Koch Brothers Flout Law With Secret Iran Sales
by Asjylyn Loder and David Evans, October 2, 2011; Bloomberg Markets Magazine
Oct. 3 (Bloomberg) -- Danny Smalley speaks with Bloomberg's David Evans about his daughter, Danielle Smalley, and the foundation which promotes pipeline safety that bears her name. In 1996 a leak in a Koch Industries Inc. butane pipeline led to an explosion that killed 17 year-old Danielle. The November issue of Bloomberg Markets magazine examines the history of some illegal and improper practices of the global empire run by the billionaire brothers Charles and David Koch. (Source: Bloomberg)
The cover of the November 2011 issue of Bloomberg Markets magazine.
David H. Koch, executive vice president at Koch Industries Inc., left, poses for a photo with Julia Koch during the opening night at the Metropolitan Opera in New York on Sept. 26, 2011. Photographer: Amanda Gordon/Bloomberg
Phil Dubose, photographed in Church Point, Louisiana, on Sept 12, 2011. Phil is a former Koch manager, says company stole oil. Photographer: Brent Humphreys/Bloomberg Markets via Bloomberg
Judge Janis Graham Jack, photographed at the federal courthouse in Corpus Christi, TX, on June 2, 2011. Photographer: David Evans
Sally Barnes-Soliz, a former Koch employee, is seen leaving federal court in Corpus Christi, Texas, on Oct. 2000. She testified that the company filed a false report in Corpus Christi. Photographer: Corpus Christi Caller-Times via Bloomberg Markets
Bill Koch at the America's Cup at San Diego Yacht Club in 1992. His young son is next to him. Photographer: Dale Frost/Port of San Diego via Bloomberg Markets
Danny Smalley, photographed at the Smalley Foundation in Texas, Sept. 15, 2011. Smalley started a foundation for his daughter Danielle after she died in an explosion at a Koch Pipeline. Photographer: Brent Humphreys/Bloomberg Markets via Bloomberg
In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova-Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. In less than a week, she discovered that the company had paid bribes to win contracts.
“I uncovered the practices within a few days,” Egorova- Farines says. “They were not hidden at all.”
She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.
By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France.
“Those activities constitute violations of criminal law,” Koch Industries wrote in a Dec. 8, 2008, letter giving details of its findings. The letter was made public in a civil court ruling in France in September 2010; the document has never before been reported by the media.
Egorova-Farines wasn’t rewarded for bringing the illicit payments to the company’s attention. Her superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent, even after Koch’s investigators substantiated her findings. She sued Koch-Glitsch in France for wrongful termination.
Obsessed with Secrecy
Koch-Glitsch is part of a global empire run by billionaire brothers Charles and David Koch, who have taken a small oil company they inherited from their father, Fred, after his death in 1967, and built it into a chemical, textile, trading and refining conglomerate spanning more than 50 countries.
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