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Person

Charles Koch

Nationality:

American
Occupation:

Chairman & CEO, Koch Industries
Residence:

Wichita, Kansas

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Charles G. Koch is an American businessman, political and charitable donor, and the current chairman and CEO of Koch Industries, the second largest privately held company in the United States. Koch, along with his late brother David, is a prolific donor to and founder of many right- and libertarian-leaning nonprofit advocacy organizations and think tanks. Both Koch Industries and nonprofits primarily funded by Charles Koch operate according to Koch’s “Market-Based Management” philosophy, which he chronicles in books he wrote titled Good Profit and The Science of Success. Koch has led Koch Industries since 1967, during which time the company grew from being worth $21 million to having revenues estimated at over $100 billion and over 100,000 employees, making it currently the second largest privately held company in the United States.

The primary vehicle for Koch’s charitable giving is the network of organizations under the umbrella organization Stand Together, which include the Charles Koch Institute, Charles Koch Foundation, Stand Together Foundation, and Americans for Prosperity. In addition to groups directly affiliated with Stand Together, Charles Koch is known, along with his late brother David, for founding and providing funding for dozens of right-leaning and libertarian-leaning organizations including Institute for Humane Studies, the Cato Institute, the Mercatus Center at George Mason University, and the Bill of Rights Institute,1 all of which are organizations that continue to regularly receive grants from the Charles Koch Foundation and Stand Together. 2

Forbes lists Koch as the 18th richest person in the world with an estimated net worth of $46 billion as of late March 2021. Koch resides in Wichita, Kansas, where Koch Industries is headquartered. 3

Background

Charles Koch was born November 1, 1935, in Wichita, Kansas and was one of four sons of Fred Koch, a Texas oilman who founded Rock Island Oil and Refining in the 1940s and built it into a regionally successful oil business. Fred Koch saw some early busines success setting up fifteen oil refineries in the Soviet Union in the late 1940s which eventually led to Stalin’s regime purging Koch employees from the operations of the refineries, further deepening Fred Koch’s staunch opposition to centralized government authority and communism, later becoming an active member of the radical anti-communist John Birch Society. Charles (along with two of his brothers) attended his father Fred’s alma mater, the Massachusetts Institute of Technology, earning a degree in engineering. 4

Upon Fred’s death in 1967, Charles was named as the successor to lead the company, which he renamed Koch Industries in honor of his father and has served as president and CEO of the company since. His brother, David Koch, worked as executive vice president of the company until his retirement and death in 2019. The brothers ran the company together and bought out their other two siblings, Bill and Frederick, in the 1980s. Charles and David were said to have inherited their libertarian politics from their father, who was staunchly opposed to government intervention in private businesses. 5

Since taking over Koch Industries in 1967, Charles Koch transformed the company from a business worth a little over $20 million to a multinational conglomerate that as estimated annual revenues over $100 billion dollars and 100,000 employees. The scope of the company has grown from oil refining to encompass a wide variety of consumer goods. The company has been continually headquartered in Wichita, where Charles has continued to live with his wife and children since he took over Koch Industries. 4

Political Activity

Throughout most of his life Charles has been closely associated with his late brother David, with whom he ran Koch Industries, as donors to a variety of center-right and libertarian causes. The brothers’ first foray into politics was in 1979 when they were ardent supporters of the Libertarian Party and supported Libertarian Ed Clark for President in 1980 against Ronald Reagan and Jimmy Carter. Charles noticed that they were unable to give much money to Clark’s campaign due to campaign finance laws, but that a candidate could give his campaign unlimited sums of money. Given this, Charles convinced David to join the Libertarian ticket as its vice-presidential candidate, giving the ticket the ability to self-fund. 4

Following the Libertarian ticket garnering only one percent of the vote in 1980, Charles and David Koch stopped engaging in electoral politics for over two decades, mostly focusing on providing funds for libertarian-leaning think tanks and nonprofits. In 1977, Charles and David provided funds to start the Cato Institute, a libertarian think tank that now has over 100 employees. In 1984, they provided funding to start Citizens for a Sound Economy, a grassroots advocacy organization that in 2004, split to become FreedomWorks and Americans for Prosperity. 4

Charles and David Koch reentered the political arena in full soon after Barack Obama was elected President in 2008. Americans for Prosperity gained a large following of conservative activists and helped catalyze the formation of the Tea Party movement. The Koch-affiliated network of organizations began to spend tens of millions and eventually hundreds of millions of dollars per election cycle beginning with the 2010 cycle supporting almost exclusively Republican candidates. 6

Following the 2020 election, Koch went on record saying he regretted his previous almost exclusive support of Republican candidates and was quoted as saying “boy, did we screw up!”7 about the previous partisanship of his political activity. 7

Since the 2019 reorganization of Stand Together, Koch has repeatedly stressed a need for bipartisanship and highlighted the work of his network with left-leaning organizations on criminal justice and poverty-related issues. 8

Koch Industries

Koch Industries, which has been operated by Charles Koch since 1967, has grown to become a large conglomerate consisting of oil and gas production and refining as well as manufacturing of many household consumer products. 9 Brands owned by the company include Georgia-Pacific, Angelsoft, Brawny, Dixie, Stainmaster carpets, and Flint Hill Resources. 10

Market-Based Management

Within Koch Industries and nonprofits funded by Charles Koch, Koch is well known for stressing the implementation of “Market-Based Management” 11 (MBM), a management philosophy that was coined by Charles Koch and has been adopted as a management structure within Koch Industries and other Koch-affiliated non-profits. MBM teachings center on the philosophy of running organizations and businesses according to free-market principles. 11

Market-Based Management is a registered trademark of Koch Industries and is touted by the Charles Koch Institute as being Charles Koch’s philosophy behind his years leading Koch Industries, in which he grew the company into an international corporation with over 100,000 employees. The management philosophy encourages employers to apply libertarian values such as free speech and property rights to workplace settings. The philosophy has principles such as integrity, compliance, transformation and “principled entrepreneurship,”12 another registered trademark of Koch Industries. 12

Stand Together Network

The organizations most closely tied to Charles Koch and Koch Industries are part of Stand Together, an umbrella organization for the Koch network that acts as the core of the political network funded by Charles Koch. The organization was previously called the Seminar Network and is a successor organization to the now-defunct Freedom Partners Chamber of Commerce. 13 The organization is funded by Charles Koch as well as a collection of hundreds of right-leaning donors who attend a private fundraising retreat for the organization annually and give the organization at least $100,000 per year. 14

Groups under the Stand Together umbrella include Americans for Prosperity (AFP), and the AFP Foundation, the Charles Koch Institute (CKI), the Charles Koch Foundation (CKF), and the Stand Together Foundation. Of these, Charles Koch is the chairman of the board of directors of Stand Together, the Charles Koch Institute, and the Charles Koch Foundation. 15 Koch’s children Chase and Elizabeth Koch also serve on the board of the Charles Koch Foundation and Charles Koch Institute. 16

The Charles Koch Foundation (CKF) annually gives well over $100 million, with a focus on grants for right-leaning and free market-oriented programs at colleges and universities, while also contributing to right-leaning advocacy organizations and think tanks such as the Cato Institute, the Reason Foundation, and the American Enterprise Institute. 16

The Charles Koch Institute (CKI) was founded in 2011 and primarily provides educational programs and policy research to support the work of the right-leaning think tanks and policy organizations within the Koch network. Programs operated by the institute include the Koch Associate Program and the Koch Internship Program, which provide internships and full-time mid- to entry-level job placements for students and young professionals to work at a right-leaning organization that receives funding from Koch-affiliated groups. 17

Americans for Prosperity (AFP) and its affiliated Americans for Prosperity Foundation act as the political center of the Stand Together network. AFP has state-level chapters in at least 35 states and mobilizes a grassroots network of millions of activists to engage state and federal lawmakers about right-leaning and libertarian positions championed by the network. AFP first came to prominence in opposing major policies of the Obama Administration and currently advocates for a host of right-leaning issues as well as occasionally partnering with left-leaning groups on issues such as criminal justice and poverty. 18

The Stand Together Foundation was founded as Stand Together three years prior to the entire Koch network rebranding as Stand Together and focuses on funding charitable projects in minority communities while promoting free-market ideas. 8

Stand Together also acts as the mouthpiece for the entire Koch network and distributes letters, videos and comments directly from Charles Koch and Stand Together president and CEO, Brian Hooks. The organization’s website hosts a frequently asked questions page where Koch and Hooks appear on video to answer questions about the network such as why the organization was created and what the purpose of its mission. The organization also regularly publishes letters to the public and members of the network that outline the current focus of the network of organizations. A letter from Koch and Hooks warned of the influence of both socialism and nationalism in the United States and stressed the need for the organization and its affiliates to find issues that provide common ground across ideologies and demographics. 19

Criticism

Decades of funding right- and libertarian-leaning political campaigns and public policy organizations has caused Charles Koch and his late brother David to receive criticism from the left. Koch-funded nonprofits and Koch industries have been routinely made the target of several left-leaning boycotts and pressure campaigns. 4

Charles Koch’s long history of academic grantmaking to colleges and universities led the Charles Koch Foundation to draw criticism from left-leaning activist groups given the right-leaning and free-market policies supported by the Charles Koch Foundation. This opposition led to the formation of UnKoch My Campus, a left-wing activist organization that organizes protests and public pressure campaigns against colleges and universities that accept grants from the Charles Koch Foundation. UnKoch My Campus is also affiliated with Koch Docs, a left-wing activist project that seeks to publicize leaked information from Koch Industries and related nonprofits. 20 UnKoch My Campus is a project of Essential Information, a left-leaning activist group that was founded in 1982 by Ralph Nader and operates several projects centered on opposition to businesses and corporate giving. 21

References

  1. “Charles G. Koch.” Charles Koch Institute. Accessed March 11, 2021. https://www.charleskochinstitute.org/about-us/charles-g-koch/
  2. “IRS Form 990”. Charles Koch Foundation. 2018. Accessed March 11, 2021. https://projects.propublica.org/nonprofits/display_990/480918408/01_2020_prefixes_47-51%2F480918408_201812_990PF_2020012117047703
  3. “#15 Charles Koch.” Forbes. Accessed March 26, 2021. https://www.forbes.com/profile/charles-koch/?sh=4a06c95d57d7
  4. Mayer, Jane. “Covert Operations: The billionaire brothers who are waging a war against Obama.” New Yorker. August 30, 2021. Accessed March 26, 2021. https://www.newyorker.com/magazine/2010/08/30/covert-operations
  5. “Charles Koch 1935-.“ Reference for Business. Accessed March 26, 2021. https://www.referenceforbusiness.com/biography/F-L/Koch-Charles-1935.html
  6. Zeballos-Roig, Joseph. “How the Koch brothers used their massive fortune to power a conservative crusade that reshaped American politics.” Business Insider. November 13, 2020. Accessed March 26, 2021. https://www.businessinsider.com/koch-brothers-fortune-power-conservative-crusade-american-politics-2019-8#the-koch-brothers-were-credited-with-financially-aiding-the-rise-of-the-tea-party-movement-which-wrested-control-of-the-house-for-republicans-in-the-2010-midterms-at-the-tail-end-of-president-barack-obamas-first-term-3
  7. Deese, Kaelan. “Charles Koch regrets his partisanship: ‘Boy, did we screw up!’.” The Hill. November 13, 2020. Accessed March 26, 2021. https://thehill.com/homenews/news/525878-charles-koch-regrets-his-partisanship-boy-did-we-screw-up
  8. Ho, Sally. “Koch network touts latest charity work, downplays politics.” Associated Press. June 5, 2019. Accessed March 26, 2021.  https://apnews.com/article/7f74edf0b54f4b41b256d2d24a659ca3
  9. “Koch Industries.” Forbes. Accessed March 26, 2021.  https://www.forbes.com/companies/koch-industries/?sh=6f02801574ce
  10. “Koch Brothers’ Products.” Insteading. October 8, 2020. Accessed March 26, 2021. https://insteading.com/blog/koch-brothers-products/
  11. “Educational Programs.” Charles Koch Institute. Accessed March 11, 2021. https://www.charleskochinstitute.org/educational-programs/
  12. “Market Based Management.” Charles Koch Institute. Accessed March 11, 2021.  https://www.charleskochinstitute.org/about-us/market-based-management/
  13. Goode, Darren and Vogel, Kenneth. “Kochs launch new super PAC.” Politico. June 16, 2014. Accessed March 26, 2021. https://www.politico.com/story/2014/06/2014-elections-koch-brothers-super-pac-107926
  14. Greve, Joanie and Alfaro, Mariana. “The Daily 202: The Koch network is reorganizing under a new name and with new priorities.” Washington Post. May 20, 2019.  Accessed March 26, 2021. https://www.washingtonpost.com/news/powerpost/paloma/daily-202/2019/05/20/daily-202-the-koch-network-is-reorganizing-under-a-new-name-and-with-new-priorities/5ce1a94fa7a0a435cff8c0d3/
  15. “About Us.” Stand Together. Accessed April 9, 2021. https://standtogether.org/about-us/
  16. “IRS Form 990.” Charles Koch Foundation. 2019. Accessed March 26, 2021. https://mk0bahufale3skgkthdo.kinstacdn.com/wp-content/uploads/2021/01/CKF_2019_990.pdf
  17. “About Us.” Charles Koch institute. Accessed March 26, 2021. https://www.charleskochinstitute.org/about-us/
  18. “About.” Americans for Prosperity. Accessed March 26, 2021. https://americansforprosperity.org/about/
  19. “FAQs.” Stand Together. Accessed March 26, 2021. https://standtogether.org/faq-charles-koch-brian-hooks/
  20. “Mission.” UnKoch My Campus. Accessed April 9, 2021.  http://www.unkochmycampus.org/mission-4
  21. “Home.” Essential Information. Accessed March 26, 2021. https://www.essentialinformation.org/#
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