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Bloomberg Investigation: The “Koch Method,” A Corporate Culture of Lying & Stealing

03 Oct 2011  |   Emma Brown

Tags: Climate Change, General Environment, General Political

A Bloomberg Markets investigation revealed Monday that leading climate change denier Koch Industries has repeatedly violated U.S laws, often placing Americans’ health, the environment, and national policy in jeopardy. From less than ethical trading with Iran—a known supporter of terrorists, to knowingly spewing illegal and dangerous amounts of the known carcinogen benzene, Koch industries has shown a blatant disregard for the law and the public’s well-being for more than two decades.


Company culture repeatedly encouraged unethical behaviors and taught employees the “Koch Method,” of how to steal and cheat in order to advance company interests, the investigation revealed. The company’s long history of illegal and unethical behavior illustrates the pervasiveness of the Koch method and shows that the company is willing to forego ethics, public safety, and environmental protections all for the sake of a profit.  In addition to other less-than-ethical behaviors, the Bloomberg investigation found that:


  • In 1999, a Texas jury found that Koch industries’ negligence lead to the wrongful death of two teenagers after a company’s pipeline ruptured, and ordered the company to pay $296 million in compensatory damages—the largest damage award against a corporation in U.S. history.
  • In 2001, Koch industries was ordered to pay $21 million after the company was found guilty of felony charges of falsifying documents and lying to air toxics regulators. The illegal behavior was discovered after a company whistleblower reported to officials that Koch had removed. equipment to reduce benzene emissions—a known carcinogen—and was knowingly spewing 15 times the legal amount into the air, endangering both its workers and the public.
  • Koch industries sold millions of dollars in petrochemical equipment to Iran—a known supporter of terrorist organizations—through backdoor means. In order to navigate around a U.S. ban barring companies from doing business with Iran, Koch industries simply engaged Iran through its foreign subsidiaries—as long as American employees were not involved in the deals, it was legally acceptable, the company’s U.S. lawyers determined, according to internal documents.
  • In 1994, the EPA sued Koch after a series of pipeline leaks resulted in oil slicks in several states, including a 12 mile long one along Nueces and Corpus Christi bays.
  • In 2007, Conoco Phillips settled with Koch industries for an undisclosed amount after Koch had failed to pay more than $2.7 million in court-ordered clean-up costs, from business practices in the 1940’s and 1950’s that lead to tainted groundwater in Oklahoma.

In many instances, internal whistleblowers were pressured to falsify documents and keep quiet about the company’s illustrious practices. When they refused, many were pressured to quit or quietly terminated, the investigation found. 

The Koch brothers have been major players in politics in recent years, spending millions in lobbying efforts to roll-back vital environmental protections, and bankrolling climate change-denying politicians and the anti-regulation Tea Party.  The Koch industries political action committee, KochPAC invested $50,000 on Texas Governor Rick Perry’s gubernatorial campaigns, and has supported Representative Michele Bachmann’s political ventures in the past as well. Both are major climate change deniers, and have openly sought to drastically handicap the EPA. The Koch brothers have played a fundamental role in whipping up support for the dangerous Keystone XL pipeline, and have aggressively worked to dismantle the Regional Greenhouse Gas Initiative (RGGI) a multi-state effort to curb climate change inducing emissions as well.

View the full Bloomberg investigation here.

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