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American Justice: The Criminal (?) Enterprise Known as the Koch Brothers and Koch Industries

A History of One of the Most Corrupt Business in America

I WRITE THAT SUBTITLE KNOWING THAT IT COULD COME BACK TO BITE ME by the subjects of this hub, Koch Industries as well as Charles and David Koch, aka the Koch Brothers. I say that because they do not take well criticism, especially criticism based of facts, The Kochs, et al, tend, as history shows, to strike back hard. While my following is rather small and the chances that this may come to their notice is minimal, I am still taking a chance that my life may become hell as a result of this hub.

I am currently (Feb 2016) writing a Hub on money in politics based on the research of Jane Mayer in her book Dark Money, but am taking a quick break to develop this Hub on one aspect of her extremely well documented book ... the civil and criminal misbehavior of Charles Koch and his source of money, Koch Industries owned by himself and his brother, David Koch. I got about a 1/3rd of the way through Dark Money when I came to a chapter devoted to the malfeasance of the Kochs and their business enterprise. Dark Money itself is about how a few billionaires have constructed this largely secret network of tax deductible foundations whose sole purpose is to essentially overthrow our system of government and reconstruct it to reflect there radical libertarian views (they make Ron and Rand Paul look like Lefties).

The scope of the criminal behavior described in this chapter left me so upset that I knew I had to write about it before completing the more general analysis about money in politics.

Koch Industries Knows No Limits to Their Depravity

WHAT I LEARNED IN CHAPTER 4 OF JANE MAYER'S BOOK DARK MONEY left me flabbergasted as to the extent of what, if it had been a person (oh wait, corporations are people, aren't they, except when they do wrong), it would have been sentenced to life without parole; their "crimes" were that bad. Their attempts to cover it up, intimidate witnesses and prosecutors, if proven beyond a reasonable doubt, were high crimes as well ... of the most insidious sort. In short, Koch Industries and the Koch Brothers are not nice by any stretch of the imagination.

This hub is a synopsis of what Jane Mayer documented in her book, an outline if you will. All credit as to the factual content as well as the strong circumstantial evidence goes to her excellent research. I just what to make it visible to my readers in hopes they will pursue it more by reading her astonishing and, to me, depressing rendition of corporate bad behavior gone wild. As any of you who read me regularly know, I am no fan of Corporate America (as opposed to small business America) due to their constant, ubiquitous rip-off of their consumers and low-level employees.

I must make this distinction between scales of business. Small business plays by regulated free-market rules and therefore, normally by choice, are honest hard working entrepreneurs who treat their employees fairly and aren't trying to deliver the poorest product for the most money they can get away with. Conversely, Corporate America is largely above the law where their great wealth allows them to flout the law (it's cheaper to pay fines than do the right thing) and do pretty much what their general lack of ethics and morality allow them to do.



Koch Industries

KOCH INDUSTRIES IS THE LARGEST PRIVATELY-HELD ENERGY COMPANY in the United States. They have subsidiaries involved in manufacturing, trading, and investments. Companies owned by Koch Industries include, but are not limited to, Invista, Georgia-Pacific, Molex, Flint Hills Resources (Pine Bend Refinery), Koch Pipeline, Koch Fertilizer, Koch Minerals, and Matador Cattle Company. It is involved in the manufacturing, refining, and distribution of petroleum, chemicals, energy, fiber, intermediates and polymers, minerals, fertilizers, pulp and paper, chemical technology equipment, ranching, finance, commodities trading, and many other ventures and investments. The firm employs about 60,000 people in the United States and another 40,000 in 59 other countries. Koch Industries' annual revenues of $115 billion, with a 'B'.

Court documents show many of these Koch companies were involved in a pattern of flagrantly ignoring multiple pollution controls (needless and harmful regulations in their view), fraud, intimidation, and employee abuse.

So, what is it exactly that Koch Industries and its owners did wrong? A lot !!

1940 - That is when it began

KOCH INDUSTRIES BEGAN ITS LIFE IN 1940 AS WOOD RIVER OIL AND REFINING COMPANY founded by Jeff Koch, father of Charles, David, Bill, Frederick, and Elizabeth (Charles and David are estranged from the rest of the family). In 1946, it was renamed Rock Island Oil & Refining Company after acquiring a refinery by that name. In 1968, several years after Fred Koch died, the company was renamed yet again to Koch Industries Inc., to honor the founder.

Before there was Wood River, there was Winkler-Koch, founded in 1925, Fred's first company founded to take advantage of a new oil refining process much better than anything currently available. In true free-market fashion, the much bigger and older oil companies, sensing a threat from this new start-up quickly slapped it down claiming patent infringements. Many years later, Koch finally won in court. In the mean time, to keep things afloat, he took his process to England and started building refineries there, then for the Soviet Union, and finally for Hitler. Had Koch not built the German refineries, Hitler would have had no air force with which to bomb England and Americans who entered the war against Germany.

Flash-forward to 1977 where we will begin our story, 11 years after Charles Koch became President and Chairman of Koch Industries, Inc.

1974 - Donald Carlson

IN 1974, DONALD CARLSON BEGAN TO WORK FOR KOCH AND ALSO BEGAN TO DIE, courtesy of Koch Refining Company at their Pine Bend Refinery in Rosemount, Minnesota. Bull, which was Donald's nickname worked 12 and 16-hour shifts without complaint. He liked what he did, which was to hand-scrape tanks that has contained leaded gasoline, measured tank levels where the built up pressure of toxic gases would blow his safety helmet off, or clean up spills that were so deep sometimes, they burned his calves. Bull, however, wasn't aware of the hazardous environment he worked in; "They [Koch] didn't tell me anything, and I didn't know anything", Bull said later (121).

One of the chemicals he frequently came in unprotected contact with was benzene. Unfortunately for Bull, Koch Company didn't tell him that since 1928 it was suspected, then known that benzene was a human carcinogenic! In 1995, Carlson became to sick to work; and that is when the trouble really began.

in 1974, OSHA (one of the many government organizations the libertarian Koch's want to sweep into a dust bin) issued several regulations regarding employer responsibilities to monitor and notify employees regarding complications from working with benzene and other hazardous substances. Koch Company picked and chose which of the these regulations they wanted to follow. For example, they did blood tests as required, but didn't report the results to the employee; even when Bull's blood count became abnormal in 1990.

They didn't tell him in 1991, 1992, and 1993. They finally told him in 1994, but it was too late. Bull worked to the summer of 1995, but even the massive blood transfusions wasn't enough to keep in on the job. His reward ... being fired with six-months wages. Carlson filed for workers' compensation claiming his illness was work related. Koch disagreed (and thought that OSHA and workers' comp was socialism gone wild).

The workers' compensation benefits would have covered his medical bills and continued dependency for his wife and daughter. According to Mrs. Calrson (122), "The doctor couldn't believe he was never put on workmen's comp years ago!" and "We were just naive. We didn't think people would actually let you die. We thought 'they help you, don't they?'" Donald "Bull" Carlson died in 1997 of leukemia; he was 55 and died thinking "if you worked hard and did a good job, you would get rewarded." Clearly libertarian Charles Koch didn't.

Mrs Carlson pressed her claim against Koch Industries. They offered her crumbs on the stipulation it would not be considered compensation for work related injuries; she demurred. On the eve of the trial, the Koch's caved and settled on her terms, although a confidentiality agreement sealed the records.

The settlement amount is unknown.

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