David and Charles Koch, the billionaire brothers who support the tea party movement, climate change skeptics and other conservative causes and who control Koch Industries, the second largest privately-owned company in the U.S., are facing accusations that they sold petrochemical equipment to Iran in violation of U.S. sanctions.
A new investigation by Bloomberg Markets Magazine alleges the brothers have encouraged a culture of secrecy and dodged a number of government regulations and laws. The report says that Koch violated U.S. sanctions to sell millions of dollars of petrochemical equipment to Iran, which Bloomberg Markets Magazine notes is “a country the U.S. identifies as a sponsor of global terrorism.”
Koch Industries general counsel Mark Holden has responded to the allegations in an exclusive interview with the Post’s Jennifer Rubin, saying the the story is rife with errors and brings up old matters that have since been resolved. Holden says no laws were broken in trades with Iran and that the sales were stopped voluntarily. Read the full statement here.
The Koch brothers have always been known to be extremely private, with Charles once saying that the company will publicly offer shares “literally over my dead body.”
They have also faced a number of controversies over the years:
1. Pipeline accidents.
In 1996, a Koch butane pipeline leak in Texas led to an explosion that killed two teenagers. While Koch had distributed pamphlets about safety around the pipelines, many residents in the area had not received them, including the familes of the two teenagers.
2 . Pollution
From 1990-1997, Koch Industries was fined $35 million for 300 alleged pipeline spills across six states — some 3 million gallons of oil.
In 1991, a Koch Industries subsidiary, Koch Petroleum Group, pled guilty to charges that it had been negligent in dumping hundreds of thousands of gallons of aviation fuel into wetlands near the Mississippi River from a refinery in Minnesota, as well as illegally dumping a million gallons of high-ammonia wastewater into the Mississippi River.
And in 2006, Koch Industries’ subsidiary Flint Hill Resources was fined nearly $16,000 for 10 separate violations of the Clean Air Act at its Alaska oil refinery facilities.
3. Alleged theft of oil
A federal jury fined Koch Industries $553,504 in 1999 for allegedly stealing oil from government and American Indian lands and having lied about its purchases more than 24,000 times.
4. Working without government authorization.
In June 2003, Koch subsidiary Flint Hill Resources was charged with exporting crude petroleum from the U.S. to Canada without proper U.S. government authorization. The U.S. Commerce Department fined Koch $200,000, saying Flint Hill had committed 40 violations of Export Administration Regulations.
5. Bribery allegations against an affiliate
In 2008, Koch discovered that a French affiliate had allegedly violated bribery laws. The specifics of the payments can be found in two French labor court cases, and are also outlined in the Bloomberg Markets Magazine article.
Many of the other incidents were profiled in a New Yorker piece entitled “Covert Operations: The Billionaire Brothers Who are Waging a War Against Obama.”
The Bloomberg investigation alleges that the company skirted U.S. sanctions while lobbying for less government intervention.
The report quotes former employee Sally Barnes-Soliz, who now works as an investigator for the State Department of Labor and Industries. According to Bloomberg, Barnes-Soliz testified to a federal grand jury that when her bosses at Koch and a company lawyer asked her to falsify data for a report, and she refused:
They didn’t know what to do with me....They were really kind of baffled that I had ethics.