Christopher Leonard's New Book Puts an Ever-Expanding 'Kochland' on the Map

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Christopher Leonardโ€™s new book, Kochland: The Secret History of Koch Industries and Corporate Power in America, begins, appropriately enough, with an FBI agent, who is investigating criminal activity by the company, standing in a field with a pair of binoculars, trying to catch a glimpse of the daily operations of a company that prizesย secrecy.

Koch Industries was under investigation for theft of oil from the Osage and other Indigenous nations. Walking into the company’s office building involved passing through security checkpoints, Leonard explains, so numerous that one investigator later told Leonard that it โ€œreminded him of traveling to CIA headquarters in Langley,ย Virginia.โ€

Through exhaustive reporting and extraordinary interviews with past and current company executives, including some turned whistleblower, Kochland offers readers a view far larger than can be seen through binocular lenses, walking readers past those layers of security checkpoints and into the inner workings of an institution that has for decades tirelessly built itself into practicallyย all American lives, while largely evading accountability orย transparency.

While Charles and David Kochโ€™s political operations have been the subject of powerful investigative reporting by the New Yorker‘s Jane Mayer, author of the landmark book Dark Money, and numerous others, Leonard probes into the business that not only funds the Koch political machine, but also represents the clearest embodiment of the Kochsโ€™ market fundamentalist political philosophy inย action.

The Invisible Elephant in theย Room

In 1961, whenย Charles Koch joined his father Fred โ€” a founder of the John Birch Society who had, as Mayer reported, previously helped Hitler and Stalin build out their oil refineries,ย Koch Industries, was generating $3.5 million in profit a year, Leonardย writes.

By the end of the Obama administration,ย company had grown enough to leave Charles and David Koch with personal fortunes of $81 billionย (contrasted against Bill Gates’ $81 billion). Koch Industries says its workforce now numbers 130,000 people worldwide, roughly half of those in the U.S., and that it operates today in 60ย countries.ย 

As much as it is mammoth โ€” its โ€œannual revenues are larger than that of Facebook, Goldman Sachs, and U.S. Steel combined,โ€ Leonard told NPR โ€” if Koch Industries is the elephant in the room, it has sought to master the art of being a virtually invisibleย one.

That inconspicuousness is built into its business model.ย The company invests little in consumer brands and largely acts as industrializationโ€™s middleman, churning raw fossil fuels into not only gasoline at its Pine Bend refineryย in Minnesota, but also into the ingredients that become our buildings, our clothing, and other items that we may not know about because even those who closely track the Kochsโ€™ politics have been unable to trace (are they involved with fracking, for example? A definitive answer is surprisingly hard to come by, says Koch Docs director Lisaย Graves).

Koch Industries is also omnipresent in the agricultural machine that, in Leonardโ€™s words, has become โ€œone immense machine that laundered energy from fossil fuels into food calorie energy that humans could eat,โ€ thanks to natural gasโ€“based fertilizers. Not only does it manufacture those fertilizers, it produces livestock feed, cattle, and even the disposable plate you might eat your mealย from.

Leonard describes how Charles Koch sought to grow and harness the entrepreneurial spirit of his management staff by treating them like small business owners, attuned not to performance metrics or budgets but directly to the companyโ€™s profits and losses โ€” with the key difference being that the privately held Koch Industries, not workers or management, are reaping theย profits.

โ€œWhat resulted was a kind of perpetual motion machine,โ€ Leonard writes of one era in the company’s history, โ€œa company that grew and then cited that growth as justification to growย faster.โ€

The 704-page book offers an inside-the-fenceline view of how that company has operated and grown over the years, including a blow-by-blow account of how Koch Industries sought to break the back of a refinery workersโ€™ union in the 1970s. Leonard presents readers with a riveting narrative of โ€œthe war for Pine Bend,โ€ including helicopter airlifts and the apparent attempted sabotage of the refinery via a runaway diesel trainย engine.

Shrouded in Secret, Beyond Consumerย Reproach

In Kochland, it seems, the only form of accountability that executives recognize as important comes from businessย losses.

As a private firm, Koch Industries faces none of the reporting requirements that publicly traded companies must meet โ€” Leonard recounts how during a 1989 deposition, Charles Koch was forced to reveal sales and profit figures, which Leonard writes were โ€œconsidered top secretโ€ by the company,ย but for a publicly traded firm, a widely available set ofย numbers.

Koch Industries

Koch Industries eludes consumer boycotts by selling products that are inescapably entwined in the infrastructure of daily American life. As much as any single organization, Koch Industries has made any problems it is responsible for โ€” intentionally, in Leonardโ€™s telling โ€” structural, problems that cannot be addressed through individual consumerย action.

When it comes to environmental accountability, Leonard diagnoses structural issues inside the company in the 1990s that facilitated law breaking. In a fascinating chapter, Leonard offers readers an account of Koch Industries deliberately and repeatedly spewing contaminated wastewater into wetlands in Minnesota, a major violation of environmental law to which the company pled guilty inย 1999.

โ€œThe company learned that violating regulations could put a dent in its profit margins, and responded accordingly,โ€ Jennifer Szalai wrote in a New York Times review of Kochland. โ€œIt now imprints upon employees the need for โ€˜10,000 percent complianceโ€™: obeying 100 percent of the laws 100 percent of theย time.โ€

That narrative isnโ€™t a perfect fit for the facts โ€” just a year later, Koch pled guilty to falsifying documents and settled with the Justice Department for $20 million over benzene pollution in Corpus Christi, Texas, and an attempted cover-up, according toย Greenpeace.

And 10 years later, a Koch subsidiary reached a deal with the U.S. Environmental Protection Agencyย and Department of Justice over environmental law-breaking that spanned seven states. Those violations resulted in a $1.7 million fine and $500 million in repair obligations, Greenpeace adds as it details both accidental spills or leaks and toxic pollution (at times with the permission of state regulators) that have sickened those living around theย plants.

If anything, what Koch Industries seemed to learn from costly environmental fines and settlements is that it can be cheaper to change the law today than it is to pay the fine tomorrow. Leonard details how, for example, the Kochs began, via a nonprofit group, to sponsor free educational events for judges, hosted in luxurious locales, which organizers said by 2016 had attracted more than 4,000 state and federal judges from every part of theย country.

Power inย Politics

The Kochsโ€™ power as political actors is, of course, notoriously non-transparent โ€” which can conceal not only the mechanisms they use for leverage, but also the degree of self-interest that may motivate theirย work.

David Koch
David Koch speaking at the 2015 Defending the American Dream Summit at the Greater Columbus Convention Center in Columbus, Ohio.
ย Credit:ย Gage Skidmore,ย CCย BYSAย 2.0

While the Kochs have labored strenuously to market themselves as sincere ideological Libertarians, defending personal freedom (for property owners, at least) against government encroachment, their agenda is interwoven with threads of visibleย self-interest.

From their earliest forays into politics โ€” like David Kochโ€™s failed 1980 Libertarian party vice-presidential bid as part of a campaign that championed abolishing the Department of Energy โ€” the political platforms they support consistently seem to include planks that would benefit the Kochsโ€™ business. (And in cases where their business interests and ideologies might conflict, it may be worth bearing in mind that the Kochs who Leonard describes are adept at strategizing with a long-range view, accepting short-term losses at times in the pursuit of longer-termย gains.)

That long-range strategy extends to the Koch networkโ€™s stance on climate change โ€” and here, Mayer credits Leonardโ€™s book with breaking new ground, demonstrating that when it comes to opposing action on climate change, โ€œtheir role went as far back asย 1991.โ€

โ€œIf there is any lingering uncertainty that the Koch brothers are the primary sponsors of climate-change doubt in the United States, it ought to be put to rest by the publication of โ€œKochland,โ€ Mayer wrote in the New Yorker. โ€œMagnifying the Kochsโ€™ power was their network of allied donors, anonymously funded shell groups, think tanks, academic centers, and nonprofit advocacy groups, which Koch insiders referred to as their โ€˜echoย chamber.โ€™โ€

Koch Docs, an online archive launched August 9, has collected many of the documents used by Leonard and others to understand how Charles Koch and his companyย operate.

‘Block and Tackle’ Underย Trump

When it comes to the Trump administration, the focus of the bookโ€™s final chapters, Leonard compares the Koch strategy to a โ€œblock and tackleโ€ system โ€” in the sense that by working to block certain policies and offer the administration assistance tackling others, itโ€™s possible to create a path of least interference for the administration that runs right where Kochย desires.

โ€œIโ€™m more excited about what weโ€™re doing and about the opportunities than Iโ€™ve ever been,โ€ Leonard quotes Charles Koch as saying during a January 2018 meeting of Koch network donors in Palm Springs. โ€œWeโ€™ve made more progress in the last five years than I had in the previousย fifty.โ€

While Kochland goes a long way towards letting readers peer inside the windows of Koch Towers, much remains unknown about the organization, despite the efforts of Leonard and many others. But Kochland chips away at a significant portion of the opaque layer that’s shielded the Kochs fromย scrutiny.

Leonardโ€™s work leaves open a question for readers โ€” once youโ€™ve had a glimpse inside the Kochs’ private capitalist empire, is it a place you want toย live?

Because when it comes to both politics and consumerism, Leonard’s book suggests that an ever-expanding Kochland just might becomeย inescapable.

Main image: Kochland book cover over original image ofย the Pine Bend oil refinery, one of many Koch businesses profiled in Kochland. Credit: Tony Webster,ย CC BYSAย 2.0

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Sharon Kelly is an attorney and investigative reporter based in Pennsylvania. She was previously a senior correspondent at The Capitol Forum and, prior to that, she reported for The New York Times, The Guardian, The Nation, Earth Island Journal, and a variety of other print and online publications.

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