Charles Koch: Dark money’s slick operator

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Welcome to Good Bad Billionaire, the show where we pick a billionaire and we find out how they made their money.

And then we judge them.

Are they good, bad, or just another billionaire?

I'm Singh Singh and I'm a journalist, author, and podcaster.

And I'm Simon Jack, I'm the BBC's business editor.

And this episode, we've got a mysterious, shadowy figure, purveyor of political influence, oilman turned conglomerate, Charles Coke, K-O-C-H, not Koch, Coke.

So let's talk about Charles Coke by numbers.

He is currently worth a whopping $59.2 billion, which makes him the 24th richest person in the world.

He's 42% owner of Coke Industries, a conglomerate, big company, owns lots of different things, but founded on oil.

He's one of four brothers, and this may get confusing, so we will try and keep you on track.

Freddie, the eldest, Charles, second born, and David and Bill, who are twins.

Our focus is very much on Charles, but this is a family affair.

Coke Industries is a family story.

One of Charles' brothers once said that their battles make Dallas and Dynasty or Dynasty look like a playpen.

You remember how succession-y some of these episodes get?

Because this is like the ultimate succession family style drama.

Charles inherited the business from his father and made it about 7,000 times larger than the company he was given.

And if you don't know the name Coke Industries, you will know the names of some of the things they own, like Dixie Cups, Stainmaster Carpets, and even Lycra the Company.

Or some of the think tanks they fund, like the Cato Institute for Students of Politics.

That will be a name that some recognize.

According to a leaked speech, the Coches plan to spend $889 million on the 2016 election.

And some estimates suggest that this went up to about a billion dollars around the 2020 US election.

Some people call their influence in things like politics the coctopus, which doesn't quite work.

Doesn't quite work.

Maybe if you, you know, mispronounce their name ever so slightly.

Coctopus, coctopus, they are the Koch family, and for some, they're the epitome of what's known as dark money in US politics.

Okay, let's go from zero to a million.

And spoiler alert, this is not a rags to riches story.

No, it very much isn't.

In fact, you could call this a Niple baby story.

Yeah, richest to riches story.

So Charles, who's our focus, built the company larger than he inherited.

But Coke Industries was built by his father, Fred Coke.

Yes, and Fred was the son of a Dutch immigrant, and he studied chemical engineering at MIT in 1922.

And he worked for a couple of oil companies, including one in the UK.

So in the 20s, Fred set up a company with a guy called Lewis Winkler, who'd worked at somewhere called Universal Oil Products.

Now, Universal Oil had developed a way of cracking heavy crude oil in a clean and efficient way.

And cracking means splitting it up into various different components, one of which is gasoline, otherwise known as petrol.

Very lucrative indeed.

So Fred and his friend Lewis replicated this method from Universal Oil and then undercut them, charging a single fee rather than a subscription.

And understandably, these big oil companies were none too happy about that.

Yeah, they sued them, but Fred won the case and he proved opponents had bribed the judge.

Still, that didn't mean they were home scot-free.

While the court case was going on, Fred Koch was prevented from using that process in the States.

So what does he do?

He goes to Russia and helps develop the petroleum industry there under Stalin.

And actually that left a mark on Fred because he witnessed Stalin's purges, he had acquaintances killed and he returned to the US with a lifelong antipathy towards communism.

And as we'll see, this is going to be an antipathy that has long-lasting consequences on the Koch children.

So Charles's parents met in 1932.

They were married a month later.

They had a big Tudor-style house in Wichita, Kansas.

And Charles was born in Wichita, Kansas in 1935, the second of those four brothers.

So the eldest, remember, is called Freddie, and he has two younger twin brothers, Bill and David.

And a family friend said about Fred Sr., he was the monarch.

He was untouchable.

You didn't play bowl with him.

So a real Logan Roy-esque character.

Yeah, and really demanding father by all accounts.

Charles once said, Dad didn't want us to turn into country club bums, which actually was quite opposite because their house was right opposite the local country club.

So very much a kind of nightmare that Fred Coke would wake up and see the country club beckoning his layabout sons.

Yeah.

In fact, in 1941, Fred purchased Spring Creek Ranch in Kansas.

And Fred Sr.

forced the boys to take menial summer jobs at the cattle ranch.

Which tells you a lot about the kind of dad he was.

And in fact, Freddie, the elder son, had a nervous breakdown on the ranch one summer.

Yeah, well, let's focus again on Charles.

Charles, at 11 years old, a psychologist told parents that Charles's presence at home was causing problems for Bill.

Charles played with David, but excluded Bill, who was becoming angry and depressed.

This is already not a very happy family.

No, I mean,

probably 11-year-old Charles didn't realise the kind of politics of playing with one twin and not the other.

But as we'll see later on in this story, those politics have a very, very large fallout on the family.

So Charles was sent to boarding school in Arizona.

He said at the time, I pleaded with them not to send me away, but off he went.

And understandably, teenage Charles was a bit of a wild child.

Charles did some awful things as a teenager, according to his brother David, who describes him as a bad boy turned good.

For high school, Charles was sent to Culver Military Academy in northern Indiana, a sort of elite military school with a reputation for taking in wild boys and spitting out upright disciplined men.

Charles did not respond well to this.

He actually considered it a bit of a prison sentence, and he was expelled in his junior year for drinking beer on the train to school after spring break.

I personally think that, you know, this whole idea of sending your child to boarding school at 11, that is just setting your child up to be a little bit of a maladjusted individual.

It's still, people pay £60,000 a year to do it in this country anyway.

But I think it's interesting that we get to get the set up here.

We've got a fractious family where he's playing with one kid and not the other.

He's a bad person.

It's got a psychologist, which is pretty weird.

I mean, that's early on for psychologists to be interfering in family dynamics.

Yeah, so this would have been in the 40s.

40s or 50s?

Yeah.

It must have gotten quite bad for them to bring in a psychologist because they don't strike me as the kind of family who say, let's sit down and talk about our feelings.

You know, it's quite a weird setup, I would say.

So Charles actually gets bounced three times to different

living situations.

And the third time seems to be the charm because Fred Coke sends Charles to live with relatives in Texas.

Fred Sr.

had put the fear of God in him into Charles.

He said, if you don't make it, you'll be worthless.

You have disappointed me.

Ouch.

Pretty, pretty.

Pretty Logan Roy versus Kendo dynamics here.

But it seemed to work for Charles Koch because by 1957, he graduates from MIT just like dear old dad with an engineering degree.

And classes apparently came easy to him.

Whilst friends were cramming for exams, he would be laid back getting pizza and beer.

His passion was rugby, unusual in the US.

And apparently, he was very competitive on the field.

In fact, a fellow MIT graduate who refereed Charles's matches said it was like he was playing the Super Bowl.

Now he planned to do a master's in nuclear engineering, which is a new industry at that time, but it was a very tightly regulated industry.

So he changed to do chemical engineering.

Interesting, that fear of regulation.

Oh, yeah, well, I mean, it's clearly sets a seed for later on with what he does with the Koch campaigning.

And in 1959, he gets a job with a company in Boston.

You know, people who have studied this period, Daniel Shoman, for instance, who wrote a Koch brothers biography, said that he really enjoyed living in Boston and loved his job because in Wichita, he was Fred Koch's son, but in New England, Charles had found a way to step out of his father's shadow, and that seems to have been pivotal.

Yeah, meanwhile, dad is expanding the family business.

In 1959, he bought a 35% interest in Great Northern Oil Company.

We'll get more on that later.

And in 1960, annual sales were around $80 million, a lot of money in 1960.

But it was around this point that Fred, the dad, starts to put pressure on Charles to come and join the family business.

I mean, it doesn't sound like it was a gentle sort of pressure, sort of a firm application of stress, because Daddy Coke threatened to sell the company if Charles did not return home, which seems quite drastic to me.

But what a weird threat.

Right.

Come home or I'll sell the family company.

Odd.

Anyway, it works because in 1961, Charles Coke joined the family business as a vice president of Koch Engineering.

And at this point, right, he's also 26 and he's already a vice president.

Although it's interesting, those titles, vice president, assistant vice president, executive vice president.

In modern America, every middling executive is pretty much a vice president.

If you're an assistant vice president, you're dirt.

If you're a vice president, you're kind of mainstream.

And if you're senior vice president or executive vice president, you're actually getting somewhere.

So vice presidents, there's not just one vice president, there are hundreds.

Oh, interesting.

See, I didn't know that.

It's interesting how with all these billionaires, their families put such an emphasis on keeping the family together or at least in the business.

But that doesn't always work, as we'll see with Charles's story.

But Charles had some early success.

He opened a European manufacturing plant in Italy.

Fred Sr., his dad, had been very nervous about Italy because he thought that communism had a strong streak in northern Italy.

And clearly, Fred Sr.'s antipathy towards communism will have rubbed off on the Koch brothers, as we'll see later on.

But within four years, Charles had doubled Coke Engineering's sales, so clearly made a success of himself.

Yeah, and then he was made a vice president of the other bit of the business, Rock Island Oil, too.

And in 1966, he becomes president of the family business.

So he's clearly at this point the heir apparent.

And in fact, his older brother, Freddie, has fallen out with his father and moved to New York.

Yeah, Freddie in this story is sort of like the Connor in succession.

He is technically the eldest boy, but everyone knows someone else is the eldest.

Meanwhile, tensions developing between Charles and Fred, the dad.

Charles wants to expand the business.

His dad, Fred, a bit more cautious.

And the ultimate plan was for Charles to take over with Fred Sr., the dad, guiding him in the early years.

So at this point, he's around 30.

You know, this is a big multi-million pound company.

So, you know, he needs that kind of fatherly direction.

But this is the point where tragedy strikes.

Yeah, in 1967, Fred, the dad, has a heart attack, which leaves him hospitalised for two months.

He seems to recover, but a few months later, he goes duck shooting.

Apparently, he shoots a duck, turns and says, boy, that was a magnificent shot, and collapses.

So Charles Coke, our focus today, inherits an enterprise at this point with 650 employees and a value of $50 million.

Still pretty young and green, he's 32 at this point.

And he does have help from a long-standing Coke employee called Sterling Varner, who goes on to become president of the company.

Sterling acts as a kind of mentor figure where Fred Koch the dad couldn't.

So Charles, David and Bill each inherit 20%-ish of the company.

Freddie was left out of the will, but he already owned 14%.

So I think we can safely say that in 1967, at the death of his father, and they inherit these shares, that Charles Coke is a millionaire.

So how does Charles Coke go from a million to a billion?

He starts off by immediately consolidating his father's various companies and renames them Coke Industries in his father's honour.

And he does this in 1968 by having what was an uncharacteristic thing.

He holds a press conference and at which point it unveiled the company's impressive size.

$250 million in annual sales.

That is the equivalent of $2 billion in today's money.

And it was ranked among the largest privately owned companies in the US.

And I kind of want to ask at this point, why would you consolidate a business if everything's going well?

What's the point?

I think there are some reasons you would consolidate everything together.

And there are two main reasons.

One is you can bring a common philosophy, discipline, the way you do business, your methodology, whatever, across an entire group of companies.

I suppose, you know, going back to our Logan Roy, the succession thing, which runs through several of our billionaires, there are lots of businesses within that empire, but you always know who's the person at the top.

And I suppose, in a way, it allows you a sense of ownership and authority over an entire group of companies.

And it lets you make big moves as well, right?

Because in 1969, Charles started making his first of two really big early moves.

He buys a company called Great Northern Oil outright.

And if you remember, Fred, his dad, had bought 35% of it 10 years earlier.

Charles calls this one of the most significant events in the evolution of our company.

Because Great Northern Oil owned a refinery which refined 40,000 barrels of oil a day called Pine Bend.

And this refinery was the doorway that permitted Coke Industries to enter the chemical industry and more recently the fibers and polymers industry.

And it was a cash cow.

Their next big move was into the trucking business.

Sterling Varna, friend of the family, senior executive, he said we were looking at different little pipeline systems.

But when we bought Mohawk, and this was a Tulsa-based crude oil trucking company, that was the first time we got into trucking, which was significant.

Because previously they'd preferred oil pipelines to trucking right and the significance of trucking means that with a pipeline it takes a while to build so it's going to take you quite a bit of time to get a pipeline to and from somewhere so with their trucking business they could be the first kind of on the scene to get the oil out of new fields And the black gold just keeps flowing.

Yes, it sure does.

So then we come to a twist in detail, right?

There's more family drama.

This sets it all up.

In 1970, David, that's the twin twin that Charles played more with as a kid and got sent away to boarding school because of it.

David joins Coke Industries as a technical services manager.

He founds the New York office.

Yeah, and in 1971, the following year, Bill, the other twin, joins as a consultant in Boston.

So you've now got all three brothers working for the company that they co-own.

And the company runs fairly smoothly through the 70s, but there are troubles brewing, largely, because of Dundun Dun politics.

Now, remember, after Russia, his experience in Russia, Fred, the dad, had held this lifelong hatred of communism.

And in 1958, Fred joins this anti-communist organization called the John Birch Society, which is named after a U.S.

Army intelligence officer and Baptist missionary who was killed by Chinese communists, making him quote-unquote the first hero of the Cold War, in their eyes, at least.

And Fred, the father, saw communism looming behind everything.

He liked things like American foreign aid.

He said the USA is following Stalin's prescription, college campuses.

He describes the breeding grounds of recruits of the Communist Party.

This is like McCarthy gone mad.

Right, yeah,

it's kind of like the wizard of Ozdy.

Like you pull back the curtain, there's communists everywhere.

Yeah.

But Charles took his dad's politics to heart.

In the early 1960s, Charles opened a John Birch Society bookshop in Wichita.

But by 1980, Charles and the twin he liked, David, or we used to play with, were bound up in the Libertarian Party.

And in fact, David was the vice presidential candidate for the Libertarian Party on their ticket for the US presidential election with Chowes' support and they were taking Coke money to fund these political causes.

Obviously in 1980 Reagan won.

The Libertarians were out of the picture.

Meanwhile the eldest brother Freddie and the other twin Bill didn't really share their brother's politics and didn't appreciate the amount of money they were spending on it.

So Freddie, at the time, was estranged from the family.

He was estranged from the father.

He was living a life in New York as an art philanthropist.

Bill was working for the company, but Bill and Freddie, importantly, are both shareholders.

And then we have the first truly, true succession moment.

In 1980, Freddie, the older brother, and the other twin Bill, tried to get rid of Charles as chief executive in a boardroom coup, which failed.

So they both felt that Charles had assumed autocratic control, which, you know, was not necessarily an untrue assumption.

In the words of one economist, Bruce Bartlett, Charles runs Coke Industries Industries with an iron hand.

And the twin Bill was also angry.

You know, it's not just all, you know, political based.

He was angry Charles didn't pay out enough dividends.

He said, should I donate all my money to the Libertarian Party?

Charles was giving as much to the libertarians as he was paying out in dividends.

Pretty soon we would get the reputation that the company and the Cokes were crazy.

But in retaliation, the company board, which remember answered to Charles, fired Bill from the company.

Lawsuits were filed.

Freddie and Bill on the one side, Charles and David on the other.

A big mess.

Don't forget, David and Bill are literally twins.

So clearly, that twin bond counts for nothing.

Right, that's interesting, isn't it?

Twins went in different directions.

But despite all this family infighting, Coke Industries, the business, is growing, doing great, and diversifying.

And in 1982, Charles makes his first appearance on the Forbes 400 list, which at the time was a list of the 400 richest Americans.

And they estimated his net worth was $266 million.

The following year, it was $375.

So their wealth is growing fast.

And Charles and David, his favorite twin, they kind of want to end this feud.

So they decide to buy Freddie and Bill's stakes in Coke Industries, reportedly for a total of nearly $800 million.

So they're spending a lot of money.

That is a huge amount of an outlay for any size of company.

But Coke Industry actually borrowed the $800 million to fund the buyout of Freddie and Bill.

And Bill and his bankers calculated calculated it would take years to be free of the debt, but in fact, they managed to clear the debt in two years.

And this gets Bill thinking.

And he says, how could they have so much cash?

Yeah, and so he thinks, hang on a second, maybe I've been shortchanged here.

So he files another lawsuit against Charles and David saying, I want more money.

And this kicks off a 15-year legal battle in which there are a lot of, to a layman's eye, very petty moves.

So Charles and David, for instance, asks Forbes for their wealth to be recorded separately from Freddie and Bill.

And Freddie and Bill, in retaliation, sue over control of their father's charitable foundation.

Meanwhile, Charles and David sued Bill for not following through on an agreement to trade his share of the childhood home for their interest in their father's gold coin collection.

I mean, really getting into that

really tit for tat.

And yet, the company keeps growing.

By 1986, Coke Industries assets included 17,000 miles of oil pipelines, two oil refineries, six gas processing plants, 800,000 acres of mineral exploration rights and several coal mines and 400,000 acres of cattle ranches.

So clearly the family drama did not have an effect on their ability to acquire more wealth because by 1988 Forbes estimates that Chowes and David Coke are worth $1.1 billion each.

So Charles Coke is officially a billionaire.

In the late 80s.

And I think as a business person, Charles, this wasn't dumb luck.

Charles had a formula.

And in fact, Chowes also had a specific, I want to say, vibe that he brought to running a company.

I mean, there was an in-joke at the company that Coke actually stood for Keep Old Charlie Happy.

But Charles would say he empowers his workers through a business philosophy he calls market-based management.

And he was a student of sort of libertarian approaches to economics, things like the Austrian School of Economics.

And he was frustrated at some of these untested theories.

And Coke Industries, in many ways, became his real-world laboratory.

Yeah, by the 90s he was implementing these approaches throughout the company from the mailroom all the way up to the boardroom.

He flattened the management structure.

He gave workers decision right, that's authority, to manage the assets under their control.

He did teach employees to think of themselves as business owners, so classic capitalists.

So he removed salary caps and incentivised people to earn more.

So executives often received six, seven figure salaries.

You could have high school educated farm boys rather than Harvard MBA graduates running multi-million dollar divisions of the company.

But on the other hand, Charles's management style also had a flip side.

So apparently there was a really cutthroat atmosphere.

And in the late 90s, Coke Industries had a wave of discrimination lawsuits by middle-aged employees.

One 48-year-old lawyer who was fired accused the company of generally hiring one type of clone that fit Coke's image of itself.

Young, white, male, sharp, aggressive, and consistent with Koch's management philosophy.

But, you know, say what what you want about the management philosophy, it clearly worked because Charles Coke is richer than ever.

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They've got a billion dollars each, so going beyond a billion, and probably the reason that we're talking about Charles and his family today is the fact they keep making money, and it's what they do with that money, the way they get it, and the way they spend it.

That's right.

They spend a lot of money to support right-wing causes in the United States.

In fact, they've constructed and funded this huge, vast network of institutions, think tanks, political action groups, and lobbying groups, which has been dubbed the coctopus.

Or coctopus.

Coctopus, which is a very different mental mental image.

So let's not go there.

I'll leave that to you.

So let's dig into the coctopus, coctopus, with the tentacles of their political wranglings and influence.

1980 was really year zero for the birth of the coctopus.

So David, that's a twin, ran as the vice presidential nominee for the Libertarian Party in the 1980 US elections.

But it did not end well because David only got 1% of the vote.

Now, there's not very much in a presidential election.

So you're not going to have any influence if you're garnering 1% of the vote.

And Charles has said that it persuaded brothers to refocus their energies on funding think tanks and lobbying groups rather than standing actually as candidates.

Yeah.

And they started moving away from these sort of overtly libertarian parties towards more mainstream Republican parties and trying to influence them.

And originally...

they both donated to Republicans and Democrats, which apparently is quite standard for American companies.

Yeah, you look at all the big kind of investment banks in the U.S.

They all donate to both.

They cover their bases.

Over time, however, Koch industries vastly diminished their Democrat funding, and now they exclusively donate to Republicans.

And they were also very secretive about it.

It's hard to track the spending of the coctopus, but people estimate that it's in the billions.

And the Koch brothers and the Koch family have very good contacts, obviously, in politics.

People like the ex-vice president Mike Pence with Supreme Court judges.

And the Koch came to more public prominence in the early years of the Obama presidency because they strongly opposed him in the 2008 election and after that saw the rise and possibly funded the rise of the Tea Party.

So if you don't remember the Tea Party, I mean maybe you remember people like Sarah Palin.

It was a kind of quote-unquote grassroots eruption of this anti-government, right-wing, anti-tax sentiment.

So is it true that this whole idea of funding think tanks and campaign groups, that all kind of comes back to the Coches?

Well, maybe.

I mean, it's possible you could say that, you know, the Coctopus, people watched how the Koch brothers were wielding their influence and mimicked it in some way.

Right.

Like they thought to themselves, hey, we don't need to get people elected.

We can just kind of influence them behind the scenes.

And for some people, this is the epitome of dark money in inverted commas in U.S.

politics, a destroyer of American democracy.

For others, they're saving the country from socialism.

Which is exactly what good old dad Fred Koch would have wanted, right?

But they were noticed, Barack Obama singled out the Coke as a problem in a speech about clean energy and the climate.

And around this period, 2009-10, they start to become recognized for funding supporting political causes, including things around climate change.

Right, they were subject to a Greenpeace investigation over the environmental impact of Coke Industries and their campaigning.

Thinking back to this, this is probably the first time I became really aware of Coke Industries as a company and people described it as the biggest company no one had ever heard of.

That was changing.

Right.

Their political influence was getting to the point where you just can't hide.

And it was in 2010 where there was a very significant Supreme Court ruling, which actually had a big bearing on how private money like Coke Industries could have an influence on politics.

Right.

Prior to this ruling, there were kind of limits on how much companies could spend on political candidates' campaigns because there were understandably fears about corruption and undue influence.

But this ruling, which is called the Citizens United ruling, basically ruled that corporations could count as people because these limits went against First Amendment speech rights.

So companies like the Coke Industries could spend as much as they want on political campaigns as long as it wasn't coordinated with an official candidate.

And often this money would be channeled through something called super PACs, that's political action committees, which made people like Coke Industries hugely influential and and to be able to spend unlimited sums supporting political candidates.

And crucially, super PACs don't have to review the sources of their funding.

And people argue that this allows for the influence of dark money in US politics.

And according to a leak that was reported in Politico, the Coke's own estimate of their spending on the 2016 election was nearly $900 million.

And esports put their spending in 2020 at over a billion.

It's an estimate, right?

Because it's hard to know the exact numbers.

The Coke are very secretive and their funding streams are very opaque.

No thanks to rulings like Citizens United, which means that you can just hide the source of the funding.

It really seems like if Charles wasn't so good at making money, Charles and David, the Koch brothers, quote unquote, wouldn't have been so effective at funding loads of political things in politics.

Yeah, I mean, they're famous for their political influence, but they got their political influence by having tons of cash, which they used to deploy in slightly sort of opaque kind of ways.

And the Coke industries now constitutes an enormous range of companies.

They're in everything from agriculture, building materials, electronics, data analytics, medical products.

And they're still in oil.

The Coke Pipeline Company operates approximately 4,000 miles of pipeline in six US states.

And they've still got the old-fashioned cattle business.

The Matador Cattle Company operates three ranches with 12,000 head of cattle.

I like the fact they've still got a cattle business.

There's something kind of red-blooded American.

I I think there's something kind of good old Americana about that, isn't it?

I think it's part of the brand.

Yeah, I don't think they would ever sell the cattle business.

So let us judge Charles Coke.

Good old Charlie.

Is he good, bad, or just another billionaire?

We've got several categories for this.

Wealth, villainy, power, philanthropy.

So let's start out with wealth.

Pretty high, I would say.

24th on the list.

That's a healthy ranking, I would say.

So I'm going to give them a seven for wealth.

Definitely not middle of the pack.

Top half.

I would normally give them an eight, but I'm going to take off a one because, you know, part of what we judge wealth on is how they spend it.

And they're not.

you know, aside from the politics, they're not ostentatious spenders as far as I can tell.

And apart from on political influence, most of the money goes into either back into the business or into politics or some philanthropic causes, which we'll get to in a moment.

So seven out of ten for wealth.

Yeah.

Rags to riches.

He's not going to score highly on this.

No, I mean, they have increased the wealth of the family business by a factor of something like 7,000.

But the fact is they were brought up rich.

Right.

Charles Coke was a millionaire by the time he was in his 20s.

Yeah, basically they had an autocratic father whose mission seemed to be to stop them turning into country club bums.

I would give Charles Coke probably like a two out of ten.

It's not, I mean, it's not a rags to riches.

It sure isn't.

No, two.

A two out of ten.

Villainy.

This is probably the most interesting category here.

There is a part of the Coke brothers story that reads like something out of Killers of the Flower Moon.

And that's worth digging into a bit because they did, they were accused and found guilty of extracting oil from Native American lands.

So it's almost a direct lift from that film.

Yeah, and this was all done very secretly and very illegally.

They also had a chequered history when it comes to things like safety and oil spills.

Coke Industries was forced to pay $35 million in settlement for 300 separate oil spills in six different states, leaking 3 million gallons from corroded pipelines into local waters.

And in the 90s, they paid out $296 million for an explosion on a pipeline in Texas that killed two teenagers.

It was the largest wrongful death jury award in the nation's history by that point.

They also have funneled money towards groups which are accused of fueling climate change denial.

So on the villainy stuff,

the politics stuff, it kind of depends on your politics, right?

You know, if you're right-wing and simple, it's perfectly fine.

They can spend their money on whatever they like.

Super PACs are perfectly legal.

Do what you like.

But on the climate change stuff, I feel like we can both agree that climate change is bad and that...

If you're an oil company who has a questionable relationship with extracting oil illegally and also safety, you probably will score quite highly on this.

Okay, so climate change denial, nicking oil from Native American lands, spilling oil all over the place.

I think they're scoring pretty high on villainy.

He scores a nine out of ten for me just because oil isn't even a very big part of coke industries, but he's making a big, big uproar and a ruckus with the stuff that he does with those oil interests.

On villainy, it's a nine for me.

So then we come to philanthropy.

Does Charles Coke redeem himself with the causes he supports?

He's estimated to have donated approximately $1.8 billion to philanthropic causes, which is a sizable chunk.

Charles Coke also has donated millions to arts organisations, including 100 million to the Lincoln Center and 20 million to the American Museum of Natural History.

And $35 million to the Smithsonian.

If you look at that, Lincoln Center, Smithsonian, the American Museum of Natural History,

these are all kind of typical billionaire things.

And remember, you get quite big tax breaks in the U.S.

for the amount of you give to charity.

So there is a tax, there is a tax efficiency dimension to some of this charitable giving.

So we're nowhere near giving Pledge 50%.

We're nowhere near Chuck Feeney who invented GDP Shopping and gave away pretty much 100%.

I'm going to score them as a 4.

I would also point out that, you know, as much as I love the Smithsonian, it doesn't really need that much donations, does it?

It's doing pretty well.

Yeah.

You get a wing named after you or a door or a name up on a plaque somewhere.

Very nice.

It probably goes nowhere near to offsetting the amount of stuff that they've done.

I would give him probably a three out of ten.

Three for you, four for me.

Power.

This again is an interesting category because

although they failed in actual electoral politics, they were very influential in shaping ideas on the political right in the US.

But not so much now, right?

Because Koch actually didn't endorse Trump in 2020.

There was actually quite a public spat with Trump.

Charles Koch called Trump's trade tariffs detrimental.

Trump lashed back, saying that the Koch brothers were a total joke, so no love lost there.

Yeah, and I actually think 2024 will be the year we see just how powerful the coctopus is, because Charles Coke has actually endorsed Nikki Haley as a Republican presidential candidate.

And at the time of recording, she did not do very well in the Iowa caucuses.

So the pair might be waning, but we usually judge this category as at the height of their power.

How powerful were they?

And I think it's fair to say that at any time they could have picked up the phone to anyone on the political right if they wanted to.

And probably across the political spectrum, right?

When you're getting name-checked by Obama, albeit in a detrimental way, you're pretty powerful.

Maybe for power, I would give them a, at the height of their powers, give them a seven or an eight.

I don't know.

What do you think?

Yeah, I would give an eight out of ten, I reckon, because I think if you were in politics and if you were a president or a prime minister, if someone, if your PA patched through and said, Charles Cook is on the line, you'd pick up.

You'd pick up.

Okay, well, let's both give them an eight then.

But as we just said, their power might be waning, but the legacy, it's another of our categories, of vast private money mobilized in political causes, I think, is a pretty powerful one.

If Charles Coke and his brother actually did almost inspire a whole way of dealing and trying to influence politicians, that's really quite the legacy.

The legacy is a mixed one because it is undoubted that they set an interesting and important and consequential precedent for private capital in political life through donations.

But weirdly, Charles says he regrets some of his partisan activity.

Yeah, he does.

I mean, it's also telling what he says about this because it just reveals just how powerful he thinks he is.

In an interview with Axios on HBO, he was complaining about politicians taking these partisan positions rather than ones of principle.

And he says, Some of the politicians we helped get elected, I would see them on TV and they would be talking about policies that were antithetical against immigration, against criminal justice reform, against a more peaceful foreign policy.

I was horrified.

That's not what I paid for.

Yeah, exactly.

Some of the politicians we helped get elected.

I mean, that just tells you everything.

That tells you everything about what they think their power is.

And actually, that's probably hard to doubt.

And he also says, looking at the state of paralysis, extreme partisanship in the US, he says, partisanship doesn't work.

Boy, did we screw up, we, the Koch family.

What a mess.

It's a complicated legacy if he's going to regret most of what he spent his money on.

Yeah.

We're not scoring whether it's a good legacy or a bad legacy.

I think most people would say big private money in politics is a questionable thing, but there's no doubt that at the time of recording this, money still talks in U.S.

politics.

U.S.

politics still talks around the world.

So I would give him as a legacy, I'd give him a seven.

I'd push it up more.

I'd give him an eight out of ten.

We're still talking about Charles Koch and probably the Koch brothers for, I reckon we'll be talking about them for years to come.

Okay.

So then we have to judge him.

Good, bad, or just another billionaire?

I mean, I will go on record as saying if you're involved in oil and you're not very responsive about it, which Cook Industries clearly wasn't,

you're just you're just a bad guy.

Okay, I'm not gonna say that everyone to do with oil is bad because I have a gas boiler in my house like most people do and therefore I would not want to be hypocritical.

I use plastic.

I have a car which I put petrol in.

So I'm not gonna go on that.

But what I will say is if you have 300 spills across lots of states and you're nicking oil from Native American reservations then I think you have marked your card as a bad guy.

Also I think big money in politics is always questionable.

So on those two counts, I'm sorry, Charles Coke, you're a bad billionaire.

So next episode, we've got quite an interesting figure lined up.

At one time, richest woman in the world, currently about eighth richest woman in the world.

One spotter in pearls on the back of a flatbed truck shouting axe the tax.

We'll need no introduction in Australia as she is Australia's richest citizen of male or female.

She is Gina Reinhart.

Iron Lady literally made a fortune digging iron out of the ground.

Thanks for listening to Good Bad Billionaire.

This podcast is produced by Hannah Hufford and Mark Ward.

James Cook is our editor and it's a BBC audio production.

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