Michael Bloomberg Versus the Koch Brothers

It’s fun to watch powerful people feud. It’s like watching, Dynasty, only a lot more fun since it’s real.

This November’s Bloomberg Markets cover story is titled, “The Secret Sins of Koch Industries,” by Asjyyin Loder and David Evans. As an expose, it is thorough, thrilling and damning, the type of investigative journalism that wins awards and garners sales. It is also the type that makes enemies of really powerful people, in this case, the brothers Charles and David Koch. They are the respective heads of Koch Industries, a worldwide conglomerate worth at least $100 billion dollars.

But even more astonishing is not the scope and breadth of the accusations, but the publisher of the investigation. Bloomberg Markets is not some fringe paper, or a even regular news magazine. Bloomberg Markets is a monthly business publication, known more for highlighting business trends than for railing against the titans of industry. The choice of the cover story was meant to impress its , educated, affluent and well-connected readers. The magazine could not afford to get away with irresponsible accusations.

Some of the bombshell revelations are:

1) A European subsidiary of Koch Industries, Koch-Glitsch, authorized and executed bribes for contracts in six countries as far back as 2002.

2) Senate investigators learned that Koch officials stole oil on Indian Reservations, by falsifying the recorded amount they had obtained for sale. This shortchanged the Indian families who originally owned the oil. The investigation was triggered by testimony of Bill Koch, David’s twin brother.

3) Koch companies dumped hazardous waste and polluted groundwater at a refinery in Duncan, Oklahoma and dumped ammonia at a site in Minnesota. In the Oklahoma case, the company settled; in the latter the company plead guilty.

4) Koch companies frequently lied to environmental regulators about releasing hazardous waste. Koch Pipeline Co. lied to regulators about emitting benzine in the air. Benzine, a byproduct of oil refinement, has been known to cause leukemia for decades. A former Koch employee told investigators the company falsified documents.

5) Another Koch company, Koch Pipeline Company, failed to fix a butane pipeline it knew was corroded. Emissions from that pipe resulted in an explosion, killing two teenagers in Texas.


6) Koch subsidiaries, particularly Koch-Glitsch, sold chemical equipment to Iran in defiance of U. S. sanctions. This was done through a series of discreet back channels. Koch-Glitsch continued to help Iran develop petrochemicals, even after President George W. Bush, called Iran a part of the “Axis of Evil.” in 2002.

All the charges are grave, but Number 6 is the worst. Iran has not only supported terrorism against America’s friends and allies, but has supported forces fighting Americans like militants in Iraq and the Taliban in Afghanistan. In short, however indirectly, Koch companies have given aid and comfort to the enemy.

What’s amazing is that the Koch Brothers are known in the media more for their right-wing, Tea-Party advocacy than the “sins” of their companies. The article never directly accuses the brothers of ordering any the various violations of law and ethics. In the fact, the article restates the Koch’s companies public declarations of full compliance and the brothers’ philanthropic deeds. Additionally David Koch is mentioned as one of the largest patrons of the performing arts in New York.

Nonetheless, that is small comfort to the conglomerate. It has responded by attacking Bloomberg Markets, “substandard reporting” and insisting its companies adhere to highest standards of compliance.

Michael Bloomberg may have divested himself of his holdings long ago when he ran for mayor, but this piece had to be presented to him ere it reached the light of day. I cannot imagine that he did not give his tacit consent to it. After all, what billionaire wants to tick off other billionaires unless he knows what he is doing?

Let the games begin!

New York October 21, 2011





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