Koch Industries

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Koch Industries, Inc.

logo
legal form Incorporated
founding 1940
Seat Wichita , Kansas ,United StatesUnited States
management Charles G. Koch ( President )
Number of employees 120,000
sales 110 billion dollars (estimate)
Branch Conglomerate
Website kochind.com

Koch Industries is a US company based in Wichita , Kansas . The mixing company is active in 50 countries in the production areas of crude oil, natural gas, chemicals , energy , asphalt, artificial fertilizers, food and plastics. Koch Industries is the second largest privately held company in the United States. The owners Charles (* 1935) and David Koch (1940–2019) are politically active in the libertarian - conservative and right-wing populist camp through Koch Industries as supporters of the tea party movement .

prehistory

In 1925, Fred C. Koch and his classmate Lewis E. Winkler founded an engineering company in Wichita, Kansas called the Winkler-Koch Engineering Company . Two years later, the two of them developed a novel and efficient thermal cracking process to produce gasoline from crude oil, thereby threatening the competitive advantage of the established oil companies, which then filed a patent infringement lawsuit. The company was temporarily barred from doing business in the United States and turned to other markets. Between 1929 and 1932 Winkler-Koch built 15 cracking plants in the Soviet Union , which enabled the previous pure oil supplier to build up its own oil industry. During this time Koch got to know the socialism of the Stalin regime. In 1934 and 1935 he was involved in the construction of the Eurotank refinery , one of the largest oil refineries of the Third Reich in Hamburg . In his book A Business Man Looks at Communism , published in 1960, he describes the Soviet Union as a “country of hunger, poverty and terror”.

In 1940, Fred Koch and new partners founded the Wood River Oil and Refining Company , which was renamed Koch Industries after his death .

Business activity

Since the death of Fred C. Koch in 1967, Koch Industries has owned the majority of his sons Charles and David Koch (42 percent each), or the widow of David Koch, Julia Koch, who died in 2019, and their 3 children. President and CEO is Charles Koch. David Koch was Vice President until mid-2018, then he retired for health reasons. Steve Feilmeier is the Chief Financial Officer . The company expanded primarily by buying other companies and development rights (see the list below). It was extremely successful. Revenue, which was $ 70 million in 1960, grew to $ 110 billion by 2018.

The Pine Bend Refinery (2018)

One of the most lucrative acquisitions was the Pine Bend Refinery (then Great Northern Oil Company ) in Minnesota , in which Koch Industries acquired the majority in 1969. This refinery processes very cheap crude oil from Canadian tar sands and therefore has a particularly high profit margin. Due to increasing environmental regulations, no major competition could establish itself in the area. This refinery is particularly "dirty" because the inferior crude oil requires a lot of energy to refine.

Since the 1970s, Koch Industries has been increasingly involved in legal disputes, particularly for non-compliance with environmental regulations. Charles Koch regards such regulations as “ totalitarian ” interference in his freedom as an entrepreneur, and in the Libertarian Review in 1978 he called on other entrepreneurs to radically oppose any state interference: “We should not cave in the moment a regulator sets foot on our doorstep. [...] Do not cooperate voluntarily; Instead resist wherever and to what extent you legally can. And do so in the name of justice . ”(“ We should not give in when a regulator enters our premises. [...] Do not cooperate voluntarily, but defend yourself where and as far as you can legally. And do it in the name of justice .) "

In 1989 the US Senate initiated an investigation into allegations that Koch Industries was deliberately stealing crude oil on a large scale from Indian reservations by falsifying measurements of the quantities extracted. In this as in other comparable cases, the company put pressure on witnesses and tried to discredit them. The Kochs also made donations to politicians involved, including Senator Don Nickles . He made sure that the prosecutor responsible for the case was replaced, and under the direction of the successor, the grand jury had the proceedings closed. One of the FBI agents involved in the case , Richard Elroy, then resigned and continued his investigations as a private detective on behalf of Bill Koch, a brother of the company bosses who was in a dispute with them and wanted to prove them illegal machinations he interviewed about 500 possible witnesses over the years. In 1999, there was a retrial and Koch Industries was found guilty of fraud in 24,587 cases.

Koch Industries was also sentenced to a particularly heavy $ 296 million fine in 1999 after two people were killed in an explosion caused by gas leaked from a defective pipeline. The court found not only negligence , but malevolence because the company was aware of the extremely poor condition of the previously decommissioned pipeline and local residents were not warned of the danger posed by this underground pipeline.

After these legal defeats, Koch Industries sold large parts of its pipelines, entered the financial sector on a large scale and diversified, among other things. a. by taking over the synthetic fibers division of DuPont for $ 4 billion and the Georgia-Pacific wood processing company for $ 21 billion. Still, Koch Industries remained one of the largest polluters in the US and was identified by the Environmental Protection Agency as the largest producer of hazardous waste in 2012 . In addition, the takeovers made the company one of the largest producers of formaldehyde , which was then officially classified as carcinogenic. Koch Industries attempted to oppose this classification, and it was in this context that it became known that David Koch was on the advisory board of the National Cancer Institute , which is involved in such decisions. Koch was outraged when he was suspected of having a conflict of interest.

The company is run according to principles that Charles Koch summarizes as Market-Based Management. Like entrepreneurs in a market economy, all employees are in competition with one another because their payment largely consists of success-related bonus payments . In line with the Koch brothers' political commitment to reforming the US criminal justice system, Koch Industries is one of the few large companies that expressly recruits former offenders after serving their sentences.

Development and company acquisitions

Below is a non-exhaustive list of acquisitions and the related events:

  • 1940: Fred Koch is a co-founder of the Wood River Oil and Refining Company
  • 1946: The company acquires Rock Island Oil & Refining Co. , Oklahoma
  • 1959: Renamed Rock Island Oil and Refining
  • 1959: Fred Koch takes a 35 percent stake in the Great Northern Oil Company in Saint Paul (Minnesota)
  • 1967: After the death of the company founder Fred Koch, his son Charles Koch takes over management of the company
  • 1967: Renamed Koch Industries
  • 1969: Charles Koch and J. Howard Marshall II gain a majority in the Great Northern Oil Company ; the refinery is in Koch Refining renamed
  • 1977: Koch takes over Abcor , which is renamed Koch Membrane Systems in 1985
  • 1981: The company takes over a refinery from Sun Oil in Corpus Christi, Texas
  • 1986: Acquisition of the C. Reiss Coal Company
  • 1989: Acquisition of the assets of the John Zink Company
  • 1992: Acquisition of the United Gas Pipeline
  • 1993: Elf Asphalt is acquired
  • 1997: Acquisition of the Delhi Group
  • 1998: Purina Mills , an American animal feed manufacturer, is taken over
  • 1998: Acquisition of shares in the polyester division of Hoechst AG , from which the later subsidiary KoSa is formed
  • 2000: A US bankruptcy court canceled the Purina acquisition in order to preserve it
  • 2001: partnership with Entergy Corporation , in the United Gas Pipeline is introduced
  • 2003: Acquisition of the fertilizer division from the bankruptcy estate of Farmland Industries
  • 2004: Entergy-Koch is sold again
  • 2004: Acquisition of INVISTA fibers and resins from DuPont and merger with KoSa (formerly the PE division of Hoechst). - In Germany then active as INVISTA Resins & Fibers GmbH
  • 2005: Acquisition of the Italian industry Meccaniche di Bagnolo SpA and renaming to Koch Heat Transfer Company Srl
  • 2005: Acquisition of Georgia-Pacific is the largest takeover in the USA
  • 2005: Takeover of Puron AG from Aachen, a membrane manufacturer for water treatment systems
  • 2012: Takeover of Guardian Industries Corp (glass production, headquarters Auburn Hills / Michigan, locations worldwide)
  • 2013: Acquisition of Molex for approximately $ 7.2 billion
  • 2014: Acquisition of the Flint Group , the second largest printing ink manufacturer worldwide

Political activities

Cash flow between the non-profit organizations in the Koch Brothers network in 2012

The Koch brothers run the Koch Family Foundation , a political foundation. This is considered to be one of the most influential sponsors of climate-skeptical positions . In addition to making substantial donations to conservative think tanks , she was also responsible for building organizations like the Cato Institute and Americans for Prosperity . Koch Industries is funding a "network of denial" to systematically discredit the credibility of certain scientists and prevent climate laws.

In order to establish their radical conservative- libertarian views in science, the Kochs financed the establishment of the Mercatus Center at the then insignificant George Mason University near Washington in the 1980s and were then the most important donors for this think tank, the as part of a state-sponsored university, according to critics, primarily serves the interests of Koch Industries. Together with the affiliated, Koch-funded Institute for Humane Studies , it had a significant impact on Ronald Reagan's tax policy, for example . A representative from the business school, James M. Buchanan , received the 1986 Nobel Prize .

In addition, the Koch-funded front organizations Americans for Prosperity and FreedomWorks played an influential role in the formation of the tea party movement through astroturfing campaigns . After that, they made a significant contribution to persuading the representatives of the Republican Party to deny man-made global warming . The Koch brothers also support the tea party movement financially and organizationally.

According to Greenpeace , between 1997 and 2008, Koch Industries poured almost $ 48 million into the work of organizations whose activities include the spread of climate skepticism. After the financing of climate denial groups and the like at the end of the 2000s. a. was made public by Koch Industries and Exxon , the number of direct grants fell significantly, while funding from the Donors Trust rose rapidly. This forwards donations anonymously, which means that the original origin of the funds can no longer be proven; this process is interpreted in the scientific literature as a concealment of the origin of the donation.

In 2014 it became known that the Koch Foundation tried to use donations to Florida State University to place professors with libertarian views in the economics faculty and thus to influence the courses offered. In total, the Charles Koch Foundation and three other Koch-led organizations donated US $ 106 million to US universities, including US $ 77.7 million to George Mason University , primarily to the Mercatus Center and the Mercatus Center there Institute for Humane Studies . At Western Carolina University , Koch Foundations funded the Center for the Study of Free Enterprise . Fears that the grants would be used to influence research and teaching in order to implement a social change strategy designed by Charles Koch and his strategist Richard Fink led to resistance at some universities.

For the run-up to the 2016 elections (including the presidential election , the election of the House of Representatives , the election of 34 of the 100 US Senators and the election of numerous governors), the Koch brothers set the goal of raising 900 million dollars. This would be the highest value ever used by private individuals in an election campaign. The politicians they support with millions of sums include Vice President Mike Pence and Scott Pruitt , a declared climate change denier and US Secretary of the Environment from 2017 to July 2018. About a third of all people in Donald Trump's transition team had connections to the Koch network.

literature

Web links

Footnotes

  1. ^ Leadership Bios
  2. ↑ Own information: website of the company , accessed on January 6, 2019
  3. ↑ a b c [1] at Forbes 2018: America's Largest Private Companies , accessed January 6, 2019.
  4. ↑ Jane Mayer: Dark money: the hidden history of the billionaires behind the rise of the radical right . Doubleday, New York 2016, ISBN 978-0-385-53559-5 , pp. 30 ( preview ).
  5. ↑ American billionaire David Koch is sick. In: www.faz.net. June 5, 2018, accessed June 5, 2018 .
  6. ↑ Jane Mayer: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, New York 2016. p. 140.
  7. ↑ Jane Mayer: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, New York 2016. pp. 49f.
  8. ↑ Jane Mayer: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, New York 2016. pp. 122f.
  9. ↑ Jane Mayer: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, New York 2016. pp. 130-138.
  10. ↑ Jane Mayer: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, New York 2016. pp. 128-130.
  11. ↑ Jane Mayer: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, New York 2016. pp. 138-140.
  12. ↑ Jane Mayer: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, New York 2016. p. 152.
  13. ↑ Thje Atlantic: The Case For Hiring Ex-Offenders , June 15, 2017.
  14. ↑ Flint Group sold , loaded on November 23rd, 2018
  15. ^ Justin Farrell, Corporate funding and ideological polarization about climate change . In: Proceedings of the National Academy of Sciences (2015), doi: 10.1073 / pnas.1509433112 .
  16. ^ Riley E. Dunlap, Aaron M. McCright: Organized Climate Change Denial. In: John S. Dryzek, Richard B. Norgaard, David Schlosberg (Eds.): The Oxford Handbook of Climate Change and Society . Oxford University Press 2011, pp. 144-160, esp. 149.
  17. ↑ Campaign against climate researchers: Where deserts are hocus-pocus. In: Süddeutsche Zeitung. March 30, 2010.
  18. ↑ Greenpeace: Koch Industries - Still Fueling Climate Denial (2011 Update)
  19. ↑ Jane Mayer: Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, New York 2016. pp. 149-151.
  20. ^ Riley E. Dunlap, Aaron M. McCright: Organized Climate Change Denial. In: John S. Dryzek, Richard B. Norgaard, David Schlosberg (Eds.): The Oxford Handbook of Climate Change and Society . Oxford University Press 2011, pp. 144-160, esp. 154.
  21. ↑ Moritz Koch: The great inheritance: Money - Power - Hate - Two brothers on a crusade. In: Süddeutsche Zeitung . September 25, 2010.
  22. ↑ John Vidal: US oil company donated millions to climate skeptic groups, says Greenpeace. In: The Guardian . March 30, 2010.
  23. ↑ George Monbiot: Think of a Tank.
  24. ^ Robert Brulle: Institutionalizing delay: foundation funding and the creation of US climate change counter-movement organizations . In: Climatic Change . tape 122 , 2014, p. 681-694 , doi : 10.1007 / s10584-013-1018-7 .
  25. ↑ Ed Pilkington: Koch brothers sought say in academic hiring in return for university donation. In: The Guardian. September 12, 2014, accessed September 26, 2014 .
  26. ↑ Alex Kotch: Charles Koch gave $ 90 million to influence higher ed in the South. The Institute for Southern Studies, December 3, 2015, archived from the original June 5, 2016 ; Retrieved June 5, 2016 .
  27. ↑ see also United States gubernatorial elections
  28. ↑ “Is climate change a fact?” - “No” . In: Handelsblatt . March 17, 2015. Accessed March 23, 2015.
  29. ↑ Bernie Sanders's inaccurate claim that the two Koch brothers will spend more than either major party on 2016 elections. In: Washington Post. October 22, 2015, accessed June 7, 2016 .
  30. ↑ Kerstin Kohlenberg: Money doesn't stink ... it rules . DIE ZEIT, June 8, 2017, p. 2f.
  31. ^ The Koch Brothers' most loyal servants are serving in Donald Trump's White House . In: Salon.com . January 12, 2017. Retrieved September 14, 2017.
  32. ↑ Alan Ehrenhalt: 'Dark Money,' by Jane Mayer . In: The New York Times . 2016, ISSN  0362-4331 ( nytimes.com [accessed April 2, 2018]).