In the ever-growing list of companies leaving Russia, there are a couple of glaring omissions: pharmaceutical companies and the various offshoots of Koch Industries. That’s Koch, as in the conglomerate owned and operated by Charles Koch, who with his deceased brother David Koch essentially bought the current-day Republican Party.
The pharmaceutical industry has a humanitarian argument, and in fact the health care industry—drug makers, medical device manufacturers, and health care companies—are exempted from the sanctions levied by the U.S. and European countries. One industry spokesperson summed it up: “As a health care company, we have an important purpose, which is why at this time we continue to serve people in all countries in which we operate who depend on us for essential products, some life-sustaining.” That’s Scott Stoffel, divisional vice president for Abbott Laboratories, which manufactures and sells life-saving medicines in Russia. Most of these companies are pledging to donate essential medicines, equipment, and vaccines to Ukraine and to countries accepting Ukrainian refugees.
Koch Industries, however, has no such argument for staying in Russia, and in fact isn’t even bothering to comment on it. Judd Legum at Popular Information details the extent of the Koch investment in Russia, none of which is related to saving lives. There’s Guardian Industries, a Koch subsidiary that has two glass production plants in Russia, where it produces “high-performance, energy-efficient ClimaGuard(R) (residential) and SunGuard(R) (commercial) glass products for construction of homes, offices, retail, health-care and other facilities,” according to company hype.
The only statement from Guardian on the Russian war against Ukraine thus far is this, to the trade outlet USGlass Magazine, on March 4: “Guardian Industries continues to closely monitor the tumultuous events in Eastern Europe, supporting our employees who are affected. The health and safety of our employees and all personnel working at our facilities is our first priority.” Guardian didn’t reply to Popular Information’s request for comment.
A second Koch subsidiary is Molex, and electronic components manufacturer. Company reps are not responding to requests for comments, either. On Feb. 25, it posted a letter to customers saying that the company is “monitoring the ongoing developments between Russia and Ukraine,” and “actively monitoring our existing land, sea and air carriers with routes traversing Ukraine and Russia.” It added, “route adjustments have been initiated to mitigate product disruptions between Molex and our customers.” It rereleased that letter on its website on March 1, swapping out references to “Russia and Ukraine” to read “Eastern Europe.”
The third Koch-branded company staying in Russia is Koch Engineered Solutions, which “provides industrial products for the ‘chemical, petrochemical, refining, gas processing, pharmaceutical and specialty chemical industries.’” Legum details the company’s “history of using creative practices to evade sanctions,” including previous sanctions against Iran. The company used German and Italian subsidiaries to sell its products in Iran. The company did not respond to Popular Information’s request for comment.
Sure, you could say that these Koch subsidiaries are keeping innocent Russians employed and are thus doing a good thing. You could also say these Koch subsidiaries could have been based in the U.S., creating jobs here. But the likelier explanation for Koch Industries’ disregard for the humanitarian crisis Putin has created in Ukraine is that no one in their realm gives a damn. Witness the kerfuffle Legum writes about when two Koch-embedded staffers at the Atlantic Council wrote an article arguing that “the U.S. should not focus on human rights in its dealings with Russia,” because “democratization in Russia would not necessarily be good for US foreign policy interests.”
Or good for the Koch bottom line, more likely. The article was in response to sanctions imposed on Russia following the poisoning of opposition figure Alexei Navalny. The article was written by Emma Ashford and Mathew Burrows, two of the Council’s experts who also happened to be hired by the think tank immediately after “a $4.5 million donation over five years to the Atlantic Council from Charles Koch.”
The pharmaceutical industry is likewise in it for the profits, but there is a reason for the exemption for the industry from sanctions. Russia has not had a large domestic manufacturing sector, and has been a net importer of prescription drugs, importing $8.9 billion while exporting $635 million of medicines in 2017.
Sales of drugs to Russia is one thing. However, none of the big industry players has announced they would shutter manufacturing in the country. Hundreds of leaders of smaller bio-tech companies wrote an open letter to industry members urging that they stop doing business in Russia, including “investment in Russian companies and new investment within the borders of Russia.”
Jeffrey Sonnenfeld, the Yale School of Management professor who has been tracking which companies have stopped or suspended business in Russia, cautions giving the health industry a pass on continuing to manufacture drugs there. He says the argument that they must keep production in Russia for humanitarian reasons is “misguided at best, cynical in the medium case, and outright deplorably misleading and deceptive.”
“Russians are put in a tragic position of unearned suffering. If we continue to make life palatable for them, then we are continuing to support the regime,” Sonnenfeld told Kaiser Health News. “These drug companies will be seen as complicit with the most vicious operation on the planet. Instead of protecting life, they are going to be seen as destroying life. The goal here is to show that Putin is not in control of all sectors of the economy.”
It’s a nuanced debate that deserves consideration—what’s essential for humanitarian needs, and whether the population of an aggressor state has equal footing with the population of the victim state. There’s the realpolitik question of whether the suffering of the Russian people would help drive an ouster of Vladimir Putin, seemingly the only off-ramp that exists for Russia right now. In the case of the health care industry, it’s at least a debate. When it comes to the Koch conglomerate, no such ethical questions remain.