Fred C. Koch

Fred Chase Koch (/ˈkoʊk/; September 23, 1900 – November 17, 1967) was an American chemical engineer and entrepreneur who founded the oil refinery firm that later became Koch Industries, a privately held company which, under the principal ownership and leadership of Koch's sons Charles and David, was listed by Forbes in 2015 as the second-largest privately held company in the United States.[2][3]

For Fred C. Koch's eldest son, see Frederick R. Koch.

Fred C. Koch
Born
Fred Chase Koch

(1900-09-23)September 23, 1900
Quanah, Texas, US
DiedNovember 17, 1967(1967-11-17) (aged 67)
Bear River near Ogden, Utah, US[1]
EducationChemical Engineer
Alma materRice University, Massachusetts Institute of Technology (1922)
OccupationChemical engineer, businessman
Known forFounder of Koch Industries; Co-founder of John Birch Society
ChildrenFrederick R. Koch
Charles G. Koch
David H. Koch
William I. Koch
Parent(s)Harry Koch (father)

Early life and education

Fred C. Koch was born in Quanah, Texas, the son of Mattie B. (née Mixson) and Harry Koch, a Dutch immigrant.[4] Harry began working as a printer's apprentice in Workum, Netherlands. He worked over a year at printers' shops in The Hague and in Germany before coming to the U.S. in 1888,[5] where he bought the Tribune-Chief newspaper.[6][7] Fred attended Rice Institute in Houston from 1917 to 1919[8] and graduated from the Massachusetts Institute of Technology (MIT) in 1922, where he obtained a degree in chemical engineering practice.[8][9]

Business career

Koch started his career with the Texas Company in Port Arthur, Texas,[8] and later became chief engineer with the Medway Oil & Storage Company on the Isle of Grain in Kent, England. In 1925 he joined a fellow MIT classmate, P.C. Keith, at Keith-Winkler Engineering in Wichita, Kansas. Following the departure of Keith in 1925,[10] the firm became Winkler-Koch Engineering Company.[1][8]

In 1927, Koch developed a more efficient thermal cracking process for turning crude oil into gasoline which allowed smaller players in the industry to better compete with the oil majors. The larger oil companies quickly sued in response, filing 44 different lawsuits against Koch, and embroiling him in litigation for years. Koch was to prevail in all but one of the suits (which was later overturned due to the fact that the judge had been bribed).[11]

In 1925, Koch had entered into a partnership with Lewis Winkler, a former employee of Universal Oil Products (now UOP LLC). Winkler developed a cracking apparatus for heavy crude oil with ostensibly no patented difference in comparison to his former employer's intellectual property; thus, in 1929, UOP sued Winkler-Koch for patent infringement. Also that year, nearly three years before the patent case went to trial, Winkler-Koch signed contracts to build petroleum distillation plants in the Soviet Union, which did not recognize intellectual property rights.[12]

This extended litigation effectively put Winkler-Koch out of business in the U.S. for several years. "Unable to succeed at home, Koch found work in the Soviet Union".[13] Between 1929 and 1932 Winkler-Koch supported the Kremlin and "trained Bolshevik engineers[14] to help Stalin's regime set up fifteen modern oil refineries" in the Soviet Union during its first Five Year Plan.[15][16] "Over time, however, Stalin brutally purged several of Koch's Soviet colleagues. Koch was deeply affected by the experience, and regretted his collaboration."[13] The company also built installations in countries throughout Europe, the Middle East and Asia.[1] Koch partnered with William Rhodes Davis to build the Hamburg Oil Refinery, the third-largest oil refinery serving the Third Reich, a project which was personally approved by Adolf Hitler.[15][17] The refinery was significantly important, for it was one of the few refineries in Germany that could produce the high octane fuel needed for fighter planes.[18] Koch President and COO David L. Robertson acknowledged that Winkler-Koch provided the cracking unit for the 1934 Hamburg refinery, but said that it was but one of many "iconic" American companies doing business in Germany at the time.[19] From 1928 to 1934, 39 cracking units for heavy oil had been built.[19]

Having succeeded in securing the family fortune, Koch joined new partners in 1940 to create the Wood River Oil and Refining Company, which later became known as Koch Industries. In 1946, the firm acquired the Rock Island refinery and crude oil gathering system near Duncan, Oklahoma. Wood River was later renamed the Rock Island Oil and Refining Company.[20] In 1966, he turned over day-to-day management of the company to his son, Charles Koch.[21][22]

Personal life and death

In 1932,[23] Koch married Mary Clementine Robinson in Kansas City, Missouri.[24] Mary was the daughter of a prominent Kansas City physician,[25] Ernest Franklin Robinson,[26] who helped to found the University of Kansas School of Medicine,[27] and Mary Burnet Kip,[26] who died at an early age.[25] Her mother Mary was the paternal granddaughter of William Ingraham Kip, the Episcopal missionary bishop to California; and the maternal granddaughter of William Burnet Kinney, ambassador to Italy, and his wife, author Elizabeth Stedman (née Dodge). The Kochs had four sons: Frederick (1933-2020), Charles (b. 1935), and twins David (1940-2019) and William (b. 1940).[8]

Fred Koch had a long history of heart problems. His son David described in 2010 how he received word that his father had died: "Father was on a hunting trip bird-shooting in Utah. He was in a blind with a gun loader next to him. He was having heart palpitations and wasn't shooting that well. Finally a lone bird came over. He took the shot and hit it square. The duck falls from the air. He turns to the loader and says, 'Boy, that was a magnificent shot,' and then keels over dead."[25]

Political views

In 1928, Koch traveled to the Soviet Union to build oil refineries, but he came to despise communism and Joseph Stalin's regime.[6][28] Koch self-published a 39-page, anti-communist pamphlet "A Business Man Looks at Communism" relating his experiences in the Soviet Union and warning of the threat of Communist take-over.[29][30]:46 Koch wrote that one of the "Potential Methods of Communist Take-over in U.S.A. by Internal Subversion" was "Infiltration of high offices of government and political parties until the President of the U.S. is a Communist...Even the Vice Presidency would do as it could be easily arranged for the President to commit suicide."[25][30]:46[31]:12 Koch wrote that "socialism is the precursor to communism."[29][31]:27 Koch wrote that the Soviet Union was "a land of hunger, misery, and terror".[11][31]:5 Koch wrote that he toured the countryside and received what he wrote was a "liberal education in Communist techniques and methods."[11][31]:5 Koch grew persuaded that the Soviet threat needed to be countered in America.[11]

According to journalist Daniel Schulman, writing in Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty, upon his return to the United States, Koch "saw evidence for communist infiltration everywhere" and the pamphlet was "a forceful, though deeply paranoid polemic intended to jar Americans from their apathy."[30]:41,46 According to his son, Charles, "Many of the Soviet engineers he worked with were longtime Bolsheviks who had helped bring on the revolution." It deeply bothered Fred Koch that so many of those so committed to the Communist cause were later purged.[11] According to his son, David, his father "was a very conservative Republican and was not a fan of big government,"[11] and was paranoid about communism.[25] David told author Brian Doherty his father "was constantly speaking to us children about what was wrong with government and government policy. It's something I grew up with – a fundamental point of view that big government was bad, and impositions of government controls on our lives and economic fortunes was not good."[32]:407

In 1958, Koch became a founding member of the John Birch Society, an American political advocacy group that opposes communist infiltration and supports limited government.[13][25][33] Koch held John Birch Society chapter meetings in the basement of his family's home in Wichita, Kansas.[30]:49[34]

Also in 1958, Koch helped amend the constitution of the state of Kansas to make Kansas a right-to-work state.[12][30]:49[35]

References
  1. Dick Dilsaver (November 18, 1967). "Fred Koch, Industrialist, Dies in Utah". The Wichita Beacon.
  2. Murphy, Andrea, ed. (2015). "America's Largest Private Companies" (online). Forbes (October 28). Retrieved January 19, 2016.
  3. Wayne, Leslie (November 20, 1994). "Pulling the Wraps Off Koch Industries". The New York Times. p. Section 3; Page 1; Column 2.
  4. Mixson, John Leslie (1975). The Mixon-Mixson family, Volume 3. American Reference Publishers.
  5. "Making Headlines" (Adobe Acrobat (*.PDF)), Discovery, Koch Industries: 7, April 2009
  6. Daniel Fisher (March 13, 2006). "Mr. Big". Forbes.
  7. Koch, Charles C. (2007). The Science of Success: How Market-Based Management Built the World's Largest Private Company. John Wiley & Sons, Inc. p. 6. ISBN 978-0-470-13988-2.
  8. "History". fmkfoundation.org. Fred C. and Mary R. Koch Foundation. 2008. Archived from the original on November 14, 2013. Retrieved May 1, 2010.
  9. Liz Karagianis (Winter 2008). "Empathy for Others: Alumnus gives $100M to create cancer institute". Spectrum. Massachusetts Institute of Technology. His late father, Fred C. Koch, MIT class of '22, founded Koch Industries in 1925, made a fortune, and vowed to teach his four sons to become honorable, honest, and principled.
  10. Memorial Tributes: National Academy of Engineering, Volume 2. National Academy of Engineering. 1984. p. 148. ISBN 0-309-03482-5. Retrieved May 1, 2010.
  11. Continetti, Matthew (April 4, 2011). "The Paranoid Style in Liberal Politics". The Weekly Standard. Archived from the original on April 15, 2011.
  12. Graves, Lisa (July 10, 2014). "The Koch Brothers: The Extremist Roots Run Deep". Center for Media and Democracy. Retrieved July 25, 2015.
  13. Mayer, Jane (August 23, 2010). "Covert Operations: The billionaire brothers who are waging a war against Obama". The New Yorker. Archived from the original on August 24, 2010.
  14. Prof. Alexander Igolkin (November 1, 2006). "Learning From American Experience". Oil of Russia.
  15. Davies, Dave; Mayer, Jane (January 19, 2016). "'Hidden History' Of Koch Brothers Traces Their Childhood And Political Rise". NPR. Retrieved November 18, 2020 – via Fresh Air.
  16. Dickinson, Tim (September 24, 2014). "Inside the Koch Brothers' Toxic Empire: Together, Charles and David Koch control one of the world's largest fortunes, which they are using to buy up our political system. But what they don't want you to know is how they made all that money". Rolling Stone Magazine. Retrieved November 18, 2020.
  17. Confessore, Nicholas (January 11, 2016). "Father of Koch Brothers Helped Build Nazi Oil Refinery, Book Says". The New York Times. Retrieved January 12, 2016.
  18. Mayer, Jane (January 24, 2017). Dark Money. Anchor Books. p. 36. ISBN 978-0-307-94790-1.
  19. Confessore, Nicholas (January 12, 2016). "Koch Executive Disputes Book's Account of Founder's Role in Nazi Refinery". New York Times. Archived from the original on November 11, 2020. Retrieved January 13, 2016.
  20. J. Howard, Marshall II (1994). Done in Oil: An Autobiography. College Station: Texas A&M University Press. ISBN 0-89096-533-1.
  21. Bruce Upbin; Brandon Copple (December 14, 1998). "Creative destruction 101". Forbes.
  22. "Summary of Koch Industries History". sec.gov. U.S. Securities and Exchange Commission. November 14, 2005. Retrieved February 18, 2010.
  23. Wayne, Leslie (November 1989). "Survival of the Richest".
  24. For the ore/oil tanker named after Fred's wife, see Mary R. Koch.
  25. Goldman, Andrew (July 25, 2010). "The Billionaire's Party – David Koch is New York's second-richest man, a celebrated patron of the arts, and the tea party's wallet". New York.
  26. Mixson Family Genealogy. Retrieved January 19, 2012
  27. "The University of Kansas: "Present At The Creation"". September 6, 1905. Archived from the original on May 23, 2013.
  28. Koch, Charles C. (2007). The Science of Success: How Market-Based Management Built the World's Largest Private Company. John Wiley & Sons, Inc. p. 6. ISBN 978-0-470-13988-2.
  29. Leopold, Jason (July 30, 2014). "Revealed: Koch brothers' politics reflect their father's anti-communism". Al Jazeera. Retrieved June 15, 2015.
  30. Schulman, Daniel (2014). Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty. Hachette Book Group. ISBN 978-1455518739.
  31. Koch, Fred C. (1960). A Business Man Looks at Communism. Wichita, Kansas: self-published.
  32. Doherty, Brian (2007). Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement. Perseus Books Group. ISBN 978-1586483500.
  33. Diamond, Sara (1995). Roads to Dominion: Right-Wing Movements and Political Power in the United States. NY: Guilford Press. p. 324. ISBN 0-89862-862-8.
  34. Gold, Matea (May 20, 2014). "17 things you didn't know about the Koch brothers". The Washington Post. Retrieved July 28, 2015.
  35. Kaufman, Dan (June 12, 2015). "Scott Walker and the Fate of the Union". The New York Times. Retrieved August 21, 2015.
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