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<h1 style="font-size: 40px;" class="js-fit-text"
data-fit-compressor="2" data-fit-max-font-size="40px"
data-fit-min-font-size="30px">Inside the Koch Brothers' Toxic
Empire</h1>
<span class="byline">By <a
href="http://www.rollingstone.com/contributor/tim-dickinson"
rel="author">Tim Dickinson</a><time> | September 24, 2014<b><small><small><small><br>
<a class="moz-txt-link-freetext" href="http://www.rollingstone.com/politics/news/inside-the-koch-brothers-toxic-empire-20140924">http://www.rollingstone.com/politics/news/inside-the-koch-brothers-toxic-empire-20140924</a></small></small></small></b><br>
</time></span>
<p><span class="drop-cap">T</span>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.</p>
<div class="related-article"> <span class="related"></span></div>
<p>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
<em>Forbes</em>. 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."</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p><span class="pagebreak"></span></p>
<p><span class="drop-cap">I</span>t 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.</p>
<p>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.</p>
<p>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.</p>
<p>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 <em>Rolling Stone</em>,
insisting that Koch Carbon is a good neighbor.</p>
<p>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.</p>
<p><span class="drop-cap">C</span>harles 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."</p>
<p>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."</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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 <em>Sons of Wichita</em>, 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.</p>
<p>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.</p>
<p><span class="pagebreak"></span></p>
<p>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.</p>
<p>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."</p>
<p>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."</p>
<p>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 <em>Libertarian Review</em> 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 <em>justice</em>."</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p><span class="pagebreak"></span></p>
<p>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."</p>
<p>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.</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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 <em>The
Wichita Eagle</em> 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."</p>
<p>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."</p>
<p><span class="drop-cap">D</span>espite 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.</p>
<p>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.</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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.'"</p>
<p>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.</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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.)</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p><span class="drop-cap">O</span>n 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.</p>
<p>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."</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p><span class="drop-cap">T</span>he 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, <em>The Science of Success</em>, 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."</p>
<p>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.</p>
<p>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 <em>Rolling Stone</em> 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.</p>
<p><span class="pagebreak"></span></p>
<p>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 <em>Rolling Stone</em>.
"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."</p>
<p>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."</p>
<p>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.</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p><span class="drop-cap">A</span>rtificially 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.</p>
<p><span class="pagebreak"></span></p>
<p>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."</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p><span class="drop-cap">T</span>he 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.</p>
<p>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."</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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</p>
<p><span class="drop-cap">I</span>n "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. . . ."</p>
<p>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.</p>
<p>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.</p>
<p>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."</p>
<div class="content-issue"><span class="from-the-archive">From The
Archives</span> Issue 1219: October 9, 2014</div>
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