Political Animal


October 03, 2011 12:40 PM The story the Koch Brothers’ were afraid of

By Steve Benen

Last week, there were rumors about a Bloomberg News piece that was going to make right-wing financiers Charles and David Koch look pretty bad. As Justin Elliott put it, “Here’s a rule of thumb about public relations: When P.R. pros begin furiously spinning a story before it has even come out, there’s a pretty good chance the story is going to be damaging to the reputation of said P.R. pros’ bosses.”

And now we know what the Kochs were afraid of. As it turns out, Bloomberg News has uncovered credible evidence of Koch Industries making “improper payments” (read: bribes) to “secure contracts in six countries dating back to 2002.” One of those countries, it turns out, is Iran, which has purchased millions of dollars of petrochemical equipment from the Kochs’ company, despite a trade ban and the U.S. labeling Iran a state sponsor of terrorism.

Internal company documents show that the company made those sales through foreign subsidiaries, thwarting a U.S. trade ban. Koch Industries units have also rigged prices with competitors, lied to regulators and repeatedly run afoul of environmental regulations, resulting in five criminal convictions since 1999 in the 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. […]

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.

I think we now know why Koch Industries was so worried about this article — it’s pretty devastating.

Much of the institutional right has grown quite dependent on the Koch Brothers’ generosity, which has helped finance Tea Party efforts and scores of conservative groups and institutions. But given Koch Industries’ alleged misdeeds, the Kochs’ money may soon need to be considered far more controversial than we’d even been led to believe.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • c u n d gulag on October 03, 2011 12:46 PM:

    Please do go and read the article, it's great.

    And then read the comments after.

    Only a few comments in, someone asks, predictably, when Bloomberg News is going to do an investigative piece on that great boogey-man, George Soros?

    Let the Koch Brothers legal problems begin!

    And just watch, the Koch Brothers will say that they are being unfairly singled out, and do what a lot of righties do when they feel taht way - call the ACLU!

  • Vokoban on October 03, 2011 12:50 PM:

    What exactly defines "organized crime"?
    >In the United States the Organized Crime Control Act (1970) defines organized crime as "The unlawful activities of [...] a highly organized, disciplined association [...]".


  • karen marie on October 03, 2011 12:52 PM:

    First question that springs to my mind is, why is Bloomberg going after the Koch brothers? What's in it for Bloomberg's allies?

  • eahoppi on October 03, 2011 12:55 PM:

    I doubt it will make much of a difference. The Koch Brothers will simply pay off their Republican congressional handlers to ignore the scandal, or blame it on Obama.

    Or maybe the Koch Brothers took a page from the Reagan playbook, and sold the petrochemical equipment to Iran in exchange for hostages--they were just doing their patriotic duty!

  • dcshungu on October 03, 2011 1:00 PM:

    I think we now know why Koch Industries was so worried about this article — it is pretty devastating.

    Not only that, we also now we know what type of government we would have if the Koch brothers manage to buy the next election and have their way, and, by extension, what type of lawless government we would have if the poorly informed American voters go to the polls and hand over the Senate and the presidency to those whose campaign "war chests" are being filled by the Koch brothers' illegally obtained dough and largesse...

    One would think that anyone who cares about America, as much as the Republicans claim to, would consider this revelation a reason to distance themselves from abd denounce these criminals. But will they? Only time will tell but I have no illusions.

  • beep52 on October 03, 2011 1:01 PM:

    Great example of why it is pointless for liberals to shake their heads when something the right says or does doesn't make sense.

    Dig deeper and you find, for example, that railing against regulation when the problem with the economy is demand, makes perfect sense when ultimate goal is total rule of, by and for the mega corporations.

    We need to be more imaginative when thinking about just how dark the motives of the uber-wealthy truly are.

    While the little people worry about government takeover of industry, the real takeover is of government by corporations.

  • Texas Aggie on October 03, 2011 1:06 PM:

    I don't really think that anyone is surprised at this. Maybe the extent and the details are surprising, but that the Koch's are up to their earlobes in criminal activity is not at all unexpected. I remember a speaker at an athletic banquet in high school talking about schools that continually are the best in the conference in a particular sport. He made the point with numerous local examples that somewhere there was dishonest activity going on.

    The same thing applies to businesses. If one of them seems to be totally successful while the competitors have their ups and downs, then there is illegal activity going on. You saw it with the banks and now with the Koch's.

  • j on October 03, 2011 1:07 PM:

    Very disturbing times, I just read the article in New Yorker written by Jane Mayer, it describes how a republican multi millionaire has bought the state of North Carolina which Obama was hoping to win in 2012.

  • SteveT on October 03, 2011 1:07 PM:

    But given Koch Industries' alleged misdeeds, the Kochs' money may soon need to be considered far more controversial than we'd even been led to believe.

    That only applies if the people taking the money still have the ability to feel shame. I think that ability being removed is now a requirement for serving as a Republican.

  • ManOutOfTime on October 03, 2011 1:11 PM:

    Who knew Bloomberg was such a leftist rag? It's too bad America has bought the Galtian CEO Job Creators myth hook, line, and sinker. The people who are harmed the most by their larceny are their biggest supporters. Sickening. Not holding my breath, but if Joe Sixpack figures out the grift, there will be Hell to pay. Home Depot should stock up on torches and pitchforks, just in case. And, by the way, the revolution will be televised.

  • SecularAnimist on October 03, 2011 1:13 PM:

    Steve Benen wrote: "Much of the institutional right has grown quite dependent on the Koch Brothers’ generosity ..."

    Which is Steve's characteristically meek, mild, euphemistic way of saying that the Koch Brothers now own the Republican Party lock, stock and barrell.

  • Ron Byers on October 03, 2011 1:24 PM:

    Will this be reported on Fox News? Inquiring minds want to know.

  • jjm on October 03, 2011 1:29 PM:

    Wonder if this will ever make headline news in the mainstream news?

    The GOP is petrified that their major funding source could dry up.

    I think most Americans are simply unaware of the ferocity and lawlessness of the big mega corporations, big food cartels, big ag, as well as big oil. They are frightening to appear before, and they brook no opposition. Maybe some more revelations of this sort of article will enlighten some of them.

  • FRP on October 03, 2011 1:50 PM:

    It is pretty pointless to expect the supporters of Guvnoir Perry's quaintly styled rocks at his homey recreational inheritance , to retract painfully over something as obtuse as an old tired epithet . Dr. Laura Schlessinger is eager to point this out for slow learners , yes , she is .
    In keeping with the rock ribbed right wing attitudes towards venality , when it comes to 'a little of this a little of that' the small increment of time before the ticking time bomb applies to every shady looking grandparent with a tan would challenge the lightning speed with which Romney can oppose his last statement .
    With the perverse regularity of 'what have you got to hide' mental giants , grandma and pa can now enjoy their tans and exercise with lusty shouts of agonies with Dickie Chinlesses "guaranteed" timeless water sports .
    The issue of whether the wholesome lads and lassies of the clear water , clear conscience right can manage the burden of lying , cheating , and stealing , after the Whitewater , Al Gore and Clinton wars , I see few stumbles if any in embracing the cuddly barons of malfeasance . After all , the boys being raised on the milk of John Bircher teat have what it takes to pulverize Commies , if a few piddling laws get sideswiped , fercrissakes , you gotta break a few leggs to make a monopoly .
    Now it would be unfair to forget the tee pee 'urs who introduced sweet naive Americans to the horror , the horror , of Death Panel Shoshalism , when imagining the crushing reality of a filthy rich job creator tweaking his bum at the victim of a Norquist bathtub drowning being cheated out of its funding and laws in its responsibility to represent all Americans . Laughably unfair .
    The creativity required for a maniacally perverse authoritarian mindset that overturns both physics and logic to embrace a criminal enterprise that has straight up claimed to be interested in overturning the idea of representation involving female and brown people gainsaying the wise popes of wall street , should be found in mad minute .

  • TCinLA on October 03, 2011 1:59 PM:

    Always nice to see further proof that the words "Republican" and "Traitor" are interchangeable.

  • Robinhoodsecret on October 03, 2011 2:15 PM:

    It's going to be interesting to see which congress people were "bribed" by the Koch's to get their junk into Iran.
    Hopefully, some of "our" congress people will be sweating in the Gucci loafers.

  • FRP on October 03, 2011 2:30 PM:

    Hey , the Thirties had Hoovervilles , the twenty eleventy , and teens , can have Gucci Loafers . These Spartan affairs can casually hold professional malfeasance experts for up to life . Bring your own toothbrush .

  • Rick on October 03, 2011 2:35 PM:

    That gives us TWO international criminal syndicates to watch closely and try to shut down - News Corp and the Koch Brothers organizations.

  • John Dillinger on October 03, 2011 2:44 PM:

    So, is it going to take Move On to start a campaign to demand that candidates give back Koch money tainted by Iranian profits, or is someone else going to take the initiative?

  • Cha on October 03, 2011 2:47 PM:

    @ karen marie on October 03, 2011 12:52 PM:

    "First question that springs to my mind is, why is Bloomberg going after the Koch brothers? What's in it for Bloomberg's allies?"

    Then you don't know a damn thing about the insidious takeover/teabagger funding of the Kochs and you need to educate yourself muy pronto before you go asking ignorant questions like that again.

    The question that needs to asked is..why did the Kochs bribe Countries including Iran? Aren't they fucking rich enough?

  • Gridlock on October 03, 2011 2:50 PM:

    The article plainly states that the Kochs outright own 46 House members. They are the perfect Orwellian company. They make "integrity" their key value then do everything they can to undermine it.

    So let's take a look at the top planks of the GOP platform and see how they align with the Kochs' aims:

    Eliminate regulation Check
    Reduce taxes on the wealthy Check
    Disenfranchise minorities, the poor and the working class. Check
    Deny Climate change Check
    Reduce government so that it can be drowned in the bathtub Check

  • Cha on October 03, 2011 2:51 PM:

    @John Dillinger on October 03, 2011 2:44 PM:

    ?So, is it going to take Move On to start a campaign to demand that candidates give back Koch money tainted by Iranian profits, or is someone else going to take the initiative?"

    We know it's not going to be rebublicon Darrell Issa.

  • emjayay on October 03, 2011 2:59 PM:

    To once again state the obvious....

    It's not the least bit ant-capitalist or anti-corporations etc. to point out that businesses (private or corporations, doesn't matter) have by definition no morals and have no interest in doing anything except making more profits for owners/shareholders. (People at the top of the business, being actual people, will try to slip as much of the profit as possible into their own pockets.)

    If they can get around any law or regulation to make more profit, they will. If they can do anything possible to get rid of the law or regulation, even better. If they can steal money from everyone else with subsidies and no-bid contracts etc., even more better. It's what they are supposed to do. Any pretense of protecting the environment or funding the arts etc. is window dressing intended to also ultimately increase profits.

    Laws and regulations are necessary to make them behave. Along with vigorous investigation and enforcement. Both the regulation and enforcement cost lots of money.

    This news is not in any way surprising. Glad this tip of the iceberg is being exposed.

    Meanwhile, back to the horserace and dog whistles.

  • Perspecticus on October 03, 2011 3:15 PM:

    I am certain this will be a devastating scandal... for Democrats, somehow.

  • Sylvia Wadlington on October 03, 2011 3:43 PM:

    So Murdoch is accused of bribing a foreign government, which if found guilty, the penalty is losing your license to do business in the U.S. Apparently the Koch brothers have already been found guilty of this. Why do they still have their license?

  • T. Scheisskopf on October 03, 2011 4:00 PM:

    I think it should be pointed out, again and again, that these two worthies, during the W Administration, were in charge of The Strategic Petroleum Reserve.During that time, salt domes that had never seen a drop of oil, previously, were "filled" to the brim.

    How much of that is salt water, under the oil, is quite another story.

  • montag on October 03, 2011 6:40 PM:

    Getting Kochie is the new way to say someone is as crooked as a corkscrew.

  • andrew on October 03, 2011 7:25 PM:

    Whenever I hear something about the Koch brothers... sheesh!

  • tko on October 03, 2011 8:26 PM:

    Too bad we can't count on Holder and the DOJ to do the right thing. They'll probably go after the whistleblowers that leaked the info for the article.

  • big-bad-wolf on October 04, 2011 12:46 AM:

    Don't sweat the small stuff! After all, Koch Industries is a JOB CREATOR, so anything they do is good for the country.

  • pj in jesusland on October 04, 2011 3:48 AM:

    So all this time it's been the Republican Party that's been profiting from trade with terrorists.

    How predictable, yet still so ironic.

  • Perspecticus on October 04, 2011 7:48 AM:

    Yesterday, this story was 2/3rds of the way down on memeorandum. Today it is in the archives.

  • Andrew Karl on October 04, 2011 10:05 AM:

    Leftist billionaire George Soros is a convicted felon. He has been the biggest contributor democrats for 3 election cycles- oh he also moved his hedge funds overseas so he doesn't have to follow US rules or pay taxes

  • The_Duke on October 04, 2011 1:14 PM:

    This is old news, it will be totally discredited, and will not amount to any kind of "scandal". Keep trying, though.