Posted by: Rob | March 2, 2009

Not Invited to Join the Cult

I haven’t thought of Charles Koch in quite a while.

Back in the mid-90’s, when I was working at a refinery in Coffeyville, I began talking with a recruiter about finding another position.  I’d found things not really to my liking in Coffeyville and figured that a change was as good as a rest.

The recruiter was the wife of a former colleague of mine from Canada who was working at a refinery in Texas. (Most of us engineers who had worked at the Calgary refinery were working in the US then.)  My former supervisor was also working at the same refinery, situated in Corpus Christi and it had recently been bought out by Koch Industries.

Upon learning that there were efforts to add staff at the Corpus refinery, I agreed to let my recruiter friend, Jo, submit my resumé to Koch.

I had a telephone interview with an HR guy from Koch’s head office in Wichita.  Which I essentially blew.

However, my former boss interceded and I was subsequently invited for a round of in-person interviews in Wichita.

Against Jo’s advice, who figured I should drive up the night before (a Sunday), stay over and arrive at the interview fresh, I decided to get up very early on Monday and make the three hour drive to Wichita, returning home afterward the same day.  The long drive did exhaust me but not being exhausted wouldn’t have helped me through those interviews.

The interview format was for meetings with six different employees.  Each one lasted about 30 minutes or so and after all sessions were over with, the six would gather in a meeting room to discuss the candidate and vote on whether to make an offer of employment or not.  A single no vote could be negotiated by the other members of the team into an employment offer.  Two or more votes and it was a negative on any employment offer to the candidate.

I met with folks who would have been peers and supervisors right up to a division vice president.

I didn’t get an offer.

But I wouldn’t have accepted it anyway.  It was, without doubt, the creepiest job interview I have ever been on in my life.  In talking to these corporate drones, for that is what they were (actually, a term I picked up on a message board “corp-whores” is more apt), I couldn’t shake the feeling that I was having a secret look inside a massive cult.  There was nothing but glowing praise for the company CEO, Charles Koch.  Even when they told me that Koch personally takes out a life insurance policy on each employee – in the amount of $1,000,000 – and did I have a problem with that?

It was and is my opinion that fate helped me dodge a bullet that day.

Now, very recently, some interesting news has come up with respect to Charles Koch and how he spends his ill-gotten gains.

Heard of the “Rick Santelli Chicago Tea Party” incident?  I had heard Santelli’s rant and seen a clip on the ‘net, but hadn’t really thought much about it.  That is, until a post came up on one of the financial blog’s I follow, Max Keiser Radio.  The piece is brief, mostly just a link to a very intriguing essay * about “spontaneous” corporate financed protest groups.

After reading the Backstabber piece on*essay at, I began to recall a bit of what I had learned of Charles Koch in years past.  That knowledge has not been much enhanced today on Wikipedia.  Koch does very much prefer to stay out of the limelight.

A google search turned up a couple of interesting pieces.

This one is a puff piece that glosses over the nitty gritty details, but provides a pretty enlightening chart showing the myriad connections the Koch family has to other rich and powerful people as well as organizations and think-tanks.

This slightly older piece from CBS News contains a bit more on the details that I imagine the Koch family does not want to see out in front of the general public.

I mentioned “ill-gotten” gains above.  Charles Koch’s brother Bill was pushed out of the family business and had to launch a legal battle in order to wrest what he considered his fair share from the company.  In the course of Bill’s litigation, some interesting allegations were made:

Bill Koch says that his brother Charles made a fortune stealing oil. Much of it from beneath Indian reservations and federal lands – places like national forests. Oil under federal lands belongs to the public. Koch Industries was the middleman – buying oil from the government at the well – then selling it to refineries. Bill Koch says that the company took more oil than it paid for by cheating on measurements.

A gauger measures the volume and the quality of the oil that his company is buying. The buyer leaves his measurements behind on what’s called a “run ticket.” It’s an IOU to the well owner.

“What Koch was doing was taking all these measurements and then falsifying them on the run sheets,” says Bill Koch. “If the dipstick measured five feet 10 inches and one half inch, they would write down five feet nine and one half inches.”

That may not sound like much, but Bill Koch says that it added up. “Well, that was the beauty of the scheme. Because if they’re buying oil from 50,000 different people, and they’re stealing two barrels from each person. What does that add up to? One year, their data showed they stole a million and a half barrels of oil.”

Bill Koch filed a lawsuit in federal court claiming that much of the oil collected by Koch Industries was stolen from federal lands. At the trial, 50 former Koch gaugers testified against the company, some in video depositions. They said Koch employees had a name for cheating on the measurements.

“We in the company referred to it as the “Koch Method” because it was a system for cheating the producer out of oil,” said one of these gaugers, Mark Wilson.

The “Koch Method”, eh?  Hmmm.  Of course, in response:

Charles Koch, head of the company, testified that his gaugers weren’t stealing, they were making adjustments to compensate for irregularities like sludge or water in the tank.

“There’s always a problem of accuracy in the oil field in measurement,” says Charles Koch.

Oh yeah.  A “problem of accuracy”.  These guys are technical experts and they can’t achieve any kind of “accuracy” measuring tanks full of oil??  Right.

Fortunately, the little “problem of accuracy” did not influence what a jury found:

But in December 1999, the jury found that Koch Industries did steal oil from the public and lied about its purchases – 24 thousand times. The oil theft conviction was a heavy blow, but the troubles of Koch Industries don’t stop there. If the company was fattening its bottom line through theft – there is also evidence Koch was pinching pennies on safety and environmental protection – cutting costs with disastrous results.

What?  Pinching pennies on safety and environmental protection??  What happened?  One unfortunate incident:

“They don’t care for any loss of human life. Like I said, it was the buck that counted for them,” says Danny Smalley. He had the extreme misfortune of living near a Koch Industries underground pipeline that ran through Texas. In August, 1996, Smalley was home with his daughter Danielle and her friend Jason Stone. Danielle was packing to leave for school the next day – the first person in her family to go to college.

She and Jason started smelling gas. It was butane, pouring from a corroded Koch Industries high pressure pipeline, 200 yards from their home. Jason and Danielle set out in a pickup truck to find help. But their truck set off the butane, and caused an explosion.

Danielle and Jason both died in that explosion.  Danielle’s family received an “I’m sorry.” from Koch Industries.

Koch Industries is the largest, privately held corporation in the United States and the people that own it don’t give two shits for Joe Six Pack.  All they care about is their money and now, with Rick Santelli as one of their puppets, they’re putting that money to use ensuring that they will get to keep every penny of it through a fake “grassroots” conservative campaign to de-rail President Obama’s administration’s efforts to put the US onto a different (and hopefully better) track.


* UPDATED:  Apparently, has taken the essay down.  It’s still up on Mark Ames’ site; I have repaired the broken link.


  1. nice bit of writing – make a great submitted editorial to a newspaper. newsweek has a ‘my turn’ column where folks can submit such articles…

    and the part about the insurance policy on employees? she-it… can’t he go to vegas like other douchebags?

  2. I was such a Pollyanna for a long time that it never occurred to me that people would stoop so low. But during the past 10 years or so my eyes have been opened, and I realize there are many evil people in the world. Some recent offenders I know of are non-profits. It’s a darned shame when greed takes over. Who can we trust?

  3. Yeah, the insurance policy on employees struck me, too. So if their shitty safety program gets the employee killed, they get paid a million dollars. Brilliant. Good to know the players, and good that you didn’t get invited.

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