Koch brothers elbow-deep in corruption and murky deals with Iran

Michael Santo's picture

The Koch brothers, David and Charles, founders of the powerful multinational corporation which has recently lobbied heavily in favor of the GOP, are not the goody-two-shoes of integrity and compliance they so earnestly try to sell themselves as.

The Koch brothers inherited a small oil company from their father Fred back in 1967 and expanded it into a chemical, textile, trading and refining conglomerate giant spanning more than 50 countries. Fred had strong anti-government convictions and his sons inherited his political leanings. The brothers, each worth about $20 billion, are prominent backers of groups that believe that excessive regulation is sapping the competitiveness of American business.

That translates to heavily right-leaning sympathies. That also means they back the extreme Tea Party as well as the candidates that it endorses, such as Minnesota Congresswoman Michele Bachman and Texas governor Rick Perry. It might interest readers to know that David Koch ran for President in 1980 on a Libertarian ticket promising to abolish Social Security, the Federal Reserve System, welfare, minimum wage laws and federal agencies -- including the Department of Energy, the Federal Bureau of Investigation and the Central Intelligence Agency.

The Kochs’ political ideology has also influenced how they do business. Koch Industries is obsessed with secrecy. It discloses its annual revenue loosely – about $100 billion – and refuses to publish its profits. Koch Industries is better known by various recognizable name brands such as Dixie cups, Brawny paper towels and Quilted Northern bath tissue.

Such wealth does not simply flow in on the basis of hard work – at least not as it is conventionally defined. The Koch brothers, however, might include in their definition a willingness to bend, circumnavigate, and twist existing laws to further one end – acquire even more profit. An investigation by Bloomberg Markets uncovered that Koch Industries has sold millions of dollars of petrochemical equipment to Iran, a country the U.S. identifies as a sponsor of global terrorism. And that’s on top of a long list of other unethical business practices which include bribery, negligence and price rigging.

In regards to the sales to Iran, the company made them through foreign subsidiaries, thwarting a U.S. trade ban. The company’s products helped build a methanol plant for Zagros Petrochemical Co., a unit of Iran’s state-owned National Iranian Petrochemical Company. The facility, in the coastal city of Bandar Assaluyeh, is now the largest methanol plant in the world, according to IHS Inc., an Englewood, Colorado-based provider of chemicals, energy and economic data.

“Every single chance they had to do business with Iran, or anyone else, they did,” George Bentu, a former Koch engineer, says.

U.S. companies have been banned from trading with Iran since 1995, when President Bill Clinton declared it a threat to national security. Iran supports Iraqi militants and Taliban fighters as well as terrorist groups, including Hamas and Hezbollah, according to the U.S. State Department. Yet the big muscle that is helping to launch the political careers of ultra-right-wing GOP candidates also helped to build an important part of the Iranian infrastructure. Have we walked through the looking-glass darkly?

Koch Industries may yet face difficulty. The payments to win contracts documented by Koch investigators may violate U.S. law, says Sara Sun Beale, a professor at Duke Law School in Durham, North Carolina.


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