WHILE I HAVE ON OCCASION TOUCHED BRIEFLY on the role of Charles and David Koch, in the creation of the labyrinthine confusion of webs — social, political and financial — that constitute the conservative right in American politics today, I thought to do so with a bit more focus at this point.
(Special note: My vast store of Koch lore has filled both my attic and computer to overflowing, but to ease this short introductory essay along I am going to draw primarily from one major analysis of the Kochs published on AlterNet, by Yasha Levine, “The Roots of Stalin in the Tea Party Movement,” April 16, 2010.)
“Fred Koch, father of the present rulers of the Koch empire, started up an engineering company with a former classmate and developed a novel process to refine gasoline from crude oil that had a higher yield than anything on the market.
“Then, via the courts, the reigning oil cartel blocked its introduction and squeezed Winkler-Koch out of the American market for fifteen years.
“Fortunately Stalin’s first Five-Year Plan was just kicking into action a nation-wide industrialization effort. … The Soviet Union was desperately trying to increase its oil refining capacity, so oil engineers were especially in high demand — and well paid, too.”
“In 1929, Winkler and Koch signed a $5 million contract to build 15 refineries in the Soviet Union. According to Oil of Russia, a Russian oil industry trade magazine, the deal made Winkler-Koch into Comrade Stalin’s number-one refinery builder. It provided equipment and oversaw construction.” Please let this not be so; stalwart Americans feeding the Red Menace!
“By 1933, Koch earned $500,000, which was a boatload of money at the time. This money served as the foundation for the family’s future assets, which Koch started acquiring at rock-bottom prices. 1933 was one of the two worst years of the Great Depression — all assets were priced to go at 90 percent off. In the end, the capitalist-hating socialists ended up treating Koch fairly, way better than the monopolistic thrashing he got from his native land. Surely, one would think he’d at least have something good to say about the Soviet Union when he got home.”
But this was not to be. His angry hatred of the commies, however, was something Fred Koch kept to himself until the late 1950s, and after he stopped profiting from them. The timing of this powerful reaction was not clear, given the thaw of post-Stalin Russia. Before he died, he warned about “a massive communist conspiracy to take control of America, saying that the Reds were eroding American universities, churches, political parties, the media and every branch of government.” Oh, the bloody shame of it all! How could anyone stand to do business with folks like these!
As noted by Levine, “The Tea Party movement’s dirty little secret is that its chief financial backers owe their family fortune to the granddaddy of all their hatred: Stalin’s godless empire of the USSR. The secretive oil billionaires of the Koch family, the main supporters of the right-wing groups that orchestrated the Tea Party movement, would not have the means to bankroll their favorite causes had it not been for the pile of money the family made working for the Bolsheviks in the late 1920s and early 1930s. …The comrades were good to the Kochs.”
As for the Kochs under Obama, in just three years from 2010 to 2013 their net worth rose from $17.5 billion to $36 billion apiece, according to Forbes. Damn shame the socialist Obama clipped the wings of the wealthy! Consider only what heights could have been reached under capitalism.
With their considerable wealth the Kochs bankroll scores of free-market and libertarian think tanks, institutes and advocacy groups. Greenpeace estimates the Koch family shelled out $25 million from 2005 to 2008 funding the “climate denial machine,” which means they outspent Exxon Mobile three to one.
“I first learned about the Kochs in February 2009,” Levine writes, “when my colleague Mark Ames and I were looking into the strange origins of the then-nascent Tea Party movement. Our investigation led us again and again to a handful of right-wing advocacy groups directly tied to the Kochs. We were the first to connect the dots and debunk the Tea Party movement’s ‘grassroots’ front, exposing it as billionaire-backed astroturf campaign run by free-market advocacy groups FreedomWorks and Americans For Prosperity, both of which are closely linked to the Koch brothers. …
“Everyone’s a free-market enthusiast at Koch Industries, including its spokeswoman, who recently wrote a letter to the New York Times stating that ‘it’s a historical fact that economic freedom best fosters innovation, environmental protection and improved quality of life in a society.’ It might be true somewhere for someone, but not for the Kochs — they owe it all to socialism and totalitarianism!”
Let’s face it. In 1933 when every millionaire in the country was going belly up, the Kochs were rolling in Soviet boodle. In short, “the family’s initial wealth was not created by the harsh, creative forces of unfettered capitalism, but by the grace of the centrally planned economy of the Soviet Union.”
By the middle of the century the company had begun to expand at an unreal rate: its revenues increased from $100 million in 1966 to $100 billion in 2008 — a thousand-fold growth. Today, Koch Industries operates thousands of miles of pipelines in the United States, refines 800,000 barrels of crude oil daily, buys and sells the most asphalt in the nation, is among the top 10 cattle producers, and is among the 50 largest landowners. The company also poured hundreds of millions of dollars into right-wing organizations like the Institute for Humane Studies, the Cato Institute, the Mercatus Center at George Mason University, the Bill of Rights Institute, the Reason Foundation, Citizens for a Sound Economy and the Federalist Society — all of them promoting the usual billionaire-friendly ideas of the free market, deregulation and smaller government.
William Koch, the third brother who had a falling out with Charles and David back in the ’80s over Charles’ sociopathic management style, appeared on “60 Minutes” in November 2000 to tell the world that Koch Industries was a criminal enterprise: “It was — was my family company. I was out of it,” he says. “But that’s what appalled me so much … I did not want my family, my legacy, my father’s legacy to be based upon organized crime. …
“Charles Koch’s racket was very simple, explained William: With its extensive oil pipe network, Koch Industries’ role as an oil middleman — it buys crude from someone’s well and sells it to a refinery — makes it easy to steal millions of dollars worth of oil by skimming just a little off the top of each transaction, or what they call ‘cheating measurements’ in the oil trade. According to William, wells located on federal and Native American lands were the prime targets of the Koch scam.
“‘What Koch was doing was taking all these measurements and then falsifying them on the run sheets,’ said Bill Koch. One year, their data showed they stole a million and a half barrels of oil. He sued Koch Industries in civil court, accusing the company of stealing hundreds of millions of dollars in oil from federal lands.
“The band of brothers settled the case two years later, with Charles agreeing to pay $25 million in penalties to the federal government to have the suit dismissed. It turned out to be a great deal for Charles and David, considering that in the 1980s their “adjustments” allowed Koch Industries to siphon off 300 million gallons of oil without paying. It was pure profit — free money — to the tune of $230 million.
“At the trial, 50 former Koch gaugers testified against the company, some in video depositions. They said employees even had a term for cheating on the measurements. ‘We in the company referred to it as the Koch Method because it was a system for cheating the producer out of oil,’ said one of the gaugers, Mark Wilson.”
Ah, finally! Have we stumbled onto the secret to the family’s success? At the bottom of it all, is the Koch Method that funds all the libertarians nothing but old-fashioned theft?
Or, as Koch hero Ludwig von Mises might ask, “Is the Koch Method just an unceasing sequence of single thefts?”
Jerome Page is a Benicia resident.
Harvey Rifkin says
Jerry: Brilliant expose’ of the “Koch Thugs”! I ws going to do an article on the “Devil incarnate brothers”, but you beat me to to finish line and I humbly thank you. These Koch’s are poster boys for giving free market honest capitalism a failing grade. I do believe that there is a considerable role for moral free market “Uncrony” capitalism in our society. At the end of the day it is up to every progressive caring American to influence government to strictly punish these amoral thieves and despots to the point of causing their type of economic behavior to be vastly unprofitable. A “slap on the wrist” fine by government only becomes a cost of doing business. These “Incedulous Bastards” must be brought to the brink of bankruptcy as an example to other “Economic Thugs” that patriotic Americans of integrity have zero tolernance for “Bad behaving capitalists” whose arrogance and disregard for business ethics goes beyond reasonability. Keep up your good work of exposing these types of “Bad Actors”. I would like to see how some of our local intractable right wing pundits would go about defending the very bad immoral behavior of the “Koch Mafia”.
Will Gregory says
More detailed information on the Koch brothers for the community to consider…
A key excerpt: Read the full report at the source listed below.
“The past two weeks of the government shutdown brought to light the irresponsible influence of Koch-funded groups,” said Bold Nebraska Director, Jane Kleeb. “Rewarding the Koch Brothers with Keystone XL, who at every turn fund campaigns to mislead Americans on everything from climate to gas prices, is like the President advocating for Sen. Cruz to be the Majority Leader. It makes no sense. Farmers and ranchers in Nebraska are depending on Pres. Obama to see our national interest is not served with a pipeline that lines the pockets of climate deniers and foreign oil.”
http://kochcash.org/justreleased/
Source: International Forum on Globilization
John says
Interesting article. I wonder if there will ever be an article on George Soros and his political dealings, including his involvement as the man who broke the Bank of England?
environmentalpro says
No! That is pure fiction. Unless you can prove otherwise.
John says
Pro, Google it yourself. There are countless articles on it. You can then read about how he is one of the most feared currency investors in the world. Or you can read about the billions he made from Obama’s stimulus package. The list goes on and on. But I doubt you will see anything written here about it because it is much more fun to read about the Koch Brothers since they are not liberal.
Hank Harrison says
http://www.politicususa.com/2013/10/20/lets-straight-kochs-menacing-soros-benevolent.html
environmentalpro says
Then I guess you can quit wondering. Unless you meant “if there will ever be an article on George Soros” here on the Benicia Herald. Then I would suggest you make a formal request to some of the more rightward twisted columnists. But, I fear they might be caught up in other tunnel vision-based pursuits.
As an aside, it would be nice never to hear anything ever again about the Koch brother. Although their behavior probably precludes that reality.
John says
My point Pro is that for every nut case on the right there is one on the left. However, those with a liberal slant believe there is a great evil as do those with a conservative slant. There are nut cases on BOTH sides, neither conservatives nor liberals have a lock on them. You slam Fox for its slant, yet no mention is made of MSNBC. Someone posts a comment from a conservative web site and then a comment from a liberal site, such as PoliticusUSA is posted. Each side can continue this back and forth crap. The part I get a kick out of is BOTH sides think the other is the great evil and refuse to see the same in their “side”. There is no political discussion anymore, there is just this constant back and forth blame game with absolutely no attempt by either conservatives or liberals to work together. Each side prefers to blame the other when both are guilty of the same crap.
Hank Harrison says
A pox on both their houses! Your exegesis is distilled false equivalence. But who doesn’t wish we all could just get along?
John says
Exegesis? False equivalence? You have just proven my point Hank. What’s the point? Let us continue on the path we are on since it is working so well. And let’s continue to blame each other instead of holding our elected officials responsible to actually acomplish something.
environmentalpro says
You are correct. Pomposity, conceit, and blow-hardiness is the same no matter how you slice it.
robert Livesay says
.Many might think they are heros. Many think as Mr. Page does and of course other Liberals. I do believe they took advantage of Stalin and learned a mighty lesson along the way. The Commies were our enenies. So would it not be natural for them to think the same of the Liberal Socialist as an enemy of capitalism in his own country. It does appear the fear is correct and has always been correct. I am not defending anyones way of doing business but you just might do a little research and understand who on the far left leaning Liberal Socialist list has the same or similar practices. You will find out and you will see it at once. I am not going to do the research for you, do your own. You just might be surprised.
DDL says
From the piece: ”the (Koch) family’s initial wealth was (created)… by the grace of the centrally planned economy of the Soviet Union.” Yasha Levine
How anyone can have such an admiration for Soviet Communism is astounding, and is reflective of just what leftists are willing to ignore to advance their ideology.
I take it from this piece that the Koch brothers are worse than Uncle Joe Stalin himself and that the Koch Brothers should feel a level of loyalty to Mother Russia and Communism.
Let’s ignore the 15-20 million people (those numbers may be low) that were murdered by Stalin, let’s just call that a ‘shakedown’ cruise (stealing a term used on this blog to excuse totalitarianisms) on the way to a Communist Utopia.
Let’s consider that Fred Koch when he went to Russia, learned first-hand about the ‘grace of the Soviet Union’. His business partners were murdered, the Russians he sponsored to be trained in the USA were later killed and/or sent to gulags and the businesses he helped to start were taken over by the state.
Fred Koch also learned of the Soviets plans and infiltrations into the USA at many levels both inside and outside of the government.
So while this piece focuses exclusively on the evil side of the Kochs, it willfully ignores the far greater evil of the Soviet Union which Yasha Lavine seems to adore.
There are few people who appreciate America more than those who witnessed the horrors of Communism first hand.
The author of this column takes justifiable pride in his service to our country in defeating Germany in WWII. But that regime’s actions pales in comparison to those of Stalin. To think that what Fred Koch learned of first-hand while in Russia would not have an influence on him and his children is a huge omission of a very pertinent fact.
Robert M. Shelby says
Dennis, you just made me sick of you again! You fling your tar-brush around like you have no concept of fair balance and discrimination of issues or causes. Nor the fact that actual people do not conform to the narrow templates in your head that you provide for their horse-stall-like housing. Do clean up the eff-ing barn in your mind. Puh-leaze?? Yes, oh, yes, the Soviet experiment was a human nightmare. But, the threatened passage of Trans-Pacific Partnership Agreements will almost certainly end up equally terrible for U.S. and foreign labor, environment across the world, sovereign nations’ legal codes and humane democracy everywhere. The history and results of NAFTA are pale shadows of TTP’s likely bad consequences. (Remember, Clinton pushed NAFTA with the hopeful (wishful) view that follow-up legislation and negotiation would mitigate the bad effects on labor, nature and domestic matters. That never happened! Industry flowed to Mexico, for instance, with that “huge sucking sound” predicted by Perot. KILL the TTP, NOW. It’s nothing but raw corporatism gone rotten. Except for WWII’s ultimate repercussions, Hitler was better for Germany than TTP will be for these United States. We’ll have to start calling them the Untied States.
robert Livesay says
Shelby get up to date it is all coming back thanks to the Conservatives. Sorry Robert you are out of touch.
Robert M. Shelby says
Bullsheish, Bobby.
robert Livesay says
Excellent comment Dennis.
DDL says
Thank you Bob.
Yasha Levine.
I knew the name, but could not place it right away. Here is a link to “The Exile’d”, an online publication that he writes for.
I would encourage all readers to go to the link and draw your own conclusions.
Hank Harrison says
When they don’t like the message they go after the messager. The Kochs are so lucky to have such useful idiots at their disposal — like Stalin was lucky to have the useful idiot Fred Koch.
Robert M. Shelby says
Robert L., you can’t tell the difference between excellence and foolishness.
robert Livesay says
I do know the difference between a word freak and someone who makes sense. Sorry Shelby you do not qualify as making sense but as a word freak you did invent it to make yourself and no one else look like they are an intilect which you are not. Sorry Robert you have never made any sense.
Robert M. Shelby says
Eff you, Sillyman The Magnificent.
Harvey Rifkin says
There are bneefits to be taken from Capitalism, Socialism, and Communism that are benficial to the average America. None of the above ideoligies are all Good or Bad. The main problem with Stalin was Totalitarianism not communisn. On the Flip side we have exapanding Fascism in American where the rights and finnacial strengthy of the average American continuse to be subjugated the needs of the elite. On emust not confuse and economic system with a governments need to take away human and civil rights. The US role in the world since WWII has been far less than stellar. America has been of teh biggest perpetrators of terrorism in the world; far more than our alleged Muslim friends.
Robert M. Shelby says
You got that right, Harvey! For sure.
DDL says
Rifkin stated:The main problem with Stalin was Totalitarianism not communism
so what we need is “Compassionate Communism”
This is a perfect example of why I blocked your crap from infesting my computer. Name one country where Communism has succeeded that was not based on Totalitarianism.
You can’t, because it does not work and goes against human nature.
Naturally Shelby agrees with you, that is to be expected.
Robert M. Shelby says
Mr. Page, I came across that article, too. You made fine work of it, as usual. (Damn the torpedo-heads and full speed ahead. Fire when ready, Gridley.) I wrote a two part piece on the petroleum Coke-head Brothers, but Marc didn’t print. I was thinking about a third installment to nail ’em to the wall, but won’t need to, now.
Thanks, with blessings and cheer!
robert Livesay says
Sorry Robert the article is socialist inspired.
robert Livesay says
By the way Robert do you consider yourself a Socialist also? I do believe the readers would like to know.
Robert M. Shelby says
No, you Ah-hole, I read the socialist and communist documents in the 1950s and understood their shortcomings, as the then-current examples displayed. Still, uncontrolled capitalism is far from the answer to everything, either. Harvey is right about imperfection all around, and the need for balanced mixture in this country. As to your TYPICALLY stupid question, no, I do NOT consider myself a socialist. I leave that to impossible people like yourself.
robert Livesay says
Well what do you know when you can not win attack with profanity. That is twice you did it. Sorry Robert you have now reached your lowest point. I understand how the truth hurts you deeply. That is something you may want to review.