Citizen Koch Goes to Tampa
Meet the left’s public enemy number one.
Sep 3, 2012, Vol. 17, No. 47 • By MICHAEL BARONE
Not even the most experienced reporter is likely to recognize him as he takes his seat in the New York delegation or struggles to make his way through the jostling crowds on the floor of the Republican National Convention this week in Tampa. David Koch (the name is pronounced like the soft drink) is likely to stand out only because he’s taller (6′5″) than most people. But he’s become a key figure in liberal Democrats’ demonology, as one of the two Koch brothers, David and Charles, who are supposedly using their vast wealth to make Republican politicians jump like marionettes. Earlier this month, for example, Americans for Prosperity, which the brothers founded many years ago, launched a $25 million advertising campaign against Barack Obama.
Nate Beeler / Washington Examiner
But most of that money comes from other sources, and David Koch, interviewed in his Manhattan corner office, becomes more animated when the talk turns to things other than politics. Like membrane filtration. Or cancer research. Or a new façade for the Metropolitan Museum of Art. On Koch’s list of things he spends time on, business and family come first, he says, followed by philanthropy ranging from medical research to the American Ballet Theatre to the dinosaur exhibit at the American Museum of Natural History. “I grew up falling in love with dinosaurs,” he says. Politics comes in somewhere around fifth.
Business, of course, means Koch Industries, of which Manhattan-based David, 72, is executive vice president and his older brother Charles, 76, operating out of headquarters in Wichita, Kansas, is chairman and CEO. Their father, Fred Koch, majored in chemical engineering at MIT in the 1920s and invented a superior method for converting heavy oil to lighter elements. Oil refineries were the original Koch Industries business; after Fred’s death in 1967, Charles and David, both also chemical engineering majors at MIT, expanded the business to oil pipelines, fertilizer, financial trading, artificial fibers, and lumber. Forbes says Koch Industries is the nation’s second-largest privately held firm (behind Cargill Inc., which offers agricultural, financial, and industrial products and services), with annual revenues over $100 billion. David says it is “very profitable.” Forbes pegs David’s and Charles’s net worth at $25 billion each. Bloomberg estimates that each is worth $36.4 billion.
The Koch brothers’ wealth thus seems not to come from reaping the profits of a longstanding monopoly but owes much to technological advances. Most of the businesses they are in are highly competitive and subject to disruption by technological innovation. Take membrane filtration, about which David Koch speaks with boyish enthusiasm. It means purifying liquids with films or filters. “It’s a $2 billion a year business,” Koch says. “We have the best technology of any membrane company, competitive with Siemens and General Electric, based on research in Boston, started by professors at MIT.” Koch says he subscribes to “all the technical magazines” and reads them, searching for new ideas that have “the biggest potential” for profit. Koch lights up when he talks about how membrane filtration means “we can purify water, take the salt out, purify human sewage.” He’s upbeat about the potential for saving lives and advancing public health—and about the profit potential in huge markets like India and China.
Koch says he takes a similar approach to cancer research. In 1992 he was diagnosed with prostate cancer, and he has had radiation treatment, surgery, hormone treatment, and most recently oral treatment in a clinical trial. He has donated $40 million for cancer research to Memorial Sloan-Kettering, $30 million to the M.D. Anderson Cancer Center, $35 million to Johns Hopkins, and $120 million to create the David H. Koch Institute for Integrative Cancer Research at MIT. The idea is to generate cooperation between engineers and biological scientists, with life scientists defining problems and engineers trying to find solutions, such as using nanoparticles to target chemical toxins directly at cancer cells. MIT researchers say Koch has stayed closely involved with their research, and is willing to invest in commercial offshoots.
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