Much of Koch Industries' success can be traced to the oil industry and Charles Koch's interest in and commitment to scientific and social progress, which led to the development and implementation of the Market-Based Management business philosophy. The concepts and practice of MBM are described in Koch’s book, Science of Success: How Market-Based Management Built the World’s Largest Private Company (ISBN 978-0-470-13988-2), published in March 2007 by John Wiley & Sons, Inc. Mr. Koch is further developing the theories and expanding the practice of the MBM philosophy, as well as other applications of the science of human action, not only throughout Koch Industries, but also with scholars, non-profit leaders, government officials and other business leaders.
Koch's academic life was spent at the Massachusetts Institute of Technology. In 1957, he received a bachelor's degree in general engineering. He also received a master's degree in mechanical engineering in 1958 and a masters degree in chemical engineering in 1960.
Koch was born and lives in Wichita, Kansas, one of four sons of Fred C. and Mary Robinson Koch. Koch and his wife, Liz, have two children, Elizabeth and Chase.
Koch is a libertarian and supports many free-market organizations such as the Cato Institute, which he founded together with Edward H. Crane and Murray Rothbard in 1977. Koch also funds the highly selective Charles G. Koch Summer Fellow Program through the Institute for Humane Studies.
His brother, David H. Koch, was the Libertarian Party's candidate for vice president in 1980.
As of 2008 he is worth approximately $17 billion according to the Forbes 400 list
Charles Koch is a member of the Mercatus Center's Board of Directors.He is chairman of the board and chief executive officer of Koch Industries, Inc., one of the largest privately held companies in America.Under his leadership, Koch Industries has been transformed into a dynamic and diverse group of companies engaged in trading, investment and operations worldwide.
Much of Koch Industries' success can be traced to Mr. Koch's interest in and commitment to scientific and social progress, which led to the development and implementation at Koch Industries of Market Based Management (MBMâ„c).He has striven to further develop the theories and expand the practice of MBM, not only throughout Koch, but also in the next generation of business leaders.He frequently shares information about MBM in university and other lectures across the United States.
Mr. Koch believes that principled entrepreneurship is vital to the well-being of a community.Koch Industries and its employees also contribute to communities by sharing their time, talent and financial resources with human service and educational organizations that help people help themselves.He has continuously supported academic and public policy research for 40 years, with a special focus on developing voluntary, market-based solutions to social problems.
In recognition of his business leadership and community involvement, Mr. Koch has received a number of business and community honors and awards.
His employment has been as an engineer, Arthur D. Little, Inc. 1959-61; vice president, Koch Engineering Company, Inc. (Wichita) 1961-63 and as president from 1963-71.He was president of Koch Industries, Inc. from 1966-74, and Chairman and Chief Executive Officer, 1967-present.
Mr. Koch is a director of Intrust Bank, N.A.His non-business activities include serving as Chairman of the Institute for Humane Studies, the Claude R. Lambe Foundation and the Charles G. Koch Charitable Foundation, on the board of the Mercatus Center at George Mason University, and as a member of the Mont Pelerin Society.
Mr. Koch's book, The Science of Success, was published by Wiley in 2007.
David and Charles Koch, sons of the ultraconservative founder of Koch Industries, Fred Koch, direct the three Koch family foundations: the Charles G. Koch Foundation, the David H. Koch Charitable Foundation, and the Claude R. Lambe Charitable Foundation. David and Charles control Koch Industries, the second-largest privately owned company and the largest privately owned energy company in the nation; they have a combined net worth of approximately $4 billion, placing them among the top 50 wealthiest individuals in the country and among the top 100 wealthiest individuals in the world in 2003, according to Forbes.170
Following in the footsteps of their father, a member of the John Birch Society, the Kochs clearly have a conservative bent. Charles Koch founded the Cato Institute, and David Koch co-founded Citizens for a Sound Economy (CSE) [now FreedomWorks], where he serves as chairman of the board of directors. David also serves on the board of the Cato Institute. The Koch foundations make substantial annual contributions to these organizations (more than $12 million to each between 1985 and 2002) as well as to other influential conservative think tanks, advocacy groups, media organizations, academic institutes and legal organizations, thus participating in every level of the policy process. Their total conservative policy giving exceeded $20 million between 1999 and 2001. As reflected in their creation and funding of Cato and CSE, most of their contributions go to support organizations and groups advancing libertarian theory, privatization, entrepreneurship and free enterprise. David Koch even ran for vice president as the Libertarian Party candidate in 1980. In describing his foundation's contributions, he states, "My overall concept is to minimize the role of government and to maximize the role of private economy and to maximize personal freedoms."171
The Charles G. Koch Charitable Foundation has a threefold mission: It "primarily supports research and education into free societies, in particular how they advance the well-being of mankind"; "fosters the partnership of scientists and practitioners in order to integrate theory and practice"; and "strives to develop market-based tools that enable individuals, institutions and societies to survive and prosper." Charles' biography on the Koch Industries Web site states that "he has continuously supported academic and public policy research for 40 years, with a special focus on developing voluntary market-based solutions to social problems." Furthermore, Richard Fink, president of the foundation, has served on the Consumer Advisory Council of the Federal Reserve Board and on the President's Commission on Privatization and is editor of Supply Side Economics: A Critical Appraisal.172
The brothers' libertarian and free-market orientation comes as no surprise, given their ownership of Koch Industries, an oil and gas corporation: Curtis Moore argues that "Koch money funds industry-friendly messages that fill our airwaves and editorial pages, and influences outcomes in the halls of Congress and courtrooms across the country."173 CSE produces numerous policy papers that reach every congressional office as well as hundreds of newsletters and op-ed pieces. Representatives of the organization may be seen on a number of radio and television shows. Cato's influence also extends to policymakers and the public. In touting limited government and free markets, these organizations doubt the dangers of various chemicals, environmental pollutants and global warming, as well as challenge research efforts documenting these hazards. One CSE paper argued that "environmental conservation requires a commonsense approach that limits the scope of government."174
In writing these papers and making these appearances, individuals associated with these organizations often conveniently decline to acknowledge the substantial funding they receive from Koch and other corporations from the oil, coal, auto and other industries. By withholding such information, they are able to front as unbiased the public-minded associations promoting rigorous scientific research and economic autonomy, when, in fact, the individuals are mere mouthpieces for industries like that of the Koch brothers.
These organizations influence not only public opinion and policy but also judicial outlook. For example, in 1999 CSE subsidized the creation of amici briefs providing reasons to proclaim the Clear Air Act unconstitutional. CSE received $600,000 from the Claude R. Lambe Foundation that year.175 The foundation also provided substantial funding to the Foundation for Research on Economics and the Environment (FREE), which holds seminars for federal judges at its ranch near Big Sky, Montana. Many influential judges attend these seminars, including those who heard arguments made by legal representatives receiving funding from CSE. It makes sense that the Kochs would fund such anti-environment organizations, given their seedy past of environmental violations and lawsuits. Most significantly, the U.S. Department of Justice charged Koch Industries with 97 counts of defying federal hazardous waste and clean air-acts when it knowingly emitted benzene fumes and then lied about its actions when questioned. In 2001, Koch Industries agreed to a $20 million settlement, a drastically smaller sum than it would have paid if convicted.176
Other significant grantees in the domain of research and advocacy include the American Legislative Exchange Council, the Reason Foundation, the Heritage Foundation, the Hudson Institute and the Competitive Enterprise Institute. David Koch serves on the board of directors of the Reason Foundation.
The foundations also provide substantial funding to the Pacific Research Institute for Public Policy (PRI), whose mission is "to champion freedom, opportunity and personal responsibility for all individuals by advancing free-market policy solutions."177 The organization espouses entrepreneurship, privatization and individual liberty, three of the Koch brothers' main areas of interest. PRI publishes articles and papers, sponsors events, testifies before policymakers and provides commentary for a variety of media sources, reaching more than 141 million people in 2001 through these means. The organization supports transferring power from the government to private organizations and individuals, especially in terms of education, the environment and health care. It believes that government taxes and regulations "stifle" the nation's "entrepreneurial spirit" and lead to problems in each of these domains. Thus, the organization promotes vouchers, increased standards and accountability, and "teacher quality" in education; free-market competition in health care; and the elimination of federal social welfare programs, claiming that they result in reliance on the state and undue control of the government over individual lives. The organization gives an annual privatization award to individuals and private organizations that provide important community services, such as charter schools and sources of private scholarships.
In addition to funding think tanks and advocacy institutes, the Koch foundations also provide substantial sums to academic institutes and universities to further conservative ideology and recruit youth to the crusade. Their main grantee is George Mason University (GMU). The three Koch foundations contributed $23,030,497 between 1985 and 2002 to the university, its foundation and its Institute for Human Studies.178 Richard Fink, the president of the Charles G. Koch Foundation, serves on the Board of Directors of GMU, where he taught until 1984. After serving as president and chief executive officer of CSE for several years, he returned to GMU, where he serves on the board of trustees of the Center for the Study of Public Choice and the Center for Market Processes and as a member of the board of the Progressive Policy Institute.179
Charles is chairman of GMU's Institute for Humane Studies, which hosts the Charles G. Koch Summer Fellow Program. The mission of the center is "to support the achievement of a free society by discovering and facilitating the development of talented, productive students, scholars and other intellectuals who share a commitment to liberty and who demonstrate the potential to change significantly the current climate of opinion to one more congenial to the principles and practices of freedom."180 The institute sponsors free summer seminars for students interested in learning about "free market economics and networking."
The two most significant contributions to the university came in the form of a $3 million grant in 1997, which helped to launch the Mercatus Center, and a $10 million grant in 1998, which helped to create the James M.Buchanan Center for the Study of Political Economy.
Charles Koch is a board member at the Mercatus Center, which describes itself as a "research and education center [that] generates knowledge and understanding of how institutions affect the freedom to prosper and holds organizations accountable for their impact on that freedom."181 The center promotes free markets and "Western" values and customs. The director of its regulatory studies program, Wendy Lee Gramm, was named "villain of the month" by the Clean Air Trust in January 2002 for her work in opposition to federal regulations aimed at protecting health and the environment. The nonprofit trust charges that through his considerable donations, "Koch basically rents the university's name to give a patina of credibility to Wendy Gramm's anti-environmental agenda."182
The James M. Buchanan Center for the Study of Political Economy encompasses the Center for Study of Public Choice and the Center for Market Processes and is associated with the Institute for Humane Studies. Of the Buchanan Center's grant, the president of GMU remarked, "We believe this support will help us become a national center of excellence of study of the relationship between the polity and the economy."183 Another $3 million grant in 2001 from the Charles G. Koch Foundation allowed the university to establish the Interdisciplinary Center for Economic Science (ICES) with its seven prestigious professors of experimental economics at GMU.184
GMU also directed some of the Koch foundation funding to its Law and Economics Center (LEC) at its School of Law. Flipside.org reports that the LEC's mission is to "teach federal judges that the goal of the law should be to maximize the wealth of society by promoting the efficient use of scarce resources." To do so, the center sponsors annual eight-week training conferences at resort locations for federal and state judges. Nearly 800 judges, including two U.S. Supreme Court justices, have participated in the program since it began in 1976. The LEC also holds "economic institutes for law professors and law institutes for economists" (e.g., the Economics of Private Law institute), so that the two disciplines may become more intertwined.185
In addition to its donations to the LEC and FREE, the Koch family foundations also provide significant contributions to other conservative legal organizations. Clint Bolick, a rigid opponent of affirmative action at the Landmark Center for Civil Rights, and William Mellor, former president of PRI, asked the Koch family for financial backing for a libertarian public-interest law firm to advocate for school vouchers, faith-based social service programs and property rights and to oppose affirmative action. The organization became the conservative Institute for Justice in 1991, and it continues to receive substantial funding from the Koch family foundations.186 The Federalist Society also receives a great deal of funding from the Koch family.