Koch Industries’ Evil history of cheating, lying and breaking rules by ‘The Koch Method’
From 1999 through 2003, Koch Industries was assessed more than $400 million in fines, penalties and judgments. In December 1999, a civil jury found that Koch Industries had taken oil it didn’t pay for from federal land by mis-measuring the amount of crude it was extracting. Koch paid a $25 million settlement to the United States.
Phil Dubose, a Koch employee who testified against the company, said he and his colleagues were shown by their managers how to steal and cheat — using techniques they called the “Koch Method.”
In 1999, a Texas jury imposed a $296 million verdict on a Koch pipeline unit — the largest compensatory damages judgment in a wrongful-death case against a corporation in U.S. history. The jury found that the company’s negligence had led to a butane pipeline rupture that fueled an explosion that killed two teenagers.
Former Koch employees in the United States and Europe have testified or told investigators that they’ve witnessed wrongdoing by the company. Sally Barnes-Soliz, now an investigator for the Department of Labor and Industries in Washington state, says that when she worked for Koch, her bosses and a company lawyer at the Koch refinery in Corpus Christi, Tex., asked her to falsify data for a report to the state on uncontrolled emissions of benzene, a known cause of cancer. Barnes-Soliz, who testified to a federal grand jury, says she refused to alter the numbers. “They didn’t know what to do with me,” she says. “They were really kind of baffled that I had ethics.” Koch’s refinery unit pleaded guilty in 2001 to a federal felony charge of lying to regulators and paid $20 million in fines.
A Bloomberg Markets investigation has found that Koch Industries — in addition to being involved in improper payments to win business in Africa, India and the Middle East — has sold millions of dollars of petrochemical equipment to Iran, a country the United States identifies as a sponsor of global terrorism.
Internal company documents show that the company made those sales through foreign subsidiaries, thwarting a U.S. trade ban. Koch Industries units have also rigged prices with competitors, lied to regulators and repeatedly run afoul of environmental regulations, resulting in five criminal convictions since 1999 in the United States and Canada.
Charles, 75, and David, 71, each worth about $20 billion, are prominent financial backers of groups that believe that excessive regulation is sapping the competitiveness of American business. Charles and David have supported the tea party, a loosely organized group that aims to shrink the size of government.