Earlier this month, Bloomberg published a lengthy investigative report on Koch Industries, the privately owned corporation owned by Charles and David Koch. The report documented various illegal or questionable acts by Koch Industries, its subsidiaries and affiliated entities over the past twenty years or so, including regulatory infractions, violations of the Foreign Corrupt Practices Act, (then legal) business deals with Iran, and other unsavory things. The report generated a quick response from Koch Industries, and substantial critical comment from sources ranging from Powerline to ProPublica to the Atlantic.
About one week after the story first ran, the Washington Post republished the Bloomberg story on the front page of its business section. Today, Washington Post Ombudsman Patrick Pexton explains that he thinks this was mistake. Specifically, Pexton thinks the Post should not have republished the story without providing additional context or acknowledging the critical commentary the story had already generated. He writes:
I think The Post erred in republishing this story, or at least in the way it did. And when the Kochs complained to The Post after publication, The Post’s response wasn’t handled well.
Now, I couldn’t find any outright falsehoods in the story that would warrant corrections. Bloomberg, too, has published no corrections. But I think the story lacked context, was tendentious and was unfair in not reporting some of the exculpatory and contextual information Koch provided to Bloomberg. . . .
Lois Beckett of ProPublica made the point (in the comments section) that “Putting Koch’s entire legal and environmental record in the context of what other, less politically contentious companies have done would be an important service to readers.”
And that’s what The Post should have done. . . .
. . . , lots of companies have foreign subsidiaries that until recently did business with Iran, including GE, Hewlett-Packard and Caterpillar. Many multinational companies have been investigated and prosecuted for violations of the U.S. Foreign Corrupt Practices Act, and been fined and prosecuted for violating clean water and clean air laws.
Are the Kochs worse, better or in the middle? We can’t tell from this story.
In the environmental area, it’s well known that regulatory violations by large corporations are inevitable. In surveys, a large percentage of corporate counsel indicate their belief that consistent 100 percent regulatory compliance is impossible. In assessing an individual company’s performance, it is important to know something about the nature of the violation — is it a paperwork requirement or substantive limit — whether it represents an actual risk to human health or environmental resources, and how that company’s performance compares with others in the same industry. That a company is critical of environmental regulations, or supports their reform, does not mean the company makes less effort to comply. There are plenty of examples of corporations that endorse environmentalist goals without the regulatory compliance records to match (see, e.g., BP).
[Disclosure: Over the past twenty years, various non-profit organizations with which I have been affiliated have received funding from Koch-related foundations for various projects. I was also paid directly by Koch Industries to give a speech to Koch Industries executives at their corporate headquarters on environmental policy at some point in the late 1990s.]