The Billionaires You Don’t Know About

September 17, 2010 at 3:40 pm 1 comment

An article from the August 30, 2010 issue of The New Yorker, entitled, “Covert Operations: The Billionaire brothers who are waging a war against Obama,” is unfortunately titled. Though the article is definitely liberally biased, what I took from it wasn’t a conspiracy lobbed solely at Obama’s administration.  What I was shocked about was the fact that big money makes all sorts of things happen in America of which I am wholly ignorant.

These guys have almost completely escaped the attention of the American media. If you are not from either New York City or Wichita, Kansas, then I’m betting that there’s a pretty good chance you’ve probably never heard of either Charles or David Koch, the multi-billionaire brothers who are the subjects of the article. My guess is that as staid white billionaires in their seventies, they’re probably not considered sexy enough to get coverage.

Charles and David Koch are the sons of Fred Koch, a multi-millionaire who passed on his considerable fortune to his four sons. Fred Koch was an engineer who developed a new and better way of refining crude oil into gasoline. The story goes that Fred shopped his idea around to the big oil companies in the United States and was summarily turned down by all of them in 1927. Supposedly, the big oil companies regarded Fred Koch as a threat and shut him out of the oil industry altogether.

That’s when Fred Koch went to Stalinist Russia and built a bunch of way more efficient oil refineries over there. This profitable relationship might have gone on indefinitely had not Stalin decided to banish many of Koch’s Soviet co-workers during his years in the Soviet Union. Koch was deeply affected by their loss, was immediately sorry that he had ever partnered with the communist country, and came back home, fiercely anti-Communist in his philosophies.

Fred Koch, in the years leading up to the Second World War, heaped praise on Mussolini and warned that a civil rights movement in America would lead to a communist uprising. He made a speech in 1963 in which he claimed that Communists would eventually unknowingly infiltrate even America’s highest political offices.

After Fred Koch died in 1967, two of the brothers fought two of the other brothers for control of their father’s company. In 1980, William, thinking that Charles was assuming sole control without any deference to the other brothers, tried to take over control of the company. Freddie, the oldest brother, was an artist and supposedly a disappointment to their father. He sided with William, who was the twin brother of David. David, an affable playboy who moved to New York City, and agreed ideologically with his brother Charles, sided, of course, with Charles. A legal battle ensued and ended in 1983 when Charles and David bought out William and Freddie’s shares of the company. The feud was so bitter that the warring brothers would not speak with each other at their own mother’s funeral.

The company was named Koch Industries in 1967 upon their father’s death, and it is one of the largest privately owned companies in the world. Charles and David’s combined fortunes are third only to those of Bill Gates and Warren Buffett. Bet you’ve heard of them. Koch Industries makes most of its money from oil, but they also own Brawny paper towels, Dixie cups, Stainmaster carpet, Georgia Pacific Lumber, and Lycra. Bet you’ve heard of them, too.

Both Charles and David were heavily influenced by their father’s views, and they became staunch Libertarians. In their opinions, government and government interference, were the enemy. They do not believe in social services, and they think that The New Deal was the worst thing that ever happened to this country, which means that they disapprove of Social Security, among other things. Needless to say, they do not approve of taxes.

In 1979, Charles convinced David to run for political office. David definitely had the personality for it as he was a likeable and nice looking guy, described by others as amiable and less rough edged than his brother Charles.  He also definitely had the money for it. He could have funded his own political campaign even without the backing of another single living soul.  David ran in the Vice Presidential slot for the Libertarian campaign. Their slogan was, “The Libertarian Party has only one source of funds: You.” In truth, it was more like the Libertarian Party had only one source of funds: David Koch.

The Libertarian Party, of course, did not take the White House in 1980. What the Kochs learned from the experience was that the way to affect the kind of change they wanted to see in America was not to run for political office. They did not have the kind of grassroots support for their vision of America that is needed to win an election. What they could do, however, was to subtly influence popular culture by funding an enormous number of non-profits, think tanks, and academics to lobby and write scholarly opinions in support of their political goals. And, of course, their political goals are in support of the profit margins of Koch Industries.

Jane Mayer’s expose on the Koch brothers gives a quote at the beginning of the article, from Charles Lewis of the nonpartisan watchdog group, Center for Public Integrity. Lewis says of the Koch brothers, “There’s no one else who has spent this much money…They have a pattern of lawbreaking, political manipulation, and obfuscation…They are the Standard Oil of our times.”

In 2004, David Koch founded a group called Americans for Prosperity, a group that provided training for future Tea Party crusaders. Peggy Venable, the leader of the Americans for Prosperity, a woman who has been on the Koch payroll since 1994, readily admits that although the Tea Party has not been directly funded by the Kochs or their business entities, the purpose of Americans for Prosperity is to provide Tea Partiers with the education, policy details, and political energy to be effective. Americans for Prosperity also provides them with a list of which politicians they should channel their energies toward defeating. It’s a form of political manipulation, faintly reminiscent of The Manchurian Candidate.

The Kochs, in addition to heavily influencing the “grassroots” Tea Party movement, also fund other groups that further their own interests, including the Cato Institute, a think tank dedicated to funding and completing research that always supports the foregone conclusion that Global Warming doesn’t exist. They consistently lobby against environmental control or reform, oppose alternative energy sources to fossil fuels, and funnel huge amounts of money to The Mercatus Center through charitable donations to George Mason University.

The Mercatus Center is a hugely politically influential think tank. Many policy changes implemented by the George W. Bush administration were first proposed by the brains at The Mercatus Center. What is their favorite target? The Mercatus Center writes a lot of opinions critical of The Environmental Protection Agency. Koch Industries is constantly in trouble with the E.P.A. Does anyone think this is a coincidence?

I wonder why anyone with as much money as the Kochs have feels the need to manipulate the system to create more wealth for themselves. Why take shortcuts with the environment when you could use some of the huge amounts of money that is being funneled to politicians and think tanks and instead channel it into creating alternative fuels or use it to meet existing environmental regulations instead of trying to shortcut or circumvent the system?

It seems to me that the Koch brothers are trying to emulate their father in their political aims, and they are totally forgetting that their father was an original thinker. He invented a more efficient way of refining oil. Why don’t David and Charles take that same energy and passion and direct it into creating alternative forms of energy that are less harmful for our environment? Think outside the box.


Entry filed under: Current Events, Ecology, Economy, Money and Finances, Politics. Tags: , , , , , , , .

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1 Comment Add your own

  • 1. David F  |  September 17, 2010 at 10:05 pm

    An interesting and informative article. As an Englishman and Christian, I rejoiced at the election of Barack Obama in 2008 as I felt that the G W Bush administration had contributed to huge human suffering in particular in Iraq in the Middle East. Obama was a conviction politician with a socially minded agenda to help the most disadvantaged in American society. Perhaps, it is true that the Obama adminstration has not been as much of a charismatic and reforming force within the USA as his emotive and morally potent political campaign for election promised. However, reading, watching and hearing about the Tea Party movement in the United States really causes shivers down my spine. It is difficult to express what a huge cultural huge gulf exists between Americans who support such political, religious and social views and the average politically active English or European person (Christian or non-Christian) across the channel. I am sorry to read of the influence of billionaires such as the Koch brothers in American society and political life. Maybe people should say “God help America”, not “God save it”.


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