CHARLES KOCH

Chairman & CEO of Koch Industries (billionaire)

ESSENTIAL FACTS:

  • The Koch network has heavily funded far-right organizations and politicians who oppose environmental regulations and are climate change deniers. [1]

  • Koch Industries ranks 13th in the U.S. for toxic air pollution, and their climate pollution outpaces multiple oil giants, including: Valero, Chevron, and Shell. [1]

  • Bill Koch called his brothers “the biggest crooks in the oil industry.” [1]

  • The Koch's exploited a loophole in the 1996 sanctions so they could continue to do business with Iran. [1] According to a former employee, they used "every single chance they had to do business with Iran, or anyone else." [2] In 2022, they have  continued to do business in Russia, despite sanctions over the war in Ukraine. [3]

  • Koch companies have been charged with countless crimes and violations. [1]

  • Charles Koch organizes two yearly meetings of Republican donors and leaders. [1]

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Charles Koch

Name

Born

Education

Category

Affiliation

Charles de Ganahl Koch
November 1, 1935 (age 85) 

M.I.T. (BS, MS, MS)

Large Donor

Republican, Far-Right

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  • In an op-ed, Koch said, "EPA officials have commended (Koch Industries) for our ‘commitment to a cleaner environment’ and called us a model for other companies.’" This was rated FALSE by Politifact. [1

  • In an op-ed, Koch said his political engagement began "only in the last decade". This was rated FALSE by Politifact. [1]

  • Koch supported the Tea Party movement, saying "the way it's grown, the passion, and the intensity, was beyond what I had anticipated," he told an interviewer. [1]

  • In a manifesto he wrote for the Libertarian Review in the 1970s, titled “The Business Community: Resisting Regulation,” Charles lays out the principles that largely gird today’s Tea Party movement. Referring to regulation as “totalitarian,” he 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.” [1]

  • "The easy way to make money is to get special political privilege. From the beginning of time, business has cozied up to government and gotten restrictions on competition and subsidies and stuff." [1]

  • "Hubris, arrogance, is just one step ahead of loss of integrity, because if you think you're better than other people, you know more, then you're going to think, as many leaders have, that the rules don't apply to them - so they lose their integrity." [1]

  • "Far too many businesses have been all too eager to lobby for maintaining and increasing subsidies and mandates paid by taxpayers and consumers. This growing partnership between business and government is a destructive force, undermining not just our economy and our political system, but the very foundations of culture." [1]

  • "Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want." [1]

  • "The role of business is to provide products and services that make peoples lives better - while using fewer resources - and to act lawfully and with integrity." [1]

  • "You pass a program and get people dependent on it, making it brutal to get rid of. The key is not letting it get started." [1]

  • "Any of the social changes in American history are because people thought there was injustice. We have to show that this corporate welfare and cronyism is unjust - and that it's not only rigging the system so people get wealthy who don't deserve to get wealthy." [1]

  • "Many businesses with unpopular products or inefficient production find it much easier to curry the favor of a few influential politicians or a government agency than to compete in the open market." [1]

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  • Charles Koch, and his various companies and non-profits, have heavily funded organizations and politicians who oppose environmental regulations and are climate change deniers. [1][2][3][4]

  • Koch Industries ranks 13th in the United States 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. [1]

  • In the 1990's, in an early attempt by the federal government to recoup damages from climate polluters, the Clinton White House pushed for a BTU tax, but the Koch brothers successfully fought it off with lavish campaign spending. Richard Fink, head of Koch Company’s Public Sector and the longtime mastermind of the Koch’s political empire, confessed to The Wichita Eagle in 1994 that Koch Industries 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.”  [1]

  • By 1995, the EPA had seen enough. It sued Koch Industries 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. Ultimately, state and federal agencies forced Koch Industries 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 Industries, “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 Industries. “This settlement and penalty warn polluters that they cannot treat oil spills simply as the cost of doing business,” Cornyn said. [1]

  • Through much of the 1990s at its Pine Bend refinery in Minnesota, Koch Petroleum Group spilled up to 600,000 gallons of jet fuel into wetlands near the Mississippi River. The company also treated the Mississippi like 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.” They were ordered to pay a $6 million fine and $2 million in remediation costs, and received three years probation. The facility was declared a Superfund site in 1984. [1]

  • In 2000, Koch Industries 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 Industries 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 Industries 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 Industries faced charges on only seven counts. The Justice Department settled in what many perceived to be a sweetheart deal, and Koch Industries 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 Industries was handed $20 million in fines and reparations – another historic judgment. [1][2]

  • To undermine the widespread adoption of electric vehicles (EVs), the Koch network urged Congress to kill the federal income tax credit for EV buyers: “Congress should not be in the business of picking winners and losers by subsidizing one form of energy over others, regardless of its source,” Philip Ellender, Koch Industries’ president of government and public affairs, argued in a letter to Congress in October 2018. Despite the fact that the oil and gas industry has benefited from massive annual federal subsidies for more than 100 years. [1][2][3][4]

  • The Pacific Legal Foundation, funded by Koch, has litigated against increased environmental regulation. [1][2]

  • The American Enterprise Institute received $2.1 million over two decades from the Charles Koch Foundation for its climate change denialist activities. [1][2]
  • Together with ExxonMobil's, Koch also donated to the Independent Institute, another think-tank known for lobbying in favor of climate change denial. [1][2]
  • The Republican Trump administration adopted environmental policies similar to those advocated for by Koch-funded groups. [1]
  • To stop a version of the Waxman-Markey cap-and-trade bill in the Senate after it squeaked by in the House in 2009, the Koch funded Americans for Prosperity lobbying organization persuaded a critical mass of lawmakers to sign its “No Climate Tax” pledge, disingenuously calling the bill “the largest excise tax in history.” [1]
  • In late 2012, the Koch brothers financed “bogus studies” falsely claiming that state standards requiring utilities to ramp up their use of renewable energy would dramatically drive up electric rates. [1][2] Six years later, in 2018, when the House was about to vote on a nonbinding carbon tax resolution, Ellender — the Koch Industries lobbyist — used the same tactic, saying, “A carbon tax would make energy more expensive and raise the costs of consumer products and services on which people depend,” he wrote in a letter to the lawmakers. “It would also make US producers less cost competitive, driving production and jobs to other parts of the world.” The House passed the resolution, which stated that “a carbon tax would be detrimental to the United States economy” by a 229 to 180 vote. Nearly 70 percent of the representatives who voted for the resolution — 159 — collectively received more than $1.28 million in campaign contributions from Koch Industries PAC and employees during the 2018 election cycle. [3][4][5][6]
  • To slow the exponential growth of solar power, the Koch-funded American Legislative Exchange Council has armed utilities and state lawmakers with model legislation against net metering, which credits solar panel owners for the excess energy they generate and return to the grid, claiming that rooftop solar credits will drive up non-solar customers’ electric rates. The Energy Department, however, concluded that the credits will have a negligible impact on monthly electric bills. [1][2][3]
  • In 2017, 44 free-market groups, many of which are connected or funded by the Koch network, successfully urged former President Trump to withdraw from the Paris Climate Agreement. [1][2]
  • The Charles Koch Foundation donated $150,000 to Berkeley Earth, a nonprofit research institute founded in 2010 by Richard Muller, a physicist and self-proclaimed climate science skeptic, to review the temperature data that underpinned global-warming claims. Presumably, to Koch’s surprise — and dismay — roughly two years later, Muller announced in a July 2012 New York Times op-ed that his investigation verified that global warming is indeed real, is “almost entirely” caused by human activity, and is even worse than what the climate science community had concluded at the time. [1][2][3]
  • In 2011, the Charles G. Koch foundation made a grant of $1.5 million to Florida State University (FSU) in exchange for allowing the foundation, via an advisory committee, to approve hiring decisions in the university's economics department for a program that promotes "political economy and free enterprise". [1][2][3][4] These sorts of donations with corrupting legal strings/stipulations are common for the Koch's, and they have made similar agreements with an unknown number of schools and universities over the years. Similarly, at George Mason University, "As early as 1990, entities controlled by the billionaire brothers Charles G. and David H. Koch were given a seat on a committee to pick candidates for a professorship that they funded". [5][6][7]

  • Since the 1970's, Charles Koch has been subsidizing attacks on U.S. election laws for personal benefit. [1]

  • The Koch's and Koch Industries have long supported and exploited prison labor. [1][2][3]

  • The Koch brothers were amongst the most vital founders of the Tea Party movement, providing the large majority of their early funding. [1]

  • While most other companies have suspended operations, Koch Industries has stood by their decision to continue doing business in Russia in 2022 despite sanctions over Russia's unprovoked war against the sovereign nation of Ukraine. [1] Furthermore, various executives from Koch's non-profits have argued against sanctions and/or helping Ukraine, including Will Ruger, President of AIER, who said in a March 2, 2022 podcast with Reason Magazine, "The United States can and should do very little for Ukraine... Ukraine simply doesn't matter to America's security or our prosperity." [2] Finally, after defying public pressure for over a month by continuing to do business in Russia following their attack on Ukraine, Koch President Dave Robertson told employees in a memo that they would begin looking for an "exit strategy". [3][4]

  • The Koch's come from a wealthy family that was heavily invested in the railroad industry, in addition to being the proprietors of a far-right newspaper. Harry Koch (Charles Koch's grandfather) 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.” [1]

  • Fred Trump (Charles Koch's father)  did business with Stalin's USSR when few other companies were willing. Between 1929 and 1931, Winkler-Koch built 15 cracking units for the Soviets. And while 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. Also, Fred became a major benefactor and board member of the John Birch Society (which Charles Koch later joined as well), 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.” [1]

  • After joining the John Birch Society, Charles Koch began to be swayed by 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, and while the Birchers supported the Vietnam War, LeFevre was a pacifist who equated militarism with out-of-control state power. [1]

  • Koch Industries, under the leadership of Charles Koch, has been charged with countless lawsuits and crimes. In 1974, the Ford Administration compelled Koch Industries to pay out more than $20 million in rebates and future price reductions after they illegally overcharged customers. In 1980, Koch Industries pleaded guilty to five felonies in federal court, including conspiracy to commit fraud. [1]

  • In 1980, Bill Koch (Charles' brother), with the support of Frederick Koch (another brother), launched an unsuccessful battle for control of Koch Industries, aiming to take the company public. Three years later, Charles and David Koch 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, that he’d been defrauded. Bill 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, and 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,” and estimated that over three years, Koch "pilfered" $31 million in Native oil (which in 1988 accounted for nearly a quarter of the company’s crude-oil profits). Nevertheless, under the False Claims Act, which allows private citizens to file lawsuits on behalf of the government, Bill sued the company, and a jury concluded Koch Oil had submitted more than 24,000 false claims, exposing Koch to some $214 million in penalties. Koch later settled, paying $25 million. [1]

  • 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. 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.”  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 was barred from maintaining its innocence. [1]

  • Koch Supply & Trading made 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, previously 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 Supply & Trading engaged 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.” This behavior eventually played a large role in the 2008 financial crisis. [1]

  • 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 whistleblower 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 Industries reportedly kept trading with Tehran until 2007, after the regime was exposed for supplying IEDs to Iraqi insurgents that were killing U.S. troops. [1][2][3]

  • Koch has also given money to the American Institute for Economic Research, a right-wing libertarian think tank that lobbies against climate science, [1][2] and sponsored the Great Barrington Declaration, [1]  an open letter published in 2020 in response to the COVID-19 pandemic that claimed harmful COVID-19 lockdowns could be avoided, advocating instead the pseudo-scientific notion of "focused protection". [2] 
  • The Republican Trump administration adopted environmental policies similar to those advocated for by Koch-funded groups. [1]
  • Charles Koch supported his brother's (David Koch's) candidacy for vice president on the Libertarian Party ticket in 1980. [1] 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. [2]
  • Charles Koch organizes secretive, twice yearly meetings of Republican donors and leaders. [1][2]
  • Charles Koch has advocated for several reforms within the prison system, including the reduction of recidivist criminals, easing the employment process for rehabilitated persons, and the defense of private property from asset forfeiture. [1][2]
  • In February 2016, Charles Koch penned an opinion piece in The Washington Post, where he said that he agreed with presidential candidate Bernie Sanders about the unfairness of corporate welfare and mass incarceration in the United States. [1] Nevertheless, Koch and his companies have long sought and enjoyed the benefits of corporate welfare. [2]
  • In 2020, Koch Industries donated $2.8 million to Republican Party causes through a political action committee, while donating $221,000 to Democratic Party causes. [1]
  • In November 2020, during an interview with the Wall Street Journal, Charles Koch expressed regret that he had contributed significantly to the development of hyper-partisanship in the United States. Koch added that he intended to work with Democrats, moderate Republicans, and liberals to facilitate bipartisanship. [1][2][3] Nevertheless, since this statement, Koch and his companies/organizations have continued to support overtly partisan conservative politicians and issues. [4]
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