Discovery

MAY 2013 THE QUARTERLY NEWSLETTER OF KOCH COMPANIES A clear leader When tourists gaze at New York City from such as specialized plastic coatings made at What’s next? sites in the U.S. and . the observation deck of the Empire State Although he is now a Guardian employee, Building, they are looking through special- Today, Guardian is the world’s leader Vaupel often emphasizes a major focus ized glass made by Guardian Industries. in coated, value-added glass, including area for Koch companies: innovation. energy-efficient solar-control coatings. Guardian glass also adorns the Guggen- “I’m always reminding employees that It is a truly global corporation with diver- heim Museum in Bilbao, Spain, and the we need to improve continually, innovate sified products and nearly 1,000 patents. tallest building in the world – the 160- and embrace change if we want to enjoy story Burj Khalifa in Dubai, UAE. If it ain’t broke... even more success,” Vaupel said. Like Koch, Guardian is a privately held On Jan. 1, Ron Vaupel, the former leader company. Last December, Koch Indus- of ’ business development tries acquired a minority stake of about group, became the president and CEO of 45 percent in Guardian Industries. Guardian Industries. Embracing change Guardian was on Ron Vaupel’s “radar screen” Many of the world’s most popular smart- long before he came to the company. phones, copiers and scanners rely on “I had been following Guardian Indus- Guardian products. There’s also a good tries for at least eight years,” Vaupel said. chance the chrome-plated plastic parts “I felt Guardian’s culture and businesses on your favorite car, truck or washing would be a tremendous investment op- machine were made by Guardian. portunity for Koch.” But when the company was founded as During his first two months on the job, Guardian, which made the glass for this stairway, has about Guardian Glass Co. in 1932, its primary Vaupel visited more than 16 Guardian 19,000 employees working in 22 states and 25 countries. product was automotive glass, sold to plant sites in five countries, including Brazil, “When we talk about innovation, it’s not corporate customers in nearby Detroit Luxembourg and Russia. Most of that time just about the latest coating at the Guard- and Flint, Mich. Years later, the company was spent listening and learning, and then ian Science & Technology Center. acquired an automotive trim fabricator. sharing a vision for Guardian. “Innovation is about how you come to In 1970, Guardian began manufacturing “Wherever I go, I have the same question work every day, about doing your job bet- float glass, a product made by literally for our employees,” Vaupel said. “First ter and doing it more efficiently. floating a layer of molten glass on a bath and foremost, I want to know how well of liquid tin. (A modern float glass plant, they understand Guardian’s vision and “We do a lot of things very well,” Vaupel such as the one Guardian opened last No- their role in helping the company achieve concluded, “but we still need to strive to vember, can produce 900 tons of flawless that vision. improve everything we do. product per day.) “I’ve learned that behaving ethically while “Guardian Industries is a company that The 1980s and ‘90s brought further diversi- competing to win is very much a part really knows how to create value. And fication into fiberglass insulation and build- of the Guardian way,” Vaupel said, “as is I’m going to do everything I can to help it ing materials distribution, and the develop- entrusting people with responsibility for continue to succeed even more.” ment of high-tech, value-added products, which they can then be held accountable.” www.guardian.com

this issue… 2012 Koch jobs report pg 2 Carbon concerns pg 4 Original ideas pg 6 The President who could say “no” pg 7 Postal Pipeline KOCH COMPANIES 2012 JOBS & ECONOMIC IMPACT STUDY KOCH COMPANIES 2012 JOBS AND ECONOMIC IMPACT STUDY This analysis, completed in January 2013 and based on data for the year ended December 31, 2012, was conducted by Harrah Analytics. It details the economic DIRECT INDIRECT impact of Koch companies on the U.S. and individual 47,000+ JOBS 143,000+ JOBS state economies. Through the years, Koch companies have experienced $ $ significant growth and today employ more than 47,000 4.2B 6.7B people in all 50 United States and the District of Columbia.

DIRECT INDIRECT & INDUCED COMPENSATION COMPENSATION www.kochind.com/files/KochCompaniesJobStudy2012.pdf NEARLY 200,000 The following letter is from a history teacher TOTAL JOBS ACROSS ALL 50 STATES whose students attend weekend classes $ organized by the Gilder Lehrman Institute and IIBILLION sponsored by the Fred and Mary Koch Foundation. TOTAL COMPENSATION & BENEFITS KOCH INDUSTRIES HAS HISTORICALLY (See story, page 7.) RE-INVESTED % 90 Today, my students and I were discuss- OF EARNINGS ing aspects of the American Revolution. BACK INTO ITS BUSINESSES It was great how many of them recount- EACH KOCH COMPANY ed particular documents – including Common Sense, letters from a Penn- JOB SUPPORTS sylvania farmer and the Declaration of ABOUT THREE ADDITIONAL JOBS IN THE U.S. Independence – when addressing the founding of our nation. I know the 50 students I bring to Satur- day Academy have loved being able to attend this winter. They really enjoy the program. I want to express my appreciation for all that the Fred & Mary Koch Foundation has done for these unique opportunities. TOP 10 STATES Thank you again for all the support! Joel Schaefer COMPENSATION JOBS Andover High School & BENEFITS Andover, Kan.

$ Georgia 6,972 Georgia 746M $ 28,320 1.85B To “like” and follow Koch companies and leaders – 6,557 $ Texas Texas 628M including Georgia-Pacific, , Flint Hills Resources, 37,679 $2.08B Matador Ranch, Koch Pipeline and – visit $ Kansas 2,897 Kansas 371M 6,459 $597M Koch Industries’ Facebook and Twitter pages.

2,827 $ Wisconsin Alabama 223M 10,344 $661M Letters and other submissions become the property of Koch

$ Industries, Inc., and may be reproduced in whole or in part, Arkansas 2,624 Wisconsin 211M 9,214 $518M including your name, for any purpose and in any manner.

$ Alabama 2,419 Arkansas 191M Letters may be edited for length or clarity. 12,268 $461M DIRECT

$ TOTAL DIRECT, Oregon 2,232 Oregon 187M 10,265 $543M INDIRECT & INDUCED Discovery May 2013 | Volume 19 | Number 2 M MILLION 2,092 $154M South Carolina Minnesota B BILLION 7,611 $340M Editorial board Questions? Comments? Philip Ellender Contact: Rod Learned $ Oklahoma 1,790 Oklahoma 142M Rich Fink 316.828.6136 $ 6,023 354M Jeff Gentry [email protected]

$ Dale Gibbens Publication design Virginia 1,607 South Carolina 132M 5,674 $384M Greg Guest Amber Vogts Charles Koch Koch Creative Group Jim Mahoney Data source: Harrah Analytics, data as of Dec. 31, 2012. Direct jobs include those at Koch companies in the 50 states and the District of Columbia. Total jobs were calculated using Dave Robertson www.kochind.com RIMS II multipliers produced by the U.S. Department of Commerce, Bureau of Economic Analysis. Shareholders and executives of Koch companies are not included in jobs totals. ©2013, Koch Industries, Inc. Koch is an EOE. M/F/D/V 2 International News

Kingston – INVISTA has renewed its sponsorship of this popular Barcelona – One of Spain’s most famous fashion Westminster – Koch Membrane Systems has been honored recreation complex in eastern Ontario. designers and LYCRA® fiber celebrate 50 years together. for helping to keep Ireland “green.”

Canada – Ontario is home to three famous designer, Andres Sarda, has relied Agency. It involved testing industrial important INVISTA facilities: an air on the same “secret ingredient” for 50 years. wastewater from various sources, includ- bag fiber manufacturing site, a research That special something is LYCRA® spandex, ing a brewery, dairy producer, snack food and development center and a specialty manufactured by INVISTA. maker and pharmaceutical manufacturer. chemical manufacturing operation. Sarda was a forward-thinking textile engi- Using a KMS Laboratory Cell CF-1 mem- With more than 900 employees working neer when he decided to use the elastic- brane test unit, FDT was able to evaluate at those three sites, INVISTA is the largest ity of LYCRA® fiber to revolutionize the what type of process – microfiltration, industrial employer in eastern Ontario. lingerie industry in Spain. ultrafiltration, nanofiltration or reverse osmosis – would produce the best results. But for citizens in the Kingston area, the He specified LYCRA® fiber when design- company’s best-known site is the INVISTA ing his first lingerie collection in 1962. In addition to constructing the test unit, Centre, a popular recreation facility. It became immensely popular, and, ever KMS assisted FDT with the setup and In March, Steve Kimpton, INVISTA’s since then, LYCRA® fiber has been a provided recommendations for operat- Kingston site manager, announced the vital component in many of Sarda’s most ing and cleaning the membranes and company is renewing its naming rights famous swimwear and lingerie designs. interpreting the test data. sponsorship for the INVISTA Centre, “We are proud of having shared in a The experiment was so successful that which the company originally sponsored half-century of work by this very talented FDT entered it in the annual Green in 2008, the year the facility opened. creator,” said Denise Sakuma, global mar- Apple Award competition. These awards “Given the long-term vision for our keting director for INVISTA Apparel. were established in 1994 as a way of rec- ognizing and promoting environmental Kingston site,” Kimpton said, “and the “We plan on saluting him throughout hundreds of INVISTA employees who best practices worldwide. the year with a series of advertisements, enjoy using this regional recreation facil- promotions and exhibits.” Out of more than 500 global entries, the ity, we thought it was important to renew FDT project was one of only four from our corporate sponsorship.” INVISTA is also laying the groundwork Ireland to receive a Green Apple Award, for another celebration later this year: the The facility has four NHL-sized ice pads, presented in the House of Commons at 75th anniversary of nylon. a mini-rink, pro shop and an elevated gal- the Palace of Westminster last November. Ireland lery for viewing the skaters. The INVISTA – This island nation, nicknamed Koch Membrane Systems and FDT have Fitness and Wellness Centre, which the Emerald Isle because of its lush green worked closely on similar projects before. adjoins the rink, is a popular workout site landscape, is even greener these days One installation, at the second-largest with more than 1,000 memberships. thanks to Koch Membrane Systems and brewery in Ireland, paid for itself in just Just as INVISTA has a goal of reducing its one of its business partners. 20 months. overall energy intensity by 20 percent by Last year, Dublin-based FDT Consulting Almost 20,000 KMS systems have been 2020, the INVISTA Centre is also energy Engineers & Project Managers suggested installed worldwide, from Versailles to efficient. Its dressing rooms use radiant using KMS technology to see if water and Sharm el-Sheikh. These installations in-floor heating elements powered by carbon dioxide from various industrial are custom-designed to help customers energy captured from the rink refrigera- waste streams could be cost-effectively reduce their water footprint, increase pro- tion systems. recovered and reused. ductivity, enhance safety and reduce costs. Barcelona – Fashion designers thrive on This experiment was partially funded creating something new. But at least one by Ireland’s Environmental Protection www.kochmembrane.com 3 What’s the best energy policy? Even though much of the world is still ing believe this change is directly attribut- Vehicles with higher fuel efficiency are suffering from economic stagnation, able to the widespread use of fossil fuels. typically more expensive. They also tend to most of us would agree that we still have Because they believe further warming will be smaller. For cash-strapped families with a very high standard of living. have catastrophic effects, they have waged several children, this is a serious problem. Compared to previous generations, we a war on carbon for many years. Manufacturers have also tended to make are wealthier, healthier, have better tech- They have persuaded regulators to restrict cars lighter as a way of improving fuel ef- nology, more mobility and many more carbon-based fuels in favor of subsidized ficiency, which can reduce a car’s safety in opportunities for a better life. alternative energy and encouraged policy- the event of an accident. Several factors contribute to a higher makers to make fossil fuels more expensive Truth and consequences in hopes of discouraging their use. standard of living, but one of the most Regulators have also changed the rules for important (and most often overlooked) is A matter of policy stationary sources of emissions, including access to reliable and inexpensive energy. In 2009, some policymakers proposed mills, manufacturing plants and refineries. Affordable energy is essential for al- new legislation called “cap-and-trade,” The EPA now requires new and modified most every aspect of our modern lives. which would set a cap on carbon emissions carbon-emitting sources to have permits Without it, we wouldn’t have many of the and allow businesses to buy, sell or trade from various agencies in addition to sepa- things we often take for granted. permits for emitting carbon. rate greenhouse gas requirements. Affordable energy is needed to run the Due to its severe economic effects and the These new requirements, coupled with hospitals and laboratories that improve lack of proven benefits for the environ- lawsuits from non-governmental organi- our health. It’s required to deliver elec- ment, the legislation was widely unpopu- zations, stop expansions that would cre- tricity to our homes and put fuel in our lar and failed to become law. ate value for society and more good jobs. vehicles. It also supports the millions of jobs associated with all of these things. Carbon concerns In general, the most affordable forms of energy come from fossil fuels, such as coal, oil and natural gas. Compared to these energy sources, alternative fuels such as solar and wind power are consid- erably more expensive (and less reliable). Burning fossil fuels to generate electricity or provide power necessarily releases car-

bon dioxide, or CO2 , into the atmosphere. Carbon dioxide, a gas, is what we exhale ev- ery time we breathe. Erupting volcanoes, Corpus Christi – Although uncertainty surrounding potential cap-and-trade legislation requires Flint Hills Resources to decaying trees, wildfires and the animals evaluate its future capital needs constantly, FHR has already reduced per-barrel criteria air emissions at its refineries by on which we rely for food all emit CO2. 76 percent since 1997. That’s 64 percent better than peer refineries. This by-product, which is essential for The new rules also force manufacturers plant life and an unavoidable aspect of Instead of accepting this reality, the Ad- ministration decided to bypass Congress to use the most advanced (which usually human life, is at the center of today’s means the most expensive) technologies. climate change controversies. entirely and restrict emissions through regulations, which are rules that don’t Tale of two climates Degree of change require the approval of elected officials. If the goal is really to reduce carbon There is a vigorous debate about what The U.S. Environmental Protection effects carbon emissions may or may not emissions, it’s worth noting that the U.S. Agency began restricting emissions from is doing a good job of achieving that goal have on our future climate. mobile sources such as cars, working with without cap-and-trade programs. Many scientists have estimated that the other agencies to require manufacturers to In Europe, where carbon cap-and-trade earth’s atmosphere has warmed by about make more fuel-efficient autos. was imposed years ago, carbon emissions 1.3 degrees Fahrenheit since 1880. Although this might sound like a good are actually up, not down. The same is true

Those who believe that increased CO2 idea, such a policy is loaded with unin- for European energy prices, which have emissions inevitably lead to global warm- tended consequences. become more expensive. 4 In April, the EU’s CO2 emissions-trading For those who prefer higher taxation to program was described as “on the brink spending cuts, having an entirely new of collapse,” as prices crashed by as much source of revenue is an appealing way as 45 percent, dropping to record lows. to reduce the deficit. Unfortunately, tax- In the U.S., which has no national cap-and- ing carbon, as with all taxes, only takes trade program, carbon emissions and en- more resources from the private sector ergy prices are both down in recent years. to support a swelling federal government. Thanks to increased U.S. production, nat- Does this sound fair? ural gas, which cost about $12 per million A recent study by NERA Economic Con- April 2013 – Although the U.S. Senate recently voted down a BTUs two years ago, now costs less than sulting analyzed the probable effects of a carbon tax (again), several policymakers still want to impose one. $4. U.S. crude oil prices are also down by U.S. carbon tax that starts at $20 per ton Almost everyone is hurt by these higher more than $20 per barrel since 2011. and then rises 4 percent per year (which costs – the exception being those few is in line with recent proposals). Meanwhile, the U.S. economy is less slug- who benefit from subsidies. gish than the recessionary economies of If such a tax were imposed, the study much of Europe. estimated that more than 1.3 million U.S. A better approach An article in the U.K. acknowledged how jobs would be lost this year alone and At a time when robust economic growth the recent boom in U.S. shale oil and that workers’ incomes would eventually has been lacking, it makes no sense to natural gas production has already had drop as much as 8.5 percent. burden essential industries and millions “profound” effects. Such a tax would also decrease house- of households with even higher costs and bureaucratic hurdles. London’s Daily Telegraph noted that hold consumption, due to the increased increased production of these fossil cost of goods. As several Koch companies have shown, fuels in the U.S. is “creating hundreds of In Arkansas, for example, the average there is a better way. By focusing on thousands of jobs, significantly adding to household would have to pay 40 percent more efficient use of energy, it is possible GDP and contributing tens of billions of more for natural gas, 13 percent more for to lower emissions without imposing dollars in federal, state and local taxes.” electricity and more than 20 cents per even more environmental restrictions. Instead of celebrating these develop- gallon extra for gasoline. And that’s just INVISTA is an excellent example. That ments, state and federal regulators in the in 2013. Costs would rise even more in company is agressively pursuing a goal of U.S. keep trying to impose new and more subsequent years. reducing its energy intensity by 20 percent restrictive carbon regulations. For those living paycheck-to-paycheck, by the year 2020. Considering the numerous and extensive price hikes like these (coupled with high- Flint Hills Resources has already reduced environmental laws already in place, it’s er payroll taxes) can only mean lower its refinery emissions by 76 percent since easy to wonder why any additional carbon standards of living and less opportunity. 1997. Of the 50 largest refineries in the legislation – such as cap-and- U.S., FHR refineries rank first, seventh trade – would be necessary. and sixteenth for lowest criteria air emis- sions per barrel. Know your numbers Immediately eliminating all CO2 For 2010 (the most recent year for which All too often state and federal emissions in the U.S. would only reduce complete data are available), those emis- proposals to tax carbon directly global temperatures a negligible sions were 64 percent lower than the or launch new carbon cap-and- ° average among peer refiners. trade schemes have much more 0.08 C by 2050. But the damage to As Sheryl Corrigan notes in her Perspec- to do with raising revenue than our economy and the well-being of tive editorial on page 8, Georgia-Pacific helping our environment. American families would be enormous. has cut sulfur dioxide emissions by Even with the so-called se- Sources: Intergovernmental Panel on Climate Change; Science and Public Policy Institute almost half since 2000. questration, total U.S. spend- Koch companies are now among the ing has not gone down, but best in the world at using fewer resources taxes have certainly gone up. Families that spend a bigger portion of while producing more and better goods. As of Jan. 1, a U.S. household making their household income on transporta- That approach is not just good business, it’s $50,000 a year pays about $1,000 more in tion, utilities and household goods are good stewardship and a much better strat- taxes. That isn’t nearly enough to erase the hurt, not helped, by carbon taxes and egy for improving the quality of life for all. $1.3 trillion U.S. budget deficit, let alone cap-and-trade rules that make traditional the $16 trillion national debt. forms of energy more expensive. scienceandpublicpolicy.org/originals/state_by_state.html 5 Original ideas

An April 1 announcement about Koch company. “They’re looking for help solving Flamini said the ultimate goal is to struc- investing in a greeting card company was a problem, like the need for extra liquidity ture an investment that meets the needs of no April Fool’s joke. It was just the latest to grow or the expertise to go global. the counterparty and provides an appro- example of Koch Industries’ investment “Because we’re entrepreneurial, privately priate return for the risk Koch is assuming. capability in action. held and well-capitalized,” Feilmeier said, “Our flexibility often sets us apart from “we can respond quickly to those requests.” other investors. Building blocks “Once you’ve defined your acquisition or investment strategy,” Flamini added, “it’s Anyone who has read Charles Koch’s really about getting the message to the book, The Science of Success, knows about marketplace, proactively meeting with po- Koch’s foray into commercial real estate in tential investment candidates and listening the late 1970s and early ‘80s. willingly, so we can be problem-solvers.” What most people don’t know is that Koch Flamini contrasts Koch’s approach with is back in the commercial real estate market. those who try to line up several prospec- Koch Asset Management Group, based in tive buyers for a business or asset in hopes American Greetings’ brands include Gibson and Carlton Scottsdale, Ariz., and Koch Equity Invest- of bidding up the purchase price. Cards, Papyrus stores and licensed characters such as ments have made more than a billion “That’s unlikely to produce any real value, Strawberry Shortcake, Hollie Hobby and Care Bears. dollars’ worth of real estate investments especially in today’s environment of artifi- from coast to coast in the U.S. cially low interest rates,” Flamini said. “Far According to Steve Feilmeier, CFO for According to Chris Robertson, managing too many companies are willing to over- Koch Industries, a KII subsidiary, AG director of real estate for KAMG, these borrow and then overspend.” Invesment, LLC, has made a preferred projects range from newly built office “To conduct our business successfully,” equity investment of about $240 million space in Santa Clara, Calif., to renovated in American Greetings Corporation. Feilmeier concluded, “we’ve got to apply apartments in Orlando, Fla. MBM® to everything we’re doing. If, as expected, the $878 million buyout “In Denver, our invesment fund bought a deal closes this summer, American Greet- “We need to continually work at listening high-rise office building and completely to and understanding our customers in ings will once again be privately held by its refurbished it,” Robertson said. “It’s now founders, the Weiss family, who estab- order to anticipate and profitably satisfy fully leased and will soon be sold.” their needs.” lished the business in 1906 and took it Another project involves building a series of public in 1952. apartments in Alabama, near the Birming- “We committed this equity capital be- ham Country Club. Those will replace cause we think the Weiss family are excel- some very dated units built in the 1940s. lent managers and innovators,” Feilmeier Paying attention to the wants and needs said. “We also saw this transaction as a of customers has been essential. mutually beneficial opportunity. “Apartment tenants in Orlando said they “That’s what true origination is all about – wanted to replace the tennis courts, which building relationships and finding new were largely unused, with a pool and work- opportunities to help create value.” out facility. So that’s what’s happening.” Koch Asset Management has invested in real estate All or nothing? Enviable position transactions ranging from office space in Silicon Valley There was a time, not so long ago, when Koch’s investment capability relies on sev- (above) to apartments in Orlando (below). it seemed Koch companies would never eral important advantages, including access consider a transaction that resulted in less to capital and the ability to make decisions than a majority stake – or, at the very least, quickly with minimal bureaucracy. half-ownership. But those advantages are not enough. “In the old days,” Feilmeier admitted, “our “We try to align with like-minded manage- approach was usually to own and control, ment teams and be problem solvers,” said but now we’re much more willing to make Matt Flamini, president of Koch Equity substantial minority investments. Development. “This requires listening to He says many of the counterparties ap- the needs of counterparties and being flex- proaching Koch don’t want to sell their ible with investment structures.” 6 Looking Back

Noteworthy

Coolidge by Amity Shlaes Among its notable accomplishments, this book is a reminder that many of the issues This photo of the White House was taken in 1862 Americans wrestle with today have been by famed Civil War photographer Matthew Brady. around for decades. GLI courtesy Photos Banking issues, a volatile stock market, dangerous deficits, a push for new entitle- ments, double-digit unemployment, spe- Handling history cial treatment for special interests – Calvin The Gilder Lehrman Institute of Ameri- for Kansas teachers and special classes for Coolidge faced them all. can History was founded in 1994 to students featuring materials developed by Shlaes’ biography of the 30th U.S. President develop the study and love of American GLI. (See letter on page 2.) (1923-1929) is also a reminder that it is history, and a respect for the founding According to Susan Addington, com- possible to address such issues successfully. principles of the United States. munity relations manager for the Fred Coolidge accomplished something that Anthony Napoli, the Institute’s director of and Mary Koch Foundation, GLI does an seems impossible for education (and a former inner-city school exceptional job. today’s politicians. teacher), has a unique way of helping GLI “When you see more than 200 high school He cut the actual size achieve that goal. students repeatedly show up for three of the federal budget “We’re all about using primary source hours of extra class time on a Saturday,” while simultaneously documents, rather than textbooks, to Addington said, “that’s a pretty strong establishing policies teach history.” indicator the program is worthwhile.” that allowed the U.S. Secret weapon These Saturday Academies are often economy to grow. Nearly 70,000 documents, photographs devoted to subjects that teachers don’t have When Calvin and other historic items are preserved in time to cover in class. In many cases, GLI Coolidge was unex- the Gilder Lehrman Collection. More than has been able to tailor resources in support pectedly sworn in as President, there was a 60,000 of these are available to view online. of a topic chosen by a school district. federal deficit. By the time he voluntarily In 2011, First Lady Michelle Obama left office, there was a surplus. The items range from a hand-colored engraving of the Boston Massacre by Paul presented the Gilder Lehrman Saturday Shlaes has called Coolidge “our great Revere to a letter from a Titanic survivor, Academy Program with the National Arts refrainer” and “the President who could say scribbled while still at sea. and Humanities Youth Program Award, no.” He resisted higher taxes, bigger bud- the nation’s highest honor for out-of-school gets and costly entitlements – even when The oldest item in the collection is a letter, arts and humanities programs. they were popular with voters. written in Latin, from Christopher Colum- bus to Queen Isabella of Spain. “We’ve also seen a terrific response from Many historians have dismissed the 1920s teachers for our Foundation-sponsored as a frivolous or extravagant era that set up “Many of these items are on display at the GLI seminars,” Addington said. “Most the Great Depression. In reality, the 1920s New York Historical Society or on loan teachers, whether from public, private or were largely a time of innovation, growth to museums across the U.S.,” Napoli said, parochial schools, appreciate the opportu- and opportunity. “but their real value comes when we put nity to ‘dive deep’ on important subjects, them in the hands of students and teachers. It was also a time when one man, leading such as the history of freedom of speech.” by example, could accomplish a great deal. “If you’re trying to understand what slavery “Thanks to the Fred and Mary Koch was really like or what people were really www.amityshlaes.com Foundation and others, we have more saying during the Great Depression, we than 2,800 schools affiliated with our pro- can provide the photos, letters and docu- grams,” Napoli said, “including programs ments that bring those issues to life. ” in Atlanta, Houston and the Twin Cities. “I am for economy. After that I am for Koch connection “That creates a lot of opportunities to give our collection a real workout.” more economy.” – Calvin Coolidge Since 2006, the Fred and Mary Koch Foundation has sponsored workshops www.gilderlehrman.org Too True Too 7 By Sheryl Corrigan Perspective Senior vice president – FHR renewables operations and EH&S In 1994, my husband and I took our new- vancing environmental stewardship efforts Instead of integrating vision, virtue and born son and his great-grandma to the in Minnesota. Here was a company that talents, knowledge processes, decision beach in Bayport, Minn., for a swim. “walked the talk” and let its environmental rights and incentives when addressing At the end of our day, she told me how performance speak for itself. environmental issues, policymakers tend happy and thank- It was through those interactions with to focus on just one thing – their own ful she was to see FHR that I learned about MBM and agenda – without considering adverse her great-grandson Koch’s Guiding Principles and how the ap- secondary consequences. playing in the wa- plication of both led to good stewardship. That agenda is usually whatever is popular or politically correct. ter she had avoided I now know that Koch has a long history for most of her life. of environmental stewardship (dating all Having good data and measurement Eighty years earli- the way back to Fred Koch in the 1920s) systems to support any policy is criti- er, she recalled, the that has changed people’s lives for the bet- cally important. Unfortunately, very few water was “dirty ter. That’s why Koch was at the top of my knowledge systems are perfect, which is and smelly,” pol- list when it came time to seek a role in the why policymakers tend to default to their From 2003 through the luted from waste- own agenda instead. summer of 2006, Corrigan was private sector. water and runoff, Climate change policy is a sobering ex- commissioner of the Minnesota with trash floating Walking the talk Pollution Control Agency. ample of this. Because the incentives for downstream. Since 1997, Flint Hills Resources’ refiner- all those involved in developing climate Today, that same beach is a popular gath- ies have reduced average per-barrel criteria change policy are not aligned, getting the ering site and recreational resource for the air emissions by 76 percent. best data to our decision-makers hasn’t entire region. In 2004, FHR earned a Clean Air Award been successful or sufficient. Tipping point from the U.S. Environmental Protection The consequences of this (not just for Agency for reduced flaring and emissions. Koch, but society as a whole) are twofold. That was a great day for our family, but especially for me, as it showed me that In 2000, FHR refineries averaged almost First, what used to be a robust discourse successful environmental stewardship can, two hours of flaring per day. In 2012, on how to further stewardship efforts for and should, make people’s lives better. flaring at totaled just air, land and water quality has now been six-and-a-half hours for the entire year. reduced to a single topic: climate. It was also a significant driver in my deci- sion to accept a leadership position at the As for other Koch Second, Minnesota Pollution Control Agency. companies, at “Koch has a long history of resources Georgia-Pacific, that could Working at the state’s environmental sulfur dioxide environmental stewardship that has be applied regulatory agency gave me a chance to emissions have changed people’s lives for the better.” to more observe and learn about the most success- been reduced by pressing ful approaches to stewardship. Perhaps almost half since 2000. Total suspended local needs – such as rebuilding outdated the most important lesson I learned had to solids in wastewater have been cut by 38 wastewater treatment plants – have been do with vision. percent since 2005. hijacked to support the climate drumbeat. Regardless of what policy, regulation or GP Harmon Recycling helps recover and Time for reflection initiative the agency was working on, if reuse millions of tons of wastepaper used Today, when I look at my 19-year-old son, there was a clear vision about the desired by GP and other companies. outcome and all parties involved agreed I still think about that day on the beach. I there was value in the vision, the approach Last year, six INVISTA sites received am just as committed to driving environ- was generally successful. awards for perfect EH&S performance. mental excellence now as I was then. But if the vision wasn’t shared or there In addition, Koch’s Matador Ranch won a Great-grandma would probably be proud was disagreement regarding its value, the 2012 EH&S Excellence award for its water that I am working for a company that stewardship effort usually failed. conservation efforts in Texas. has demonstrated its commitment to the These outcomes shouldn’t surprise any- Shifting policies environment in so many ways over so many years. one who works at a Koch company, If we use an MBM perspective to look at as vision and incentives are two of the our country’s environmental decision- But I can’t help wondering what she five dimensions of our MBM® framework. making, it’s not hard to see why so many would think about our nation’s blinkered During my time at the MPCA, Flint Hills policies and programs have failed to focus on climate change. Resources was actively and effectively ad- achieve the desired results. http://www.kochind.com/Operations_Excellence/ 8