The Other Koch Brother

In the shadow of his brothers' Tea Party fame, Bill Koch seems almost like a normal billionaire.

After their father died, in 1967, Charles took over the family business, and the strain between him and Bill increased. Bill came to work for Koch Industries as a consultant in the early '70s, but Charles wasn't happy with his job performance. "He never seemed to get any self-respect out of what he was doing, and always wanted to be doing something else," Charles told the Times. (Through a spokesperson, Charles and David Koch declined to be interviewed for this article.)

Bill was angry that company money was spent on his brothers' political causes. "Why should I donate all my money to the Libertarian Party?" he said. "Pretty soon we would get the reputation that the company and the Kochs were crazy."

But under Charles Koch's leadership, Koch Industries became the second-largest privately held company in America. In addition to its oil refineries, it owns Brawny paper towels, Lycra, and Georgia-Pacific lumber.

PRNewsFoto/Palm Beach High School Foundation, Kim Sargent; © Sargent Photography
Bill Koch celebrates the America’s Cup victory in San Diego.
Portofsandiego.org
Bill Koch celebrates the America’s Cup victory in San Diego.

In 1979, the Koch brothers celebrated their last Christmas together. The next year, Bill tried unsuccessfully to seize control of the board of Koch Industries. An epic legal battle followed. Bill sued Charles and David for corporate mismanagement. They fired back with a libel suit. In 1983, Bill and Frederick Koch sold their shares of the company to Charles and David, and Bill walked away with $470 million. But two years later, after his bankers crunched the numbers, Bill decided he'd gotten a raw deal. He sued again, demanding more money. For nearly two decades, his lawsuits against his brothers piled up. Things got ugly. At one point, Bill subpoenaed his elderly mother to testify a few months after she had a stroke. He also filed a whistle-blower suit accusing Koch Industries of stealing crude oil from Native American lands; it would drag on for years.

Bill stopped speaking to Charles and David. "I don't want to see my brothers in jail," Bill told Fortune in 1997. "But I'm at war."

Through all these spats and scandals, Bill Koch's more prosperous brothers retained a low public profile. Unless they were suing one another, the press had little interest in the oil, coal, and gas barons from Kansas.

Until last August. As the Tea Party movement gained steam, gearing up to send a wave of right-wing, anti-government candidates to Congress, a few muckraking reporters finally noticed the Kochs. The New Yorker published a scathing exposé calling Charles and David "the billionaire brothers who are waging a war against Obama." They founded the libertarian think tank the Cato Institute and the Americans for Prosperity Foundation, which educates and trains Tea Party activists. In Washington, D.C., their support of conservative causes is so widespread that their web of influence is known as the "Kochtopus."

Charles and David Koch were vilified by Democrats as the Big Oil moneybags behind the Tea Party. By contrast, Bill Koch's business and political activities seemed tame.

When Barack Obama was running for president in 2008, Bill Koch bundled at least $100,000 in campaign contributions for John McCain, according to the nonpartisan Center for Responsive Politics. Since last year, with Republicans preparing for big wins in Congress, Koch has personally given at least $165,400 to GOP candidates throughout the country. The largest chunks of cash—$126,200—went to the National Republican Senatorial Committee and the National Republican Congressional Committee. Koch is now on the Florida fundraising team for GOP presidential candidate Mitt Romney.

"He does not agree with the president's economic policies," Goldstein says of his boss. "This administration has made it extremely difficult for businesses to operate."

Specifically, Koch doesn't appreciate the way Obama officials treat coal mining, and calls the Environmental Protection Agency "hyper-aggressive."

"It's far easier to get permits to mine for natural resources outside the United States than inside," Goldstein says. Not surprisingly, Goldstein adds, "He thinks Mitt Romney would be much more pro-business than Barack Obama."

Men arrived at the Four Seasons hotel in Palm Beach wearing tuxedos, the women in long, shimmering dresses. This was not just another corporate Christmas party. Plates were piled high with filet mignon, and at least 200 guests gleefully descended on an open bar. "This was hands-down the greatest company event that I've ever been to in my life," recalls employee Ron Brosh. "You thought you'd won an award."

It was the late '90s, and Bill Koch's company could afford to lavish such extravagance on its employees. In 1983, he used the initial millions he got from selling his shares of Koch Industries to start his own energy company, Oxbow Corp. He founded the company in Massachusetts, but after battling the state over taxes on a stock purchase, he got fed up and moved Oxbow to West Palm Beach in 1989. Oxbow, like individuals and many other large corporations in Florida, does not have to pay state income taxes. "That's the reason I came here—it's tax-friendly," he told the St. Petersburg Times in 2003.

Initially, Oxbow made its mark as a more environmentally friendly energy company than Koch Industries. Oxbow built and financed geothermal power plants in the U.S., Costa Rica, and the Philippines in the '90s, when the federal government was providing subsidies for green power.

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