‘Sons of Wichita’: An Unauthorized Examination of the Koch Dynasty

Until the run-up to the 2010 congressional elections, Daniel Schulman — like much of America — had barely heard of Charles and David Koch, billionaire industrialists who were primary backers of the tea party and were determined to take down President Obama. But after reading Jane Mayer’s piece about the political machinations of the brothers in The New Yorker, Schulman began researching them and found all the elements of a good story full of money, power, and corporate and political intrigue. And lawsuits — lots and lots of lawsuits. As Bill Koch, David’s twin, said, “This would make ‘Dallas’ or ‘Dynasty’ look like a playpen.”

Now Schulman, a senior editor in the Washington bureau at Mother Jones, has written a book about the family and their influence on America, the recently released “Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty.”

Patriarch Fred Koch and his firm developed a new process for refining oil. On a trip to the Soviet Union to help modernize its refineries, he was so horrified by communism that it shaped his politics and he went on to become a founder of the far-right John Birch Society.

Charles Koch, who believes fervently in libertarian ideas and free-market economics, joined with his younger brother David to grow his father’s firm, renamed Koch Industries, into one of the largest private companies in the world with more than 100,000 employees. They are two of the wealthiest men on the planet, worth about $40 billion each. Their older brother, Frederick, wanted nothing to do with the family business and stays out of public life as an arts patron with several homes.

Bill Koch was thrown out of the family company, built an energy empire of his own, had a flashy lifestyle with multiple marriages and affairs, won sailing’s America’s Cup and has spent much of his time suing his brothers. Truthdig talked to Schulman about the Koch family’s pugilism, how the brothers made libertarianism mainstream and how it might be fun to have a beer with Bill.

Emily Wilson: You start the book with the story of the twins Bill and David, as teenagers, getting out of the car to box. Their caretaker, an ex-Marine, carried boxing gloves around so they could fight without killing each other. Why did you begin the book this way?

Daniel Schulman: I think the theme of pugilism carried through their lives. These guys fought each other legally, physically and emotionally. If you look at Bill Koch, his life is like a series of legal cases. Then Charles and David are taking a stand against the Obama administration. So it was an image that seemed to get to the themes that emerged later in the book.

EW: You say that their politics is not the most interesting thing about the Kochs. What is most interesting?

DS: I was really fascinated by how their father had left such a deep and lasting imprint on his sons. His legacy really has influenced all four of these guys in different ways. If you look at the politics of Charles and David especially, they’re more or less carrying his political torch into the future. The eldest Koch brother, Frederick, he was a disappointment to his father, so his life has been slightly haunted by that.

Bill Koch saw his dad fighting all of these lawsuits when he grew up, so what he took from that is that litigation is this tool of righteous retributions. You see him in this long fight with his brothers feeling as if he’s doing what his father would have done. So that was what captivated me. And, of course, this legal drama playing out between the brothers, which is absolutely brutal and goes back to things that happened in childhood.

EW: How did you do research? Whom did you talk to? The Kochs wouldn’t talk to you, right?

DS: I talked to the eldest brother, Frederick. We spent a few hours together and spent some time on the phone. I spoke to a lot of friends, relatives and former employees. The other layer to this is there is this massive amount of court records going back to 1929 that had to do with their father’s litigation. There was a lot of material out there, but it wasn’t necessarily easy to find. The court records for Koch v. Koch were literally stored in a salt mine, so tracking them down and actually being able to see them was pretty difficult.

I’ve never made so many cold calls. I was making 10 calls to get someone who would talk. That was the biggest challenge because the Kochs did not want me doing this book. Bill Koch and his operation were the least cooperative. When I talked to his spokesman, as I was describing what I was trying to do, he was like, “Yeah, letting you talk to Bill would be like slitting my throat.” Charles and Bill aren’t necessarily friendly right now — they’re just not fighting. I think both sides are afraid they could touch off a war.

EW: You think people see them as big in the Republican Party, but really they’re libertarians. Why do you think that’s important for people to know?

DS: I think people misunderstand their politics. At this point, they are these big Republican powerbrokers. They don’t want to accentuate the points where they’re in complete disagreement with the Republican Party, which is on a lot of things, like most social issues. These guys have had such an uneasy relationship with Republicans over the years that they’re just happy now that they’ve got a seat at the table. The question is how will they use this power — are they going to be able to influence the party in their direction? I think it’s important for people to understand where they are coming from.

EW: You say that they have influenced the party already, right? You write about how Charles has made libertarianism more mainstream.

DS: I don’t think we’d be talking about libertarianism at all if Charles hadn’t made this the thrust of his philanthropic legacy. What you see now is the Republican Party having this libertarian streak with Rand Paul. What I’m wondering is if they’re going to be able to moderate the Republican Party on social issues, which is a tougher sell.

EW: On social issues, they don’t have a problem with gay marriage, are against the Iraq War and are moderate on immigration. It’s all about economics for them.

DS: Totally. These guys are free-market hard-liners. Charles Koch, talking to his libertarian allies from the 1970s, will say his view of the role of government was that really there shouldn’t be much of any government. He believes that private individuals can handle almost every function of government themselves. His vision for the country is not what your mainstream Republican would have.

EW: But you believe that they’re sincere in their political views — it’s not just about less taxes and regulations. You seem to feel that they genuinely believe this is what America needs to do.

DS: I really don’t believe this is all about money and making more money, although certainly there’s absolutely no question they’re looking out for their business interests. You could argue, from a libertarian perspective, that there should be no government solution to climate change, but that’s accepting that climate change is a real thing. But what they’ve done is fund a lot of groups that have created the impression there’s no such thing as climate change, which to me is a little more diabolical. They’re scientifically minded guys, and I would be surprised if they didn’t believe climate change is a real thing.

That’s where they create the impression they’re really just out for their bottom line. But I can give you one good example why I don’t think that. In the ’70s, Charles was railing against the business community and Republicans. He was attacking them for talking out of both sides of their mouth — condemning the welfare state but seeking corporate welfare. He believes that was hypocritical.

EW: You write about their environmental violations, and you have a chapter about two teenagers in Texas killed by a pipeline leak at Koch Industries.

DS: The company during the ’90s was profit driven. There was a deposition with one Koch supervisor about a different pipeline that was exposed. He had taken his higher-up out to look at it, and his concern was that a logging truck could drive over it and it could explode. This guy said his boss remarked something to the effect of, “Our philosophy is that if something happens here, the money it takes to repair this, instead of investing it in maintenance, investing it elsewhere could make more money, and if there’s a lawsuit later on, we can come back and pay that off.”

There was a lot that was attributed to Charles’ libertarian market-based philosophy, which was basically trying to create this free-market microcosm and people were relentlessly driven to add value to the company. A lot of people took it to mean they had to make money at any cost, and this was a really good example of Koch Industries not paying attention to maintenance and safety. They had a huge problem at the time. Even the general counsel of the company said, “If we stayed on that path, who knows where things would have led.”

EW: Your book details the hundreds of oil spills the company had and how they often didn’t report them or underreported them.

DS: In some ways, they’re an argument for why a pure free-market economy can’t work. If there were no regulators, this would have gone on. Charles Koch changed after a series of events — there was the pipeline explosion in Texas, there were multiple other environmental cases going on around the country. Their brother Bill was pursuing a whistle-blower case against them, and then the Clinton administration is a few months from leaving office, and they bring down a 97-count indictment against Koch Industries for environmental releases at its Corpus Christi refinery. Charles was absolutely shell-shocked, and it forced a course correction. After that the corporate mantra becomes “100 percent compliance 100 percent of the time.”

EW: Your book shows how flamboyant Bill is — winning the America’s Cup after starting from scratch and his soap operaesque romantic life, like when he went to court to evict a former Ford model from his $2.5 million apartment once their affair cooled down.

DS: Of the four Koch brothers, maybe Bill would be the most fun to go out and have a beer with. He gets into so many romantic entanglements. During the ’90s there were all these private detectives looking to dig up dirt and Bill’s dirty laundry — you didn’t have to rifle through his trash — it was right on the front page. You really can’t make any of these characters up. When they were having these legal battles, Bill would say, “This is a pure business dispute.” But at the same time, he would kind of go off on some episode where Charles pushed him down the root cellar when they were kids.

The other fascinating thing to me was their father had left in a note to his sons that Charles found after he died, and it says, “This money could be a blessing or a curse.” Of course they have this incredible privilege, but this money ends up fueling the implosion of the family with all these legal disputes.