Not everyone did so poorly: Online job descriptions, résumés, Koch Industries employee listings.
The illegal activity at Pine Bend was not an isolated incident: Loder and Evans, “The Secret Sins of Koch Industries.”
CHAPTER 9: OFF THE RAILS
Koch Industries executives gathered . . . in Wichita: Watson, Hall, interviews by author, 2013–16; John Pitinger, Participant Profile, Aspen Institute, Communications and Society Program; “Innovation: Everyone’s Job,” Discovery: The Quarterly Newsletter of Koch Companies, October 2016.
Dean Watson joined . . . twenty-two years old: Watson, interviews by author, 2016.
Watson wasn’t shy about challenging the people around him: Watson, Hall, interviews by author, 2013–16.
Koch’s fertilizer plant was basically an oil refinery: Joe Hise, former fertilizer plant manager in Enid, Oklahoma, interviews by author, 2013; insight into the American food system derives in part from the author’s previous reporting as national agribusiness reporter for the Associated Press between 2008 and 2012.
fertilizer business itself was a platform for growth: Watson, Packebush, interviews by author, 2013–16; Bruce Upbin and Brandon Copple, “Creative Destruction 101,” profile of Koch Industries and Koch Agriculture, Forbes, December 14, 1998.
Koch Agriculture first branched out into the beef business: Watson, Perry Owens (feedlot manager), interviews by author, 2016.
If the motivations . . . the tactics Bill employed were even darker: Douglas Frantz, “Journalists, or Detectives? Depends on Who’s Asking,” New York Times, July 28, 1999; Burrough, “Wild Bill Koch.”
The Wall Street Journal published a front-page story: Robert Tomsho, “Blood Feud: Koch Family Is Roiled by Sibling Squabbling over Its Oil Empire,” Wall Street Journal, August 9, 1989.
During the late 1990s, Charles Koch found himself consumed: Hall, interviews by author, 2013–14; O’Reilly and De Llosa, “The Curse.”
There was . . . dedicated to expanding the company: Hall, Markel, interviews by author, 2013–14.
The largest animal feed maker in America: Watson, Hall, interviews by author, 2013–16; Traci Carl, “Koch Agriculture Buys Purina Mills,” Associated Press, January 13, 1998.
The pig industry was emblematic of this shift: Christopher Leonard, The Meat Racket: The Secret Takeover of America’s Food Business (New York: Simon & Schuster, 2014), 253–69.
The company operated fifty-eight giant feed mills: Purina Mills, 10-K filing with the Securities and Exchange Commission, Fiscal Year Ended December 31, 1996.
But 1996 was a down year for Purina Mills: Ibid.
This didn’t mean . . . excited about selling it: Arnie Sumner, interviews by author, 2016.
Koch’s ambitions for Purina were vast: Sumner, Watson, Hall, interviews by author, 2016.
Koch ended up borrowing . . . two massive sources of debt: Purina Mills, SEC Filing, form 10-12G, section 2, “Financial Restructuring Developments,” describing indebtedness as of March 31, 1998, and March 23, 2000.
One of Dean Watson’s first and most important jobs: Sumner, Watson, interviews by author, 2016.
Things started to go south . . . government policy: Watson, Hall, interviews by author, 2016; E. C. Pasour Jr. and Randal R. Rucker, Plowshares and Pork Barrels: The Political Economy of Agriculture (Oakland, CA: Independent Institute, 2005).
Before the deal . . . warned about Purina’s pig business: Watson, interviews by author, 2016.
In 1998, the US hog market experienced a shock: Leonard, Meat Racket, 329–33.
Purina Mills should have been insulated: Watson, Hall, interviews by author, 2016; Purina Mills, SEC Filing, form 10-12G, “Management Discussion and Analysis,” March 23, 2000.
Watson was named CEO of Purina Mills: Watson, interviews by author, 2016; “Purina Mills Names New CEO,” PR Newswire, December 21, 1998.
The hog market crisis raced forward faster . . . could respond: Dean Watson, Hall, interviews by author, 2016; Purina Mills, SEC Filing, form 10-12G, section 2, “Financial Restructuring Developments,” March 23, 2000.
Brad Hall was dispatched from Wichita to St. Louis: Hall, interviews by author, 2013–16; Purina Mills, SEC Filing, form 10-12G, “Management Discussion and Analysis,” March 23, 2000.
Charles Koch was just returning his full attention: Leslie Wayne, “Zero Is the Verdict in $2 Billion Koch Family Feud,” New York Times, June 20, 1998.
Most people . . . have never seen him get angry: Cris Franklin, Markel, Paulson, Hall, interviews by author, 2013–16.
When Brad Hall explained what was happening: Hall, interviews by author, 2016.
Watson was in Wisconsin: Watson, interviews by author, 2016.
There was only one way that Purina Mills might survive: Sumner, Hall, interviews by author, 2016.
“True knowledge results in effective action”: Boulton, “Koch and His Empire.”
In late August of 1999 . . . no extra money from Wichita: Purina Mills, SEC Filing, form 8-K, November 9, 1999, 22.
Koch appeared to have . . . protected it from the bankers’ claims: Koch’s use of the corporate veil as a financing structure was first discussed with the author by two sources requesting anonymity; both sources were directly involved with Koch Industries’ financial activity and strategies. Koch’s use of the corporate veil was confirmed by a third source, a financier working for a bank that lent Koch money for the Purina Mills acquisition who also requested anonymity. Also Purina Mills, SEC Filing, form 8-K, November 9, 1999, 27–28, 102–3.
Lawyers working for the banks . . . first hurdles of a lawsuit: Source directly involved in the matter, background interview by author, 2016.
Koch finally agreed to pay $60 million: “Purina Mills: Tentative Agreement for $60 Million from Parent,” Troubled Company Reporter, November 12, 1999.
After the banks were paid off, Charles Koch began to dismantle: Hall, interviews by author, 2016; “Economic Downturn Leads to Layoffs at Koch Industries,” Associated Press, April 13, 1999.
CHAPTER 10: THE FAILURE
Charles Koch drove himself to work every day: Charles Koch’s habit of driving his own car to work every day, and arriving very early, was described by several current and former Koch Industries employees, many of them making a special note of it because his car was in the employee parking lot before they arrived. His habits later changed, as noted in ch. 20.
The previous decade had been a public embarrassment: See endnotes, chs. 1–9.
This mattered to Charles . . . company’s conduct: Charles Koch deposition with US Senate investigators, transcript, April 24, 1989.
Charles Koch said . . . difficult times of his life: Charles Koch, interview by author, 2015.
Charles Koch was in a position to see the seeds of strength: The following passage summarizes the strengths of Koch Industries based on reporting outlined in endnotes for chs. 1–9.
“I just work harder”: Charles Koch, interview by author, 2015.
CHAPTER 11: RISE OF THE TEXANS
Over the course . . . reinvented Koch Industries: Details about Koch Industries’ strategic overhaul effort after the debacles of the 1990s were provided to the author by a source with direct knowledge of events who requested anonymity. Many granular details of the overhaul were included after being confirmed by external sources—Charles Koch’s decision to fire many company presidents, for example, created an external footprint of news releases announcing personnel changes. Broad outlines of the overhaul were also confirmed on the record by senior sources at Koch such as Brad Hall and F. Lynn Markel. (Markel left during the transition but witnessed its aftereffects.)