Charles Koch Clutches Pearls, Dies of Moral Rectitude

Charles Koch of Koch Industries, wounded to the core of his being by allegations from Senate Majority Leader Harry Reid and others that his championing of the “free market” conceals lobbying efforts to rig the system in his favor, sufficiently recovered his composure to respond in a Wall Street Journal op-ed (“I”m Fighting to Restore a Free Society,” April 2).

“Instead of encouraging free and open debate,” he writes, “collectivists strive to discredit and intimidate opponents. … Rather than try to understand my vision for a free society or accurately report the facts about Koch Industries, our critics would have you believe we’re ‘un-American’ and trying to ‘rig the system,’ that we’re against ‘environmental protection’ or eager to ‘end workplace safety standards.'”

In an effort to supply those missing facts and elevate the public debate, Koch immediately launches into what amounts to a corporate press release (probably actually written for him by his company’s flacks) consisting entirely of bullet points (“Did you know …?”). It starts out “Koch companies employ 60,000 Americans, who make many thousands of products that Americans want and need,” and only degenerates further into Official Happy Talk from there. “Koch employees have earned well over 700 awards for environmental, health and safety excellence since 2009” — many of them from the EPA and OSHA! “EPA officials have commended us for our ‘commitment to a cleaner environment’ and called us ‘a model for other companies.'”

As for charges that Koch Industries tries to shape federal regulations in its own interests, Koch indignantly notes: “Far from trying to rig the system, I have spent decades opposing cronyism and all political favors …”

On closer examination, the Gospel According to St. Charles appears to have been heavily redacted in transmission. Let’s start with all those awards and praise from the EPA and other government agencies. I have to say, just as an aside, that it’s probably not all that hard to get an environmental award from the EPA; all Koch Industries would have to do is call up the same EPA inspectors who had sex with BP management before the Deepwater Horizons spill. Even so, the claims are still misleading. evaluated the claims and found them “mostly false”: All the quotes of praise and commendation were cherry-picked from specific projects by specific Koch Industries subsidiaries or companies working on contract for them, and simply edit out a much broader record of negligence, malfeasance and outright criminality.

Among the many awarded damages for negligence and malice associated with Koch Industries oil pipelines and refineries: A fine in Minnesota for knowingly discharging aviation fuel into a Minnesota wetland and adjoining waterway, releasing benzene from a Texas refinery, and a $30 million settlement in 2000 for 300 oil pipeline leaks in six states.

So when it comes to his defense on environmental performance, Koch is a lot like Lincoln’s anecdotal Jesuit who, accused of murdering ten men and a dog, triumphantly produced the dog in court.

As for Koch’s claim about opposing all forms of cronyism and market rigging, that’s much less ambiguous. He’s flat-out lying.

For starters, most oil drilling in the continental U.S. is carried out on vacant land to which original title was preempted by the federal government, and then preferentially granted to politically connected mining, logging and oil interests. Or retained as federal property and leased out on a preferential basis for drilling. This saves industry from the inconvenience of having to deal with the ordinary people who might otherwise have homesteaded the vacant land first. And according to Bill Koch, a third Koch brother who was squeezed out by the other two, Koch Industries has a history of stealing more oil than it paid for from drillers on federal lands and Indian reservations by using falsified measurements. Koch employees privately referred to this cheating as the “Koch method.” In the ’80s alone this amounted to 300 million gallons of oil, with a profit of $230 million.

Also, considering the number of miles of pipelines Koch Industries owns, and considering his support for the Keystone XL pipeline project, it’s fair to say Charles Koch supports one very big form of cronyism and market-rigging — i.e., government facilitating pipeline projects by stealing land from ordinary people and giving it to the oil industry.

Another form of cronyism Koch supports is so-called “tort reform,” which amounts to the government rigging the legal system — via liability caps, indemnities against liability, loser pays provisions, etc. — to protect them against paying damages to the victims of their leaks, spills, frauds and coverups.

Over two hundred years ago free market economist Adam Smith pointed out that, when businesspeople get involved in government, it’s to protect themselves against competition and rob the public. That’s just as true of the Kochs as of the rest of them.

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