He also became an anticrime crusader. In 1994, after Bill and his son, Wyatt, then eight years old, attended a July Fourth fireworks display in Wichita where gang violence had erupted, he bankrolled a commission to study the state’s crime problem and develop recommendations to help at-risk youth.
“I’m a celebrity in Kansas,” he boasted. “I walk down the street and people ask for my autograph.” He grew close to the state’s Democratic governor, Joan Finney, who conferred on him the honorary title of admiral of the Kansas Navy. Bill—whose relationship with Joan Granlund, Wyatt’s mother, was on and off during their more than twenty years together—also began casually dating the state’s attractive attorney general, Carla Stovall, causing a minor scandal when he gifted her with a $5,000 diamond tennis bracelet that she was later forced to return.
Bill’s flashy style made him a hit with the Kansas press and helped him to cultivate local journalists. He had provided Kansas reporters with all-expenses-paid junkets to watch him compete in the America’s Cup. Two years later, in 1994, he offered local news outlets heavily subsidized trips to San Diego to cover his announcement of the formation of the first-ever all-female America’s Cup team, which would sail aboard a yacht he’d christened the Mighty Mary, after his late mother. (“She took my brothers’ side in all the legal fights, and I guess this is my way of forgiving her and asking her forgiveness,” he told reporters. “Corny, huh?”) The endeavor seemed to combine two of Bill’s passions: sailing—and fit, young women. There was surely some irony in the fact that, in the course of his tribute to female empowerment, he impregnated Marie Beard, a six-foot Texan who had tried out for the America’s Cup team (and in 1996 gave birth to Bill’s daughter, Charlotte).
The zany adventures of “Wild Bill,” as he came to be called, were far more appealing to local reporters than his brothers’ latest pipeline purchase or refinery expansion. The year he unveiled his female sailing syndicate, Bill appeared as the celebrity mystery guest at the Wichita Gridiron Club’s annual show, where as “Captain Koch” he donned a superhero costume in a comedy sketch about his efforts to “save” Kansas. Afterward, he footed the bill for local journalists and their spouses at an upscale Wichita restaurant, which one Kansas journalism professor considered part of Bill’s efforts to purchase “the best coverage money can buy.”
“Bill spent some time in Wichita and just delighted in saying scurrilous things—not for publication—but for people he partied with, and he partied with the press a great deal of the time,” said one veteran Wichita journalist. “The young reporters would come back with stories about what great fun he was. He was obviously courting them and doing one heck of a job of it, too, buying champagne by the magnums, et cetera. The parties went late into the night at the local pubs and they thought he was terrific. Of course, on the other side, here’s buttoned up Charles. The contrast couldn’t have been greater.”
By 1997, Bill’s stature had risen to such heights in Kansas that he was floated as a possible Democratic challenger to Republican Senator Sam Brownback—a prospect that must have made Charles shudder. He fueled rumors of a potential Senate bid by telling the Lawrence Journal-World that he was “listening to the suitors” and found the prospect of elected office “very seductive.” Focus groups Bill commissioned showed that, second to Bob Dole, Bill Koch was America’s best-known Kansan.
The fawning recognition Bill received for his philanthropy infuriated Charles and his supporters. “Billy’s brought his toys to town, shared them and people love it,” Sterling Varner fumed. “Meanwhile Charles has worked his butt off here. He put his heart into building this company. He’s given millions to charity and never said anything. Billy comes to town and builds a little boathouse and he’s a hero. We must be doing something wrong. If it weren’t for Charles, Billy wouldn’t even have a rowboat.”
In the mid-1990s, according to a former senior Wichita official, Koch Industries quietly complained about the boathouse—an aggravating monument to Bill’s sailing prowess—dispatching a lobbyist to city hall to express the company’s displeasure.
“Can you imagine how Charles feels when he drives through downtown Wichita on his way to the airport and has to see that every time?” the lobbyist asked. According to the former official, the lobbyist was told that Charles should consider taking another route, because the boathouse was there to stay. When in 1997 the state opted against reauthorizing Bill’s crime commission, the Topeka Capital-Journal cited sources (including Bill) who said that Charles had leaned on Kansas’s new governor, Bill Graves, to shutter the outfit.
It was all the state’s nonprofit community could do to stay out of the crossfire of the family feud. In one episode, the Kansas Sports Hall of Fame rejected a $50,000 contribution from Bill—along with a model of his America’s Cup–winning yacht for display—after learning that accepting the donation might jeopardize its funding from Koch Industries.
Bill knew his local involvement chafed Charles, and he was candid about the strategic motives behind his generosity. “I’ve had a lot of bad PR in Kansas and part of this is to level the playing field.”
Bill’s aggressive PR machine forced Charles and his notoriously closemouthed company to ramp up their own publicity efforts. In charity, as in everything else he did, Charles preferred to keep a low profile. He didn’t care about seeing his name enshrined on a plaque or memorialized on a building (at least one that didn’t belong to Koch Industries); in fact, he found that sort of attention embarrassing. For years, Charles and Liz Koch, along with Koch Industries itself, had donated generously, but quietly, to a variety of local causes. They paid for the Twilight Pops Concert at the annual Wichita River Festival, contributed to the city’s Institute of Logopedics (which focuses on speech disorders), gave to the local Boys & Girls Club and United Way, and provided a grant to fund a mobile mammography van. They bankrolled Shakespeare in the Park and underwrote a performance by Ray Charles to benefit the Wichita Center for the Arts. Charles also formed his own nonprofit, Youth Entrepreneurs, to educate Kansas students in business and economics.
As Bill splashed money around and nabbed headlines, Charles and Koch Industries had little choice but to respond in kind. “They became just much more engaged locally,” said the former city official. “I think they consciously wanted to build their local image. Bill Koch really smoked them out.” The more conspicuous tenor of their giving was evident in the combined $2 million gift Charles and Liz Koch and the company made to the local Salvation Army in 1994 for the construction of a new headquarters, dubbed the Koch Center.
But other factors may have influenced their effort at image building. One September evening in 1993, the Kochs’ sixteen-year-old son, Chase, blew through a red light as he sped down Wichita’s East Douglas Road on the way to a local mall. The teenager’s Ford Explorer barreled through the intersection just as twelve-year-old Zachary Seibert, listening to Kris Kross on his headphones, crossed the street. Seibert died at a local hospital about an hour later.
Rumors circulated that the Kochs would use their power and influence to make any charges disappear, but Charles and his family instead seemed determined that their billionaire status not become an issue. Instead of retreating behind the gates of their Wichita compound and leaving lawyers and crisis management professionals to handle the fallout, the enigmatic family made a public showing of support for the Seiberts. The Kochs escorted their traumatized son to the boy’s funeral, “where every eye in that church was on them,” one attendee remembered. Chase later pleaded guilty to a misdemeanor charge of vehicular manslaughter and was sentenced to 100 hours of community service and 18 months of probation. The judge also imposed a 9:00 p.m. curfew for 10 months. (This was a fairly harsh sentence, according to the special prosecutor in the case, who said an adult would have probably gotten off easier.)
“That was a tough deal to go through,” said Charles’s friend Nestor Weigand. “It was just a very, very painful time. I think it was one of those things that fami
lies do. They just do whatever they can to try to survive it.”
After his son’s accident, in addition to becoming more visible in his charitable giving, Charles and his company permitted the local paper rare access to write one of the first in-depth profiles of Koch Industries, its chief executive, and his family. It marked a new era of cautious public engagement for the company. “Before, our whole strategy was that no one needed to know anything,” Paul Brooks, a Koch senior vice president, said at the time.
Despite Charles’s best efforts, however, his estranged brother continued to enjoy widespread popularity, especially among state and local officials. The fact that they persisted in lauding Bill for his generosity stung Charles and others at Koch Industries. The company employed thousands of people in Kansas. Didn’t Bill’s friends in government realize that he was on a revenge-fueled crusade to destroy everything Charles had built?
Finally, in 1997, Koch Industries sent the state a subtle but unmistakable message when it announced plans to expand—in Houston, not Wichita.
“Billy is going to take five years off Charles’ life,” Nestor Weigand complained to The Wichita Eagle, telling the paper that the Koch family was aggrieved by a “lack of insight” into Bill’s motives. “Everything Billy does Charles feels deeply.”
“The only thing I do know,” Weigand said, “is the day this is over, Billy is gone. You won’t even see his smoke.”
Another layer of the conflict played out in the shadows. This war, like most, had its covert aspect, with allegations of espionage and skullduggery on both sides. Bill, especially, seemed to relish the use of cloak-and-dagger tactics, which over the years he employed not just against his brothers but against a wide range of rivals, including sailing competitors, employees, at least one former girlfriend, and the second of his three wives.
In the 1980s and 1990s, the brothers unleashed a small army of private investigators on each other. “We’re up against a very secretive company that operates like a cult,” Oxbow’s spokesman, Brad Goldstein, once told The New York Times, explaining the company’s heavy reliance on PIs.
The elaborate operations hatched by Bill’s operatives seemed right out of the CIA playbook. In one case, Vanity Fair reported, his crafty investigators established a phony company and posed as corporate headhunters in order to glean intelligence from ex–Koch Industries employees, donning body mics to secretly record their interviews.
Former Oxbow employees claim Bill’s investigators resorted to underhanded electronic surveillance techniques, including buggings and wiretaps. “He has bragged to me that he has had his brothers and other people tracked by private investigators and he has wiretapped their discussions,” one former Oxbow executive, Michael Aquilina, said in a 1988 lawsuit against Bill and his company. (Aquilina was fired from Oxbow after Bill accused him of submitting fraudulent financial statements.) Though Bill denied having his brothers followed or conducting any illegal surveillance—“I didn’t authorize using it, and never will,” he once said—he did acknowledge that he had on one occasion worn a bug, tucked into his breast pocket, to a meeting with J. Howard Marshall II. (“The recording wasn’t worth shit,” Bill said.)
Bill’s investigators also engaged in more low-tech methods: Seeking intelligence and clues to Koch Industries’ legal strategy, they pilfered trash from the homes and offices of Charles, David, and three of their lawyers, bribing janitors and trash collectors to gain access to their garbage, according to the brothers’ attorneys. (The Dumpster-diving operation resulted in a temporary restraining order in 1992 that prevented Bill and his legal team from “invading or interfering with the privacy and confidentiality of the defendants, their counsel, and their immediate families, either through efforts to obtain the trash from the personal residences or the offices” of the brothers or their lawyers.)
In Bill’s case, there was often little need to riffle through his garbage cans to dig up dirt, though perhaps Koch’s detectives tried it. He was, as Vanity Fair’s Bryan Burrough put it in a 1994 profile, “a man whose closet is free of skeletons in large part because they all seem to be turning somersaults in his living room.” Bill left a turbulent wake of controversy and litigation wherever he went, and his misadventures provided plenty of ammunition for Koch Industries. In its effort to discredit Bill as hyperlitigious, mentally unbalanced, and fueled by vengeance, the company’s PR shop created a dossier of Bill’s more memorable debacles. “Koch had done a bunch of opposition research on Bill Koch—a fact-based summary of litigation he’d been involved in, and what he’d done and said,” explained a former Koch executive. The company distributed this fifty-page opposition research file, titled “The Truth About Koch v. Koch Industries,” widely to reporters covering the legal drama.
The juiciest scuttlebutt often concerned Bill’s stormy personal life (he would eventually sire five children by four women: Wyatt with first wife Joan, Charlotte with girlfriend Marie Beard, William Jr. and Robin with second wife Angela Gauntt, and Kaitlin with third wife Bridget Rooney Koch). The tawdriest of his soap-operatic travails was revealed, as were so many of the Koch clan’s most intimate moments, in a drab courtroom, where in November 1995 Bill faced off against a former Ford model named Catherine de Castelbajac. He’d installed her in his seldom-used, $2.5 million pied-à-terre in the apartment section of Boston’s Four Seasons, but wanted to evict her now that their romance had cooled. (De Castelbajac, the wife of a French nobleman when they began their affair, also became a target of Bill’s detectives when she refused to vacate his apartment. They in turn uncovered her modest origins as, in Bill’s words, a “Santa Barbara surfing girl.”)
As Bill wooed de Castelbajac, he simultaneously juggled at least three other women, including Joan, whom he married in April 1994 to legitimize Wyatt for estate-planning purposes. He and Joan divorced not long after.
The sensational nine-day trial over de Castelbajac’s housing arrangements made news on both sides of the Atlantic, with tabloid editors one-upping each other with headline puns (such as, BEAUTY AND THE LEASE and JUST ONE OF THOSE FLINGS). It’s unlikely such titillating testimony had ever been heard in Boston housing court, where lurid details about the couple’s courtship were revealed (“She started kissing me quite passionately. I must admit I did not resist.”) and a series of steamy transcontinental faxes that passed between the pair were entered into evidence.
“Hot Love From Your X-rated Protestant Princess,” de Castelbajac signed one of the racy messages. She referred to herself in a separate fax as a “wet orchid” who yearned for warm honey to be drizzled on her body. In another, she wrote: “My poor nerve endings are already hungry. You are creating such a wanton woman. I can feel those kisses, and every inch of my body misses you.”
Bill’s far-less-sensuous facsimiles displayed the MIT-trained engineer’s geeky side: “I cannot describe how much I look forward to seeing you again,” he wrote. “It is beyond calculation by the largest computers.” In another fax, he jotted an equation to express his devotion, ending with a hand-drawn heart and, within it, the mathematical symbol for infinity.
In late November 1995, Bill won the court’s approval to evict the ex-model. Less than two weeks after the verdict was read, Bill’s newest love interest, thirty-three-year-old Marie Beard, announced she was three months pregnant with his child—and that she was moving into his Palm Beach mansion.
In the mid-1990s, an aura of Cold War–esque vigilance enveloped both Oxbow and Koch Industries. In addition to concerns about Dumpster-diving detectives and electronic eavesdropping, both factions also believed the other had slipped informants into their midst.
“We were all paranoid because of the tactics that were in use,” said a former Koch executive. “There was a paranoia at some point that my secretary was a Bill Koch plant. You saw something at every turn.”
Bill grew increasingly distrustful of everyone around him. “There were moles and spies all over,” he has said. He feared his brothers had tapped his phones an
d believed that Koch operatives had stolen documents from his offices. Once, in an effort to prove Koch spies had infiltrated Oxbow, Bill’s in-house counsel drafted a bogus memo and left it sitting conspicuously on his desk overnight. This fictitious document later turned up in a filing made by Koch Industries, according to Bill and his lawyers.
Bill had taken to furtively recording some of his phone calls on a Norelco Dictaphone, and he employed a shadowy security operator, Marc Nezer, to sweep for bugs and smoke out possible Koch moles. Employees occasionally spotted Nezer at the Oxbow offices on weekends slithering through the heating ducts. It was unclear whether he was combing for listening devices—or perhaps planting them.
Former employees say Bill had them surveilled in an effort to uncover those who might have betrayed him. Among them was Paul Siu, an Oxbow executive and close friend of Bill’s in the 1970s and 1980s. Suspected of spying for Bill’s brothers, he was canned from Oxbow. Afterward, Siu alleged that Bill had him tailed and bugged his phones. “After the proxy fight, he changed completely,” he noted. “… Bill was in the first stage of Howard Hughes syndrome. Very paranoid.”
Spy games became a way of life for Bill, and he used them prodigiously during his bid for the America’s Cup. The race has long had a reputation for a certain amount of espionage. Bill’s competitors, however, accused him of taking things to an absurd and unsportsmanlike extreme. He was unapologetic. “This is more than the gentlemanly sport it used to be,” he said. “This is war.”
Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty Page 19
