Tag: Cato Institute

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 that 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.

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Which is apparently just 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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