We're featuring new information on the dangers of drilling for methane gas (commercially labeled "natural" gas) in New York and other states. Visit our Water Portal for more on the toxic chemicals in "fracking" (hydraulic fracturing) and the threat massive new drilling poses to clean drinking water. Please support SourceWatch.

Koch Industries

From SourceWatch

Jump to: navigation, search


This article is part of the Center for Media & Democracy's spotlight on global corporations.

Learn more from the Center for Media and Democracy's portal on climate change.

Koch Industries, (pronounced "coke"), is the largest privately owned company in the United States with 70,000 employees and annual sales of $100 billion in the fiscal year ending December of 2008. [1] Cargill comes in second for privately owned companies. Operations include refining, chemicals, process and pollution control equipment, technologies, fibers and polymers, commodity and financial trading and consumer products. The company operates crude gathering systems and pipelines across North America. One subsidiary processes 800,000 barrels of crude oil daily in its three refineries.

Koch also owns ranches with a total of 15,000 head of cattle in Kansas, Montana and Texas. Though diversified, the company amassed most of its fortune in oil trading and refining.[2] The company was started in 1927 by Fred Koch, a charter member of the John Birch Society, with an oil delivery business in Texas.

Contents

Convictions for Environmental crimes

According to an August 30, 2010 article in The New Yorker magazine, "In 1999, a jury found Koch Industries guilty of negligence and malice in the deaths of two Texas teen-agers in an explosion that resulted from a leaky underground butane pipeline. (In 2001, the company paid an undisclosed settlement.) And in the final months of the Clinton Presidency the Justice Department levelled a ninety-seven-count indictment against the company, for covering up the discharge of ninety-one tons of benzene, a carcinogen, from its refinery in Corpus Christi, Texas. The company was liable for three hundred and fifty million dollars in fines, and four Koch employees faced up to thirty-five years in prison. The Koch Petroleum Group eventually pleaded guilty to one criminal charge of covering up environmental violations, including the falsification of documents, and paid a twenty-million-dollar fine. David Uhlmann, a career prosecutor who, at the time, headed the environmental-crimes section at the Justice Department, described the suit as “one of the most significant cases ever brought under the Clean Air Act.”[3]

Affiliations

Koch Family Foundations

Sons Charles G. Koch and David H. Koch run the company as well as Koch Family Foundations, one of the largest single sources of funding for conservative organizations in the United States. Organizations and think tanks supported by the foundation include Citizens for a Sound Economy, the libertarian Cato Institute, Reason Magazine, the Manhattan Institute, the Heartland Institute, and the Democratic Leadership Council. David H. Koch ran for president on the Libertarian Party ticket in 1980. Author Thomas Frank wrote in "What's the Matter with Kansas?" that "Koch money flowed through Triad Management Services"[4], an advisory service to conservative donors groups and candidates, for the 1996 Senate campaign of Sam Brownback.[5] Other sources only hint at a connection of Koch family members and Triad.[6]

Cato Institute

Charles G. Koch co-founded the Cato Institute, a libertarian think tank based in Washington DC, with Edward H. Crane in 1977. [7] Recently, Koch Industries has become an aggressive opponent of climate legislation and a major funder of climate skeptics, including the Cato Institute. [8]

Koch Industries and Coal

In 2005 Koch Industries acquired the American pulp and paper company Georgia-Pacific, which now operates as a subsidiary.[9] Georgia-Pacific owns and operates the following mills:

  • Naheola mill in Pennington, Alabama, which began operations in 1958. Currently, the principle products from the Naheola mill include both plate stock and cup stock for use in the food service market.
  • The Crossett mill, located in Crossett, Arkansas, produces bleached paperboard grades, including folding carton, plate stock, bleached linerboard, and various cup stock grades.
  • The recently acquired Brewton mill, located in Brewton, Alabama, produces folding carton, blister packaging, and skin packaging grades.
  • Fort James Muskogee Mill Power Plant is a coal-fired power station in Muskogee, Oklahoma that provides power to Georgia-Pacific's Muskogee paper mill. [10]:

Pollution

Koch Industries is also a major polluter. During the 1990s, its faulty pipelines were responsible for more than 300 oil spills in five states, prompting a landmark penalty of $35 million from the Environmental Protection Agency (EPA). In Minnesota, it was fined an additional $8 million for discharging oil into streams. During the months leading up to the 2000 presidential elections, the company faced even more liability, in the form of a 97-count federal indictment charging it with concealing illegal releases of 91 metric tons of benzene, a known carcinogen, from its refinery in Corpus Christi, Texas. Koch Industries was ranked number 10 on the list of Toxic 100 Air Polluters by the Political Economy Research Institute in March, 2010. [1][2]

In a study released in the spring of 2010, the University of Massachusetts at Amherst’s Political Economy Research Institute named Koch Industries one of the United States' top ten air polluters. [11]

Republican Ties

If convicted, the company faced fines of up to $352 million, plus possible jail time for company executives. After George W. Bush became president, however, the U.S. Justice Department dropped 88 of the charges. Two days before the trial, John Ashcroft settled for a plea bargain, in which Koch pled guilty to falsifying documents. All major charges were dropped, and Koch and Ashcroft settled the lawsuit for a fraction of that amount.

Koch had contributed $800,000 to the Bush election campaign and other Republican candidates.

Alex Beehler, assistant deputy under secretary of defense for Environment, Safety and Occupational Health, previously served at Koch as director of environmental and regulatory affairs and concurrently served at the Charles G. Koch Foundation as vice president for environmental projects. [3] Beehler was later nominated and re-nominated by the Bush White House, to become the U.S. Environmental Protection Agency's Inspector General. [4]

Lobbying

The company spent $3,528,750 for lobbying in 2006. $820,000 was to outside lobbying firms with the remainder being spent using in-house lobbyists. [12]

In February 2005, the Hill reported, "Top White House official Matt Schlapp is joining the Washington office of oil-and-gas conglomerate Koch Industries, the latest example of high-level administration and congressional staffers making post-election leaps to the lobbying world." Schlapp had headed the White House’s Office of Political Affairs. At Koch, Schlapp will be the executive director of federal affairs, directing Washington lobbying. [5]

Elizabeth Stolpe, previously in-house lobbyist for Koch Industries, is now Associate Director For Toxics & Environmental Protection at the White House Council on Environmental Quality.

Climate Change Denial

According to the 2010 report by Greenpeace, Koch Industries: Secretly Funding the Climate Denial Machine, Koch has out-spent ExxonMobil in funding climate change denial. From 2005 to 2008, ExxonMobil spent $8.9 million, while the Koch Industries-controlled foundations contributed $24.9 million in funding to organizations of climate change skeptics. Efforts include:

  • ClimateGate Echo Chamber—At least twenty Koch-funded organizations have repeatedly rebroadcast, referenced and appeared as media spokespeople in the story, dubbed “ClimateGate,” of supposed malfeasance by climate scientists from stolen emails from the University of East Anglia in November 2009. These organizations claim the emails prove a “conspiracy” of scientists and "proves" climate change is a hoax.
  • More than $5 million to Americans for Prosperity Foundation (AFP) for its nationwide “Hot Air Tour” campaign to spreading misinformation about climate science and opposing clean energy and climate legislation.
  • More than $1 million to the Heritage Foundation, a mainstay of misinformation on climate and environmental policy issues.
  • Over $1 million to the Cato Institute, which disputes the scientific evidence behind global warming, questions the rationale for taking climate action, and has been heavily involved in spinning the recent ClimateGate story.
  • $800,000 to the Manhattan Institute, which has hosted Bjorn Lomborg twice in the last two years, a prominent media spokesperson who challenges and attacks policy measures to address climate change.
  • $365,000 to Foundation for Research on Economics and the Environment (FREE), which advocates against taking action on climate change because warming is “inevitable” and expensive to address.
  • $360,000 to Pacific Research Institute for Public Policy (PRIPP) which supported and funded An Inconvenient Truth...or Convenient Fiction, a film attacking the science of global warming and intended as a rebuttal to former Vice-President Al Gore’s documentary An Inconvenient Truth. PRIPP also threatened to sue the U.S. Government for listing the polar bear as an endangered species.
  • $325,000 to the Tax Foundation, which issued a misleading study on the costs of proposed climate legislation.

The reports says such contributions are only part of the picture, because the full scope of direct contributions to organizations is not disclosed by individual Koch family members, executives, or from the company itself. But contributions through Koch’s political action committee (PAC) are a matter of public record. Since the beginning of the 2006 election cycle, Koch’s PAC spent more on contributions to federal candidates than any other oil-and-gas sector PAC. For that period, Koch Industries and its executives spent $2.51 million compared to next three biggest contributors: Exxon ($1.71 million), Valero ($1.68 million), and Chevron ($1.22 million).

Koch executives and their families wield political influence on climate change in other ways too, including direct federal lobbying and campaign contributions. Over the last few years, Koch Industries, Koch employees, and Koch family members:

  • Spent $37.9 million from 2006 to 2009 for direct lobbying on oil and energy issues, outspent only by ExxonMobil ($87.8 million) and Chevron Corporation ($50 million).
  • Spent $5.74 million in PAC money for candidates, committees, and campaign expenditures since the 2006 election cycle.
  • Contributed at least $270,800 to federal political party committees since the 2006 election cycle.
  • Gave $10,000 to Senator Lisa Murkowski in 2010,[13] who, in January, proposed stripping the EPA of its ability to regulate greenhouse gases under the Clean Air Act, and lamented that BP's Deepwater Horizon oil disaster has temporarily halted exploratory offshore drilling in the arctic planned by Shell Oil for summer 2010, a topic that even many conservative opponents of climate action have remained silent on in the face of the unfolding historic despoiling of the gulf.[14][15]

Political Contributions

Koch Industries is the single largest oil company contributor to both Republican and Democratic candidates for Congress. These contributions total $1,065,750 to the 110th US Congress (as of the third quarter), the largest of which has been to Rep. Todd Tiahrt (R-KS) for $42,950. Rep. Tiahrt, for his part, has consistently voted with the oil industry on energy, war and climate bills. [6]

Contributions like this from fossil fuel companies to members of Congress are often seen as a political barrier to pursuing clean energy. More information on oil industry contributions to Congress can be found at FollowtheOilMoney.org, a project created by the nonpartisan, nonprofit organization Oil Change International.

Koch Industries gave $948,000 to federal candidates in the 05/06 election cycle through its political action committee (PAC) - 17% to Democrats, 82% to Republicans. [16]

Mergers & acquisitions

In 2003, Koch announced a $4.4 billion cash purchase of Invista, the world's largest fibers company and owner of brand names such as Lycra and Teflon; from DuPont. [17] In 2005, Koch purchased paper products giant Georgia-Pacific for $21 billion, acquiring brands such as Quilted Northern, Angel Soft, Brawny, Sparkle, Vanity Fair, and Dixie cups. Internationally, brands include Lotus, Colhogar, Delica, Tenderly, and the Vania brand of personal care products. See also Invista.

Contact

4111 E. 37th St. North
Wichita, KS 67220-3203

Phone: 316-828-5500

Fax: 316-828-5739

Web: http://www.kochind.com

Articles & sources

SourceWatch articles

References

  1. ↑ Koch Industries, Inc. Financials, Hoovers accessed July 2009
  2. ↑ Koch Industries, Inc. Company Description, Hoovers, accessed July 2009
  3. ↑ Jane Mayer Covert Operations: The billionaire brothers who are waging a war against Obama The New Yorker, August 30, 2010
  4. ↑ Thomas Frank, What's the Matter with Kansas?, Metropolitan Books, June 2004, pp. 81-82.
  5. ↑ "Carolyn Malenick", archived from the website of the Institute for First Amendment Studies, 1998. This bio note on Carolyn Malenick states that she was "President, Triad Management Services, a for-profit business whose purpose is to provide expert services to its clients – conservative political donors."
  6. ↑ Ruth Marcus, "Funds Consultant Helped Senator Behind Scenes", Washington Post, December 12, 1997; Page A01.
  7. ↑ Cato Celebrates Its 25th Anniversary, Cato Institute, May 2002
  8. ↑ Te-Ping Chen Behind the Climate Skeptisim Curtain: The Koch Family and the Cato Institute, The Center for Public Integrity, April 2009
  9. ↑ Company Overview, Georgia-Pacific Corporation, accessed September, 2009.
  10. ↑ "Mill Facilities" Georgia-Pacific, September 2009
  11. ↑ Jane Mayer Covert Operations: The billionaire brothers who are waging a war against Obama, The New Yorker, August 20, 2010
  12. ↑ Koch Industries lobbying expenses, Open Secrets.
  13. ↑ "http://www.opensecrets.org/politicians/contrib.php?cid=N00026050&cycle=2010&type=I&newMem=N&recs=100 "Lisa Murkowsji: Top 100 Contributors" opensecrets.org, accessed August 2010.
  14. ↑ "Senator Lisa Murkowski, drilling away at environmental protections" ABC7.com, June 3, 2010.
  15. ↑ Jane Mayer Covert Operations: The billionaire brothers who are waging a war against Obama, The New Yorker, August 30, 2010
  16. ↑ 2006 PAC Summary Data, Open Secrets, accessed July 2007.
  17. ↑ Steve Gelsi DuPont sells textiles unit for $4.4 bln: Inventor of polyester sheds business for 'science' focus, Market Watch, November 2003

External articles

Retrieved from "http://www.sourcewatch.org/index.php?title=Koch_Industries"
Personal tools

Be a SourceWatcher!

Enter your e-mail address to get the Center for Media and Democracy's free weekly e-newsletter.