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Billionaire Charles Koch is a patron of conservative causes - but out of public eye

By Carol Eisenberg

August 8, 2008 at 11:41am

Charles G. Koch may be the richest and most politically connected mogul you’ve never heard of.

Koch (pronounced Coke) heads Koch Industries, the world’s largest private company with oil refineries, gas pipelines, cattle ranches, paper mills and financial services which produce an estimated $90 billion in revenue a year. Although Koch is richer than George Soros or Carl Icahn - and spends millions each year to lobby Congress and to bankroll libertarian causes - he is largely unknown outside of his hometown of Wichita, KS.

Which is apparently the way he likes it.

“I don’t want to dedicate my life to getting publicity,” he told the New York Times more than a decade ago after his younger brother, William, a former America’s Cup winner, brought suit, claiming he had been cheated out of his rightful share of the company, and thereby, opening the company to scrutiny. The suit was eventually settled.

But though Charles Koch, now 72, prefers to fly below the radar, he is a true believer in what he refers to as the “science of market-based management.” Both he and his younger brother, David H., a co-owner of the family business, have disseminated Libertarian principles by pouring millions of dollars into conservative think tanks and advocacy groups, in addition to direct lobbying of Congress.

Koch Industries contributes more money to candidates through its political action committee (KochPAC) and its 80,000 employees, than any other oil or gas company - donating $1.15 million during the 2008 election cycle, according to the Center for Responsive Politics. The lion’s share of that, or 85 percent, went to Republicans; 15 percent went to Democrats.

(For comparison’s sake, the next biggest contributor, among major oil or gas companies, was Exxon Mobil, which donated $674, 359 in the 2008 cycle so far).

Very little, however, went to presumptive Republican nominee John McCain, though McCain has received millions from other oil and gas companies.

Although Koch Industry’s former top lobbyist - Nancy Mitchell Pfotenhauer – advises McCain on economic issues - the company has contributed only $6,750 to the GOP candidate thus far, according to the CRP. It has given nothing to Illinois Sen. Barack Obama, the presumptive Democratic nominee.

But Koch has donated generously to several Republican committees, including the Republican National Committee ($30,000), the National Republican Congressional Committee ($30,000), the National Republican Senatorial Committee ($30,000) and the National Democratic Senatorial Committee ($30,000), as well as to a slew of mostly GOP lawmakers.

Recipients of its largesse to Congress include Texas Republicans Joe Barton, Michael Burgess and John Culberson, and also Todd Tiahrt of Kansas (where Koch is headquartered), Paul Broun Jr. of Georgia, and Roy Blunt of Missouri; Top Senate recipients include Republicans Sam Brownback and Pat Roberts of Kansas, Mitch McConnell of Kentucky, Saxby Chambliss of Georgia, and John Barrasso of Wyoming, according to CRP.

But the brothers exert their greatest influence by seeding interconnected, libertarian-leaning advocacy groups and think tanks, bankrolled by foundations they control – the Charles G. Koch Charitable Foundation, the Claude R. Lambe Charitable Foundation and the David H. Koch Charitable Foundation, according to their tax filings.

Top recipients are the Cato Institute, the Reason Foundation, the Institute for Humane Studies, the Heritage Foundation, the Federalist Society and the Mercatus Center at George Mason University – all of which issue papers or advocate for the principles of free enterprise, market-friendly public policies including deregulation, and individual liberties.

David H. Koch was the Libertarian Party’s vice-presidential candidate in 1980, and serves as a director of the Cato Institute and the Reason Foundation, both Libertarian-leaning think tanks.

“It’s astounding that so few people have ever heard of a family this rich and powerful and aggressive when it comes to policy and politics,” analyst Jeff Krehely told the Center for Public Integrity. “When you talk about Koch, most folks think you are talking about the soft drink company.”

The Koches seem to have inherited their conservatism from their father. Fred Koch, the son of a Dutch immigrant who originally ran a Texas newspaper, developed a more efficient method of refining crude oil into gasoline in the late 1920s.

After being hit with patent suits from several oil companies, he emigrated to the Soviet Union where he helped build refineries for Josef Stalin. But he developed such a hatred for communism there that upon his return to the U.S., he became a member of the John Birch Society, according to a Forbes profile of the company.

All of his sons seem to have gotten his engineering gifts. Charles and David Koch got basic and advanced engineering degrees from the Massachusetts Institute of Technology. After working for several years for Arthur Little Inc., Charles Koch returned to Wichita after his father threatened to sell the business, and took control after his father’s death in 1967.

When he took over Koch Industries was a motley collection of oil pipeline assets with revenues of $250 million, according to the New York Times.

Charles expanded the pipelines and refineries, increased oil exploration and added natural gas, asphalt, paper products and chemicals to the product lines. Although there have been bumps along the way, he has grown the company into a conglomerate that sells everything from Stainmaster carpets and Dixie cups to oil and gas. His acquisition of Georgia-Pacific Corporation for $21 billion in late 2005 made Koch the largest privately held company in the nation.

Asked in 2006 whether he would ever sell shares of the company to the public, Charles Koch replied: “Over my dead body.”

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12 Comments

  • #1.   Frank P. Barrasso 08.08.2008

    I only wish Mr. Koch would share some of his wealth with us. Since United
    States Senator Dr. John Barrasso, M.D. is worth 9.2 Million dollars and dosen’t share a penny of his Net Worth with his family, maybe Mr. Koch would be willing to share some of that Oil Money with us. And I promise not even to spend a penny of the money Mr. Koch gives us on any Campaigns or Political contributions or even Associates…Us poor people in the Transportation Industry and Trucking Industry are being hit with big fuel costs were not dining out in Washington, D.C. like the wealthy United States Senator John Barrasso, M.D. Mr. Koch I love oil and I will be very happy to except any contributions you would like to forward us…were AFL-CIO Teamster and we work very hard for our money…Thank You Frank P. Barrasso
    Barrasso Transport, Inc (BTI) 160 Floral Park Street Islip Terrace, New York 11752 USA

  • #2.   Frank P. Barrasso 08.08.2008

    Thank you

  • #3.   Mike Mansfield 09.10.2008

    Mr. Barrasso. He does share his wealth. I am pretty sure his company, like yours, pays a trememendous amount of money in taxes. He also provides 80,000 families with a good and honest career and paycheck. Those 80,000 paychecks are also taxed and the things those 80,000 families buy are also taxed. This massive company provides a massive injection into the communities that they reside and something tells me that your transportation company has hauled something, sometime, for someone who has benefited from Mr. Koch directly and thus you indirectly.

  • #4.   Frank P. Barrasso 06.07.2009

    Has anyone had the opportunity to investigate the Long Island School Scandal and now what is being called the New York Pension Fraud which is in the Billions, and most likely to exceed 140 Billion dollars and now New Mexico has launched a similar investigation that involves many of the same people operarting in New York State and Long Island New York. Investiagtor Reporter of the Albuquerque Journal Mike Gallagher has been writing articles in reference to the State of New Mexico’s massive Teachers Fraud investigations although he is misleading people by not giving more details about this massive fraud cases. Reports are now also saying further cases are being investigated coast to coast it’s about time someone questions these unions and political leaders who have year in and year out covered up these ongoing criminal activities which will now cost the American Taxpayer 100’s of BILLIONS OF DOLLARS. I suggest writing to United States Senator John Barrasso, M.D. for further information in these PENSION FRAUD SCANDALS and demand answers from the United States Congress and the United States Senators and the United States Department of Justice and the United States Treasury. This investigation on Long Island and New York State has been assumed by the FEDERAL ORGANIZED CRIME TASK FORCE and the same should be done in New Mexico and California. Thank You.

  • #5.   ted nichols 09.27.2010

    Would you please do the same thing for George Sorros? Thought not.

  • #6.   Laurie Bennett 09.27.2010

    We’ve done numerous posts about Soros and the influence he wields. Conservatives across the web also love to link to our Soros map:
    http://www.muckety.com/George-Soros/4166.muckety

  • #7.   thomas oines 02.21.2011

    Leave Charlie be. I’m a union steamfitter 455 and he employs union labor at his refinery in pine bend mn. He pays them real well too. With libya in an uproar it looks like BP may be out of luck. Hey, Charlie, how about starting those projects that were put on hold 2 yrs, ago. I don’t think the price of oil is going down again. I could use the work.

  • #8.   Martin Murphy 03.10.2011

    Another wealthy republican asking for a free ride to enhance his wealth and limit his fair share of paying taxes.

  • #9.   Danny 08.27.2011

    Mike Mansfield’s comment pretty much covered every thought that raced into my mind after reading that first comment. I can’t tell if the commenter suffers from a spirit of envy or a defeatist attitude. If he is still reading this I would bet him to read the following books to both learn the truth about the rich he seems to hate and how to become one of them. These books inspired me to drop my “loser talk” and go from six figure debt to six figure income. “My Total Money Makeover”, “The Millionaire Next Door” and the “Question Behind the Question”.

  • #10.   Danny 08.27.2011

    @Martin Murphy

    It’s funny how when someone is successful their “fair share” is an unfair amount. I’m sure he wouldn’t mind paying more money as long as it was the same percentage as everyone else. I hate paying my taxes only because I know that half the country doesn’t. I pay taxes to pay someone that refuses to work.

  • #11.   superguts 05.14.2012

    Where are the links to Clarence Thomas? Scalia? Ted Olsen? Grover Norquist? This is an excellent chart/map but that ALEC/Koch crap is so expansive its hard not to be limited.. I’d call this a good start ! Someone please expand. tyvm

  • #12.   Laurie Bennett 05.16.2012

    You can expand any box with a + sign in the right corner by double-clicking on it. More options are available through the map tools bar on the left of every map.

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