the Company.” It was a broadside against Charles and his leadership, implicitly accusing him of deception and abuse of power. But most importantly, the memo stabbed at the most sensitive nerve that the Koch brothers possessed. It suggested that their father, Fred, would be ashamed of Charles.
“The corporation’s good name is dragged through the mud by one set of indictments [in the Denver case]. . . . The corporation’s good name is threatened by more such actions,” Bill Koch wrote in the memo. The corporation’s good name, of course, was their father’s good name. Bill implied that Charles was tarnishing it.
During the month of June, Charles recalled getting between six and ten similar memos from Bill. The younger brother was asking for more staff and more money that he could control for a new investment fund. He wanted more responsibility and a stronger voice.
When Bill recalled this period later in media interviews, his explanations for his behavior always quickly devolved into a bitter thicket of childhood resentments and tensions. In a lengthy interview with Vanity Fair magazine, Bill recalled a mother who was distant, a father who was severe and parsimonious with his affection, and an older brother, Charles, who was relentlessly manipulative, controlling, and a bully. All of it seemed to come gushing out of Bill in those memos during the summer of 1980. Charles appears to have seen it the same way: “Whatever I’ve done to make you so bitter toward me is in the past.” He saw Bill’s complaints over the business as a means for complaining about things that were deep-seated, personal, and largely irrational.
While Charles dismissed Bill’s concerns, he also kept trying to sue for peace. Charles called Bill at the end of June and asked him again to stop the “emotional attacks.” Bill told Charles that he wanted to have more access to him, more time to ask him questions and have his concerns addressed. Charles agreed to that, and remembers Bill saying that the attacks would stop.
If the attacks did stop, it was only for a few days. On July 3, Bill sent Charles a memo that ended their relationship forever and nearly split the company apart.
The memo was ten pages long, single-spaced. But one paragraph stood out.
“I’m not interested in a battle and would like to settle the problems between us,” he wrote. “Since I’m not alone in these concerns, the failure to solve them, which can be done quite easily, will be destructive to everyone concerned. Indeed, if they are not solved, the company will probably have to be sold or taken public.”
The company will probably have to be sold or taken public, Bill had written.
There was no going back after that.
* * *
In early July, Koch Industries held an emergency meeting of the board. Both Charles and Bill attended. Charles confronted each of Bill’s accusations and defended himself. Bill told the board that shareholders, himself included, needed to get more cash out of the company than they were getting. The board agreed to take actions that might address Bill’s concerns. Charles agreed to form a “liquidity committee” that would look at paying out more dividends. He also agreed to explore the idea of taking Koch public. Going public would not only entail selling ownership of the company to ordinary investors through Wall Street brokers—it almost certainly would mean that the Koch family would lose control of the firm. But by losing control, the Koch family and other shareholders would get a onetime windfall of at least hundreds of millions of dollars. Bill Koch would be a very rich man, and not just on paper. He would never need to borrow money to buy a house again.
Bill seemed satisfied with the deal. But he had seemed satisfied before. During the board meeting, Charles Koch told the directors that if the attacks from Bill did not stop, he would seek the authority to fire his younger brother.
For a while, the attacks did stop. During this time, Charles called Bill and made a proposition. He asked Bill if he would be the co-executor and trustee of Charles’s two children if Charles and his wife, Liz, were both to die. If that happened, Bill and David would split authority for the kids. It was the ultimate expression of trust in Bill, and the kind of agreement that would seem to cement their tie as brothers again. Bill told Charles he “would be delighted.”
What Bill did not know at the time was that Charles was