Kochland Page 80

  The tennis courts . . . Dave Hawley: David Hawley, interview by author, 2018; “Junior Championships, Results,” Associated Press, March 25, 1991; Taylor Eldridge, “Boys Tennis: Collegiate’s Dave Hawley Wins His 50th Tennis State Championship,” Wichita Eagle, May 13, 2017.

  Chase Koch’s style of play . . . two primary strengths: Hawley, interview by author, 2018.

  Chase Koch could never beat Matt Wright: Ibid.; “Boys State Tennis Champions,” Kansas State High School Activities Association Championship History, 2018.

  On the evening of Saturday, September 18, 1993: Robert Short, “Teenage Driver Ran Red Light, Police Say,” Wichita Eagle, September 21, 1993.

  That evening, a woman named Nola Foulston: Bill Hirschman, “Special Prosecutor Enters Koch Case,” Wichita Eagle, November 2, 1993.

  Zachary Seibert was out for a jog: Walter Seibert, interview by author, 2018; Short, “Teenage Driver Ran Red Light”; Jennifer Comes Roy, “Loss of 12-Year-Old Zac Pains Family, Classmates,” Wichita Eagle, September 21, 1993.

  Zachary Seibert . . . HCA Wesley Medical Center: Seibert, interview by author, 2018; Short, “Teenage Driver Ran Red Light”; Bill Hirschman, “Chase Koch Charged in Fatal Auto Accident,” Wichita Eagle, November 4, 1993.

  Charles Koch . . . one of the city’s economic engines: Short, “Teenage Driver Ran Red Light.”

  Charles and Liz . . . Zac’s parents in their home: Seibert, interview by author, 2018.

  Charles, Liz, and Chase Koch attended Zachary Seibert’s funeral: Seibert, interview by author, 2018; Boulton, “Koch and His Empire.”

  Nola Foulston recused herself . . . in the case: Hirschman, “Chase Koch Charged”; Hirschman, “Special Prosecutor Enters.”

  Walter Seibert said . . . justice had been served: Seibert, interview by author, 2018.

  Chase Koch would never be able to escape what he had done: Chase Koch, interview by author, 2018.

  During the second half . . . found his place on the tennis court: Chase Koch, Hawley, interviews by author, 2018.

  After Chase Koch’s senior year . . . Koch Industries’ oil refinery: O’Neill, interview by author, 2016.

  Fred Koch went to MIT: Schulman, Sons of Wichita, 50–57.

  Chase majored in marketing: Chase Koch, interview by author, 2018.

  In 2003 . . . with his family: Chase Koch, Leslie Rudd, interviews by author, 2018.

  Chase Koch began a rotation . . . Koch Industries’ modern business: Chase Koch, Hall, interviews by author, 2013–18.

  Chase’s first assignments was to Koch’s development group: Chase Koch, interview by author, 2018.

  The first principle . . . state-sanctioned theft: Murray N. Rothbard, “Toward a Strategy for Libertarian Social Change,” memo obtained by author, April 1977, 13.

  These two competing ideas: Three sources speaking on background; Alexandria Robins and Michele Surka, Picking up the Tab 2016: Small Businesses Bear the Burden for Offshore Tax Havens (Boston: MASSPIRG Education Fund, November 2016); Will Fitzgibbon and Dean Starkman, “The ‘Paradise Papers’ and the Long Twilight Struggle Against Offshore Secrecy,” International Consortium of Investigative Journalists online, last modified December 27, 2017, www.icij.org/investigations/paradise-papers; “The Panama Papers: Exposing the Rogue Offshore Finance Industry,” International Consortium of Investigative Journalists online, last modified April 3, 2016, www.icij.org/investigations/panama-papers.

  Charles Koch . . . is listed as an employee or director: Nexis database, business entities.

  Koch Industries, like many US companies: Two sources speaking on background; Grand Cayman business registries; Floyd Norris, “The Islands Treasured by Offshore Tax Avoiders,” New York Times, June 5, 2014; Laura Davison, “Corporate America Flees Zero-Tax Caribbean Havens After Crackdown,” Bloomberg News, November 15, 2018; Steve Lohr, “Where the Money Washes Up,” New York Times Magazine, March 29, 1992.

  Koch Industries had a surprisingly diverse: American Bridge report, “How the Kochs Avoid Paying Their Fair Share,” 2016.

  The ways in which Koch could employ: Alison Fitzgerald Kodjak and Marina Walker Guevara, “Latest ‘Lux Leaks’ files obtained by ICIJ disclose secret tax structures sought by ‘Big 4’ accounting giants for brand name international companies,” Center for Public Integrity, December 9, 2014; Alison Fitzgerald, Marina Walker Guevara, and Colm Keena, “Koch Industries Implicated in Luxembourg Leaks,” Irish Times, December 10, 2014.

  When Chase Koch . . . gripped a tennis racket: Chase Koch, interview by author, 2018.

  Chase got a view . . . most traders never got to see: Chase Koch, Hall, interviews by author, 2013–18.

  a job opened up in Koch Fertilizer: Chase Koch, interview by author, 2018.

  Chase grinded it out . . . in an up-close and granular way: Chase Koch, Osbourn, interviews by author, 2016–18.

  Elizabeth, followed in the footsteps of her uncle Freddie: Elizabeth Koch’s lack of participation in the business was confirmed by several current and former Koch Industries employees. It was also confirmed by what they didn’t say: during five years and dozens of interviews about different divisions of the business, no one mentioned Elizabeth’s participation in any business venture. She was brought up only in reference to the family, and one source mentioned her involvement with the family’s foundation. Also, Jennifer Maloney, “A Literary Koch Launches New Publishing House,” Wall Street Journal, September 10, 2015.

  Elizabeth’s contact with Charles Koch was both limited and strained: Elizabeth Koch, “You Don’t Say,” Guernica, February 24, 2008.

  Chase Koch got a promotion: Chase Koch, interview by author, 2018; Kathy Huting, “Taking Nitrogen Technology to the Next Level,” Farm Industry News, October 7, 2013; “Precision Agriculture,” Discovery: The Quarterly Newsletter of Koch Companies, October 2011; Gary DiGiuseppe, “Snake Oil or Silver Bullet,” Cattleman, February 1, 2013.

  Packebush . . . offered Chase the biggest break of his career: Chase Koch, interview by author, 2018; “Koch Fertilizer Announces New Holding Company and Leadership Changes,” press release, Koch Industries, December 5, 2013.

  Chase would be the public face of Koch Industries: Chase Koch, interview by author, 2018; “Koch Industries Breaks Ground on Single Largest Project in Company History,” Wichita Business Journal, October 10, 2014; “Koch’s Largest Project: Enid Expansion,” Discovery: The Quarterly Newsletter of Koch Companies, February 2015.

  It was an awful day to make a speech: Video of groundbreaking on expansion of Koch Fertilizer plant in Enid.

  Chase Koch’s confidence . . . changes in his personal life: Chase Koch, Rudd, interviews by author, 2018; “2010 Year in Review,” Discovery: The Quarterly Newsletter of Koch Companies, January 2011.

  Chase and Annie . . . their home: “Buyer of 70 Acres Is Newlywed Chase Koch,” Wichita Eagle, June 10, 2010.

  wasn’t what most people might think it would be: Chase Koch, interview by author, 2018.

  CHAPTER 23: MAKE THE IBU GREAT AGAIN

  Steve Hammond volunteered to become a union official: Hammond, interviews by author, 2013–17.

  This question was at the heart of . . . Koch Industries in 2016: Ibid.; for worker fatalities citations, please see this chapter’s endnotes p. 646–48.

  Hammond still worked . . . Longshoremen’s union hall: Hammond, Dodge, interviews by author, 2013–17; descriptions of office from notes and photos taken during reporting trips, 2014, 2017.

  In 2015 . . . biggest challenge of their new partnership: Hammond, Dodge, Smith, Franzen, McKinney, interviews by author, 2013–17.

  The discontent throughout Georgia-Pacific went beyond economic concerns: Georgia-Pacific employee speaking on background, interview by author, 2017–18.

  When Koch . . . inherited a new monitoring system at the company: Ibid.; Georgia-Pacific internal TRAX reports, 2008–18. Ten years’ worth of TRAX data, and other documents listed here, were provided to the author by a Georgia-Pacific insider in the summer
of 2017 and early 2018. When Koch Industries was given a chance to respond to this material in early 2019, the company provided its own set of TRAX data which differed slightly from the data the author previously obtained. Koch explained that the deviation was due to updates made to the data over time as new cases were added or old ones eliminated. This explanation seemed reasonable. The data showed the same patterns over time, although Koch’s new data showed the problem was worse than indicated earlier—accident rates had increased more steeply and reached a higher level than was evident in 2017 or 2018. The author chose to use Koch’s newly provided data for this book because it was more recent and because the deviations were small.

  Between 2005 and roughly 2009, the TRAX data set was spotty: Georgia-Pacific employee speaking on background, 2017–18; Georgia-Pacific TRAX report, 2010.

  Georgia-Pacific was reporting six worker deaths a year across the country: Internal Georgia-Pacific safety presentation, slide 4: “Hearts and Mind: Averaging 2 Fatalities a Year Since 2007.” The presentation is undated but includes data through the first quarter of 2017.

  Koch Industries was delivered something of a reprieve: Ibid.; analysis of safety procedures at Georgia-Pacific is based on tours of Georgia-Pacific plants in Savannah and Brunswick, Georgia, and interviews with current and former Georgia-Pacific managers and employees named in this chapter.

  During the lull . . . injuries declined: Georgia-Pacific TRAX reports, 2007–11.

  In 2011, the housing market . . . began to recover: Housing-starts data taken from historic database of US Census Bureau, Department of Commerce, “New Residential Construction,” 2005–17.

  Koch’s newly renovated operations . . . were put to the test: Notes and interviews at Georgia-Pacific facilities, 2016; debt ratings from Thomas J. Nadramia and Maurice Austin, “Summary: Georgia-Pacific LLC, Standard & Poor’s Rating Services, Corporate Credit Rating: A+/Stable/A-1+”; earnings from Georgia-Pacific 10-Filing, 2005; Hannan, interview by author, 2016.

  Jim Hannan, a rising star within the company: Hannan, interview by author, 2016.

  But one stubborn problem emerged in the shadow of the rising profits: Georgia-Pacific TRAX reports, 2011–14.

  Injuries jumped sharply between 2013 and 2014: Ibid., 2013–14.

  Most alarmingly . . . rate of injuries also increased: Georgia-Pacific TRAX reports, 2013–17.

  Hannan joined a group of senior executives: Notes from “Health and Safety Conference,” March 17–March 19, 2014.

  Koch Industries changed the way people worked: Dana Blocker, Mark Caldwell, interviews by author, 2016.

  Koch Industries tried to mitigate these safety risks: Georgia-Pacific employee speaking on background, interview by author, 2017–18.

  a forty-one-year-old man named Robert Wesson: Occupational Safety and Health Administration inspection report and accident summary, August 12, 2014; Georgia-Pacific employee speaking on background, interview by author, 2017–18; “Hamburg Man Killed in Plant Accident,” KTVE online, last modified August 13, 2014; Patty Wooten, “Hamburg Man Killed in Accident at Georgia Pacific,” Seark Today (AK), last modified August 13, 2014; internal Georgia-Pacific safety presentation, slide 7, “The Heart,” list of Georgia-Pacific fatalities.

  Wesson’s death was the fifth . . . in 2014: Safety presentation, slide 7, “The Heart.”

  Sam Southerland was working . . . in Pennington: OSHA inspection report and accident summary, April 16, 2014; obituary of Samuel Eugene “Sambo” Southerland Jr., April 2014.

  at Georgia-Pacific’s plant in Corrigan, Texas: OSHA violation detail and accident summary, September 23, 2014; OSHA inspection detail, April 27, 2014; Jessica Cooley, “2nd Plant Explosion Victim Passes Away,” Lufkin Daily News (TX), June 6, 2014; “7 Injured in Texas Plant Explosion,” Associated Press, April 27, 2014; Bailey Woolum, “Nine Injured in Paper Plant Explosion,” KFOR online, last modified April 27, 2014; Gary Bass, “Lawsuit Filed to Determine Cause of Georgia-Pacific Plant Explosion,” KTRE online, last modified August 5, 2014; obituary of Kenneth W. “Kenny” Morris, June 2014; obituary of Charles Wayne Kovar, May 2014.

  Georgia-Pacific employee named Lydia Faircloth: OSHA inspection report and accident summary, July 25, 2014; internal Georgia-Pacific safety memo, “Safety Awareness for Everyone,” April 20, 2012; Susan Vernon-Devlin, “Colquitt Woman Killed in Tragic Accident at Georgia-Pacific,” Miller County Liberal (Colquitt, GA), July 30, 2014; Lance Griffin, “OSHA Investigating Georgia Pacific Workplace Fatality,” Dothan Eagle (AL), July 28, 2014.

  Wesson was killed at the mill in Crossett: Georgia-Pacific employee speaking on background, interview by author, 2017–18; safety presentation, slide 7, “The Heart.”

  six workers had been killed in Georgia-Pacific: Safety presentation, slide 4, “Hearts and Mind: Averaging 2 Fatalities a Year.”

  accidents and injuries continued to climb each year: Georgia-Pacific TRAX reports, 2010–17.

  Koch Industries needed to change . . . how it would do so: Notes from “Health and Safety Conference,” March 17–March 19, 2014.

  Georgia-Pacific was fined $5,000: OSHA violation detail, January 20, 2015; OSHA volation detail and accident summary, September 23, 2014.

  Koch Industries responded . . . by reemphasizing the need of employees to follow the guidelines: Georgie-Pacific internal safety presentation, slides 1, 2, and 3. The presentation is undated but includes data through the first quarter of 2017.

  Georgia-Pacific was more unsafe than Koch’s competitors: Safety presentation, slides 5 and 6, “2016 AF&PA Member Company TCIR Quartiles” and “2016 AF&PA Member Company DART Quartiles.”

  Koch’s response . . . reduce risk: Safety presentation, slides 1, 9, 10, 11.

  Another chart, entitled “Georgia-Pacific 20-Year Bet”: Safety presentation, slide 9.

  This was the reality faced by the Dodger and the Hammer: Hammond, Dodge, Smith, Franzen, McKinney, interviews by author, 2013–14.

  Once again, the Dodger and the Hammer . . . Koch’s team: Hammond, Dodge, interviews by author, 2013–14; descriptions of Red Lion hotel taken from notes and photos during reporting trip in 2017.

  Bonuses were anathema to workers . . . the same way that a wage hike did: Patricia Cohen, “Where Did Your Pay Raise Go? It May Have Become a Bonus,” New York Times, February 10, 2018; US Salary Increase Survey 2017/2018 (London: Aon Hewitt, 2017).

  The Dodger said he wasn’t having it: Hammond, Dodge, interviews by author, 2013–17.

  IBU members filed . . . Hammond and Dodge’s office: Hammond, Dodge, Smith, Franzen, McKinney, interviews by author, 2013–14; descriptions of union hall meeting room from notes and photos taken inside the meeting room during a reporting trip, 2017.

  Hammond sobered up after he retired: Hammond, interviews by author, 2013–17.

  During the final months . . . another election: Hammond, Dodge, Smith, Franzen, interviews by author, 2013–17.

  Trump’s candidacy . . . disrupting Charles Koch’s plans: Fredreka Schouten, “Charles Koch: We Like 5 GOP Candidates in Primaries,” USA Today, April 21, 2015; Fredreka Schouten, “Charles Koch: We’re Not in Politics to Boost Our Bottom Line,” USA Today, April 24, 2015.

  Koch had carefully set up . . . flipped it over: Matt Flegenheimer and Michael Barbaro, “Donald Trump Is Elected President in Stunning Repudiation of the Establishment,” New York Times, November 9, 2016.

  Shortly after . . . Republicans scurried to reorient themselves around Trumpism: Former senior US Senate staffer speaking on background, interview by author, 2017.

  CHAPTER 24: BURNING

  Springtime came early . . . in 2017: Notes reporting in Washington, DC, 2017; Jeremy White and Henry Fountain, “Spring Came Early: Scientists Say Climate Change Is the Culprit,” New York Times, March 8, 2017; “NASA, NOAA Data Show 2016 Warmest Year on Record Globally,” press releasee, NASA, January 18, 2017; carbon, parts per million in atmosphere, taken from National Oceanic and Atmospheric Administration database.


  political seasons . . . were being disrupted: Descriptions of Trump’s inauguration taken from C-Span archive.

  The Trump administration saw itself as a revolutionary force: Trump political operative speaking on background, interview by author, 2017.

  Koch responded . . . with a strategy that bore his hallmarks: This analysis is based on interviews with political operatives in both the Koch and Trump spheres and observations of Koch’s political actions during 2017 and 2018. “Block-and-tackle” is my own phrase that I believe captures the Koch strategy.

  The first fight was to repeal Obamacare: Jeff Stein, “Obamacare Jacked Up Taxes on the 1 Percent, Gave $16 Billion Annually to Poor,” Washington Post, March 28, 2018; Veronica Stracqualursi, “How the GOP Health Care Bill Failed Without a Vote,” ABC News online, last modified March 24, 2017.

  Trump promised to both repeal . . . and replace: Robert Costa and Amy Goldstein, “Trump Vows ‘Insurance for Everybody’ in Obamacare Replacement Plan,” Washington Post, January 15, 2017; Stracqualursi, “How the GOP Health Care Bill Failed.”

  another reason for Trump to compromise: Transcript of “Trump’s Takeover,” Frontline, April 10, 2018.

  On March 6 . . . plan to repeal and replace Obamacare: Description of Americans for Prosperity event taken from reporting notes, 2017; Robert Pear and Thomas Kaplan, “House Republicans Unveil Plan to Replace Health Law,” New York Times, March 6, 2017; Haeyoun Park and Margot Sanger-Katz, “The Parts of Obamacare Republicans Will Keep, Change or Discard,” New York Times, March 6, 2017.

  Inside the US House of Representatives . . . Freedom Caucus: Rand Paul and Mark Meadows, “Senator Paul, Rep. Meadows: Let’s Fully Repeal ObamaCare, Then Have an Open Debate on How to Replace It,” FoxNews.com, last modified March 6, 2017; Bob Bryan, “Conservatives Just Dealt ‘Trumpcare’ a Significant Blow,” Business Insider, March 15, 2017; Isaac Arnsdorf, “Club for Growth and Koch Nurtured Freedom Caucus,” Politico online, last modified October 22, 2015.