Tuesday :: Oct 4, 2011

The Koch Case for Government Regulation

by Mary

Bloomberg's expose on the Koch Brothers documents the decades of corruption and criminal behavior that led to their accumulation of vast wealth. According to Charles Koch, the conglomerate operates under the philosophy of Compilance and Integrity.

The Bloomberg piece closes with Charles' assessment that the problems that had arisen during the decades of operation were because they were struggling to keep up with the overwhelming regulations.

“My overall concept is to minimize the role of government and to maximize the role of the private economy and maximize personal freedoms,” David Koch told the National Journal in May 1992.

In his 2007 book, Charles Koch says his company had difficulty keeping up with changing government regulations and that it did eventually build an effective compliance program for 20 areas ranging from environmental to antitrust to safety regulations.

“We were caught unprepared by the rapid increase in regulation,” he wrote. “While business was becoming increasingly regulated, we kept thinking and acting as if we lived in a pure market economy.”

Obviously, it was the increase of regulations that caused the problems. Because a company with integrity will obviously operate a leaky pipeline that would killed two people when it exploded if there isn't a regulation to stop it.

The 570-mile-long pipeline carrying liquid butane from Medford, Oklahoma, to Mont Belvieu, Texas had corroded so badly that one expert, Edward Ziegler, likened it to Swiss cheese....A memo forwarded by Caffey to another Koch executive vice president justified putting a 70-mile section of the pipeline back into operation after being closed for three years because it could earn more than $7 million in operating income a year. “We were to work on reducing wasteful spending,” Caffey said in his deposition.

And obviously, it is just fine to pollute the water when there isn't an explicit regulation that forbids it:

The company used fire hydrants to pump more than a million gallons of wastewater contaminated with ammonia onto the ground.

Koch also increased its dumping of wastewater on weekends when it didn’t monitor discharges, circumventing the reporting requirement of its permit, the EPA said. Koch also admitted that it negligently released between 200,000 gallons (757 kiloliters) and 600,000 gallons of aviation fuel into a nearby wetland.

Cohlmia says the company cooperated with state and federal regulators to resolve the Rosemount issues and has met all of its obligations.

And it must be okay to cheat people out of the money you owe for the oil if there isn't any rule against it. Or to bribe foreign agencies for contracts. Or to trade with embargoed countries.

The Koch Brothers prove that there isn't responsibility to the public good that isn't explicitly required when your goal is to operate in a free market society. They are the perfect example of why government regulation is required to prevent the wholesale looting that would occur if people of their moral caliber were allowed to operate without some rules to govern their behavior.

Mary :: 11:53 AM :: Comments (5) :: Digg It!