Sons of Wichita How the Koch brothers became America's most powerful and private dynasty

Daniel Schulman

Book - 2014

"Like the Rockefellers and the Kennedys, the Kochs are one of the most influential dynasties of the modern age, but they have never been the subject of a major biography... until now. Not long after the death of his father, Charles Koch, then in his early 30s, discovered a letter the family patriarch had written to his sons. "You will receive what now seems to be a large sum of money," Fred Koch cautioned. "It may either be a blessing or a curse." Fred's legacy would become a blessing and a curse to his four sons-Frederick, Charles, and fraternal twins David and Bill-who in the ensuing decades fought bitterly over their birthright, the oil and cattle-ranching empire their father left behind in 1967. Against a b...ackdrop of scorched-earth legal skirmishes, Charles and David built Koch Industries into one of the largest private corporations in the world-bigger than Boeing and Disney-and they rose to become two of the wealthiest men on the planet. Influenced by the sentiments of their father, who was present at the birth of the John Birch Society, Charles and David have spent decades trying to remake the American political landscape and mainline their libertarian views into the national bloodstream. They now control a machine that is a center of gravity within the Republican Party. To their supporters, they are liberating America from the scourge of Big Government. To their detractors, they are political "contract killers," as David Axelrod, President Barack Obama's chief strategist, put it during the 2012 campaign. Bill, meanwhile, built a multi-billion dollar energy empire all his own, and earned notoriety as an America's Cup-winning yachtsman, a flamboyant playboy, and as a litigious collector of fine wine and Western memorabilia. Frederick lived an intensely private life as an arts patron, refurbishing a series of historic homes and estates. SONS OF WICHITA traces the complicated lives and legacies of these four tycoons, as well as their business, social, and political ambitions. No matter where you fall on the ideological spectrum, the Kochs are one of the most influential dynasties of our era, but so little is publicly known about this family, their origins, how they make their money, and how they live their lives. Based on hundreds of interviews with friends, relatives, business associates, and many others, SONS OF WICHITA is the first major biography about this wealthy and powerful family-warts and all"--

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Subjects
Published
New York : Grand Central Publishing 2014.
Language
English
Main Author
Daniel Schulman (-)
Edition
First Edition
Physical Description
424 pages, 8 unnumbered pages of plates : illustrations ; 24 cm
Bibliography
Includes bibliographical references (pages 377-408) and index.
ISBN
9781455518739
  • Prologue
  • 1. Sons of Wichita
  • 2. Stalin's Oil Man
  • 3. "The Dead Will Be the Lucky Ones"
  • 4. May Day at MIT
  • 5. Successor
  • 6. Rise of the Kochtopus
  • 7. The Divorce
  • 8. Mighty Mary
  • 9. "My God, I'm Going to Die!"
  • 10. The Art of War
  • 11. There Will Be Blood
  • 12. Planet Koch
  • 13. Out of the Shadows
  • 14. The Mother of All Wars
  • 15. Legacy
  • Acknowledgments
  • Notes
  • Index
  • About the Author
Review by New York Times Review

IN 2010, TWO of the Koch brothers, Charles of Wichita, Kan., and David of New York, rather suddenly became the top-of-mind conservatives for American liberals. That was partly because at that moment the Democratic Party controlled the White House and both houses of Congress, so there wasn't a dominant conservative politician to focus on; partly because of a wave of news media attention, notably an influential story on the Kochs' political activities by Jane Mayer in The New Yorker; and partly because of the rise of the Tea Party movement, of which the Koch political apparatus was a primary backer. The conservative victories in the Congressional elections that fall looked like conclusive proof of the Kochs' power. The very first television ads the Obama re-election campaign ran in 2012 were attacks on the Kochs, not on the Republican Party. Daniel Schulman, a senior editor in the Washington bureau of Mother Jones magazine, undertook "Sons of Wichita" during that wave of intense liberal interest in the Kochs, and if Barack Obama's re-election, which the Kochs fervently tried to prevent, made them look a little less puissant, that opens up some room to consider them outside the tight frame of their present-day maneuverings in Washington and the state capitals. Schulman has taken advantage of this opportunity to produce a book that is closer to a family saga than a political exposé. There are four Koch brothers, not two, and they have been feuding, intermittently but operatically, for many decades. The founder of the family dynasty, Fred Koch, born in 1900, grew up middle class in a small town just east of the Texas Panhandle and rose quickly. A few years after graduating from M.I.T., he helped found an engineering firm in the oil industry that did well enough to make him rich by the time he was in his early 30s. He met his wife, Mary, a Kansas City debutante, at a polo match, and was able to hire a private plane to carry her extensive luggage on their honeymoon. The Kochs set themselves up on an estate in Wichita, and Koch Industries prospered. Their four sons - Frederick, Charles and the twins David and William - were all sent first to boarding schools and then to Harvard (Frederick) or M.I.T. (the other three). It would be hard to think of a rich oilman in the Southwest who wasn't right-wing during Fred Koch's midcentury heyday, but Koch seems to have been especially so. A period spent doing business in the Soviet Union in 1930 left a deep impression on him. In 1938 he wrote to a friend that Germany, Japan and Italy were "the only sound countries in the world." In 1958 he became one of the founders of the John Birch Society. In 1960 he published a pamphlet called "A Business Man Looks at Communism," in which he wrote: "The colored man looms large in the Communist plan to take over America." The eldest son, Frederick, a collector and patron of the arts, didn't get along with his father and never worked in the family business. His three younger brothers did. Charles has been running it since 1967, when Fred Koch died. Both Charles and David inherited some variant of their father's conservatism, but they have devoted themselves mainly to libertarian causes rather than to the Birch Society and its descendants. Charles was one of three founders - the one with the money -of the libertarian Cato Institute, in 1977. David ran for vice president of the United States on the Libertarian Party ticket in 1980, thus opposing Ronald Reagan. William Koch is possibly more liberal than his brothers, and definitely more flamboyant (which, in this family, is saying a lot). He spent the entire 1980s and '90s waging war on Charles and David, often enlisting Frederick as his ally. He started his own company, filed multiple lawsuits against his brothers and became the leading purveyor of dirt about the Koch empire. These activities won William and Frederick very large, and spectacularly spent, financial settlements from Charles and David. Schulman tells us that Charles, David and William did not sit down for a meal together for nearly 20 years, until May 2001, when a carefully negotiated truce finally began to take effect. The Obama campaign's ad called the Kochs "secretive oil billionaires." That captures both the allure and the difficulty of writing about them. Koch Industries is America's second-largest private company (after Cargill, the Minnesota grain giant), and that's substantially because Charles and David Koch don't want to disclose as much about their business as publicly held companies have to. Schulman tells us he collected "hundreds of interviews" for his book, but a great majority of the material on the page comes from public sources - mainly news accounts and legal documents produced during the brothers' battles. At the very end there is a brief, tantalizing direct encounter with Frederick Koch, in a grand Upper East Side mansion where he keeps some of his art but doesn't live, but it ends with Frederick demanding that Schulman sign a document giving him the right to approve everything Schulman writes about him, and Schulman refusing. Otherwise all the principal characters in the story are inaccessible. Schulman has ably assembled everything known about the Kochs into a single, straightforward, understandable account, marred by occasional lapses into cheesy wording ("Scantily clad women danced poolside and gyrated on the tennis court") or mixed metaphors ("The brothers' opponents seemed to miss the forest for the trees as they strained to find evidence of the Kochs' hidden hand at work, a smoking gun that proved the governor of Wisconsin's marching orders came straight out of Wichita"). He is inescapably a prisoner of the available material, so there's a great deal here about lawsuits and government investigations, but less than you would want to know about exactly what Koch Industries - whose revenues, Schulman tells us, increased from $70 million in 1960 to $90 billion in 2006 - does and how it became so successful. Still, it's some combination of poignant and fun to get at least a peek inside the life of a family whose misadventures have taken place against a lush backdrop of grand homes, yachts, priceless paintings, messy romances, private investigators and armored limousines. (From what little Schulman is able to tell us, the members of the third generation of the Koch dynasty seem thus far to be content to live a lot more quietly and less luxuriously than the second generation.) "Sons of Wichita" may strike some readers as surprisingly pro-Koch. Although Schulman leaves out no confirmable damning detail, especially about Koch Industries' deadly indifference to environmental and safety matters, he grants Charles and David two key concessions: They have sincere political views that go beyond being just a cover for their companies' interest in lower taxes and fewer regulations, and many of their political activities have been right out in the open, rather than lurking in the shadows. He seems to be almost in awe of Charles, the most mysterious of the brothers, who runs Koch Industries by a system he devised called Market-Based Management. Summarizing, but not dissenting from, the views of Charles's employees, Schulman calls him "a near-mythic figure, a man of preternatural intellect and economic prowess," adding: "He is unquestionably powerful, but unfailingly humble; elusive, but uncomplicated; cosmopolitan, yet thoroughly Kansan." It's noteworthy, Schulman argues, that for decades the Koch family was definitely not welcome in the Republican Party. That they came to stand for Republicanism, at least in the minds of liberals, in 2010 and 2012 is testament to their persistence, to the weakening of the traditional party structures and to their success in making libertarianism a mainstream rather than a fringe ideology. "It's a brilliant, extraordinary accomplishment," Schulman quotes Rob Stein of the liberal Democracy Alliance as saying about the Kochs' rise to influence. If Schulman winds up denying his readers the satisfaction of believing that if only two malign figures can somehow be beaten back, American conservatism would be crippled, that's probably a good thing. Even the Tea Party movement is not entirely dependent on intravenous feeding from the Kochs or that other favorite liberal villain, Fox News. And elements of Koch-style libertarianism, connected to the interests of major donors, now live within the Democratic Party too - not just on social issues like same-sex marriage, but on economic and regulatory ones too. "Sons of Wichita" reminds us that political outcomes depend far more on ideas and organization, and the energy and persistence devoted to them, than they do on the balance of power between good guys and bad guys. NICHOLAS LEMANN is dean emeritus of Columbia Journalism School and a staff writer at The New Yorker.

Copyright (c) The New York Times Company [May 25, 2014]
Review by Publisher's Weekly Review

Mother Jones senior editor Schulman's group portrait of the amazingly wealthy, strong-minded Koch brothers is a critical, but surprisingly nuanced tale of money and influence. Casting new light on one of America's most ambitious families, this "unauthorized" biography will disappoint Koch haters. The Wichita-based Koch money (now totaling billions of dollars) comes from oil grown into a closely held conglomerate with a mixed environmental record. David and Charles have used their wealth to fund the libertarian Cato Institute and more recently, contribute to the Republican Party, and campaign against Obamacare and climate change. They have consequently been on the receiving end of White House enmity. Schulman concentrates on the family's intramural battles: the central conflict begins with an ugly 1985 lawsuit for control of the family money; the four brothers have battled each other in court for decades. Frederick, Charles, and fraternal twins David and Bill-ranging in age from 74 to 82-come off as worldly, intelligent, accomplished, and difficult. This is a complex story of epic sibling rivalry, with important political dimensions. (May) © Copyright PWxyz, LLC. All rights reserved.


Review by Kirkus Book Review

Mother Jones senior editor Schulman delivers provocative reportage on the Koch alpha-family legacy.Patriarch Fred, a dedicated Kansan industrialist, rancher and entrepreneur, exercised a task-driven, voracious work ethic. He was a founding member of the anti-communist John Birch Society and a pugilist, which meant that resolving disputes among his sons often involved gloved fisticuffs. Frederick, the oldest and most artistic, was an outlier gravitating away from the family business. He was soon followed by rebellious second son Charles and pathologically competitive fraternal twins David and Bill. Well before his fathers death in 1967, Charles had already assumed authority over the successful family oil-refining business, which Fred left equal percentages of to three of his four sons (Frederick was disinherited due to numerous theft allegations) with the caveat that the bequeathal could be either a blessing or a curse. Charles and David exerted a diligent top-down control with libertarian leanings in building the business into the countrys second-largest privately owned multinational corporation. However, dissension in the ranks pitted brother against brother, as Schulman depicts in the second half. While the brothers drive and dedication further fortified their fathers empire, the Koch family portrait becomes less flattering as their ruthless, vicious infighting and litigiousness became commonplace. The author generously depicts the nasty retaliatory efforts by Charles in response to flashy Wild Bills numerous efforts to gain his own foothold in the business and against hermetic, reclusive collector Frederick when he refused to relinquish company shares. Now billionaires, Charles and Davids strategic, manipulative political contributions, Schulman notes, have also garnered negative notoriety for personifying the nations wealth inequalitymost notably, in the 2012 presidential election, where they emerged as cartoonish robber barons bankrolling the tea party movement. Free from conjecture or personal criticism, Schulmans astute account is buttressed by concrete research, legal documents, and verbatim interviews with family members and friends.A straightforward, evenhanded and often riveting assessment. Copyright Kirkus Reviews, used with permission.

Copyright (c) Kirkus Reviews, used with permission.