Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty (43 page)
Authors: Daniel Schulman
Sons of Wichita
is my first book, and when I began this project, in the fall of 2011, my editor John Brodie cautioned me that the process would feel a bit like summiting Everest. There’s no question that there were times in the two years that followed when I wished someone would hand me an oxygen mask. Thankfully, John was with me every step of the way, spurring me on with advice, insight, and encouragement. This book is better in every way because of him, and he has my gratitude for seeing the promise in this project and in me. Thanks also to John’s wonderful colleagues, in particular Grand Central Publishing’s president and publisher, Jamie Raab; Hachette’s senior vice president of legal and business affairs, Karen Andrews; production editor Yasmin Mathew; production associate Melissa Mathlin; plus the marketing and PR team including Brian McLendon, Amanda Pritzker, Amanda Brown, and Andrew Duncan, who were fantastic to work with from start to finish. Thanks, as well, to Liz McNamara.
Equally vital to this endeavor was my agent, Howard Yoon, who helped me transform a kernel of an idea into a biography and was key to shaping the vision for this book. Howard’s partner, Gail Ross, was indispensable, and I feel extremely fortunate to have both of them in my corner. I’m also indebted to my friend Bruce Falconer, who read an early draft of the book and provided feedback that greatly improved the final product, sparing readers some terrible clichés.
A number of outstanding young journalists assisted me, and they have my sincere appreciation. Ryan Brown, now an author in her own right, contributed research and conducted a handful of interviews. Andy Kroll, my
Mother Jones
colleague, pitched in with some great reporting that appeared in “Out of the Shadows” and “The Mother of All Wars”; I hope our bull sessions about the Byzantine workings of Charles and David Koch’s political network continue long into the future. Molly Redden tracked down hard-to-find court records—some stored in a literal salt mine—and arranged for me to view them. Noah Shannon helped with fact checking. Thanks, as well, to Matt Corley, Victoria Rossi, Perry Stein, and Chris Heller.
David Corn is
Mother Jones
’s Washington bureau chief, and I’m lucky to have him as a boss and to count him as a friend. David was the first person I consulted when I was considering writing a book, and he introduced me to my agent. Along with my thanks, I owe David an orca platter at the Old Ebbitt Grill. Monika Bauerlein and Clara Jeffery, the magazine’s brilliant, indefatigable, and award-winning co-editors-in-chief, were incredibly supportive of this project from the outset and gave me the time to see it to fruition. Special thanks to Nick Baumann, who did double duty when I took book leave—and a shout-out to the rest of the MoJo family.
There were many fellow journalists who helped me at various stages of the reporting process. Among them is the phenomenal Leslie Wayne, formerly of
The New York Times
, who was one of the first reporters to pull back the curtain on the Koch clan. Her previous work was an incredible resource, and Leslie herself was a source of invaluable insight. She also generously shared with me her research materials, which this book benefited from greatly. Thanks to Carol Ann Whitmire, editor of the
Quanah-Tribune Chief
, for her hospitality when I visited Fred Koch’s birthplace on an early reporting trip. At
The Wichita Eagle
, Sherry Chisenhall and Jean Hays provided me with access to the paper’s “morgue”;
the
Eagle
has done a tremendous job of covering Koch Industries and the Koch family over the years, and its archives were an important source of background material. The work of Bryan Burrough, who profiled Bill Koch for
Vanity Fair
in 1994, was another great resource, and I thank him for indulging my questions about obscure matters nearly two decades in the past. Last, a hat tip to Jeff Riggenbach, who patiently dug through old audiotapes and photos to unearth some gems from the early days of the Libertarian Party.
This book simply could not have been written without the participation of the scores of people I interviewed along the way. To anyone who returned my call; replied to my e-mail; agreed to meet for coffee or a drink; contributed insights and anecdotes; or pointed me in the right direction—you have my deepest appreciation. Thanks to each of you for being so generous with your time.
I also could not have done this without the support of my friends and family, who provided encouragement and inspiration throughout the process. My parents, Bernard and Linda Schulman, have been behind me at every step during my career, never more so than during the writing of this book. I owe them more than they know. My gratitude as well to the Schulman, Cooke, Silverman, and Zell families, as well as to my wonderful in-laws, Ray and Marilyn Pieczarka, and my sister- and brother-in-law, Kate and Greg Skouteris. Thanks, most of all, to my wife, Stacey, who was a beacon of confidence when I was overcome by doubt, who buoyed me with love and levity when I needed it most, and who gave me the strength to put one foot in front of the other and climb.
Daniel Schulman
is a senior editor in the Washington bureau of
Mother Jones
, and a founding member of the magazine’s investigative journalism team. His work has appeared in the
Boston Globe Magazine
,
Columbia Journalism Review
,
Psychology Today
,
Village Voice
, and many other publications. He splits his time between Cambridge, Massachusetts and Washington, D.C.
This book is the product of more than two years of research and reporting. It is based on hundreds of interviews with a wide range of sources: friends, relatives, classmates, and acquaintances; business associates and employees; political allies and adversaries; members of the philanthropic community; and many, many others who were gracious enough to share their perspectives on the Koch family and/or their companies. Unless specified in the source notes below, all quotations come from interviews conducted by me, or, in a handful of cases, by my research assistants Andy Kroll and Ryan Brown. Whenever possible, I strove to quote sources on the record, but in some cases interview subjects requested, and I granted, anonymity so they could speak candidly.
My research also benefited from a huge range of primary source documents, including thousands of pages of correspondence and other material, unearthed at more than a dozen archives. They include those located at the Chicago History Museum, Columbia University, Harvard University, the Hoover Institution, the Library of Congress, the Massachusetts Institute of Technology, Rice University, the Russian State Archive of Economics, the University of Michigan, the University of Oregon, the University of Southern California, Wichita State University,
the Wisconsin Historical Society, and elsewhere. I relied as well on many thousands of pages of legal documents—transcripts, depositions, exhibits, motions, and more—produced through numerous lawsuits involving the Koch brothers, their father, and/or the family’s various business entities. Any errors of omission or commission are mine and mine alone.
1. “
Okay, boys
”: Interview with Jay Chapple.
2.
nineteen minutes younger
: “Brother Versus Brother,”
The New York Times
, April 28, 1998.
3.
shared a small room
: Interview with John Damgard.
4.
a college boxer
: “Knights of Padded MIT in First Meet Tomorrow,”
The Tech
, March 5, 1920.
5. “
It would make ‘Dallas’ and ‘Dynasty’ look like a playpen
”: “Build Your Own Playpen,”
New England Business
, September 1988.
6. “
10,000 orgasms
”: “Billionaire Bill Koch Wins $12 Million More From Wine Maven Who Sold Him Bogus Bordeaux,”
New York Post
, April 13, 2013.
7.
Bill ranks 329th
: “The World’s Billionaires,”
Forbes
, March 4, 2013.
8. “
the biggest company you’ve never heard of
”: “The Price of Immortality,”
Portfolio
, October 15, 2008.
9.
former home to John D. Rockefeller Jr.
: Michael Gross,
740 Park
(Broadway Books, 2005), p. 48.
10.
stage actors working off a script
: Brian Doherty,
Radicals for Capitalism
(Public Affairs, 2007), p. 410.
1.
some of the earliest colonial settlers
: Mary Judith Robinson,
Patriots and Loyalists: An American Family from Colonial Times
(2009).
2.
enjoyed visiting Fred’s father
: “Quanah Parker, Chief of the Comanches,”
Kerrville Mountain Sun
, November 18, 1926.
3.
the Koch family’s home phone number
: “Fred Koch at Rice University,” published by Rice University’s Office of Public Affairs, November 2008.
4.
briefly captained the MIT team
: “Matmen Campaign Proves Successful,”
The Tech
, March 15, 1921.
5. “
The way up the ladder
”: “College Grad Seeks Job… And More,”
Discovery
, July 2012.
6.
from plane manufacturing to gold mining
: “C.F. De Ganahl, 69, Plane Maker, Dies: Manufacturer Also Had Been Gold Miner,”
The New York Times
, May 15, 1939.
7.
engineering challenges
: “Special Napthas with Pipe Still,” F. C. Koch,
Oil and Gas Journal
, March 10, 1927.
8. “
as brilliant a pair of brain lobes
”: Charles Francis de Ganahl,
The Life and Letters of Charles Francis de Ganahl Vol. II
(R. R. Smith, 1949), p. 379.
9.
former Army sergeant
:
The National Cyclopædia of American Biography, Vol. 56
(J. T. White & Company, 1975), pp. 209-210.
10.
Fred bought a one-third stake
: “Restructure, Inc.”
11.
lived in his office
: Ibid.
12.
Mary’s parents approved
: From an unpublished portion of an interview conducted with Mary Koch in 1986 by Leslie Wayne, then of
The New York Times
. At the time, she also interviewed Charles, Bill, and a handful of Koch Industries executives. Copies of the interview notes are in the possession of the author. (Hereafter, “Leslie Wayne interview notes.”)
13.
a month (and six dates)
: Ibid.
14. “
a typical old country boy
”: “Family Feud at a Corporate Colossus,”
Fortune
, July 26, 1982.
15. “
Fred was a strong man
”: “A Visit with Mary Koch,”
East Wichita News
, October 1988.
16.
The inspiration for the elaborate trip
:
The Life and Letters of Charles F. de Ganahl
.
17. “
But this is my trousseau!
”: “A Visit with Mary Koch.”
18.
After crisscrossing South America
: Details of their honeymoon come from films of their trip viewed by the author.
19.
Fred felled a pair of leopards
: “Koch Family Matriarch Dies at 83,”
The Wichita Eagle
, December 23, 1990.
20.
Mary helped to exercise
: From a compilation of family films narrated by Mary Koch and viewed by the author.
21.
the child’s namesake telegrammed
: “Namesake and Mentor,”
Discovery
, January 2010.
22. “
The most glorious feeling
”: “A Letter’s Legacy,”
The Wichita Eagle
, March 15, 1998.
23. “
He wanted to make sure
”:
Koch v. Koch Industries
(D. Kans., 1985), testimony of Charles Koch.
24. “
country-club bums
”: “A Letter’s Legacy,”
The Wichita Eagle
, March 15, 1998.
25. “
If we wanted to go to the movies
”: Ibid.
26. “
He was like John Wayne
”: “David Koch Intends to Cure Cancer in His Lifetime and Remake American Politics,”
Palm Beach Post
, February 18, 2012.
27. “
The old man didn’t put up with
”: “Captain America,”
Sports Illustrated
, April 20, 1992.
28. “
It used to be so hot there
”: “A Letter’s Legacy,”
The Wichita Eagle
, March 15, 1998.
29. “
My father was quite a student of history
”:
Koch v. Koch Industries
, testimony of Charles Koch.
30.
a cancerous tumor
: Details about Fred’s palate condition come from Leslie Wayne’s 1986 interview with Mary Koch and from: John Lincoln,
Rich Grass and Sweet Water: Ranch Life with the Koch Matador Cattle Company
(Texas A&M University Press, 1989), pp. 5–6.
31.
advertise their cattle brands
: “Early Day Newspapers in Quanah,”
Quanah Tribune-Chief
, August 26, 1938.
32.
10,000 acres
: Lincoln,
Rich Grass and Sweet Water,
p. 6.
33.
Monet’s Field of Oats and Poppies
: George T. M. Shackelford and Elliot Bostwick Davis,
Things I Love: The Many Collections of William I. Koch
(MFA Publications, 2005), p. 24.
34.
He sold a refinery
: Lincoln,
Rich Grass and Sweet Water
, p. 6.
35. “
fat cattle and nutritious grass
”: Lincoln,
Rich Grass and Sweet Water
, p. 61.
36.
driving there by a different route
: “A Letter’s Legacy,”
The Wichita Eagle
, March 15, 1998.
37. “
It sure is clean here
”: “Koch and His Empire Grew Together,”
The Wichita Eagle
, June 26, 1994.
38. “
Freddie didn’t want to learn
”: From a compilation of family film footage narrated by Mary Koch and viewed by the author.
39. “
another world
”: Leslie Wayne interview notes.
40.
Frederick had a nervous breakdown
: “The Curse on the Koch Brothers,”
Fortune
, February 17, 1997.
41. “
Father wanted to make all his boys
”: “Survival of the Richest,”
Fame
, November 1989.
42. “
Freddie sort of segregated himself
”: “Brothers at Odds,”
The New York Times Magazine,
December 7, 1986.
43. “
Freddie wanted no part
”: “Survival of the Richest.”
44. “
He and Mrs. Koch have three sons
”: “Responsible Leadership Through the John Birch Society,” a pamphlet published by the public relations department of the John Birch Society.
45.
tearfully pleading
: “Survival of the Richest.”
46. “
bad boy who turned good
”: “Brothers at Odds.”
47. “
I’m still alive
”: Leslie Wayne interview notes.
48. “
Father put the fear of God in him
”: “The Curse on the Koch Brothers,”
Fortune
, February 17, 1997.
49. “
It was a miracle
”: “Charles Koch Remains Focused on Business,”
The Wichita Eagle
, March 29, 1998.
50.
In his baby book
: “Wild Bill Koch,”
Vanity Fair
, June 1994.
51.
desperate gambits for attention
: Ibid.
52. “
He’d lash out
”: “Pulling the Wraps off Koch Industries,”
The New York Times
, November 20, 1994.
53. “
We had to get Charles away
”: “Brothers at Odds.”
54. “
to grow up amongst ourselves
”: “A Letter’s Legacy,”
The Wichita Eagle
, March 15, 1998.
55. “
When you’re one of four kids
”: “Wild Bill Koch,”
Vanity Fair
, June 1994.
56.
mischievous bully
: “Blood Feud,”
Wall Street Journal
, August 9, 1989.
57. “
For a long time”
: “Wild Bill Koch.”
58.
bashed his twin over the head with a polo mallet
: Ibid.
59.
David still bears a scar
: Ibid.
60. “
from an unsophisticated country boy
”: 2003 Deerfield Medal acceptance speech by David Koch.
61.
had become unhinged
: Leslie Wayne interview notes.
62. “
You’ve got to talk to a psychiatrist to analyze it
”: “Survival of the Richest.”
1.
2,500 cracking-related patents
: David McKnight Jr.,
A Study of Patents on Petroleum Cracking
(University of Texas, 1938), p. 9.
2.
sixteen contracts
:
Winkler-Koch v. Universal Oil Products
(S.D.N.Y., 1945), opinion, July 16, 1951.
3. “
conducting a very aggressive, active campaign
”:
Universal Oil Products Co. v. Winkler-Koch Engineering and Globe Oil and Refining Co.
(D. Del., 1931), trial testimony of G. W. Miller.
4.
they gathered their clients
:
Universal Oil Products v. Winkler-Koch Engineering Co. and Root Refining Co.
(D. Del., 1929), affidavit of Walter J. Blenko.
5.
Koch and Winkler had incorporated a new company
: Charter of the Winkler-Koch Patent Company, February 20, 1929.
6.
The plan initially called
: Details about the Winkler-Koch Patent Company and its legal defense fund come from documents and testimony in
Universal Oil Products v. Winkler-Koch Engineering Co. and Root Refining Co.
7.
Winkler had been Universal’s chief engineer
:
The National Cyclopædia of American Biography, Vol. 56
, p. 209.
8.
worked shoulder to shoulder with Carbon Dubbs
: Charles Remsberg and Hal Higdon,
Ideas for Rent: The UOP Story
, 1994 (UOP), p. 138.
9.
declined to testify
:
Universal Oil Products v. Winkler-Koch Engineering Co., et al.
(D. Del., 1931), opinion, April 27, 1934.
10. “
post graduates of Universal
.”: Ibid.
11. “
exclusively a patent holding company
”:
Universal Oil Products v. Winkler-Koch Engineering Co. and Root Refining Co.
, trial transcript.
12. “
The differences that do exist are modifications
”:
Universal Oil Products v. Winkler-Koch Engineering Co., et al.
, opinion, April 27, 1934.
13.
to proceed vigorously
: “Validity of Petroleum Cracking Patents Sustained,”
Chemical Bulletin
, June 1934.
14. “
We assume you will be interested
”: Hearings Before a Subcommittee of the Committee on Military Affairs, United States Senate, 78th Congress, “Monopoly and Cartel Practices: Universal Oil Products,” November 3, 1943.