Faragher quickly discovered why this was. During her orientation as a new employee, Koch Industries flew her to Wichita. She joined a group of other new recruits from around the country, and they were shepherded into the opaque glass edifice of the Tower. Just entering the Tower felt like gaining admittance to a secret society. It was obvious that not just anyone could get past the security guards in the hushed lobby. Faragher and the other recruits were ushered deep inside the building and delivered to a large auditorium.
It would be inaccurate to describe what happened next as corporate training. Corporate training can often be little more than a gimmick, one that usually involves a captive audience of employees sitting in a meeting room while bosses recite a script of vaguely inspiring catchphrases—like “living with integrity,” “thinking outside the box,” and “a sum being greater than its parts”—which are promptly forgotten once employees get back to their desks and actually start working.
This is not what happened in Wichita. Faragher and her new colleagues were told that they were being let in on a secret. They were about to learn the Koch way of doing business. And Charles Koch, the CEO himself, would arrive to reveal the secrets in person.
Even decades later, Faragher would vividly remember seeing Charles Koch walk out onto the stage to address the crowd. He had bone-deep confidence, the kind that expresses itself in the weird way of making a man simultaneously humble and also completely certain of his beliefs.
During such meetings, Charles Koch explained that there were fundamental laws guiding the natural world: the law of inertia, the law of gravity. These were immutable forces that dictated events. And there were also immutable laws that governed human affairs. History showed, inarguably, that the laws protecting individual liberty and free-market capitalism were the only principles that could form the bedrock of a healthy society. The same held true for creating a healthy company. Individual liberty and free-market capitalism were the cornerstones. These principles would guide every action of every employee inside the company. Commitment to these laws was a precondition to employment at Koch Industries. It was also the surest path to a virtuous and prosperous life.
This wasn’t a pep rally. This wasn’t corporate training. As Heather Faragher would soon discover, this was her introduction to a new society. She joined this secret society eagerly. But after a year or so at Koch Industries, Faragher was exposed to the dark side of this society, too.
She watched while her bosses and coworkers broke the law and flagrantly poisoned the environment. She stood up and tried to stop them, and that’s when the secret society turned against her. Faragher saw firsthand how toxic a workplace could become when everyone spoke the same language and thought the same way, and how dangerous this could be to those who challenged the culture from the inside. She would lose her job, face the risk of doing time in jail, and have her career permanently damaged. All because she tried to do the right thing.
Faragher’s experience was not unique. The conduct she witnessed was emblematic of problems at Koch Industries during the 1990s. Throughout the company—from the pipeline division to the Corpus Christi refinery and elsewhere—a common problem emerged from the teachings of Market-Based Management. All too often, an emphasis on boosting profits took precedence over the need to operate safely or to obey the law. A belief in the power of markets created a disdain for the government agencies tasked with regulating Koch. And the people who didn’t agree with the principles of Market-Based Management were all but labeled apostates. Understanding what happened to Heather Faragher is the key to understanding why Koch Industries racked up a shocking number of criminal charges and civil complaints throughout the 1990s, branding the company as a kind of corporate outlaw.
When Heather Faragher joined the company in 1995, she only saw the promise of it—the potential. This was years before the sleepless nights, and the federal agents with guns on their hips showing up at her doorstep, and the pressure from her bosses to lie to authorities. All of that came later. In the beginning, there was only the thrill, the thrill of being part of something much larger than herself.
* * *
Heather Faragher had grown up about thirty-five miles north of the Pine Bend refinery, in the small town of Bayport, Minnesota. About three thousand people lived in Bayport back in 1990. It was a sleepy community carved into the western bank of the St. Croix River. This was the kind of town where conformity was the norm and where neighbors quickly learned each other’s business. But even from a very early age, Faragher knew what it was like to stand apart from the crowd. She learned this from one of the people she idolized most in the world: her father, Ted Lawrence.
Ted Lawrence described Bayport as a “redneck town,” and he made it abundantly clear that he did not consider himself a redneck. Lawrence commuted every day to his job in the city of Saint Paul. He worked for the county’s child protection services, counseling abused children and their families. He and his wife, Henri, had two kids. The oldest was Heather, and four years later came her little brother, Steven.
The Lawrence household was filled with politics. Ted Lawrence made sure of that. He wasn’t just a state social worker; he was also president of his local union. Lawrence spent hours of his free time working on union business and stumping for local politicians. He lived and breathed by the progress of the liberal wing of the Democratic Party, of which he considered himself a lifelong member. In September of 1966, the month Heather was born, Lawrence joined a march with Dr. Martin Luther King Jr. from Chicago to the town of Cicero, Illinois, the site of race riots in the 1950s. Lawrence told the story for many years to come; a story that showed how common people could take action to change a public wrong.
The Lawrence family often accepted foster children into their home on a temporary basis, giving them a place to stay before the state could find them something permanent. The foster kids were often minorities from urban Saint Paul, setting them apart from their neighbors in overwhelmingly white Bayport. The Lawrence home was different.
Ted Lawrence didn’t just encourage his kids to be Democrats. He encouraged them to do the right thing. Even more important, he encouraged them to argue. “It was always all right for [Heather] to argue with her mother and father if there was something she disagreed about,” Lawrence recalled. “There was lots of humor in our house. There was a lot of yelling in our house.”
Heather was a bright kid who always seemed to have a book in her hand. Like many first children, she was a rule follower who was a high achiever in school. She skipped the fourth grade and excelled in the fifth grade. She read far more books than were required. Also, like many firstborns, Heather made a point to walk in her parents’ footsteps. During her time off, she helped her dad walk door to door and stuff political pamphlets in mailboxes and hammer campaign signs into the ground. As a union president, Ted Lawrence was on the phone constantly with his union peers, discussing disputes or arranging campaigns. Lawrence was amused when he’d later hear Heather repeat the things he said over the phone. Heather and her little brother, Steven, had been absorbing it all. “That’s what amazed me the most, was how much they heard of my phone conversations,” Lawrence said. When little Steven was in grade school, he could name every major politician in Minnesota—he had helped campaign for many of them.