The Koch lineage in American began with a man drawn here by a generation of stories about the Barons of the Railroad at the end of the Gilded Age.
The brother's grandfather, Harry Koch, came to the US in 1888 from Holland, determined to become wealthy through the opportunity which had made multimillionaires of the Railroad Barons. Harry finished an apprenticeship in printing and took ship from Holland, landing in New York on December 5th . In 1891 he settled in a small Texas town, Quanah, named for Quanah Parker, the last Chief of the Comanche.
The tracts of land and funding which build the lines, coupled with sales of these vast stretches of land turned ordinary men into a new baronage, at the end of the Gilded Age were waning, but Harry seized the opportunity to start a spur which ran through Quanah which was called the Quanah, Acme and Pacific Railway.
As a member of a prosperous, but numerous, family in Holland, Harry had always seen himself as one of an elite but without the money to give this meaning. This was his entry point to the reality. He would began publishing a newspaper, using this to advertise the short line railroad in which he invested, making himself wealthy.
Quanah Parker, who would die in 1911,was also an investor in the railroad Harry Koch started and his appearance could be depended on to gather crowds or admirers. He and his entire tribe would visit Quanah once a year until his death, coming with their teepees and camping, becoming a magnet for children, especially boys.
Parker's mother, a white girl, had been kidnapped by the tribe when she was nine in 1836 from Fort Parker in Texas. She was taken as a wife by the chief, having three children before she was captured by rescuers. In the same incident her Comanche husband was killed. Cynthia Ann was returned to her family in Texas.
Quanah, orphaned at age 12, survived, though he grieved for his mother, who tried over and over again to escape and return to her children.
As a young warrior Quanah earned the respect of whites and Indians by ensuring his people evaded the ambushes laid for them as they were forced on to the reservation. He, himself, became a cattleman on the reservation land, ensuring he and his people were paid for the use of the land when the cattle drives began to move North from Texas across the reservation. Quanah studied the ways of the white man, assimilating himself and then showing his people how to do the same. In this way he lead them a path of survivial and protected their rights while encouraging them to keep their Comanche traditions.
Quanah became a friend of President Theodore Roosevelt and his story was known by everyone in Texas, where he was accorded deep respect by the people of both cultures. In the town named for Quanah, every boy knew his story.
Frederick Chase Koch, the younger son of Harry, ran away from home to live with the Indians according to his youngest son, William. In an article titled, “Palm Beach William Koch's 'Super-Wild' West collection,” appearing in PB Pulse by Scott Eyman, William said,
"Once, my father ran away from home to an Indian camp, and the Indian chief kept him for a day and sent him home. I'd like to believe that Indian chief was Quanah Parker."[ Note: the link to the article, originally published 11.01 p.m. ET March 3, 2012, was updated 8:55 p.m. ET, November 21, 2014. I am looking for an original version. Sign up for updates if you would like to see the original version, which had mentions of the Koch law suit.]
According to local historian, Scarlett Dougherty, Quanah Parker came to town every year during the time Fred was a boy, camping in the teepees they brought with them. Local ranchers supplied beef cattle to them.
Quanah adopted at least one young white boy and was generous with his time, always glad to share the stories of his people. Fred's deep love of the wilderness, and hunting could have its origin in these early experiences with a man viewed as a hero of his times.
When he was 19 Fred began college at MIT after two years at Rice University, effectively leaving home. Although his father called both of his sons home to work for him at the Quanah Chief-Tribune, Fred refused. His older brother, John Anton, left college to work at the paper, with their father, taking over the publication.
In 1922 Fred graduated with a degree in engineering from MIT. In 1925 he joined, and became a partner in Keith-Winkler Engineering, a petrochemical engineering concern in Wichita, Kansas. The company was renamed the Winkler-Koch Engineering Company that year. In 1927 Fred invented an improved thermal cracking process for converting heavy oil into gasoline.
A consortium of larger oil companies sued Koch for patent infringement, blocking him from selling his process in the United States. This would send Fred Koch out of the United States to find markets for his process. The company built installations in countries throughout Europe, the Middle East and Asia.
In the early 1930s, Winkler-Koch hosted Soviet technicians for training.
Contacted by the Russian government Fred agreed to install 15 refineries for Stalin, spending time in Russia, where he encountered how Communism impacted its people. Russian engineers with whom he had personally been working were assassinated. Shocked at the inhumanity he saw he became a life long opponent to communism and Marxism. Fred found it incredible people would kill for the sake of an idea and that they were willing to kill their parents for these ideas.
John Anton would remain in Quanah, taking his father's place in 1942, until his death in 1959. Frederick's love of the land, perhaps learned from Quanah, continued. When Fred's business interests had made him wealthy he purchased, over a period of years, between 1 and 2 million acres of ranch land and 150,000 head of cattle. According to son, William, Fred Koch was, “the largest rancher in the country.”
This was not an enterprise taken up primarily for profit.
Fred Koch, his family and business
In 1932, Koch married Mary Robinson, and the couple had four sons, Frederick R. Koch, born in 1932, Charles G. Koch, born1935, David H. Koch and David’s twin, William I. Koch, both born in1940. By the late 1950’s, none of his sons had joined him in the oil business, and he became concerned that he might have to sell his oil refineries, and other businesses to outside parties.
The attacks on Fred's cracking process were finally settled in 1952 when Fred won the last of dozens of lawsuits, securing a $1.5 million settlement. He went on to build a fortune around pipelines and refineries.
His friend, J. Howard Marshall, II would say of Fred, about his purchased of a 35% interest in Great Northern at its book price, “(he) always always said he jumped at the chance to buy a refinery for book, didn't hesitate.”
J. Howard Marshall, II would late in his life marry Anna Nicole Smith, leaving her his stock in Koch Industries to the consternation of his heirs and, most especially, the very secretive Koch brothers.
The purchase of Fred's share in Great Northern took place in 1959. Fred knew refineries, paying 5 million for the facility, in cash. It may have been a comment by Marshall which later made Charles Koch aware of the potential to produce high quality products from the “lousiest crude in the world.” Marshall made the comment after Charles had become CEO of the company, now named Koch Industries. Charles took his father's place when Fred's failing health forced him to retire in 1966.
Koch Industries, with Sun Oil, now Suncor, were the first two companies to begin acquiring tar sands property in Canada. These acquisitions began after Fred's death in 1967.
Son Charles had followed his father’s academic interests, and had graduated from MIT with a B. S. degree in chemical engineering. He had gone to work for Arthur D. Little, and was one of its engineering consultants. The senior Koch issued an ultimatum to Charles that if he did not join him in running the Koch companies, he would sell the Koch companies to outside interests. The ultimatum worked, and Charles joined the firm in 1961.
In 1966, Charles became the president of the firm, and in 1967, following his father’s death, Charles became chairman and chief executive officer of the firm. In that same year the firm’s name was officially changed to Koch Industries, the name it is known by today.
Fred C. Koch passed away in November 1967, at age 67. He had had an eventful and successful career. The firm he left behind to his four sons was in the able hands of his son Charles. The firm was not large, by the standards of the industry,then considered a medium sized oil firm, with annual revenues of about $180 million.
The issue of Tar Sands was quiescent, but present.
Although Suncor divested themselves of their original holdings they began reacquiring shares in the 1980s.
Fred Koch in Politics
Fred's wife, Mary, quoted in an article, Survival of the Richest, on the Koch family written by Leslie Wayne in 1989, described him as, “...a strong man who liked to hunt and fish. He was not a society man at all and he taught me to fish and hunt and all that. He liked weekends at the ranch, riding horses, and pitching hay. I hardly ever saw Fred enjoy a cocktail party. He couldn't stand chitchat and gossip. He was quite a rugged individualist."
In 1961, Koch would write a book on communism entitled, “A Business Man Looks at Communism”. The pamphlet was 29 pages in length, basically describing the shocking events he had witnessed against the lives of men he had worked with and the conditions in Russia.
In his book he describes Russia as "a land of hunger, misery, and terror". Given a 'handler, ' a man named Jerome Livshitz when he toured the countryside, Fred Koch got what he later called, "liberal education in Communist techniques and methods." Hearing and seeing persuaded Fred Soviets were a threat which America must counter.
According to his son, Charles, “Many of the Soviet engineers he worked with were longtime Bolsheviks who had helped bring on the revolution.” Fred Koch found it deeply disturbing that so many of those so committed to the Communist cause, who he personally knew, were later purged. Any emotionally normal person would share his horror.
According to Gus diZarega, who Charles mentored politically in Wichita, Charles had rejected many of the ideas of the John Birch Society, which his father. Fred, helped start. DiZerega said, “He did not appear to take the Communist Conspiracy stuff very seriously, and, unlike most all in the right-wing, opposed the Vietnam War. But he did take very seriously the argument that big government would inevitably lead to the loss of essential freedoms until eventually we would be in about the same position as the unfortunate subjects of Communist tyranny.”
Today Charles has shown, by his actions, he eventually decided control through corporations was the correct solution. He appears to have ignored the original principles of American government, that the people will hold power locally, governing themselves.
The JBS were comprised of traditional conservatives frightened of communism who did not understand the ideology's relationship with corporations.
These direct experiences were followed by World War II and then events which focused many on the aggressive stance and threats issued by the Soviet Union.
When Nikita Khrushechev said "We will bury you!" to a group of Western Ambassadors gathered at a reception at the Polish embassy in Moscow on November 18, 1956 he may have been referring to what he believed was an ideological battle going on between Marxism and freedom but most people viewed this as a direct threat. Khrushechev repeated the quote through the next several years.
Although Marxism and then Communism were actually viewed by corporations as tools for creating the centralized governments they wanted this was not a fact then obvious to the vast majority of Americans. If the real source of the threat had been understood events would have played out very differently. As it was, the Military-Industrial Complex, of which Eisenhower would warn Americans when he left office on Jan.17,1961. But Conservatives had come to distrust Eisenhower.
The use of 'ideologies' as tools for establishing control by corporations ignored the emotional investment of people around the world.
Eisenhower Speech, January 17, 1961
The booklet is available online and can be read at this LINK in its entirety.
The Next Generation
Each of Fred's sons was sent to work on one of the ranches Koch owned. Fred believed strongly his sons should start working early, this likely reflecting his own experiences growing up with Harry as a father. The boys, according to William, were sent to different ranches.
William spent five summers working on the ranch in Montana doing the same chores as an ordinary hired hand for 50 cents an hour. He loved working on the ranch, and hated it when those years ended and he was sent to military school.
The four boys were heirs to two generations of Koch men who were very different but driven by firmly held ideas. Fred was a Conservative. Harry was a corporatist elitist.
Could Fred have learned some of his own values from Quanah Parker, a tough, resilient man who bore extreme hardship and emerged wealthy? At the end of his life Quanah was no longer rich, having spent most of his wealth on helping his people, actions he never regretted. He had helped them survive a transition to a different world and in so doing earned the respect of both whites and Native Americans through his example and generosity.
Fred's father, Harry, had prospered through hard work and the opportunity available to him, as the publisher of a paper, to use the misplaced trust of the public. While his sons were in college Harry wrote to demand they quit school and come work for him. John did as he was asked, Fred refused. He was a man who saw a different future for himself and viewed his sons as resources for accomplishing this.
Are Charles' ideas inherited more from grandfather Harry than from his father, Fred?
Ideas and values are experienced through the filter of the time in which the individual lives. In raising his own sons Fred was unquestionably demanding, insisting they start working early and adhere to the same goals he had set for himself. Enforcing an early work ethic is common to many conservatives and corporatist elitists.
In an article appearing in Fortune Magazine titled, “THE CURSE ON THE KOCH BROTHERS ONE OF THE BIGGEST FAMILY FEUDS IN BUSINESS HISTORY MAY SOON COME TO A CLIMAX. YOU THOUGHT $1 BILLION COULD BUY HAPPINESS? NOT FOR THESE GUYS,” on February 17, 1997, Fred is quoted as having written to his sons, "Be kind and generous to one another," also warning the boys their wealth could be "a blessing or a curse."
The four men had, as children, competed for their parents affections and time. Fred was frequently away from home on business while they were growing up and their mother, Mary Robinson Koch was a dedicated socialite who left much of the raising of her children to nannies.
Fred disinherited his oldest son, Frederick, Jr., who wanted to pursue the arts, drawn to the interests he shared with his mother.
Control of Koch Industries has been driven by Fred's choice of Charles as his successor as CEO. David is acknowledged as a loyal adherent to his brother, the other two siblings appearing not to fit into the Koch corporate culture as redefined after the death of Fred by Charles.
Oldest brother Fred, Jr., escaped to school at Harvard, studying the humanities. After receiving his B.A in 1955 Fred, Jr. enlisted in the U.S. Navy serving in Millington, near Memphis and then on the aircraft carrier USS Saratoga. Back in civilian life Koch enrolled at the Yale School of Drama where his focus was playwriting and from which he received an M.F.A. degree in 1961.
Today, Fred, Jr., is a philanthropist and a collector with several homes in Europe.
Charles said of his brother in an article appearing in the Wichita Eagle on October 11, 2012, by Roy Wenzl and Bill Wilson, “Charles Koch relentless in pursuing his goals," "Father wanted to make all his boys into men and Freddy couldn't relate to that regime," explains Charles. "Dad didn't understand and so he was hard on Freddy. He didn't understand that Freddy wasn't a lazy kid-he was just different."
William, the youngest by several minutes, graduated with a bachelors of science, master's, and doctoral degree in chemical engineering all from MIT. He then went to work for Koch Industries, leaving to become the founder and president of the Oxbow Group, an energy development holding company out of West Palm Beach, Florida.
Today William spends time with his avocation for ranching and collecting Western memorabilia. He has commented on his enduring love for a father who was often absent.
The four men are reconciled today, but law suits which were played out over twenty years caused rifts in their relationships, dividing Fred, Jr, and William from Charles and David.
These began with a suit filed by William, with Fred, Jr., in which William asserted his reasons were based in brother Charles' dishonesty. In the CNN Money article by By Brian O'Reilly and reporter associate Patty De LLosa, published February 17, 1997, William is quoted as saying, "It's about money, that's all....Charles is a cheat, and I hope he sues me on it." William later says, "I resent the fact that Charles cheated me all my life."
Charles and his wife, Elizabeth, have two children. The available evidence indicates Charles is very much like his father in his family life but not like him in his personal world views.
Fred adhered to the beliefs of Conservatism. Charles has used the rhetoric of both Conservatism, free market economics, and Libertarianism, but his actions do not reflect that these beliefs are what is running in his brain as an operating system. His ruthlessness cuts across how he does business, how he operates in politics, and how he treats his family.
Lying, cheating and stealing are the hallmarks of the Koch Method, as outlined by employees who claim to have been trained in these practices. These same methods are used routinely with their political campaigns. Using the rhetoric of freedom to justify all of these actions parallels the corporate strategy adopted by the Rockefeller Republicans and other corporatists.
In an article, Charles Koch relentless in pursuing his goals, appearing in the Wichita Eagle on October 11, 2012, by Roy Wenzl and Bill Wilson, Elizabeth Koch is quoted. “What drives Charles Koch most, Liz Koch said, is a conviction that free markets are the only way to create prosperity. Even those who live in poverty, he believes, have more money and more opportunities for jobs if they live in a free-market economy rather than one controlled by dictators or socialists intent on redistributing wealth.
It is impossible to find any reality in the words of Liz Koch.
The Kochs' family culture ignores the underlying realities. The article provided insights into how intelligent people delude themselves. Citing the “millions to charities” the Kochs donated they ignore the fact these donations were largely money given to the political organizations which they try to control, or own, which carry out their political agenda. Additionally, today many people are starting to understand just how problematical the Koch impact has been on our world.
Money can't buy everything. Now, the people are beginning to see what has been happening.
For the Kochs 'freedom' is being able to operate their business without oversight and without being taxed. This is not freedom, just in rhetoric. There is a singular lack of accountability in how they operate.
Until recently it is unlikely Charles, or David, were ever criticized for anything they said. A curious courtesy is generally a benefit of being Koch-wealthy. Now Charles is being scrutinized for the first time in his life and he does not like it, likely because he knows what he is hiding.
Koch Industries and publicly held corporations depend heavily on their relationship with government. Koch Industries receives enormous government contracts domestically and off shore. They were in Vietnam with Halliburton and in Iraq. Government's regulatory process, certainly, not free market, limit their competition and so strangles innovation. They lawyer up when found in fault, violate the rights of individuals with impunity. This, the Kochs, by the evidence, characterize this as 'free market capitalism.' It is better understood as fascism.
Charles and David Koch have spun out an empire, larger than some countries, which hides behind the protections granted private companies and have worked to eviscerate the traditional, localized, form of government adopted by our founders.
This is the legacy of Charles Koch.