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Koch Industries is the second largest [PDF] privately-held...

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Koch Industries

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Koch Industries is the second largest [PDF] privately-held company in the United States with $100 billion in annual sales. The conglomerate is made up of over 20 companies, including Flint Hills Resources, Georgia-Pacific, and Invista.  Koch Industries has a presence in nearly 60 countries, conducting business operations in the fields of petroleum refining, fuel pipelines, coal supply and trading, oil and gas exploration, chemicals and polymers, fertilizer production, ranching and forestry products.

The vast majority of Koch Industries’ assets are controlled by Charles G. and David H. Koch, two of four sons of the company’s founder, who each own 42% of the company stock.  According to 2010 Forbes rankings, the Koch brothers are tied for the 24th richest person in the world, and for fifth richest American, each worth $21.5 billion.  Their combined wealth puts them behind only Bill Gates and Warren Buffett in U.S. richness.

Evidence

Pollution:

The Political Economy Research Institute ranks Koch Industries as the tenth worst air polluter in the U.S. in their Toxic Release Inventory.  CARMA reports that Koch releases about 200,000 tons of atmospheric carbon dioxide annually.

Koch Industries has a long record [PDF] of environmental crimes and violations, including, but not limited to:

  • A $1.7 million fine by the EPA and $500 million commitment to correct pollution violations in seven states
  • Millions of gallons of spilled oil from Koch pipelines throughout the past decade
  • A $25 million settlement with the U.S. government in 2001 after falsifying extraction records for oil collected on Native American and federal land
  • A $20 million settlement in 2000 for falsifying documents relating to a major release of the carcinogen benzene
  • A 1996 explosion that killed two teenagers due to a leaking Koch gas pipeline

While David Koch, a victim of prostate cancer, has donated millions to cancer research institutions and is a member of the National Cancer Advisory Board, Koch Industries subsidiary Georgia-Pacific is actively working to downplay the dangers of formaldehyde, a known carcinogen.

Financing of climate science denial front groups: 

Through Koch Industries and their family foundations, the Koch brothers are premier financiers to organizations that deny, skepticize or belittle the significance of global warming.  Compared to ExxonMobil, which spent $10.2 million on skeptic groups from 2005-2008, Koch Industries dwarfed their contribution with a $31.6 million effort. More than $5.6 million went to the Americans for Prosperity Foundation (founded and chaired by David Koch), over $2.2 million to the Heritage Foundation and over $1.2 million the Cato Institute (co-founded by Charles Koch, chaired by David Koch).  The Koch family foundations have contributed over $55 million since 1997, more than half of which was spent after 2005.
Source: Greenpeace Report

Koch Industries is a member of the American Legislative Exchange Council (ALEC) and part of ALEC's Energy, Environment and Agriculture task force. Through ALEC, Koch works with state legislators to distribute anti-environmental model bills across the country that delay policy solutions to climate change, block clean energy, prevent EPA from regulating coal pollution, fasttrack coal mining projects and other dirty energy initiatives. Koch's support for ALEC is unique; Charles Koch helped bail ALEC out during financial trouble in the late 1990s; Koch lobbyist Mike Morgan has severed on ALEC's private enterprise board for over a decade (see PR Watch references, paragraph 6).

Koch Industries was the 2011 inductee for Corporate Accountability International's Corporate Hall of Shame for "spending over $50 million to fund climate change denial and influencing the Supreme Court's decision to allow unlimited corporate dollars to flow into federal elections." Koch Industries is the sixth member of the Hall of Shame, after Monsanto, Chevron, ExxonMobil, Blackwater and Halliburton.

Koch worked behind the scenes during the 2010 “Rally for Jobs” astroturf events, coordinated by the American Petroleum Institute in order to create political pressure against clean energy and climate legislation in the interest of the oil and gas industry.  Groups such as Americans for Prosperity and FreedomWorks, which are both heavily funded by the Koch brothers and founded by David Koch, were partner organizations in promoting the rallies.

Koch Industries spent $1 million to promote California Proposition 23, intended to undermine the states clean energy and climate law, through subsidiary company Flint Hills Resources.  Koch also pushed Prop 23 through one of their beneficiary front groups, the Pacific Research Institute, which published and promoted reports that made favorable economic arguments for Prop 23 using flawed methodologies.

Political Expenditures:

Koch Industries is a major political contributor, spending over $8.3 million on political and campaign contributions in the last three election cycles (2008, 2010 & 2012).

Koch Industries has spent $56.7 million from 2008-2012 on federal lobbying.

In conjunction with $43,000 in 2010 political donations from Koch Industries to Republican Wisconsin Gov. Scott Walker, Koch-founded and -financed Americans for Prosperity has coordinated support for the Governor's union busting efforts. Wisconsin's budget crisis has been inflamed by corporate tax cuts initiated by Gov. Walker, who then used the lack of income to justify taking bargaining rights from Wisconsin union workers and cutting the salaries and benefits of state employees. This process was advised by the American Legislative Exchange Council, which has received over $500,000 from Koch Industries since 1997, and over $1.4 million from ExxonMobil. Koch Industries holds numerous business operations in Wisconsin.

International bribes and trading with Iran:

Bloomberg Markets Magazine reports that Koch Industries, through a French subsidiary, sold millions of dollars of petrochemical equipment to Iran, and also appears to have bribed companies in countries like Saudi Arabia, Morocco, Algeria, India and Nigeria to solicit business contracts from 2002-2008.

Role in Keystone XL tar sands pipeline:

Koch Industries has been involved in tar sands operations for half a century. Koch refines 25% of tar sands crude oil entering the U.S. and operates a terminal at the proposed pipeline's origin in Hardisty, Alberta. Koch Industries has repeatedly denied any financial interest in TransCanada's Keystone XL pipeline. After 6 months of public insistence that Koch Industries had nothing to do with Keystone XL, news emerged that Koch's wholly-owned subsidiary Flint Hills Resources told Canada's Energy Board it has "direct and substantial interest" in a government filing. Koch has continued to deny any financial link to the rejected project, although Americans for Prosperity (which was founded by the Kochs, chaired by David Koch and funded by over $5.6 million from Koch foundations) bussed pipeline supporters to testify at State Department Hearings in Nebraska.

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