In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova-Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. In less than a week, she discovered that the company had paid bribes to win contracts.
“I uncovered the practices within a few days,” Egorova- Farines says. “They were not hidden at all.”
She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.
By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France.
“Those activities constitute violations of criminal law,” Koch Industries wrote in a Dec. 8, 2008, letter giving details of its findings. The letter was made public in a civil court ruling in France in September 2010; the document has never before been reported by the media.
You might bet handsomely that Ms. Egorova-Farines was rewarded for bringing the illicit payments to the company’s attention. But you would lose:
Her superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent, even after Koch’s investigators substantiated her findings.
This is the sort of thing Charles G. Koch may have been thinking about when he recently opposed Buffett’s suggestion that the wealthiest Americans are undertaxed:
I believe my business and non-profit investments are much more beneficial to societal well-being than sending more money to Washington.” Charles G. Koch, Chairman and CEO, Koch Industries, Inc.
But which society is it that Mr. Koch things he’s benefitting, one wonders. These recent developments help clarify why Koch sees it as so critical to wage “the mother of all wars” to create a U.S. regime that does as little as possible in the way of regulation, taxation, and law enforcement. Shame to have pesky government watchdogs looking into all that “societal well being” he and his brother’s inherited oil fortune has been fostering.
Elections aren’t contests between Republican and Democratic billionaires but is there any doubt Democrats would come out ahead my this metric? Warren Buffett v. the Koch brothers — symbolic of so much.