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Not long after the death of his father, Charles Koch, then in his early 30s, discovered a letter the family patriarch had written to his sons. “You will receive what now seems to be a large sum of money,” Fred Koch cautioned. “It may either be a blessing or a curse.”
Fred’s legacy would become a blessing and a curse to his four sons-Frederick, Charles, and fraternal twins David and Bill-who in the ensuing decades fought bitterly over their birthright, the oil and cattle-ranching empire their father left behind in 1967. Against a backdrop of scorched-earth legal skirmishes, Charles and David built Koch Industries into one of the largest private corporations in the world-bigger than Boeing and Disney-and they rose to become two of the wealthiest men on the planet.
Influenced by the sentiments of their father, who was present at the birth of the John Birch Society, Charles and David have spent decades trying to remake the American political landscape and mainline their libertarian views into the national bloodstream. They now control a machine that is a center of gravity within the Republican Party. To their supporters, they are liberating America from the scourge of Big Government. To their detractors, they are political “contract killers,” as David Axelrod, President Barack Obama’s chief strategist, put it during the 2012 campaign.
Bill, meanwhile, built a multi-billion dollar energy empire all his own, and earned notoriety as an America’s Cup-winning yachtsman, a flamboyant playboy, and as a litigious collector of fine wine and Western memorabilia. Frederick lived an intensely private life as an arts patron, refurbishing a series of historic homes and estates.
Sons of Witchita traces the complicated lives and legacies of these four tycoons, as well as their business, social, and political ambitions. No matter where you fall on the ideological spectrum, the Kochs are one of the most influential dynasties of our era, but so little is publicly known about this family, their origins, how they make their money, and how they live their lives. Based on hundreds of interviews with friends, relatives, business associates, and many others, Sons of Witchita is the first major biography about this wealthy and powerful family-warts and all.
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Sons of Wichita
Strong-jawed and broad-shouldered, with reddish hair and a pair of wire-rim glasses that gave him an air of industriousness, Fred Chase Koch cut a dashing figure galloping up and down the polo field at the Kansas City Country Club. It was a September day in 1932, and debutantes crowded the sidelines to watch the match between the local old-money boys and the visiting squad from Wichita—a town newly flush with oil wealth, where Fred was a partner in a fledgling engineering company that catered to the refining industry. One of those society belles was Mary Clementine Robinson, the twenty-four-year-old daughter of a prominent Kansas City surgeon and granddaughter of a founding faculty member at Kansas University. She was tall, graceful, and erudite, with delicate features and a wavy bob of chestnut hair. A graduate of Wellesley with a degree in French, she was a talented artist and had worked as a designer for the Kansas City apparel maker Nelly Don.
Fred had remained a bachelor into his early thirties. There had been little time for settling down. He traveled regularly to far-flung locales to oversee the construction of refinery equipment and scare up new business opportunities for his firm, the Winkler-Koch Engineering Company. Recently, his work had even taken him to the Soviet Union, where Fred's firm helped to overhaul the country's archaic oil refineries, a lucrative contract that had made him and his partner millionaires.
That Fred was riding on the same polo field as the elite of Kansas City and in the company of women like Mary Robinson, whose ancestors included some of the earliest colonial settlers, spoke to his rapid rise from hardscrabble origins.
The second son of a Dutch immigrant turned frontier newspaperman, Fred was born on September 23, 1900, in Quanah, Texas, a poor but plucky town just east of the panhandle. To a boy, unaware of the hardships of frontier life, this whistle-stop town on the Fort Worth and Denver City Railway seemed like paradise. It had streams to fish, plentiful game to hunt, and fields to roam. At the turn of the century, Indians still periodically came to town, including Quanah's stoic namesake, Comanche Chief Quanah Parker, who enjoyed visiting Fred's father, Harry, to gawk at his modern printing press.
Though a magical place for a boy, Quanah's allure diminished year by year as Fred grew into an ambitious young man. He came of age in a time of rapid technological change, and he suspected his future lay beyond his hometown, an enclave surrounded by prairie that stretched to the horizon, interrupted by occasional stands of spindly mesquite.
When Fred was born, there were fewer than eight thousand cars in the United States. They were expensive and impractical, the playthings of the rich. Yet by Fred's sophomore year at Quanah High School, there were 2 million. Thanks, in part, to Henry Ford's decision to forgo steam or electricity for gas-powered internal combustion engines in his signature automobiles, there was now a growing national thirst for gasoline, once considered a useless by-product of converting crude oil to kerosene.
Texas ranchers had once shaken their heads bitterly as they drilled down through the bone-dry soil in search of water, only for viscous oil to ooze to the surface. Now wildcatters raced to sink wells and tap the next big gusher. Among those lured in by the oil boom was Fred's uncle, Louis B. "L. B." Simmons, who had established a refinery in the oil town of Duncan, Oklahoma. The future, to Fred's way of thinking, no longer belonged to those who could make crops grow in the soil, but to the engineers and entrepreneurs who could extract wealth from what lay beneath the surface.
A gifted student with a particular aptitude for science and math, Fred left home in the fall of 1917 for the newly established Rice University in Houston. The bustling oil-rich city was a significant change of pace from Quanah, where the Koch family's home phone number had been all of a single digit—3. Fred thrived at Rice. His teachers considered him a standout student and his peers elected him president of his sophomore class. But like his father, Harry, whose wanderlust had led him from the Dutch harbor city of Workum to a dusty frontier town in Texas, Fred soon grew restless to experience the world.
He spent the summer after his sophomore year working aboard the SS Coweta, a Merchant Marine vessel, as it steamed to England. When he returned, he did not go back to Rice. Instead, he moved east to Boston, matriculating to the elite Massachusetts Institute of Technology. Along with his studies, he also took up boxing and briefly captained the MIT team.
Fred's engineering skills were in demand, and even before graduating, he accepted a position with Texas Company (later Texaco), where he worked as a research engineer at the company's Port Arthur refinery on the Gulf Coast. But he saw little future there: "The way up the ladder in that large organization looked very steep and difficult." So he quit, joined another oil company, then resigned from that one, too. As he struggled to drum up work as a consultant, Fred heard from an MIT friend, Carl de Ganahl, whose father was building a refinery in England and who would become a mentor to the callow engineer.
Charles Francis de Ganahl's résumé read like an adventure novel. He was an explorer and entrepreneur who as a young man had established a sugar plantation deep in the Mexican interior after opening the country's upper Panuco River to boat navigation. Over his trail-blazing career he dabbled in everything from shipbuilding to oil, and from plane manufacturing to gold mining, with business interests that spanned three continents.
In the early 1920s, with the domestic supply of oil increasingly controlled by the major U.S. oil companies, Ganahl established a petroleum refinery and storage facility in England. The Soviet Union supplied the refinery with the bulk of its oil, transporting it by tanker from the Georgian city of Batoum on the Black Sea.
Located on the Isle of Grain, where the Thames and Medway Rivers flow into the North Sea, Ganahl's Medway Oil and Storage Company was ideally situated to provide deepwater access to oceangoing tankers. But the terrain, largely reclaimed marshland, posed an array of engineering challenges.
In 1924, Ganahl—seeking to build out Medway as a refining and distribution hub—took a chance on Fred, making him the chief engineer on the project. Fred worked alongside Ganahl's son, the company's operations manager, to design and construct a new refinery on the island. Ganahl would later call Fred "the soundest chemical engineer in the world" and say he possessed "as brilliant a pair of brain lobes as are worn by any young man of my acquaintance." The admiration was mutual. Fred considered Ganahl a mentor, if not a father figure, and the men remained close the rest of their lives.
In 1925, with the refinery project completed, Fred headed back to the United States. He planned to go straight to Texas to visit his parents, but detoured to Wichita, Kansas, at the invitation of an MIT classmate named Percival "Dobie" Keith. Keith had recently partnered with Lewis E. Winkler, a self-taught engineer and former Army sergeant, to form a new engineering firm. He wanted Fred to come to work for them.
If Fred had learned anything from Charles de Ganahl, it was that the most successful men controlled their destinies—they were owners, not employees. Fred countered Keith's offer with his own. He wouldn't work for them—but he would work with them, as a full partner in the engineering firm. Keith and Winkler agreed to his terms. For $300, Fred bought a one-third stake in the outfit.
It was hard to imagine that the confident, worldly, and fabulously rich man standing in front of Mary Robinson had, just a few years earlier, been so poor that he had lived in his office, located in Wichita's Continental Oil building on the banks of the Arkansas River. As players and spectators mingled on the manicured polo field after the match, Mary and Fred were introduced. Smitten, he pursued his courtship of her as if closing the most important business deal of his life. Fred came from a humble background, but Mary's parents approved of him. He came across as a man of substance and sound judgment. After all, Fred had quickly parlayed a $300 investment into an enviable fortune. On October 22, 1932, a month (and six dates) after Fred and Mary met, they married.
Fred and his bride were opposites. He was "a typical old country boy," as one friend put it, "except everything he touched turned to money." She was artistic and sophisticated, an extrovert who seemed most in her element buzzing around a cocktail party. "She was the epitome of a lady. Absolutely beautiful," Mary's niece, Carol Margaret Allen, recalled. "She was one of the loveliest hostesses I've ever known in my life."
Fred, by contrast, was a quiet, serious man, who did his best to avoid parties and social gatherings, abhorred chitchat and gossip, and generally eschewed superfluous things. "Fred was a strong man; he wasn't a party man.… When you could get him out he would gravitate to the smartest man at the party," Mary remembered. He preferred to pass the time with a book, tinkering with a new refinery design at his drafting desk, or out hunting or fishing in the solitude of nature.
For their many differences, the couple complemented each other. Fred shared his love of the outdoors with Mary, teaching his wife how to hunt and shoot. Mary schooled Fred in fine art.
If the newlyweds had little time to get acquainted during their brisk courtship, their honeymoon remedied that. Fred planned an extravagant, seven-month sojourn that spanned four continents, carrying them by air, land, and sea to some of the remotest and most exotic reaches of the world. The inspiration for the elaborate trip came from Fred's former boss, Ganahl, who had taken his wife on a similar globe-spanning journey.
The Kochs sailed from New York that November, visiting the white-sand beaches of Cuba, touring the Panama Canal, and exploring the barrios of Santiago, Chile. One day, as they prepared to board a train that would carry them across the Andes, a clerk stopped the couple and informed Mary she would have to leave her steamer trunk behind; space was limited and they had brought too much luggage. Mary was adventurous, and she had her rugged side, but she was also accustomed to a certain level of comfort.
"But this is my trousseau!" Mary pouted.
Fred attempted to soothe his new wife. "Don't worry," he said, "I'll buy you 10 trousseaus."
The offer was little consolation. When the train departed later that day without her trunk, Mary was sullen. Staring mournfully out the window, she noticed a small plane trailing closely behind them. Fred saw her following it with her eyes and leaned over, smiling: "Mary, that's the charter plane I've hired to bring over your trousseau."
After crisscrossing South America, from small jungle villages to the cosmopolitan cities of Rio de Janeiro and Buenos Aires, they traveled to Portugal and Spain, taking in the plazas of Madrid and catching a bull fight in Seville. From Gibraltar, they crossed into Africa, browsing the open-air bazaars of Tangiers and Alexandria. Wearing pith hats and outfitted head to toe in khaki, they toured the Sudan and spent weeks on safari in Tanzania and Kenya. Fred felled a pair of leopards and later had their pelts made into a fur coat for Mary.
Loaded down with souvenirs and artifacts, the couple returned to Wichita in May 1933, settling on a rambling tract on the rural outskirts of the city. Initially, they lived in a modest, white home with black shutters, but Fred soon began construction of a grand Tudor-style mansion on the grounds.
Built of light-colored stone, the house had archways, gables, and a heavy, Gothic-looking front door that gave it the feel of an English manor. It featured a stately circular drive and espaliered shrubbery, a wading pool on a patio off the dining room, and a four-car garage. Elsewhere on the property were stables for Fred's twelve polo ponies, which Mary helped to exercise nearly every morning.
The mansion's interior mingled both of their styles, rustic and elegant—on one wall the mounted head of an antelope, on another Renoir's Girl in Lavender Skirt. Thomas Hart Benton's The Music Lesson hung above a plush burnt-orange sofa in the half-timbered living room. A downstairs game room, draped with animal skins, housed the Kochs' growing collection of hunting trophies, including a wall crammed with the heads of exotic horned creatures.
Mary had returned from their honeymoon pregnant with their first child. Before long, the Koch mansion echoed with the voices of four young boys.
Born in August 1933, Frederick Robinson Koch was named for his father, but with a twist of refinement. The patriarch was just plain old Fred. Mary gave birth to another boy in November 1935. Following a family tradition established by Fred's father, Harry, they named their second son after a business associate. "Am very greatly honored and delighted but shocked that you are so cruel to the boy," the child's namesake telegrammed, playfully, after receiving news of the birth of Charles de Ganahl Koch.
In May 1940 came the birth of fraternal twins David Hamilton Koch and William Ingraham Koch. With the arrival of four sons in seven years, Fred had given a lot of thought to forging his boys into men. He had come up in a place where sometimes all that separated prosperity from poverty was an unfortunate turn in the weather. Quanah was a town of strivers. This environment—and watching his own father's rise from penniless immigrant to successful local businessman—had fueled Fred's ambition. If he handed his boys everything, what would motivate them to make something of themselves? Fred feared that a life of privilege would little by little erode their independence, and he worried that they would rely on his successes and never bother to achieve their own. "The most glorious feeling," Fred often told his sons, "is the feeling of accomplishment."
"He wanted to make sure, because we were a wealthy family, that we didn't grow up thinking that we could go through life not doing anything," Charles once recalled. Fred's mantra, drilled repeatedly into their minds, was that he had no intention of raising "country-club bums." Complicating matters, the Koch compound sat directly across East 13th Street from the exclusive Wichita Country Club.
Fortunes were being made in Wichita. Known as "The Magic City," it had become a magnet for risk takers, entrepreneurs, and fortune seekers of all stripes. The Texas gas-lamp salesman W. C. Coleman had established a thriving business there. So had Walter Beech and Clyde Cessna, the airplane manufacturers who would help to establish the city as America's "Air Capital."
Though they grew up on an estate, Fred went out of his way to make sure his children did not feel wealthy. "Their father was quite tight with his resources," recalled Jay Chapple, an elementary and middle school friend of the Koch twins, who spent time in the family's home. "He did not shower them with toys and that kind of thing." Until well into the 1950s, Chapple said, Fred refused to buy a television. "Every family was getting a TV set that could possibly afford one, but Fred Sr. just said no."
The brothers received no allowances, though they were paid for chores they completed around the house. Still, Fred kept such a tight rein on his wallet that even cobbling together the pocket change to see a movie could be a struggle: "If we wanted to go to the movies, we'd have to go beg him for money," David told an interviewer. In the local public school, where the wealthy Koch twins began their educations alongside the sons and daughters of blue-collar workers from the Cessna and Beech factories, it was their classmates who often seemed like the rich ones, he remembered: "I felt very much of a pauper compared to any of them."
To his sons and their friends, Fred came across as a larger-than-life figure, whose gruff mien and rugged ways evoked comparisons to Western gunslingers. "He was like John Wayne," David has said. "Just like John Wayne." Fred even "kind of looked like John Wayne with glasses," recalled longtime Koch family friend Nestor Weigand. "He was a tough, tough guy." He described Fred's style as "my way or the highway."
Fred rarely displayed affection toward his sons, as if doing so might breed weakness in them. "Fred was just a very stiff, calculated businessman," said Chapple. "I don't mean this in a critical way, but his interest was not in the kids, other than the fact that he wanted them well educated." He was not the kind of dad who played catch with his boys; rather, he was the type of father, one Koch relative said, who taught his children to swim by throwing them into a pool and walking away. "The old man didn't put up with any—" Sterling Varner, who went to work for Fred Koch in the 1940s and later became president of Koch Industries, once said. "He was papa, and that was that."
Or as the Koch relative put it, "He ruled that house with an iron fist."
The Koch patriarch was determined to instill in his sons the voracious work ethic that he attributed to his own success in business. He ensured his boys' hands knew calluses, and their muscles experienced the ache of a long day of manual labor. He put them to work milking cows, bailing hay, digging ditches, mowing lawns, and whatever else he could think of. The never-ending routine of chores was especially torturous during the summer months, when other local kids from Wichita's upper crust whiled away the afternoons at the country club, the sounds of their delight literally wafting across 13th Street to the Kochs' property. "It used to be so hot there in the summertime," David remembered. "My best friend came from a wealthy family in Eastborough. He used to spend every day at the swimming pool of the country club. The wind would blow from the south and carry the noise across the street, and I'd hear him laughing, splashing in the pool, and I would be out there working and feeling sorry for myself."
Periodically during the summers, David and Bill spent a few weeks in Quanah with their cousins, where they made the most of their freedom from their father's strict household, spending their days shooting tin cans, swimming, and generally goofing off with no chores or expectations hanging over their heads. "I think Uncle Fred kept them reined in pretty good," said Carol Margaret Allen, the daughter of Fred's older brother, John Anton, who had remained in Quanah to work at the family's newspaper, the Quanah Tribune-Chief. "They lived out in the country. There was nothing around them much. I don't think they did a whole lot of things except stay out there and do chores. So I think when they got away, they had a little fun."
In Quanah, the twins loved visiting the local drugstore, where they could sprawl out on the floor with comic books and order chocolate milk or ice cream from the soda fountain, charging their purchases to their uncle's expense account. They found the concept of a charge account almost as thrilling as the latest Superman comic. Because of their rigid upbringing—and Fred's deep aversion to debt—they had no idea such a thing as credit even existed.
Fred traveled frequently on business, but when he was home, the Koch household took on an air of Victorian formality. After work, Fred often retreated to his wood-paneled library, its shelves filled with tomes on politics and economics, emerging promptly at 6:00 p.m., still in coat and tie, for dinner in the formal dining room. "He just controlled the atmosphere," Chapple recalled. "There was no horseplay at the table." Fred would occasionally use family dinners to impart advice to his sons or to lecture them on government and politics. "My father was quite a student of history, so we got a lot of history lessons at the dinner table," Charles remembered.
In the Koch brothers' early childhood, Fred's stern demeanor was not improved by the fact that he spent much of the time in great physical pain. Doctors treated a cancerous tumor on his palate with radiation and surgery, but the treatment itself left behind a quarter-sized hole in the roof of his mouth. It made it difficult for him to eat and hindered his speech. The nature of his business forced him to interact regularly with clients and potential customers. As this became increasingly difficult, he began to reflect on his career and considered retreating to a quieter, simpler life.
Fred came from ranching country, growing up around such legendary spreads as the Matador, the Swenson, and the Pitchfork. Collectively, these historic ranches sprawled across more than a million acres, expansive monuments to Texas's proud cowboy and frontier heritage. The ranching life always appealed to Fred. Ranchers were the men of status and wealth during his childhood. During a particularly bleak stretch in Quanah's history, when wheat crops failed and a local bank went under, Fred's dad had managed to tread water in the newspaper business by convincing ranchers—the only local businessmen still prospering—to advertise their cattle brands in his paper.
In 1941, Fred purchased Spring Creek Ranch in the majestic Flint Hills of eastern Kansas, where the state's otherwise flat, homogenous landscape suddenly gives way to a gently undulating terrain of shimmering bluestem tall grass, peppered with ponds and woven with veins of gurgling creeks. Fred added to its acreage over time until the ranch grew to 10,000 acres.
It was not just a business, but also a frequent spot for family getaways. On weekends, Fred enjoyed piling his clan in their wood-paneled station wagon and setting out for Spring Creek, located about 60 miles east of Wichita. The property featured a small white cottage with a screen porch. Down a slope was a pond, with a raft in the middle and a dock with a diving board, from which the Koch boys—when they weren't mucking stalls, or performing any number of other chores—leapt into the crisp water. (A few decades later, when Bill made one of his first major art purchases, he selected Claude Monet's Field of Oats and Poppies, because it reminded him of a favorite family picnic spot on the ranch.)
A plastic surgeon eventually cured Fred's palate condition. He maintained a foothold in the oil business, but his focus turned increasingly to ranching. He sold a refinery in Illinois and offloaded oil leases in northwestern New Mexico, channeling some of the proceeds into the December 1950 purchase of the 257,000-acre Beaverhead Ranch in southern Montana on the edge of the Continental Divide. The Beaverhead became the crown jewel of Fred's burgeoning ranching empire. In 1952, he formed the Matador Cattle Company to oversee his ranch holdings, and in early 1953, he purchased three parcels of the historic Matador Ranch, founded in 1882 and located 70 miles west of Quanah in Motley County, Texas. Fred did not just buy choice acreage known for its "fat cattle and nutritious grass," in the words of the Matador Cattle Company's onetime president John Lincoln; he acquired approximately 105,000 acres of Texas history.
The ranches were a fixture of the Koch boys' childhood, and during the summers Fred and his sons spent at least a month at Beaverhead, driving there by a different route each time in order to take in new sights as they made the 1,300-mile journey from Wichita. Trips to the family ranches were not vacations; they were yet another opportunity for Fred to break his children of any privileged tendencies through long days of labor.
The boys drove tractors, dug fence posts and irrigation ditches, rode herd, cleaned stalls, and performed other assorted jobs. On the ranches, the multimillionaire's sons were treated no differently than lowly cowhands, and they lived alongside Fred's employees in no-frills bunkhouses. One summer Charles bunked in a log cabin nestled in Montana's Centennial Valley alongside a colorful cowboy named "Bitterroot Bob," who was known to take potshots at flies as he lay in bed at night cradling his pistol. On his way back to prep school at the end of the summer, Charles and one of Fred's employees stopped for lunch in Dillon, Montana. Charles glanced around the divey restaurant. "It sure is clean here," he said.
Charles and his younger brothers endured their summers working on the ranches—and later even came to appreciate the character-building experience of it—but the eldest Koch brother rebelled against Fred's reign. Every dictatorship has its dissident, and Frederick played this part within the Koch family's rigid power structure.
Frederick was the outlier among his rough-and-tumble, ultracompetitive brothers. While the three younger boys took after their father, he gravitated toward his mother's interests. Mary helped to nourish Frederick's artistic side, and when he grew up, mother and son would enjoy spending time together taking in plays and attending performing arts festivals. Artsy and effete, Fred was a student of literature and a lover of drama, who liked to sing and act. He wasn't athletic, displayed no interest in business, and loathed the work-camp-like environment fostered by his father, with whom he shared little in common, beyond a love of opera.
Fred bonded with his sons through manly pursuits, especially father-son hunting expeditions to far-off places, such as the Arctic and Africa. Frederick had no interest in such primeval excursions. Unlike his brothers, "Freddie didn't want to learn" to shoot, Mary recalled. He was in "another world."
The more Fred glimpsed signs of effeminacy in his son, the more he tried to toughen him up—and the more Frederick resisted. Finally, Frederick had a nervous breakdown, according to Charles, during a summer of forced labor on one of the family's ranches. ("I have never had a 'nervous breakdown,' " Frederick said. He added that after one summer of work at Spring Creek, he had subsequent summer jobs at a music store and a handful of banks in Wichita.)
"Father wanted to make all his boys into men and Freddie couldn't relate to that regime," Charles explained. "Dad didn't understand and so he was hard on Freddie. He didn't understand that Freddie wasn't a lazy kid—he was just different."
By the late 1950s, when Frederick was in his twenties, it was an open secret among the family's circle of friends in Wichita that he was gay. "We all knew Freddie was gay," said someone who spent time with the family and their friends in the 1950s and 1960s. "You know, those things—especially in an environment like Wichita—were almost whispered. It was common knowledge."
Frederick could do little to relate to his father or win his approval. "Freddie was a sophisticate and a man of the world in addition to the fact that he was gay," said Koch family friend Nestor Weigand. "It wasn't something that was easily accepted in those days." (According to Frederick, he is not gay.)
- "Sons of Wichita feels as close to the truth as anyone is likely to get for a long time to come."—Financial Times
- "[A] riveting biography...fair-minded and inquisitive. Schulman offers carefully observed details that help flesh out our image of the men whose money has so dramatically remade our politics, revealing much about their motives as well as the demons that haunt them."—The Washington Post
- "This is a complex story of epic sibling rivalry, with important political dimensions."—Publishers Weekly
- "[C]ompulsively readable... a bias-free book that illuminates two of the most influential figures on the American landscape while telling a remarkable, if cautionary, tale about money, power, and the bonds of brotherhood."—Booklist
- A straightforward, evenhanded and often riveting assessment."—Kirkus
- "[Schulman] leaves no stone unturned as he walks the reader through decades of personal and professional history. Sure, the detailed and realistic portrait Schulman paints of the development of a business empire that is almost unrivaled in its reach and influence is indeed mesmerizing. But it will be the human side of the equation that ultimately holds your attention."—Bowling Green Daily News
- On Sale
- May 20, 2014
- Page Count
- 320 pages
- Grand Central Publishing