Koch Brothers lawbreaking: Oil Stealing episode

by David Safier

I've read through the lengthy Bloomberg News article, Koch Brothers Flout Law Getting Richer With Secret Iran Sales. The Iran sales and bribery episodes which have gotten most of the attention are only part of the story. This is a "preponderance of evidence" situation, where, when you see all the things Koch Brothers corporations have done over the years, you understand these people are motivated by nothing more than the basest greed. Their libertarian, Tea Party philosophy is little more than their way of making sure they pay less taxes and get away with more illegal activity.

The Brothers K are poster children for the need for government regulation, and an army of regulators. Corporations are amoral animals. It's not shocking when they stretch the law to its limits and break it in ways they hope won't be discovered in their quest for ever greater profits. You might as well be shocked that sharks swim around looking for people and other creatures to devour. It's in their nature. One can argue the ecosystem needs sharks and the economic system needs corporations, but both have to be considered dangerous, even lethal, if the proper precautions aren't taken.

The Bloomberg article has too many stories to tell them all at once, so I'll tell one now and cover others in later posts.

Koch Oil purposely defrauded American Indians and the federal government by underreporting the amount of crude it pulled out of the ground. According to one employee testifying during the lawsuit, this was standard operating procedure: "The Koch Method."

Phil Dubose, who worked for Koch Industries from 1968 to 1994, told the jury how the scheme worked.

“The Koch Method is to cheat the producer out of crude oil,” he said.

He testified that he was able to steal 2,000 barrels a month from one customer.

“You used every available tool to mismeasure the crude oil in Koch’s favor,” says Dubose, who is now retired.

The jury's decision:

Koch Industries had made 24,587 false claims in buying oil, underpaying the U.S. government for royalties on Native American land from 1985 to 1989. Koch paid the U.S. $25 million to settle the case in 2001.

Cheating Native Americans and the federal government can be considered a long standing American tradition — deplorable but hardly surprising. But when Koch Industries knew a pipeline was badly corroded, refused to fix it and two teenage girls went up in flames, that's more than standard issue corporate malfeasance. More about that in another post.