It now imprints upon employees the need for “10,000 percent compliance”: obeying 100 percent of the laws 100 percent of the time. The company learned that violating regulations could put a dent in its profit margins, and responded accordingly. (Charles Koch said the company “got more money than we paid for oil,” but insisted it was only because his employees had mismeasured the oil they took - which they happened to do consistently in the company’s favor.) In 1999, Koch Industries pleaded guilty to dumping contaminated wastewater near its Pine Bend refinery in Minnesota. Leonard recounts the company’s most ignominious hits, including a Senate investigation into whether it had been stealing oil from Native American tribal land. That name - Market-Based Management - didn’t sound all that imaginative, but then neither did the theory itself, which boiled down to treating employees like entrepreneurs and exposing them to market discipline.įor a while, this entrepreneurial risk-taking resulted in a slew of criminal charges and complaints. He settled on a name for his vision, a set of rules that he codified in a pamphlet for employees and later enshrined in a book. (Two brothers, Freddie and Bill, were bought out of their shares in the early ’80s David, who ran for vice president on the Libertarian Party ticket in 1980, retired from Koch Industries last year.)Īs the company grew, Charles Koch developed a corporate philosophy to ensure that its various divisions could focus on their ultimate purpose: to generate profits. “Secrecy was a strategic necessity for Koch Industries,” Leonard writes.

In 1981, Wall Street bankers offered him a windfall for what was then an “obscure, midsize energy company.” He refused.

Yes, Koch Industries is one of the largest privately owned companies in the world this means it isn’t beholden to the same transparency requirements of a publicly traded company, whose shareholders expect to see the books.Ĭharles de Ganahl Koch, the chairman and chief executive, has taken care to keep it this way. Telling this story as well as “Kochland” does is harder than it looks, and not just for the obvious reasons. Leonard peers into the black box of the enormous energy conglomerate itself: “Kochland” is a corporate history, lucidly told. In “Kochland,” the business journalist Christopher Leonard adds to a growing shelf that includes Jane Mayer’s best-selling “Dark Money” and Daniel Schulman’s “Sons of Wichita.” Schulman focused on the Koch family story, while Mayer investigated the Koch-funded war chest for a conservative political agenda, including a stubborn denial of climate science. With great power comes a lot of publicity - not all of it wanted, as a new book about the secretive Koch Industries makes clear.

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