JANUARY 2016 Discovery THE QUARTERLY NEWSLETTER OF KOCH COMPANIES Koch’s Philosophy of Philanthropy Koch companies, foundations, employees Koch sites have the leeway to make “We don’t want to be a micro-manager of and family members all have well- donations that address other types of needs nonprofits, because that stifles innovation. deserved reputations for generosity. in their communities. Molex employees We’re respectfully investing in their visions in Munich, for example, have supported a because we believe they align with ours,” The Salvation Army, American Red Olson said. “We’re very open to new ideas, Cross, and United Negro College Fund local social project that provides resources new partners and new ways of advancing our are among the many organizations that to disadvantaged children. vision of philanthropy.” have made points of applauding Koch’s Georgia-Pacific’s Bucket Brigade program philanthropy. Last summer, a New York has donated more than $1.75 million Unlike some donors, Koch tends to take a publication called David Koch’s donations to dozens of local fire departments for long-term view with charitable investments. “outrageously generous.” equipment, programs and training. It is not the kind of company that writes a check and then walks away or that gives For members of the Koch family, Similarly, FHR’s Pine Bend Refinery money to try to boost its reputation. charitable giving usually reflects personal donated a specially equipped trailer to the priorities. David Koch, a late-stage cancer Dakota County Fire Chiefs Association. “We don’t give to look good; we give to do survivor, has pledged or contributed In Germany, INVISTA’s nylon 6,6 yarn good,” Olson said. “We also hold people more than $1.2 billion — much of it to processing site in Michelau has also accountable for results, just as we do with our cancer research, as well as educational contributed to local emergency responders. own businesses. institutions and the arts. Elsewhere, children are the focus of “Charles Koch continually reminds us that But for Koch Industries and Charles giving. In China, the GP Cellulose Green all people have unique talents, abilities and ™ Koch, philanthropic giving is driven by a Hand Project (pictured) is giving advantages. A free society enables them to very specific vision. “My philanthropy,” thousands of schoolchildren access to discover these and succeed. explains Charles Koch, “is focused on better sanitation and cleaner water. “That’s why our overarching goal is to create advancing ideas that help people improve The Flint Hills International Children’s opportunities for earned success among the their lives. Festival in St. Paul, Minnesota, has been least advantaged.” sponsored by FHR for 16 years. FHR has “We want to help people develop the also been a major contributor to the Texas To learn more about Koch’s philanthropy in values and skills needed for success. Aquarium in Corpus Christi. action, see the story on Page 10. We also want to remove regulatory and other obstacles that prevent them from WHAT IT’S NOT capturing opportunities.” All Koch donations, whether at the local THIS ISSUE... LOCAL TOUCH or national level, are made using a similar 5 2015: Year in Review thought process. At the local level, hundreds of Koch 9 Choosing the Wright carpet company sites around the world also Meredith Olson, vice president of public make charitable contributions. Many affairs for Koch Companies Public Sector, 10 Koch philanthropy in action of those contributions mirror Koch says the core of Koch’s philanthropy is 12 Dave Robertson: 10 years and counting Industries’ corporate vision. not about buying control. Letters and other submissions become the property of Koch Industries, Inc., and may be reproduced in whole or in Postal Pipeline part, including the author’s name, for any purpose and in any manner. Letters may be edited for length or clarity. Mr. Koch, I am an entrepreneur from Germany and I have read the book written by As a lifelong employee of Koch Pipeline, Charles Koch with interest. It has I want to express my gratitude for the really impressed me and filled me opportunities Koch has made available to with enthusiasm. me and my family. To have a different point of view leads My career with Koch began in 1966 as a to success. Mr. Koch, you have shown part-time college student at the pipeline this in your life. yard in Duncan, Oklahoma. Two dollars per hour and 48 hours per week was big money In your country, performance and to an 18-year-old. independence lead to prosperity and admiration. But in my country, Sterling Varner was gracious enough to independence and freedom are suspect Anthony Mason’s interview of Charles Koch aired introduce us at the Duncan yard where I for most people, and innovations are on CBS the week of Oct. 11. was working as an electrician. I also was often seen as negative. These are not fortunate enough to visit with you in 1969 After watching the CBS “Sunday Morning” good conditions for me and my very in Haskell, Texas, after the Service Pipeline interview with Mr. Koch, I am inspired to write small company. acquisition. The fact that you remembered and say how much I enjoyed it. me was amazing. By reading your book, I was motivated I’ve found it difficult to learn more about what not to give up and to always believe in I remained with Koch until 2005, when Mr. Koch stands for because most of what is myself and my ideas. Because there are ONEOK NGL bought Mid-Continent written is not written by Mr. Koch himself. It’s only a few role models in Germany, I’m Gathering. I retired from ONEOK in 2012. very difficult to sort through reporters’ lenses glad to have discovered and read your to really understand Mr. Koch’s message. Koch Industries must have had a strong new book. affect on me because I am still working Elisabeth Matheis Everything that was said in today’s interview as president of Manhattan Inspection in Neunkirchen, Germany resonated with me and I would like to get Shawnee, Oklahoma. I have spent the last more involved. Is there anything else you can three years working on the Sterling lines recommend that would explain Mr. Koch’s from Medford to Mont Belvieu. message without the bias that seems to go My family and I thank you for making a along with it in the reports I’ve seen? better life possible through the vision of Nikki Steingold Koch Industries. Richmond, Virginia Ronnie D. Sims, president In addition to two books, Charles Koch has written Manhattan Inspection numerous editorials for Discovery newsletter and Shawnee, Oklahoma op-eds for major publications. All of these can be found at KOCHind.com. Discovery January 2016 It was a pleasure to watch your Volume 22 | Number 1 interview on “The Kelly File.” I have EDITORIAL BOARD heard the name “Koch” mentioned Susan Armitage so many times on the various news Philip Ellender channels and by our politicians, yet I Jeff Gentry Greg Guest had no idea who you were, what you Charles Koch looked like and what you thought. Steve Lombardo It was nice to get a small opportunity Walt Malone Dave Robertson to see and hear from you directly Ken Spain which, in turn, informs me and allows me to develop my own opinion QUESTIONS? of who you are. COMMENTS? Email us at: My conclusion: you should do more [email protected] interviews! Lynn R. Ferguson Azusa, California www.KOCHind.com 2 © 2016 Koch Industries, Inc. Koch is an EOE. M/F/D/V. International News INVISTA believes biotechnology has the potential to significantly improve the cost and availability of several chemicals and raw materials that are used to produce its current products. For years, it has researched this possibility. Last December, Gary Smith, INVISTA’s vice president of intermediates sustainability based in Wilton, U.K., announced a breakthrough for bio-derived butadiene production through INVISTA’s collaboration with LanzaTech (founded in New Zealand). “Through our collaboration with LanzaTech, we have developed a metabolic toolkit that has been successfully applied to generate new pathways for bio- derived butadiene production,” Smith said. This work is in an early stage of development. INVISTA hopes to commercialize it within the next several years. Butadiene, a key intermediate chemical used in the production of synthetic rubber and various plastics, is used by INVISTA in its proprietary, butadiene- based adiponitrile (ADN) production technologies. In early January, INVISTA announced it was granted a patent for bio-derived raw materials technology developed through a collaboration with Arzeda (headquartered in Seattle). Last October, Steve Daley, president of Koch’s MBM® capability, gave a special presentation to about 180 international students at the London campus of ESCP Europe Business School. ESCP, established in 1819, calls itself “the world’s first business school” and also has campuses in Berlin, Madrid, Paris, Turin and Warsaw. Daley’s presentation included an overview of Koch Industries and an explanation of the differences between good and bad profit as presented in Charles Koch’s new book. A Q&A session with the students followed Daley’s lecture. “This was a significant opportunity to share our ideas with tomorrow’s business leaders,” Daley said. “Since we believe the concepts of economic freedom and MBM are universal, it was great to have this discussion with a European audience.” Koch companies employ about 6,000 people at dozens of sites across Europe, ranging from manufacturing plants and research facilities to financial trading operations and business support capabilities. BUSINESS HIGHLIGHT Last December marked Georgia-Pacific’s 10th anniversary as a A DECADE OF CHANGE Koch company.