Billionaire brothers Charles and David Koch have helped create a sweeping network of manufacturing facilities and nonprofit groups that lobby against increased regulation of toxic substances like asbestos, dioxin, and formaldehyde. Most Americans know the Kochs as owners of Koch Industries — the country’s second-largest private corporation — and as deep-pocketed men who act as financial angels for conservative causes and politicians.
What’s not so well-known is that deep in the trenches of Washington D.C., Koch Industries is the ringleader of deals and handshakes meant to steamroll regulation at the expense of hardworking men and women.
The Koch Brothers Build a Business Empire & Buy Influence
Oil is the heart of the Koch business empire. Koch Industries began as an oil refining company called Wood River Oil and Refining Co. — which was founded by Fred C. Koch. Sons, David and Charles, later inherited Koch Industries from their father and currently own 84% of the company. Together, they come in second for the world’s richest families.
Koch’s interests, however, go well beyond big oil. In fact, their footprint expands not only North America but to nearly all continents across the globe. They make jet fuel in Alaska; manufacture spandex in China and ethanol in Iowa. They raise cattle in Montana; make napkins in France, and toilet paper in Wisconsin. Koch Industries has more than 70,000 employees, and a presence in 60 countries.
The Kochs Push an Extreme Agenda in Washington
When they are not funneling money back into their private business interests, the Koch brothers pour millions of dollars into lobbying Washington. Through Koch Industries, henchmen are sent to roam the corridors of Washington in an effort to influence politicians and policy with extreme anti-worker, anti-environment, and anti-health agendas.
One prime example: The Furthering Asbestos Claim Transparency Act of 2015 (FACT Act) — a bill sponsored only by Republican senators that directly impedes support and compensation to asbestos victims and their families. In addition, to augment Koch Industries’ lobbying tactics, the Koch brothers have built even more clout by donating more than $11 Million in the last 2 decades to parties and candidates for federal office, as well as generous gifts to universities, globe-trotting conservatives, and interest groups.
Is it fair to pay for this kind of influence?
Charles Koch thinks so. In fact, in a November 2015 interview with MSNBC’s Joe Scarborough, Koch said he fully expects to get something in return for the money he throws around in Washington.
“If it’s to get policies that will create and open up opportunities for people and get rid of all this corporatism and corporate welfare, wherein, what, seven of the richest counties in the country are around Washington, D.C.? I mean, we have two-year presidential campaigns where that’s all anybody’s focused on. Why is that? It just isn’t random. It’s because the government’s picking winners and losers. And you want to be a winner more than you do a loser, so you give money to slant it your way.”
Charles Koch also defended his lobbying practices in a March 2011 column for The Wall Street Journal, saying,
“As a matter of principle our company has been outspoken in defense of economic freedom. This country would be better off if every company would do the same. Instead, we see far too many businesses that paint their tails white and run with the antelope.”
Koch’s Toxic Ties Run Deep
In 2004, Koch Industries bought Invista, a subsidiary of DuPont, known for manufacturing lycra, Stainmaster carpets, and other textiles and fabrics. The following year, Koch Industries also bought the giant wood and paper products firm, Georgia-Pacific — which had used asbestos to make drywall products. Since buying up these companies, Koch has worked tirelessly on Capitol Hill to stop the government from passing regulation that would limit the use of toxic substances — such as asbestos and dioxin (released at both Invista and Georgia-Pacific plants) — that could affect Koch’s bottom line.
Furthermore, when Koch Industries bought Georgia-Pacific, it also took on a huge liability regarding asbestos. In the 1980s, the firm was targeted for more than 340,000 claims from plaintiffs who said they suffered from lung and respiratory illnesses and other diseases, too, including mesothelioma. By 2015, Georgia-Pacific was spending $200 Million a year on asbestos-related claims and had to build a hefty $1.5 Billion reserve fund for asbestos liability payouts — the very payouts the Koch brothers are trying to stop through the FACT Act in order to keep that money.
In 2008, Koch Industries General Counsel, Mark Holden, was quoted in a publication, saying,
“…many of the [asbestos] claims are an outright abuse of the legal system… that often involves people who are not sick… all because of over-zealous litigators and a legal system that gives them perverse incentives.”
Holden, incidentally, is also a board member at the U.S. Chamber of Commerce — the largest lobbying organization in the country and staunch supporter of the FACT Act and other “asbestos-reform” legislation, which would, in reality, make it much more difficult for claimants to receive any compensation from court-ordered asbestos trusts.
The Koch-Backed FACT Act Directly Attacks Sick Victims of Asbestos
While asbestos is a known carcinogen and has been linked to millions of deaths worldwide, the fiber has not been banned in the United States. In fact, it still remains a threat to Americans in homes, schools, and workplaces. Approximately one-third of asbestos victims are veterans. And, we know that thousands more men and women who risked their lives during the 9/11 terror attacks on the World Trade Center and during Hurricane Sandy in 2012 — have been exposed to asbestos, and risk dying from diseases like asbestosis and mesothelioma. Asbestos victims and their families need help. Moreover, they deserve compensation for lives that have, or could be, cut needlessly and dramatically short.
Yet, instead of encouraging money flow back to the victims, Koch Industries and groups like the Chamber of Commerce continue to back the FACT Act. Why? Because these lobbying groups – such as The Chamber – get large payouts for doing so. And the Koch brothers, by supporting such legislation, will wind up saving potentially billions in liability claims.
If you can believe it, in spite of the 11,000 Americans that die every year from asbestos, Koch Industries business holdings still manufacture products with the mineral. They also carry significant asbestos liability from past use. Koch Industries has a tremendous vested interest in keeping cash in its hands, and away from the men and women who have been exposed to asbestos.
FACT Act Opponents Cry Foul, Cite No Evidence of Fraud
The FACT Act’s detrimental impact is twofold: It would slow trust claims processing and payment distribution in the hopes the victims will die before compensation, and it would require disclosure of victim’s personal information — putting them at risk for identity theft. Opponents of the bill say the legislation blatantly caters to highly financed-interests of the asbestos industry — namely the Koch brothers. Furthermore, the opposition cites an investigation by the Government Accountability Office (GAO) which analyzed many company trusts and found no evidence of fraud.
Opposition groups include:
- American Veterans
- Association of the U.S. Navy
- Military Order of the Purple Heart
- International Association of Fire Fighters
- National Education Association
- American Federation of State, County, and Municipal Employees
- American Federation of Labor and Congress of Industrial Organizations
While the FACT Act is still awaiting a vote in the House, consider this: The Koch brothers’ shady political practices are not illegal. If anything, they illustrate how a small number of wealthy people can amplify their influence and get what they want simply by coordinating and funding the work of several organizations. And in the end, it’s the nation’s sick who pay the ultimate toll. Isn’t this all a crying shame?