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Oil billionaires Charles and David Koch
Oil billionaires and scofflaws Charles and David Koch
A blockbuster report from Bloomberg News details how Koch Industries and its founders, tea party financiers David and Charles Koch, apply their anti-government, anti-regulation political beliefs to business. They just ignore government regulation.

Bloomberg details activities from bribing officials in Africa, India and the Middle East to win contracts to rigging prices with competitors to the most damning action: using foreign subsidiaries to sell equipment to Iran.

A Bloomberg Markets investigation has found that Koch Industries—in addition to being involved in improper payments to win business in Africa, India and the Middle East—has sold millions of dollars of petrochemical equipment to Iran, a country the U.S. identifies as a sponsor of global terrorism.

Internal company documents show that the company made those sales through foreign subsidiaries, thwarting a U.S. trade ban. Koch Industries units have also rigged prices with competitors, lied to regulators and repeatedly run afoul of environmental regulations, resulting in five criminal convictions since 1999 in the U.S. and Canada.

From 1999 through 2003, Koch Industries was assessed more than $400 million in fines, penalties and judgments. In December 1999, a civil jury found that Koch Industries had taken oil it didn't pay for from federal land by mismeasuring the amount of crude it was extracting. Koch paid a $25 million settlement to the U.S.

This, according to a Koch whistleblower testifying in one of those cases, was the "Koch Method": stealing and cheating.

Sally Barnes-Soliz, who's now an investigator for the State Department of Labor and Industries in Washington, says that when she worked for Koch, her bosses and a company lawyer at the Koch refinery in Corpus Christi, Texas, asked her to falsify data for a report to the state on uncontrolled emissions of benzene, a known cause of cancer. Barnes-Soliz, who testified to a federal grand jury, says she refused to alter the numbers.

"They didn't know what to do with me," she says. "They were really kind of baffled that I had ethics."

The article describes a corporate culture of "lawless behavior," the kind of environment in which ethics managers are fired when they reveal violations of the law. The article also points out that "Koch Industries has spent more than $50 million to lobby in Washington since 2006," and are major benefactors of the tea party.

The bribery accounts, documented in court materials related to the firing of the compliance officer who uncovered them, could be sufficient for a Justice probe under the Foreign Corrupt Practices Act. Investigators from the U.S. Department of Homeland Security have met with a former Koch employee to learn more about the subsidiary sales to Iran, but DHS would not comment on this story or reveal whether there is an investigation in place. Koch may not have violated the ban on sales to Iran "if no U.S. people or company divisions facilitated trades with Iran," which is impossible to determine without a thorough investigation.

Hopefully those investigations—into violations of the Foreign Corrupt Practices Act and Iran activities—are happening. But Bloomberg has done a tremendous service in revealing just how anti-American these tea party "patriots" are. The entire report is well worth the read.

Originally posted to Joan McCarter on Mon Oct 03, 2011 at 07:56 AM PDT.

Also republished by Daily Kos.

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