U.S. of Koch

Part Four of Multi-part series | go to part one >> / part two >> / part three >> or go to long read >>

Latter-day Nazis

If you were to call Charles de Ganahl Koch a Nazi to his face, you’d probably get escorted out of wherever you are by a member of his large security detail. But, you wouldn’t be very far from the truth. While his views on socialism or anything approaching the communist ideology are more than clear, the tacit approval of fascist ideology that runs in the family is less well-known.

In 1932, as told in a Koch-commissioned family history, Fred Koch collected $500,000 for building 15 oil refineries for Joseph Stalin, forming the backbone of the Soviet Union’s petroleum industry. The contract had been won through a referral, of sorts, after the senior Koch had helped build one in Great Britain with his future son’s namesake and mentor, Charles de Ganahl. Fred continued to provide technical assistance as the Soviets went on to build 100 more. The family-approved lore leaves this last detail out, contending Fred Koch’s distaste for the communist regime led him to renounce all future involvement.

An eight-year gap is left in the official Koch story, but various independent accounts have him traveling to Hitler’s Germany from 1933 onwards. According to archival records unearthed by Jane Mayer in her seminal book, Dark Money, Winkler-Koch Engineering of Wichita – Fred’s company – “provided the engineering plans and began overseeing the construction of a massive oil refinery” in Hamburg. The company that hired Koch’s firm was led by American Nazi sympathizer, William Rhodes Davis, who met with Hitler himself to secure the deal. Completed in 1935, the refinery had the capability to produce the high-octane fuel German Nazi war planes required.

Fred had a real soft spot for the Third Reich and the other fascist regimes. Just before hostilities broke out in ‘39, Fred Koch decried America’s “dependence on government” and expressed his wish that the “course of idleness, feeding at the public trough” he saw as an affliction the United States could “overcome”. Perhaps it was this desire to correct the nation’s “course” that inspired him to bring a fervently pro-Hitler, German governess to rear his two first-born sons, Freddie and Charles. The boys were subjected to the nurse’s rather harsh methods, which included force-feeding and enemas for much of their early years until she returned to Germany of her own accord in 1940.

Winkler-Koch unit at the Eurobank oil refinery
in Hamburg, Germany | Photo: United States Strategic Bombing Survey

Physical, emotional and psychological abuse in the Koch household was the price Fred Koch exacted from his offspring for being born. The patriarch was known to let his rage loose on them with tree branches and belts. A family member witnessed the “twins” get “whipped like dogs” after disturbing some rocks in a stone patio. For Freddie Koch, the eldest son, life offered more than this and he would never participate in the family business, choosing instead a career in the arts and a close relationship with his mother. Charles, on the other hand, would rationalize it as the actions of a man trying to instill a “work ethic” in him.

Younger brothers, Bill and David, would round out the Koch heir pool. But, Charles would prevail in the end wresting control from Bill who would challenge him in court before accepting a multi-billion-dollar buyout. David would assume a subordinate role, preferring to indulge in his Manhattan lifestyle, but still own half of Koch Industries. Eventually, he would join his older brother in pursuance of their shared goal to bring government to heel wherever their interests were threatened.

Scorched Earth Freedom

At the center of the fossil fuel barons’ nightmares was what Lew Ward, chairman of the Independent Petroleum Association of America, called “The radical environmentalist ‘off-oil’ agenda”. In 1997, when the Koch-connected and former Oklahoma oil man said this to a room-full of colleagues, the scientific consensus had already arrived at the conclusion, that 80% of the word’s fossil fuel reserves had to remain in the ground if we were to make it to 2050 with tolerable temperatures. Such warnings represented a death knell to an industry dominated by mostly private, but fabulously wealthy hands with a long tradition of bucking government regulation.

Historically and for obvious reasons, this powerful faction had maintained their position in the pecking order despite blatant anti-government stances and even public expressions of the racism, like that of Texas oil magnate Hugh Roy Cullen who, in defiance of FDR’s policies decided create a new political party promulgating “the restoration of the supremacy of the White race”. His grandson, Corbin Robertson Jr., a prominent member of the Koch network, owns one of the largest coal caches in the country, second only to that held by the government of the United States.

A full list of Koch’s donor network is yet to be compiled, but Jane Mayer’s tour de force accounting of this massive subversive political operation, provides a comprehensive sample that gives us a clear image of the scope and reach it has. The players are not limited to the fossil fuel industry either. Sheldon Adelson of the Las Vegas Sands casino empire and Stephen Schwarzman of the embattled Wall Street hedge fund, Blackstone Group are only two of the enormously influential characters with whom Charles Koch has partnered with to face off increasing pressure from a planet, which can no longer support the activities they profit from.

Koch was already years ahead of Lew Ward’s admonitions in the late 90’s, having poured millions of dollars to political front groups, foundations and think tanks dedicated to the Oligarch’s cause. But, the new century would, indeed mark a stronger push by the richest men in the country to put a stop to the “siege” their extractive industries were under.

We’re Not in Kansas Anymore

Koch’s political machinery was hard at work mounting attacks on what he and Henry Manne had identified as their number one enemy all those years ago and which Ward had warned against in his retirement speech at the IPAA. The environmental movement, in the mind of the fossil fuel oligarchy, was nothing more than an attempt by an entrenched government bureaucracy to restrict their property rights and rescind the divine edict passed down by the gods of “free markets” to devastate any ecosystem in the name of profit.

Foremost in their sights was the EPA; the single government agency they despised above all others. Taking it down required a long term strategy, which Charles Koch embraced. In concert with the vast array of think tanks and political lobbying organizations masquerading as foundations, as well as straight forward lobbying efforts, the Koch network went about the work to overturn, subvert or neutralize any environmentally-friendly legislation.

In Washington D.C., Koch Industry lobbyists were not only among the most active, but also among the most numerous. In a time when 90% of U.S. corporations did not employ one full time lobbyist, Koch Industries had five full time lobbyists who were industry leaders in their own right, fighting the company’s top issues: chemical safety, rate billing and tax rates. The bigger operation, however, was happening at the state level where Koch through ALEC and other groups like Americans for Prosperity (AFP) were pushing through legislation and even candidates favorable to their anti-environmental aims.

One of the most salient examples was the fight to reverse Kansas’ renewable energy mandates passed by the state legislature in 2009. Koch and friends zeroed in on state lawmakers two years later, sending Cato Institute scholars and other “heavy hitters” to testify about the “damaging” effects of wind power on the economy and other critiques of the mandate, which had been adopted as a compromise to the construction of a coal fired plant.

Republican Kansas state senator, Dennis Hedke, a geophysicist who had done consulting work for the oil and natural gas industry was the chairman of the House Energy and Environment Committee pushed a bill in 2013 to repeal the renewable energy mandate. The bill had been crafted by ALEC, which Hedke put forward with a few modifications. Parallel to this, Koch dumped $50,000 in the local primary races – a huge amount for the mostly rural state. The money was used to run negative ad campaigns against opponents, while the Koch-picked candidates were advised to simply stay home.

Hedke’s repeal passed in 2015 and, by then, Koch had managed to fill the Kansas state house with Koch Industry drones. Republican Senator Tom Moxley had joined the legislature in 2007 and sat in the same Energy and Environment Committee Hedke chaired. Himself a climate change skeptic, Moxley had changed his views after reading the science and, after witnessing the underhanded tactics used by the Koch network to defeat the bill and flip the house, he retired in disgust.

These same moves were executed in over a dozen states by the same Koch funded institutions and political operatives. Ohio and West Virginia passed similar bills against renewable energy. In these particular cases, the bills were not even modified from the drafts written by Koch-funded Heartland Institute and presented by ALEC. Through these machinations, Koch managed to redraw the country’s political map, setting the stage for the coup de grace in 2016.

Koch’s President

There’s no such thing as an outsider in American politics. No matter how seemingly removed from the established order an individual in either of the two sanctioned parties might be, a network of sponsors must exist behind the scenes to put wind in the sails of any prospective candidate for public office. Donald Trump, despite claims of being beyond the reach of special interests because of his wealth, is no exception. Certainly, no one can reach the highest office in the land, beset as it is by a multiplicity of foreign and domestic policy issues, without a powerful coterie of intensely interested patrons.

Donald Trump and Mike Pence during the 2016 Presidential campaign | Photo AP – Copyright 2016 The Associated Press.

Charles Koch had been working, greasing and diverting the political pipelines for decades by the time Donald Trump ran roughshod over the Republican Party and captured the electoral victory over Hillary Clinton in 2016. A narrative was quickly spread about Koch’s distaste for the New York real estate developer and media personality. Rumors of the billionaire brothers balking at Trump’s veiled, derisive references to their donor network fundraisers helped the NBC reality star appear to be a kind of anti-establishment, anti-oligarch maverick. Trump’s running mate would have been a red flag for anyone entertaining such ideas, if the Manhattan billionaire’s own status wasn’t a clear enough indication of the opposite.

Mike Pence was closely aligned with Koch’s Americans for Prosperity as Congressman and later Governor of the state of Indiana. Just six months into the new Trump administration, Charles Koch took an unscheduled, hour-long private meeting with Pence in Colorado where the fossil fuel baron, the Vice President and a few staffers discussed the President’s legislative agenda and, significantly, strategies to take after the midterm elections, which they already foresaw being a ‘blue wave’.

As Trump filled cabinet positions, Koch’s hand was more than visible to anyone with eyes to see. Rex Tillerson’s appointment as Secretary of State, while not directly tied to Koch Industries was, nevertheless, a blatant gift to the oil industry, in general. But, once Tillerson exited he was replaced with a Koch politician through and through in Mike Pompeo who was a member of the House Energy and Commerce Committee during the 112th Congress during Obama’s second term, when Republicans took control after the 2010 midterms.

Pompeo was then a freshman Republican from Wichita, Kansas, home of Koch Industries. Known as the “congressman from Koch”, Pompeo not only received funding for his political campaigns from Koch, but for his own aerospace company, as well. The future Director of the CIA even poached Koch’s lobbying team to find his Chief of Staff, Mark Chenoweth.

The Republican-controlled Committee featuring Pompeo had signed a “No Climate Tax” pledge invented by Americans for Prosperity. 156 Republican house members would go on to sign the same pledge and initiate the attack on their donors’ nemesis, the EPA, by taking away 27% of the Environmental Protection Agency’s budget.

Mike Pompeo (center) flanked by Senator Bob Dole (right) and Senator Pat Roberts (left) | Photo Joe Raedle – Getty

The radical transformation Koch and his cadre of billionaires had carried out in the nation’s political landscape was beginning to reach critical mass. The red lines their policy think tanks and front groups had drawn across the country had delivered a whole new species of politician to the halls of state and municipal power and, in turn, to the floor of the U.S. Congress. The next step was 1600 Pennsylvania Avenue.

Destroying the EPA

The plan to get rid of the Environmental Protection Agency would take six years to complete, according to David Schnare, the man tasked with putting it together. Schnare was a part of Trump’s EPA transition team, which also included AFP organizer, Charles Muñoz, senior research fellow at Weyrich’s Heritage Foundation and outspoken EPA opponent and climate change denier, Myron Ebell.

Schnare’s 47-page “Agency Action Plan” was a veritable wish list of the fossil fuel industry: elimination of the Clear Act Greenhouse Gas regulations, rescinding of federal fuel efficiency standards known as the CAFE standards and the end of Clean Coal laws. As for the agency itself, it would be broken up and its functions assigned to other agencies or ignored altogether.

Trump’s initial pick to lead the EPA, Scott Pruitt, was yet another creature of the oil interests. Attorney General of Oklahoma where oil reigned supreme, Pruitt ultimately proved to be to incompetent to see the job through and resigned a year later. His replacement, and EPA Administrator to this day, is former Coal industry lobbyist, Andrew Wheeler.

Koch Industries had been pegged as the largest toxic waste producer in the United States, responsible for 950 million pounds of hazardous material in 2012 alone. The company emitted the equivalent of 5 million cars a year in greenhouse gas pollution. Koch boasted of its “10,000%” compliance policy throughout its huge, cross-industry private corporation, but evidence of it is scant and often contradicted by the public record.

In 1998, the MPCA (Minnesota Pollution Control Agency) fined Koch $6.9 million for pollution from the Pine Bend refinery. An additional $11.5 million followed after federal criminal charges were brought against the company. One of Koch’s own employees, whose job it was to make sure the refinery was abiding by the clean water laws, had to blow the whistle on Koch after they tried to silence her when she tried to report the violations.

New Money, Old Game

The FBI’s case in the Osage murder investigation in the 1920’s revealed a plot so evil, that it transfixed the whole nation when the details were published in the biggest newspapers and projected on the earliest movie screens as news reels. William K. Hale had built a solid reputation in the Osage community as a stand-up citizen purporting to protect the interests and livelihoods of the Native Americans in this corner of Midwest America, who were sitting on a fortune beneath their feet. The people looked up to this White man as a beacon of righteousness and integrity.

Convicted murderer, William K. Hale; one of the
masterminds of the Osage murder plots

When it was discovered that he had masterminded the cold-blooded assassination of several Osage Indians in a plot to secure their headrights, worth millions of dollars, his name and face would become synonymous with the devil himself for the descendants of the Osage tribe. The satanic scheme was not limited to Hale, however, and while the FBI would never pursue any of the other leads in the epidemic of Osage murders, subsequent investigations have shown that dozens of other ‘masterminds’ and accomplices were killing hundreds of Osage Indians during this period in order to take over their oil fortunes.

The murderous “Indian business”, as it was called by the perpetrators themselves, reached high up the social ladder. Far beyond the relatively limited capabilities of a former ranch hand like W.K. Hale. But, Hale was enough for J. Edgar Hoover to establish himself as the nation’s top law enforcer. After all, the case was sensational enough to grab the public’s attention and peddle a reassuring tale of good triumphing over evil. But, the truth was that nobody really cared much about Native American lives and the 12 years Hale served of the “life sentence” he received for the single murder he was convicted of was more than most would have expected in those days.

A similar game, on a far larger scale, is being played out today with the calls for “liberty” and “free-markets” by the billionaire Koch network, posing as defenders of the everyman and patriots who seek only the best for America, have angled to trick an increasingly exploited and economically insecure population into supporting policies that, in the long run, cause us all irreparable harm.

The truth of their self-serving greed will make itself evident in its own time, much as it did when a repentant Koch oil gauger, unbeknownst to him, struck up a conversation with a relative of the very first victim in the Osage murder saga. Charles Whitehorn was shot between the eyes for his oil wealth and his corpse left rotting on a hill over a mile north of Pawhuska, Oklahoma. Osage Chief, Dudley Whitehorn, sat with the former Koch employee as his car was being repaired at a local gas station. “We did steal from you”, the remorseful man admitted.

 

Part Four of Multi-part series | go to part one >> / part two >> / part three >>

 

Works cited in this series: Kochland, The Secret History of Koch Industries and Corporate Power in America by Christopher Leonard; Democracy in Chains, The Deep History of the Radical Right’s Stealth Plan for America by Nancy MacLean; Dark Money, The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer; Killers of the Flower Moon, The Osage Murders and the Birth of the FBI by David Grann

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