Charles: 1 November 1935, David: 3 May 1940
Koch Pronunciation According to Wiki
Koch, according to Wikipedia, is pronounced /'ko?k/ or to make it easier, “COKE.”
The Koch Industries
Their product may not be noticeable and people may not realize that they’re probably using some of Koch Industries products. Charles and David, with their innermost wealth, were able to influence and shake up the political landscape of the United States. Both brothers are also passionate believers of the free market.
People, especially in the US, may not realize it but they’re using Koch Industries products and services everyday like gas, towels, beef, paper, toilet napkins, and home’s wallboards. Koch Industries’ annual revenue from all of these products amounts to about $100 billion. The manufacturing and energy giant that are owned by Charles and David Koch is a private company that doesn’t reveal its numbers.
The two Koch brothers’ net worth is over $40 billion just behind other billionaires including Bill Gates and Warren Buffett. They grew up in Wichita, Kansas in a house located across the country club. Charles and David’s father is Fred Koch Sr., an entrepreneur and chemical engineer.
Charles Koch recalled the belief of his father which was “Unless you start working at an early age you never really develops the skills, habits and values necessary to make you productive and so he told me at an early age that he didn’t want to know country club bums as he suspiciously put it.”
Charles de Ganahl Koch and David Hamilton Koch Follow in their Father’s Footsteps
In 1925, their strong-willed and demanding father, Fred Sr., during the early part of his career, became a partner in the Winkler-Koch Engineering Company, making a fortune building refineries in the Stalin era Soviet Union. When Fred returned to Wichita, he built his own oil refining empire. Being disillusioned with the political state of his country, he turned into a raging right winger. He also co-founded the John Birch Society, a right-winged organization, which claimed that the president of the United States was part of the Communist conspiracy.
Within the family, Fred Sr. was a strict father and a disciplinarian. He groomed Charles and David together with their two brothers, Bill and Frederick, to inherit his company. However, Frederick Jr. rebelled against his father and later distanced himself from the family. Frederick found his own lifestyle different from what his father wanted him to have.
Bill, Charles, and David, on the other hand, obeyed their father and the three brothers all went to MIT. In 1967, after graduating from MIT, Charles took over to manage the family business after Fred Sr. died due to a heart attack. He quickly improved the company and after four years, his two brothers, David and Bill, joined him.
Charles and David Koch not only inherited the business that their father had started, the two also acquired the extreme right-wing political belief of their father. In was in the mid-1960s that they took classes being offered by Robert LeFevre, a libertarian extremist who owned a libertarian school in Colorado Springs called Freedom School.
LeFevre, being an extreme libertarian has a hard core belief on private property. He maintained a belief that if a thief, bringing his own rope, attacks and bound a person, that person has no right to cut the rope because that rope is owned by the thief and not by the victim.
Charles de Ganahl Koch Founds CATO Institute
Although the two brothers are not as extreme as their libertarian teacher, Charles Koch still wanted to influence public policy with the idea of libertarianism. In adherence to his libertarianism principle, Charles co-founded the CATO Institute in 1977.
CATO Institute became the first full service libertarian public think tank. The institute even hired an expert who could explain why a small government libertarian solution would fit in on everything from education to military policy and even on trade policy.
David Hamilton Koch Runs for Vice-President
In 1980, about two years after CATO Institute was founded, David took an even bolder step when he ran for the vice presidential position under the Libertarian Party. Ed Clark became his presidential candidate. Both of them don’t have the belief that they will win on the election and all that they’ve wanted was to promote the libertarian idea.
Some ideas being promoted by the libertarian are that if people were given more individual freedom, if the government doesn’t control too many things, and if taxes are lower, people will become richer, better educated, and better off over a long period of time.
The Libertarian Party was also about abolishing the Federal Reserve and government regulations. It also promotes other extreme ideas like liberalizing victimize crime, getting rid of restrictions on prostitutes and prostitutions and recreational drugs. David got less than a million votes during the 1980 presidential election, while spending about $2 million of his own money during the campaign period.
The Koch Brothers’ Falling Out
Before Charles and David put much effort on politics in the 1970s, the Koch Industries has expanded dramatically into natural gas, petroleum derivatives, and real estate. Together with Bill and Fred Jr., the four brothers own the majority share of the company. Charles and David, during the early development of their company, were focused on the long term growth turning 90% of revenue back into the company.
Bill, on the other hand, who was earning $5 million annually, felt that the money was insufficient and together with Frederick made a move to control Koch Industries. Bill and Frederick secretly orchestrated a boardroom coup to oust Charles and David, who later thwarted the plot after discovering it.
Charles and David were not ousted from the chairmanship of the company because of the swing vote in their favor that came from J. Howard Marshall, a minority Koch Industries shareholder and an old friend of their father who later became famous when he married the then 26 years old Anna Nicole Smith at the age of 89. With the failure of the coup attempt, the company board promptly fired Bill and in 1983, brothers Bill and Frederick together, with other minority shareholders of the company, offered their share for a pay-out costing $1 billion.
With Koch Industries under Charles and David, it continued to expand throughout the 1980s. The company acquired and ventured into other industries including coal, pipelines, and fertilizers. And as their business continued to expand, Charles and David also lived a very different lifestyle from each other.
Charles settled with his wife and children in Wichita, driving to and from his work at about less than 15 minutes. Some of their close friends even said that Charles’ wife listens to books on tape during commute because of the belief: “why waste a minute when you could be learning?” Charles, like any Koch Industries employee, also goes down on the company’s cafeteria to eat.
David, on the other hand, was different, living the life of a playboy and dividing his time between Southampton and New York City.
Throughout the 1980s, Charles and David continue supporting conservative causes financially and the line between their corporate, personal, and political agenda were hard to distinguish and oftentimes overlapped with each other. The two Koch brothers spent a lot of money promoting the anti-government, free enterprise, anti-regulation, and lower taxes belief, which benefit their huge business empire as well as their personal motives.
In the mid-1990, Koch Industries thrived on almost every industry that it ventured into but problems within their family continued to deepen and theirs later on became the nastiest family feud in America’s business history. Bill and Frederick accused their two brothers of cheating during the time when they sold their shares from the company.
David Koch has a Change of Heart
On 1 February 1991, while David Koch was onboard USAir Flight 1493 on a stopover, it crashed into a SkyWest Flight 5569 in a runway on Los Angeles. A total of 34 people died on that deadly crash due to a fire including everyone in first class—except David.
Another setback for David came when after surviving the plane crash he was diagnosed with prostate cancer. David started aggressive treatment and in the wake of his life’s turmoil, thrown an old page of his life and embraced a new one. He had given up his life as a playboy and in 1996, married Julia Flesher, who was 23 years his junior. David became a father at age 58, two years after their marriage.
Bill Koch versus David and Charles Koch
Also in 1996, Bill Koch has filed numerous lawsuits against his brothers including alleged corruption, mismanagement, and racketeering. It was a sad and dark time for the Koch family with very deep emotional conflict, causing them to not to speak with each other inside the courtroom. Charles and David won the lawsuit filed by Bill but after the decision was proclaimed by the court, another legal action was faced by Koch Industries.
More Lawsuits Against Koch Industries
A butane pipeline explosion occurred in Texas in 1996 killing two teenagers. The pipeline was owned by the Koch Pipeline Company, a subsidiary of Koch Industries. The company claimed that the occurrence of the incident was unforeseeable but the jury disagreed awarding the victims $296 million. The company appealed and ultimately settled for a confidential sum.
In 1995 and 1997, two lawsuits were also filed by the US Justice Department against Koch Industries. The Koch brothers became under fire because of the alleged spilling of 2 million gallons of oil for six days. Three years later in 2000, Koch Industries settled the lawsuits with a fine amounting to $35 million.
Koch Industries got into another trouble when just six weeks prior the 2000 election, the US Justice Department again filed another 97 counts of criminal indictment. The company, according to the lawsuit, allegedly hid an illegal discharge of 91 tons of benzene from its refinery in Corpus Christi, Texas.
Although initially denied by the company, it later pleaded guilty of the environmental violations that it had done after six months and paid a fine of $20 million. The company stated later that they issued a mandate to their entire employees to comply with the local regulatory agencies and to Federal State.
It was also in 2000, with left and right lawsuits faced by Koch Industries, that Bill Koch accused his two brothers of criminal conspiracy during an interview on “60 Minutes.” According to Bill, Koch Industries allegedly took oil profits from public lands and Indian Reservations amounting to $230 million.
A collection of 50 videos from 50 former Koch Industries employees were collected by Bill’s legal team in order to back his accusations. Although Charles Koch in his own video denied any wrongdoing, the court ruled in favor of Bill and the U.S. government ordered Koch Industries to pay $25 million in penalties. A third of that money went to Bill, who later on reconciled with Charles and David.
With Koch brothers’ reconciliation and the company’s settlement of lawsuits, Koch Industries in 2004 powered on and bought a Du Pont subsidiary, Invista, for $4.4 billion. In 2005, the conglomerate entered into one of its biggest deals when it bought Georgia Pacific, a pulp and paper company, for $21 billion. It was the start of Koch Industries in paper goods business.
What Philanthropic Works Do the Koch Brothers Do?
Koch brothers not only expanded their business interests, they also became more active in politics when they became one of the key figures and alleged supporters of the forces behind the TEA Party or Tax Enough Already that started in 2009.
In 2010, the US Supreme Court issued a ruling that remove the ban on political spending by corporations on candidates during elections which makes the Koch brothers more influential in the field of politics. Yearly estimates of the lobbying expenses of Koch brothers started at $800,000 in 2004 and rose to almost $40 million in the last four years.
The Koch brothers also channeled their resources to foundations with David donating $100 million to help renovate the Lincoln Center in New York City. The two brothers have also given millions to help support educations, arts, and cancer research.
- Koch Industries Inc.
- Georgia Pacific Corporation
- Intrust Financial Corporation
- Cato Institute
- Institute for Humane Studies
- Mercatus Center
- Bill of Rights Institute
- Market-Based Management Institute
- Heritage Foundation
- Charles G. Koch Charitable Foundation
- David H. Koch Charitable Foundation
- The Heartland Institute
- Institute for Humane Studies
- Charles Koch Foundation
- Koch Cultural Trust
- Youth Entrepreneurs Kansas
- Prostate Cancer Foundation
- David H. Koch Institute for Integrative Cancer Research
- Massachusetts Institute of Technology
- Johns Hopkins University School of Medicine
- Memorial Sloan–Kettering Cancer Center
- University of Texas M. D. Anderson Cancer Center
- David Koch Center for Applied Research in Genitourinary Cancers
- New York-Presbyterian Hospital Weill Cornell Medical Center
- House Ear Institute
- Hospital for Special Surgery
- Lincoln Center for the Performing Arts
- Metropolitan Museum of Art
- American Ballet Theater
- Public Broadcasting Service
- Smithsonian Institution
- American Museum of Natural History
- Deerfield Academy
- Cold Spring Harbor Laboratory
- Americans for Prosperity Foundation
Awards and Achievements
- 2004: President's Medal from Wichita State University
- 1999: Directors' Award for Global Vision in Energy
- 1999: Governor's Arts Patrons Award
- 2000: National Distinguished Service Award from The Tax Foundation
- 2011: William E. Simon Prize for Philanthropic Leadership
- 2011: TIME 100 Most Influential
- George Mason University Honorary Doctor of Science
- Washburn University Honorary Doctor of Commerce
- Washburn Law School Association’s Honorary Life Member
- University of Kansas’ Distinguished Service Citation
- Kansas State University Distinguished Citizen Award
- Wichita State University Entrepreneur in Residence
- Babson College Honorary Doctor of Laws
- American Legislative Exchange Council’s Adam Smith Award
- The Heritage Foundation’s Spirit of Justice Award
- National Foundation for Teaching Entrepreneurship’s Entrepreneurial Leadership Award
- National Conference of Christians and Jews’ The Brotherhood/Sisterhood Award
- Boy Scouts of America’s Distinguished Citizen Award
- The Council for National Policy’s Free Enterprise Award
- The Association of Private Enterprise Education’s Herman W. Lay Memorial Award
- Inducted to the Kansas Oil and Gas Hall of Fame,
- Inducted to the Wichita and Kansas Business Halls of Fame,
- The Urban League of Wichita’s Spirit of Excellence Award
- Greater Wichita Chapter of the National Society of Fundraising Executives' Outstanding Humanitarian Award
- Wichita City Medallion
- Wichita District Minority Small Business Advocate of the Year
- Individual Recognition Award from the Wichita/Sedgwick County Arts and Humanities Council,
- The Uncommon Citizen Award from the Wichita Chamber of Commerce
- 1980: Ran for Vice President under Libertarian Party
- 1984: Founded the Citizens for a Sound Economy
- 2006: Chronicle of Philanthropy’s world top 50 philanthropists
- 2007: CSHL Double Helix Medal Honoree
- 2011: TIME 100 Most Influential