Cris Franklin, the young trader in Houston: Franklin, interviews by author, 2016.
The risk extended all the way into the foundation: Debt figures from Alan S. Blinder, After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead (New York: Penguin Press, 2013), 49–50.
debt was carried in the form of home mortgages: Blinder, After the Music Stopped, 19. Insight into the economic crash also derived from the author’s time as a national business reporter for the Associated Press from 2008 to 2012, when he was covering unemployment, the labor market, and the Great Recession.
Then the loans were packaged into . . . CDOs: Michael Lewis, The Big Short: Inside the Doomsday Machine (New York: W. W. Norton, 2010); Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World (New York: Viking, 2018).
All of these derivatives bets were opaque: Doyle, Georgetown Law School class, “Complex Derivative Transactions,” spring semester of 2013.
a Clinton Administration regulator named Brooksley Born: Peter Coy and Silla Brush, “Top Clinton Aides Blew a Chance to Avert the Financial Crisis,” Bloomberg Businessweek, May 1, 2014.
The black box financial system swelled: Blinder, After the Music Stopped, 59–65.
Lehman Brothers declared bankruptcy: Carrick Mollenkamp, Susanne Craig, Serena Ng, and Aaron Lucchetti, “Lehman Files for Bankruptcy, Merrill Sold, AIG Seeks Cash,” Wall Street Journal, September 16, 2008.
The losses on Cris Franklin’s trading desk: Franklin, interviews by author, 2016.
others who worked with Charles Koch saw him behave in the same way: Franklin, Jeremy Jones, interviews by author, 2013–16.
Jeremy Jones came into frequent contact with Charles Koch: Jeremy Jones, interview by author, 2013.
His venture fund, Koch Genesis, was shut down: Ibid.; “Naturally Advanced Technologies Appoints Industry Veteran VP to Advisory Board; Industry Veteran Jeremy K. Jones to Consult on Partnership and Business Development Initiatives,” PR Newswire, March 2, 2009; Jefferson Weaver, “Georgia-Pacific Plant to Close Dec. 1,” News Reporter (Whiteville, NC), October 6, 2008; Gary Haber and Dan Shortridge, “Invista to Lay Off 400 at Nylon Plant,” News Journal (New Castle, DE), October 15, 2008; Geoff Folsom, “Flint Hills Closing: Vest Vows to Find Use for Plant,” Odessa American (TX), November 7, 2008; Geoff Folsom, “Flint Hills ESOP,” Odessa American (TX), January 28, 2009; Jeff Amy, “Monroeville Area to Lose 300 Jobs,” Mobile Register Press (AL), November 12, 2008; “Invista Will Halt Nylon Production in Waynesboro, Vice Mayor Says It’s a ‘Strong Blow’ to City,” News Virginian (Waynesboro, VA), December 10, 2008; Dan Heath, “70 to Lose Jobs at Georgia-Pacific,” Press-Republican (Plattsburgh, NY), December 11, 2008; Jimmy LaRoue, “Invista Cuts Debt by 63 Percent,” News Virginian, February 10, 2009.
The bloodletting at Koch . . . was mild: National job-cut figures compiled from historic database of the US Bureau of Labor Statistics.
Many of the jobs lost in 2008 never came back: Blinder, After the Music Stopped, 10–14.
Things looked very different from Charles Koch’s office: Charles Koch, Hall, Beckett, Markel, Feilmeier, interviews by author, 2013–16.
It’s difficult for outsiders to even understand . . . a contango market: Beckett, former senior Koch Industries trading executives speaking on background, interviews by author, 2013–16.
When the market goes into contango . . . to profit: Ibid.; Robert Tuttle and Alexander Kwiatkowski, “In Troubled Times, Stockpiling Crude May Be the Way to Hit a Profit Gusher,” Bloomberg News, December 9, 2008; “Pricing for Oil, Gas Seems Peculiar,” Times Record News (Wichita Falls, TX), February 8, 2009; Guy Chazan and Russell Gold, “Big Oil Still ‘Printing Money’ Despite Slump in Crude Prices,” Wall Street Journal, April 30, 2009; “Hoarding Crude Boosts Futures Prices: Companies Stockpiling in Supertankers,” Bloomberg News, December 9, 2008.
Outsiders . . . were denied: Steve Everly, “Speculators Profit by Locking in Higher Oil Prices,” Kansas City Star (MO), February 10, 2009.
even David Koch was forced to adjust his behavior and his outlook: Mike Spector, “Big Players Scale Back Charitable Donations,” Associated Press, November 25, 2008.
One evening in Houston . . . an exclusive social event: Franklin, interviews by author, 2016.
First came a giant federal bailout plan: David M. Herszenhorn, “Bailout Plan Wins Approval: Democrats Vow Tighter Rules,” New York Times, October 3, 2008; Edmund L. Andrews, Michael J. de la Merced, and Mary Williams Walsh, “Fed’s $85 Billion Loan Rescues Insurer,” New York Times, September 16, 2008.
What was unspoken . . . was that all of this would also mean more taxes: “Charles Koch: Perspective,” Discovery: The Quarterly Newsletter of Koch Companies, January 2008.
This moment was dangerous, in Charles Koch’s view: Ibid., January 2009; Bill Wilson and Roy Wenzl, “The Kochs’ Quest to Save America,” Wichita Eagle, October 13, 2012; Jake Tapper, “Billionaire Conservative Activist Charles Koch on 2012 Election: ‘We Have Saddam Hussein, This Is the Mother of All Wars,’ ” ABC News online, last modified September 6, 2011; Charles G. Koch, “Anti-Capitalism and Business,” address to the Institute for Humane Studies, April 27, 1974.
After these crashes . . . the American people blamed capitalism: “Charles Koch: Perspective,” Discovery: The Quarterly Newsletter of Koch Companies, January 2009.
message found a receptive audience in Steve Mawer’s living room: Franklin, interviews by author, 2017.
On the wall . . . painting that was quite unpleasant: Notes and photos from reporting in Charles Koch’s office, 2015.
CHAPTER 18: SOLIDARITY
In the early morning hours . . . Koch Industries’ headquarters: Notes from reporting at Koch Industries headquarters, 2015; current and former Koch Industries employees, interviews by author, 2013–18.
training began . . . a certain kind of employee: Pohlman, Charles Koch, Hall, Markel, interviews by author, 2013–15; Charles Koch, Science of Success, 77–94.
Koch began training them immediately: Notes from guided tours at Koch Industries headquarters, 2013, 2018; Abel Winn, Andrew Methvin, Hoffmann, interviews by author, 2013–16.
The unity among Koch Industries’ employees: General analysis based on interviews with dozens of current and former Koch Industries employees, 2013–18.
One of the true believers . . . Abel Winn: Winn, interviews by author, 2013.
Winn helped design a large laboratory: Ibid.; Amy Geiszler-Jones, “New Center to Teach Successful Koch Industries Strategy,” Inside WSU, September 22, 2006; Michael D. Parente and Abel M. Winn, “Bargaining Behavior and the Tragedy of the Anticommons,” Journal of Economic Behavior and Organization 84 (November 2012): 475–90.
Hammond . . . worked in a crummy little office: Hammond, Gary Bucknum, Franzen, Dodge, Smith, interviews by author, 2013–17; descriptions of IBU office from notes, photos, and video taken during reporting trips, 2013, 2017.
The size of the task . . . more severe than many of them understood: These figures and analysis are based on copies of IBU labor agreements for workers at the warehouse dating back to 1975, excluding several contracts during the 1980s and 1990s. The contracts from the 1970s provided a historic baseline, while more recent contracts showed the trajectory of working conditions since 2000. During this time, ownership of the warehouse changed several times, but the facility and the IBU remained constant. IBU labor contracts: 1975, 1978, 2000, 2005, 2010 (the first contract negotiated with Koch Industries), 2014, 2016.