TEA PARTY BACKERS: Organized Crime, Oil Theft

Koch And Native-American Reservation Oil Theft

By Dave Johnson
Created 03/20/2011 – 8:00pm

Just what is this Koch Industries? Should it be called a “company?” If so we need to re-think the idea of what a company and a business is supposed to be. Even the brother of Koch Industries owners David and Charles Koch called the company an “organized crime” operation.

Koch money is a key driver of the conservative movement. Almost every [1] conservative-movement rock [2] you turn over [3] has Koch money [4] crawling around [5] under it. As the movement becomes more and more of a pay-to-play operation, conservatives of every stripe do more and more to protect and enrich the Koch operation. This has included blocking, disrupting and avoiding official investigations of accusations. It also includes funding front groups to advance the political and financial interests of the company and its owners.

Theft Of Oil From Reservations

Oppose The Future [6] has the story of how Koch Oil [7] was caught stealing oil from an Indian Reservation, reducing or removing the incomes of so many poor residents.

At some point in 1987, Thurmon Parton’s royalty checks for the three oil wells he inherited from his mother suddenly dropped from $3,000 a month to a little over $1,000. He and his sister, Arnita Gonzalez, members of the Caddo tribe, lived near Gracemont, Oklahoma, a town of a few hundred people on a small grid on the prairie.

Those modest royalties were the only source of income each of them had.

. . . What happened to Mr. Parton, Ms. Gonzales and Ms. Limpy had nothing to do with the wells or how they were producing. Their oil was being stolen. And all of the evidence pointed to the same culprit: Koch Oil, a division of Koch Industries.

This is an important story today because it helps us understand the nature of the Koch operation, which has so much influence over our politics and even livelihoods today. It also helps us understand why our government not only appears to be influenced, but often to be outright corrupted. From the story,

In the spring of 1989, a Special Committee on Investigations of the United States Senate’s Select Committee on Indian Affairs was formed to look into concerns that the path to tribal self-rule was impeded by fraud, corruption and mismanagement from all sides.

… Within a span of months, the Special Committee determined that “Koch [Oil] was engaged in systematic theft, stealing millions in Oklahoma alone.” BLM, even with a tip that Koch was behaving improperly, hadn’t done a thing.

Oppose The Future [7] lays out the story and details of the oil theft. There is also story of the years following.

“A Broad Pattern Of Criminal Behavior”

Back in 1996 Business Week looked into the relationship between then-Senator and Presidential Candidate Bob Dole and Koch Industries and an apparent pattern of influence by the company, in BOB DOLE’S OIL-PATCH PALS [8]. Here are some excerpts from their investigation, [emphasis added]

Koch has had a history of run-ins with the Justice Dept. and other federal agencies. In 1989, a special congressional committee looked into charges that Koch had routinely removed more oil from storage tanks on Indian tribal lands … Dole tried to influence the Senate committee to soft-pedal the probe. Nevertheless, after a yearlong investigation, the committee said in its final report, “Koch Oil, the largest purchaser of Indian oil in the country, is the most dramatic example of an oil company stealing by deliberate mismeasurement and fraudulent reporting.” The report triggered a grand jury probe. The inquiry was dropped in March, 1992, which provoked outrage by congressional investigators.

Then in April, 1995, the Justice Dept. filed a $55 million civil suit against Koch for causing more than 300 oil spills over a five-year period. Dole and other Senators, however, sponsored a bill … that critics charge would help Koch defend itself … legal sources say the government’s ultimate goal is to use evidence in the two actions to establish that Koch has engaged in a broad pattern of criminal behavior.

… From Apr. 19, 1991, through Nov. 2, 1992, David Koch and the Koch Industries political action committee together contributed $7,000 to Nickles’ campaign war chest. Around the same time, [Oklahoma Republican Senator Don] Nickles sponsored Timothy D. Leonard, an old friend of Nickles, for the post of U.S. Attorney in Oklahoma City. … initially, questions were raised in the U.S. attorney’s office about whether Leonard should recuse himself because Koch Industries purchased oil from wells in which Leonard and his family had royalty interests … Then-Deputy Attorney General William P. Barr granted him a waiver to participate in the case … In March, 1992, after an 18-month investigation, the U.S. Attorney’s office terminated the grand jury probe and informed Koch it anticipated no indictments. … As the grand jury investigation was winding down, Nickles sponsored Leonard for a federal judgeship. He was nominated by President Bush in November, 1991, and confirmed by the Senate the following August.

Business Week lays out the evidence [8] in detail. The timing, with Republican administration/committee/agency/department after administration/committee/agency/department impeding and/or dropping investigations into Koch activities is also clear.

In 2000, CBS’ 60 Minutes ran a segment, Blood And Oil And Environmental Negligence [9] looking at the activities of the Koch brothers and their private company Koch Industries,

As we told you when we first reported this story last November, the Koch family of Wichita, Kansas is among the richest in the United States, worth billions of dollars. Their oil company, Koch Industries, is bigger than Intel, Dupont or Prudential Insurance, and they own it lock stock and barrel.

William Koch, brother of company owners David and Charles, called the company an “organized crime” operation:

Koch says that Koch Industries engaged in “(o)rganized crime. And management driven from the top down.”

“It was – was my family company. I was out of it,” he says. “But that’s what appalled me so much… I did not want my family, my legacy, my father’s legacy to be based upon organized crime.”

In March, 2001 the incoming Bush administration repealed the “responsible contractor rule” that barred companies that chronically defraud the government and/or violate federal pollution, wage and other rules from receiving federal contracts.

Then, in 2002 the Bush II administration awarded Koch the contract [10] to supply oil to the Strategic Petroleum Reserve. (There were accusations that the government bought oil when prices were high, and sold it when prices were low.) The contract was renewed in 2004. Koch received tens of millions [11] in other government contracts during the Bush years.

The story [12] and timeline of the Koch operation (and its front-groups) go on [13] and on [14], organizing and funding [15] climate-denial front groups [16], front-groups run and funded by the Koch Brothers [17] organizing and funding the Tea Party [18]. (Please click the links.)

Think Progress [19] in particular has been following the activities of this “company” [20] and its front groups [21], and it is certainly worth taking a look. See REPORT: How Koch Industries Makes Billions By Demanding Bailouts And Taxpayer Subsidies (Part 1) [22],

Koch funds both socially conservative groups and socially liberal groups. However, Koch’s financing of front groups and political organizations all have one thing in common: every single Koch group attacks workers’ rights, promotes deregulation, and argues for radical supply side economics.


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Posted by on March 22, 2011, With Reads Filed under Government. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

9 Responses to "TEA PARTY BACKERS: Organized Crime, Oil Theft"

  1. Sandra  May 12, 2011 at 11:32 am

    You are missing some of the best quotes from the Senate investigation! View the whole report from the Senate here: http://www.eric.ed.gov/ERICWebPortal/search/detailmini.jsp?_nfpb=true&_&ERICExtSearch_SearchValue_0=ED325263&ERICExtSearch_SearchType_0=no&accno=ED325263′ defer=’defer

    Best line: “Koch Oil, a subsidiary of Koch Industries and the largest purchaser of Indian oil in the country, is the most dramatic example of an oil company stealing by deliberate mismeasurement and fradulent reporting.”

  2. Ken Pearson  April 9, 2011 at 3:06 pm

    We are contacting the Tea Party Concerning a Song, Lure Records is working on for consideration as a Tea Party Theme Song. The Song was Written by 2 US Vets. We all know that Music is the Universal Language that every one can connect with. The Title to the song is “Don’t Tread On Me”, Every thing about this song cries Tea Party to America, If this song is promoted on major Radio as The National Tea Party Song “Don’t Tread On Me” People will love it, because it is the cry of the American people. It is a Modern Country Pop/Americana Song that will reach out to the American People. The Song is Copyrighted and Published through BMI.

    We can Promote the song on Major Radio and through your media make this a song to bring America Back

    CNN April 9,2011 showed a young man in Egypt playing on his guitar, a song he had wrote that has started A
    Revolution There. Music Is the Universal Language

    The First Verse and Chorus says

    Trying to Live Free in this Bad Economy.
    Hoping there’s a rainbow at the end
    Knowing if we try, we will not be denied
    And the right will win out in the end

    Like The Founding Fathers Said, Give Me Liberty Or Make Me Dead
    We Won’t Forget Those That Kept Us Free
    Washington Must Know, That We’ll Let Them All Go
    They Can’t Tread On Me.

    Any contact you could offer where we can send a copy of the song for consideration would be greatly appreciated.

    Ken Pearson

  3. shawn  March 24, 2011 at 6:01 pm

    That sucks .Here in America were we have a person that stills a slice of pizza and gets three strikes and people like this get away with it because they have the most money. They need to b placed in general population for life PRISON.

  4. Alton  March 23, 2011 at 8:12 pm

    Reading about the ‘Tea Pot dome Scandal’ many years ago and what should have happened but didn’t and what did happen but shouldn’t have, AKA because of this, something happened to America and it wasn’t good.
    So my point is can we give this stealing of the Indian oil a ‘flashy name’ so that if something goes wrong or right depending on where you stand…like, before the Oil theft or after it or before Koch went to jail or after that.

  5. Ameire  March 23, 2011 at 7:16 pm

    I think these people should be prosecuted for treason! I am a Vet and it is to funny how we keep going to war for the Republican oil buddies and big business interest!

  6. Thomas O'Brien  March 23, 2011 at 1:55 pm

    Here in Wyoming, they believe in everything the Faux News Network tells them.
    If there is “justice in this universe” the Koch brothers should knocked down
    a couple notches by the angels in heaven.

  7. Jsharnik  March 23, 2011 at 9:20 am

    Really appreciate your comments, brother… I suspect it is actually worse than published here…?

  8. Private Bradley  March 23, 2011 at 8:01 am

    The only pertinent question is whether we, as vets, will allow this sort of bullshit to go on and call it patriotism. How many people do you know watching those liars at Fox News and pretending to believe it? Remember our oath to protect the Constitution against ALL her enemies, foreign and domestic? These people think they own the damned Constitution, the flag, and every woman and man in uniform.

  9. B.A. Gilmore  March 22, 2011 at 5:41 pm

    Whoa. Time to get out of Dodge.

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