Scroll: You were born and raised in Kansas—how did you find Deerfield from there? And as a follow-up, can you talk a little bit about your time at Deerfield (what made it so special, the highs, lows, any funny anecdotes).
Mr. Koch: I attended a public grade school in Wichita, Kansas. The public education was very inferior and my mother and father, who were both very sophisticated people (my father went to MIT and my mother went to Wellesley College), brought my twin brother and me to the Northeast. We visited half a dozen boarding schools. I really liked what I experienced at my visit to Deerfield. That was my first choice, and I was admitted. My twin brother—he went a different school, which was best for him. As a result of Deerfield, I received great instruction, made tremendously good friends, and was very much involved in athletics. I was the high scorer on the varsity basketball team and captain of the track team. I set a school record for the pole-vault on the track team. Deerfield helped me immensely to get into MIT. And as a result, I feel obligated to serve on the board of trustees and help Deerfield in many ways, because they helped me so much.
Scroll: As an alumnus of Deerfield, what sort of a school do you think Deerfield should aspire to be? How do you envision its future?
Mr. Koch: It’s outstanding in so many ways. I like the fact that it’s so strong in the liberal arts and sciences. It didn’t used to be that way. It used to be all focused on liberal arts and not on sciences, but now, I think it’s a proper balance. Deerfield has a terrifically interesting and diverse student body. It attracts students from all across the USA and internationally. I think that other wonderful qualities are the great athletic program and terrific arts program. We have terrific instructors and I think that long term, with the tremendous leadership that Deerfield has, it will continue to get stronger and stronger for years to come. I am really pleased with just about everything that Deerfield represents and has to offer.
Scroll: We understand that Koch Industries is a very active company, which consists of numerous subsidiaries that manufacture, refine and distribute a variety of goods to the public. However, could you please offer us a deeper insight into what areas your corporation is involved with, what its mission is, and the bigger picture of what you are trying to achieve through your work?
Mr. Koch: We are either the first or the second largest privately owned company in the world. It depends on what measure. We are in many, many different business areas. We do oil refining, chemical manufacturing, commodity trading, fertilizer production, textile-fiber manufacturing, wood products for construction use, retail products such as paper towels, paper plates, and toilet paper. Believe it or not, our company Georgia Pacific has 40% of the toilet paper market—and that never goes out of style. We are a world leader in supply of different kinds of equipment for oil refining and chemical manufacturing. Last, but not least, we have a company in the Boston area that has developed a new water-purification system. I expect great things out of that technology that we’ve developed.
Scroll: Your company employs more than 100,000 people around the world. How does it feel to know that you are providing a source of income and stability to that many?
Mr. Koch: We do have over 100,000 employees. I feel extremely proud that we can successfully employ this large a number of people to work for us. We are tremendously interested in providing great opportunities for our people and promoting them. Our company, even though it’s a huge company, we try to keep like a family company. We do a good job of recruiting people. We have been really, really successful at hiring outstanding executives, ones who really manage our businesses extremely well.
Scroll: What is the secret to your success? What advice do you have to offer young people today?
Mr. Koch: I believe one of the main reasons we are so successful is because of the outstanding executives who have excellent business skills. We employ wonderful people who are very happy to work for us; they really like the jobs that they have with us. We have very little turnover within our company. When people join us, they stay with us for years and years and years.
I think that the best way for young people to succeed is to get a terrific education at a fine high school and university and have them pursue a career in a field that they like—that they feel comfortable in. The better education you acquire, the better opportunities there are available to you in the future. Pursue a field that is complementary to your talents. Don’t try to pursue a field where you don’t really have any talents. I would starve to death if I tried to make my living as a painter or singer.
Scroll: What are your thoughts on the Josh Krugman Letter?
Mr. Koch: That [letter] is highly inaccurate in so many ways. Almost all of this person’s statements are factually wrong. I was extremely appreciative that the president of the board, Phil Greer, and the incoming president, Rodgin Cohen, and Margarita Curtis collectively wrote a letter criticizing the content of Krugman’s article. I am immensely appreciative that they did that on my behalf. I think that their response to Krugman’s article speaks for itself.
Scroll: The Josh Krugman letter voices fears that you, as a board member, have control over Deerfield’s “admissions policy, hiring and firing, curriculum, long-range planning.”
Mr. Koch: That is absolutely incorrect. There is no way that any member of the board interferes, in my opinion, with the selection of students to enroll at Deerfield. We have a terrific team of people in the admissions department who very, very carefully evaluate applicants and, I think, do a superb job of accepting the best people in the applicant pool. And I think Margarita has done a terrific job of recruiting outstanding instructors; I think the instruction at Deerfield is as good as you’ll find at any boarding school in the country.
Scroll: What do you actually have control over as a board member?
Mr. Koch: I had a lot of different roles early on. But now I am a lifetime trustee and I attend any of the committee meetings that I want to and do my best to make helpful suggestions. I try to be a very constructive member of the board, and I think I do that very well. Gosh, I’ve served about 25 years on the board at Deerfield, longer than anyone else.
Scroll: Can you give some specific examples of things the board does?
Mr. Koch: There are so many things—so many committees. Nominating committee, building and grounds committee, academic committee, audit committee, and it just goes on and on. We have people on the board that serve on these different committees.
Scroll: How involved are you in planning the buildings you fund at Deerfield, and what other involvement do you have in the school’s affairs?
Mr. Koch: I’m not really an expert in architecture. I leave that up to experts.
Scroll: How hands-on and involved were you in the design process of the Koch Center. There are rumors that you were very specific about who you wanted to design it and many small details of the project.
Mr. Koch: Well, I was on the building committee for many years. We collectively interviewed a lot of architects, and I think in almost every case there was a real consensus on what architect to choose to design each of the various buildings we have on campus. And I think they’ve done a great job; I think these buildings are very successful.
Scroll: In the Josh Krugman letter, Krugman suggests that some of your company’s practices have been harmful to the environment. Could you clear up these accusations?
Mr. Koch: We are very proud of the fact that at Koch Industries we’ve won several hundred awards for our environmental practices and personnel safety achievements over the last five years. I think these awards really speak for themselves. Our environmental emissions are consistently well below the emissions level that the EPA requires us to achieve. In many cases, we are 50% or 2/3 less than what the federal rules are. That’s why we’ve won so many of these awards. You know, we don’t get these just ‘cause we’re nice people. We get these awards because we do a terrific job of controlling our emissions at really low levels and practicing marvelous safety [procedures] to protect our personnel from being injured.
Scroll: Could you clarify your stance on the issues of global warming and environmental stewardship?
Mr. Koch: My mother and father were really outdoors people. They loved hunting and fishing, and I grew up outside. My family’s belief is to protect the outdoors. The last thing we want to do is to spoil the environment. That’s why we work so hard to reduce our emissions from our many, many manufacturing plants to very, very low levels. We wouldn’t get these awards unless we were successful in doing that. My father used to take us out hunting and fishing almost every weekend to a small pond of ours not far from our home in Kansas.
I think the earth is warming. But the question is: is it warming because of natural trends in the history of the earth or is it maybe because of the hugely growing population of the world? How do you deal with all of this? There are all kinds of opinions as to which is causing the earth to warm more: is it the natural cycle of the heating and cooling of the earth or is it because of the huge increase in population?
Scroll: Through the organizations you support—Americans for Prosperity, Freedom Works—you have donated hundreds of millions of dollars to various political campaigns. Some people have argued that such donations wield influence over political campaigns. To what extent is it acceptable for lobbies to influence politicians?
Mr. Koch: In the constitution of the United States, the First Amendment of the Constitution guarantees free speech for all citizens. All eligible voters have the right to support or vote for candidates of their choice. And there are limits on how much money you can give any candidate running for federal office. I, like any other voter in the United States, have the right to support and hopefully elect candidates of my choice.
Scroll: I’ve read about an ad featuring Julie Boonstra, that was funded by Americans for Prosperity, that attacks Obamacare and Congressman Peters. Many news outlets investigated this and reported that it contains misinformation. Do you know anything about these ads or are you really not involved in the day-to-day operations of these organizations?
Mr. Koch: AFP has its own independent board. I happen to be one member of the board, but I believe that there are a lot of things that are probably not as good as they should be with the Affordable Care Act. I’m a strong believer that there is a lot in the ACA that ought to be changed and improved. As you many know, 60% of Americans dislike the Obama Care law. Only 40% support the Obamacare program. Here you have a significant majority of the population not happy with it. There are a whole variety of reasons that’s the case, which I don’t have time to go into in this conversation.
Scroll: What is your vision for America? You are obviously a Republican, but you support gay marriage, stem cell research, and are against the war on drugs. Can you elaborate a little bit about where you think America should be moving (in regards to taxes, business / bank regulations, distribution of wealth, and social issues)?
Mr. Koch: I’m a Republican businessman, and we’ve built up a terrific company—my brother and I. But I’m a social liberal. I believe in gay marriage and a lot of other things I favor that some people might find controversial. I think it would be terrific if we legalized drugs for adults. And boy, if that happened, the price of drugs would collapse to very low numbers, and there would be one of the greatest results because it would reduce the amount of crime. So many people engage in theft to get the money to pay for their illegal drug use. I think that drugs that are illegal now should be legalized and sold at a very, very low price. That would be a wonderful improvement in the amount of crime that occurs in the United States.
Scroll: Do you find the current bi-partisan system frustrating because I know that a lot of Republican candidates these days don’t seem to be as liberal as you are in terms of social issues?
Mr. Koch: Yeah—that’s true. I’m really a Libertarian. That’s my political point of view.
Scroll: You have been incredibly philanthropic over the years, donating $100 million to New York-Presbyterian Hospital, $100 Million to MIT, $70 million to Deerfield, and the list goes on. There are some prominent figures, like Steve Jobs, who never gave any money to charity. Why do you believe that giving back is so important? What are you hoping to achieve through these donations?
Mr. Koch: I believe that people who have achieved significant financial success in life should be generous philanthropists. In fact, I think philanthropy, if it’s given properly, helps make the world a far better place. And, personally, I feel as though I almost have a moral obligation to contribute money to great institutions. I plan to continue with my charitable giving for the rest of my life. I’m very proud of that and I guarantee you that the institutions I support are extraordinarily appreciative of it, particularly Deerfield. I care deeply about other people, and one of the things that I am constantly doing [is sitting] on a large number of medical boards, and I get calls all the time from people who get sick and reach out to me and say I have this illness or that illness—where should I go to get treatment. I immediately stop what I’m doing and contact the patient coordinator at a hospital who will arrange for the person to visit the right doctor and get appointments for these ill people very soon. The people are really appreciative of my efforts to help them find the right medical center.
Scroll: Do you think the public misunderstands you, and does the constant criticism become frustrating?
Mr. Koch: Yeah, for sure it does. What really worries me is the way the federal government is conducting itself . . . The deficits are running at the federal level about a trillion dollars a year. That’s a staggering deficit to run year after year. What I worry about is that the Federal Reserve is buying these Treasury bonds that add up to a trillion dollars a year by printing money. I think that this could lead to runaway inflation if it continues for many more years. We’ve got to get this deficit under control or this country is going to have very, very serious financial problems. This could lead to, as I said, runaway inflation. There are just so many problems that will come along with these deficits being out of control for so many years in a row.
Scroll: Any final words?
Mr. Koch: I am a huge fan of Deerfield. It has been led brilliantly by Margarita Curtis. She has done a great job of hiring outstanding faculty and athletic coaches and done a great job of recruiting outstanding people who are attending Deerfield.