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Crane vs. the Kochs - The Fascists Eat Their Own

Written by Subject: Philosophy: Fascism

What does Anna Nicole Smith (Left) have in common with Kathryn Washburn Niskanen(Right)? You might ask.
On March 1st the Koch Brothers filed a law suit against Widow Niskanen in an attempt to force her to sell her inherited interest in Cato Institute to them. The holding of one quarter of the shares of Cato, held until his death by her late husband, was left as one third to his widow, one third to Cato, and a third to the Institute For Justice, according to TPM Muckraker.
But there is far more story here than meets the eye, part of which is the lingering image of Anna Nicole Smith, the gorgeous, blond, nubile woman who married creaky, aged billionaire Howard Marshall, II, and so laid claim to an unimaginably valuable slug of stock in Koch Industries, the only shares in the very privately held company not owned by family members. The stock amounted to 16% of Koch Industries. The case went to the Supreme Court, firing the imaginations of Americans, enticed by the provocative form and story of Anna Nicole. But Americans did not understand what was really at issue.
Today, with the parallel revelations of manipulation funded by the Kochs in covert manipulations of the initiative process across the country and intrusions into local self-determination, this may began to dawn.
In 2006 I was contacted by Hart Williams, who had begun to investigate the Kochs and the denizens of Cato. Today, you can benefit from his detailed and accurate insights at We know more than we did, but not enough.
Despite diligent research, the corporate books for Koch Industries still hold secrets thought to reveal cost plus contracts, unusual treatment by courts and government agencies that normally are charged with protecting the public, and other information lending insights to their relations with the Bush administration. Today, given the present, very political trajectory of the Brothers Koch, these events are well worth revisiting.
The bottom line of the Koch's profits include a string of offenses against public decency and safety of monumental proportions which were 'forgiven' by the Bushes, then in power.
In late 2000 it seemed some of these corporate policies might be catching up with Koch; they were hit with a 97-count indictment related to a cover up of discharge of more than 15 times the legal limit of benzene, a carcinogen, from a refinery in Corpus Christi, Texas. Koch faced penalties of $350, 000,000.00, according to the Center for Public Integrity.
Four Koch employees were also charged individually, facing up to 35 years in prison according to the same source. The lawsuits were settled three months into the Bush Administration. Koch plead guilty to one count of concealment, agreed to pay 20,000,000. All criminal charges were dropped by the Justice Department.
According to Greg Palast, published on, in May of 2001, Koch Industries was then the third largest industry donor to the Bush Campaign.
In another case, Koch was sued by the government in 1995 and 1997 over a reported 300 oil spills at pipelines owned and operated by the company. Those lawsuits sought from $71 million to $214 million in penalties for the spills, which dumped an estimated three million gallons of oil into lakes and streams in six states.
On January 13, 2000, the Justice Department settled that case for $35 million in fines, according again to the Center for Public Integrity.
Brad Goldstein Corporate Communications Director (561) 640-8822
But the back story is even deeper. Politico writes, “The group (Cato) had four shareholders until last year: Charles Koch; David Koch; Edward H. Crane III, Cato’s president; and William A. Niskanen,” what is left out is the curious exclusion of the founding shareholder left unnamed.
Murray Rothbard, the voice of the Austrian Economics in the last half of the 20th Century, is the shareholder who goes unmentioned. Murray was a founding member of the board for Cato until kicked off in 1981 for the hideous crime of disagreeing with Ed Crane.
The bi-Monthly Newsletter for The Libertarian Forum for January – April of 1981 ran on its front page an article headlined as, “Purged from Cato! It Usually Ends With Ed Crane.” Sounding entirely like Murray the article begins, “On Black Friday, March 27th, 1981, at 9:00 A. M. in San Francisco, the “libertarian” power elite of the Cato Institute, consisting of President Edward H. Crane, III and Other Shareholder Charles G. Koch, revealed its true nature and its cloven hoof. Crane, aided and abetted by Koch, ordered me to leave Cato's regular quarterly board meeting, even though I am a shareholder and a founding board member of the Cato Institute. The Crane/Koch action was not only iniquitous and high-handed but also illegal, as my attorneys informed them before and during the meeting. They didn't care. What's more, as will be explained shortly, in order to accomplish this foul deed to their own satisfaction, Crane/Koch literally appropriated and confiscated the shares which I have naively left in the Cato Witchita office for “safekeeping”, an act clearly in violation of our agreement as well as contrary to every tenet of libertarian principle.”
Murray was the spokesman for free market economics. Additionally, he had challenged the hold of Ayn Rand on the minds of Libertarians. Simultaneously, his voice was muted and replaced by Milton Friedman, who has never been a proponent of free market economics but is, rather, an adherent of the Chicago School of Economics. The difference between the two is significant. Friedman was entirely open to government intervention. As a proponent of the free market Rothbard opposed the use of legislation in human action and was a stalwart voice for individual rights, speaking out for unity between right and left. Retrospectively, this and not a 'personal conflict' was the source of Murray's ejection from Cato.
Koch Industries might have been free market during the life time of its founder, Fred C. Koch, the father of Charles and David, but, today, it is a solidly entrenched member of the Military Industrial Complex, or Greedville, as I call the constellation of banking, oil, war contracting, pharmaceutical, and other interests.
The Kochs, arguably, masterminded the conversion of the term, 'free market' into something very different, a justification of governmental subsidies which continue to fatten their bottom line, the antitheses of the direction intended by the original libertarian movement. In this, they had the eager assistance of Ed Crane, who is remembered in song, and with bitterness, by many.
Ed Crane is Cato's president, he keeps his standards high
He says he runs a trim, taut ship – just like Captain Bly.
The similarity is really nothing but a joke.
For there'll be no mutiny on the bounty of Billionaire Charles Koch.”
Lyrics by an obscure songster named A C Franklin, 1979
But the libertarian movement, suppressed by the actions of the Kochs and Cato, remained small. Today the mainstream believes the positions of Cato and Koch are Libertarian when nothing could be further from the truth.
It cost the Kochs to start Cato but the conversion of ideas, from freedom to those which supported the tenets of fascism, has paid off – for them. Solidifying their control of Cato was, and remains, all about the money.
The predatory strategies of the Koch Brothers were not popular, even in their own family. The Koch family came into enormous conflict on how the fortunes would be handled that reflect some of the questionable strategies that founded those fortunes, continuing to actively divide those involved.
Koch Brother, Bill, interviewed on 60 minutes August 21, 2001, said, "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."
Of the four brothers who inherited control of Rock Island Oil & Refining Co., at the death of their father, Fred Koch, in 1967, Charles and David managed to get a lock on control, renaming the megacorporation Koch Industries. The other two brothers, Fred, Jr. and William, retreated, having lost what seems to be an attempt to change the direction of the corporation.
The guy inside Koch who orchestrates their PR and political strategy is will not believe this but I could not make it up......Rich Fink. Their money, how they get in and what they will do to lower their costs and hang onto that money are some of the things they want to keep private.
Koch Industries was hit by the largest judgment for personal liability in history over the incineration of Danielle Smalley and a friend on Aug. 24, 1996. The cause was a defective high-pressure gas pipeline that exploded, taking the lives of the two teenagers. Both were 17. The amount named by the jury was 296 million dollars. Punitive damage awards exist to make it possible to hit those with money and power who act with blatant disregard of others. This, although Koch Industries admitted in court it had not properly maintained the lines and had failed to tell the public, according to the site of the attorney representing the Smalleys, Jim Arnold and Associates. Conveniently enough for Koch Industries, the Texas court forced a reduction in the award that meant that Danielle's father had to sign a nondisclosure agreement on the amount awarded.
The Smalley case was only one of three hundred spills caused over six states in the 90s, for which Koch Industries was finedaccording to Planet Ark.
Guess who was governor in Texas at the time? George W. Bush.
In 1992 a wedding took place at Camp David between Doro Bush and Robert Koch. When you notice the names and wonder about the relationship there you find, despite the visibility of the families, you cannot discover if Robert Koch is related to the Koch's who founded Koch Industries unless you really dig.
That is a small part of the real story. You can't get it all in an article and someday I will get around to writing the book.

1 Comments in Response to

Comment by John Hix
Entered on:


Your piece is well written and most interesting.  

Regards, John 

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