The deep changes . . . Reagan presidency: Budget figures drawn from United States Budget, 1981–1988, Inside Government, Office of Management and Budget.
The trend continued under Bill Clinton: Gimore and Sugrue, These United States, 576–95.
the overall size and burden of the federal government continued to grow: Clyde Wayne Crews Jr., Ten Thousand Commandments: A Policymaker’s Snapshot of the Federal Regulatory State (Washington, DC: Competitive Enterprise Institute, 1996).
There was . . . between government and private enterprise: Hacker and Pierson, American Amnesia.
But a loophole . . . apply only to new oil refineries: Dianne M. Shawley, former senior counsel, Environment and Natural Resources Division, US Department of Justice, interviews by author, 2016. Shawley participated in a federal effort to enforce the new source review process of the Clean Air Act, resulting in settlements with Koch Industries and other oil refiners. Also Shi-Ling Hsu, “What’s Old Is New: The Problem with New Source Review,” Regulation, Spring 2006; Jonathan Remy Nash and Richard L. Reeves, “Grandfathering and Environmental Regulation: The Law and Economics of New Source Review,” Northwestern University Law Review 101, no. 4 (2007).
Oil companies expanded . . . gaming the New Source Review program: Shawley, interviews by author, 2016; Suzanne Gamboa, “Refiner Agrees to Pollution Controls,” Associated Press, December 22, 2000.
After the Watergate scandal of the early 1970s: Zephyr Teachout, interview by author, 2017; Zephyr Teachout, Corruption in America: From Benjamin Franklin’s Snuff Box to Citizens United (Cambridge, MA: Harvard University Press, 2014).
In 1996 . . . Economic Education Trust: Glenn R. Simpson, “New Data Shows That Koch Firm Funded GOP TV Ads in ’96 Races,” Wall Street Journal, June 1, 1998.
In October of 1996, the Economic Education Trust gave $1.79 million: “Investigation of Illegal or Improper Activities in Connection with 1996 Federal Election Campaigns,” US Senate Report 5, no. 167 (1998): 6309.
Triad was . . . had a strange business model: Ibid., 6289–313; US Senate Report 4, no. 167 (1998): 4603.
One of Triad’s consultants . . . designed specifically to shield the wealthy: US Senate Report 5, no. 167 (1998): 6311.
“Most disturbing, Triad is poised to become a model”: Ibid., 6290.
Koch Industries’ political operations . . . inside the company: Markel, Hall, interviews by author, 2013–14; Boulton, “Koch and His Empire”; Boulton, “Straight-shooting to the Top.”
Charles Koch’s office was located on the third floor: Notes and photos from reporting at Koch Industries headquarters and Charles Koch’s office, 2015.
Charles Koch liked to tell people that “true knowledge results in effective action”: Boulton, “Koch and His Empire.”
One of the first things Charles Koch did . . . get the rules written down: Wayne Gable and Jerry Ellig, Introduction to Market-Based Management (Fairfax, VA: Center for Market Progress, 1993).
The words of Market-Based Management were not simple slogans: Dozens of current and former Koch Industries executives and employees, Markel, Hall, Watson, interviews by author, 2013–18.
CHAPTER 8: THE SECRET BROTHERHOOD OF PROCESS OWNERS
Heather Faragher . . . winter of 1995: Heather Faragher, interviews by author, 2015; Heather Faragher, transcript of interview with Minnesota Pollution Control Agency (hereafter cited as MPCA) investigators, December 19, 1997.
The empty fields . . . sky was often slate gray: Notes from reporting at the Pine Bend refinery in March 2015.
Faragher joined the company: Faragher, interviews by author, 2015; Heather Faragher, transcript of interview by MPCA investigators, December 19, 1997.
It would be inaccurate to describe . . . corporate training: Faragher, and dozens of other current and former Koch Industries employees, interviews by author, 2013–18.
She watched while her bosses and coworkers broke the law: Accounts in this chapter are based in part on transcripts of lengthy interviews that the primary actors gave to investigators with the MPCA in 1997. Citations of interview transcripts often include a page number corresponding to germane sections of the interview in question, but those pages are not the only source for information in this narrative—details of each episode are often reinforced by statements elsewhere in the interview and by interviews with other participants. It is the overlapping accounts of all the interviews, in full, that undergird the narrative in this chapter. The interview transcripts are supplemented by interviews with participants, newspaper accounts, and court filings.
Faragher’s experience . . . problems at Koch Industries during the 1990s: Loder and Evans, “The Secret Sins of Koch Industries.”
Heather Faragher . . . small town of Bayport, Minnesota: Faragher, Lawrence, interviews by author, 2015; US Census data on Bayport, Minnesota.
In 1992, Koch launched . . . make cleaner fuels: “Koch Begins Construction on Clean Fuels Project,” PR Newswire, March 24, 1992.
In 1995, Koch was considering a new $300 million project: “Koch Refining Eyes Building 250-MW Petroleum-Coke Fired Unit in Minn.,” Industrial Energy Bulletin, May 19, 1995.
The production capacity . . . during this time: “Annual Refining Capacity,” Oil & Gas Journal, March 18, 1985; ibid., March 18, 1986; ibid., March 18, 1995; ibid., March 18, 1996.
The rapid expansion created strains: Faragher, interviews by author, 2015; Faragher, Brian Roos, Steve David, Tim Rusch, Larry Barnett, Terry Stormoen, Joseph Butzer, Charlie Chadwell, Gary Ista, Todd Aalto, Karen Hall, Ruth Estes, Eric Askeland, Rick Legvold, transcripts of interviews by MPCA investigators, December 19, 1997; “Whistleblower Trial Against Koch Refinery Begins in Federal Court,” Associated Press, January 4, 2000.
Karen Hall oversaw the division: Karen Hall, transcript of interview by MPCA investigators, November 4, 1997.
Faragher’s glass-walled office was located next to Hall’s: Faragher, interviews by author, 2015.
The refinery pumped . . . every day: Roos, transcript of interview by MPCA investigators, November 17, 1997, 64; Faragher, interviews by author, 2015.
There was, in fact, a stark division of power: Faragher, interviews by author, 2015. Safety officials like Faragher are considered as working for “nonprofit” centers at Koch Industries, while managers who operate the facilities are considered “property owners.” Koch sought to contain expenses within its “nonprofit” functions. Gable and Ellig, Introduction to Market-Based Management, 41–46.
Karen Hall explained . . . the operations people: Karen Hall, transcript of interview by MPCA investigators, November 4, 1997, 14.
The operations team that Faragher reported to was run by . . . Brian Roos: Faragher, interviews by author, 2015; Roos, transcript of interview by MPCA investigators, November 17, 1997, 64.
The refinery at Pine Bend was divided into five groups: Faragher, interviews by author, 2015; Karen Hall, transcript of interview by MPCA investigators, November 4, 1997, 19–20; Roos, transcript of interview by MPCA investigators, November 17, 1997, 5–6.
Environmental engineers . . . nonprofit groups: Gable and Ellig, Introduction to Market-Based Management, 41–46.
Heather Faragher spent a lot of time walking: Faragher, interviews by author, 2015.
One of the operators . . . Todd Aalto: Todd Aalto, transcript of interview by MPCA investigators, November 6, 1997.