Thursday, September 25th, 2014

Response to Rolling Stone Story

When Rolling Stone magazine’s Tim Dickinson reached out to us for a story about “a detailed, longitudinal examination of the rise of Koch Industries to become one of the largest private firms in America,” we were open and honest with him. As our emails with Mr. Dickinson show, however, we told him we were skeptical of his intentions and whether he would write an objective and balanced story about Koch Industries and our 100,000 dedicated employees, including 60,000 in the United States. Instead, we explained, he seemed to be simply “checking a box” and going through the motions of saying he tried to get our perspective. We also expressed our concerns that given his and Rolling Stone’s past distorted and dishonest coverage of Koch, we were doubtful that he would be fair and objective with us.

We noted that his storyline seemed almost identical to many other unbalanced, agenda-driven pieces in the past, such as a widely panned and discredited Bloomberg Markets story. It appeared to us that he was simply regurgitating and cribbing from past pieces hostile to Koch. Mr. Dickinson insisted that he was “attempting to engage in a good-faith discussion” and denied that his reporting was aided by any of the agenda-driven attack groups that have long peddled misinformation about Koch for ulterior political purposes. This despite the fact that Mr. Dickinson has made a career at left-wing outlets like Mother Jones or that topics in this article track almost in lockstep with the prior work of other reporters who share his ideological commitments.

Despite our well-founded reservations, we provided detailed responses to Mr. Dickinson’s questions and requested that he use our responses in full. We asked that if he felt the need to omit any of our responses that he engage us in a discussion, as any ethical journalist would. Judging from the resulting article, it’s clear he wasn’t interested in being fair or honest.

Mr. Dickinson’s blatantly dishonest and misleading article published by Rolling Stone this week has numerous willful omissions, and contains no new or newsworthy information. We provided on-the-record responses to each of his several dozen questions and topics — answers amounting to more than 3,200 words in total — yet Mr. Dickinson quoted just 99 words in his more than 9,000 words. In addition, his article covers many topics that he never raised with us. Given that he used less than five percent of the information we provided, it is likely that he would have ignored further input in any event.

Any pretense at objectivity is belied by Mr. Dickinson’s efforts to hype his article on social media with hyperbole like, “From toxic pollution to toxic assets — everything you need to know about how the Koch brothers got so rich.” The caricatured illustration that accompanies the piece is appropriate, since the article, too, is a subjective distortion of reality.

Here is a link to all the information we provided on the record to Mr. Dickinson – information that he hid from readers. And here are further links that provide previously existing public responses from Koch and material that we provided Mr. Dickinson — nearly all of which was ignored:

•   Mr. Dickinson makes a number of broad negative claims about Koch’s environmental record, but only passing reference to the more than 900 awards for safety, environmental excellence, and community stewardship Koch has received since 2009 alone - information that we provided to Mr. Dickinson. In an article ostensibly about Koch’s relationship with regulators, the fact that EPA has repeatedly praised Koch for a productive and collaborative approach is surely relevant to Rolling Stone readers. In addition, he excised our explanation of the long and continuing path to improve and enhance our environmental, health, and safety performance. He also ignored the discussion about our ongoing efforts to ensure we understand and meet the expectations of the EPA and other regulators, our communities, and our shareholders.

•  While he never raised the issue with us, Mr. Dickinson refers to a University of Massachusetts-Amherst report from a radical group that names Koch as an alleged major “polluter” in the United States. Here again he omits key context to mislead readers. As we detailed here in a statement readily available to Mr. Dickinson, that report included virtually every major manufacturer in the United States today, which combined form the lifeblood of the economy and provide good-paying manufacturing jobs to millions of Americans. Moreover, the emissions cited in the report are legal and regulated by the Environmental Protection Agency (EPA). EPA itself notes that Toxic Release Inventory (TRI) information alone does not indicate that the use or release of these chemicals poses a risk. EPA has compiled TRI data for facilities with the same U.S.-based parent company. A parent company is defined as the highest-level company, located in the U.S., which owns at least 50 percent of the voting stock of the manufacturer. These parent companies are ranked by EPA based upon the total volume of production-related waste managed by those facilities. Koch Industries, Inc. is the parent company for the Koch companies. Due to the size and nature of our U.S.-based manufacturing presence, Koch has been among the top 10 parent companies for the last three years. More than 100 Koch company sites submit TRI reports—significantly more than the other top-10 parent companies, which have between 1 and 65 sites reporting.

•   The article states that Koch made the difficult decision to convert a Flint Hills Resources refinery in North Pole, Alaska to a terminal, after “the discovery that a toxic solvent had leaked from the facility, fouling the town’s groundwater.” Mr. Dickinson ignored all the information we provide him on this topic. He deceptively omits the undisputed facts that the off-site contamination existed long before Koch bought the refinery in 2004, that the contamination was not disclosed to Koch by the prior owner, and that once discovered, Koch quickly and voluntarily began providing alternative water to the community. He also ignores that Alaskan public officials like Senator Mark Begich and Governor Sean Parnell empathized with Flint Hills’ difficult decision and that Flint Hills has worked to retain as many of the affected employees as possible at other Koch companies.

•   The article falsely claims that Koch’s petroleum coke business at its KCBX North facility in Chicago is endangering the “health of South Side residents,” despite the fact that we provided Mr. Dickinson the Congressional Research Service researchfindings from the city of Chicago that “there are no known illnesses or health effects associated with pet coke dust,” and EPA’s own conclusion that “petroleum coke itself has a low level of toxicity and that there is no evidence of carcinogenicity.” Nor does Mr. Dickinson note that KCBX was honored with the Good Neighbor award from the Southeast Environmental Task Force in 2001 and again in 2005.

•   Mr. Dickinson rehashes regulatory and legal issues from the 1970s and 1980s regarding Nixon Administration price controls and oil lotteries that have long since been settled. In some instances, Mr. Dickinson fails to note the responses we provided him.

•   The article falsely declares that Koch “stole” oil from American Indian lands in the 1970s and 1980s. In fact, no oil was “stolen” and there was no finding of theft of any kind in this case. We detailed this to Mr. Dickinson before publication and provided him with a statement and substantiation explaining the issue. He ignores all of it.

•   In discussing Koch facilities in Minnesota, Mr. Dickinson accuses us of “treating the Mississippi [River] as a sewer” during the 1990s. This is inaccurate and one-sided. In fact, between 1998 and 2001, Koch Petroleum Group entered into a series of agreements with the Minnesota Pollution Control Agency and EPA to resolve issues at Koch’s Rosemount, Minnesota refinery, taking full responsibility for past discharges from an aviation fuel tank leak, part of which reached a wetland adjacent to the Mississippi River, though not the river itself. We pointed Mr. Dickinson to the fact that our Minnesota refinery is recognized for its exemplary environmental performance, and its cooperative and productive relationships with regulators, environmental groups, and neighbors. His story omits these facts.

•   Mr. Dickinson says Koch was convicted of a “felony count for covering up the fact that it had disconnected a key pollution-control device” at a Corpus Christi facility. In fact, in 1995 an individual Koch employee filed a false report in this case, was terminated for doing so, and Koch voluntarily disclosed the incident to the Texas environmental regulatory agency. We provided Mr. Dickinson with this information in detail, including information demonstrating that someone altered evidence during the grand jury process. The official Texas state government meeting record showed when Koch first learned of the issues in 1995, our employees openly and directly told the state regulator that the refinery was out of compliance and advised they would come back to the regulator when they better understood all the details. In fact, later government records show that our employees did just as they promised. The meeting record that was used by the federal grand jury had that key exculpatory information excised. Ultimately, the 97-count indictment Mr. Dickinson mentions was dismissed after the government’s case cratered when Koch finally had a chance to challenge the evidence in front of the trial judge. As part of a settlement, Koch pled guilty to the incident stemming from the event we voluntarily disclosed back in 1995. The government required the four individuals who were wrongly accused to waive their rights to sue for malicious prosecution as part of this settlement. We gave Mr. Dickinson all this information and provided him copies of the documents, which are in our responses above. He intentionally ignores all of this to repeat the same dishonest and misleading story that many others have written about over the past 13 years.

•   The article shamefully uses the circumstances of a tragic 1997 fatal accident—the only such accident of its kind in the history of Koch Pipeline Company—in a cowardly effort to smear Koch as more concerned with a “10 percent” increase in profit than with human lives. As with so many other issues, Mr. Dickinson omits our point of view, even though we have publicly addressed the accident on multiple occasions since it happened–the only such accident of its kind in the history of Koch Pipeline Company) and have always accepted responsibility for this tragedy.

•   Mr. Dickinson quotes former EPA administrator Carol Browner negatively on Koch, and seems to suggest that Koch’s 2000 Clean Air agreement with the EPA is evidence of misdeeds. In fact, Ms. Browner described that very agreement as “innovative and comprehensive” and praised the “unprecedented cooperation” of Koch in stepping forward ahead of its industry peers. The agency also deemed the agreement as a “major step in fulfilling the promise of the Clean Air Act.”

•   Mr. Dickinson never raised with us many of the issues in Koch’s financial and trading operations that he later addresses in the article, and on other issues he again fails to note the responses we provided. In discussing a legal settlement with Commodity Futures Trading Commission (CFTC) over energy trading, for instance, Mr. Dickinson fails to note that CFTC praised Koch for full cooperation with its investigation (and also omits that it was a 50-50 joint venture between Entergy and Koch Trading). This was an industry-wide effort by CFTC, Mr. Dickinson fails to mention, and not focused solely on Entergy-Koch Trading (EKT). And in a lengthy discussion of futures trading issues, Mr. Dickinson appears to rely heavily on an article published by left-wing activists in the spring of 2011, despite the fact that the article and its author, Lee Fang, were thoroughly and utterly debunked at the time by multiple independent sources.

•   Despite providing Mr. Dickinson with links to the many mainstream media pieces that mocked, discredited, and criticized a Bloomberg Markets article on a Koch foreign subsidiary’s lawful business in Iran, he fails to include any of that information. Koch directly addressed the rank falsehoods emerging from the story multiple times, a repetition made necessary by political partisans and agenda-driven activists who spread known falsehoods in much the same way Mr. Dickinson does here. If he would have bothered to include our statement or link to our responses or other media coverage, he would have seen key information that impeaches the credibility of Bloomberg Market’s key source for his story – a former European employee who praised the company previously and never raised any issue about trade with Iran before he left. In any event, the fact that last decade a European subsidiary did some limited business in Iran is irrelevant since, as we have explained multiple times, that was permissible under the law at that time. We ultimately made a voluntary decision not to do business in Iran even when U.S. law allowed it. If Mr. Dickinson had any desire to be open and honest with his readers, he might have noted that many companies continued to do business in Iran long after Koch ceased doing so voluntarily, and that some still do business there.

•   Mr. Dickinson’s discussion of the Keystone XL pipeline is inaccurate and contradictory. He implies that Koch stands to gain from approval of the pipeline—a claim refuted here and more than a dozen times since such as here,  herehere, and here. Yet in the next breath Mr. Dickinson admits that the approval of Keystone XL would actually “eat into [Koch] profit margins.” He then offers a third distinct claim, that uncertainty over whether Keystone XL will be approved benefits Koch.

•   Other bizarre internal contradictions emerge throughout the article. For instance, Mr. Dickinson first implies Koch was guilty of patent infringement nearly a century ago, then pages later notes that the patent decision against Koch was thrown out when it was discovered the other party had illegally bribed the judge in the case, and that Koch in fact won at the Supreme Court and successfully countersued for anti-trust violations. Elsewhere in the article, Fred Koch is criticized for being both too soft on Stalinism and too “rabidly anti-Communist.”

Any reasonable reader will conclude that this article is nothing more than a thinly veiled “hit piece.” We believe that Rolling Stone readers would have benefitted from an open and honest discussion of the issues Mr. Dickinson decided to write about. We are confident that if the true facts had been presented, Rolling Stone readers might have learned something about us that was contrary to the misinformation that Rolling Stone and other media have rehashed and regurgitated over the years. Apparently Rolling Stone and Mr. Dickinson do not trust or respect their readers enough to provide them with balanced information and an objective narrative, nor do they want their readers to make up their own minds.


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