<![CDATA[Forums - Campaign funding]]>

<![CDATA[Forums - Campaign funding]]> http://rightwingers.org/forums/ Thu, 16 Apr 2026 13:50:02 +0000 MyBB <![CDATA[Mail ballots rigging]]> http://rightwingers.org/forums/thread-2877.html Sun, 04 Oct 2020 18:19:30 +0000 http://rightwingers.org/forums/thread-2877.html Quote:"Where is the river?" the reporter asked. Ms McEnany, rather than answering the question, launched into a defensive tirade accusing the reporter of "missing the forest for the trees" and accusing him and others of lacking "journalistic curiosity." "The other day [Mr Trump] said 'they found a lot of ballots in a river.' Who is they?" the reporter asked. "Who is 'they,' that found those ballots, and where is this river, anywhere in this country?" McEnany claimed the "local authorities" were the ones who found the ballots in a ditch in Wisconsin. The reporter asked if that meant that Mr Trump misspoke, which McEnany denied. Then the reporter read Mr Trump's quote back to her, in which he claimed ballots were dumped in rivers and creeks. At that point, Ms McEnany accused him of being shortsighted. White House can't identify mystery river where Trump claims ballots were dumped | The Independent]]> Quote:"Where is the river?" the reporter asked. Ms McEnany, rather than answering the question, launched into a defensive tirade accusing the reporter of "missing the forest for the trees" and accusing him and others of lacking "journalistic curiosity." "The other day [Mr Trump] said 'they found a lot of ballots in a river.' Who is they?" the reporter asked. "Who is 'they,' that found those ballots, and where is this river, anywhere in this country?" McEnany claimed the "local authorities" were the ones who found the ballots in a ditch in Wisconsin. The reporter asked if that meant that Mr Trump misspoke, which McEnany denied. Then the reporter read Mr Trump's quote back to her, in which he claimed ballots were dumped in rivers and creeks. At that point, Ms McEnany accused him of being shortsighted. White House can't identify mystery river where Trump claims ballots were dumped | The Independent]]> <![CDATA[A brilliant expose on the broken system..]]> http://rightwingers.org/forums/thread-2713.html Fri, 08 Feb 2019 15:13:30 +0000 http://rightwingers.org/forums/thread-2713.html Quote:Alexandria Ocasio-Cortez has used a speech before finance watchdogs to expose the vast conflicts of interest which shape American politics. In just three minutes the Democrat congresswoman laid bare the almost total absence of rules stopping lawmakers from being bought off by wealthy corporations. “We have a system with right now which is fundamentally broken,” she concluded after her question and answer session with a panel of senior figures from campaign finance watchdog groups.

The 29-year-old told the officials she wanted to imagine what she could do within the current rules if she was a “bad guy” who wanted to “enrich myself and advance my interest, even if that means putting that ahead of the American people”. “Let’s say I have some skeletons in my closet that I need to cover up so I can get elected. “If I want to run a campaign that is entirely funded by corporate political action committees, is there anything that legally prevents me from doing that?” she asked. The panel admitted there were no regulations stopping politicians from pursuing such a course of action.

Ms Ocasio-Cortez then went further: “So I use my special interest dark money-funded campaign to pay off folks that I need to pay off to get elected. “Now I’m elected I have the power to draft, lobby and shape the laws that govern the USA. I can be totally funded by oil and gas, by big pharma, and there’s no limit to that whatsoever.” The congresswoman, who represents New York’s 14th district, then noted how a corrupt legislator could even buy stocks in a company, then write laws deregulating that industry, causing the share price to soar and pocket a huge profit. “You could do that,” confirmed one of the officials, adding that even the minor ethics regulations which did apply to members of Congress did not affect the president.

“So I and every member of this body are being held to a higher ethical standard than the president of the United States,” Ms Ocasio-Cortez concluded. Minds “It’s already super legal as we have seen for me to be a pretty bad guy. So it’s even easier for the president to be one.” Ms Ocasio-Cortez won her seat in congress by unseating long-time Democrat elder statesmen Joe Crowley, who outspent her in the primary campaign 18 to 1. Almost 75 per cent of her campaign funding came from small individual donations, compared to just 1 per cent for Mr Crowley, who was mostly funded by larger businesses. Alexandria Ocasio-Cortez delivers devastating dissection of US financial system and political corruption in congress speech | The Independent]]> Quote:Alexandria Ocasio-Cortez has used a speech before finance watchdogs to expose the vast conflicts of interest which shape American politics. In just three minutes the Democrat congresswoman laid bare the almost total absence of rules stopping lawmakers from being bought off by wealthy corporations. “We have a system with right now which is fundamentally broken,” she concluded after her question and answer session with a panel of senior figures from campaign finance watchdog groups.

The 29-year-old told the officials she wanted to imagine what she could do within the current rules if she was a “bad guy” who wanted to “enrich myself and advance my interest, even if that means putting that ahead of the American people”. “Let’s say I have some skeletons in my closet that I need to cover up so I can get elected. “If I want to run a campaign that is entirely funded by corporate political action committees, is there anything that legally prevents me from doing that?” she asked. The panel admitted there were no regulations stopping politicians from pursuing such a course of action.

Ms Ocasio-Cortez then went further: “So I use my special interest dark money-funded campaign to pay off folks that I need to pay off to get elected. “Now I’m elected I have the power to draft, lobby and shape the laws that govern the USA. I can be totally funded by oil and gas, by big pharma, and there’s no limit to that whatsoever.” The congresswoman, who represents New York’s 14th district, then noted how a corrupt legislator could even buy stocks in a company, then write laws deregulating that industry, causing the share price to soar and pocket a huge profit. “You could do that,” confirmed one of the officials, adding that even the minor ethics regulations which did apply to members of Congress did not affect the president.

“So I and every member of this body are being held to a higher ethical standard than the president of the United States,” Ms Ocasio-Cortez concluded. Minds “It’s already super legal as we have seen for me to be a pretty bad guy. So it’s even easier for the president to be one.” Ms Ocasio-Cortez won her seat in congress by unseating long-time Democrat elder statesmen Joe Crowley, who outspent her in the primary campaign 18 to 1. Almost 75 per cent of her campaign funding came from small individual donations, compared to just 1 per cent for Mr Crowley, who was mostly funded by larger businesses. Alexandria Ocasio-Cortez delivers devastating dissection of US financial system and political corruption in congress speech | The Independent]]> <![CDATA[Permanent minority rule]]> http://rightwingers.org/forums/thread-2696.html Sun, 04 Nov 2018 13:47:17 +0000 http://rightwingers.org/forums/thread-2696.html Quote:The American right is in the midst of a formidable project: installing permanent minority rule, guaranteeing control of the government even as the number of actual human beings who support their political program dwindles. Voter suppression is one, but only one, loathsome tactic in this effort, which goes far beyond just winning one election. Minority rule is the result of interlocking and mutually reinforcing strategies which must be understood together to understand the full picture of what the American right wants to achieve.

Examples are everywhere. Take North Dakota. In 2012, Heidi Heitkamp, a Democrat, won a surprise victory in a Senate race by just 2,994 votes. Her two largest county wins were in the Standing Rock and Turtle Mountain Reservations, where she won more than 80% of the vote. Her overall vote margin in counties containing Native reservations was more than 4,500 votes. Observing that Heitkamp literally owed her seat to Native voters, North Dakota’s Republican legislature enacted a voter ID law that requires voters to present identification showing their name, birth date and residential address. There’s the rub: many Native voters do not have traditional residential addresses, so this law effectively disenfranchises them. Rigging the vote: how the American right is on the way to permanent minority rule | Ian Samuel | Opinion | The Guardian

They have to lie about their policies (tax cuts for the rich and cutting entitlements) because they are VERY unpopular.
They rarely win the popular vote
Vote suppression
Stuffing regulator bodies and courts with conservatives
Campaign law financing allowing unlimited dark money

Etc. etc.]]> Quote:The American right is in the midst of a formidable project: installing permanent minority rule, guaranteeing control of the government even as the number of actual human beings who support their political program dwindles. Voter suppression is one, but only one, loathsome tactic in this effort, which goes far beyond just winning one election. Minority rule is the result of interlocking and mutually reinforcing strategies which must be understood together to understand the full picture of what the American right wants to achieve.

Examples are everywhere. Take North Dakota. In 2012, Heidi Heitkamp, a Democrat, won a surprise victory in a Senate race by just 2,994 votes. Her two largest county wins were in the Standing Rock and Turtle Mountain Reservations, where she won more than 80% of the vote. Her overall vote margin in counties containing Native reservations was more than 4,500 votes. Observing that Heitkamp literally owed her seat to Native voters, North Dakota’s Republican legislature enacted a voter ID law that requires voters to present identification showing their name, birth date and residential address. There’s the rub: many Native voters do not have traditional residential addresses, so this law effectively disenfranchises them. Rigging the vote: how the American right is on the way to permanent minority rule | Ian Samuel | Opinion | The Guardian

They have to lie about their policies (tax cuts for the rich and cutting entitlements) because they are VERY unpopular.
They rarely win the popular vote
Vote suppression
Stuffing regulator bodies and courts with conservatives
Campaign law financing allowing unlimited dark money

Etc. etc.]]> <![CDATA[The Koch's anti-environmentalist lobby]]> http://rightwingers.org/forums/thread-1607.html Mon, 17 Jul 2017 16:16:35 +0000 http://rightwingers.org/forums/thread-1607.html

Quote:President-elect Donald Trump raised eyebrows late last year when he named the head of an obscure right-wing think tank, with close ties to petrochemical billionaires Charles and David Koch, to lead his energy transition team. Since then, officials from the Institute for Energy Research (IER) have been appointed to high-level positions at the Department of Energy where they are playing major roles in implementing pro-fossil fuel, anti-renewable energy policies. Thomas Pyle, who serves as president of IER and its advocacy arm, the American Energy Alliance (AEA), set the tone by drafting a priority list for the new administration; at the top of the list was withdrawal from the Paris climate agreement.

Soon after Trump took office, newly appointed officials across the federal government started a push to prop up the fossil fuel sector, particularly the coal industry. In the spring, Energy Secretary Rick Perry directed his staff to conduct a study of the U.S. electric grid to determine if renewables were harming traditional baseload generation sources, like coal and nuclear. A former IER official, Travis Fisher, was selected to oversee the study. A draft of the study leaked last week concluded that renewables pose no threat to the grid. The leaked draft was completed by DOE career staff, and thus is subject to change by Perry and his team of Trump appointees. A DOE spokeswoman told Bloomberg that “those statements as written are not in the current draft.” The report clarifies that the spokeswoman “wouldn’t say they are incorrect, just the draft is ‘constantly evolving.’”

This is how the Kochs’ anti-renewable agenda becomes White House policy]]>

Quote:President-elect Donald Trump raised eyebrows late last year when he named the head of an obscure right-wing think tank, with close ties to petrochemical billionaires Charles and David Koch, to lead his energy transition team. Since then, officials from the Institute for Energy Research (IER) have been appointed to high-level positions at the Department of Energy where they are playing major roles in implementing pro-fossil fuel, anti-renewable energy policies. Thomas Pyle, who serves as president of IER and its advocacy arm, the American Energy Alliance (AEA), set the tone by drafting a priority list for the new administration; at the top of the list was withdrawal from the Paris climate agreement.

Soon after Trump took office, newly appointed officials across the federal government started a push to prop up the fossil fuel sector, particularly the coal industry. In the spring, Energy Secretary Rick Perry directed his staff to conduct a study of the U.S. electric grid to determine if renewables were harming traditional baseload generation sources, like coal and nuclear. A former IER official, Travis Fisher, was selected to oversee the study. A draft of the study leaked last week concluded that renewables pose no threat to the grid. The leaked draft was completed by DOE career staff, and thus is subject to change by Perry and his team of Trump appointees. A DOE spokeswoman told Bloomberg that “those statements as written are not in the current draft.” The report clarifies that the spokeswoman “wouldn’t say they are incorrect, just the draft is ‘constantly evolving.’”

This is how the Kochs’ anti-renewable agenda becomes White House policy]]> <![CDATA[Drain the swamp!]]> http://rightwingers.org/forums/thread-1512.html Thu, 17 Nov 2016 14:07:33 +0000 http://rightwingers.org/forums/thread-1512.html

Quote:Seeing the federal government slip into Republican hands is terrifying campaign finance experts, who are bracing for a wave of deregulation that could give millionaires and billionaires powerful new ways to influence American politics. Top Republican leaders — most vocally, Senate Majority Leader Mitch McConnell — have spent years advocating specific changes that would gut what’s left of an American campaign finance regime that’s already been crippled. "We’re getting ready for a fight. We know that Republicans aren’t going to do anything about Citizens United and that they’re probably going to want to throw out what little is left of McCain-Feingold," says Craig Holman, a government affairs lobbyist at the transparency nonprofit Public Citizen, referencing the bipartisan bill from 2002 that put some restrictions on campaign spending. (Many of the restrictions put in place by that bill were thrown out by the Supreme Court’s Citizens United decision in 2010.) "It's going to be a tough battle.”

Republicans plan to "drain the swamp" by gutting campaign finance laws - Vox]]>

Quote:Seeing the federal government slip into Republican hands is terrifying campaign finance experts, who are bracing for a wave of deregulation that could give millionaires and billionaires powerful new ways to influence American politics. Top Republican leaders — most vocally, Senate Majority Leader Mitch McConnell — have spent years advocating specific changes that would gut what’s left of an American campaign finance regime that’s already been crippled. "We’re getting ready for a fight. We know that Republicans aren’t going to do anything about Citizens United and that they’re probably going to want to throw out what little is left of McCain-Feingold," says Craig Holman, a government affairs lobbyist at the transparency nonprofit Public Citizen, referencing the bipartisan bill from 2002 that put some restrictions on campaign spending. (Many of the restrictions put in place by that bill were thrown out by the Supreme Court’s Citizens United decision in 2010.) "It's going to be a tough battle.”

Republicans plan to "drain the swamp" by gutting campaign finance laws - Vox]]> <![CDATA[The next time you think the Republicans are on the side of the little guy.]]> http://rightwingers.org/forums/thread-1479.html Fri, 14 Oct 2016 17:20:46 +0000 http://rightwingers.org/forums/thread-1479.html

Quote:Warren’s primary complaint, and one shared by other Democrats, is White’s refusal to begin work on a rule that would require corporations to disclose their political spending activities. Such a contentious initiative has been sought by Democrats ever since the Supreme Court’s ruling in Citizens United v. Federal Election Commission, which opened the doors to a huge increase in political spending by outside organizations.

The SEC has not made headway on that rule under White and in fact has removed it from its regulatory agenda altogether. Republicans in Congress have included riders in the last two spending bills barring the use of funds to write such a rule, but Warren argued that project is never going to move forward under White’s “brazen conduct.”

White’s refusal to take on a political spending rule has infuriated Warren and other key Democrats, including Sen. Charles Schumer (N.Y.), who is expected to serve as the Senate’s top Democrat in 2017. While policy riders have limited the SEC’s ability to work on such a rule, Democrats are incensed that the SEC is not even taking apparent steps to prepare to act on the rule if a future funding bill drops that provision.

Warren to Obama: Fire your SEC chief | TheHill]]>

Quote:Warren’s primary complaint, and one shared by other Democrats, is White’s refusal to begin work on a rule that would require corporations to disclose their political spending activities. Such a contentious initiative has been sought by Democrats ever since the Supreme Court’s ruling in Citizens United v. Federal Election Commission, which opened the doors to a huge increase in political spending by outside organizations.

The SEC has not made headway on that rule under White and in fact has removed it from its regulatory agenda altogether. Republicans in Congress have included riders in the last two spending bills barring the use of funds to write such a rule, but Warren argued that project is never going to move forward under White’s “brazen conduct.”

White’s refusal to take on a political spending rule has infuriated Warren and other key Democrats, including Sen. Charles Schumer (N.Y.), who is expected to serve as the Senate’s top Democrat in 2017. While policy riders have limited the SEC’s ability to work on such a rule, Democrats are incensed that the SEC is not even taking apparent steps to prepare to act on the rule if a future funding bill drops that provision.

Warren to Obama: Fire your SEC chief | TheHill]]> <![CDATA[Singer versus the Kochs to pick up the pieces]]> http://rightwingers.org/forums/thread-1305.html Thu, 21 Jul 2016 02:40:57 +0000 http://rightwingers.org/forums/thread-1305.html
But Singer and his political operation are dedicated to reshaping the Republican Party with that “welcoming vision.” The gay rights fight is more of a side project for the hedge fund manager who is focused on national security, in particular staunch pro-Israel policies, lower taxes and a conservative judiciary. He has given money to immigration reform efforts in the past but his advisers say it is not a focus.

What makes Singer so influential is that he can stroke a $5 million check to boost Marco Rubio and then pour $2.5 million more into an anti-Trump super PAC, while he also has a large enough network of friends to be among the most effective bundlers of direct contributions in Republican politics. Singer’s circle of sometimes-allied donors includes billionaires such as Todd Ricketts, Cliff Asness, Dan Loeb and Charles Schwab, and he has been reaching out to more wealthy financiers recently in hopes of expanding his network, according to people who have set up such calls for him.

Singer has slowly assembled this constellation of disparate donors—with himself at the nexus—through groups like American Unity Fund, Winning Women (which, as the name suggests, seeks to elect more women) and, most significantly, the American Opportunity Alliance, which hold secretive semi-annual meetings. The groups are independent but all connected to him. Singer is also a prominent donor to the Republican Jewish Coalition, which itself is planning a post-November push to refocus the GOP’s priorities after Trump, according to one of the group’s leaders. The RJC will hold a political briefing for donors in Cleveland on Wednesday, though Singer isn’t expected to be in town.

“There is a reasonable bet that there’s going to be a lot of death and destruction for the GOP on Election Day,” said an operative involved in the Singer network. “And donors like Singer, who have the resources and relationships and commitment to stay engaged, will need to play a role if the pieces are going to be put back together into something more conservative and more electable than Trumpism.”

So far, Singer’s ambitions have outpaced his success. One prominent Republican strategist, speaking anonymously at the risk of angering so important a donor, laughed at the series of recent losses: immigration reform, Rubio, Stop Trump, gay marriage. “Singer’s group is shaping up to be 0 for life,” the strategist said.

But there could be an opening for Singer, especially because the dominant network of GOP financiers of the past half decade, the Koch network, has shown signs of a reorientation, at least in terms of direct electoral politics.

Singer and the Kochs are disgusted with Trump. “It’s either racist or it’s stereotyping,” Charles Koch said of Trump’s controversial criticism of a federal judge’s Mexican heritage. “It’s unacceptable.” Singer has said Trump’s economic policies, if implemented, would amount to “close to a guarantee of a global depression.”

They appear to have taken different lessons from the 2016 primaries, however. Singer wants to remake the party; the Kochs want to re-educate the electorate. The Kochs, for instance, have little appetite for the minutiae of the RNC platform committee that Dickerson was fighting over. “We could care less,” said a person intimately familiar with the Koch network. “It’s not what we do.”

“We are not trying to move the party,” said Frayda Levin, a major donor and the chair of the board of directors of Americans for Prosperity, one of the biggest arms of the Koch network. “We believe freedom lies, as Thomas Jefferson said, in an educated public and, for the most part, the party will reflect what they believe the American people want. We have to start with the constituency.”

If the 2016 primaries showcased the divide between the Republican elite and the electorate—on trade, on immigration, on entitlement spending—then the Kochs want to emphasize the latter, leveraging what remains the biggest nonparty political infrastructure in America.

James Davis, a spokesman for Freedom Partners a key group in the Koch network, disagreed with the idea that the group was pulling back from politics in any way. “Our electoral efforts are focused on freedom-oriented members of the Senate,” he said.
Singer’s political operation declined to comment for this story.

Singer has, in recent years, assembled a talented and connected roster of formal and informal political advisers: Dan Senor, a former top Romney aide and Paul Ryan confidant; Leonard Leo, executive vice president of the Federalist Society; Angela Meyers, a former national party finance director; and Conor Sweeney, another ex-Ryan adviser, among them.

The Paul Ryan overlap—Senor and Sweeney—is particularly notable. Ryan flew down to Palm Beach in March to attend the most recent gathering of the American Opportunity Alliance, and the two share more than just advisers. They are largely in sync on economic policy, foreign policy and modernizing the GOP’s image, even if they differ on specifics.

In fact, in late June, Singer hosted a previously unreported fundraiser for Ryan in Manhattan. “Regardless of what happens in November,” Singer told the donors, according to a person who was there. “Paul Ryan will be indispensable to the future of the conservative movement.”

Read more: http://www.politico.com/magazine/story/2016/07/rnc-2016-gop-republican-party-leaders-future-donald-trump-214065#ixzz4F0UK9WJw
Follow us: @politico on Twitter | Politico on Facebook]]>
But Singer and his political operation are dedicated to reshaping the Republican Party with that “welcoming vision.” The gay rights fight is more of a side project for the hedge fund manager who is focused on national security, in particular staunch pro-Israel policies, lower taxes and a conservative judiciary. He has given money to immigration reform efforts in the past but his advisers say it is not a focus.

What makes Singer so influential is that he can stroke a $5 million check to boost Marco Rubio and then pour $2.5 million more into an anti-Trump super PAC, while he also has a large enough network of friends to be among the most effective bundlers of direct contributions in Republican politics. Singer’s circle of sometimes-allied donors includes billionaires such as Todd Ricketts, Cliff Asness, Dan Loeb and Charles Schwab, and he has been reaching out to more wealthy financiers recently in hopes of expanding his network, according to people who have set up such calls for him.

Singer has slowly assembled this constellation of disparate donors—with himself at the nexus—through groups like American Unity Fund, Winning Women (which, as the name suggests, seeks to elect more women) and, most significantly, the American Opportunity Alliance, which hold secretive semi-annual meetings. The groups are independent but all connected to him. Singer is also a prominent donor to the Republican Jewish Coalition, which itself is planning a post-November push to refocus the GOP’s priorities after Trump, according to one of the group’s leaders. The RJC will hold a political briefing for donors in Cleveland on Wednesday, though Singer isn’t expected to be in town.

“There is a reasonable bet that there’s going to be a lot of death and destruction for the GOP on Election Day,” said an operative involved in the Singer network. “And donors like Singer, who have the resources and relationships and commitment to stay engaged, will need to play a role if the pieces are going to be put back together into something more conservative and more electable than Trumpism.”

So far, Singer’s ambitions have outpaced his success. One prominent Republican strategist, speaking anonymously at the risk of angering so important a donor, laughed at the series of recent losses: immigration reform, Rubio, Stop Trump, gay marriage. “Singer’s group is shaping up to be 0 for life,” the strategist said.

But there could be an opening for Singer, especially because the dominant network of GOP financiers of the past half decade, the Koch network, has shown signs of a reorientation, at least in terms of direct electoral politics.

Singer and the Kochs are disgusted with Trump. “It’s either racist or it’s stereotyping,” Charles Koch said of Trump’s controversial criticism of a federal judge’s Mexican heritage. “It’s unacceptable.” Singer has said Trump’s economic policies, if implemented, would amount to “close to a guarantee of a global depression.”

They appear to have taken different lessons from the 2016 primaries, however. Singer wants to remake the party; the Kochs want to re-educate the electorate. The Kochs, for instance, have little appetite for the minutiae of the RNC platform committee that Dickerson was fighting over. “We could care less,” said a person intimately familiar with the Koch network. “It’s not what we do.”

“We are not trying to move the party,” said Frayda Levin, a major donor and the chair of the board of directors of Americans for Prosperity, one of the biggest arms of the Koch network. “We believe freedom lies, as Thomas Jefferson said, in an educated public and, for the most part, the party will reflect what they believe the American people want. We have to start with the constituency.”

If the 2016 primaries showcased the divide between the Republican elite and the electorate—on trade, on immigration, on entitlement spending—then the Kochs want to emphasize the latter, leveraging what remains the biggest nonparty political infrastructure in America.

James Davis, a spokesman for Freedom Partners a key group in the Koch network, disagreed with the idea that the group was pulling back from politics in any way. “Our electoral efforts are focused on freedom-oriented members of the Senate,” he said.
Singer’s political operation declined to comment for this story.

Singer has, in recent years, assembled a talented and connected roster of formal and informal political advisers: Dan Senor, a former top Romney aide and Paul Ryan confidant; Leonard Leo, executive vice president of the Federalist Society; Angela Meyers, a former national party finance director; and Conor Sweeney, another ex-Ryan adviser, among them.

The Paul Ryan overlap—Senor and Sweeney—is particularly notable. Ryan flew down to Palm Beach in March to attend the most recent gathering of the American Opportunity Alliance, and the two share more than just advisers. They are largely in sync on economic policy, foreign policy and modernizing the GOP’s image, even if they differ on specifics.

In fact, in late June, Singer hosted a previously unreported fundraiser for Ryan in Manhattan. “Regardless of what happens in November,” Singer told the donors, according to a person who was there. “Paul Ryan will be indispensable to the future of the conservative movement.”

Read more: http://www.politico.com/magazine/story/2016/07/rnc-2016-gop-republican-party-leaders-future-donald-trump-214065#ixzz4F0UK9WJw
Follow us: @politico on Twitter | Politico on Facebook]]> <![CDATA[The US Chamber of Commerce, the most powerful lobby group]]> http://rightwingers.org/forums/thread-116.html Fri, 08 Apr 2016 03:27:27 +0000 http://rightwingers.org/forums/thread-116.html U.S. Chamber of Commerce Goes for the Extreme

APRIL 7, 2016 9:30 AM EST

By Barry Ritholtz

In 1912, the U.S. Chamber of Commerce was created at the behest of President William Howard Taft as a business counterweight to the growing labor movement.

To say it was a success is an understatement. While organized labor has languished, the Chamber has become the single largest lobbying organization in the country. According to Open Secrets, a site that tracks political lobbying and spending, during the past 18 years the Chamber has spent three times more than any other organization on behalf of industry ($1.2 billion versus $351 million by the No. 2 lobbying group, the National Association of Realtors).

This is of great interest in the context of the Chamber's opposition to the new fiduciary rules for retirement accounts, requiring brokers to put savers' interests ahead of their own. Opposing the fiduciary standard may be pro-Wall Street, but it's anti-small business.

So I decided to do a bit of digging to find out where the Chamber’s advocacy pits it against broader business interests. What I found was that the Chamber is at odds with the interests of some, if not most, of its membership in three other areas: climate change, minimum wages and tobacco.

First, let's take a deeper look at the fiduciary rule: On one side is the financial industry, which manages about $14 trillion in various retirement plans. The president’s Council of Economic Advisers estimated that more than 10 percent of the advice given is conflicted in some way. That bad advice causes a performance lag of about 1 percent, costing investors an estimated $17 billion a year. This is money that otherwise would go into retirement-saving accounts. Wall Street, of course, isn't happy about the change and the vehemence of the opposition to the new rules make me suspect the losses for investors -- and the profits for the financial industry -- are much bigger.

On the other side are the millions of small businesses that have potential liability as 401(k)-plan sponsors. The natural outcome of this change is that once the new rules take effect, businesses will be in a position to shift that liability to the fiduciary advisers. This is something they should welcome -- especially since 96 percent of the Chamber's member businesses have fewer than 100 employees. These are precisely the companies that will benefit from the change.

All of which makes the Chamber’s opposition -- based on arguments that have already been debunked -- so surprising. The new fiduciary rule doesn't harm business; it's a benefit. The Chamber had said it may sue over the fiduciary adviser rules, although for the time being it's taking a wait-and-see approach.

Examination of other positions leads to the conclusion that the Chamber isn't so much an advocate for industry as much as it is a conservative think tank.

On climate change, consider that 94 percent of Chamber campaign contributions went to candidates who were climate-change deniers.

Not surprisingly, this has provoked a considerable backlash. In 2009, Apple, the world's largest company by market value, left the Chamber over its position on climate change. Yahoo left for the same reason in 2011. Athletic apparel powerhouse Nike resigned from the Chamber’s board, though it remained a member in order to press the organization to alter its positions. More recently, Nike joined with 100 other companies to support President Barack Obama's proposed regulations on carbon emissions.

And it's not just businesses, but local Chamber of Commerce chapters -- at least 60 have left since 2009 because of the Chamber's "extreme positions." (Only 249 of the 7,000 local chambers are members of the national organization.)

Ignoring those companies opposed to the Chamber's stand on climate change is easy. Why? Money, of course. A third of the Chamber's revenue comes from just 19 companies, many of them in the energy industry.

The case of pharmacy giant CVS Health is also instructive. In 2014, it became the first big drug-store chain to remove cigarettes and other tobacco products from its stores -- the reasoning being that it's in a business related to health care. The following year, after reports that the Chamber was working around the world to fight antismoking measures, CVS decided to drop its membership.

Another schism between the Chamber and most of its membership is over the minimum wage. The Washington Post reported that leaked documents from Republican pollster Frank Luntz showed that 80 percent of business owners supported raising the pay floor:

LuntzGlobal managing director David Merritt told state chamber executives in a webinar describing the results…that it squares with other polling they’ve done. "And this is universal. If you’re fighting against a minimum wage increase, you’re fighting an uphill battle, because most Americans, even most Republicans, are okay with raising the minimum wage."

The Chamber is opposed to a higher minimum wage.

Some of the dissatisfaction with the Chamber is reflected in the growth of alternative business lobbying groups. Groups such as the American Sustainable Business Council, the Main Street Alliance and the Small Business Majority have blossomed. A number of larger corporations (including Bloomberg LP, parent of Bloomberg News), have joined Ceres, which is committed to creating "a thriving, sustainable global economy" -- a charge that puts it at odds with the U.S. Chamber on a number of issues.

The Chamber’s priorities are aligned with the small number of companies that are its largest contributors. Maybe that's only natural. In any case, it no longer seems like the organization serves the interests of business at large.]]> U.S. Chamber of Commerce Goes for the Extreme

APRIL 7, 2016 9:30 AM EST

By Barry Ritholtz

In 1912, the U.S. Chamber of Commerce was created at the behest of President William Howard Taft as a business counterweight to the growing labor movement.

To say it was a success is an understatement. While organized labor has languished, the Chamber has become the single largest lobbying organization in the country. According to Open Secrets, a site that tracks political lobbying and spending, during the past 18 years the Chamber has spent three times more than any other organization on behalf of industry ($1.2 billion versus $351 million by the No. 2 lobbying group, the National Association of Realtors).

This is of great interest in the context of the Chamber's opposition to the new fiduciary rules for retirement accounts, requiring brokers to put savers' interests ahead of their own. Opposing the fiduciary standard may be pro-Wall Street, but it's anti-small business.

So I decided to do a bit of digging to find out where the Chamber’s advocacy pits it against broader business interests. What I found was that the Chamber is at odds with the interests of some, if not most, of its membership in three other areas: climate change, minimum wages and tobacco.

First, let's take a deeper look at the fiduciary rule: On one side is the financial industry, which manages about $14 trillion in various retirement plans. The president’s Council of Economic Advisers estimated that more than 10 percent of the advice given is conflicted in some way. That bad advice causes a performance lag of about 1 percent, costing investors an estimated $17 billion a year. This is money that otherwise would go into retirement-saving accounts. Wall Street, of course, isn't happy about the change and the vehemence of the opposition to the new rules make me suspect the losses for investors -- and the profits for the financial industry -- are much bigger.

On the other side are the millions of small businesses that have potential liability as 401(k)-plan sponsors. The natural outcome of this change is that once the new rules take effect, businesses will be in a position to shift that liability to the fiduciary advisers. This is something they should welcome -- especially since 96 percent of the Chamber's member businesses have fewer than 100 employees. These are precisely the companies that will benefit from the change.

All of which makes the Chamber’s opposition -- based on arguments that have already been debunked -- so surprising. The new fiduciary rule doesn't harm business; it's a benefit. The Chamber had said it may sue over the fiduciary adviser rules, although for the time being it's taking a wait-and-see approach.

Examination of other positions leads to the conclusion that the Chamber isn't so much an advocate for industry as much as it is a conservative think tank.

On climate change, consider that 94 percent of Chamber campaign contributions went to candidates who were climate-change deniers.

Not surprisingly, this has provoked a considerable backlash. In 2009, Apple, the world's largest company by market value, left the Chamber over its position on climate change. Yahoo left for the same reason in 2011. Athletic apparel powerhouse Nike resigned from the Chamber’s board, though it remained a member in order to press the organization to alter its positions. More recently, Nike joined with 100 other companies to support President Barack Obama's proposed regulations on carbon emissions.

And it's not just businesses, but local Chamber of Commerce chapters -- at least 60 have left since 2009 because of the Chamber's "extreme positions." (Only 249 of the 7,000 local chambers are members of the national organization.)

Ignoring those companies opposed to the Chamber's stand on climate change is easy. Why? Money, of course. A third of the Chamber's revenue comes from just 19 companies, many of them in the energy industry.

The case of pharmacy giant CVS Health is also instructive. In 2014, it became the first big drug-store chain to remove cigarettes and other tobacco products from its stores -- the reasoning being that it's in a business related to health care. The following year, after reports that the Chamber was working around the world to fight antismoking measures, CVS decided to drop its membership.

Another schism between the Chamber and most of its membership is over the minimum wage. The Washington Post reported that leaked documents from Republican pollster Frank Luntz showed that 80 percent of business owners supported raising the pay floor:

LuntzGlobal managing director David Merritt told state chamber executives in a webinar describing the results…that it squares with other polling they’ve done. "And this is universal. If you’re fighting against a minimum wage increase, you’re fighting an uphill battle, because most Americans, even most Republicans, are okay with raising the minimum wage."

The Chamber is opposed to a higher minimum wage.

Some of the dissatisfaction with the Chamber is reflected in the growth of alternative business lobbying groups. Groups such as the American Sustainable Business Council, the Main Street Alliance and the Small Business Majority have blossomed. A number of larger corporations (including Bloomberg LP, parent of Bloomberg News), have joined Ceres, which is committed to creating "a thriving, sustainable global economy" -- a charge that puts it at odds with the U.S. Chamber on a number of issues.

The Chamber’s priorities are aligned with the small number of companies that are its largest contributors. Maybe that's only natural. In any case, it no longer seems like the organization serves the interests of business at large.]]> <![CDATA[The anti-Trump PAC]]> http://rightwingers.org/forums/thread-87.html Thu, 17 Mar 2016 18:58:29 +0000 http://rightwingers.org/forums/thread-87.html Quote:These are issues that have all been touched upon by the Republican party’s largest anti-Trump group: Our Principles PAC (Political Action Committee). The super PAC, which has millions of dollars of donations behind it, was founded by leader Katie Packer, a veteran Republican strategist who served as Mitt Romney’s deputy campaign manager back in 2012. She launched the PAC back in January when it was suggested their aim was to “kill off” Trump. Judging by their website – TrumpQuestions.Com – this is still their number one goal. ‘How much do you really know about Donald Trump?’ it asks before reminding readers of his worst moments and saying he ‘probably identifies more as a Democrat’. But - believe it or not - it seems their biggest issue with Trump is that he’s not actually right-wing enough.

According to The Resurgent, Packer’s goal is now to make sure voters hear the insanity of Trump’s own words: “Data has shown that when Trump is attacked, his voters just lock down harder for him. But when, instead of attacking Trump, voters just hear him in his own words directly contradicting everything he says, not only do some voters flee Trump, but undecided voters immediately decide against Trump.”

Packer launched the PAC (an organisation that pools campaign contributions from members for or against a certain candidate) earlier this year, after apparently spending months in talks with Republic donors, stating: “Our Principles PAC has focused on conservative principles and ensuring that voters have the necessary information to make a wise decision on Election Day." It’s now clear that most of its funding comes from Marlene Ricketts, co-owner of the Chicago Cubs baseball franchise and wife of billionaire J. Joe Ricketts. Last year, she donated thousands to PACs backing Jeb Bush’s campaign, as well as those of Rick Perry, Chris Christie, Lindsey Graham, Ted Cruz and Marco Rubio. Essentially, anyone but Trump. And it seems Our Principles agrees. Meet Katie Packer - the extreme Republican desperate to stop Donald Trump]]> Quote:These are issues that have all been touched upon by the Republican party’s largest anti-Trump group: Our Principles PAC (Political Action Committee). The super PAC, which has millions of dollars of donations behind it, was founded by leader Katie Packer, a veteran Republican strategist who served as Mitt Romney’s deputy campaign manager back in 2012. She launched the PAC back in January when it was suggested their aim was to “kill off” Trump. Judging by their website – TrumpQuestions.Com – this is still their number one goal. ‘How much do you really know about Donald Trump?’ it asks before reminding readers of his worst moments and saying he ‘probably identifies more as a Democrat’. But - believe it or not - it seems their biggest issue with Trump is that he’s not actually right-wing enough.

According to The Resurgent, Packer’s goal is now to make sure voters hear the insanity of Trump’s own words: “Data has shown that when Trump is attacked, his voters just lock down harder for him. But when, instead of attacking Trump, voters just hear him in his own words directly contradicting everything he says, not only do some voters flee Trump, but undecided voters immediately decide against Trump.”

Packer launched the PAC (an organisation that pools campaign contributions from members for or against a certain candidate) earlier this year, after apparently spending months in talks with Republic donors, stating: “Our Principles PAC has focused on conservative principles and ensuring that voters have the necessary information to make a wise decision on Election Day." It’s now clear that most of its funding comes from Marlene Ricketts, co-owner of the Chicago Cubs baseball franchise and wife of billionaire J. Joe Ricketts. Last year, she donated thousands to PACs backing Jeb Bush’s campaign, as well as those of Rick Perry, Chris Christie, Lindsey Graham, Ted Cruz and Marco Rubio. Essentially, anyone but Trump. And it seems Our Principles agrees. Meet Katie Packer - the extreme Republican desperate to stop Donald Trump]]> <![CDATA[Koch's and the Tea Party]]> http://rightwingers.org/forums/thread-56.html Tue, 08 Mar 2016 20:31:22 +0000 http://rightwingers.org/forums/thread-56.html The Tea Party movement: deluded and inspired by billionaires

George Monbiot
By funding numerous rightwing organisations, the mega-rich Koch brothers have duped millions into supporting big business

Monday 25 October 2010 20.15 BSTLast modified on Thursday 31 December 201521.11 GMT

The Tea Party movement is remarkable in two respects. It is one of the biggest exercises in false consciousness the world has seen – and the biggest Astroturf operation in history. These accomplishments are closely related.

An Astroturf campaign is a fake grassroots movement: it purports to be a spontaneous uprising of concerned citizens, but in reality it is founded and funded by elite interests. Some Astroturf campaigns have no grassroots component at all. Others catalyse and direct real mobilisations. The Tea Party belongs in the second category. It is mostly composed of passionate, well-meaning people who think they are fighting elite power, unaware that they have been organised by the very interests they believe they are confronting. We now have powerful evidence that the movement was established and has been guided with the help of money from billionaires and big business. Much of this money, as well as much of the strategy and staffing, were provided by two brothers who run what they call "the biggest company you've never heard of".

Charles and David Koch own 84% of Koch Industries, the second-largest private company in the United States. It runs oil refineries, coal suppliers, chemical plants and logging firms, and turns over roughly $100bn a year; the brothers are each worth $21bn. The company has had to pay tens of millions of dollars in fines and settlements for oil and chemical spills and other industrial accidents. The Kochs want to pay less tax, keep more profits and be restrained by less regulation. Their challenge has been to persuade the people harmed by this agenda that it's good for them.

In July 2010, David Koch told New York magazine: "I've never been to a Tea Party event. No one representing the Tea Party has ever even approached me." But a fascinating new film –(Astro)Turf Wars, by Taki Oldham – tells a fuller story. Oldham infiltrated some of the movement's key organising events, including the 2009 Defending the American Dream summit, convened by a group called Americans for Prosperity (AFP). The film shows David Koch addressing the summit. "Five years ago," he explains, "my brother Charles and I provided the funds to start Americans for Prosperity. It's beyond my wildest dreams how AFP has grown into this enormous organisation.

A convener tells the crowd how AFP mobilised opposition to Barack Obama's healthcare reforms. "We hit the button and we started doing the Twittering and Facebook and the phonecalls and the emails, and you turned up!" Then a series of AFP organisers tell Mr Koch how they have set up dozens of Tea Party events in their home states. He nods and beams from the podium like a chief executive receiving rosy reports from his regional sales directors. Afterwards, the delegates crowd into AFP workshops, where they are told how to run further Tea Party events.

Americans for Prosperity is one of several groups set up by the Kochs to promote their politics. We know their foundations have given it at least $5m, but few such records are in the public domain and the total could be much higher. It has toured the country organising rallies against healthcare reform and the Democrats' attempts to tackle climate change. It provided the key organising tools that set the Tea Party running.

The movement began when CNBC's Rick Santelli called from the floor of the Chicago Mercantile Exchange for a bankers' revolt against the undeserving poor. (He proposed that the traders should hold a tea party to dump derivative securities in Lake Michigan to prevent Obama's plan to "subsidise the losers": by which he meant people whose mortgages had fallen into arrears.) On the same day, Americans for Prosperity set up a Tea Party Facebook page and started organising Tea Party events.

Oldham's film shows how AFP crafted the movement's messages and drafted its talking points. The New Yorker magazine, in the course of a remarkable exposure of the Koch brothers' funding networks, interviewed some of their former consultants. "The Koch brothers gave the money that founded [the Tea Party]," one of them explained. "It's like they put the seeds in the ground. Then the rainstorm comes, and the frogs come out of the mud – and they're our candidates!" Another observed that the Kochs are smart. "This rightwing, redneck stuff works for them. They see this as a way to get things done without getting dirty themselves."

AFP is one of several groups established by the Koch brothers. They set up the Cato Institute, the first free-market thinktank in the United States. They also founded the Mercatus Centre at George Mason University, which now fills the role once played by the economics department at Chicago University as the originator of extreme neoliberal ideas. Fourteen of the 23 regulations that George W Bush put on his hitlist were, according to the Wall Street Journal, first suggested by academics working at the Mercatus Centre.

The Kochs have lavished money on more than 30 other advocacy groups, including the Heritage Foundation, the Manhattan Institute, the George C Marshall Institute, the Reason Foundation and the American Enterprise Institute. These bodies have been instrumental in turning politicians away from environmental laws, social spending, taxing the rich and distributing wealth. They have shaped the widespread demand for small government. The Kochs ensure that their money works for them. "If we're going to give a lot of money," David Koch explained to a libertarian journalist, "we'll make darn sure they spend it in a way that goes along with our intent. And if they make a wrong turn and start doing things we don't agree with, we withdraw funding."

Most of these bodies call themselves "free-market thinktanks", but their trick – as (Astro)Turf Wars points out – is to conflate crony capitalism with free enterprise, and free enterprise with personal liberty. Between them they have constructed the philosophy that informs the Tea Party movement: its members mobilise for freedom, unaware that the freedom they demand is freedom for corporations to trample them into the dirt. The thinktanks that the Kochs have funded devise the game and the rules by which it is played; Americans for Prosperity coaches and motivates the team.

Astroturfing is now taking off in the United Kingdom. Earlier this month Spinwatch showed how a fake grassroots group set up by health insurers helped shape the Tories' NHS reforms. Billionaires and corporations are capturing the political process everywhere; anyone with an interest in democracy should be thinking about how to resist them. Nothing is real any more. Nothing is as it seems.
• A fully referenced version of this story can be found at www.monbiot.com]]> The Tea Party movement: deluded and inspired by billionaires

George Monbiot
By funding numerous rightwing organisations, the mega-rich Koch brothers have duped millions into supporting big business

Monday 25 October 2010 20.15 BSTLast modified on Thursday 31 December 201521.11 GMT

The Tea Party movement is remarkable in two respects. It is one of the biggest exercises in false consciousness the world has seen – and the biggest Astroturf operation in history. These accomplishments are closely related.

An Astroturf campaign is a fake grassroots movement: it purports to be a spontaneous uprising of concerned citizens, but in reality it is founded and funded by elite interests. Some Astroturf campaigns have no grassroots component at all. Others catalyse and direct real mobilisations. The Tea Party belongs in the second category. It is mostly composed of passionate, well-meaning people who think they are fighting elite power, unaware that they have been organised by the very interests they believe they are confronting. We now have powerful evidence that the movement was established and has been guided with the help of money from billionaires and big business. Much of this money, as well as much of the strategy and staffing, were provided by two brothers who run what they call "the biggest company you've never heard of".

Charles and David Koch own 84% of Koch Industries, the second-largest private company in the United States. It runs oil refineries, coal suppliers, chemical plants and logging firms, and turns over roughly $100bn a year; the brothers are each worth $21bn. The company has had to pay tens of millions of dollars in fines and settlements for oil and chemical spills and other industrial accidents. The Kochs want to pay less tax, keep more profits and be restrained by less regulation. Their challenge has been to persuade the people harmed by this agenda that it's good for them.

In July 2010, David Koch told New York magazine: "I've never been to a Tea Party event. No one representing the Tea Party has ever even approached me." But a fascinating new film –(Astro)Turf Wars, by Taki Oldham – tells a fuller story. Oldham infiltrated some of the movement's key organising events, including the 2009 Defending the American Dream summit, convened by a group called Americans for Prosperity (AFP). The film shows David Koch addressing the summit. "Five years ago," he explains, "my brother Charles and I provided the funds to start Americans for Prosperity. It's beyond my wildest dreams how AFP has grown into this enormous organisation.

A convener tells the crowd how AFP mobilised opposition to Barack Obama's healthcare reforms. "We hit the button and we started doing the Twittering and Facebook and the phonecalls and the emails, and you turned up!" Then a series of AFP organisers tell Mr Koch how they have set up dozens of Tea Party events in their home states. He nods and beams from the podium like a chief executive receiving rosy reports from his regional sales directors. Afterwards, the delegates crowd into AFP workshops, where they are told how to run further Tea Party events.

Americans for Prosperity is one of several groups set up by the Kochs to promote their politics. We know their foundations have given it at least $5m, but few such records are in the public domain and the total could be much higher. It has toured the country organising rallies against healthcare reform and the Democrats' attempts to tackle climate change. It provided the key organising tools that set the Tea Party running.

The movement began when CNBC's Rick Santelli called from the floor of the Chicago Mercantile Exchange for a bankers' revolt against the undeserving poor. (He proposed that the traders should hold a tea party to dump derivative securities in Lake Michigan to prevent Obama's plan to "subsidise the losers": by which he meant people whose mortgages had fallen into arrears.) On the same day, Americans for Prosperity set up a Tea Party Facebook page and started organising Tea Party events.

Oldham's film shows how AFP crafted the movement's messages and drafted its talking points. The New Yorker magazine, in the course of a remarkable exposure of the Koch brothers' funding networks, interviewed some of their former consultants. "The Koch brothers gave the money that founded [the Tea Party]," one of them explained. "It's like they put the seeds in the ground. Then the rainstorm comes, and the frogs come out of the mud – and they're our candidates!" Another observed that the Kochs are smart. "This rightwing, redneck stuff works for them. They see this as a way to get things done without getting dirty themselves."

AFP is one of several groups established by the Koch brothers. They set up the Cato Institute, the first free-market thinktank in the United States. They also founded the Mercatus Centre at George Mason University, which now fills the role once played by the economics department at Chicago University as the originator of extreme neoliberal ideas. Fourteen of the 23 regulations that George W Bush put on his hitlist were, according to the Wall Street Journal, first suggested by academics working at the Mercatus Centre.

The Kochs have lavished money on more than 30 other advocacy groups, including the Heritage Foundation, the Manhattan Institute, the George C Marshall Institute, the Reason Foundation and the American Enterprise Institute. These bodies have been instrumental in turning politicians away from environmental laws, social spending, taxing the rich and distributing wealth. They have shaped the widespread demand for small government. The Kochs ensure that their money works for them. "If we're going to give a lot of money," David Koch explained to a libertarian journalist, "we'll make darn sure they spend it in a way that goes along with our intent. And if they make a wrong turn and start doing things we don't agree with, we withdraw funding."

Most of these bodies call themselves "free-market thinktanks", but their trick – as (Astro)Turf Wars points out – is to conflate crony capitalism with free enterprise, and free enterprise with personal liberty. Between them they have constructed the philosophy that informs the Tea Party movement: its members mobilise for freedom, unaware that the freedom they demand is freedom for corporations to trample them into the dirt. The thinktanks that the Kochs have funded devise the game and the rules by which it is played; Americans for Prosperity coaches and motivates the team.

Astroturfing is now taking off in the United Kingdom. Earlier this month Spinwatch showed how a fake grassroots group set up by health insurers helped shape the Tories' NHS reforms. Billionaires and corporations are capturing the political process everywhere; anyone with an interest in democracy should be thinking about how to resist them. Nothing is real any more. Nothing is as it seems.
• A fully referenced version of this story can be found at www.monbiot.com]]> <![CDATA[The Koch's secret Iran sales]]> http://rightwingers.org/forums/thread-55.html Tue, 08 Mar 2016 16:25:27 +0000 http://rightwingers.org/forums/thread-55.html Koch Brothers Flout Law Getting Richer With Iran Sales

Asjylyn Loder and David Evans

October 3, 2011 — 2:28 PM ART

[Image: 488x-1.jpg]

Koch Industries Executive Vice President David H. Koch, left, poses for a photo with Julia Koch during the opening night at the Metropolitan Opera in New York on Sept. 26, 2011. Photographer: Amanda Gordon/Bloomberg

In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova-Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. In less than a week, she discovered that the company had paid bribes to win contracts.

“I uncovered the practices within a few days,” Egorova-Farines says. “They were not hidden at all.”
She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.

By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France.

“Those activities constitute violations of criminal law,” Koch Industries wrote in a Dec. 8, 2008, letter giving details of its findings. The letter was made public in a civil court ruling in France in September 2010; the document has never before been reported by the media.

Egorova-Farines wasn’t rewarded for bringing the illicit payments to the company’s attention. Her superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent, even after Koch’s investigators substantiated her findings. She sued Koch-Glitsch in France for wrongful termination.

Obsessed with Secrecy
Koch-Glitsch is part of a global empire run by billionaire brothers Charles and David Koch, who have taken a small oil company they inherited from their father, Fred, after his death in 1967, and built it into a chemical, textile, trading and refining conglomerate spanning more than 50 countries.

Koch Industries is obsessed with secrecy, to the point that it discloses only an approximation of its annual revenue -- $100 billion a year -- and says nothing about its profits.
The most visible part of Koch Industries is its consumer brands, including Lycra fiber and Stainmaster carpet. Georgia-Pacific LLC, which Koch owns, makes Dixie cups, Brawny paper towels and Quilted Northern bath tissue.
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. They inherited their anti-government leanings from their father.

Abolishing Social Security
Fred was an early adviser to the founder of the anti-communist John Birch Society, which fought against the civil rights movement and the United Nations. Charles and David have supported the Tea Party, a loosely organized group that aims to shrink the size of government and cut federal spending.

These are long-standing tenets for the Kochs. In 1980, David Koch ran for vice president on the Libertarian ticket, pledging to abolish Social Security, the Federal Reserve System, welfare, minimum wage laws and federal agencies -- including the Department of Energy, the Federal Bureau of Investigation and the Central Intelligence Agency.

What many people don’t know is how the Kochs’ anti-regulation political ideology has influenced the way they conduct business.
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 U.S. identifies as a sponsor of global terrorism.

The ‘Koch Method’
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 U.S. and Canada.

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 mismeasuring the amount of crude it was extracting. Koch paid a $25 million settlement to the U.S.

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.

Refused to Falsify
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 U.S. and Europe have testified or told investigators that they’ve witnessed wrongdoing by the company or have been asked by Koch managers to take what they saw as improper actions.

Sally Barnes-Soliz, who’s now an investigator for the State Department of Labor and Industries in Washington, says that when she worked for Koch, her bosses and a company lawyer at the Koch refinery in Corpus Christi, Texas, 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 and penalties.

Corporate Cultures
“How much lawless behavior are we going to tolerate from any one company?” asks David Uhlmann, who oversaw the prosecution of the Koch refinery division when he was chief of the environmental crimes unit at the U.S. Department of Justice. “Corporate cultures reflect the priorities of the corporation and its senior officials.”

Koch Industries declined to make either Charles Koch, who lives near corporate headquarters in Wichita, or David Koch, who lives in New York, available for interviews.

Melissa Cohlmia, Koch’s director of corporate communications, said in an e-mailed statement that the company has developed a good relationship with environmental regulators and now complies with all rules. Cohlmia says the company has learned lessons from past mistakes, including the improper payment scheme that Koch outlined in its letter filed in French court.

‘Steps to Correct’
“We are proud to be a major American employer and manufacturing company with about 50,000 U.S. employees,” she wrote. “Given the regulatory complexity of our business, we will, like any business, have issues that arise. When we fall short of our goals, we take steps to correct and address the issues in order to ensure compliance.”

Cohlmia says Koch fired the employees and sales agents involved in the illicit payments and strengthened internal controls.
Regarding sales to Iran, she wrote, “During the relevant time frame covered in your article, U.S. law allowed foreign subsidiaries of U.S. multinational companies to engage in trade involving countries subject to U.S. trade sanctions, including Iran, under certain conditions.”
Koch has since stopped all of its units from trading with Iran, she says.

Lobbying Washington
The Koch brothers have vaulted into the American political spotlight in recent years. Koch Industries has spent more than $50 million to lobby in Washington since 2006, according to the Center for Responsive Politics, a nonpartisan group that tracks political donations. The company opposed derivatives regulation and greenhouse gas limits.

The brothers have backed a foundation that has trained thousands of Tea Party activists. The Tea Party, a popular movement whose name stands for Taxed Enough Already, has grown into a potent force in national politics. Sixty representatives of Congress, out of a total of 435, identify themselves as Tea Party members. Virtually every Republican candidate for president -- including Texas Governor Rick Perry and Minnesota Congresswoman Michele Bachmann -- has solicited the group’s support.

Integrity and Compliance
Koch Industries’ political action committee, KochPAC, donated $50,000 to Texans for Rick Perry last year for his gubernatorial campaign, according to the Texas Ethics Commission. It has also donated to support Bachmann’s congressional campaigns, Federal Election Commission records show.

The company tells all of its employees around the world that its top two values, which it calls Guiding Principles, are integrity and compliance. Koch Industries and its subsidiaries have won 436 awards for safety, environmental excellence, community and customer service and innovation since January 2009, Cohlmia says.

The U.S. Occupational Safety and Health Administration has recognized several of the company’s units for their commitment to the workplace, the company says. Koch Industries has also supported charitable causes in Wichita and beyond, including the Kansas Special Olympics and Big Brothers Big Sisters. The company has also helped enlistees in the U.S. Army Reserve.
Koch Industries has donated millions of dollars to the Nature Conservancy, the Red Cross, the Salvation Army and victims of the March 11 earthquake and tsunami in Japan.

Reputation is Critical
David Koch has contributed more than $135 million to cultural institutions, including Lincoln Center for the Performing Arts in New York and the Smithsonian’s National Museum of Natural History.

Koch Industries zealously guards its public image.
“A company’s reputation is critical to how it will be treated by others and to its long-term success,” Charles Koch wrote in “The Science of Success: How Market-Based Management Built the World’s Largest Private Company” (Wiley, 2007). “We must build a positive reputation based on reality, or others will create one for us based on speculation or animus and we won’t like what they create.”
The illicit payments uncovered by Ludmila Egorova-Farines raised the specter of a new blow to the company’s effort to improve its reputation following criminal convictions and civil penalties.

Avoiding Scandal
The company wanted to avoid a bribery scandal similar to that of Siemens AG, says Ged Horner, a managing director at Koch-Glitsch in the U.K. from 2002 until he retired in 2010.

“The only thing that would seriously impact the profitability and continuity of Koch Industries was a compliance issue,” Horner says.
In November 2006, the U.S. Department of Justice and German prosecutors opened an investigation into bribery by Munich-based Siemens, Europe’s largest engineering company. Siemens and three of its subsidiaries pleaded guilty in December 2008 to charges of violating the U.S. Foreign Corrupt Practices Act from 1998 to 2007.

Siemens paid $1.6 billion in penalties, admitting it had paid bribes to companies in Argentina, Bangladesh, Iraq and Venezuela.
“Koch decided that if it could happen to Siemens, it could happen to them,” Horner says.
Koch Chemical Technology Group, a Koch Industries subsidiary run by David Koch, hired Egorova-Farines in April 2008 for the newly created position of compliance and ethics manager for Europe and Asia.

French Investigation
The division, which makes distillation, pollution control and water filtration equipment, recruited her from accounting firm PricewaterhouseCoopers LLP, where she was a consultant for four years on integrating corporate cultures after mergers. As soon as she joined Koch, the company flew her to Wichita to attend an internal compliance conference, she says.

The company then asked her to investigate Koch-Glitsch in France because it had heard that managers were awarding salary increases inappropriately, Egorova-Farines says. The company never mentioned anything about improper payments for contracts when it gave her that assignment, she says. She declines to discuss the details of her findings, saying it would be unprofessional.

The specifics of illicit payments for contracts by Koch-Glitsch can be found in two French labor court cases. The complaints were brought separately by Egorova-Farines and Leon Mausen, business director of Koch-Glitsch France from 1998 to 2008.

Illicit Payments
Koch-Glitsch fired Mausen on Dec. 8, 2008, sending him a termination letter that described illicit payments from 2002 to 2008 in Algeria, Egypt, India, Morocco, Nigeria and Saudi Arabia. In the Middle East, Koch-Glitsch paid what the termination letter describes as an exceptionally high commission of 23 percent to one of its sales agents.

“A portion of that money was intended to pay a customer’s employee in order to secure the contract,” Koch wrote.
The customer was an unnamed Egyptian company that was partially owned by the state. Koch-Glitsch made similar payments to win other contracts with public and private companies in Egypt and Saudi Arabia, Koch wrote in its letter to Mausen.

Koch-Glitsch gave envelopes stuffed with cash to a Moroccan company, Koch wrote in its letter. Koch-Glitsch also made an improper payment to secure a contract with a Moroccan government organization, Koch wrote. The company made similar payments to an unnamed Nigerian government agency to win contracts, Koch wrote.

Koch Blamed Employee
Koch-Glitsch inflated its bid price to a private company in India in 2008, the letter said. A Koch employee explained the reason in an e-mail copied to Mausen and dated Feb. 6, 2008: “Add an extra 2 percent for a third person whose name I would rather give you only on the phone at this time.”

A Koch-Glitsch agent increased the commission paid to an Algerian agent in 2007 and 2008 to cover what Koch described as an unlawful payment to secure a deal with an unnamed French company.

Koch’s spokeswoman Cohlmia says Koch Industries acted firmly and decisively in response to what it had learned.
In its Dec. 8, 2008, termination letter to Mausen, Koch blamed him for the illegal payments. In July 2009, Mausen sued Koch for severance and performance pay in the Arles Labor Court in southern France.

On Sept. 27, 2010, the court said Mausen hadn’t acted on his own.
“It was not Mr. Mausen alone who was giving authorizations,” the court wrote.
Company policy required approval from other Koch-Glitsch managers, including Christoph Ender, the president of Koch-Glitsch for Europe and Asia, the court said.

‘Without Doing Due Diligence’
“Ender, manager of Koch-Glitsch France, as well as the controllers and auditors who were assisting him, allowed such business practices developed with Mr. Mausen to continue without doing due diligence in their reviews concerning the payment of commissions and the final beneficiaries of said commissions,” the labor court wrote.

An appeals court in Aix-en-Provence issued a second ruling on June 14, 2011, saying the company couldn’t justify terminating Mausen for the payment scheme because his managers had been aware of the practices for more than 60 days before he was fired. The court ordered Koch-Glitsch to pay Mausen 150,808 euros ($206,170).

Mausen declined to comment, beyond saying he disputed Koch’s arguments in court. Ender, who is now a Koch-Glitsch executive in Wichita, didn’t respond to requests for comment.
Koch’s Cohlmia says Ender “had no knowledge of Mr. Mausen’s misconduct at the time it occurred, as Mr. Mausen concealed it from him.”

Initially On Track
As for Egorova-Farines, her career was initially on track after she exposed bribery. Koch Chemical promoted her to a permanent position after her trial period expired in mid-2008, court records show. She was dispatched to offices in Germany, Russia and Switzerland, she says.
“I worked hard to drive cultural change to make these units compliant,” she says.

Egorova-Farines was hospitalized for seven weeks starting in February 2009, according to the decision in her lawsuit against Koch-Glitsch for wrongful termination.
The company fired her on June 16, 2009, saying later in court that she didn’t have the skills she’d listed on her resume and that she had failed to share documents with others at the company, according to the court record. She contested Koch’s arguments.

Court Ruling
Neither Egorova-Farines nor the labor court knew at the time that Koch had cited the company’s six-year pattern of improper payments in its termination letter to Mausen, she says. The court ruled against her on Feb. 11. She filed an appeal two months later in Paris.

She said in court that Koch had harassed her and retaliated against her for uncovering the payment scheme. She asked to be reinstated in her Koch job and paid for the time she was out of work. Egorova-Farines, who was born in London, now runs a business practices consulting firm in Paris.
Koch’s Cohlmia says the labor court found that the company treated Egorova-Farines fairly and provided her with chances to perform adequately.

The payments to win contracts documented by Koch investigators may violate U.S. law, says Sara Sun Beale, a professor at Duke Law School in Durham, North Carolina. She says Koch’s termination letter to Mausen gives clear guidance to federal prosecutors.

‘Smoking Gun’
“It sounds like a smoking gun,” says Beale, who co-authored “Federal Criminal Law and Its Enforcement” (Thompson West, 2010). “It really should get the Justice Department’s attention. When you have a smoking gun, you launch an investigation.”
Such a probe would fall under the Foreign Corrupt Practices Act, a 1977 law that makes it illegal for companies and their subsidiaries to pay bribes to government officials and employees of state-owned companies.

Justice Department spokeswoman Laura Sweeney says the agency won’t confirm or deny the existence of any investigation.
While Koch-Glitsch was conducting its internal probe of illicit payments for contracts, the U.S. government was investigating Koch’s European unit on another front: sales to Iran.

On Aug. 14, 2008, investigators from the U.S. Department of Homeland Security met with George Bentu, who had worked as a sales engineer from 2001 to 2007 for Koch-Glitsch in Germany, Bentu says. In a four-hour interview at the U.S. consulate in Frankfurt, the officials asked about documents showing details of the company’s trades with Iran, he says.

Legal Sidestep
Homeland Security spokeswoman Barbara Gonzalez declined to comment.
Internal company records show that Koch Industries used its foreign subsidiary to sidestep a U.S. trade ban barring American companies from selling materials to Iran. Koch-Glitsch offices in Germany and Italy continued selling to Iran until as recently as 2007, the records show.

The company’s products helped build a methanol plant for Zagros Petrochemical Co., a unit of Iran’s state-owned National Iranian Petrochemical Co., the documents show. The facility, in the coastal city of Bandar Assaluyeh, is now the largest methanol plant in the world, according to IHS Inc., an Englewood, Colorado-based provider of chemicals, energy and economic data.

Engineer Challenged Sales
“Every single chance they had to do business with Iran, or anyone else, they did,” Bentu, 46, says.
Bentu, a German engineer who earned his master’s degree in chemical engineering from Montana State University in Bozeman in 1990, joined Koch-Glitsch in 2001. His duties included drawing up bids for potential buyers of the company’s distillation equipment, which is used in making fuels, fertilizers, detergents and other products.

Bentu says he had been working at Koch-Glitsch in Viernheim, about 80 kilometers (50 miles) south of Frankfurt, for two months when he first saw an order destined for Iran. Concerned that the transaction might run afoul of U.S. law, Bentu asked his manager about it, he says. Bentu says his boss told him not to worry, that the company’s U.S. lawyers made sure the deals with Iran were legal.
U.S. companies have been banned from trading with Iran since 1995, when President Bill Clinton declared it a threat to national security. Iran supports Iraqi militants and Taliban fighters as well as terrorist groups, including Hamas and Hezbollah, according to the U.S. State Department.

Getting Around Ban
Koch Industries took elaborate steps to ensure that its U.S.-based employees weren’t involved in the sales to Iran, internal documents show.
Koch Industries may not have violated the law if no U.S. people or company divisions facilitated trades with Iran, says Avi Jorisch, a Treasury Department policy adviser from 2005 to 2008. That’s impossible to determine without a complete investigation, Jorisch says.
Internal Koch-Glitsch correspondence shows that the company coordinated with Koch Industries lawyers in the U.S. to make sure that American employees didn’t work on sales to Iran. Elena Rigon, now Koch-Glitsch compliance manager for Europe, based in Italy, in December 2000 addressed a memo outlining compliance guidelines to company managers in her region.

‘Axis of Evil’
In another e-mail, Rigon said all offices had to go through a checklist for each estimate quoted for materials headed to Iran.
“Your staff shall send this form to me since I have to send it to the lawyers in the USA as part of the compliance program,” Rigon wrote in the e-mail. “If somebody happens to find out that any U.S. persons are involved in this project or U.S. material is delivered to Iran you CANNOT quote.”
Rigon declined to comment.
“Koch-Glitsch had protocols in place that were consistent with applicable U.S. laws allowing such sales at the foreign subsidiary level,” Koch’s Cohlmia says.

In his annual State of the Union address on Jan. 29, 2002, in the wake of the 9/11 attacks in New York and Washington, President George W. Bush said that Iran was part of what he called the “Axis of Evil.”
A year later, in his Jan. 28, 2003, address to Congress, Bush said, “In Iran, we continue to see a government that represses its people, pursues weapons of mass destruction and supports terror.”

Soliciting Iranian Orders
The following day, Koch-Glitsch was sent a purchase order to supply petrochemical equipment for the Zagros plant, which was being designed and built by two engineering firms, Pidec in Iran and Lurgi in Germany, according to company documents.
On May 31, 2004, Koch-Glitsch secured another contract for 1.2 million Euros, to help expand the Zagros facility. The plant helped Iran turn its vast natural gas reserves into methanol, which is used for making plastics, paints and chemicals.

The Italian office of Koch-Glitsch sought work on other projects in Iran -- the expansion of the Abadan refinery, the country’s largest, and the development of South Pars, part of the world’s largest natural gas field, the documents show.
Koch-Glitsch told employees in 2006 that the company was winding down business in Iran, Bentu says. At that point, he says, his bosses still asked him to work on Iran bids. He says he told them he was no longer willing to sign off on such work, leading to arguments between Bentu and his managers.

‘Totally Betrayed’
Bentu says he felt dismayed because Koch Industries clearly tells all of its employees around the world that integrity is the company’s No. 1 value.
“You feel totally betrayed,” Bentu says. “Everything Koch stood for was a lie.”
Bentu, who was earning about 49,000 euros a year, says the company forced him out in April 2007 and paid him 25,000 euros severance.

In 2009, Bentu was interviewed as part of a probe by the Bundeskartellamt, the German antitrust agency. It was looking into whether Koch-Glitsch had collaborated with a rival, Montz GmbH, a smaller petrochemical equipment maker in nearby Hilden, to rig bids they made to supply products to companies.

In November 2010, Koch-Glitsch and Montz each paid 250,000 euros as part of a settlement with the regulator for sharing information from December 2002 to August 2008. The German regulator said the violations were a minor infraction. Koch-Glitsch closed its office in Viernheim in 2009, Bentu says. Several former employees went to work for Montz.
Guenther Frey, general manager for Montz, declined to comment.
Cohlmia says of the agency’s ruling, “The decision did not find that Koch-Glitsch GmbH engaged in price fixing or any illegal behavior.”

Felony Conviction
This wasn’t Koch Industries’ first brush with complaints of improper competition. In October 2000, the FBI secretly recorded the telephone calls of Troy Stanley Sr., director of textile staples at KoSa, then a Luxembourg company with its main office in Charlotte, North Carolina.

Koch Industries and a Mexican company established KoSa as a joint venture in 1998 to buy the Hoechst AG unit that produced polyester staples, which are used in making textiles. KoSa pleaded guilty in October 2002 to a felony charge of conspiracy to restrain trade and paid a $28.5 million fine.
Stanley pleaded guilty to one count of conspiring to restrain trade in December 2004 and was sentenced to one year of probation and a $5,000 fine.

‘Anti-trust Conspiracy’
“Officers, directors, managers or employees participated in the conspiracy” between September 1999 and January 2001, KoSa admitted in the plea agreement.
The conspiracy began before KoSa bought the business and continued during its ownership, Stanley testified. Koch bought out its partner in 2001. The criminal activity occurred while Koch was a 50 percent owner.

During the next eight years, Koch Industries paid $76 million to settle antitrust claims brought by KoSa’s customers, and $59 million in legal fees, according to court records. KoSa is now part of Koch’s Invista unit.
A prosecution of KoSa by Canada’s attorney general for price fixing followed in August 2003. KoSa pleaded guilty and paid a C$1.5 million fine.

Cohlmia says a KoSa subsidiary “unknowingly bought into an ongoing antitrust conspiracy.” Once the company found out about the wrongdoing, it stopped the conspiracy and cooperated with the U.S. Justice Department, she says.

Benzene Emissions
The price-fixing convictions came after years of investigations, environmental lawsuits and fines that had plagued Koch’s oil pipeline and refining divisions.

In April 1996, Koch environmental technician Sally Barnes-Soliz walked into the offices of Texas regulators in Corpus Christi and told them the company had lied about spewing benzene into the air.
Koch Refining Co. had recruited Barnes-Soliz in 1991 to work in the safety department at the company’s Corpus Christi refinery. Barnes-Soliz, then 30, had earned a bachelor’s degree in science and environmental health and a Master of Science in industrial hygiene at Colorado State University in Fort Collins.

“I loved that job,” she says, describing how she helped protect plant workers and neighborhood residents from the many hazards at the refinery. “It’s important to me that people are safe and their job is not the reason they die.”
Federal rules in 1995 required the plant, one of two refineries Koch owns in Corpus Christi, to reduce benzene emissions to less than 6 metric tons a year. Benzene, a chemical compound refined from crude oil, was found to cause leukemia in 1928 by two Italian doctors who detected the cancer in a worker exposed to benzene for five years.

False Report
Four federal agencies -- the National Institutes of Health, the Food and Drug Administration, the Environmental Protection Agency and the Occupational Safety and Health Administration -- say that benzene is a cause of cancer.
On Jan. 6, 1995, Koch’s refining unit informed the Texas Natural Resource Conservation Commission, or TNRCC, that it had installed a new anti-pollution device called a Thermatrix that used flameless heat to burn off the benzene. The machine lacked sufficient capacity for the job, Barnes-Soliz says, and refinery workers disconnected it within days.

“The refinery was just hemorrhaging benzene into the atmosphere,” she says.
Three months after disconnecting the machine, Koch filed a quarterly report with Texas regulators, while concealing that it had violated the emission rules.

Pressured to Change
On Aug. 17, 1995, Koch Industries attorney Vincent Mietlicki wrote a memo to another company lawyer, Thomas Meek, saying the refinery had given the state incorrect information about its uncontrolled benzene emissions.
“I think it goes without saying that there is a need to correct our first quarterly report which is misleading and inaccurate,” he wrote.
That December, a refinery manager asked Barnes-Soliz to tally the plant’s annual benzene emissions for a report to state regulators, Barnes-Soliz says. She found 91 metric tons of uncontrolled benzene emissions, more than 15 times higher than what the rules allowed.

“I redid the calculation a lot of times,” Barnes-Soliz says.
Those levels of emissions could increase the cancer risk to refinery employees and the public, she says. Barnes-Soliz reported the results in a document dated Jan. 4, 1996, to Mietlicki, the same lawyer who had written the memo calling out the inaccuracies in the quarterly report Koch filed with the state. She says Mietlicki and other Koch executives pressured her to lower the figures in her report.

Falsified Document
“There were a lot of meetings to try and get me to change the number,” she says. “It was hard, but I held firm to my convictions.”
Barnes-Soliz’s bosses went around her. On April 8, 1996, Koch reported to Texas regulators that its Corpus Christi plant had uncontrolled emissions of 0.61 metric tons for 1995, or 1/149th the quantity she had found.
“When I saw they had actually falsified that document, I had no recourse but to notify the authorities,” Barnes-Soliz says.
On April 18, 1996, on her lunch break, she drove to the state’s TNRCC office and reported that Koch had lied about its benzene emissions. By the time Barnes-Soliz walked in, environmental regulators were already investigating Koch in Corpus Christi.

Oil Slick
The EPA had sued Koch Industries a year earlier for a series of pipeline leaks in several states, including one that left a 12-mile-long oil slick on Nueces and Corpus Christi bays in October 1994. Her statement triggered another probe by state regulators and the FBI.
During the next three years, investigators compiled evidence that included hundreds of internal memos about benzene emissions. In 1999, Koch’s lawyers tried to stop prosecutors from using the documents in court.
Koch argued that records of the company’s internal investigation regarding benzene rules were protected by attorney-client privilege. U.S. District Judge Janis Graham Jack in Corpus Christi rejected that claim, ruling that the privilege doesn’t apply when used to help commit a crime or fraud. She singled out Mietlicki.

‘Front Man’
“The government has submitted evidence which indicates that Koch was intentionally using Mietlicki and his investigation and expertise in reference not to prior wrongdoing, but to future wrongdoing,” the judge wrote. “The February memo strongly suggests that Koch was using Mietlicki (and his investigation and expertise) as a ‘front man’ to impede the TNRCC from ascertaining the extent of its noncompliance.”

The February memo was sealed by the court.
A federal grand jury issued a 97-count indictment against Koch Petroleum Group, Mietlicki and three refinery managers on Sept. 28, 2000. Koch Petroleum Group pleaded guilty to a felony charge of lying to the government about its benzene emissions in April 2001.

Judge Jack fined Koch Petroleum $10 million and ordered that it pay another $10 million to fund environmental projects in south Texas. Koch earned $176 million in profit from the Corpus Christi plant in 1995, prosecutors told the court. The company said in a hearing that it would have cost $7 million to comply with the benzene emission regulation.

Koch Petroleum changed its name to Flint Hills Resources in 2002.
In the agreement to plead guilty, prosecutors dropped the charges against the four individuals.

‘Ultimately Collapsed’
Koch spokeswoman Cohlmia says the company reported its compliance issues to the state before a whistle-blower did so. She says the federal case was flawed, citing testimony by a prosecution expert witness.
“The government’s case ultimately collapsed after the company finally had an opportunity to challenge the government’s key expert witness,” she says.

Uhlmann, the federal prosecutor who led the probe, says Koch’s after-the-fact response is a public relations whitewash.
“The Koch case was a classic case of environmental crime, significant violations of law occurring alongside widespread efforts to conceal those violations, which Koch has admitted,” Uhlmann says. He now teaches at the University of Michigan Law School in Ann Arbor.

Empty Office
Mietlicki, who is now assistant principal at John Paul II High School in Corpus Christi, says he can’t comment on details of the case.
“I know all of my actions as a lawyer, throughout all my years of practice, were nothing but honest and truthful,” he says.
After the company found out that Barnes-Soliz had tipped off state regulators, Koch stripped her of her responsibilities and moved her to an empty office with no tasks and no e-mail access, she says.

“They were pressuring me to quit,” she says.
She left the company in July 1996. Barnes-Soliz sued Koch in January 1997, saying the company harassed and mistreated her after she became a whistle-blower. Koch settled the lawsuit in July 1999 for an undisclosed amount.
The Corpus Christi case was one of a series of challenges Koch Industries faced in the 1990s over environmental issues. In 1997, a company now owned by ConocoPhillips sued Koch for toxic waste dumping at a refinery in Duncan, Oklahoma.

‘Replete With Evidence’
In March 1998, U.S. District Court Judge Vicki Miles-LaGrange in Oklahoma City ordered Koch to pay for 15 percent of the cleanup costs for dumping at the site between 1946 and 1953. That decision was upheld by the U.S. Court of Appeals for the 10th Circuit in May 2000.

“The record is replete with evidence Koch used unlined ditches, pits and ponds to dispose of hazardous waste at the site,” the appeals court ruled, finding that Koch had tainted groundwater. “The pollution of any Oklahoma waters, including groundwater, has been prohibited by state statute since the early 1900s -- well before Koch’s waste disposal activity at the refinery.”
By March 2007, Koch Industries had paid just $440,899 and still owed $2.97 million for its share of the cleanup, Conoco told the court.
“Koch simply refuses to pay its share as ordered by this court,” Conoco said.

Companies Settled
The two companies settled in February 2009. Terms weren’t disclosed.
Cohlmia says, “We understand that appropriate remediation is occurring and Koch has met all of its obligations with respect to this matter.”

A Koch unit in Rosemount, Minnesota, pleaded guilty in 1999 to two federal misdemeanors of violating the Clean Water Act and paid $8 million in fines and penalties. The company used fire hydrants to pump more than a million gallons of wastewater contaminated with ammonia onto the ground.

Koch also increased its dumping of wastewater on weekends when it didn’t monitor discharges, circumventing the reporting requirement of its permit, the EPA said. Koch also admitted that it negligently released between 200,000 gallons (757 kiloliters) and 600,000 gallons of aviation fuel into a nearby wetland.
Cohlmia says the company cooperated with state and federal regulators to resolve the Rosemount issues and has met all of its obligations.

“In March, 1999, Koch Petroleum Group took full responsibility for past underlying discharges,” she says.
Koch Industries also spent much of the 1990s defending itself against what a U.S. Senate subcommittee called a widespread scheme to steal oil on Indian land.

Twin Brother
The Senate held hearings in May 1989 after Bill Koch, David Koch’s twin brother, told a U.S. Senate special committee on investigations that Koch Industries was stealing oil on American Indian reservations, cheating the federal government of royalties.
Bill Koch had a long-standing feud with his brothers after his failed attempt to take over the company in the early 1980s. He sold his shares in June 1983 and later lost a lawsuit claiming he’d been shortchanged.
The Senate committee sent investigators to Oklahoma to secretly observe oil companies, including Koch, buying crude on Indian land. The federal agents hid in ditches, crouched behind scrub cedars and ducked behind cows to avoid detection by Koch Oil’s purchasers, FBI agent Richard Elroy testified to the committee in May 1989.

‘Theft is Widespread’
The investigators caught Koch Oil’s employees falsifying records so that the company would get more crude than it paid for, shortchanging Indian families, Elroy said. Koch’s records showed that the company took 1.95 million barrels of oil it didn’t pay for from 1986 to 1988, according to data compiled by the Senate.

“The theft is widespread and pervasive, and these people are being horribly victimized,” Elroy testified.
Elroy told the committee that Charles Koch gave a deposition that said that no one could make exact measurements.
“There was a lot of uncertainty and tremendous variations,” Elroy quoted Koch as saying. The full deposition is sealed, which is committee policy.

The committee concluded in a November 1989 report that Koch Oil had engaged in a widespread, sophisticated scheme to steal millions of barrels of oil. The Senate referred the case to the Justice Department, which convened a grand jury that never indicted the company.
“We believe that our practices were consistent with industry practice,” Cohlmia says.

The Civil Trial
Bill Koch brought a lawsuit on behalf of U.S. taxpayers, claiming that Koch Industries’ scheme defrauded the government of royalties. The case came to trial in 1999. Former company employees testified that Koch Industries trained them to steal.
Phil Dubose, who worked for Koch Industries from 1968 to 1994, told the jury how the scheme worked.
“The Koch Method is to cheat the producer out of crude oil,” he said.

He testified that he was able to steal 2,000 barrels a month from one customer.
“You used every available tool to mismeasure the crude oil in Koch’s favor,” says Dubose, who is now retired.
Charles Koch testified in the trial, saying the company had the highest standards.
“By 1988, I thought we had developed the best measurement approach, controls and so on of any crude oil purchaser in the industry,” Koch said. “And that’s why we became the No. 1 crude oil purchaser in the United States.”

24,587 False Claims
Two days before Christmas 1999, the jury delivered the verdict: Koch Industries had made 24,587 false claims in buying oil, underpaying the U.S. government for royalties on Native American land from 1985 to 1989. Koch paid the U.S. $25 million to settle the case in 2001.

The Koch brothers, meanwhile, reached an agreement, with undisclosed terms, dropping all litigation against each other.
While the Koch brothers battled over oil, Koch Industries clashed with regulators over its failure to properly maintain its pipelines. In 1995, the EPA sued the company, saying poor maintenance resulted in corrosion that contributed to hundreds of spills.
The following year, before the EPA case was resolved, a leak in a Koch butane pipeline led to an explosion that killed two teenagers.

Burned Alive
On Aug. 24, 1996, Danielle Smalley and her high school friend and neighbor Jason Stone, both 17, smelled gas outside Smalley’s mobile home in rural Lively, Texas, 50 miles southeast of Dallas. The house had no telephone, so they decided to drive the Smalley family’s pickup truck to a neighbor’s home to call 911.
They never made it.

The truck stalled after the couple drove into a fog-like cloud, says Danielle’s father, Danny Smalley, who watched them drive away. It was butane vapor, leaking from a corroded steel pipeline. Seconds later, as Danielle restarted the truck, the gas ignited into a fireball, burning Danielle and Jason to death.
Smalley’s father sued Koch Industries in 1997 in the Kaufman County, Texas, district court for the wrongful death of his daughter.
‘Definitely Responsible’

“I will tell you Koch Industries is definitely responsible for the death of Danielle Smalley,” Bill Caffey, an executive vice president of the company, testified in a 1999 deposition during Smalley’s lawsuit.
Caffey oversaw pipeline safety at the company. He testified that he thought the pipeline was safe before the explosion. Koch Pipeline Co., the unit that managed the Texas pipeline, knew the line had corroded and didn’t fix it, an investigation by the National Transportation Safety Board concluded in November 1998.

The 570-mile-long pipeline carrying liquid butane from Medford, Oklahoma, to Mont Belvieu, Texas had corroded so badly that one expert, Edward Ziegler, likened it to Swiss cheese. The company didn’t give 40 of the 45 families near the explosion site -- including the Smalley and Stone families -- any information about what to do in case of an emergency, the NTSB wrote.
Danny Smalley hired Ziegler, a third-generation oilman and certified safety professional, as an expert witness. Ziegler had previously been retained by Koch Industries as an expert witness in an unrelated case. Ziegler told the jury that he’d never seen a company disregard safety to this extent in his more than 25-year career.

‘A Total Failure’
“This is an example of a total failure of a company to follow the regulations, keep their pipeline safe and operate it as the regulations require,” Ziegler, who now operates his own pipelines, testified.
A memo forwarded by Caffey to another Koch executive vice president justified putting a 70-mile section of the pipeline back into operation after being closed for three years because it could earn more than $7 million in operating income a year.
“We were to work on reducing wasteful spending,” Caffey said in his deposition.
In his 2007 book, Charles Koch didn’t comment on the pipeline explosion. He did, however, offer this observation: “Our organization does not reward failure.”

Koch Industries didn’t penalize Caffey, the executive in charge of pipeline safety. The company doubled his annual bonus to $900,000 for 1996, the year the fatal blast occurred, according to court records. In his deposition, lawyers asked Caffey whether the disaster came up during his annual review.

‘I Don’t Believe’
“I don’t believe we discussed that specifically in my review,” he said.
Caffey, who stayed with Koch for a decade after the explosion and now runs the BB River Ranch in Comanche, Texas, says the explosion was a one-of-a-kind tragedy.

“I have never known any company executive more focused on compliance than Charles Koch,” he says.
The state jury awarded Danny Smalley $296 million in its Oct. 21, 1999, verdict. The jury found that Koch Industries acted with malice because it had been aware of the extreme risks of using the faulty pipeline.

Smalley later settled for an undisclosed amount. Stone’s family also settled. Danny Smalley used settlement money to start the Danielle Dawn Smalley Foundation for pipeline safety education. Large pipeline operators such as ExxonMobil Corp., BP Plc and Kinder Morgan Inc. -- and not Koch -- accept free services from the foundation, Smalley says.

‘Never Forget’
“You see two children burned to death in front of you, you never forget that,” he says. “I want to stop other parents from ever having to see that.”

Cohlmia says Koch Industries used the lessons learned from the explosion to help avoid similar accidents. The company immediately accepted responsibility for the explosion, which was the only one of its kind, she says.

Three months after the Smalley verdict, Koch settled the five-year-old EPA case for pipeline leaks, along with a second EPA case brought in 1997. The company paid $35 million to resolve those cases, which covered more than 300 oil spills in six states.
For six decades around the world, Koch Industries has blazed a path to riches -- in part, by making illicit payments to win contracts, trading with a terrorist state, fixing prices, neglecting safety and ignoring environmental regulations. At the same time, Charles and David Koch have promoted a form of government that interferes less with company actions.
‘Overall Concept’

“My overall concept is to minimize the role of government and to maximize the role of the private economy and maximize personal freedoms,” David Koch told the National Journal in May 1992.

In his 2007 book, Charles Koch says his company had difficulty keeping up with changing government regulations and that it did eventually build an effective compliance program for 20 areas ranging from environmental to antitrust to safety regulations.
“We were caught unprepared by the rapid increase in regulation,” he wrote. “While business was becoming increasingly regulated, we kept thinking and acting as if we lived in a pure market economy.”

Leigh Baldwin in Zurich at lbaldwin3@bloomberg.net.
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Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net.]]> Koch Brothers Flout Law Getting Richer With Iran Sales

Asjylyn Loder and David Evans

October 3, 2011 — 2:28 PM ART

[Image: 488x-1.jpg]

Koch Industries Executive Vice President David H. Koch, left, poses for a photo with Julia Koch during the opening night at the Metropolitan Opera in New York on Sept. 26, 2011. Photographer: Amanda Gordon/Bloomberg

In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova-Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. In less than a week, she discovered that the company had paid bribes to win contracts.

“I uncovered the practices within a few days,” Egorova-Farines says. “They were not hidden at all.”
She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.

By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France.

“Those activities constitute violations of criminal law,” Koch Industries wrote in a Dec. 8, 2008, letter giving details of its findings. The letter was made public in a civil court ruling in France in September 2010; the document has never before been reported by the media.

Egorova-Farines wasn’t rewarded for bringing the illicit payments to the company’s attention. Her superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent, even after Koch’s investigators substantiated her findings. She sued Koch-Glitsch in France for wrongful termination.

Obsessed with Secrecy
Koch-Glitsch is part of a global empire run by billionaire brothers Charles and David Koch, who have taken a small oil company they inherited from their father, Fred, after his death in 1967, and built it into a chemical, textile, trading and refining conglomerate spanning more than 50 countries.

Koch Industries is obsessed with secrecy, to the point that it discloses only an approximation of its annual revenue -- $100 billion a year -- and says nothing about its profits.
The most visible part of Koch Industries is its consumer brands, including Lycra fiber and Stainmaster carpet. Georgia-Pacific LLC, which Koch owns, makes Dixie cups, Brawny paper towels and Quilted Northern bath tissue.
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. They inherited their anti-government leanings from their father.

Abolishing Social Security
Fred was an early adviser to the founder of the anti-communist John Birch Society, which fought against the civil rights movement and the United Nations. Charles and David have supported the Tea Party, a loosely organized group that aims to shrink the size of government and cut federal spending.

These are long-standing tenets for the Kochs. In 1980, David Koch ran for vice president on the Libertarian ticket, pledging to abolish Social Security, the Federal Reserve System, welfare, minimum wage laws and federal agencies -- including the Department of Energy, the Federal Bureau of Investigation and the Central Intelligence Agency.

What many people don’t know is how the Kochs’ anti-regulation political ideology has influenced the way they conduct business.
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 U.S. identifies as a sponsor of global terrorism.

The ‘Koch Method’
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 U.S. and Canada.

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 mismeasuring the amount of crude it was extracting. Koch paid a $25 million settlement to the U.S.

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.

Refused to Falsify
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 U.S. and Europe have testified or told investigators that they’ve witnessed wrongdoing by the company or have been asked by Koch managers to take what they saw as improper actions.

Sally Barnes-Soliz, who’s now an investigator for the State Department of Labor and Industries in Washington, says that when she worked for Koch, her bosses and a company lawyer at the Koch refinery in Corpus Christi, Texas, 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 and penalties.

Corporate Cultures
“How much lawless behavior are we going to tolerate from any one company?” asks David Uhlmann, who oversaw the prosecution of the Koch refinery division when he was chief of the environmental crimes unit at the U.S. Department of Justice. “Corporate cultures reflect the priorities of the corporation and its senior officials.”

Koch Industries declined to make either Charles Koch, who lives near corporate headquarters in Wichita, or David Koch, who lives in New York, available for interviews.

Melissa Cohlmia, Koch’s director of corporate communications, said in an e-mailed statement that the company has developed a good relationship with environmental regulators and now complies with all rules. Cohlmia says the company has learned lessons from past mistakes, including the improper payment scheme that Koch outlined in its letter filed in French court.

‘Steps to Correct’
“We are proud to be a major American employer and manufacturing company with about 50,000 U.S. employees,” she wrote. “Given the regulatory complexity of our business, we will, like any business, have issues that arise. When we fall short of our goals, we take steps to correct and address the issues in order to ensure compliance.”

Cohlmia says Koch fired the employees and sales agents involved in the illicit payments and strengthened internal controls.
Regarding sales to Iran, she wrote, “During the relevant time frame covered in your article, U.S. law allowed foreign subsidiaries of U.S. multinational companies to engage in trade involving countries subject to U.S. trade sanctions, including Iran, under certain conditions.”
Koch has since stopped all of its units from trading with Iran, she says.

Lobbying Washington
The Koch brothers have vaulted into the American political spotlight in recent years. Koch Industries has spent more than $50 million to lobby in Washington since 2006, according to the Center for Responsive Politics, a nonpartisan group that tracks political donations. The company opposed derivatives regulation and greenhouse gas limits.

The brothers have backed a foundation that has trained thousands of Tea Party activists. The Tea Party, a popular movement whose name stands for Taxed Enough Already, has grown into a potent force in national politics. Sixty representatives of Congress, out of a total of 435, identify themselves as Tea Party members. Virtually every Republican candidate for president -- including Texas Governor Rick Perry and Minnesota Congresswoman Michele Bachmann -- has solicited the group’s support.

Integrity and Compliance
Koch Industries’ political action committee, KochPAC, donated $50,000 to Texans for Rick Perry last year for his gubernatorial campaign, according to the Texas Ethics Commission. It has also donated to support Bachmann’s congressional campaigns, Federal Election Commission records show.

The company tells all of its employees around the world that its top two values, which it calls Guiding Principles, are integrity and compliance. Koch Industries and its subsidiaries have won 436 awards for safety, environmental excellence, community and customer service and innovation since January 2009, Cohlmia says.

The U.S. Occupational Safety and Health Administration has recognized several of the company’s units for their commitment to the workplace, the company says. Koch Industries has also supported charitable causes in Wichita and beyond, including the Kansas Special Olympics and Big Brothers Big Sisters. The company has also helped enlistees in the U.S. Army Reserve.
Koch Industries has donated millions of dollars to the Nature Conservancy, the Red Cross, the Salvation Army and victims of the March 11 earthquake and tsunami in Japan.

Reputation is Critical
David Koch has contributed more than $135 million to cultural institutions, including Lincoln Center for the Performing Arts in New York and the Smithsonian’s National Museum of Natural History.

Koch Industries zealously guards its public image.
“A company’s reputation is critical to how it will be treated by others and to its long-term success,” Charles Koch wrote in “The Science of Success: How Market-Based Management Built the World’s Largest Private Company” (Wiley, 2007). “We must build a positive reputation based on reality, or others will create one for us based on speculation or animus and we won’t like what they create.”
The illicit payments uncovered by Ludmila Egorova-Farines raised the specter of a new blow to the company’s effort to improve its reputation following criminal convictions and civil penalties.

Avoiding Scandal
The company wanted to avoid a bribery scandal similar to that of Siemens AG, says Ged Horner, a managing director at Koch-Glitsch in the U.K. from 2002 until he retired in 2010.

“The only thing that would seriously impact the profitability and continuity of Koch Industries was a compliance issue,” Horner says.
In November 2006, the U.S. Department of Justice and German prosecutors opened an investigation into bribery by Munich-based Siemens, Europe’s largest engineering company. Siemens and three of its subsidiaries pleaded guilty in December 2008 to charges of violating the U.S. Foreign Corrupt Practices Act from 1998 to 2007.

Siemens paid $1.6 billion in penalties, admitting it had paid bribes to companies in Argentina, Bangladesh, Iraq and Venezuela.
“Koch decided that if it could happen to Siemens, it could happen to them,” Horner says.
Koch Chemical Technology Group, a Koch Industries subsidiary run by David Koch, hired Egorova-Farines in April 2008 for the newly created position of compliance and ethics manager for Europe and Asia.

French Investigation
The division, which makes distillation, pollution control and water filtration equipment, recruited her from accounting firm PricewaterhouseCoopers LLP, where she was a consultant for four years on integrating corporate cultures after mergers. As soon as she joined Koch, the company flew her to Wichita to attend an internal compliance conference, she says.

The company then asked her to investigate Koch-Glitsch in France because it had heard that managers were awarding salary increases inappropriately, Egorova-Farines says. The company never mentioned anything about improper payments for contracts when it gave her that assignment, she says. She declines to discuss the details of her findings, saying it would be unprofessional.

The specifics of illicit payments for contracts by Koch-Glitsch can be found in two French labor court cases. The complaints were brought separately by Egorova-Farines and Leon Mausen, business director of Koch-Glitsch France from 1998 to 2008.

Illicit Payments
Koch-Glitsch fired Mausen on Dec. 8, 2008, sending him a termination letter that described illicit payments from 2002 to 2008 in Algeria, Egypt, India, Morocco, Nigeria and Saudi Arabia. In the Middle East, Koch-Glitsch paid what the termination letter describes as an exceptionally high commission of 23 percent to one of its sales agents.

“A portion of that money was intended to pay a customer’s employee in order to secure the contract,” Koch wrote.
The customer was an unnamed Egyptian company that was partially owned by the state. Koch-Glitsch made similar payments to win other contracts with public and private companies in Egypt and Saudi Arabia, Koch wrote in its letter to Mausen.

Koch-Glitsch gave envelopes stuffed with cash to a Moroccan company, Koch wrote in its letter. Koch-Glitsch also made an improper payment to secure a contract with a Moroccan government organization, Koch wrote. The company made similar payments to an unnamed Nigerian government agency to win contracts, Koch wrote.

Koch Blamed Employee
Koch-Glitsch inflated its bid price to a private company in India in 2008, the letter said. A Koch employee explained the reason in an e-mail copied to Mausen and dated Feb. 6, 2008: “Add an extra 2 percent for a third person whose name I would rather give you only on the phone at this time.”

A Koch-Glitsch agent increased the commission paid to an Algerian agent in 2007 and 2008 to cover what Koch described as an unlawful payment to secure a deal with an unnamed French company.

Koch’s spokeswoman Cohlmia says Koch Industries acted firmly and decisively in response to what it had learned.
In its Dec. 8, 2008, termination letter to Mausen, Koch blamed him for the illegal payments. In July 2009, Mausen sued Koch for severance and performance pay in the Arles Labor Court in southern France.

On Sept. 27, 2010, the court said Mausen hadn’t acted on his own.
“It was not Mr. Mausen alone who was giving authorizations,” the court wrote.
Company policy required approval from other Koch-Glitsch managers, including Christoph Ender, the president of Koch-Glitsch for Europe and Asia, the court said.

‘Without Doing Due Diligence’
“Ender, manager of Koch-Glitsch France, as well as the controllers and auditors who were assisting him, allowed such business practices developed with Mr. Mausen to continue without doing due diligence in their reviews concerning the payment of commissions and the final beneficiaries of said commissions,” the labor court wrote.

An appeals court in Aix-en-Provence issued a second ruling on June 14, 2011, saying the company couldn’t justify terminating Mausen for the payment scheme because his managers had been aware of the practices for more than 60 days before he was fired. The court ordered Koch-Glitsch to pay Mausen 150,808 euros ($206,170).

Mausen declined to comment, beyond saying he disputed Koch’s arguments in court. Ender, who is now a Koch-Glitsch executive in Wichita, didn’t respond to requests for comment.
Koch’s Cohlmia says Ender “had no knowledge of Mr. Mausen’s misconduct at the time it occurred, as Mr. Mausen concealed it from him.”

Initially On Track
As for Egorova-Farines, her career was initially on track after she exposed bribery. Koch Chemical promoted her to a permanent position after her trial period expired in mid-2008, court records show. She was dispatched to offices in Germany, Russia and Switzerland, she says.
“I worked hard to drive cultural change to make these units compliant,” she says.

Egorova-Farines was hospitalized for seven weeks starting in February 2009, according to the decision in her lawsuit against Koch-Glitsch for wrongful termination.
The company fired her on June 16, 2009, saying later in court that she didn’t have the skills she’d listed on her resume and that she had failed to share documents with others at the company, according to the court record. She contested Koch’s arguments.

Court Ruling
Neither Egorova-Farines nor the labor court knew at the time that Koch had cited the company’s six-year pattern of improper payments in its termination letter to Mausen, she says. The court ruled against her on Feb. 11. She filed an appeal two months later in Paris.

She said in court that Koch had harassed her and retaliated against her for uncovering the payment scheme. She asked to be reinstated in her Koch job and paid for the time she was out of work. Egorova-Farines, who was born in London, now runs a business practices consulting firm in Paris.
Koch’s Cohlmia says the labor court found that the company treated Egorova-Farines fairly and provided her with chances to perform adequately.

The payments to win contracts documented by Koch investigators may violate U.S. law, says Sara Sun Beale, a professor at Duke Law School in Durham, North Carolina. She says Koch’s termination letter to Mausen gives clear guidance to federal prosecutors.

‘Smoking Gun’
“It sounds like a smoking gun,” says Beale, who co-authored “Federal Criminal Law and Its Enforcement” (Thompson West, 2010). “It really should get the Justice Department’s attention. When you have a smoking gun, you launch an investigation.”
Such a probe would fall under the Foreign Corrupt Practices Act, a 1977 law that makes it illegal for companies and their subsidiaries to pay bribes to government officials and employees of state-owned companies.

Justice Department spokeswoman Laura Sweeney says the agency won’t confirm or deny the existence of any investigation.
While Koch-Glitsch was conducting its internal probe of illicit payments for contracts, the U.S. government was investigating Koch’s European unit on another front: sales to Iran.

On Aug. 14, 2008, investigators from the U.S. Department of Homeland Security met with George Bentu, who had worked as a sales engineer from 2001 to 2007 for Koch-Glitsch in Germany, Bentu says. In a four-hour interview at the U.S. consulate in Frankfurt, the officials asked about documents showing details of the company’s trades with Iran, he says.

Legal Sidestep
Homeland Security spokeswoman Barbara Gonzalez declined to comment.
Internal company records show that Koch Industries used its foreign subsidiary to sidestep a U.S. trade ban barring American companies from selling materials to Iran. Koch-Glitsch offices in Germany and Italy continued selling to Iran until as recently as 2007, the records show.

The company’s products helped build a methanol plant for Zagros Petrochemical Co., a unit of Iran’s state-owned National Iranian Petrochemical Co., the documents show. The facility, in the coastal city of Bandar Assaluyeh, is now the largest methanol plant in the world, according to IHS Inc., an Englewood, Colorado-based provider of chemicals, energy and economic data.

Engineer Challenged Sales
“Every single chance they had to do business with Iran, or anyone else, they did,” Bentu, 46, says.
Bentu, a German engineer who earned his master’s degree in chemical engineering from Montana State University in Bozeman in 1990, joined Koch-Glitsch in 2001. His duties included drawing up bids for potential buyers of the company’s distillation equipment, which is used in making fuels, fertilizers, detergents and other products.

Bentu says he had been working at Koch-Glitsch in Viernheim, about 80 kilometers (50 miles) south of Frankfurt, for two months when he first saw an order destined for Iran. Concerned that the transaction might run afoul of U.S. law, Bentu asked his manager about it, he says. Bentu says his boss told him not to worry, that the company’s U.S. lawyers made sure the deals with Iran were legal.
U.S. companies have been banned from trading with Iran since 1995, when President Bill Clinton declared it a threat to national security. Iran supports Iraqi militants and Taliban fighters as well as terrorist groups, including Hamas and Hezbollah, according to the U.S. State Department.

Getting Around Ban
Koch Industries took elaborate steps to ensure that its U.S.-based employees weren’t involved in the sales to Iran, internal documents show.
Koch Industries may not have violated the law if no U.S. people or company divisions facilitated trades with Iran, says Avi Jorisch, a Treasury Department policy adviser from 2005 to 2008. That’s impossible to determine without a complete investigation, Jorisch says.
Internal Koch-Glitsch correspondence shows that the company coordinated with Koch Industries lawyers in the U.S. to make sure that American employees didn’t work on sales to Iran. Elena Rigon, now Koch-Glitsch compliance manager for Europe, based in Italy, in December 2000 addressed a memo outlining compliance guidelines to company managers in her region.

‘Axis of Evil’
In another e-mail, Rigon said all offices had to go through a checklist for each estimate quoted for materials headed to Iran.
“Your staff shall send this form to me since I have to send it to the lawyers in the USA as part of the compliance program,” Rigon wrote in the e-mail. “If somebody happens to find out that any U.S. persons are involved in this project or U.S. material is delivered to Iran you CANNOT quote.”
Rigon declined to comment.
“Koch-Glitsch had protocols in place that were consistent with applicable U.S. laws allowing such sales at the foreign subsidiary level,” Koch’s Cohlmia says.

In his annual State of the Union address on Jan. 29, 2002, in the wake of the 9/11 attacks in New York and Washington, President George W. Bush said that Iran was part of what he called the “Axis of Evil.”
A year later, in his Jan. 28, 2003, address to Congress, Bush said, “In Iran, we continue to see a government that represses its people, pursues weapons of mass destruction and supports terror.”

Soliciting Iranian Orders
The following day, Koch-Glitsch was sent a purchase order to supply petrochemical equipment for the Zagros plant, which was being designed and built by two engineering firms, Pidec in Iran and Lurgi in Germany, according to company documents.
On May 31, 2004, Koch-Glitsch secured another contract for 1.2 million Euros, to help expand the Zagros facility. The plant helped Iran turn its vast natural gas reserves into methanol, which is used for making plastics, paints and chemicals.

The Italian office of Koch-Glitsch sought work on other projects in Iran -- the expansion of the Abadan refinery, the country’s largest, and the development of South Pars, part of the world’s largest natural gas field, the documents show.
Koch-Glitsch told employees in 2006 that the company was winding down business in Iran, Bentu says. At that point, he says, his bosses still asked him to work on Iran bids. He says he told them he was no longer willing to sign off on such work, leading to arguments between Bentu and his managers.

‘Totally Betrayed’
Bentu says he felt dismayed because Koch Industries clearly tells all of its employees around the world that integrity is the company’s No. 1 value.
“You feel totally betrayed,” Bentu says. “Everything Koch stood for was a lie.”
Bentu, who was earning about 49,000 euros a year, says the company forced him out in April 2007 and paid him 25,000 euros severance.

In 2009, Bentu was interviewed as part of a probe by the Bundeskartellamt, the German antitrust agency. It was looking into whether Koch-Glitsch had collaborated with a rival, Montz GmbH, a smaller petrochemical equipment maker in nearby Hilden, to rig bids they made to supply products to companies.

In November 2010, Koch-Glitsch and Montz each paid 250,000 euros as part of a settlement with the regulator for sharing information from December 2002 to August 2008. The German regulator said the violations were a minor infraction. Koch-Glitsch closed its office in Viernheim in 2009, Bentu says. Several former employees went to work for Montz.
Guenther Frey, general manager for Montz, declined to comment.
Cohlmia says of the agency’s ruling, “The decision did not find that Koch-Glitsch GmbH engaged in price fixing or any illegal behavior.”

Felony Conviction
This wasn’t Koch Industries’ first brush with complaints of improper competition. In October 2000, the FBI secretly recorded the telephone calls of Troy Stanley Sr., director of textile staples at KoSa, then a Luxembourg company with its main office in Charlotte, North Carolina.

Koch Industries and a Mexican company established KoSa as a joint venture in 1998 to buy the Hoechst AG unit that produced polyester staples, which are used in making textiles. KoSa pleaded guilty in October 2002 to a felony charge of conspiracy to restrain trade and paid a $28.5 million fine.
Stanley pleaded guilty to one count of conspiring to restrain trade in December 2004 and was sentenced to one year of probation and a $5,000 fine.

‘Anti-trust Conspiracy’
“Officers, directors, managers or employees participated in the conspiracy” between September 1999 and January 2001, KoSa admitted in the plea agreement.
The conspiracy began before KoSa bought the business and continued during its ownership, Stanley testified. Koch bought out its partner in 2001. The criminal activity occurred while Koch was a 50 percent owner.

During the next eight years, Koch Industries paid $76 million to settle antitrust claims brought by KoSa’s customers, and $59 million in legal fees, according to court records. KoSa is now part of Koch’s Invista unit.
A prosecution of KoSa by Canada’s attorney general for price fixing followed in August 2003. KoSa pleaded guilty and paid a C$1.5 million fine.

Cohlmia says a KoSa subsidiary “unknowingly bought into an ongoing antitrust conspiracy.” Once the company found out about the wrongdoing, it stopped the conspiracy and cooperated with the U.S. Justice Department, she says.

Benzene Emissions
The price-fixing convictions came after years of investigations, environmental lawsuits and fines that had plagued Koch’s oil pipeline and refining divisions.

In April 1996, Koch environmental technician Sally Barnes-Soliz walked into the offices of Texas regulators in Corpus Christi and told them the company had lied about spewing benzene into the air.
Koch Refining Co. had recruited Barnes-Soliz in 1991 to work in the safety department at the company’s Corpus Christi refinery. Barnes-Soliz, then 30, had earned a bachelor’s degree in science and environmental health and a Master of Science in industrial hygiene at Colorado State University in Fort Collins.

“I loved that job,” she says, describing how she helped protect plant workers and neighborhood residents from the many hazards at the refinery. “It’s important to me that people are safe and their job is not the reason they die.”
Federal rules in 1995 required the plant, one of two refineries Koch owns in Corpus Christi, to reduce benzene emissions to less than 6 metric tons a year. Benzene, a chemical compound refined from crude oil, was found to cause leukemia in 1928 by two Italian doctors who detected the cancer in a worker exposed to benzene for five years.

False Report
Four federal agencies -- the National Institutes of Health, the Food and Drug Administration, the Environmental Protection Agency and the Occupational Safety and Health Administration -- say that benzene is a cause of cancer.
On Jan. 6, 1995, Koch’s refining unit informed the Texas Natural Resource Conservation Commission, or TNRCC, that it had installed a new anti-pollution device called a Thermatrix that used flameless heat to burn off the benzene. The machine lacked sufficient capacity for the job, Barnes-Soliz says, and refinery workers disconnected it within days.

“The refinery was just hemorrhaging benzene into the atmosphere,” she says.
Three months after disconnecting the machine, Koch filed a quarterly report with Texas regulators, while concealing that it had violated the emission rules.

Pressured to Change
On Aug. 17, 1995, Koch Industries attorney Vincent Mietlicki wrote a memo to another company lawyer, Thomas Meek, saying the refinery had given the state incorrect information about its uncontrolled benzene emissions.
“I think it goes without saying that there is a need to correct our first quarterly report which is misleading and inaccurate,” he wrote.
That December, a refinery manager asked Barnes-Soliz to tally the plant’s annual benzene emissions for a report to state regulators, Barnes-Soliz says. She found 91 metric tons of uncontrolled benzene emissions, more than 15 times higher than what the rules allowed.

“I redid the calculation a lot of times,” Barnes-Soliz says.
Those levels of emissions could increase the cancer risk to refinery employees and the public, she says. Barnes-Soliz reported the results in a document dated Jan. 4, 1996, to Mietlicki, the same lawyer who had written the memo calling out the inaccuracies in the quarterly report Koch filed with the state. She says Mietlicki and other Koch executives pressured her to lower the figures in her report.

Falsified Document
“There were a lot of meetings to try and get me to change the number,” she says. “It was hard, but I held firm to my convictions.”
Barnes-Soliz’s bosses went around her. On April 8, 1996, Koch reported to Texas regulators that its Corpus Christi plant had uncontrolled emissions of 0.61 metric tons for 1995, or 1/149th the quantity she had found.
“When I saw they had actually falsified that document, I had no recourse but to notify the authorities,” Barnes-Soliz says.
On April 18, 1996, on her lunch break, she drove to the state’s TNRCC office and reported that Koch had lied about its benzene emissions. By the time Barnes-Soliz walked in, environmental regulators were already investigating Koch in Corpus Christi.

Oil Slick
The EPA had sued Koch Industries a year earlier for a series of pipeline leaks in several states, including one that left a 12-mile-long oil slick on Nueces and Corpus Christi bays in October 1994. Her statement triggered another probe by state regulators and the FBI.
During the next three years, investigators compiled evidence that included hundreds of internal memos about benzene emissions. In 1999, Koch’s lawyers tried to stop prosecutors from using the documents in court.
Koch argued that records of the company’s internal investigation regarding benzene rules were protected by attorney-client privilege. U.S. District Judge Janis Graham Jack in Corpus Christi rejected that claim, ruling that the privilege doesn’t apply when used to help commit a crime or fraud. She singled out Mietlicki.

‘Front Man’
“The government has submitted evidence which indicates that Koch was intentionally using Mietlicki and his investigation and expertise in reference not to prior wrongdoing, but to future wrongdoing,” the judge wrote. “The February memo strongly suggests that Koch was using Mietlicki (and his investigation and expertise) as a ‘front man’ to impede the TNRCC from ascertaining the extent of its noncompliance.”

The February memo was sealed by the court.
A federal grand jury issued a 97-count indictment against Koch Petroleum Group, Mietlicki and three refinery managers on Sept. 28, 2000. Koch Petroleum Group pleaded guilty to a felony charge of lying to the government about its benzene emissions in April 2001.

Judge Jack fined Koch Petroleum $10 million and ordered that it pay another $10 million to fund environmental projects in south Texas. Koch earned $176 million in profit from the Corpus Christi plant in 1995, prosecutors told the court. The company said in a hearing that it would have cost $7 million to comply with the benzene emission regulation.

Koch Petroleum changed its name to Flint Hills Resources in 2002.
In the agreement to plead guilty, prosecutors dropped the charges against the four individuals.

‘Ultimately Collapsed’
Koch spokeswoman Cohlmia says the company reported its compliance issues to the state before a whistle-blower did so. She says the federal case was flawed, citing testimony by a prosecution expert witness.
“The government’s case ultimately collapsed after the company finally had an opportunity to challenge the government’s key expert witness,” she says.

Uhlmann, the federal prosecutor who led the probe, says Koch’s after-the-fact response is a public relations whitewash.
“The Koch case was a classic case of environmental crime, significant violations of law occurring alongside widespread efforts to conceal those violations, which Koch has admitted,” Uhlmann says. He now teaches at the University of Michigan Law School in Ann Arbor.

Empty Office
Mietlicki, who is now assistant principal at John Paul II High School in Corpus Christi, says he can’t comment on details of the case.
“I know all of my actions as a lawyer, throughout all my years of practice, were nothing but honest and truthful,” he says.
After the company found out that Barnes-Soliz had tipped off state regulators, Koch stripped her of her responsibilities and moved her to an empty office with no tasks and no e-mail access, she says.

“They were pressuring me to quit,” she says.
She left the company in July 1996. Barnes-Soliz sued Koch in January 1997, saying the company harassed and mistreated her after she became a whistle-blower. Koch settled the lawsuit in July 1999 for an undisclosed amount.
The Corpus Christi case was one of a series of challenges Koch Industries faced in the 1990s over environmental issues. In 1997, a company now owned by ConocoPhillips sued Koch for toxic waste dumping at a refinery in Duncan, Oklahoma.

‘Replete With Evidence’
In March 1998, U.S. District Court Judge Vicki Miles-LaGrange in Oklahoma City ordered Koch to pay for 15 percent of the cleanup costs for dumping at the site between 1946 and 1953. That decision was upheld by the U.S. Court of Appeals for the 10th Circuit in May 2000.

“The record is replete with evidence Koch used unlined ditches, pits and ponds to dispose of hazardous waste at the site,” the appeals court ruled, finding that Koch had tainted groundwater. “The pollution of any Oklahoma waters, including groundwater, has been prohibited by state statute since the early 1900s -- well before Koch’s waste disposal activity at the refinery.”
By March 2007, Koch Industries had paid just $440,899 and still owed $2.97 million for its share of the cleanup, Conoco told the court.
“Koch simply refuses to pay its share as ordered by this court,” Conoco said.

Companies Settled
The two companies settled in February 2009. Terms weren’t disclosed.
Cohlmia says, “We understand that appropriate remediation is occurring and Koch has met all of its obligations with respect to this matter.”

A Koch unit in Rosemount, Minnesota, pleaded guilty in 1999 to two federal misdemeanors of violating the Clean Water Act and paid $8 million in fines and penalties. The company used fire hydrants to pump more than a million gallons of wastewater contaminated with ammonia onto the ground.

Koch also increased its dumping of wastewater on weekends when it didn’t monitor discharges, circumventing the reporting requirement of its permit, the EPA said. Koch also admitted that it negligently released between 200,000 gallons (757 kiloliters) and 600,000 gallons of aviation fuel into a nearby wetland.
Cohlmia says the company cooperated with state and federal regulators to resolve the Rosemount issues and has met all of its obligations.

“In March, 1999, Koch Petroleum Group took full responsibility for past underlying discharges,” she says.
Koch Industries also spent much of the 1990s defending itself against what a U.S. Senate subcommittee called a widespread scheme to steal oil on Indian land.

Twin Brother
The Senate held hearings in May 1989 after Bill Koch, David Koch’s twin brother, told a U.S. Senate special committee on investigations that Koch Industries was stealing oil on American Indian reservations, cheating the federal government of royalties.
Bill Koch had a long-standing feud with his brothers after his failed attempt to take over the company in the early 1980s. He sold his shares in June 1983 and later lost a lawsuit claiming he’d been shortchanged.
The Senate committee sent investigators to Oklahoma to secretly observe oil companies, including Koch, buying crude on Indian land. The federal agents hid in ditches, crouched behind scrub cedars and ducked behind cows to avoid detection by Koch Oil’s purchasers, FBI agent Richard Elroy testified to the committee in May 1989.

‘Theft is Widespread’
The investigators caught Koch Oil’s employees falsifying records so that the company would get more crude than it paid for, shortchanging Indian families, Elroy said. Koch’s records showed that the company took 1.95 million barrels of oil it didn’t pay for from 1986 to 1988, according to data compiled by the Senate.

“The theft is widespread and pervasive, and these people are being horribly victimized,” Elroy testified.
Elroy told the committee that Charles Koch gave a deposition that said that no one could make exact measurements.
“There was a lot of uncertainty and tremendous variations,” Elroy quoted Koch as saying. The full deposition is sealed, which is committee policy.

The committee concluded in a November 1989 report that Koch Oil had engaged in a widespread, sophisticated scheme to steal millions of barrels of oil. The Senate referred the case to the Justice Department, which convened a grand jury that never indicted the company.
“We believe that our practices were consistent with industry practice,” Cohlmia says.

The Civil Trial
Bill Koch brought a lawsuit on behalf of U.S. taxpayers, claiming that Koch Industries’ scheme defrauded the government of royalties. The case came to trial in 1999. Former company employees testified that Koch Industries trained them to steal.
Phil Dubose, who worked for Koch Industries from 1968 to 1994, told the jury how the scheme worked.
“The Koch Method is to cheat the producer out of crude oil,” he said.

He testified that he was able to steal 2,000 barrels a month from one customer.
“You used every available tool to mismeasure the crude oil in Koch’s favor,” says Dubose, who is now retired.
Charles Koch testified in the trial, saying the company had the highest standards.
“By 1988, I thought we had developed the best measurement approach, controls and so on of any crude oil purchaser in the industry,” Koch said. “And that’s why we became the No. 1 crude oil purchaser in the United States.”

24,587 False Claims
Two days before Christmas 1999, the jury delivered the verdict: Koch Industries had made 24,587 false claims in buying oil, underpaying the U.S. government for royalties on Native American land from 1985 to 1989. Koch paid the U.S. $25 million to settle the case in 2001.

The Koch brothers, meanwhile, reached an agreement, with undisclosed terms, dropping all litigation against each other.
While the Koch brothers battled over oil, Koch Industries clashed with regulators over its failure to properly maintain its pipelines. In 1995, the EPA sued the company, saying poor maintenance resulted in corrosion that contributed to hundreds of spills.
The following year, before the EPA case was resolved, a leak in a Koch butane pipeline led to an explosion that killed two teenagers.

Burned Alive
On Aug. 24, 1996, Danielle Smalley and her high school friend and neighbor Jason Stone, both 17, smelled gas outside Smalley’s mobile home in rural Lively, Texas, 50 miles southeast of Dallas. The house had no telephone, so they decided to drive the Smalley family’s pickup truck to a neighbor’s home to call 911.
They never made it.

The truck stalled after the couple drove into a fog-like cloud, says Danielle’s father, Danny Smalley, who watched them drive away. It was butane vapor, leaking from a corroded steel pipeline. Seconds later, as Danielle restarted the truck, the gas ignited into a fireball, burning Danielle and Jason to death.
Smalley’s father sued Koch Industries in 1997 in the Kaufman County, Texas, district court for the wrongful death of his daughter.
‘Definitely Responsible’

“I will tell you Koch Industries is definitely responsible for the death of Danielle Smalley,” Bill Caffey, an executive vice president of the company, testified in a 1999 deposition during Smalley’s lawsuit.
Caffey oversaw pipeline safety at the company. He testified that he thought the pipeline was safe before the explosion. Koch Pipeline Co., the unit that managed the Texas pipeline, knew the line had corroded and didn’t fix it, an investigation by the National Transportation Safety Board concluded in November 1998.

The 570-mile-long pipeline carrying liquid butane from Medford, Oklahoma, to Mont Belvieu, Texas had corroded so badly that one expert, Edward Ziegler, likened it to Swiss cheese. The company didn’t give 40 of the 45 families near the explosion site -- including the Smalley and Stone families -- any information about what to do in case of an emergency, the NTSB wrote.
Danny Smalley hired Ziegler, a third-generation oilman and certified safety professional, as an expert witness. Ziegler had previously been retained by Koch Industries as an expert witness in an unrelated case. Ziegler told the jury that he’d never seen a company disregard safety to this extent in his more than 25-year career.

‘A Total Failure’
“This is an example of a total failure of a company to follow the regulations, keep their pipeline safe and operate it as the regulations require,” Ziegler, who now operates his own pipelines, testified.
A memo forwarded by Caffey to another Koch executive vice president justified putting a 70-mile section of the pipeline back into operation after being closed for three years because it could earn more than $7 million in operating income a year.
“We were to work on reducing wasteful spending,” Caffey said in his deposition.
In his 2007 book, Charles Koch didn’t comment on the pipeline explosion. He did, however, offer this observation: “Our organization does not reward failure.”

Koch Industries didn’t penalize Caffey, the executive in charge of pipeline safety. The company doubled his annual bonus to $900,000 for 1996, the year the fatal blast occurred, according to court records. In his deposition, lawyers asked Caffey whether the disaster came up during his annual review.

‘I Don’t Believe’
“I don’t believe we discussed that specifically in my review,” he said.
Caffey, who stayed with Koch for a decade after the explosion and now runs the BB River Ranch in Comanche, Texas, says the explosion was a one-of-a-kind tragedy.

“I have never known any company executive more focused on compliance than Charles Koch,” he says.
The state jury awarded Danny Smalley $296 million in its Oct. 21, 1999, verdict. The jury found that Koch Industries acted with malice because it had been aware of the extreme risks of using the faulty pipeline.

Smalley later settled for an undisclosed amount. Stone’s family also settled. Danny Smalley used settlement money to start the Danielle Dawn Smalley Foundation for pipeline safety education. Large pipeline operators such as ExxonMobil Corp., BP Plc and Kinder Morgan Inc. -- and not Koch -- accept free services from the foundation, Smalley says.

‘Never Forget’
“You see two children burned to death in front of you, you never forget that,” he says. “I want to stop other parents from ever having to see that.”

Cohlmia says Koch Industries used the lessons learned from the explosion to help avoid similar accidents. The company immediately accepted responsibility for the explosion, which was the only one of its kind, she says.

Three months after the Smalley verdict, Koch settled the five-year-old EPA case for pipeline leaks, along with a second EPA case brought in 1997. The company paid $35 million to resolve those cases, which covered more than 300 oil spills in six states.
For six decades around the world, Koch Industries has blazed a path to riches -- in part, by making illicit payments to win contracts, trading with a terrorist state, fixing prices, neglecting safety and ignoring environmental regulations. At the same time, Charles and David Koch have promoted a form of government that interferes less with company actions.
‘Overall Concept’

“My overall concept is to minimize the role of government and to maximize the role of the private economy and maximize personal freedoms,” David Koch told the National Journal in May 1992.

In his 2007 book, Charles Koch says his company had difficulty keeping up with changing government regulations and that it did eventually build an effective compliance program for 20 areas ranging from environmental to antitrust to safety regulations.
“We were caught unprepared by the rapid increase in regulation,” he wrote. “While business was becoming increasingly regulated, we kept thinking and acting as if we lived in a pure market economy.”

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Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net.]]> <![CDATA[Dark Money, right wing billionaires assault on the country]]> http://rightwingers.org/forums/thread-26.html Thu, 03 Mar 2016 15:53:31 +0000 http://rightwingers.org/forums/thread-26.html Dark Money review: Nazi oil, the Koch brothers and a rightwing revolution

New Yorker writer Jane Mayer examines the origins, rise and dominance of a billionaire class to whom money is no object when it comes to buying power

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David Koch listens to speakers at the Defending the American Dream Summit, in Washington DC in November 2011. Photograph: Chip Somodevilla/Getty Images
Charles Kaiser
Sunday 17 January 2016 12.00 GMTLast modified on Sunday 17 January 201612.18 GMT

Lots of American industrialists have skeletons in the family closet. Charles and David Koch, however, are in a league of their own.

The father of these famous right-wing billionaires was Fred Koch, who started his fortune with $500,000 received from Stalin for his assistance constructing 15 oil refineries in the Soviet Union in the 1930s. A couple of years later, his company, Winkler-Koch, helped the Nazis complete their third-largest oil refinery. The facility produced hundreds of thousands of gallons of high-octane fuel for the Luftwaffe, until it was destroyed by Allied bombs in 1944.

In 1938, the patriarch wrote that “the only sound countries in the world are Germany, Italy and Japan”. To make sure his children got the right ideas, he hired a German nanny. The nanny was such a fervent Nazi that when France fell in 1940, she resigned and returned to Germany. After that, Fred became the main disciplinarian, whipping his children with belts and tree branches.

These are just a handful of the many bombshells exploded in the pages of Dark Money, Jane Mayer’s indispensable new history “of the billionaires behind the rise of the radical right” in America.

A veteran investigative reporter and a staff writer for the New Yorker, Mayer has combined her own research with the work of scores of other investigators, to describe how the Kochs and fellow billionaires like Richard Scaife have spent hundreds of millions to “move their political ideas from the fringe to the center of American political life”.

Twenty years after collaborating with the Nazis, Fred Koch lost none of his taste for extremism. In 1958 he was one of the 11 original members of the John Birch Society, an organization which accused scores of prominent Americans, including President Dwight Eisenhower, of communist sympathies.

In 1960, Koch wrote that “the colored man looms large in the Communist plan to take over America”. He strongly supported the movement to impeach chief justice Earl Warren, after the supreme court voted to desegregate public schools in Brown v Board of Education. His sons became Birchers too, although Charles was more enamored of “antigovernment economic writers” than communist conspiracies.

After their father died, Charles and David bought out their brothers’ shares in the family company, then built it into the second largest privately held corporation in America.

“As their fortunes grew, Charles and David Koch became the primary underwriters of hard-line libertarian politics in America,” Mayer writes. Charles’s goal was to “tear the government out ‘at the root’.”

Another man who studied Charles thought “he was driven by some deeper urge to smash the one thing left in the world that could discipline him: the government”.

Much of what the American right has accomplished can be seen as a reaction to the upheavals of the 1960s, when big corporations like Dow Chemical (which manufactured napalm for the Vietnam War) reached the nadir of their popularity.

In 1971, corporate lawyer (and future supreme court justice) Lewis Powell wrote a 5,000 word memo that was a blueprint for a broad attack on the liberal establishment. The real enemies, Powell wrote, “were the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences”, and “politicians”.

He argued that conservatives should control the political debate at its source by demanding “balance” in textbooks, television shows and news coverage” – themes that were echoed in inflammatory speeches by Richard Nixon’s vice-president, Spiro Agnew.

The war on liberals was so effective that practically everyone reacted to it: from the New York Times, which hired ex-Nixon speechwriter Bill Safire to “balance” its op-ed page, to the Ford Foundation, which gave $300,000 to the American Enterprise Institute (AEI) in 1972. The impact was cumulative: almost four decades later, Barack Obama was astonished by one of the first questions asked to him, by a New York Times reporter, after he became president: “Are you a socialist?”

The AEI was one of dozens of the new thinktanks bankrolled by hundreds of millions from the Kochs and their allies. Sold to the public as quasi-scholarly organizations, their real function was to legitimize the right to pollute for oil, gas and coal companies, and to argue for ever more tax cuts for of the people who created them. Richard Scaife, an heir to the Mellon fortune, gave $23m over 23 years to the Heritage Foundation, after having been the largest single donor to AEI.

Next, the right turned its sights on American campuses. John M Olin founded the Olin Foudation, and spent nearly $200m promoting “free-market ideology and other conservative ideas on the country’s campuses”. It bankrolled a whole new approach to jurisprudence called “law and economics”, Mayer writes, giving $10m to Harvard, $7m to Yale and Chicago, and over $2m to Columbia, Cornell, Georgetown and the University of Virginia.

The amount of spent money has been staggering. Between 2005 and 2008, the Kochs alone spent nearly $25m on organizations fighting climate reform. One study by a Drexel University professor found 140 conservative foundations had spent $558m over seven years for the same purpose.

The next step for the radical right was to support the creation of the Tea Party movement, through organizations like Americans for Prosperity, which was funded by the Kochs.

“The Heritage Foundation, the Cato Institute and Americans for Prosperity provided speakers, talking points, press releases, transportation, and other logistical support,” Mayer writes. As the writer Thomas Frank has pointed out, the genius of this strategy was to “turn corporate self-interest into a movement among people on the streets”.

The last element of this multi-pronged campaign saw the direct investment of hundreds of millions of dollars in political campaigns at every level, from president to city councilman. In 1996, a last-minute $3m campaign of attack ads against Democrats in 29 races, a campaign which may have been financed by the Kochs, was considered outrageous and extravagant. But after the disappearance of virtually all restrictions on campaign contributions – another result of rightwing lobbying and the supreme court’s Citizens United decision – $3m is now a tiny number.

In the 2016 elections, the goal of the Koch network of contributors is to spend $889m, more than twice what they spent in 2012.

Four years ago, because Obama had the most sophisticated vote-pulling operation in the history of American politics, and a rather lackluster opponent, a Democratic president was able to withstand such a gigantic financial onslaught. This time around, it’s not clear that any Democrat will be so fortunate.

Charles Kaiser is a writer based in New York. He is the author of 1968 in America, The Gay Metropolis and The Cost of Courage.

]]> Dark Money review: Nazi oil, the Koch brothers and a rightwing revolution

New Yorker writer Jane Mayer examines the origins, rise and dominance of a billionaire class to whom money is no object when it comes to buying power

[Image: 4692.jpg?w=300&q=85&auto=format&sharp=10...2104b03c3d]

Charles Kaiser is a writer based in New York. He is the author of 1968 in America, The Gay Metropolis and The Cost of Courage.

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