Kochs: Southern Illinois roots, national clout

The Koch family fortune has its roots  in the Metro East area of Illinois, with branches radiating in many directions. The patriarch of the clan, Fred C. Koch, started as an engineer in the oil and gas industry. In 1940, Fred Koch partnered with a fellow MIT alumni to found Wood River Oil and Refining Company. After the elder Koch’s death in 1967 the company was renamed Koch Industries in his honor. The company is currently run by two of Fred Koch’s sons, Charles (CEO) and David (executive VP). These two brothers bought out the remaining heirs of the estate in the 1980’s, in a deal worth over a billion dollars.

Sins against the environment

From the beginning, a major part of Koch Industries has been oil and gas pipelines, with the Wood River- Hartford area of Illinois serving as a major terminus connecting the Wood River refineries with facilities from Indiana, New Orleans, Minnesota and North Texas. This network of pipelines has a long history of problems.

The worst inland spill in American history took place in Vienna MO, in 1983 spilling over 800,000 gallons of oil. Koch Industries was criticized for failing to report the spill to authorities until well after the event. The spill was bad enough that beer tasters at Anheuser Busch in St. Louis reported an “oily smell” to the product they were testing.

According to Wikipedia:

During the 1990s, Koch Industries’s faulty pipelines were responsible for more than 300 oil spills in five states, prompting a landmark penalty of $35 million from the Environmental Protection Agency (EPA). In Minnesota,[ Koch] was fined an additional $8 million for discharging oil into streams. During the months leading up to the 2000 presidential elections, the company faced even more liability, in the form of a 97-count federal indictment charging it with concealing illegal releases of 91 metric tons of benzene, a known carcinogen, from its refinery in Corpus Christi, Texas.

The Koch Industries website would have us believe that “When challenges arise, Koch companies’ approach is to move quickly to correct the situation (clean up a spill, rectify a reporting issue, etc.) and take responsibility with the appropriate regulatory authorities.” The reality has been that when a spill occurs, the company attempts to escape blame, delays cleanup, and opposes efforts of regulators and officials overseeing the cleanup.

Currently, Koch Industries is pushing for the addition of the “Keystone XL” pipeline to be constructed from Alberta to tie into the current pipelines. This would allow tar sand oil from Alberta to be piped to refineries in Minnesota, and the refinery in Wood River, Illinois. The pipeline developer is lobbying for the same type of environmental waivers for the tar sand pipeline that were granted to BP prior to the Gulf spill, prompting some to label this a “BP on the Prairies”.

Charles and David Koch have become familiar to most Americans as the deep pockets behind the Tea Party. Funding of conservative causes also includes groups such as “Americans for Prosperity” and “Freedomworks”. Totals spent are difficult to track given the wide variety of companies owned or controlled by the Kochs (Georgia-Pacific, Invista, Koch Minerals, etc.) but has been estimated in the hundreds of millions of dollars.

Anti-government hypocrisy

Among the causes that the Kochs, or their proxies, have fought against include healthcare reform, spending millions in political efforts to deny access to healthcare . At the same time, Koch Industries applied for healthcare subsidies made possible by a program vigorously opposed by groups funded by the Koch brothers. They have fought worker’s rights, most dramatically through their support of Governor Walker’s (WI) efforts. PACs funded by the Koch brothers spent $1 million in TV ads attacking Walker’s opponent and contributed $48,000 directly to his campaign.

The Koch brothers argue against government funded assistance at every turn, except when it directly benefits their business. Matador Cattle Company, a Koch brother’s subsidiary, grazes cattle on government-owned land, at no cost. Georgia-Pacific (another Koch owned company) logs national forests with the financial assistance of the federal government. The forest service cuts roads and is paid only a modest fee when vast areas of America’s forests are laid bare.

David Koch ran for Vice-President on the Libertarian ticket in 1980. The platform included the end of Social Security, public schools and a long list of government agencies (FBI, ATF, EPA, etc.) and especially those regulations seen as hindering business. The family has a long history of attempting to influence the political scene. Fred Koch (the company founder) helped found the John Birch Society. His sons have founded The Cato Institute, Heritage Foundation and many others. These groups are pushing America in a direction that benefits the Koch brothers greatly, but not the average American.