Report: Conservative Koch Bros. Sidestepped U.S. Trade Ban on Iran

The unyielding conservatives allegedly used a foreign subsidiary to do business with the country.

Updated: October 4, 2011 | 11:18 a.m.
October 3, 2011 | 7:52 a.m.

The Koch Industries Inc. headquarters is shown Monday, Nov. 14, 2005, in Wichita, Kan. In an announcement Sunday, paper products giant Georgia-Pacific Corp., the maker of Brawny paper towels and Angel Soft tissue, is being acquired for more than $13 billion by Koch Industries Inc., the nation's second-biggest private company. (AP Photo/Larry W. Smith) (AP Photo/Larry W. Smith)

Correction: The original version of this story incorrectly described the familial relationship between Charles and David Koch. They are brothers.

Koch Industries, a business run by billionaire brothers long known for funding a variety of conservative causes, sold millions of dollars of equipment to Iran, circumventing a U.S. trade ban with that country, Bloomberg Markets magazine reports.

Internal company documents show Koch Industries, one of the world’s largest privately held companies, used foreign subsidiaries to bypass the ban, which prohibits American companies from doing business with Iran. Offices in Germany and Italy sold to Iran as recently as 2007, though a spokeswoman said the company has since stopped all of its units from trading with the country, Bloomberg Markets magazine reports.

Charles and David Koch—influential conservatives described as being "at heart of GOP power"—have long supported conservative causes, having funded 34 "political and policy organizations, three of which they founded, and several of which they direct," according to tax records from 2008 reviewed by the New Yorker. FreedomWorks, a key part of the Tea Party movement, and Americans for Prosperity both split off in 2004 from a parent organization founded by David. AFP advocates for conservative economic policies and supports less government regulation.

Ever since 1995, when former President Bill Clinton declared that trading with Iran was a threat to national security, American companies have been banned from trading with the country, which supports Iraqi militants—and groups the U.S. considers foreign terrorist organizations, such as Hamas and Hezbollah. Still, Bloomberg Markets magazine quotes former Treasury Department policy adviser Avi Jorisch as saying that Koch may not have violated federal law if no American people or company divisions facilitated the trades with Iran.

WATCH White House press secretary was asked about the Bloomberg report at the briefing Monday:

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