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MSNBC/Bloomberg - Koch Industries made secret sale to Iran, report says

@DCGoldPants

By @DCGoldPants
in The Tailgate

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http://bottomline.msnbc.msn.com/_news/2011/10/03/8120637-koch-industries-made-secret-sale-to-iran-report-says

Koch Industries made secret sale to Iran, report says

biz-111003-bloomberg-cover-KochBros.nv_nws.jpg

By Al Olson

Koch Industries, the company controlled by GOP mega-donors Charles and David Koch, sold millions of dollars of petrochemical equipment to Iran in an end-run around a trade ban and cheated the government out of nearly 2 million barrels of oil from federal lands, according to a blockbuster report in the November issue of Bloomberg Markets magazine.

The company has also been involved in improper payments to win business in Africa, India and the Middle East, the Bloomberg report says.

It says internal company documents show the company made petrochemical equipment sales to Iran through foreign subsidiaries, thwarting a U.S. trade ban. The company also repeatedly ran afoul of environmental regulations, resulting in five criminal convictions since 1999 in the U.S. and Canada.

Koch Industries units have also rigged prices with competitors and lied to regulators, according to Bloomberg Markets magazine’s investigative report. It took 14 reporters from around the globe six months to put the story together.

The company, the report suggests, is obsessed with secrecy, to the point that it discloses only an approximation of its annual revenue -- $100 billion a year -- and says nothing about its profits.

Charles, 75, and David, 71, each worth about $20 billion, are prominent financial backers of several conservative think tanks and nonprofit organizations, such as FreedomWorks and the Cato Institute, that believe excessive regulation is sapping the competitiveness of American business.

Here are some of the investigation’s key allegations:

  • Koch Industries made improper payments (described by the former compliance director who discovered them as "bribes") to win business in six countries over eight years, a possible violation of the Foreign Corrupt Practices Act. One criminal law professor called the findings a "smoking gun.” The company described the payments as "activities constitut[ing] violations of criminal law."
  • Koch Industries sold millions dollars worth of refinery equipment to Iran after President George W. Bush declared the nation was part of the “Axis of Evil.” The company claims these sales were legal at the time, and says it has since cut ties with Iran.
  • Koch Industries allegedly pilfered 1.95 million barrels of crude oil pumped from federal lands by falsifying purchasing records, a Senate investigation found. One former worker said the company routinely incorrectly measured the oil, calling this practice the “Koch Method.”
  • Koch Industries ignored federal regulations for pipeline safety — resulting in the deaths of at least two people in a pipeline explosion in Lively, Texas in 1996.

A spokesperson for the company acknowledged the past mistakes, but said the company has altered its practices and policies to avoid running afoul of the law.

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Prosperity

Prosperity

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Are you kidding me?!?

Your other screenname wouldn't happen to be "sarge" would it?

I think even Sarge would have a problem with theft... in fact, he'd probably recommend the death sentence

•Koch Industries allegedly pilfered 1.95 million barrels of crude oil pumped from federal lands by falsifying purchasing records, a Senate investigation found. One former worker said the company routinely incorrectly measured the oil, calling this practice the “Koch Method.”

That's pretty block buster... especialyl when you think that maybe that's just the times they've gotten caught

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TimmySmith

TimmySmith

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Are you kidding me?!?
Nope. Which one stands out to you. The "possible" violation, which at most results in a fine that they will pay out their pocket. The sale of refining equipment to a country of which the reporter does not know the legality. The "alleged pilfering" of oil. Or the 2 deaths 15 years ago of employees engaged in one of the most dangerous professions. The last rings out to me, but I am sure that was settled about 14 1/2 years ago.

Actually the last one was not employees, it was bystanders. They settled for huge money 12 years ago. The failure of the Koch company to secure their pipeline is by far the worst on the list IMO.

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mojobo

mojobo

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Hinderaker points out multiple issues with the reporting

http://www.powerlineblog.com/archives/2011/10/bloomberg-whiffs-part-1.php

Sadly almost nobody will read this and will ignore the fact that their use of subsidiaries to get around trade restrictions with Iran is mild at best in comparison with other companies. Not saying that using those subsidiaries to deal with Iran is ethical or not, but if the goal of the article was to point out companies going around the law to do business with Iran then they wouldn't have started with the Koch Industries.

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Prosperity

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Dude, the entire basis of that "powerline blog" article is that Koch and it's lawyers created every legal fiction they could so that they could find a loophole into Iran.

Internal Koch-Glitsch correspondence shows that the company coordinated with Koch Industries lawyers in the U.S. to make sure that American employees didn’t work on sales to Iran. Elena Rigon, now Koch-Glitsch compliance manager for Europe, based in Italy, in December 2000 addressed a memo outlining compliance guidelines to company managers in her region.

In another e-mail, Rigon said all offices had to go through a checklist for each estimate quoted for materials headed to Iran. “Your staff shall send this form to me since I have to send it to the lawyers in the USA as part of the compliance program,” Rigon wrote in the e-mail. “If somebody happens to find out that any U.S. persons are involved in this project or U.S. material is delivered to Iran you CANNOT quote.”

well ****, as long as their lawyers argue its legal, who's to even consider otherwise?

In other words, Koch Industries insisted on strict compliance with the law.

No.

:ols:

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