How David Koch Made The World A Better Place (With Less Pollution) and The Left Cheers His Death: At Least Get Your Facts Straight

With news of David Koch passing yesterday it seems as if some people on social media and elsewhere are cheering the fact that David Koch passed away. My own view is that social media has allowed a small percentage of individuals write awful, vile, and hateful things (I don't think this should be regulated though as I believe in the first amendment of free speech). These types of things in my view have led us to a more uncivil society. Years ago even when someone passed away bitter political rivals would recognize the passing of that individual and offer condolences to the remaining family members. These days it seems as if you dislike someone and their political views you need to at least do the equivalent of give them the middle finger with an f* you so everyone knows how you really feel.

Actress Bette Midler first incorrectly retweeted that Charles Koch had passed when in reality younger brother David Koch had passed. Actor Ron Perlman was wishing for a "speedy reunion of the Koch Brothers" (his post has since been removed). Actress Alyssa Milano said "celebrating a man's death while fighting to abolish the death penalty is a bad look for democrats/human". Actually I can't even find any evidence to remotely support this. As I type this 16,000 individuals have retweeted Ms. Milano's comment. Comedian Michael Ian Black who said on Twitter "in lieu of flowers, the family of David Koch requests that mourners simply purchase a Republican politician". Actor George Takei mentioned that "you have all the money in world but it can't change the ending. Do good in the world with your time on it. That is all I will say". It is interesting how people that didn't know Mr. Koch made such statements. If they even bothered looking at the actual evidence or data they clearly would realize what they said is not inaccurate but factually incorrect.

Comedian Bill Maher said on his show Real Time last evening that he was glad David Koch passed away and hope the end was "painful" for him. In his comments Maher mentioned that Koch passed away "yesterday" which is factually incorrect as Maher's show is live on Friday night and David Koch passed away Friday morning. I have watched Bill Maher for years and although I don't agree with him politically he does make some good points at times. Also what is ironic is that Bill Maher used to consider himself a libertarian at one point and would favor many of the same thing David Koch favors (legalizing drugs, legalizing gay marriage, a non interventionist foreign policy, criminal justice reform). Maher over the years has invited people with all types of political views on his show and usually is one of the few progressives that do. You would think Mr. Maher would be more tolerant than he was.

It should be pointed out that for years David and Julia Koch have attended many social functions with people in Hollywood and a different spectrum of the political aisle then they are. There are photos of Julia Koch with Naomi Watts, Glenn Close, Sarah Jessica Parker, even chef Emeril Lagasse. So even though David and Julia Koch may hold different viewpoints than some there are other actors/actresses that still have gotten along with them despite possible political differences.

David Koch believes that global warming would actually be "good for the earth" since "A far greater land area will be available to produce food". He goes on to say that "lengthened growing seasons in the northern hemisphere will make up for any trauma caused by slow migration of people away from disappearing coastlines...the earth will be able to support enormously more people because a far greater land area area will be available to produce food". Brother Charles Koch when asked about climate change in a 2017 interview by Stephen Dubner points out that despite all the projections of disaster there has not been the catastrophe that people have predicted on climate change. Charles is open to idea that if there is a risk what is the best way to fix it. To Charles "the answer is innovation, these policies that has U.S. government has, others have proposed or promulgated have just been symbolic. They have essentially made no difference. The EPA has said this". I would say that Charles and David Koch most likely are willing to accept that there is climate change but they would probably ask what is the cost and benefit for taking action today? They I believe would both be in favor of free market solutions to reducing pollution (trying to create efficiencies to reduce the amount of resources used thus reducing pollution or using technology

It should be pointed (as I did in this post) out that the world wouldn't be as clean if Koch Industries didn't exist. Between 1997-2012 Flint Hills Resources (a subsidiary of Koch Industries) reduced its emissions by 76% and their emissions were 38% lower than peer refiners for 2012. The Flint Hills Resources refinery in Rosemont, Minnesota from 1997-2006 decreased emissions of carbon monoxide, nitrogen oxide, and sulfur dioxide by 53%. Lastly Koch between 1995-2000 was able to reduce their pipeline leaks by 92% (it should be pointed out that in 1996 teenagers Danielle Smalley and Jason Stone passed away from a pipeline that Koch owned that was passing liquid butane through the pipeline-although this was a very unfortunate incident Koch would spend millions of dollars upgrading their pipelines with software, fiber optics cables, and a power supply that was uninterrupted). Koch generally reinvests 90% of their profits back into the business to make their processes and systems more efficient which in turn leads to less waste/pollution. Although, Koch hasn't been perfect on their environmental record they consistently have been improving the safety and efficiency of their equipment and reducing pollution with the use of technology.

Maher seems to focus on the environment issues though but Mr. Koch has done more to to help the environment that Mr. Maher (his only contribution to the environment has been smoking pot). For instance Koch produces toilet paper (cleaner in the backside), paper towels (cleans up messes humans create, Koch Industries sells pollution control equipment to reduce pollutants. In fact David Koch as far back as 1980 he would divide his weekends by either skiing or studying pollution control designs in the office. Most importantly Koch Industries has a division that David Koch was in charge of called Koch Chemical Technology which has it's own subsidiary called Koch Membrane that develops and helps companies and municipals filtrate and purify water. Koch would create advanced systems that could take dirty polluted water with iron, bacteria, silt and turn it into colorless, crystal-clear drinking water. Koch even developed products that desalinize water (remove the saltine from water) and then turn it into water that is consumable by humans or can be use by farmers for irrigation. David was so passionate about water desalination there is an article where he discusses the merits of a new product Koch develops a large diameter membrane that is integrated and smaller than existing systems that will help companies purify water at a reduced cost.

Mr. David Koch contributed his time, energy, and resources to different medical institutions over the years (around $400 million between 1998-2012). This doesn't even include the $150 million he gave in 2015 to Memorial Sloan Kettering through the David H Koch Charitable Foundation. He gave to institutions like Memorial Sloan Kettering, New York Presbyterian Hospital, MD Anderson Cancer Center. I might add that these gifts were never focused on only improving the health for just conservatives but the funds were used to improve the quality of life of many different people: from different backgrounds, races, and socioeconomic classes. He also gave $100 million to the New York State Theater which again benefited many different people. Also he gave $65 million to the New York Met in 2014. People forget that Mr. Koch chose to gave this money and could have decided to give away nothing.

It has been known for many years that Mr. Koch has given to organizations that are "right-winged". Often times people mention something is "Koch-funded" and associate whatever views the organization has to whatever Mr. Koch believes. It would be almost impossible for David Koch to hold the exact same view for every organization he supports. At his core he is a libertarian and simply believes that people should left alone, the size and scope of government should be limited to allow people to maximize peace and prosperity and allow individuals to realize their full potential. To me this doesn't sound as harmful as liberals make Mr. Koch out to be.

Despite how people may feel about his political views David Koch has in fact made the world a better place. He ran a division of Koch Industries that turned bacteria and dirty water into clean drinkable water for people all over the world. For many years David Koch studied pollution control designs and he oversaw a division of Koch Industries that created equipment to reduce emissions and pollution on refineries. He contributed hundreds of millions of dollars to medical causes and cancer research centers that greatly enhanced prostate cancer for future individuals. He gave generously to the arts, sciences, and museums that many patrons in New York City benefited from in the past and many many more patrons will still continue to benefit from in the future. Before liberals say awful and vile things they should first have studied what David Koch did with his life before making statements.

The Life and Passing of David Koch and What Is Next for Koch Industries?

Today (Friday August 23, 2019) it was announced that David Koch passed away at the age of 79 (I saw this first reported by CNBC earlier this morning). David formally retired from Koch Industries last July as he was suffering from health issues. David Koch had been suffering from prostate cancer since 1992. In 1993, after finally entering remissions from Sloan Kettering David decided to celebrate and have a $100,000 fireworks display with an orchestra champagne soiree at his Southampton place. For years David was taking the drug Zytiga for his advanced prostate cancer. Koch explained here how the drug turned his prostate cancer into a more manageable disease.

David started working for Koch Industries as a technical services manager in 1970 and founded the New York office and was only earning $16,000 per year when he started working. He then was promoted to run Koch Engineering in 1979. His last position before he retired from Koch Industries was as an Executive Vice President of Koch Industries were he oversaw the Chemical Technology Group. During David's 48 year tenure the subsidy of Koch Industries purchased more than 50 businesses and during his tenure grew the company by 1,000 fold. The success paid off over time though with the growth of Koch Industries (who had a history of reinvested 90% of their profits back into the business). In 1979 as I covered in this post David was earning a $250,000 salary, a $850,000 bonus, and a $3 million dividend which David would testify in the Koch vs. Koch trial that he thought it was "way more than we deserved". He believed that one of the most important lessons he learned in life was how to be successful. David believed "if you have an undertaking you must prepare thoroughly. Success requires dedicated work, and it is not just a brief spurt. It's a continuous way of life, day after day, week after week, year after year" he would remark back in 1999.

Nearly every week David would fly from New York to Boston and spend 2 days with Koch Membrane Group (in 2008 the company had sales of $110 million). The subsidy of Koch Industries that started with essentially 0 employees now has 5,000 employees. One of the areas that Koch Membrane focused on was turning dirty undrinkable water that might have been left over from a refinery and converting it into drinkable or reusable water. So yes David Koch literally made the world a cleaner place. If you don't believe me read this article where David Koch nerds out on water filtration systems and discusses technology will not only purify water but will do it at a reduced cost.

David was known for working long hours and get to the office starting around 9 A.M. and then stay until 7 P.M. (with 12 hour days not being unusual for him. He also served on 21 different boards (which would be a full time job in itself) and spent about 1/3 of his time on charitable organizations.

During his life Koch was very charitably inclined. He had given away $1.3 billion to charity before he passed away to medical institutions, the arts, cancer research centers, and to the sciences as well. Koch has been an individual who always have been giving away his money as this 1999 MIT article shows he gave away half of his income every year. He personally insured thousands of individuals got the best medical care possible and wanted to make sure people he cared only got the best. Even liberal Lawrence O'Donnell on MSNBC thanked David Koch on air for his generosity.

In his younger days David was quite a bachelor and often times would have up to 3 dates per day as I covered in this post. David always enjoyed having lots of beautiful women around him. His pal John Damgard who was his high school classmate said back in those days David "could afford to pick up the check even in those days, he was 6'5, wore pretty good looking suites, and was interesting". David use to joke that "if you have spent as many years as I did begging girls for favors, you'd have bad knees too".

In  January 1991 friends had set up David and Julia Flesher on a blind date and took her to Le Club on the East Side of New York, and then afterwords they both shook hands and Julia recalled saying "I'm glad I met that man because now I know I never want to go out with him". David would recall that in his younger days "when I was a bachelor I with a different girl every week, people didn't think I was quite legitimate". However, in July 1991 when they ran into each other at a party David introduced himself and Julia had pointed out that they had gone out before. David pulling out his trusty black book said "Oh my God" and she was correct. When David was diagnosed with prostate cancer Julia stuck by him but gave him two options. Either David could be a live husband or a dead bachelor". The couple married on May 26, 1996 at David Koch's home in Southampton Long Island when David was 56 years old and Julia was 33 years old.

On February 1, 1991 David brushed with death as he was aboard an USAir Flight when it collided with a SkyWest plane upon trying to land. David was the only survivor in first class and 35 people passed away on the flight. After this close call with death David dedicated the rest of his life to philanthropy. David would write about the experience and this was published in the New York Times back on March 7, 1991.

He ran for the libertarian party in 1980 as the vice presidential candidate (with Ed Clark on as the front runner) and received 1.1% of the total nationwide vote. Koch personally gave $1 million of his own money to the libertarian party (which I estimated to be around 12.5% of his total income) in 1980. During the 1980 campaign David would go across the country visiting different cities and states to get the word out. The Clark/Koch campaign didn't take limos, slept in private homes, and flew commercial airlines (David would sit in first class 11 years later when he was in a terrible plane crash).  While on the country tour Koch complained when a staffer was driving David around the staffer insisted they drive under the 55 mph speed limit. David was fully aware that the libertarians would not win the nomination however wanted to influence the thinking of Americans in terms of being more open to free markets and individual choice within our own private lives.

For fun David enjoyed taking a private jet with close friends and visiting Africa, the Himalayas, and the Amazon jungle, and would enjoy reading but would say "I'm so darned busy with my business that I don't get to read nearly enough". He would also had a 6 day $100,000 Alaska cruise where he rented a minesweeper that was converted into an excursion ship, and he would charter three helicopter before getting onto the boat. I covered David Koch's lifestyle and homes in this post.

Now that David Koch has passed Koch Industries loses one of its largest shareholders. I estimated that Koch Industries after taxes earns roughly $13 billion per year, which would mean David Koch pulls in close to $400 million per year in dividends. Koch CFO Steve Feilmeir estimated that Koch Industries was worth $12 million when Charles Koch took in over and  grew 7500 times which would put the net worth of Koch Industries at $90 billion and say David Koch is worth close to $40 billion.

In terms of what happens next with Koch Industries should be interesting. David Koch in this 2014 article mentions that "almost all our money is in Koch Industries. Once we pass, our children will acquire the stock". David leaves behind 3 children (David Jr roughly 20, Mary Julia roughly 17, and John Mark roughly 12) who appear they will now be the shareholders of Koch Industries. Of course minors can't posses property or any interest until they reach the age of majority (age of 18 in New York). Even if they were of legal age there would be no rational reason for them to have an interest in the company given they haven't work in the company yet and they are of yet of age to be making decisions shareholders should be making. It is possible that a trustee is named to make decisions for them until they reach a certain age.

Years ago an insurance agent Michael Brown had planned to met with Charles and David Koch to sell them a policy (Brown was unable to make the meeting and lost a $8 million commission as a result). Insurance policies can be used to save on estate taxes. Often times the insurance policy is purchased and placed into an irrevocable life insurance trust and the assets aren't counted as part of the estate put can provide liquidity.

The executor of David Koch's estate has 6 months to pay estate taxes under normal rules however under IRS code section 6166 the Koch family could have up to 14 years to pay estate taxes! Also it is worth pointing out that in addition to federal estate taxes New York state also imposes their own state estate taxes which are about 16% which would add $6 billion to the coffers of New York (assuming no planning has already been done).

David Koch could also gift his shares to a charitable foundation and receive a federal estate charitable deduction and then have the charity sell back his shares to Koch Industries and the charity would get cash as a result. Although, one issue with this would be Koch Industries plows back 90% of their earnings into the company and this would take Koch Industries many years to pay back the charity unless there was planning done ahead of time.

What happens with David's shares of Koch Industries may not be known for years if ever. My prediction though would be his shares are gifted to charity, along with using insurance, and other advanced estate planning concepts to reduce the taxable amount of his estate.

To me David Koch is an American hero who worked hard all his life and helped grow a division of Koch Industries that started out with nothing, gave part of his fortune and advance knowledge for cancer research, tried to get the word out on libertarian principals, wanted to see a society that let individuals make their own decisions when it came to their own pocketbook or the bedroom. David wanted to be remembered as someone "who did his best to make the world a better place and he hopes his wealth will help people long after he passes".