Charles G. Koch Charitable Foundation, David H ... - DocumentCloud
Charles G. Koch Charitable Foundation, David H. Koch Charitable Foundation, Claude R. Lambe Charitable Foundation Charles G. Koch Charitable Foundation 1450 G Street, Suite 445 W ashington, DC 20005 202-393-2354 202-393-2355 Officers Richard Fink, President Elizabeth Koch, Vice President Victoria H ughes, Vice President Vonda H ollim an, Secretary/Treasurer Charles G. Koch, Director Financial Data Year 1992 1993 1994 1995
Assets ($)
Grants ($)
19,080,412
1,438,595
Claude R. Lambe Charitable Foundation 1450 G Street, Suite 445 W ashington, DC 20005 202-393-2354 202-393-2355 Officers Richard Fink, President Elizabeth Koch, Vice President Victoria H ughes, Vice President Sarah A ndrew s, Secretary Vonda H ollim an, T reasurer Charles G. Koch, Director Year 1992 1993 1994 1995
Assets ($)
Grants ($)
27,265,741
1,785,430
David H. Koch Charitable Foundation
David Koch President R uth Williams Secretary V onda H ollim an Treasurer Trustees C laude R. Lambe Charitable Foundation Charles Koch Year 1992 1993 1994 1995
Assets ($)
Grants ($)
906,799
9,256,760
Charles and David Koch comm and the largess of four family related philanthropic foundations. Each has their ow n personal foundation and have grantm aking control at another family foundation, The Fred C. and Mary R. Koch Foundation and The Claude R. Lambe Charitable Foundation, which was established in 1982 by a sympathetic friend of their father. The namesake foundations plus the Lambe foundation enable the politically active and connected brothers to funnel millions of dollars to organizations established to advance their personal causes. G roups like Capital Research Center, Competitive Enterprise Institute, The Heritage Foundation, and H udson Institute have all benefited from the W ichita based fortune of the oil industrialists. The brothers are the controlling interests in Koch Industries established by their father Fred Koch. He patented an inexpensive m ethod of oil extraction that m ade his com pany profitable and in direction com petition w ith the large oil corporations. Mr. Koch's search for new m arkets took him to the Soviet U nion in the 1950s w here he built refineries at the behest of Stalin1. However, relations quickly soured as Mr. Koch's allies became embroiled in the turm oil or post W orld W ar II Soviet politics. Many of his colleagues and friends disappeared during Stalinist purges. He left the Soviet Union at the end of the '50s in disgust em bittered tow ards the com m unist governm ent w ho earlier seized his refineries. U pon returning to the U.S., Mr. Koch helped launch the anti-com m unist John Birch Society2. Koch Industries did not endure a sm ooth transition after the death of Mr. Koch in 1967. He began groom ing his four sons early on for m anagem ent but it was Charles and David who succeeded. The other two, William and Frederick, pursued outside interests while show ing no am bition or inclination to run the company. U pon succeeding his father Charles became the chief executive officer and increased the firm's holdings and diversified its business. The financial program im plem ented by Charles enabled the company to purchase pipelines throughout the
gulf coast and invest in asphalt and amm onia production. The family ow ned corporation refuses to release financial data bu t estimates of their w ealth in 1994 place it at $23 billion up from $250 million only 25 years ago3. Another decision Charles m ade has proved to be a financial drain and a continuous headache for the company and family members. In 1983, there w as a rum or that brothers Frederick and William w ere attem pting a takeover. Charles and David pre-em pted this move at a shareholder meeting by convincing J. H ow ard M arshall, w ho became famous recently for m arring 26 year old Playboy centerfold A nna Nicole Smith at age 89, to vote against the move4. The resulting buyout of W illiam, Fred, and their allies am ounted to $1.1 billion. Fred used his share to am ass a num ber of European properties and is know n as an art philanthropist in his adopted land of Monaco. William pursued other business and personal interests including funding the first all female crew in an America's Cup race5. How ever, William claims he and his brother were shortchanged by Charles and David. In court docum ents subm itted in a suit brought against them William states the brothers conspired to hide assets in an effort to keep the buyout price low. W illiam has pursued this claim w ith nine different law suits including one brought against his m other, Mary w ho was 81 at the tim e6. William also brought suit against Koch Industries acting on behalf of the federal governm ent as a citizen w histle blower. This suit was announced after an investigation launched bv the Senate Select Committee on Indian Affairs in 1989 found the com pany w illfully stoleTnillions of dollars w orth of crude oil from wells on Native Am erican territo ryT~The~company is involved I n another still unresolved suit against th e Justice Departm ent, the EPA, and the Coast G uard for unlaw fully discharging millions of gallons of oil from over 300 oil spills since 19907. ~ These evenfs”Torced a sharp change in how the family conducted business. Previously, Charles and David rebuffed public attention and kept them selves at arm 's length from public officials. Now, the Kochs set about rehabilitating their image w ith a public relations m edia blitz and courting relationships w ith powerful office holders. The brothers poured thousands of dollars from their ow n pockets into of cam paign coffers of members of Congress. The brothers created a company sponsored political Action comm ittee. KochPac distributed over $100,000 in the last two election cycles overw helm ingly favoring Republicans. Regional m em bers of Congress like Representatives David M cIntosh R-IN, Todd Tiahrt R-KS, and Senators James Inhofe R-OK, Sam Brownback R-KS, and his predecessor Bob Dole received the lion's share of their donations. Koch Industries has donated $172,000 to the Republican N ational Committee since 1994. The Kochs also opened up a legislativejia iso n office in the capital in order to keep close contact w ith their new found friends8. ..' ............. A nother feature to help solidify their presence in W ashington required an investm ent in activists organizations that w ould work on behalf of the interests of the com pany and the brothers. Finding few in existence, the Koch brothers set about creating groups that m atched their libertarian ideology. Charles cofounded the Cato Institute in 1978 w ith Paul C rane. The organization has received over $20 million in Koch m oney since then9. The brothers provided the seed m oney to Citizens for a Sound Economy and the Institute for Justice. Other Koch projects include the
Center for the Study of M arket Processes and the Institute for H um ane Studies. These institutes are academic havens for libertarians and conservatives located at George M ason University. Over the years, Koch funds have reached the American Legislative Exchange Council, H eartland Institute, Landm ark Legal Foundation, and Political Economy Research Center10. Recently, Charles has tem pered his personal involvem ent w ith these organizations. Reports attribute this to his workaholic personality and a disillusionm ent with politics in general. He resigned from the boards of both CSE and Cato. How ever, David and Koch Industries' W ashington lobbyists have taken up the slack11. David has always been the m ost politically active m em ber of the Koch family. He ran as the Libertarian Party vice presidential candidate in 1980. He sits on the board of CSE, Cato, and The Reason Foundation. W ayne Gable a registered lobbyist for Koch Industries is a board m em ber of CSE and the Institute for Justice. Richard Fink, another lobbyist for Koch Industries was a founding m em ber of CSE and the Center for the Study of Market Process at George M ason University in 1980 and is a board m em ber of The Reason Foundation12. David and Charles have sunk most of their prestige and funds into the Cato Institute. The group adheres to a strict libertarian philosophy including leading taboo discussions on drug legalization. It lists S. Fred Singer (Science & Environm ental Policy Project), Terry A nderson (Political Economy Research Center), Thomas DiLorenzo (Capital Research Center), and Thomas Gale Moore (Hoover Institution) as board m em bers13. Tax law only allows a 501 (c)(3) organization to receive a third of its resources from a single entity. The Kochs have been careful not to violate the threshold but taken together, the Koch foundations provide a substantial am ount of Cato's budget. In 1991, the Koch foundations p rovided over $2.5 million including $1 million for building renovation costs. Koch m oney accounted for 55% of their $4.7 million in revenue that year14. Sam pling of grants from the Koch Foundations from 1990-1995 1990 O rganization Atlas Economic Research Foundation Cato Institute Center for the Study of Market Processes Citizens for a Sound Economy George Mason University Institute for Hum ane Studies Institute for Justice Pacific Research Institute Political Economy Research Center The Reason Foundation
1991
Charles K. 200,000 33,100 250,000 10,000 20,000 20,000 20,000
David K.
Claude L.
250,000 50,000 600,000 250,000 350,000
1,300,000 93,800 200,000
25,000
-
174,672
253,000
T otal 1,750,000 176,900 800,000 500,000 613,000 45,000 20,000 194,672
Organization
Charles K.
Atlas Economic Research Foundation Cato Institute
5,000
Center for the Study of M arket Processes Citizens for a Sound Economy George Mason University Institute for Hum ane Studies Institute for Justice Pacific Research Institute Political Economy Research Center The Reason Foundation
9,300
David K. 1,839,435 50,000
Claude L.
30,000 2,639,435
10,600
69,900 825,000 57,700 703,000
500,000
325,000 57,700
350,000
353,000 150,000
25,000
400,000 25,000
183,238
5,000 193,238
250,000 5,000 10,000
Total
25,000 800,000
1992 Organization Atlas Economic Research Foundation Cato Institute Center for the Study of Market Processes Citizens for a Sound Economy George M ason University Institute for H um ane Studies Institute for Justice Pacific Research Institute Political Economy Research Center The Reason Foundation
Charles K. 2,500 271,000
50,000
David K.
Claude L.
Total
25,000
27,500
352,919 50,000 1,000,000
800,000 22,000 300,000
1,423,919 72,000 1,300,000
350,000
42,660 443,074
42,660 843,074
450,000 25,000
700,000 40,000
20,000 10,000
25,000 10,000
250,000 15,000 5,000
1993 Organization Atlas Economic Research Foundation Cato Institute Center for the Study of Market Processes Citizens for a Sound Economy George M ason University Institute for H um ane Studies Institute for Justice Pacific Research Institute Political Economy Research Center The Reason Foundation
1995
Charles K.
David K.
Claude L.
2,500 271,000
50,000 15,000 5,000
400,000 250,000
900,000
750,000
300,000 429,333 536,000 100,000
350,000 250,000 50,000 138,700
Total 2,500 1,300,000 521,000 1,050,000 429,333 936,000 350,000 65,000 5,000 138,700
O rgan ization
C harles K.
Atlas Economic Research Foundation Cato Institute Center for the Study of Market Processes 475,000 Citizens for a Sound Economy 24,484 George Mason University Institute for Humane Studies Institute for Justice Pacific Research Institute 50,000 Political Economy Research Center The Reason Foundation 50,000 The Heritage Foundation The Heartland Institute 10,000 Competitive Enterprise Insitute
D a v id K.
C lau d e L.
500,000
500,000
50,000 600,000
125,000 300,000
250,000 250,000
335,500
100,000
T otal
120,000 50,000
25,000
4 Wayne, Leslie "Pulling the Wraps Off Koch Industries." New York Times 11/20/94. 2 Pary, Robert "What Wouldn't Bob Do For Koch Oil?" The Nation 8/26/96. 3 Wayne, Leslie New York Times 11/20/94. 4 ibid. 5 Moore, W. John "Wichita Pipeline." National Journal 5/16/92. 6 Wayne, Lesliee New York Times. 7 Parry, Robert The Nation. ® ibid. 9 Moore, W. John National Journal. IRS 990 Tax Forms from the Charles G. Koch Foundation, the David H. Koch Foundation, and the Claude R. Lambe Foundation. 44 Wayne, Leslie New York Times. 42 Moore, W. John National Journal. 43 Cato Institute Annual Report 1992. 44 Cato Institute 990 IRS 1992.
Assets ($)
Grants ($)
19,080,412
1,438,595
Claude R. Lambe Charitable Foundation 1450 G Street, Suite 445 W ashington, DC 20005 202-393-2354 202-393-2355 Officers Richard Fink, President Elizabeth Koch, Vice President Victoria H ughes, Vice President Sarah A ndrew s, Secretary Vonda H ollim an, T reasurer Charles G. Koch, Director Year 1992 1993 1994 1995
Assets ($)
Grants ($)
27,265,741
1,785,430
David H. Koch Charitable Foundation
David Koch President R uth Williams Secretary V onda H ollim an Treasurer Trustees C laude R. Lambe Charitable Foundation Charles Koch Year 1992 1993 1994 1995
Assets ($)
Grants ($)
906,799
9,256,760
Charles and David Koch comm and the largess of four family related philanthropic foundations. Each has their ow n personal foundation and have grantm aking control at another family foundation, The Fred C. and Mary R. Koch Foundation and The Claude R. Lambe Charitable Foundation, which was established in 1982 by a sympathetic friend of their father. The namesake foundations plus the Lambe foundation enable the politically active and connected brothers to funnel millions of dollars to organizations established to advance their personal causes. G roups like Capital Research Center, Competitive Enterprise Institute, The Heritage Foundation, and H udson Institute have all benefited from the W ichita based fortune of the oil industrialists. The brothers are the controlling interests in Koch Industries established by their father Fred Koch. He patented an inexpensive m ethod of oil extraction that m ade his com pany profitable and in direction com petition w ith the large oil corporations. Mr. Koch's search for new m arkets took him to the Soviet U nion in the 1950s w here he built refineries at the behest of Stalin1. However, relations quickly soured as Mr. Koch's allies became embroiled in the turm oil or post W orld W ar II Soviet politics. Many of his colleagues and friends disappeared during Stalinist purges. He left the Soviet Union at the end of the '50s in disgust em bittered tow ards the com m unist governm ent w ho earlier seized his refineries. U pon returning to the U.S., Mr. Koch helped launch the anti-com m unist John Birch Society2. Koch Industries did not endure a sm ooth transition after the death of Mr. Koch in 1967. He began groom ing his four sons early on for m anagem ent but it was Charles and David who succeeded. The other two, William and Frederick, pursued outside interests while show ing no am bition or inclination to run the company. U pon succeeding his father Charles became the chief executive officer and increased the firm's holdings and diversified its business. The financial program im plem ented by Charles enabled the company to purchase pipelines throughout the
gulf coast and invest in asphalt and amm onia production. The family ow ned corporation refuses to release financial data bu t estimates of their w ealth in 1994 place it at $23 billion up from $250 million only 25 years ago3. Another decision Charles m ade has proved to be a financial drain and a continuous headache for the company and family members. In 1983, there w as a rum or that brothers Frederick and William w ere attem pting a takeover. Charles and David pre-em pted this move at a shareholder meeting by convincing J. H ow ard M arshall, w ho became famous recently for m arring 26 year old Playboy centerfold A nna Nicole Smith at age 89, to vote against the move4. The resulting buyout of W illiam, Fred, and their allies am ounted to $1.1 billion. Fred used his share to am ass a num ber of European properties and is know n as an art philanthropist in his adopted land of Monaco. William pursued other business and personal interests including funding the first all female crew in an America's Cup race5. How ever, William claims he and his brother were shortchanged by Charles and David. In court docum ents subm itted in a suit brought against them William states the brothers conspired to hide assets in an effort to keep the buyout price low. W illiam has pursued this claim w ith nine different law suits including one brought against his m other, Mary w ho was 81 at the tim e6. William also brought suit against Koch Industries acting on behalf of the federal governm ent as a citizen w histle blower. This suit was announced after an investigation launched bv the Senate Select Committee on Indian Affairs in 1989 found the com pany w illfully stoleTnillions of dollars w orth of crude oil from wells on Native Am erican territo ryT~The~company is involved I n another still unresolved suit against th e Justice Departm ent, the EPA, and the Coast G uard for unlaw fully discharging millions of gallons of oil from over 300 oil spills since 19907. ~ These evenfs”Torced a sharp change in how the family conducted business. Previously, Charles and David rebuffed public attention and kept them selves at arm 's length from public officials. Now, the Kochs set about rehabilitating their image w ith a public relations m edia blitz and courting relationships w ith powerful office holders. The brothers poured thousands of dollars from their ow n pockets into of cam paign coffers of members of Congress. The brothers created a company sponsored political Action comm ittee. KochPac distributed over $100,000 in the last two election cycles overw helm ingly favoring Republicans. Regional m em bers of Congress like Representatives David M cIntosh R-IN, Todd Tiahrt R-KS, and Senators James Inhofe R-OK, Sam Brownback R-KS, and his predecessor Bob Dole received the lion's share of their donations. Koch Industries has donated $172,000 to the Republican N ational Committee since 1994. The Kochs also opened up a legislativejia iso n office in the capital in order to keep close contact w ith their new found friends8. ..' ............. A nother feature to help solidify their presence in W ashington required an investm ent in activists organizations that w ould work on behalf of the interests of the com pany and the brothers. Finding few in existence, the Koch brothers set about creating groups that m atched their libertarian ideology. Charles cofounded the Cato Institute in 1978 w ith Paul C rane. The organization has received over $20 million in Koch m oney since then9. The brothers provided the seed m oney to Citizens for a Sound Economy and the Institute for Justice. Other Koch projects include the
Center for the Study of M arket Processes and the Institute for H um ane Studies. These institutes are academic havens for libertarians and conservatives located at George M ason University. Over the years, Koch funds have reached the American Legislative Exchange Council, H eartland Institute, Landm ark Legal Foundation, and Political Economy Research Center10. Recently, Charles has tem pered his personal involvem ent w ith these organizations. Reports attribute this to his workaholic personality and a disillusionm ent with politics in general. He resigned from the boards of both CSE and Cato. How ever, David and Koch Industries' W ashington lobbyists have taken up the slack11. David has always been the m ost politically active m em ber of the Koch family. He ran as the Libertarian Party vice presidential candidate in 1980. He sits on the board of CSE, Cato, and The Reason Foundation. W ayne Gable a registered lobbyist for Koch Industries is a board m em ber of CSE and the Institute for Justice. Richard Fink, another lobbyist for Koch Industries was a founding m em ber of CSE and the Center for the Study of Market Process at George M ason University in 1980 and is a board m em ber of The Reason Foundation12. David and Charles have sunk most of their prestige and funds into the Cato Institute. The group adheres to a strict libertarian philosophy including leading taboo discussions on drug legalization. It lists S. Fred Singer (Science & Environm ental Policy Project), Terry A nderson (Political Economy Research Center), Thomas DiLorenzo (Capital Research Center), and Thomas Gale Moore (Hoover Institution) as board m em bers13. Tax law only allows a 501 (c)(3) organization to receive a third of its resources from a single entity. The Kochs have been careful not to violate the threshold but taken together, the Koch foundations provide a substantial am ount of Cato's budget. In 1991, the Koch foundations p rovided over $2.5 million including $1 million for building renovation costs. Koch m oney accounted for 55% of their $4.7 million in revenue that year14. Sam pling of grants from the Koch Foundations from 1990-1995 1990 O rganization Atlas Economic Research Foundation Cato Institute Center for the Study of Market Processes Citizens for a Sound Economy George Mason University Institute for Hum ane Studies Institute for Justice Pacific Research Institute Political Economy Research Center The Reason Foundation
1991
Charles K. 200,000 33,100 250,000 10,000 20,000 20,000 20,000
David K.
Claude L.
250,000 50,000 600,000 250,000 350,000
1,300,000 93,800 200,000
25,000
-
174,672
253,000
T otal 1,750,000 176,900 800,000 500,000 613,000 45,000 20,000 194,672
Organization
Charles K.
Atlas Economic Research Foundation Cato Institute
5,000
Center for the Study of M arket Processes Citizens for a Sound Economy George Mason University Institute for Hum ane Studies Institute for Justice Pacific Research Institute Political Economy Research Center The Reason Foundation
9,300
David K. 1,839,435 50,000
Claude L.
30,000 2,639,435
10,600
69,900 825,000 57,700 703,000
500,000
325,000 57,700
350,000
353,000 150,000
25,000
400,000 25,000
183,238
5,000 193,238
250,000 5,000 10,000
Total
25,000 800,000
1992 Organization Atlas Economic Research Foundation Cato Institute Center for the Study of Market Processes Citizens for a Sound Economy George M ason University Institute for H um ane Studies Institute for Justice Pacific Research Institute Political Economy Research Center The Reason Foundation
Charles K. 2,500 271,000
50,000
David K.
Claude L.
Total
25,000
27,500
352,919 50,000 1,000,000
800,000 22,000 300,000
1,423,919 72,000 1,300,000
350,000
42,660 443,074
42,660 843,074
450,000 25,000
700,000 40,000
20,000 10,000
25,000 10,000
250,000 15,000 5,000
1993 Organization Atlas Economic Research Foundation Cato Institute Center for the Study of Market Processes Citizens for a Sound Economy George M ason University Institute for H um ane Studies Institute for Justice Pacific Research Institute Political Economy Research Center The Reason Foundation
1995
Charles K.
David K.
Claude L.
2,500 271,000
50,000 15,000 5,000
400,000 250,000
900,000
750,000
300,000 429,333 536,000 100,000
350,000 250,000 50,000 138,700
Total 2,500 1,300,000 521,000 1,050,000 429,333 936,000 350,000 65,000 5,000 138,700
O rgan ization
C harles K.
Atlas Economic Research Foundation Cato Institute Center for the Study of Market Processes 475,000 Citizens for a Sound Economy 24,484 George Mason University Institute for Humane Studies Institute for Justice Pacific Research Institute 50,000 Political Economy Research Center The Reason Foundation 50,000 The Heritage Foundation The Heartland Institute 10,000 Competitive Enterprise Insitute
D a v id K.
C lau d e L.
500,000
500,000
50,000 600,000
125,000 300,000
250,000 250,000
335,500
100,000
T otal
120,000 50,000
25,000
4 Wayne, Leslie "Pulling the Wraps Off Koch Industries." New York Times 11/20/94. 2 Pary, Robert "What Wouldn't Bob Do For Koch Oil?" The Nation 8/26/96. 3 Wayne, Leslie New York Times 11/20/94. 4 ibid. 5 Moore, W. John "Wichita Pipeline." National Journal 5/16/92. 6 Wayne, Lesliee New York Times. 7 Parry, Robert The Nation. ® ibid. 9 Moore, W. John National Journal. IRS 990 Tax Forms from the Charles G. Koch Foundation, the David H. Koch Foundation, and the Claude R. Lambe Foundation. 44 Wayne, Leslie New York Times. 42 Moore, W. John National Journal. 43 Cato Institute Annual Report 1992. 44 Cato Institute 990 IRS 1992.
