long flirted with danger.
And that it has not suffered a catastrophic loss in the past 15 years
would seem to be as much about luck as about skillful management.
The Kochs have brushed up against some of the major debacles of
the crisis years. In 2007, as the economy began to teeter, Koch was
gearing up to plunge into the market for credit default swaps, even
creating an affiliate, Koch Financial Products, for that express
purpose. KFP secured a AAA rating from Moody's and reportedly sought
to buy up toxic assets at the center of the financial crisis at up to
50-times leverage. Ultimately, Koch Industries survived the
experiment without losing its shirt.
More recently, Koch was exposed to the fiasco at MF Global, the
disgraced brokerage firm run by former New Jersey Gov. Jon Corzine
that improperly dipped into customer accounts to finance reckless
bets on European debt. Koch, one of MF Global's top clients,
reportedly told trading partners it was switching accounts about a
month before the brokerage declared bankruptcy – then the
eighth-largest in U.S. history. Koch says the decision to pull its
funds from MF Global was made more than a year before. While MF's
small-fry clients had to pick at the carcass of Corzine's company to
recoup their assets, Koch was already swimming free and clear.
Because it's private, no one outside of Koch Industries knows how
much risk Koch is taking – or whether it could conceivably create
systemic risk, a concern raised in 2013 by the head of the Futures
Industry Association. But this much is for certain: Because of the
loopholes in financial-regulatory reform, the next company to put the
American economy at risk may not be a Wall Street bank but a trading
giant like Koch. In 2012, Gary Gensler, then CFTC chair, railed
against the very loopholes Koch appears to be exploiting, raising the
specter of AIG. "[AIG] had this massive risk built up in its
derivatives just because it called itself an insurance company rather
than a bank," Gensler said. When Congress adopted Dodd-Frank,
Gensler added, it never intended to exempt financial heavy hitters
just because "somebody calls themselves an insurance
In "the science of success," Charles Koch highlights the
problems created when property owners "don't benefit from all
the value they create and don't bear the full cost from whatever
value they destroy." He is particularly concerned about the
"tragedy of the commons," in which shared resources are
abused because there's no individual accountability. "The
biggest problems in society," he writes, "have occurred in
those areas thought to be best controlled in common: the atmosphere,
bodies of water, air. . . ."
But in the real world, Koch Industries has used its political
might to beat back the very market-based mechanisms – including a
cap-and-trade market for carbon pollution – needed to create the
ownership rights for pollution that Charles says would improve the
functioning of capitalism.
In fact, it appears the very essence of the Koch business model is
to exploit breakdowns in the free market. Koch has profited precisely
by dumping billions of pounds of pollutants into our waters and skies
– essentially for free. It racks up enormous profits from
speculative trades lacking economic value that drive up costs for
consumers and create risks for our economy.
The Koch brothers get richer as the costs of what Koch destroys
are foisted on the rest of us – in the form of ill health, foul
water and a climate crisis that threatens life as we know it on this
planet. Now nearing 80 – owning a large chunk of the Alberta tar
sands and using his billions to transform the modern Republican Party
into a protection racket for Koch Industries' profits – Charles
Koch is not about to see the light. Nor does the CEO of one of
America's most toxic firms have any notion of slowing down. He has
made it clear that he has no retirement plans: "I'm going to
ride my bicycle till I fall off."
And these folks are running our country. Eeeewwwww.