Billionaire David Koch, Who Reshaped American Politics and Paved the Way for Trump, Has Died

By malcolm.jones@thedailybeast.com (Malcolm Jones)
REUTERS
REUTERS

Say what you will about David Koch, he could be disarmingly self-aware.

In 2003, he addressed the alumni at Deerfield Academy, where he had attended prep school and to which he had just donated $25 million.

“You might ask: How does David Koch happen to have the wealth to be so generous?” he said. “Well, let me tell you a story. It all started when I was a little boy. One day, my father gave me an apple. I soon sold it for five dollars and bought two apples and sold them for ten. Then I bought four apples and sold them for twenty. Well, this went on day after day, week after week, month after month, year after year, until my father died and left me three hundred million dollars!”

So whatever you say about Koch, whose death at the age of 79 was announced Friday, you can’t accuse him of claiming to be a self-made man.

As far as his critics were concerned, that still left lots of room to bitch. Koch (pronounced like the soft drink), who with his brother Charles parlayed the modest energy company inherited from their father into the second-largest privately held company in the U.S., was one of the most polarizing—OK, let’s just say it: hated—figures in American life.

Nobody hated the Koch brothers because they got rich, although they did get very, very rich. At the time of his death, David was worth $43.7 billion, according to Forbes, making him one of the world’s wealthiest people and the second richest person in New York City, after Michael Bloomberg.

No, what galled people about the Kochs was how they made their money and what they did with it.

Koch Industries began as an oil company, and while the brothers expanded their portfolio to include everything from Georgia-Pacific to Dixie cups to Stainmaster carpets to Lycra, they stuck pretty closely to their father’s vision. Indeed, for people in the energy business, they seemed remarkably uninterested in renewables, sticking with oil and coal mining long after oil and coal mining ceased to be cool.

In that respect, they were merely off-the-rack villains in the minds of their environmentalist critics, not much different from any other big energy company.

What put the Kochs in a class by themselves was their political spending. Starting in the ’70s, the brothers began pouring millions into conservative causes, and they did it on a scale and with zeal and acumen never seen before. Like a lot of conservative tycoons, they gave money to candidates. But they did not stop there. They also created and funded think tanks, university-sponsored policy centers, advocacy groups, and lobbying arms. And they did it all quietly, which simply added to their sinister reputation as the puppet masters of the far right.

David might disingenuously disavow any direct connection with the Tea Party (“I’ve never been to a Tea Party event. No one representing the Tea Party has ever even approached me.”), but Koch money seeded that populist revolution and helped it flourish. And while the Kochs detested Donald Trump (Charles Koch compared the choice of Trump or Hillary Clinton to a choice between cancer and a heart attack), their influence on some of the most highly placed figures in his administration was enormous. Among those who were either friends of the Kochs or who owed their political careers to Koch money were Mike Pence, Betsy DeVos, Mike Pompeo, Scott Pruitt, and particularly many of the apparatchiks who helped dismantle the environmental protections so despised by the brothers from Wichita.

But if the Kochs were quiet about their spending, they were not disinterested brokers. As David told a reporter a few years ago in another moment of self-aware candor, “If we’re going to give a lot of money, we’ll make darn sure they spend it in a way that goes along with our intent. And if they make a wrong turn and start doing things we don’t agree with, we withdraw funding.”

They not only financed a political revolution. They ran it as well, and they got what they paid for.

David Koch was born May 3, 1940 in Wichita, Kansas, the third of four boys (his twin brother William was born 19 minutes later). The Koch boys grew up on a big estate across the road from the Wichita Country Club in a house whose walls were lined with paintings by Renoir and Thomas Hart Benton, but their father, Fred—who was a self-made man—was determined that his sons would not grow up to be country-club bums.

“Their father was quite tight with his resources,” recalled one childhood friend. “Every family was getting a TV set that could possibly afford one, but Fred Sr. just said no.”

If the boys wanted money, they had to work for it. There were no allowances. “If we wanted to go to the movies, we’d have to go beg him for money,” David said. Before being shipped off to prep schools and military academies, David and his brothers attended public school in Wichita, where their classmates were the sons and daughters of factory workers at Cessna and Beech. According to David, “I felt very much of a pauper compared to any of them.”

Fred Koch was not an affectionate father, according to members of the extended family. As one Koch relative put it, Fred was the sort of man who hired an ex-Marine to mind his young sons and taught his children to swim by throwing them in the pool and then walking off. “This was not a lovey-dovey family,” said another relative. “This was a family where the father was consumed by his own ambitions. The mother was trapped by her generation and wealth and surrounded by alpha males. And the boys had each other, but they were so busy in pursuit of their father’s approval that they never noticed what they could do for each other.”

“Everything goes back to their childhood,” said the relative. “Everything goes back to the love they didn’t get.”

Fred did insist that his boys become well educated, and when it came to politics, he took on the job himself. “He was constantly speaking to us children about what was wrong with government,” David said. “It’s something I grew up with—a fundamental point of view that big government was bad, and imposition of government controls on our lives and economic fortunes was not good.”

In the ’20s, Fred Koch had tried to compete with the big oil companies and lost. In frustration, he went off to the Soviet Union where he built power plants for Stalin. Repulsed by Stalin’s purges, he became a lifelong anti-communist, and when he returned to the U.S. in the early ’30s, he helped found the John Birch Society, an organization that both David and Charles would later join, only to leave when they became more enamored of libertarian politics in the ’70s.

David, like Charles and William, attended MIT, where he received a BA and an MA in engineering. At 6’5”, he was also an outstanding basketball player, averaging a school-high 21 points a game and setting another school record of 41 points scored in a single game, a record that stood for almost half a century.

None of the sons was eager to return to Wichita after college, but when Fred threatened to sell the family business, Charles went home and became head of the company upon his father’s death in 1967. In 1970, David also returned, first as a technical services manager and then as founder of the firm’s New York office. In 1979, he became head of his own division, Koch Engineering, and ultimately the CEO of Koch’s Chemical Technology Group. They were not honorary titles: David held four U.S. patents.

Bill Koch, too, joined Koch Industries. Only the oldest son, Freddie, refused to have anything to do with the family business. But before long things began to unravel. By all accounts, Charles Koch has always run Koch Industries with an iron hand, and the sibling rivalry fault lines laid down in childhood erupted with a vengeance when the men became adults. In 1985, Freddie joined Bill in an attempt to wrest control of the company from Charles. They lost that fight, but lawsuits over compensation dragged on for almost two decades.

If David and Charles ever fought, they never fought in public. Partly this is because David was always willing to defer to his older brother when it came to running the family business. As one observer put it, “Charles is the company. Charles runs it.” But there’s another reason as well: Both men are very much the sons of Fred Koch, especially when it comes to ideology. Someone who knew both men well couldn’t think of a single issue on which they disagreed. Both are also committed to their father’s belief in staying off the radar as much as possible. As Fred told them, “It’s when the whale spouts that he gets harpooned.”

Neither man has much use for the press, but to the extent that Koch Industries has a public face, it belongs to David.

So, when Charles urged his younger brother to run as the vice-presidential candidate on the Libertarian ticket in 1980, he did, throwing $2 million of his own money into the campaign.

Here’s a marker of just how deeply conservative the brothers are: David Koch ran for vice president because the brothers thought Ronald Reagan was too liberal.

The Libertarian Party platform in the 1980 campaign called for the abolition of the FBI, the CIA, the Department of Energy, the Securities and Exchange Commission, Social Security, Medicare, minimum-wage laws, gun control, and personal and corporate income taxes. It favoried the legalization of prostitution, recreational drugs, and suicide.

And here’s another marker: In 1980, the party received 1 percent of the vote. America at that time still thought Libertarian ideas were on the fringe of the fringe. Even William F. Buckley called Libertarianism “anarcho-totalitarianism.”

The election experience convinced the brothers to never again run for office. Politicians, they decided, were no more than actors reading from a script written by someone else. It was then that they decided to be that someone else. Thereafter, they devoted their millions to supporting people and organizations who could change people’s minds.

The strategy has been enormously successful, if you consider that the ideas promoted by the Kochs, once considered batshit crazy even by Republicans, now dominate the party. The Kochs, for example, did not create the Tea Party, but they funded the hell out of it.

But the Kochs and the GOP have never been more than lukewarm sweethearts. The brothers have even spent money actively campaigning against GOP policies on immigration and tariffs, and David on several occasions voiced his support for gay rights, same-sex marriage, abortion rights, and stem-cell research. Both brothers supported decriminalization of drugs, a non-interventionist foreign policy, and prison reform. Complicating this picture, of course, is the fact that the Kochs have given millions to Republican candidates who are decidedly not social liberals.

Fussing over their party loyalty or lack thereof, however, is almost beside the point. With the notable exceptions above, the Koch brothers were doctrinaire conservatives who believed in crippling big government wherever possible, especially where it affected their business interests. In fact, the Kochs’ influence on conservative American politics is so deep and widespread that they are often described as more powerful and influential than the GOP itself. As Jane Mayer wrote in The New Yorker last year, “By lavishly underwriting candidates, policy organizations, and advocacy groups—often through untraceable donations—they have pulled American politics toward their own arch-conservative, pro-business, anti-tax, and anti-regulatory agenda, particularly in the environmental area.”

It is hard to parse the difference between David and Charles, but it is not impossible, particularly in one area: philanthropy. Charles is a generous man, particularly on causes and issues affecting his hometown of Wichita. David, on the other hand, was a philanthropic superman.

In 1991, David Koch survived a runway plane collision in Los Angeles in which more than 30 people died, including everyone in first class but Koch, who felt his way down the plane’s smoke-filled aisle and pried open a door to escape.

While he was recovering from injuries sustained in the crash, a routine physical exam led to the discovery of prostate cancer. Koch spent the rest of his life fighting the disease, but the plane crash and the cancer, he said, forced him to reconsider his priorities. As he told Portfolio magazine, “When you’re the only one who survived in the front of the plane and everyone else died—yeah, you think, ‘My God, the good Lord spared me for some greater purpose.’ My joke is that I’ve been busy ever since, doing all the good work I can think of, so He can have confidence in me.”

Between 1998 and 2012, Koch contributed at least $395 million to medical research causes and institutions, according to Philanthropy magazine.

“The way I look at it is, cancer research is absolutely nonpartisan.” he said. “Cancer is very democratic in the sense that it attacks people regardless of their race, their gender, their national background, or their political persuasions.”

In the last two decades, he has donated more than a billion dollars to various non-political causes, primarily in medical care and the arts, including $100 million to the New York City Ballet alone.

It is hard to muster much sympathy for a multi-billionaire, but spare a tear for David Koch, who in his last years apparently became the final victim of his own brother’s relentless desire for control. In 2018, Koch Industries announced that David Koch was retiring due to ill health. But two sources close to the family told reporter Jane Mayer that “Charles pushed David out. It was done with a wink, and a nod, and a nudge.” Another family associate confirmed this: “Charles had been pushing him out for quite some time. David kept resisting. It was bad. Charles took control.” And so ended one of the most remarkable careers in American business and American politics, not with a bang but a stab in the back.

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