Welcome to the Investors Trading Academy event of the week. Each week our staff of educators tries to introduce you to a person of interest in the financial world. This could be a person in government or banking or an important investors or trader.
Not long ago, many Americans, including Washington, DC, insiders, had never heard of Charles and David Koch — now known as “the Koch brothers” — and were not aware of their vast political operation. That changed after a slew of investigative reports started to appear in 2010 — most famously Jane Mayer’s “Covert Operations” in The New Yorker that June, one of several pieces that have led to her recent book, Dark Money.
David Koch shares control of $115 billion of Koch Industries with his older brother Charles. Koch Industries has interests in oil pipelines, refineries, building materials, paper towels and Dixie cups, and is growing with acquisitions fueled by the company's prodigious cash flow. He's also joined his brother's campaign to raise and spend almost $900 million on political activity, education and issues like criminal-justice reform in the run-up to this year's presidential election.
Already David has pumped more than $130,000 into Republican causes and PACs, although he and brother Charles have yet to endorse a candidate. They are also active philanthropists. The Metropolitan Museum of Art in New York has the David H. Koch Plaza, part of a $65 million renovation he funded, and the David Koch Charitable Foundation has made more than $1.2 billion in contributions over his lifetime.
One of the most politically influential billionaires in the United States, Charles Koch compares his crusade for smaller government and economic liberty to the civil rights campaign. So far Koch hasn't backed a GOP presidential nominee, but at a February conference for the Koch network in Indian Wells, Calif., an official with Freedom Partners Action Fund said they might spend money trying to defeat Donald Trump.
The enormity of the Koch fortune is no mystery. Brothers Charles and David are each worth more than $40 billion. The electoral influence of the Koch brothers is similarly well-chronicled. The Koch’s are homegrown oligarchs; they've cornered the market on Republican politics and are nakedly attempting to buy Congress and the White House. Their political network helped finance the Tea Party and powers today's GOP. Koch-affiliated organizations raised some $400 million during the 2012 election, and aim to spend another $290 million to elect Republicans in this year's midterms. So far in this cycle, Koch-backed entities have bought 44,000 political ads to boost Republican efforts to take back the Senate.
The company controls at least four oil refineries, six ethanol plants, a natural-gas-fired power plant and 4,000 miles of pipeline. Until recently, Koch refined roughly five percent of the oil burned in America.
By Barry Norman, Investors Trading Academy - ITA
