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things fall apart

The Second Coming

BY WILLIAM BUTLER YEATS

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

The Week Democracy Died

Dark days this summer showed how government by the people—beset by illiberal populists on one side and undemocratic elites on the other—is poised for extinction.

Animation by Slate. Photos by Getty Images, Reuters.

There are years, decades even, in which history slows to a crawl. Then there are weeks that are so eventful that they seem to mark the dissolution of a world order that had once seemed solid and to foretell the rise of one as yet unknowable.

The week of July 11, 2016, has every chance of being remembered as one of those rare flurries of jumbled, inchoate, concentrated significance. The centrifugal forces that are threatening to break political systems across the world may have started to register a decade ago; they may have picked up speed over the last 12 months; but never since the fall of the Berlin Wall have they wreaked havoc in so many places in so short a span of time—showcasing the failures of technocratic rule, the terrifying rise of populist strongmen, and the existential threat posed by Islamist terrorism, all in the span of seven short days.

At first glance, a political crisis in London; a terrorist attack in Nice, France; a failed putsch in Ankara, Turkey; and a bloviating orator on his way to becoming the Republican nominee for the presidency of the United States look like the dramatic apex of very different, barely connected screenplays. To my eye, they are garish panes of glass that add up to one unified, striking mosaic. Looked at from the right distance, they tell the story of a political system, liberal democracy, that has long dominated the world—and is now in the midst of an epic struggle for its own survival.

A Week Full of Omens

 

The week started with all eyes on the United Kingdom. Brits had recently voted to leave the European Union in a referendum whose unexpected results sent shock waves across the continent. But when David Cameron resigned as prime minister, when the promises of leading members of the “Leave” campaign went up in smoke, when the pound tanked and the first companies announced layoffs and many voters reportedly began to regret their choice, it seemed as though the country’s elites might engineer some subtle subterfuge. And the woman to engineer that subterfuge was Theresa May, a cautious supporter of the “Remain” campaign who had quickly emerged as one of two candidates to succeed Cameron as the country’s next prime minister.

Those hopes were dashed when May set out her political program in a hastily arranged campaign appearance in the city of Birmingham early on Monday morning. “Brexit,” she vowed in the most significant piece of political tautology of recent times, “means Brexit.” If May became prime minister, she would lead the country out of the EU—throwing the defining political project of Europe’s postwar era into an existential crisis.

 

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Top: Theresa May on April 12. Bottom: A lone Brexit supporter during the protest against the referendum decision to leave the EU on July 2.

Stefan Wermuth/Reuters, Michael Tubi/Corbis via Getty Images

 

By the time Big Ben had struck noon, Andrea Leadsom, May’s last remaining rival for the leadership of Britain’s Conservative Party, and the country, had dropped out of the race. Within 48 hours, May kneeled before the Queen, and was named the second female Prime Minister in the country’s history. The cabinet picks she announced on Wednesday evening confirmed that she meant business. With Euroskeptics like Boris Johnson and David Davis in key positions, the last shreds of doubt about her commitment vanished. Britain will leave the European Union. Europe’s postwar order is one step closer to unraveling.

* * *

Thursday, July 14, was Bastille Day. After a brutal 18 months in which France was hit by two major terrorist attacks, the nation took the opportunity to reaffirm its commitment to liberty, equality, and fraternity. In his annual Bastille Day press conference at the Élysée Palace, President François Hollande announced that he would end the state of emergency that had held sway since the bloody attack on the Bataclan last November. On the beaches of Nice, just beyond the storied Promenade des Anglais, a second home to Europe’s rich and famous for the better part of two centuries, tens of thousands gathered to watch a fireworks display resplendent in red, white, and blue.

When the fireworks were over, when the city was teeming with humanity—young and old, rich and poor, French and foreign, Christian, Muslim, and Jew—a truck of death barreled down the Promenade, zigzagging, firing shots, killing indiscriminately, killing avariciously. By the time the truck had come to a standstill, 84 people were dead or dying.

Eighteen months earlier, when terrorists had stormed the offices of Charlie Hebdo and gone on to kill shoppers at a kosher supermarket in the east of Paris, solidarity among the French political class had held for about a week. This time, the jockeying for position started almost immediately.

Marine Le Pen, the leader of the far-right populist National Front, mocked Hollande for his ill-timed revocation of the state of emergency and accused the government of total failure in its fight again Islamist terrorism. Her broadside resonated. Every attack pushes frightened citizens “a little closer to surrendering to the impulse to embrace an authoritarian response,” warned Art Goldhammer, one of the most astute American observers of France. While it had once seemed unimaginable that Le Pen might become president of France in elections next spring, “it is becoming thinkable” that it will be she who holds the traditional Bastille Day press conference from the Élysée Palace on July 14, 2017.

* * *

Just as tensions began to rise among the French political class, the first explosions pierced a quiet Friday night in sleepy Ankara. Yet another terrorist attack, the good people of Twitter quickly concluded. But what played out in front of the world’s eyes over the next hours was something else entirely: an old-fashioned coup against President Recep Tayyip Erdogan, updated for the age of social media by his desperate FaceTime pleas for Turks to take to the street and come to his rescue.

Both illiberal democracy and undemocratic liberalism may be headed for a remarkably similar fate: a gradual descent into dictatorship.

Plotters, even ones imminently doomed to be deemed incompetent by CNN’s self-proclaimed coup experts, tend to have the benefit of surprise on their side. In those first hours, tanks secured Atatürk Airport and the offices of the state broadcasting station. Erdogan, infamously vain, was reduced to addressing his nation through the speakers of a TV presenter’s iPhone; rumors already located him en route to political exile in Germany or perhaps the United Kingdom. The country’s secular elite, it seemed, had retained more of its power than observers had thought possible. With the might of the army’s F-16s on their side, they were mounting a last-ditch attempt to resist Erdogan’s creeping Islamicization of the country. The coup looked likely to succeed.

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Top: Turkish President Recep Tayyip Erdogan speaks on CNN Türk via FaceTime call in the early morning hours of July 16. Bottom: A wounded Turkish woman lies on the ground, July 16 in Ankara.

Burak Kara/Getty Images, Gokhan Sahin/Getty Images

 

Then the tide began to turn. When Erdogan next spoke to the nation, he stood in front of real cameras, looking more self-assured. At his behest, Turks came out in tens of thousands to defend democracy, or to pay allegiance to their tribune, or to claim the right to impose their religion on others, or perhaps all three at once. Most of the army fought the plotters, opposition parties condemned the coup, and—once they could be reasonably confident that Erdogan would stay in power—so did Angela Merkel and Barack Obama.

By daybreak, a military dictatorship had been averted. But liberal democracy seemed to be in no less trouble. Safely returned to Istanbul, Erdogan called the coup “a gift from God” and set about the task of purging the state of anybody whom he suspected of disloyalty. Among the scores of arrests he made, and the thousands of judges he fired, some might plausibly have had a hand in the plot; but for most, their crime was one of thought, not action. And so Turkey had witnessed two coups in 48 hours: first, the failed rebellion of factions of the military against Erdogan’s proto-authoritarian rule, and second, Erdogan’s successful purge of all who might one day challenge his position, whether through the barrel of a gun or the power of the ballot box.

* * *

Never one to allow harrowing events to upstage him or to let propriety stand in the way of his sales pitch, Donald J. Trump cheered every twist and turn in London, Nice, and Ankara from the sidelines. When Brits voted to Brexit, Trump congratulated them on taking “their country back,” promising “to do the exact same thing on Election Day 2016 here in the United States.” When he heard of the terror attack in Nice, he saw, first and foremost, an opportunity to drive home his opposition to Muslim immigration. “When will we learn?” he tweeted that Thursday night. “It’s only getting worse.” Even the coup in Turkey became “further demonstration of the failures of Obama-Clinton. You just have to look,” he said at a Saturday press conference announcing Mike Pence as his running mate, “every single thing they’ve touched has turned to horrible, horrible death-defying problems.”

Trump’s case is straightforward: The challenges facing America are momentous. But they were brought about by incompetence, corruption, or false loyalties. And so they can easily be solved once a strong, incorruptible, patriotic leader—a leader just like Trump—takes power. He, and only he, is the solution to the “death-defying problems” that shaped this terrible week.

Donald Trump
Republican presidential candidate Donald Trump introducing his newly selected vice presidential running mate Mike Pence during an event at the Hilton Midtown Hotel, July 16 in New York City.

Drew Angerer/Getty Images

 

It is this providential fusion of the people and their leader—the belief that collective deliverance from a dark world can only come from a pure, unadulterated conduit for the people’s voice—that defines the core of his appeal. And it is his closely related inability to contemplate that he may at times be mistaken, or that there may be legitimate conflicts of interest in a democracy, or that the power of the presidency needs to be checked by other institutions, that makes him so dangerous.

Never has the egotism at the heart of his appeal been more apparent than during the media blitz to introduce his running mate. During the Saturday press conference at which they first appeared in public together, Trump was barely able to say a few consecutive sentences about Pence. Instead, he passionately spoke about his own views, interlaced with a few perfunctory talking points about his would-be vice president read from a conspicuous cue card.

Sunday brought yet another display of Trump’s egotism. When Pence was asked what kind of vice president he hoped to be during a joint interview on 60 Minutes, Trump answered the question for him. When Pence lauded Trump for speaking from his heart, Trump interrupted again: “Well, I speak from my heart and my brain. Just so we understand.” But the best line of the interview, and the most telling, came when the interviewer suggested that Trump is “not known to be a humble man.”

“I think I am actually a humble man,” Trump responded. “I think I’m much more humble than you would understand.”

Liberal Democracy Under Attack

The truly scary thing about Donald Trump is not that he is unique. It is, rather, that he is far from exceptional. In a rich, raucous republic of 300 million, there will always be a glamorous bully with a taste for the gutter. What is new is not the existence of a populist willing to voice nasty sentiments; it’s that a lot of voters have become so disgusted by the political class, and so disillusioned with the current state of the country’s institutions, that they are willing to vote for someone quite so nasty.

In the long run, Trump’s particular views and quirks matter less than we would like to think. He is ultimately no more than an extra in an unfolding horror show—the most prominent beneficiary of an epochal shift whose roots predate Trump’s entry into politics and whose effects will continue to shape our societies long after he has retired to one of his many estates.

The political establishment is increasingly insulating itself from the people’s demands.

Across the affluent, established democracies of North America and Western Europe, the last years have witnessed a meteoric rise of figures who may not be quite so brash or garish as Trump and yet bear a striking resemblance to him: Marine Le Pen in France, Frauke Petry in Germany, Geert Wilders in the Netherlands, and many of the leading Brexiteers in the United Kingdom. They too harness a new level of anger that is quite unlike anything liberal democracies have witnessed in a half-century. They too promise to stand up for ordinary people, to do away with a corrupt political elite, and to put the ethnic and religious minorities who are now (supposedly) being favored in their rightful (subordinate) place. They, too, are willing to do away with liberal political institutions like an independent judiciary or a free, robust press so long as those stand in the way of the people’s will.  Together, they are building a new type of political regime that is slowly coming into its own: illiberal democracy.

Geert Wilders
Dutch far-right Freedom Party leader Geert Wilders in Brussels in 2014.

Francois Lenoir/Reuters

 

Critics often attack Trump, Le Pen, and their cohort for being undemocratic. But that is to misunderstand both their priorities and the reasons for their appeal. For the most part, their belief in the will of the people is real. Their primary objection to the status quo is, quite simply, that institutional roadblocks like independent courts or norms like a “politically correct” concern for the rights of minorities stop the system from channeling the people’s righteous anger into public policy. What they promise, then, is not to move away from popular rule but rather to strip it of its artificial, liberal guise—all the while embodying the only true version of the people’s will.

Places like Hungary and Poland show what this might mean in practice. Once celebrated as examples of successful democratic transition, these countries are now at the forefront of the movement toward illiberal democracy. After Viktor Orbán took power in Budapest six years ago, his Fidesz party undermined the country’s constitutional court, stacked government institutions like the electoral commission with party loyalists, and turned the most important media outlets into uncritical propaganda machines. Over the course of the past year, Poland’s Law and Justiceparty has accomplished much the same feat in a fraction of the time. In both places, key liberal rights are honored more in the breach than the observance.

Political elites are understandably terrified by the speed with which illiberal democracy is coming into its own. But if the populists are pushing for a political system that does away with one half of liberal democracy, the truth is that a large number of establishment politicians are increasingly tempted to embrace a system that does away with the other half. Where Trump and Le Pen seek to establish an illiberal democracy, a lot of sensible centrists are quietly seeking their salvation in what I call “undemocratic liberalism.” If the people want to violate the rights of unloved minorities, setting up the prospect of democracy without rights, the political establishment is increasingly insulating itself from the people’s demands, opting for a form of rights without democracy.

To be sure, undemocratic liberalism usually retains a democratic sheen. The standard rigmarole of political life in a supposed democracy is jealously observed: There are regular elections and hard-fought campaigns, grand speeches and parliamentary votes. The institutional apparatus that supposedly serves to translate the will of the people into public policy remains in place. And yet, the actual purpose of these institutions—to let the people rule—is increasingly forgotten. To anyone who cares to take a skeptical look, it is obvious how ineffectual representative institutions have become at delivering on the noble task they supposedly serve.

Take the U.S. Congress. Legislators are supposed to represent the people, but the views of ordinary voters now have precious little influence on Capitol Hill. More wealthy, more white, and much more likely to have gone to elite schools than the average American, congressmen and senators don’t resemble the people they are supposed to represent. But the main problem is not who they are but rather what incentives the systems gives them. To get elected, politicians need to prevail in a primary system that emphasizes the voice of a small number of radical ideologues. To bankroll their campaigns, they need to raise contributions at a constant clip, making them dependent on the good will of major funders. And to enjoy a plush retirement, they need to cultivate the corporations and lobbyists that are likely to throw easy money their way once they leave office. Given those conditions, it is hardly surprising that political scientists who study to what degree legislation reflects the preferences of average voters have concluded that there is a deep democratic disconnect, in the United States and in many other supposed democracies across the West as well.

Legislation thus reflects the will of the people less and less. As important, many areas of public policy have been taken out of the legislative process altogether. Congress is not only constrained by traditional balances like the Supreme Court. Increasingly, it is also hamstrung by the expanding influence of experts, an increase in bureaucratic autonomy, and the rise of new international organizations. Economic policy is a case in point: Some of the most essential economic decisions are now made by independent bureaucratic agencies like the Federal Reserve or the Consumer Financial Protection Bureau, set in stone by far-reaching trade agreements like NAFTA, or adjudicated by international institutions like the World Trade Organization.

Ordinary people are angry at the political system in part because they recognize to what extent they have been shut out of key decisions. But, by the same token, the process is becoming so unresponsive in part because the rise of illiberal populists has given the political establishment a good reason to insulate itself from the people’s anger. A pendulum is swinging from illiberal democracy to undemocratic liberalism, then back again. And its swings are getting wider and wider.

* * *

Britain’s vote to leave the European Union is a perfect illustration of the tension between illiberal democracy and undemocratic liberalism.

Even the most passionate defenders of the EU find it difficult to deny that it suffers from a serious democratic deficit. Most of the power in the institution rests with the European Commission, which is run by career bureaucrats, and the European Council, which represents the governments of member states. While the European Parliament is meant to provide a democratic counterweight to this elite-driven process, it is toothless in practice: elected with a tiny turnout by voters who barely register what it does day to day, the body has few formal powers. For all of its many achievements, the EU is a key exhibit for the existence of undemocratic liberalism.

Resistance to the European Union has long been especially strong among Brits, who have traditionally prided themselves in the unchecked sovereignty enjoyed by their parliament. Under increasing pressure from right-wingers in his own party, David Cameron thus agreed to a referendum on membership in the EU. Giving the people a one-time simulacrum of plebiscitary democracy, he hoped, would “lance the boil” of Euroskepticism once and for all.

Never in history has a wealthy, consolidated democracy collapsed. Not once.

There was only one problem with this plan: When the British people were offered the little finger of plebiscitary democracy, they decided to grab hold of the whole hand. Expected to follow the lead of their betters, they took great pleasure in shocking them with their disobedience. And while there are some perfectly reasonable grounds on which to dislike the EU, opinion polls leave little doubt as to the real reasons why most Brits wound up favoring Brexit. While the hard-line Euroskeptics who forced the referendum may have been concerned with questions of sovereignty, most voters cherished an opportunity to express their illiberal resentments. For all intents and purposes, the referendum turned into a plebiscite against immigration.

In the manner of a parent who tells Little Timmy he can have anything he wants for dinner, then tries to back out of the deal when Little Timmy announces he would like a dozen grasshoppers with a side of vanilla ice cream, a lot of political leaders were tempted to backtrack on Brexit once the results were in. Couldn’t they negotiate a deal that would end formal membership in the European Union while keeping all the important things the way they are now? Or call a second referendum in the hope that it might produce a different result? Faced with a blatant expression of how illiberal the preferences of most people are, the temptation to subvert the democratic procedures that were meant to translate those views into actual public policy was—understandably—strong.

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A Brexit supporter outside Downing Street in London, June 24.

Neil Hall/Reuters

 

Theresa May ultimately quashed the hope that Brexit might mean something less than Brexit. The people had been allowed the rare luxury of speaking their mind, and she recognized it would have been too embarrassing to renege on so prominent a promise. If Little Timmy insisted, he would be allowed to eat grasshoppers with vanilla ice cream this one time. But just as any prudent parent would learn from the experience and grow much more wary of letting an unruly child make untutored decisions in the future, so too the political class has mostly interpreted Brexit as a warning about the irrationality of popular referenda. By and large, it will serve as a reminder of the importance of holding the illiberal preferences of the average voter at bay.

* * *

Liberal democracy is decomposing into its constitutive parts: Over the next decades, much of the world will face a tragic choice between illiberal democracy, or democracy without rights, and undemocratic liberalism, or rights without democracy.

But if that comes to pass, it is unlikely to be the end point. For when illiberal democrats fall out of favor, they tend not to give up power. What starts as a genuine attempt to channel the voice of the people all too often degenerates into a straightforward dictatorship. A strikingly similar development might well befall undemocratic liberalism: Forced to defend itself against an onslaught of illiberal populists, it may have to resort to increasingly illiberal means to subdue its opponents. In the long run, both illiberal democracy and undemocratic liberalism may thus be headed for a remarkably similar fate: a gradual descent into an unvarnished form of dictatorship.

There could hardly be a more striking illustration of this prediction than recent developments in Turkey. For decades, Turkey was a relatively clear-cut case of undemocratic liberalism: In a deeply religious country, a small, secular elite protected ethnic and religious minorities, resisting any attempt to pass laws inspired by Islam. Whenever a popularly elected government made small steps toward putting religion at the center of public life, the army was waiting in the wings to depose it. Then Erdogan managed to lead a seemingly moderate Islamic movement to political victory and to break the power of the secular elite. For some years, outside observers hoped that he would turn Turkey into a true democracy, allowing pious Muslims fuller participation in social and political life without violating the rights of secularists or religious minorities. But that hope gradually faded. Before long, Erdogan pushed illiberal legislation, from new restrictions on the sale of alcohol to increasingly extreme measures against critical journalists and academics.

The failed coup was no more than a final showdown between the two ugly sides of this coin. If the coup had succeeded, the victorious factions of the army would likely have reestablished some liberal freedoms, in part by reverting to a more secular vision of Turkey. At the same time, they would have done away with any pretense of democracy: The freedom to drink alcohol in the streets of Istanbul would have been purchased by an inability to speak one’s mind about the new military government.

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A supporter of Turkish President Recep Tayyip Erdogan waves a flag against an electronic billboard during a rally in Kizilay Square on July 18 in Ankara.

Chris McGrath/Getty Images

 

When the coup failed, the outcome was not all that different. Long desperate to consolidate his rule, Erdogan seized the moment. In the first three days after the coup, he suspended close to 30,000 members of the civil service, revoked the licenses of 21,000 teachers, took over 6,000 soldiers into custody, and commanded all 1,577 deans of Turkish universities to submit their resignations. The purge is continuing apace: All in all, over 26,000 people have been arrested in the weeks since the coup. Elected as a people’s tribune, Erdogan has now amassed so much power that he can well afford to ignore the views of his electorate. The form of illiberal democracy he has instituted for the past decade has finally taken off its mask and revealed the ugly face of dictatorship.

The Roots of the Crisis

By historical standards, liberal democracies have been extraordinarily stable. Poor countries have trouble sustaining democratic rule. Some rich countries, especially those with vast oil wealth, have always been controlled by autocrats. But once a wealthy country has successfully transitioned to democracy, its form of government is locked in. This is about as remarkable a fact as political science has on offer. Never in history has a wealthy, consolidated democracy collapsed. Not once.

By historical standards, liberal democracies have been extraordinarily stable. Poor countries have trouble sustaining democratic rule. Some rich countries, especially those with vast oil wealth, have always been controlled by autocrats. But once a wealthy country has successfully transitioned to democracy, its form of government is locked in. This is about as remarkable a fact as political science has on offer. Never in history has a wealthy, consolidated democracy collapsed. Not once.

That remarkable fact has made it easy to ascribe the stability of the West’s political institutions to its fundamental attributes: universal suffrage, rule of law, checks and balances, individual rights. Each country gives its own spin on the genealogy of its particular political settlement. Americans tend to thank the genius of their founders, the French the principled visionaries on the barricades, Brits the fortuitous rise of pluralistic institutions owed to the blood-soaked compromises struck between lord and liege. But for all of the specificities of national myth and memory, the triumphalist upshot is remarkably similar in every democratic country. The question of the best regime form, which had animated the writings of thinkers from Socrates to Rousseau, has supposedly been solved. The end of history has arrived.

This happy story overlooks a number of facts that have been so formative of our political world that it is easy to forget just how extraordinary they, too, are by historical standards. All through the history of democratic stability, the incomes of ordinary citizens grew rapidly. All through the history of democratic stability, a democracy has been the most powerful country in the world. And all through the history of democratic stability, democracies have been highly homogeneous.

Over the last decades, each of these factors stopped being the case. Living standards stagnated. The rise of China is threatening American hegemony. Democracies in North America and Western Europe are more diverse than they have ever been before.

History cannot tell us how liberal democracies perform under those circumstances, so we are only just starting to gather the first shreds of evidence for what the effects of those transformations might be. What little we know suggests that the answer is not going to be pretty.

 

* * *

Since the founding of the American republic, the median citizen in every generation could pride himself on being much wealthier than his parents and had strong reason to believe that his children would be even better off. Indeed, ever since the ink dried on the Declaration of Independence, a clear majority of American citizens ended their lives with comforts they could barely have imagined when they were growing up. From 1935 to 1960, the standard of living of the median voter just about doubled. From 1960 to 1985, it just about doubled again. From 1985 to 2010, it flatlined.

Most Americans have not experienced real economic gains since George H.W. Bush was elected.

In the years since then, America’s gross domestic product, the Dow Jones, and the incomes of the rich have all recovered from the depths of the Great Recession. But the incomes of most Americans have barely improved. Most citizens have not experienced real economic gains since George H.W. Bush was elected.

If statistics lie, it’s often because averages hide. The stagnation of living standards conceals the phenomenal increase in income and wealth for the richest Americans. It also conceals the remarkable decline in income and wealth for the poorest Americans. That is true for many Latino and black Americans, who are more likely than other demographic groups to be doing the kinds of blue-collar jobs that have seen wages decrease in real terms. But it is felt especially keenly among white Americans with high expectations, limited qualifications, and declining hourly wages—that is to say, among some of Donald Trump’s most passionate supporters.

Trump Supporters
Supporters of Donald Trump at a campaign rally at Grant Park Event Center in Westfield, Indiana, July 12.

Tasos Katopodis/AFP/Getty Images

 

The appeal of illiberal democracy cannot be understood in abstraction from this economic story. The fortunes of the populists do not necessarily rise and fall in step with the business cycle or even the unemployment rate. Nor need it always be the very poorest, or those who stand to suffer the most immediate losses because of globalization, who flock toward them in the greatest numbers. The story that matters is broader than that: The basic deal offered by political elites since the inception of democracy was to provide ordinary people with large increases in their standard of living from one generation to the next. So long as that deal held, the people were willing to defer to the political class. Now that the deal has been broken—broken spectacularly—they no longer feel bound by their side of the bargain. And so many of them are willing to entertain the hope that the illiberal demagogues who are courting them so assiduously will serve them better than the unfaithful lot that is now in power.

* * *

In most parts of Europe, democracy took firm root only after the killings and expulsions of World War II turned countries that had once been home to a large number of minorities deeply homogeneous. Democracy in those places is a creation of the nation state, and for outsiders, membership in those nations has always remained difficult and incomplete. A German or an Italian or a Swede was thought to look a particular way and to descend from a particular ethnic stock. Though not every German is blond, and not every Italian has olive skin, it went without saying that somebody who is black or Asian or Middle Eastern could be neither German nor Italian.

The story was a little more complicated in the United States and in Canada, where membership in the nation had always been based on mutual aspirations for the future rather than descent from common ancestors. But even in the U.S., the lip service to diversity was secretly—and not so secretly—predicated on two important facts: The social and economic superiority of whites was not to be called into question. And particular ethnic or religious groups could not be associated with physical threats to the safety of American citizens. What happened in the brief intervals when these background conditions did not obtain speaks for itself. During World War I, some descendants of German immigrants were suspected of disloyalty; a flourishing German American associational life quickly disappeared. World War II was much worse: In the wake of Pearl Harbor, Japanese Americans were classified as enemy aliens and promptly interned.

The brittle foundations of ethnic inclusion explain why tensions over immigration and racial identity have been running especially high over the last two decades. In Europe, places like Germany and Italy had to admit to themselves during that period that they were indeed “countries of immigration” and that they would not be able to go on forever denying immigrants of Turkish or Middle Eastern descent full membership in the nation. Meanwhile, in North America, many members of ethnic and religious minorities ascended to unprecedented positions of power and prestige, threateningthe majority’s comfortable assumption of perennial dominance.

On both sides of the Atlantic, these transformations—which are cultural as much as they are economic or political—made the ethnic majority deeply resentful. The fuse was now in place, and it was connected to a ton of TNT. The terrorists just had to light it.

This is the most important political effect of the series of spectacular Islamist terror attacks on liberal democracies in the West that began on 9/11 and has continued to wreak havoc since: The constant terror threat gradually transformed a division of “us” versus “them” that had once been one of many important facts of politics into the primary line of political division and mobilization.

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An anti-Muslim group in Austin, Texas, in 2015.

Robert Daemmrich Photography Inc/Corbis via Getty Images

 

In every country and epoch, political life is defined by the key questions that determine which side you are on. In some countries these questions are socio-economic: Are you for the industrialists or the landowners, for the proletariat or the bourgeoisie? In other countries, the key questions are religious or ethnic: Are you for the Protestants or the Catholics, for the Luo or the Kikuyu?

These political “cleavages” can be a productive element of democratic life, a way of balancing the interests of different groups who mobilize to defend their own. But they always run the risk of turning so deep that people on both sides of the divide can no longer recognize each other as fellow citizens with legitimate interests. That is when victory at the polls starts to provide an excuse for subjugating a minority; when different groups might formally retain citizenship of the same country but the state becomes no more than a committee for advancing the interests of the ascendant faction. This is what the fallout from Islamist terrorism is now threatening to do across North America and Western Europe: A cleavage that was already fraught in most liberal democracies is becoming an instrument of tyranny.

 

These political “cleavages” can be a productive element of democratic life, a way of balancing the interests of different groups who mobilize to defend their own. But they always run the risk of turning so deep that people on both sides of the divide can no longer recognize each other as fellow citizens with legitimate interests. That is when victory at the polls starts to provide an excuse for subjugating a minority; when different groups might formally retain citizenship of the same country but the state becomes no more than a committee for advancing the interests of the ascendant faction. This is what the fallout from Islamist terrorism is now threatening to do across North America and Western Europe: A cleavage that was already fraught in most liberal democracies is becoming an instrument of tyranny.

Despite their hatred for each other, the populists and the terrorists thus live in a strange kind of symbiosis.

Despite their hatred for each other, the populists and the terrorists thus live in a strange kind of symbiosis. The more marginalized Muslims feel in Western societies, the easier ISIS finds it to recruit converts to its bloody cause. And the more homegrown terrorists kill innocents in the name of Islam, the easier it becomes for populists to incite voters against liberal democracy’s protections for ethnic and religious minorities. Seen in this light, the terror attack in Nice is yet another weapon in the armory that might allow Marine Le Pen to subvert liberté, egalité, and fraternité: It is yet another cause of fear in the population; yet another excuse to see politics from the vantage point of an ethnic in-group; and yet another example Le Pen can point to in claiming that Muslim immigrants simply do not fit into France.

The terrorists, the pious sentiment goes, will never have enough power to vanquish the principles of liberal democracy. That is true, so far as it goes. But it doesn’t go very far. As the political fallout from the attack in Nice—and the attacks in Orlando and Brussels and Würzburg, Germany—demonstrate, it’s looking increasingly likely that we will let them win by doing their bidding for them.

The most pressing political question of our age is how we can stop that from happening. What reforms are needed to re-establish the social end economic foundations of liberal democracy? And how can we express liberal democratic values convincingly enough to win the battle of ideas against the likes of Donald Trump?

Regaining Our Conviction

Habituation breeds indifference. A turn of phrase that expressed a point with the help of a striking image no longer packs the same punch because we have grown inured to its literal meaning; linguists call this a dead metaphor. Driving to work in the sweet ride we bought a few months ago no longer gives us the same pleasure; economists call this hedonic adaptation. The person who once sent our heart racing enters the room and we barely notice it; grown-ups call this being married.

Something akin to this form of habituation has happened to our most fundamental political values. The ideals of liberal democracy are all around us. We know that the people are supposed to rule and that all citizens have a right to the same basic freedoms irrespective of their race, creed, or religion. But precisely because these ideas have surrounded us in a diffuse way for so long, we have begun to forget their meaning and their grandeur. “The fatal tendency of mankind to leave off thinking about a thing when it is no longer doubtful,” John Stuart Mill presciently warned inOn Liberty, “is the cause of half their errors.”

So, while civics teachers dutifully recite the ideals of the Founding Fathers and while the political instincts of mainstream publications from Time to the Huffington Post are in some vague sense “liberal,” the intellectual energy is now on the side of liberalism’s opponents.

A few decades ago, right-wing critics of liberal democracy were mostly confined to the oddballs and nostalgics who stubbornly harkened back to some imagined golden age, whether it be the era of fascism in Europe or the era of Jim Crow in the United States. Their ideas were terrifying and their influence, at times, real. And yet it was clear to all that they were ultimately defunct, bound to become more and more ridiculous with every passing year.

Since the turn of the millennium, this has changed fundamentally. The assumption that far-right alternatives to liberal democracy are invariably a remnant from the past is, itself, a relic of a bygone era. Illiberal democracy, the form of rule the far right now advocates in most places from the United States to the United Kingdom and from France to Turkey, is in many ways a new invention—and its ambition is nothing less than to claim the future for itself. Its broad appeal and rapid spread, encapsulated so painfully in the week of July 11, 2016, demonstrates that this aspiration is not to be dismissed lightly. To ensure that the future does not belong to illiberal democracy, its opponents will have to do the hard work of political resistance—and be willing to overcome their own deep divisions to cooperate against a common enemy.

As in the 1920s, when liberal democracy first came under deadly fire across the world, this willingness to work together in the face of a grave far-right threat is far from assured. Nobody should be more scared of the rise of illiberal populists than the left. And yet, in both Europe and North America, much of the left increasingly thinks of “liberal” as a term of abuse. Indeed, a growing share of left-wing activists has gone from understandable anger at the many shortcomings of the status quo to an outright rejection of the foundational political values of our age. Assuming that ideals that are flagrantly contradicted in practice can’t be worth very much in theory either, they too are giving up on the core tenets of liberal democracy.

If Donald Trump rails against Muslims in his speeches then, they believe, it is time to accept that freedom of speech is an outmoded concept. And if the police kill innocent black Americans then, they believe, the ideal of state neutrality between different ethnic groups is no more than a tool for white domination. The society they envisage is not one in which liberal democratic ideals are more perfectly realized than they are now—but rather one in which these ideals are sacrificed in the name of social justice.

The most foolhardy parts of the left even go so far as to see the rise of their enemies as a strategic opportunity. Believing that things will have to get worse before they can get better, their most urgent desire is to smash up the status quo. Unwilling to recognize any real difference between the policies favored by the likes of Trump and the policies favored by the likes of Clinton, they prefer the agent of chaos, however violent, to the defender of the current political order, however decent.

And so it is centrist politicians who have now become the last explicit defenders of liberalism. But, squeezed between a blatantly authoritarian right and an increasingly illiberal left, they have begun to seek refuge in new forms of technocratic rule. In the short run, the undemocratic bulwarks they are building against illiberal sentiments are protecting the rights of minorities. But their lack of urgency and the dearth of their vision mean that they do not even attempt to tackle the root causes of the populist rise, like the stagnation in living standards. In the long run, this is very dangerous: The exclusion of the people from the political process—especially when coupled with an unwillingness (or an inability) to pass real economic reform—will only serve to inflame illiberal passions, turning even more citizens against liberal democracy.

Among the many worrying signs of our time, perhaps the most concerning is that those who believe both in liberalism and in democracy, both in popular rule and in individual rights, have increasingly taken on a defensive crouch. They seek to rescue what they know to be valuable, and yet they have lost their ability to articulate what part of contemporary reality is worth fighting for and why. And so many of them wind up focusing their energies on shoring up the bad as well as the good parts of our crumbling political order: Rather than imagining what social and economic policies might help to diffuse popular anger and fulfill the promises of liberal democracy, they seek their salvation in immobility.

To fight the terrorists and the populists, to prevail both against the plotters of undemocratic coups and the illiberal tribunes propelled into office by the intense anger of a volatile age, will require liberal democrats to stand tall for their values—and to develop the radical imagination that is desperately needed if we are to recreate the conditions that once allowed for the system’s stability. New economic policies are needed to ensure that ordinary people capture much more of the world’s economic gains than they have in the past decades. Meanwhile, democratic institutions designed for the 18th century need to restore the promise of popular rule by incorporating the technologies of the 21st century.

By the cruel standards of human history, the last few decades have been uncommonly serene. It is looking less and less likely that we will one day be able to say the same thing of the next few decades. Radical change seems to lurk just around the corner. The question is no longer whether we can preserve our political order in its current form. (We probably can’t.) It is what reforms are needed to ensure that the precious, fragile combination of liberalism and democracy does not entirely vanish from the face of the earth. If the center is to hold—if we are to rescue what is best about our imperfect political order—a lot will have to change.

 

 Hallelujah

I’ve heard there was a secret chord
That David played, and it pleased the Lord
But you don’t really care for music, do you?
It goes like this
The fourth, the fifth
The minor fall, the major lift
The baffled king composing Hallelujah

Hallelujah
Hallelujah
Hallelujah
Hallelujah

Your faith was strong but you needed proof
You saw her bathing on the roof
Her beauty in the moonlight overthrew you
She tied you to her kitchen chair
She broke your throne and she cut your hair
And from your lips she drew the Hallelujah

Hallelujah, Hallelujah
Hallelujah, Hallelujah

Now, maybe there’s a god above,
As for me, all I ever learned from love
Is how to shoot at someone who outdrew you
But it’s not a cry that you hear tonight,
It’s not some pilgrim claims to have seen the light
No it’s a cold and it’s a very broken Hallelujah.

Hallelujah, Hallelujah
Hallelujah, Hallelujah

Oh, people, I’ve been here before
I know this room and I’ve walked the floor
You see, I used to live alone before I knew you
And I’ve seen your flag on the marble arch
But this is not some kind of victory march, no
It’s a cold and it’s a very lonely Hallelujah

Hallelujah, Hallelujah
Hallelujah, Hallelujah

There was a time you let me know
What’s really going on below,
But now, now you never ever even show it to me, do you?
I remember when I moved in you,
And the holy dove, she was moving too,
And every single breath that we drew was Hallelujah.

Hallelujah, Hallelujah
Hallelujah, Hallelujah

I’ve done my best, I know it wasn’t much
I couldn’t feel, so I learned to touch
I’ve told the truth, I didn’t come all this way just to fool you
Yeah, even though it all went wrong
I’ll stand right here before the Lord of Song
With nothing, nothing on my tongue but Hallelujah

Hallelujah, Hallelujah
Hallelujah, Hallelujah

Hallelujah, Hallelujah
Hallelujah, Hallelujah

There is a long ditch in the village of My Lai. On the morning of March 16, 1968, it was crowded with the bodies of the dead—dozens of women, children, and old people, all gunned down by young American soldiers. Now, forty-seven years later, the ditch at My Lai seems wider than I remember from the news photographs of the slaughter: erosion and time doing their work. During the Vietnam War, there was a rice paddy nearby, but it has been paved over to make My Lai more accessible to the thousands of tourists who come each year to wander past the modest markers describing the terrible event. The My Lai massacre was a pivotal moment in that misbegotten war: an American contingent of about a hundred soldiers, known as Charlie Company, having received poor intelligence, and thinking that they would encounter Vietcong troops or sympathizers, discovered only a peaceful village at breakfast. Nevertheless, the soldiers of Charlie Company raped women, burned houses, and turned their M-16s on the unarmed civilians of My Lai. Among the leaders of the assault was Lieutenant William L. Calley, a junior-college dropout from Miami.

By early 1969, most of the members of Charlie Company had completed their tours and returned home. I was then a thirty-two-year-old freelance reporter in Washington, D.C. Determined to understand how young men—boys, really—could have done this, I spent weeks pursuing them. In many cases, they talked openly and, for the most part, honestly with me, describing what they did at My Lai and how they planned to live with the memory of it.

In testimony before an Army inquiry, some of the soldiers acknowledged being at the ditch but claimed that they had disobeyed Calley, who was ordering them to kill. They said that one of the main shooters, along with Calley himself, had been Private First Class Paul Meadlo. The truth remains elusive, but one G.I. described to me a moment that most of his fellow-soldiers, I later learned, remembered vividly. At Calley’s order, Meadlo and others had fired round after round into the ditch and tossed in a few grenades.

Then came a high-pitched whining, which grew louder as a two- or three-year-old boy, covered with mud and blood, crawled his way among the bodies and scrambled toward the rice paddy. His mother had likely protected him with her body. Calley saw what was happening and, according to the witnesses, ran after the child, dragged him back to the ditch, threw him in, and shot him.

The morning after the massacre, Meadlo stepped on a land mine while on a routine patrol, and his right foot was blown off. While waiting to be evacuated to a field hospital by helicopter, he condemned Calley. “God will punish you for what you made me do,” a G.I. recalled Meadlo saying.

“Get him on the helicopter!” Calley shouted.

Meadlo went on cursing at Calley until the helicopter arrived.

Meadlo had grown up in farm country in western Indiana. After a long time spent dropping dimes into a pay phone and calling information operators across the state, I found a Meadlo family listed in New Goshen, a small town near Terre Haute. A woman who turned out to be Paul’s mother, Myrtle, answered the phone. I said that I was a reporter and was writing about Vietnam. I asked how Paul was doing, and wondered if I could come and speak to him the next day. She told me I was welcome to try.

The Meadlos lived in a small house with clapboard siding on a ramshackle chicken farm. When I pulled up in my rental car, Myrtle came out to greet me and said that Paul was inside, though she had no idea whether he would talk or what he might say. It was clear that he had not told her much about Vietnam. Then Myrtle said something that summed up a war that I had grown to hate: “I sent them a good boy and they made him a murderer.”

Meadlo invited me in and agreed to talk. He was twenty-two. He had married before leaving for Vietnam, and he and his wife had a two-and-a-half-year-old son and an infant daughter. Despite his injury, he worked a factory job to support the family. I asked him to show me his wound and to tell me about the treatment. He took off his prosthesis and described what he’d been through. It did not take long for the conversation to turn to My Lai. Meadlo talked and talked, clearly desperate to regain some self-respect. With little emotion, he described Calley’s orders to kill. He did not justify what he had done at My Lai, except that the killings “did take a load off my conscience,” because of “the buddies we’d lost. It was just revenge, that’s all it was.”

Meadlo recounted his actions in bland, appalling detail. “There was supposed to have been some Vietcong in [My Lai] and we began to make a sweep through it,” he told me. “Once we got there we began gathering up the people . . . started putting them in big mobs. There must have been about forty or forty-five civilians standing in one big circle in the middle of the village. . . . Calley told me and a couple of other guys to watch them.” Calley, as he recalled, came back ten minutes later and told him, “Get with it. I want them dead.” From about ten or fifteen feet away, Meadlo said, Calley “started shooting them. Then he told me to start shooting them. . . . I started to shoot them, but the other guys wouldn’t do it. So we”—Meadlo and Calley—“went ahead and killed them.” Meadlo estimated that he had killed fifteen people in the circle. “We all were under orders,” he said. “We all thought we were doing the right thing. At the time it didn’t bother me.” There was official testimony showing that Meadlo had in fact been extremely distressed by Calley’s order. After being told by Calley to “take care of this group,” one Charlie Company soldier recounted, Meadlo and a fellow-soldier “were actually playing with the kids, telling the people where to sit down and giving the kids candy.” When Calley returned and said that he wanted them dead, the soldier said, “Meadlo just looked at him like he couldn’t believe it. He says, ‘Waste them?’ ” When Calley said yes, another soldier testified, Meadlo and Calley “opened up and started firing.” But then Meadlo “started to cry.”

Mike Wallace, of CBS, was interested in my interview, and Meadlo agreed to tell his story again, on national television. I spent the night before the show on a couch in the Meadlo home and flew to New York the next morning with Meadlo and his wife. There was time to talk, and I learned that Meadlo had spent weeks in recovery and rehabilitation at an Army hospital in Japan. Once he came home, he said nothing about his experiences in Vietnam. One night, shortly after his return, his wife woke up to hysterical crying in one of the children’s rooms. She rushed in and found Paul violently shaking the child.

I’d been tipped off about My Lai by Geoffrey Cowan, a young antiwar lawyer in Washington, D.C. Cowan had little specific information, but he’d heard that an unnamed G.I. had gone crazy and killed scores of Vietnamese civilians. Three years earlier, while I was covering the Pentagon for the Associated Press, I had been told by officers returning from the war about the killing of Vietnamese civilians that was going on. One day, while pursuing Cowan’s tip, I ran into a young Army colonel whom I’d known on the Pentagon beat. He had been wounded in the leg in Vietnam and, while recovering, learned that he was to be promoted to general. He now worked in an office that had day-to-day responsibility for the war. When I asked him what he knew about the unnamed G.I., he gave me a sharp, angry look, and began whacking his hand against his knee. “That boy Calley didn’t shoot anyone higher than this,” he said.

I had a name. In a local library, I found a brief story buried in the Times about a Lieutenant Calley who had been charged by the Army with the murder of an unspecified number of civilians in South Vietnam. I tracked down Calley, whom the Army had hidden away in senior officers’ quarters at Fort Benning, in Columbus, Georgia. By then, someone in the Army had allowed me to read and take notes from a classified charge sheet accusing Calley of the premeditated murder of a hundred and nine “Oriental human beings.”

Calley hardly seemed satanic. He was a slight, nervous man in his mid-twenties, with pale, almost translucent skin. He tried hard to seem tough. Over many beers, he told me how he and his soldiers had engaged and killed the enemy at My Lai in a fiercely contested firefight. We talked through the night. At one point, Calley excused himself, to go to the bathroom. He left the door partly open, and I could see that he was vomiting blood.

In November, 1969, I wrote five articles about Calley, Meadlo, and the massacre. I had gone to Life and Look with no success, so I turned instead to a small antiwar news agency in Washington, the Dispatch News Service. It was a time of growing anxiety and unrest. Richard Nixon had won the 1968 election by promising to end the war, but his real plan was to win it, through escalation and secret bombing. In 1969, as many as fifteen hundred American soldiers were being killed every month—almost the same as the year before.

Combat reporters such as Homer Bigart, Bernard Fall, David Halberstam, Neil Sheehan, Malcolm Browne, Frances FitzGerald, Gloria Emerson, Morley Safer, and Ward Just filed countless dispatches from the field that increasingly made plain that the war was morally groundless, strategically lost, and nothing like what the military and political officials were describing to the public in Saigon and in Washington. On November 15, 1969, two days after the publication of my first My Lai dispatch, an antiwar march in Washington drew half a million people. H. R. Haldeman, Nixon’s most trusted aide, and his enforcer, took notes in the Oval Office that were made public eighteen years later. They revealed that on December 1, 1969, at the height of the outcry over Paul Meadlo’s revelations, Nixon approved the use of “dirty tricks” to discredit a key witness to the massacre. When, in 1971, an Army jury convicted Calley of mass murder and sentenced him to life at hard labor, Nixon intervened, ordering Calley to be released from an Army prison and placed under house arrest pending review. Calley was freed three months after Nixon left office and spent the ensuing years working in his father-in-law’s jewelry store, in Columbus, Georgia, and offering self-serving interviews to journalists willing to pay for them. Finally, in 2009, in a speech to a Kiwanis Club, he said that there “is not a day that goes by that I do not feel remorse” for My Lai, but that he was following orders—“foolishly, I guess.” Calley is now seventy-one. He is the only officer to have been convicted for his role in the My Lai massacre.

In March, 1970, an Army investigation filed charges ranging from murder to dereliction of duty against fourteen officers, including generals and colonels, who were accused of covering up the massacre. Only one officer besides Calley eventually faced court-martial, and he was found not guilty.

A couple of months later, at the height of widespread campus protests against the war—protests that included the killing of four students by National Guardsmen in Ohio—I went to Macalester College, in St. Paul, Minnesota, to give a speech against the war. Hubert Humphrey, who had been Lyndon Johnson’s loyal Vice-President, was now a professor of political science at the college. He had lost to Nixon, in the 1968 election, partly because he could not separate himself from L.B.J.’s Vietnam policy. After my speech, Humphrey asked to talk to me. “I’ve no problem with you, Mr. Hersh,” he said. “You were doing your job and you did it well. But, as for those kids who march around saying, ‘Hey, hey, L.B.J., how many kids did you kill today?’ ” Humphrey’s fleshy, round face reddened, and his voice grew louder with every phrase. “I say, ‘Fuck ’em, fuck ’em, fuck ’em.’ ”

I visited My Lai (as the hamlet was called by the U.S. Army) for the first time a few months ago, with my family. Returning to the scene of the crime is the stuff of cliché for reporters of a certain age, but I could not resist. I had sought permission from the South Vietnamese government in early 1970, but by then the Pentagon’s internal investigation was under way and the area was closed to outsiders. I joined the Times in 1972 and visited Hanoi, in North Vietnam. In 1980, five years after the fall of Saigon, I travelled again to Vietnam to conduct interviews for a book and to do more reporting for theTimes. I thought I knew all, or most, of what there was to learn about the massacre. Of course, I was wrong.

My Lai is in central Vietnam, not far from Highway 1, the road that connects Hanoi and Ho Chi Minh City, as Saigon is now known. Pham Thanh Cong, the director of the My Lai Museum, is a survivor of the massacre. When we first met, Cong, a stern, stocky man in his late fifties, said little about his personal experiences and stuck to stilted, familiar phrases. He described the Vietnamese as “a welcoming people,” and he avoided any note of accusation. “We forgive, but we do not forget,” he said. Later, as we sat on a bench outside the small museum, he described the massacre, as he remembered it. At the time, Cong was eleven years old. When American helicopters landed in the village, he said, he and his mother and four siblings huddled in a primitive bunker inside their thatch-roofed home. American soldiers ordered them out of the bunker and then pushed them back in, throwing a hand grenade in after them and firing their M-16s. Cong was wounded in three places—on his scalp, on the right side of his torso, and in the leg. He passed out. When he awoke, he found himself in a heap of corpses: his mother, his three sisters, and his six-year-old brother. The American soldiers must have assumed that Cong was dead, too. In the afternoon, when the American helicopters left, his father and a few other surviving villagers, who had come to bury the dead, found him.

hersh ditch

The ditch where Lieutenant Calley ordered the killing of dozens of civilians.PHOTOGRAPH BY KATIE ORLINSKY

(ADDED BY seekingspirt)

The Ditch at My Lai

March 16, 2010.
It is the 42nd anniversary of the
My Lai Massacre on March 16, 1968.
When I went back to Vietnam in
March 1994, I took this picture of
the infamous ditch at the massacre site.
Over 150 innocent Vietnamese civilians
were herded into this ditch and shot at
point-blank range.
It took less than a minute for the locust of
bullets to take the lives of 150 people.
America was on a rampage.
You drain the swamp to kill all the fish.
You carpet bomb to kill everyone.
And while this ditch was filling up with
blood and body parts,
the rest of the U.S Government troops
were under orders to kill the other 350
civilians who were in the village that day.
A total of 504 innocent civilians were
slaughtered.
The U.S. Government troops were there
about four hours, long enough to commit
other unspeakable war crimes before people
were shot.
During the first stages of the massacre,
high ranking military officers were flying
overhead in helicopters directing the massacre.
         These people were never found guilty of war crimes. 

Mike Hastie
U.S. Army Medic
Vietnam 1970-71

Later, at lunch with my family and me, Cong said, “I will never forget the pain.” And in his job he can never leave it behind. Cong told me that a few years earlier a veteran named Kenneth Schiel, who had been at My Lai, had visited the museum—the only member of Charlie Company at that point to have done so—as a participant in an Al Jazeera television documentary marking the fortieth anniversary of the massacre. Schiel had enlisted in the Army after graduation from high school, in Swartz Creek, Michigan, a small town near Flint, and, after the subsequent investigations, he was charged with killing nine villagers. (The charges were dismissed.)

The documentary featured a conversation with Cong, who had been told that Schiel was a Vietnam veteran, but not that he had been at My Lai. In the video, Schiel tells an interviewer, “Did I shoot? I’ll say that I shot until I realized what was wrong. I’m not going to say whether I shot villagers or not.” He was even less forthcoming in a conversation with Cong, after it became clear that he had participated in the massacre. Schiel says repeatedly that he wants to “apologize to the people of My Lai,” but he refuses to go further. “I ask myself all the time why did this happen. I don’t know.”

Cong demands, “How did you feel when you shot into civilians and killed? Was it hard for you?” Schiel says that he wasn’t among the soldiers who were shooting groups of civilians. Cong responds, “So maybe you came to my house and killed my relatives.”

A transcript on file at the museum contains the rest of the conversation. Schiel says, “The only thing I can do now is just apologize for it.” Cong, who sounds increasingly distressed, continues to ask Schiel to talk openly about his crimes, and Schiel keeps saying, “Sorry, sorry.” When Cong asks Schiel whether he was able to eat a meal upon returning to his base, Schiel begins to cry. “Please don’t ask me any more questions,” he says. “I cannot stay calm.” Then Schiel asks Cong if he can join a ceremony commemorating the anniversary of the massacre. Cong rebuffs him. “It would be too shameful,” he says, adding, “The local people will be very angry if they realize that you were the person who took part in the massacre.”

Before leaving the museum, I asked Cong why he had been so unyielding with Schiel. His face hardened. He said that he had no interest in easing the pain of a My Lai veteran who refused to own up fully to what he had done. Cong’s father, who worked for the Vietcong, lived with Cong after the massacre, but he was killed in action, in 1970, by an American combat unit. Cong went to live with relatives in a nearby village, helping them raise cattle. Finally, after the war, he was able to return to school.

There was more to learn from the comprehensive statistics that Cong and the museum staff had compiled. The names and ages of the dead are engraved on a marble plaque that dominates one of the exhibit rooms. The museum’s count, no longer in dispute, is five hundred and four victims, from two hundred and forty-seven families. Twenty-four families were obliterated—–three generations murdered, with no survivors. Among the dead were a hundred and eighty-two women, seventeen of them pregnant. A hundred and seventy-three children were executed, including fifty-six infants. Sixty older men died. The museum’s accounting included another important fact: the victims of the massacre that day were not only in My Lai (also known as My Lai 4) but also in a sister settlement known to the Americans as My Khe 4. This settlement, a mile or so to the east, on the South China Sea, was assaulted by another contingent of U.S. soldiers, Bravo Company. The museum lists four hundred and seven victims in My Lai 4 and ninety-seven in My Khe 4.

hersh at work
Hersh at work in North Vietnam, in 1972, three years after he broke the massacre story. COURTESY SEYMOUR M. HERSH

The message was clear: what happened at My Lai 4 was not singular, not an aberration; it was replicated, in lesser numbers, by Bravo Company. Bravo was attached to the same unit—Task Force Barker—as Charlie Company. The assaults were by far the most important operation carried out that day by any combat unit in the Americal Division, which Task Force Barker was attached to. The division’s senior leadership, including its commander, Major General Samuel Koster, flew in and out of the area throughout the day to check its progress.

There was an ugly context to this. By 1967, the war was going badly in the South Vietnamese provinces of Quang Ngai, Quang Nam, and Quang Tri, which were known for their independence from the government in Saigon, and their support for the Vietcong and North Vietnam. Quang Tri was one of the most heavily bombed provinces in the country. American warplanes drenched all three provinces with defoliating chemicals, including Agent Orange.

On my recent trip, I spent five days in Hanoi, which is the capital of unified Vietnam. Retired military officers and Communist Party officials there told me that the My Lai massacre, by bolstering antiwar dissent inside America, helped North Vietnam win the war. I was also told, again and again, that My Lai was unique only in its size. The most straightforward assessment came from Nguyen Thi Binh, known to everyone in Vietnam as Madame Binh. In the early seventies, she was the head of the National Liberation Front delegation at the Paris peace talks and became widely known for her willingness to speak bluntly and for her striking good looks. Madame Binh, who is eighty-seven, retired from public life in 2002, after serving two terms as Vietnam’s Vice-President, but she remains involved in war-related charities dealing with Agent Orange victims and the disabled.

“I’ll be honest with you,” she said. “My Lai became important in America only after it was reported by an American.” Within weeks of the massacre, a spokesman for the North Vietnamese in Paris had publicly described the events, but the story was assumed to be propaganda. “I remember it well, because the antiwar movement in America grew because of it,” Madame Binh added, speaking in French. “But in Vietnam there was not only one My Lai—there were many.”

One morning in Danang, a beach resort and port city of about a million people, I had coffee with Vo Cao Loi, one of the few survivors of Bravo Company’s attack at My Khe 4. He was fifteen at the time, Loi said, through an interpreter. His mother had what she called “a bad feeling” when she heard helicopters approaching the village. There had been operations in the area before. “It was not just like some Americans would show up all of a sudden,” he said. “Before they came, they often fired artillery and bombed the area, and then after all that they would send in the ground forces.” American and South Vietnamese Army units had moved through the area many times with no incident, but this time Loi was shooed out of the village by his mother moments before the attack. His two older brothers were fighting with the Vietcong, and one had been killed in combat six days earlier. “I think she was afraid because I was almost a grown boy and if I stayed I could be beaten up or forced to join the South Vietnamese Army. I went to the river, about fifty metres away. Close, close enough: I heard the fire and the screaming.” Loi stayed hidden until evening, when he returned home to bury his mother and other relatives.

Two days later, Vietcong troops took Loi to a headquarters in the mountains to the west. He was too young to fight, but he was brought before Vietcong combat units operating throughout Quang Ngai to describe what the Americans had done at My Khe. The goal was to inspire the guerrilla forces to fight harder. Loi eventually joined the Vietcong and served at the military command until the end of the war. American surveillance planes and troops were constantly searching for his unit. “We moved the headquarters every time we thought the Americans were getting close,” Loi told me. “Whoever worked in headquarters had to be absolutely loyal. There were three circles on the inside: the outer one was for suppliers, a second one was for those who worked in maintenance and logistics, and the inner one was for the commanders. Only division commanders could stay in the inner circle. When they did leave the headquarters, they would dress as normal soldiers, so one would never know. They went into nearby villages. There were cases when Americans killed our division officers, but they did not know who they were.” As with the U.S. Army, Loi said, Vietcong officers often motivated their soldiers by inflating the number of enemy combatants they had killed.

The massacres at My Lai and My Khe, terrible as they were, mobilized support for the war against the Americans, Loi said. Asked if he could understand why such war crimes were tolerated by the American command, Loi said he did not know, but he had a dark view of the quality of U.S. leadership in central Vietnam. “The American generals had to take responsibility for the actions of the soldiers,” he told me. “The soldiers take orders, and they were just doing their duty.”

Loi said that he still grieves for his family, and he has nightmares about the massacre. But, unlike Pham Thanh Cong, he found a surrogate family almost immediately: “The Vietcong loved me and took care of me. They raised me.” I told Loi about Cong’s anger at Kenneth Schiel, and Loi said, “Even if others do terrible things to you, you can forgive it and move toward the future.” After the war, Loi transferred to the regular Vietnamese Army. He eventually became a full colonel and retired after thirty-eight years of service. He and his wife now own a coffee shop in Danang.

Almost seventy per cent of the population of Vietnam is under the age of forty, and although the war remains an issue mainly for the older generations, American tourists are a boon to the economy. If American G.I.s committed atrocities, well, so did the French and the Chinese in other wars. Diplomatically, the U.S. is considered a friend, a potential ally against China. Thousands of Vietnamese who worked for or with the Americans during the Vietnam War fled to the United States in 1975. Some of their children have confounded their parents by returning to Communist Vietnam, despite its many ills, from rampant corruption to aggressive government censorship.

Nguyen Qui Duc, a fifty-seven-year-old writer and journalist who runs a popular bar and restaurant in Hanoi, fled to America in 1975 when he was seventeen. Thirty-one years later, he returned. In San Francisco, he was a prize-winning journalist and documentary filmmaker, but, as he told me, “I’d always wanted to come back and live in Vietnam. I felt unfinished leaving home at seventeen and living as someone else in the United States. I was grateful for the opportunities in America, but I needed a sense of community. I came to Hanoi for the first time as a reporter for National Public Radio, and fell in love with it.”

Duc told me that, like many Vietnamese, he had learned to accept the American brutality in the war. “American soldiers committed atrocious acts, but in war such things happen,” he said. “And it’s a fact that the Vietnamese cannot own up to their own acts of brutality in the war. We Vietnamese have a practical attitude: better forget a bad enemy if you can gain a needed friend.”

During the war, Duc’s father, Nguyen Van Dai, was a deputy governor in South Vietnam. He was seized by the Vietcong in 1968 and imprisoned until 1980. In 1984, Duc, with the help of an American diplomat, successfully petitioned the government to allow his parents to emigrate to California; Duc had not seen his father for sixteen years. He told me of his anxiety as he waited for him at the airport. His father had suffered terribly in isolation in a Communist prison near the Chinese border; he was often unable to move his limbs. Would he be in a wheelchair, or mentally unstable? Duc’s father arrived in California during a Democratic Presidential primary. He walked off the plane and greeted his son. “How’s Jesse Jackson doing?” he said. He found a job as a social worker and lived for sixteen more years.

Some American veterans of the war have returned to Vietnam to live. Chuck Palazzo grew up in a troubled family on Arthur Avenue in the Bronx and, after dropping out of high school, enlisted in the Marines. In the fall of 1970, after a year of training, he was assigned to an élite reconnaissance unit whose mission was to confirm intelligence and to ambush enemy missile sites and combat units at night. He and his men sometimes parachuted in under fire. “I was involved in a lot of intense combat with many North Vietnamese regulars as well as Vietcong, and I lost a lot of friends,” Palazzo told me over a drink in Danang, where he now lives and works. “But the gung ho left when I was still here. I started to read and understand the politics of the war, and one of my officers was privately agreeing with me that what we were doing there was wrong and senseless. The officer told me, ‘Watch your ass and get the hell out of here.’ ”

Palazzo first arrived in Danang in 1970, on a charter flight, and he could see coffins lined up on the field as the plane taxied in. “It was only then that I realized I was in a war,” he said. “Thirteen months later, I was standing in line, again at Danang, to get on the plane taking me home, but my name was not on the manifest.” After some scrambling, Palazzo said, “I was told that if I wanted to go home that day the only way out was to escort a group of coffins flying to America on a C-141 cargo plane.” So that’s what he did.

After leaving the Marines, Palazzo earned a college degree and began a career as an I.T. specialist. But, like many vets, he came “back to the world” with post-traumatic stress disorder and struggled with addictions. His marriage collapsed. He lost various jobs. In 2006, Palazzo made a “selfish” decision to return to Ho Chi Minh City. “It was all about me dealing with P.T.S.D. and confronting my own ghosts,” he said. “My first visit became a love affair with the Vietnamese.” Palazzo wanted to do all he could for the victims of Agent Orange. For years, the Veterans Administration, citing the uncertainty of evidence, refused to recognize a link between Agent Orange and the ailments, including cancers, of many who were exposed to it. “In the war, the company commander told us it was mosquito spray, but we could see that all the trees and vegetation were destroyed,” Palazzo said. “It occurred to me that, if American vets were getting something, some help and compensation, why not the Vietnamese?” Palazzo, who moved to Danang in 2007, is now an I.T. consultant and the leader of a local branch of Veterans for Peace, an American antiwar N.G.O. He remains active in the Agent Orange Action Group, which seeks international support to cope with the persistent effects of the defoliant.

In Hanoi, I met Chuck Searcy, a tall, gray-haired man of seventy who grew up in Georgia. Searcy’s father had been taken prisoner by the Germans in the Battle of the Bulge, and it never occurred to Searcy to avoid Vietnam. “I thought President Johnson and the Congress knew what we were doing in Vietnam,” he told me. In 1966, Searcy quit college and enlisted. He was an intelligence analyst, in a unit that was situated near the airport in Saigon, and which processed and evaluated American analyses and reports.

“Within three months, all the ideals I had as a patriotic Georgia boy were shattered, and I began to question who we were as a nation,” Searcy said. “The intelligence I was seeing amounted to a big intellectual lie.” The South Vietnamese clearly thought little of the intelligence the Americans were passing along. At one point, a colleague bought fish at a market in Saigon and noticed that it was wrapped in one of his unit’s classified reports. “By the time I left, in June of 1968,” Searcy said, “I was angry and bitter.”

Searcy finished his Army tour in Europe. His return home was a disaster. “My father heard me talk about the war and he was incredulous. Had I turned into a Communist? He said that he and my mother don’t ‘know who you are anymore. You’re not an American.’ Then they told me to get out.” Searcy went on to graduate from the University of Georgia, and edited a weekly newspaper in Athens, Georgia. He then began a career in politics and public policy that included working as an aide to Wyche Fowler, a Georgia Democratic congressman.

In 1992, Searcy returned to Vietnam and eventually decided to join the few other veterans who had moved there. “I knew, even as I was flying out of Vietnam in 1968, that someday, somehow, I would return, hopefully in a time of peace. I felt even back then that I was abandoning the Vietnamese to a terribly tragic fate, for which we Americans were mostly responsible. That sentiment never quite left me.” Searcy worked with a program that dealt with mine clearance. The U.S. dropped three times the number of bombs by weight in Vietnam as it had during the Second World War. Between the end of the war and 1998, more than a hundred thousand Vietnamese civilians, an estimated forty per cent of them children, had been killed or injured by unexploded ordnance. For more than two decades after the war, the U.S. refused to pay for damage done by bombs or by Agent Orange, though in 1996 the government began to provide modest funding for mine clearance. From 2001 to 2011, the Vietnam Veterans Memorial Fund also helped finance the mine-clearance program. “A lot of veterans felt we should assume some responsibility,” Searcy said. The program helped educate Vietnamese, especially farmers and children, about the dangers posed by the unexploded weapons, and casualties have diminished.

Searcy said that his early disillusionment with the war was validated shortly before its end. His father called to ask if they could have coffee. They hadn’t spoken since he was ordered out of the house. “He and my mother had been talking,” Searcy said. “And he told me, ‘We think you were right and we were wrong. We want you to come home.’ ” He went home almost immediately, he said, and remained close to his parents until they died. Searcy is twice divorced, and wrote, in a self-deprecating e-mail, “I have resisted the kind efforts of the Vietnamese to get me married off again.”

There was more to learn in Vietnam. By early 1969, most of the members of Charlie Company were back home in America or reassigned to other combat units. The coverup was working. By then, however, a courageous Army veteran named Ronald Ridenhour had written a detailed letter about the “dark and bloody” massacre and mailed copies of it to thirty government officials and members of Congress. Within weeks, the letter found its way to the American military headquarters in Vietnam.

On my recent visit to Hanoi, a government official asked me to pay a courtesy call at the provincial offices in the city of Quang Ngai before driving the few miles to My Lai. There I was presented with a newly published guidebook to the province, which included a detailed description of another purported American massacre during the war, in the hamlet of Truong Le, outside Quang Ngai. According to the report, an Army platoon on a search-and-destroy operation arrived at Truong Le at seven in the morning on April 18, 1969, a little more than a year after My Lai. The soldiers pulled women and children out of their houses and then torched the village. Three hours later, the report alleges, the soldiers returned to Truong Le and killed forty-one children and twenty-two women, leaving only nine survivors.

Little, it seemed, had changed in the aftermath of My Lai.

In 1998, a few weeks before the thirtieth anniversary of the My Lai massacre, a retired Pentagon official, W. Donald Stewart, gave me a copy of an unpublished report from August, 1967, showing that most American troops in South Vietnam did not understand their responsibilities under the Geneva Conventions. Stewart was then the chief of the investigations division of the Directorate of Inspection Services, at the Pentagon. His report, which involved months of travel and hundreds of interviews, was prepared at the request of Robert McNamara, who was Secretary of Defense under Presidents Kennedy and Johnson. Stewart’s report said that many of the soldiers interviewed “felt they were at liberty to substitute their own judgment for the clear provisions of the Conventions. . . . It was primarily the young and inexperienced troops who stated they would maltreat or kill prisoners, despite having just received instructions” on international law.

McNamara left the Pentagon in February, 1968, and the report was never released. Stewart later told me that he understood why the report was suppressed: “People were sending their eighteen-year-olds over there, and we didn’t want them to find out that they were cutting off ears. I came back from South Vietnam thinking that things were out of control. . . . I understood Calley—very much so.”

It turns out that Robert McNamara did, too. I knew nothing of the Stewart study while I was reporting on My Lai in late 1969, but I did learn that McNamara had been put on notice years earlier about the bloody abuses in central Vietnam. After the first of my My Lai stories was published, Jonathan Schell, a young writer for The New Yorker,who in 1968 had published a devastating account for the magazine of the incessant bombing in Quang Ngai and a nearby province, called me. (Schell died last year.) His article—which later became a book, “The Military Half”—demonstrated, in essence, that the U.S. military, convinced that the Vietcong were entrenched in central Vietnam and attracting serious support, made little distinction between combatants and noncombatants in the area that included My Lai.

Schell had returned from South Vietnam, in 1967, devastated by what he had seen. He came from an eminent New York family, and his father, a Wall Street attorney and a patron of the arts, was a neighbor, in Martha’s Vineyard, of Jerome Wiesner, the former science adviser to President John F. Kennedy. Wiesner, then the provost of the Massachusetts Institute of Technology, was also involved with McNamara in a project to build an electronic barrier that would prevent the North Vietnamese from sending matériel south along the Ho Chi Minh Trail. (The barrier was never completed.) Schell told Wiesner what he had seen in Vietnam, and Wiesner, who shared his dismay, arranged for him to talk with McNamara.

Soon afterward, Schell discussed his observations with McNamara, in Washington. Schell told me that he was uncomfortable about giving the government a report before writing his article, but he felt that it had to be done. McNamara agreed that their meeting would remain secret, and he said that he would do nothing to impede Schell’s work. He also provided Schell with an office in the Pentagon where he could dictate his notes. Two copies were made, and McNamara said that he would use his set to begin an inquiry into the abuses that Schell had described.

Schell’s story was published early the next year. He heard nothing more from McNamara, and there was no public sign of any change in policy. Then came my articles on My Lai, and Schell called McNamara, who had since left the Pentagon to become president of the World Bank. He reminded him that he had left him a detailed accounting of atrocities in the My Lai area. Now, Schell told me, he thought it was important to write about their meeting. McNamara said that they had agreed it was off the record and insisted that Schell honor the commitment. Schell asked me for advice. I wanted him to do the story, of course, but told him that if he really had made an off-the-record pact with McNamara he had no choice but to honor it.

Schell kept his word. In a memorial essay on McNamara in The Nation, in 2009, he described his visit to McNamara but did not mention their extraordinary agreement. Fifteen years after the meeting, Schell wrote, he learned from Neil Sheehan, the brilliant war reporter for the Associated Press, the Times and The New Yorker, and the author of “A Bright Shining Lie,” that McNamara had sent Schell’s notes to Ellsworth Bunker, the American Ambassador in Saigon. Apparently unknown to McNamara, the goal in Saigon was not to investigate Schell’s allegations but to discredit his reporting and do everything possible to prevent publication of the material.

A few months after my newspaper articles appeared, Harper’s published an excerpt from a book I’d been writing, to be titled “My Lai 4: A Report on the Massacre and Its Aftermath.” The excerpt provided a far more detailed account of what had happened, emphasizing how the soldiers in Lieutenant Calley’s company had become brutalized in the months leading up to the massacre. McNamara’s twenty-year-old son, Craig, who opposed the war, called me and said that he had left a copy of the magazine in his father’s sitting room. He later found it in the fireplace. After McNamara left public life, he campaigned against nuclear arms and tried to win absolution for his role in the Vietnam War. He acknowledged in a 1995 memoir, “In Retrospect: The Tragedy and Lessons of Vietnam,” that the war had been a “disaster,” but he rarely expressed regrets about the damage that was done to the Vietnamese people and to American soldiers like Paul Meadlo. “I’m very proud of my accomplishments, and I’m very sorry that in the process of accomplishing things I’ve made errors,” he told the filmmaker Errol Morris in “The Fog of War,” a documentary released in 2003.

Declassified documents from McNamara’s years in the Pentagon reveal that McNamara repeatedly expressed skepticism about the war in his private reports to President Johnson. But he never articulated any doubt or pessimism in public. Craig McNamara told me that on his deathbed his father “said he felt that God had abandoned him.” The tragedy was not only his. 

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Seymour M. Hersh wrote his first piece for The New Yorker in 1971 and has been a regular contributor to the magazine since 1993.

Inside the Koch Brothers’ Toxic Empire

Together, Charles and David Koch control one of the world’s largest fortunes, which they are using to buy up our political system. But what they don’t want you to know is how they made all that money

 

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By Tim Dickinson | September 24, 2014

The enormity of the Koch fortune is no mystery. Brothers Charles and David are each worth more than $40 billion. The electoral influence of the Koch brothers is similarly well-chronicled. The Kochs are our homegrown oligarchs; they’ve cornered the market on Republican politics and are nakedly attempting to buy Congress and the White House. Their political network helped finance the Tea Party and powers today’s GOP. Koch-affiliated organizations raised some $400 million during the 2012 election, and aim to spend another $290 million to elect Republicans in this year’s midterms. So far in this cycle, Koch-backed entities have bought 44,000 political ads to boost Republican efforts to take back the Senate.

What is less clear is where all that money comes from. Koch Industries is headquartered in a squat, smoked-glass building that rises above the prairie on the outskirts of Wichita, Kansas. The building, like the brothers’ fiercely private firm, is literally and figuratively a black box. Koch touts only one top-line financial figure: $115 billion in annual revenue, as estimated by Forbes. By that metric, it is larger than IBM, Honda or Hewlett-Packard and is America’s second-largest private company after agribusiness colossus Cargill. The company’s stock response to inquiries from reporters: “We are privately held and don’t disclose this information.”

But Koch Industries is not entirely opaque. The company’s troubled legal history – including a trail of congressional investigations, Department of Justice consent decrees, civil lawsuits and felony convictions – augmented by internal company documents, leaked State Department cables, Freedom of Information disclosures and company whistle­-blowers, combine to cast an unwelcome spotlight on the toxic empire whose profits finance the modern GOP.

Under the nearly five-decade reign of CEO Charles Koch, the company has paid out record civil and criminal environmental penalties. And in 1999, a jury handed down to Koch’s pipeline company what was then the largest wrongful-death judgment of its type in U.S. history, resulting from the explosion of a defective pipeline that incinerated a pair of Texas teenagers.

The volume of Koch Industries’ toxic output is staggering. According to the University of Massachusetts Amherst’s Political Economy Research Institute, only three companies rank among the top 30 polluters of America’s air, water and climate: ExxonMobil, American Electric Power and Koch Industries. Thanks in part to its 2005 purchase of paper-mill giant Georgia-Pacific, Koch Industries dumps more pollutants into the nation’s waterways than General Electric and International Paper combined. The company ranks 13th in the nation for toxic air pollution. Koch’s climate pollution, meanwhile, outpaces oil giants including Valero, Chevron and Shell. Across its businesses, Koch generates 24 million metric tons of greenhouse gases a year.

For Koch, this license to pollute amounts to a perverse, hidden subsidy. The cost is borne by communities in cities like Port Arthur, Texas, where a Koch-owned facility produces as much as 2 billion pounds of petrochemicals every year. In March, Koch signed a consent decree with the Department of Justice requiring it to spend more than $40 million to bring this plant into compliance with the Clean Air Act.

The toxic history of Koch Industries is not limited to physical pollution. It also extends to the company’s business practices, which have been the target of numerous federal investigations, resulting in several indictments and convictions, as well as a whole host of fines and penalties.

And in one of the great ironies of the Obama years, the president’s financial-regulatory reform seems to benefit Koch Industries. The company is expanding its high-flying trading empire precisely as Wall Street banks – facing tough new restrictions, which Koch has largely escaped – are backing away from commodities speculation.

It is often said that the Koch brothers are in the oil business. That’s true as far as it goes – but Koch Industries is not a major oil producer. Instead, the company has woven itself into every nook of the vast industrial web that transforms raw fossil fuels into usable goods. Koch-owned businesses trade, transport, refine and process fossil fuels, moving them across the world and up the value chain until they become things we forgot began with hydrocarbons: fertilizers, Lycra, the innards of our smartphones.

The company controls at least four oil refineries, six ethanol plants, a natural-gas-fired power plant and 4,000 miles of pipeline. Until recently, Koch refined roughly five percent of the oil burned in America (that percentage is down after it shuttered its 85,000-barrel-per-day refinery in North Pole, Alaska, owing, in part, to the discovery that a toxic solvent had leaked from the facility, fouling the town’s groundwater). From the fossil fuels it refines, Koch also produces billions of pounds of petrochemicals, which, in turn, become the feedstock for other Koch businesses. In a journey across Koch Industries, what enters as a barrel of West Texas Intermediate can exit as a Stainmaster carpet.

Koch’s hunger for growth is insatiable: Since 1960, the company brags, the value of Koch Industries has grown 4,200-fold, outpacing the Standard & Poor’s index by nearly 30 times. On average, Koch projects to double its revenue every six years. Koch is now a key player in the fracking boom that’s vaulting the United States past Saudi Arabia as the world’s top oil producer, even as it’s endangering America’s groundwater. In 2012, a Koch subsidiary opened a pipeline capable of carrying 250,000 barrels a day of fracked crude from South Texas to Corpus Christi, where the company owns a refinery complex, and it has announced plans to further expand its Texas pipeline operations. In a recent acquisition, Koch bought Frac-Chem, a top provider of hydraulic fracturing chemicals to drillers. Thanks to the Bush administration’s anti-regulatory­ agenda – which Koch Industries helped craft – Frac-Chem’s chemical cocktails, injected deep under the nation’s aquifers, are almost entirely exempt from the Safe Drinking Water Act.

kochb-kaufman county txA 1996 explosion of a Koch-owned pipeline in Texas killed two teens.
(Photo: National Transportation Safety Board)

Koch is also long on the richest – but also the dirtiest and most carbon-polluting – oil deposits in North America: the tar sands of Alberta. The company’s Pine Bend refinery, near St. Paul, Minnesota, processes nearly a quarter of the Canadian bitumen exported to the United States – which, in turn, has created for Koch Industries a lucrative sideline in petcoke exports. Denser, dirtier and cheaper than coal, petcoke is the dregs of tar-sands refining. U.S. coal plants are largely forbidden from burning petcoke, but it can be profitably shipped to countries with lax pollution laws like Mexico and China. One of the firm’s subsidiaries, Koch Carbon, is expanding its Chicago terminal operations to receive up to 11 million tons of petcoke for global export. In June, the EPA noted the facility had violated the Clean Air Act with petcoke particulates that endanger the health of South Side residents. “We dispute that the two elevated readings” behind the EPA notice of violation “are violations of anything,” Koch’s top lawyer, Mark Holden, told Rolling Stone, insisting that Koch Carbon is a good neighbor.

Over the past dozen years, the company has quietly acquired leases for 1.1 million acres of Alberta oil fields, an area larger than Rhode Island. By some estimates, Koch’s direct holdings nearly double ExxonMobil’s and nearly triple Shell’s. In May, Koch Oil Sands Operating LLC of Calgary, Alberta, sought permits to embark on a multi-billion­dollar tar-sands-extraction operation. This one site is projected to produce 22 million barrels a year – more than a full day’s supply of U.S. oil.

Charles Koch, the 78-year-old CEO and chairman of the board of Koch Industries, is inarguably a business savant. He presents himself as a man of moral clarity and high integrity. “The role of business is to produce products and services in a way that makes people’s lives better,” he said recently. “It cannot do so if it is injuring people and harming the environment in the process.”

The Koch family’s lucrative blend of pollution, speculation, law-bending and self-righteousness stretches back to the early 20th century, when Charles’ father first entered the oil business. Fred C. Koch was born in 1900 in Quanah, Texas – a sunbaked patch of prairie across the Red River from Oklahoma. Fred was the second son of Hotze “Harry” Koch, a Dutch immigrant who – as recalled in Koch literature – ran “a modest newspaper business” amid the dusty poverty of Quanah. In the family legend, Fred Koch emerged from the nothing of the Texas range to found an empire. But like many stories the company likes to tell about itself, this piece of Koch­lore takes liberties with the truth. Fred was not a simple country boy, and his father was not just a small-town publisher. Harry Koch was also a local railroad baron who used his newspaper to promote the Quanah, Acme & Pacific railways. A director and founding shareholder of the company, Harry sought to build a rail line across Texas to El Paso. He hoped to turn Quanah into “the most important railroad center in northwest Texas and a metropolitan city of first rank.” He may not have fulfilled those ambitions, but Harry did build up what one friend called “a handsome pile of dinero.”

Harry was not just the financial springboard for the Koch dynasty, he was also its wellspring of far-right politics. Harry editorialized against fiat money, demanded hangings for “habitual criminals” and blasted Social Security as inviting sloth. At the depths of the Depression, he demanded that elected officials in Washington should stop trying to fix the economy: “Business,” he wrote, “has always found a way to overcome various recessions.”

In the company’s telling, young Fred was an innovator whose inventions helped revolutionize the oil industry. But there is much more to this story. In its early days, refining oil was a dirty and wasteful practice. But around 1920, Universal Oil Products introduced a clean and hugely profitable way to “crack” heavy crude, breaking it down under heat and heavy pressure to boost gasoline yields. In 1925, Fred, who earned a degree in chemical engineering from MIT, partnered with a former Universal engineer named Lewis Winkler and designed a near carbon copy of the Universal cracking apparatus – making only tiny, unpatentable tweaks. Relying on family connections, Fred soon landed his first client – an Oklahoma refinery owned by his maternal uncle L.B. Simmons. In a flash, Winkler-Koch Engineering Co. had contracts to install its knockoff cracking equipment all over the heartland, undercutting Universal by charging a one-time fee rather than ongoing royalties.

It was a boom business. That is, until Universal sued in 1929, accusing Winkler­Koch of stealing its intellectual property. With his domestic business tied up in court, Fred started looking for partners abroad and was soon doing business in the Soviet Union, where leader Joseph Stalin had just launched his first Five Year Plan. Stalin sought to fund his country’s industrialization by selling oil into the lucrative European export market. But the Soviet Union’s reserves were notoriously hard to refine. The USSR needed cracking technology, and the Oil Directorate of the Supreme Council of the National Economy took a shining to Winkler-Koch – primarily because Koch’s oil-industry competitors were reluctant to do business with totalitarian Communists.

Between 1929 and 1931, Winkler-Koch built 15 cracking units for the Soviets. Although Stalin’s evil was no secret, it wasn’t until Fred visited the Soviet Union, that these dealings seemed to affect his conscience. “I went to the USSR in 1930 and found it a land of hunger, misery and terror,” he would later write. Even so, he agreed to give the Soviets the engineering know-how they would need to keep building more.

Back home, Fred was busy building a life of baronial splendor. He met his wife, Mary, the Wellesley-educated daughter of a Kansas City surgeon, on a polo field and soon bought 160 acres across from the Wichita Country Club, where they built a Tudor­style mansion. As chronicled in Sons of Wichita, Daniel Schulman’s investigation of the Koch dynasty, the compound was quickly bursting with princes: Frederick arrived in 1933, followed by Charles in 1935 and twins David and Bill in 1940. Fred Koch lorded over his domain. “My mother was afraid of my father,” said Bill, as were the four boys, especially first-born Frederick, an artistic kid with a talent for the theater. “Father wanted to make all his boys into men, and Freddie couldn’t relate to that regime,” Charles recalled. Frederick got shipped East to boarding school and was all but disappeared from Wichita.

With Frederick gone, Charles forged a deep alliance with David, the more athletic and assertive of the young twins. “I was closer with David because he was better at everything,” Charles has said.

Fred Koch’s legal battle with Universal would drag on for nearly a quarter-century. In 1934, a lower court ruled that Winkler-Koch had infringed on Universal’s technology. But that judgment would be vacated, after it came out in 1943 that Universal had bought off one of the judges­ handling the appeal. A year later, the Supreme Court decided that Fred’s cracker, by virtue of small technical differences, did not violate the Universal patent. Fred countersued on antitrust grounds, arguing that Universal had wielded patents anti-competitively. He’d win a $1.5 million settlement in 1952.

Around that time, Fred had built a domestic oil empire under a new company eventually called Rock Island Oil & Refining, transporting crude from wellheads to refineries by truck or by pipe. In those later years, Fred also became a major benefactor and board member of the John Birch Society, the rabidly anti-communist organization founded in 1958 by candy magnate and virulent racist Robert Welch. Bircher publications warned that the Red endgame was the creation of the “Negro Soviet­ Republic” in the Deep South. In his own writing, Fred described integration as a Red plot to “enslave both the white and black man.”

Like his father, Charles Koch attended MIT. After he graduated in 1959 with two master’s degrees in engineering, his father issued an ultimatum: Come back to Wichita or I’ll sell the business. “Papa laid it on the line,” recalled David. So Charles returned home, immersing himself in his father’s world – not simply joining the John Birch Society, but also opening a Bircher bookstore. The Birchers had high hopes for young Charles. As Koch family friend Robert Love wrote in a letter to Welch: “Charles Koch can, if he desires, finance a large operation, however, he must continually be brought along.”

But Charles was already falling under the sway of a charismatic radio personality named Robert LeFevre, founder of the Freedom School, a whites-only­ libertarian boot camp in the foothills above Colorado Springs, Colorado. LeFevre preached a form of anarchic capitalism in which the individual should be freed from almost all government power. Charles soon had to make a choice. While the Birchers supported the Vietnam War, his new guru was a pacifist who equated militarism with out-of-control state power. LeFevre’s stark influence on Koch’s thinking is crystallized in a manifesto Charles wrote for the Libertarian Review in the 1970s, recently unearthed by Schulman, titled “The Business Community: Resisting Regulation.” Charles lays out principles that gird today’s Tea Party movement. Referring to regulation as “totalitarian,” the 41-year-old Charles claimed business leaders had been “hoodwinked” by the notion that regulation is “in the public interest.” He advocated the “barest possible obedience” to regulation and implored, “Do not cooperate voluntarily, instead, resist whenever and to whatever extent you legally can in the name of justice.”

After his father died in 1967, Charles, now in command of the family business, renamed it Koch Industries. It had grown into one of the 10 largest privately owned firms in the country, buying and selling some 80 million barrels of oil a year and operating 3,000 miles of pipeline. A black-diamond skier and white-water kayaker, Charles ran the business with an adrenaline junkie’s aggressiveness. The company would build pipelines to promising oil fields without a contract from the producers and park tanker trucks beside wildcatters’ wells, waiting for the first drops of crude to flow. “Our willingness to move quickly, absorb more risk,” Charles would write, “enabled us to become the leading crude-oil­gathering company.”

Charles also reconnected with one of his father’s earliest insights: There’s big money in dirty oil. In the late 1950s, Fred Koch had bought a minority stake in a Minnesota refinery that processed heavy Canadian crude. “We could run the lousiest crude in the world,” said his business partner J. Howard Marshall II – the future Mr. Anna Nicole Smith. Sensing an opportunity for huge profits, Charles struck a deal to convert Marshall’s ownership stake in the refinery into stock in Koch Industries. Suddenly the majority owner, the company soon bought the rest of the refinery outright.

Almost from the beginning, Koch Industries’ risk-taking crossed over into recklessness. The OPEC oil embargo hit the company hard. Koch had made a deal giving the company the right to buy a large share of Qatar’s export crude. At the time, Koch owned five supertankers and had chartered many others. When the embargo hit, Koch had upward of half a billion dollars in exposure to tankers and couldn’t deliver OPEC oil to the U.S. market, creating what Charles has called “large losses.” Soon, Koch Industries was caught overcharging American customers. The Ford administration in the summer of 1974 compelled Koch to pay out more than $20 million in rebates and future price reductions.

Koch Industries’ manipulations were about to get more audacious. In the late 1970s, the federal government parceled out exploration tracts, using a lottery in which anyone could score a 10-year lease at just $1 an acre – a game of chance that gave wildcat prospectors the same shot as the biggest players. Koch didn’t like these odds, so it enlisted scores of frontmen to bid on its behalf. In the event they won the lottery, they would turn over their leases to the company. In 1980, Koch Industries pleaded guilty to five felonies in federal court, including conspiracy to commit fraud.

With Republicans and Democrats united in regulating the oil business, Charles had begun throwing his wealth behind the upstart Libertarian Party, seeking to transform it into a viable third party. Over the years, he would spend millions propping up a league of affiliated think tanks and front groups – a network of Libertarians that became known as the “Kochtopus.”

Charles even convinced David to stand as the Libertarian Party’s vice-presidential candidate in 1980 – a clever maneuver that allowed David to lavish unlimited money on his own ticket. The Koch-funded 1980 platform was nakedly in the brothers’ self-interest – slashing federal regulatory agencies, offering a 50 percent tax break to top earners, ending the “cruel and unfair” estate tax and abolishing a $16 billion “windfall profits” tax on the oil industry. The words of Libertarian presidential candidate Ed Clark’s convention speech in Los Angeles ring across the decades: “We’re sick of taxes,” he declared. “We’re ready to have a very big tea party.” In a very real sense, the modern Republican Party was on the ballot that year – and it was running against Ronald Reagan.

Charles’ management style and infatuation with far-right politics were endangering his grip on the company. Bill believed his brothers’ political spending was bad for business. “Pretty soon, we would get the reputation that the company and the Kochs were crazy,” he said.

In late 1980, with Frederick’s backing, Bill launched an unsuccessful battle for control of Koch Industries, aiming to take the company public. Three years later, Charles and David bought out their brothers for $1.1 billion. But the speed with which Koch Industries paid off the buyout debt left Bill convinced, but never quite able to prove, he’d been defrauded. He would spend the next 18 years suing his brothers, calling them “the biggest crooks in the oil industry.”

Bill also shared these concerns with the federal government. Thanks in part to his efforts, in 1989 a Senate committee investigating Koch business with Native Americans would describe Koch Oil tactics as “grand larceny.” In the late 1980s, Koch was the largest purchaser of oil from American tribes. Senate investigators suspected the company was making off with more crude from tribal oil fields than it measured and paid for. They set up a sting, sending an FBI agent to coordinate stakeouts of eight remote leases. Six of them were Koch operations, and the agents reported “oil theft” at all of them.

One of Koch’s gaugers would refer to this as “volume enhancement.” But in sworn testimony before a Texas jury, Phillip Dubose, a former Koch pipeline manager, offered a more succinct definition: “stealing.” The Senate committee concluded that over the course of three years Koch “pilfered” $31 million in Native oil; in 1988, the value of that stolen oil accounted for nearly a quarter of the company’s crude-oil profits. “I don’t know how the company could have figures like that,” the FBI agent testified, “and not have top management know that theft was going on.” In his own testimony, Charles offered that taking oil readings “is a very uncertain art” and that his employees “aren’t rocket scientists.” Koch’s top lawyer would later paint the company as a victim of Senate “McCarthyism.”

By this time, the Kochs had soured on the Libertarian Party, concluding that control of a small party would never give them the muscle they sought in the nation’s capital. Now they would spend millions in efforts to influence – and ultimately take over – the GOP. The work began close to home; the Kochs had become dedicated patrons of Sen. Bob Dole of Kansas, who ran interference for Koch Industries in Washington. On the Senate floor in March 1990, Dole gloatingly cautioned against a “rush to judgment” against Koch, citing “very real concerns about some of the evidence on which the special committee was basing its findings.” A grand jury investigated the claims but disbanded in 1992, without issuing indictments.

Arizona Sen. Dennis DeConcini was “surprised and disappointed” at the decision to drop the case. “Our investigation was some of the finest work the Senate has ever done,” he said. “There was an overwhelming case against Koch.” But Koch did not avoid all punishment. Under the False Claims Act, which allows private citizens to file lawsuits on behalf of the government, Bill sued the company, accusing it of defrauding the feds of royalty income on its “volume­enhanced” purchases of Native oil. A jury concluded Koch had submitted more than 24,000 false claims, exposing Koch to some $214 million in penalties. Koch later settled, paying $25 million.

Self­interest continued to define Koch Industries’ adventures in public policy. In the early 1990s, in a high-profile initiative of the first-term Clinton White House, the administration was pushing for a levy on the heat content of fuels. Known as the BTU tax, it was the earliest attempt by the federal government to recoup damages from climate polluters. But Koch Industries could not stand losing its most valuable subsidy: the public policy that allowed it to treat the atmosphere as an open sewer. Richard Fink, head of Koch Company’s Public Sector and the longtime mastermind of the Koch brothers’ political empire, confessed to The Wichita Eagle in 1994 that Koch could not compete if it actually had to pay for the damage it did to the environment: “Our belief is that the tax, over time, may have destroyed our business.”

To fight this threat, the Kochs funded a “grassroots” uprising – one that foreshadowed the emergence, decades later, of the Tea Party. The effort was run through Citizens for a Sound Economy, to which the brothers had spent a decade giving nearly $8 million to create what David Koch called “a sales force” to communicate the brothers’ political agenda through town hall meetings and anti-tax rallies designed to look like spontaneous demonstrations. In 1994, David Koch bragged that CSE’s campaign “played a key role in defeating the administration’s plans for a huge and cumbersome BTU tax.”

Despite the company’s increasingly sophisticated political and public-relations operations, Charles’ philosophy of regulatory resistance was about to bite Koch Industries – in the form of record civil and criminal financial penalties imposed by the Environmental Protection Agency.

Koch entered the 1990s on a pipeline-buying spree. By 1994, its network measured 37,000 miles. According to sworn testimony from former Koch employees, the company operated its pipelines with almost complete disregard for maintenance. As Koch employees understood it, this was in keeping with their CEO’s trademarked business philosophy, Market­Based Management.

For Charles, MBM – first communicated to employees in 1991 – was an attempt to distill the business practices that had grown Koch into one of the largest oil businesses in the world. To incentivize workers, Koch gives employees bonuses that correlate to the value they create for the company. “Salary is viewed only as an advance on compensation for value,” Koch wrote, “and compensation has an unlimited upside.”

To prevent the stagnation that can often bog down big enterprises, Koch was also determined to incentivize risk-taking. Under MBM, Koch Industries books opportunity costs – “profits foregone from a missed opportunity” – as though they were actual losses on the balance sheet. Koch employees who play it safe, in other words, can’t strike it rich.

On paper, MBM sounds innovative and exciting. But in Koch’s hyperaggressive corporate culture, it contributed to a series of environmental disasters. Applying MBM to pipeline maintenance, Koch employees calculated that the opportunity cost of shutting down equipment to ensure its safety was greater than the profit potential of pushing aging pipe to its limits.

The fact that preventive pipeline maintenance is required by law didn’t always seem to register. Dubose, a 26-year Koch veteran who oversaw pipeline areas in Louisiana, would testify about the company’s lax attitude toward maintenance. “It was a question of money. It would take away from our profit margin.” The testimony of another pipeline manager would echo that of Dubose: “Basically, the philosophy was ‘If it ain’t broke, don’t work on it.'”

When small spills occurred, Dubose testified, the company would cover them up. He recalled incidents in which the company would use the churn of a tugboat’s engine to break up waterborne spills and “just kind of wash that thing on down, down the river.” On land, Dubose said, “They might pump it [the leaked oil] off into a drum, then take a shovel and just turn the earth over.” When larger spills were reported to authorities, the volume of the discharges was habitually low-balled, according to Dubose.

Managers pressured employees to falsify pipeline-maintenance records filed with federal authorities; in a sworn affidavit, pipeline worker Bobby Conner recalled arguments with his manager over Conner’s refusal to file false reports: “He would always respond with anger,” Conner said, “and tell me that I did not know how to be a Koch employee.” Conner was fired and later settled a wrongful-termination suit with Koch Gateway Pipeline. Dubose testified that Charles was not in the dark about the company’s operations. “He was in complete control,” Dubose said. “He was the one that was line-driving this Market-Based Management at meetings.”

Before the worst spill from this time, Koch employees had raised concerns about the integrity of a 1940s-era pipeline in South Texas. But the company not only kept the line in service, it increased the pressure to move more volume. When a valve snapped shut in 1994, the brittle pipeline exploded. More than 90,000 gallons of crude spewed into Gum Hollow Creek, fouling surrounding marshlands and both Nueces and Corpus Christi bays with a 12-mile oil slick.

By 1995, the EPA had seen enough. It sued Koch for gross violations of the Clean Water Act. From 1988 through 1996, the company’s pipelines spilled 11.6 million gallons of crude and petroleum products. Internal Koch records showed that its pipelines were in such poor condition that it would require $98 million in repairs to bring them up to industry standard.

Ultimately, state and federal agencies forced Koch to pay a $30 million civil penalty – then the largest in the history of U.S. environmental law – for 312 spills across six states. Carol Browner, the former EPA administrator, said of Koch, “They simply did not believe the law applied to them.” This was not just partisan rancor. Texas Attorney General John Cornyn, the future Republican senator, had joined the EPA in bringing suit against Koch. “This settlement and penalty warn polluters that they cannot treat oil spills simply as the cost of doing business,” Cornyn said. (The Kochs seem to have no hard feelings toward their one-time tormentor; a lobbyist for Koch was the number-two bundler for Cornyn’s primary campaign this year.)

Koch wasn’t just cutting corners on its pipelines. It was also violating federal environmental law in other corners of the empire. Through much of the 1990s at its Pine Bend refinery in Minnesota, Koch spilled up to 600,000 gallons of jet fuel into wetlands near the Mississippi River. Indeed, the company was treating the Mississippi as a sewer, illegally dumping ammonia-laced wastewater into the river – even increasing its discharges on weekends when it knew it wasn’t being monitored. Koch Petroleum Group eventually pleaded guilty to “negligent discharge of a harmful quantity of oil” and “negligent violation of the Clean Water Act,” was ordered to pay a $6 million fine and $2 million in remediation costs, and received three years’ probation. This facility had already been declared a Superfund site in 1984.

In 2000, Koch was hit with a 97-count indictment over claims it violated the Clean Air Act by venting massive quantities of benzene at a refinery in Corpus Christi – and then attempted to cover it up. According to the indictment, Koch filed documents with Texas regulators indicating releases of just 0.61 metric tons of benzene for 1995 – one-tenth of what was allowed under the law. But the government alleged that Koch had been informed its true emissions that year measured 91 metric tons, or 15 times the legal limit.

By the time the case came to trial, however, George W. Bush was in office and the indictment had been significantly pared down – Koch faced charges on only seven counts. The Justice Department settled in what many perceived to be a sweetheart deal, and Koch pleaded guilty to a single felony count for covering up the fact that it had disconnected a key pollution-control device and did not measure the resulting benzene emissions – receiving five years’ probation. Despite skirting stiffer criminal prosecution, Koch was handed $20 million in fines and reparations – another historic judgment.

On the day before Danielle Smalley was to leave for college, she and her friend Jason Stone were hanging out in her family’s mobile home. Seventeen years old, with long chestnut hair, Danielle began to feel nauseated. “Dad,” she said, “we smell gas.” It was 3:45 in the afternoon on August 24th, 1996, near Lively, Texas, some 50 miles southeast of Dallas. The Smalleys were too poor to own a telephone. So the teens jumped into her dad’s 1964 Chevy pickup to alert the authorities. As they drove away, the truck stalled where the driveway crossed a dry creek bed. Danielle cranked the ignition, and a fireball engulfed the truck. “You see two children burned to death in front of you – you never forget that,” Danielle’s father, Danny, would later tell reporters.

Unknown to the Smalleys, a decrepit Koch pipeline carrying liquid butane – literally, lighter fluid – ran through their subdivision. It had ruptured, filling the creek bed with vapor, and the spark from the pickup’s ignition had set off a bomb. Federal investigators documented both “severe corrosion” and “mechanical damage” in the pipeline. A National Transportation Safety Board report would cite the “failure of Koch Pipeline Company LP to adequately protect its pipeline from corrosion.”

Installed in the early Eighties, the pipeline had been out of commission for three years. When Koch decided to start it up again in 1995, a water-pressure test had blown the pipe open. An inspection of just a few dozen miles of pipe near the Smal­ley home found 538 corrosion defects. The industry’s term of art for a pipeline in this condition is Swiss cheese, according to the testimony of an expert witness – “essentially the pipeline is gone.”

Koch repaired only 80 of the defects – enough to allow the pipeline to withstand another pressure check – and began running explosive fluid down the line at high pressure in January 1996. A month later, employees discovered that a key anti­corrosion system had malfunctioned, but it was never fixed. Charles Koch had made it clear to managers that they were expected to slash costs and boost profits. In a sternly worded memo that April, Charles had ordered his top managers to cut expenditures by 10 percent “through the elimination of waste (I’m sure there is much more waste than that)” in order to increase pre-tax earnings by $550 million a year.

The Smalley trial underscored something Bill Koch had said about the way his brothers ran the company: “Koch Industries has a philosophy that profits are above everything else.” A former Koch manager, Kenoth Whitstine, testified to incidents in which Koch Industries placed profits over public safety. As one supervisor had told him, regulatory fines “usually didn’t amount to much” and, besides, the company had “a stable full of lawyers in Wichita that handled those situations.” When Whitstine told another manager he was concerned that unsafe pipelines could cause a deadly accident, this manager said that it was more profitable for the company to risk litigation than to repair faulty equipment. The company could “pay off a lawsuit from an incident and still be money ahead,” he said, describing the principles of MBM to a T.

At trial, Danny Smalley asked for a judgment large enough to make the billionaires feel pain: “Let Koch take their child out there and put their children on the pipeline, open it up and let one of them die,” he told the jury. “And then tell me what that’s worth.” The jury was emphatic, awarding Smalley $296 million – then the largest wrongful-death judgment in American legal history. He later settled with Koch for an undisclosed sum and now runs a pipeline-safety foundation in his daughter’s name. He declined to comment for this story. “It upsets him too much,” says an associate.

The official Koch line is that scandals that caused the company millions in fines, judgments and penalties prompted a change in Charles’ attitude of regulatory resistance. In his 2007 book, The Science of Success, he begrudgingly acknowledges his company’s recklessness. “While business was becoming increasingly regulated,” he reflects, “we kept thinking and acting as if we lived in a pure market economy. The reality was far different.”

Charles has since committed Koch Industries to obeying federal regulations. “Even when faced with laws we think are counterproductive,” he writes, “we must first comply.” Underscoring just how out of bounds Koch had ventured in its corporate culture, Charles admits that “it required a monumental undertaking to integrate compliance into every aspect of the company.” In 2000, Koch Petroleum Group entered into an agreement with the EPA and the Justice Department to spend $80 million at three refineries to bring them into compliance with the Clean Air Act. After hitting Koch with a $4.5 million penalty, the EPA granted the company a “clean slate” for certain past violations.

Then George W. Bush entered the White House in 2001, his campaign fattened with Koch money. Charles Koch may decry cronyism as “nothing more than welfare for the rich and powerful,” but he put his company to work, hand in glove, with the Bush White House. Correspondence, contacts and visits among Koch Industries representatives and the Bush White House generated nearly 20,000 pages of records, according to a Rolling Stone FOIA request of the George W. Bush Presidential Library. In 2007, the administration installed a fiercely anti-regulatory academic, Susan Dudley, who hailed from the Koch-funded Mercatus Center at George Mason University, as its top regulatory official.

Today, Koch points to awards it has won for safety and environmental excellence. “Koch companies have a strong record of compliance,” Holden, Koch’s top lawyer, tells Rolling Stone. “In the distant past, when we failed to meet these standards, we took steps to ensure that we were building a culture of 10,000 percent compliance, with 100 percent of our employees complying 100 percent.” To reduce its liability, Koch has also unwound its pipeline business, from 37,000 miles in the late 1990s to about 4,000 miles. Of the much smaller operation, he adds, “Koch’s pipeline practice and operations today are the best in the industry.”

But even as compliance began to improve among its industrial operations, the company aggressively expanded its trading activities into the Wild West frontier of risky financial instruments. In 2000, the Commodity Futures Modernization Act had exempted many of these products from regulation, and Koch Industries was among the key players shaping that law. Koch joined up with Enron, BP, Mobil and J. Aron – a division of Goldman Sachs then run by Lloyd Blankfein – in a collaboration called the Energy Group. This corporate alliance fought to prohibit the federal government from policing oil and gas derivatives. “The importance of derivatives for the Energy Group companies . . . cannot be overestimated,” the group’s lawyer wrote to the Commodity Futures Trading Commission in 1998. “The success of this business can be completely undermined by . . . a costly regulatory regime that has no place in the energy industry.”

Koch had long specialized in “over-the-counter” or OTC trades – private, unregulated contracts not disclosed on any centralized exchange. In its own letter to the CFTC, Koch identified itself as “a major participant in the OTC derivatives market,” adding that the company not only offered “risk-management tools for its customers” but also traded “for its own account.” Making the case for what would be known as the Enron Loophole, Koch argued that any big firm’s desire to “maintain a good reputation” would prevent “widespread abuses in the OTC derivatives market,” a darkly hilarious claim, given what would become not only of Enron, but also Bear Stearns, Lehman Brothers and AIG.

The Enron Loophole became law in December 2000 – pushed along by Texas Sen. Phil Gramm, giving the Energy Group exactly what it wanted. “It completely exempted energy futures from regulation,” says Michael Greenberger, a former director of trading and markets at the CFTC. “It wasn’t a matter of regulators not enforcing manipulation or excessive speculation limits – this market wasn’t covered at all. By law.”

Before its spectacular collapse, Enron would use this loophole in 2001 to help engineer an energy crisis in California, artificially constraining the supply of natural gas and power generation, causing price spikes and rolling blackouts. This blatant and criminal market manipulation has become part of the legend of Enron. But Koch was caught up in the debacle. The CFTC would charge that a partnership between Koch and the utility Entergy had, at the height of the California crisis, reported fake natural-gas trades to reporting firms and also “knowingly reported false prices and/or volumes” on real trades.

One of 10 companies punished for such schemes, Entergy-Koch avoided prosecution by paying a $3 million fine as part of a 2004 settlement with the CFTC, in which it did not admit guilt to the commission’s charges but is barred from maintaining its innocence.

Trading, which had long been peripheral to the company’s core businesses, soon took center stage. In 2002, the company launched a subsidiary, Koch Supply & Trading. KS&T got off to a rocky start. “A series of bad trades,” writes a Koch insider, “boiled over in early 2004 when a large ‘sure bet’ crude-oil trade went south, resulting in a quick, multimillion loss.” But Koch traders quickly adjusted to the reality that energy markets were no longer ruled just by supply and demand – but by rich speculators trying to game the market. Revamping its strategy, Koch Industries soon began bragging of record profits. From 2003 to 2012, KS&T trading volumes exploded – up 450 percent. By 2009, KS&T ranked among the world’s top-five oil traders, and by 2011, the company billed itself as “one of the leading quantitative traders” – though Holden now says it’s no longer in this business.

Since Koch Industries aggressively expanded into high finance, the net worth of each brother has also exploded – from roughly $4 billion in 2002 to more than $40 billion today. In that period, the company embarked on a corporate buying spree that has taken it well beyond petroleum. In 2005, Koch purchased Georgia Pacific for $21 billion, giving the company a familiar, expansive grip on the industrial web that transforms Southern pine into consumer goods – from plywood sold at Home Depot to brand-name products like Dixie Cups and Angel Soft toilet paper. In 2013, Koch leapt into high technology with the $7 billion acquisition of Molex, a manufacturer of more than 100,000 electronics components and a top supplier to smartphone makers, including Apple.

Koch Supply & Trading makes money both from physical trades that move oil and commodities across oceans as well as in “paper” trades involving nothing more than high-stakes bets and cash. In paper trading, Koch’s products extend far beyond simple oil futures. Koch pioneered, for sale to hedge funds, “volatility swaps,” in which the actual price of crude is irrelevant and what matters is only the “magnitude of daily fluctuations in prices.” Steve Mawer, until recently the president of KS&T, described parts of his trading operation as “black-box stuff.”

Like a casino that bets at its own craps table, Koch engages in “proprietary trading” – speculating for the company’s own bottom line. “We’re like a hedge fund and a dealer at the same time,” bragged Ilia Bouchouev, head of Koch’s derivatives trading in 2004. “We can both make markets and speculate.” The company’s many tentacles in the physical oil business give Koch rich insight into market conditions and disruptions that can inform its speculative bets. When oil prices spiked to record heights in 2008, Koch was a major player in the speculative markets, according to documents leaked by Vermont Sen. Bernie Sanders, with trading volumes rivaling Wall Street giants like Citibank. Koch rode a trader-driven frenzy – detached from actual supply and demand – that drove prices above $147 a barrel in July 2008, battering a global economy about to enter a free fall.

Only Koch knows how much money Koch reaped during this price spike. But, as a proxy, consider the $20 million Koch and its subsidiaries spent lobbying Congress in 2008 – before then, its biggest annual lobbying expense had been $5 million – seeking to derail a raft of consumer-protection bills, including the Federal Price Gouging Prevention Act, the Stop Excessive Energy Speculation Act of 2008, the Prevent Unfair Manipulation of Prices Act of 2008 and the Close the Enron Loophole Act.

In comments to the Federal Trade Commission, Koch lobbyists defended the company’s right to rack up fantastic profits at the expense of American consumers. “A mere attempt to maximize profits cannot constitute market manipulation,” they wrote, adding baldly, “Excessive profits in the face of shortages are desirable.”

When the global economy crashed in 2008, so did oil prices. By December, crude was trading more than $100 lower per barrel than it had just months earlier – around $30. At the same time, oil traders anticipated that prices would eventually rebound. Futures contracts for delivery of oil in December 2009 were trading at nearly $55 per barrel. When future delivery is more valuable than present inventory, the market is said to be “in contango.” Koch exploited the contango market to the hilt. The company leased nine supertankers and filled them with cut-rate crude and parked them quietly offshore in the Gulf of Mexico, banking virtually risk-free profits by selling contracts for future delivery.

All in, Koch took about 20 million barrels of oil off the market, putting itself in a position to bet on price disruptions the company itself was creating. Thanks to these kinds of trading efforts, Koch could boast in a 2009 review that “the performance of Koch Supply & Trading actually grew stronger last year as the global economy worsened.” The cost for those risk-free profits was paid by consumers at the pump. Estimates pegged the cost of the contango trade by Koch and others at up to 40 cents a gallon.

Artificially constraining oil supplies is not the only source of dark, unregulated profit for Koch Industries. In the years after George W. Bush branded Iran a member of the “Axis of Evil,” the Koch brothers profited from trade with the state sponsor of terror and reckless would-be nuclear power. For decades, U.S. companies have been forbidden from doing business with the Ayatollahs, but Koch Industries exploited a loophole in 1996 sanctions that made it possible for foreign subsidiaries of U.S. companies to do some business in Iran.

In the ensuing years, according to Bloomberg Markets, the German and Italian arms of Koch-Glitsch, a Koch subsidiary that makes equipment for oil fields and refineries, won lucrative contracts to supply Iran’s Zagros plant, the largest methanol plant in the world. And thanks in part to Koch, methanol is now one of Iran’s leading non-oil exports. “Every single chance they had to do business with Iran, or anyone else, they did,” said Koch whistle-blower George Bentu. Having signed on to work for a company that lists “integrity” as its top value, Bentu added, “You feel totally betrayed. Everything Koch stood for was a lie.”

Koch reportedly kept trading with Tehran until 2007 – after the regime was exposed for supplying IEDs to Iraqi insurgents killing U.S. troops. According to lawyer Holden, Koch has since “decided that none of its subsidiaries would engage in trade involving Iran, even where such trade is permissible under U.S. law.”

These days, Koch’s most disquieting foreign dealings are in Canada, where the company has massive investments in dirty tar sands. The company’s 1.1 million acres of leases in northern Alberta contain reserves of economically recoverable oil numbering in the billions of barrels. With these massive leaseholdings, Koch is poised to continue profiting from Canadian crude whether or not the Keystone XL pipeline gains approval, says Andrew Leach, an energy and environmental economist at the business school of the University of Alberta.

Counterintuitively, approval of Keystone XL could actually harm one of Koch’s most profitable businesses – its Pine Bend refinery in Minnesota. Because tar-sands crude presently has no easy outlet to the global market, there’s a glut of Canadian oil in the midcontinent, and Koch’s refinery is a beneficiary of this oversupply; the resulting discount can exceed $20 a barrel compared to conventional crude. If it is ever built, the Keystone XL pipeline will provide a link to Gulf Coast refineries – and thus the global export market, which would erase much of that discount and eat into company profit margins.

Leach says Koch Industries’ tar-sands leaseholdings have them hedged against the potential approval of Keystone XL. The pipeline would increase the value of Canadian tar-sands deposits overnight. Koch could then profit handsomely by flipping its leases to more established producers. “Optimizing asset value through trading,” Koch literature says of these and other holdings, is a “key” company strategy.

The one truly bad outcome for Koch would be if Keystone XL were to be defeated, as many environmentalists believe it must be. “If the signal that sends is that no new pipelines will be built across the U.S. border for carrying oil-sands product,” Leach says, “that’s going to have an impact not just on Koch leases, but on everybody’s asset value in oil sands.” Ironically, what’s best for Koch’s tar-sands interests is what the Obama administration is currently delivering: “They’re actually ahead if Keystone XL gets delayed a while but hangs around as something that still might happen,” Leach says.

The Dodd-Frank bill was supposed to put an end to economy­endangering speculation in the $700 trillion global derivatives market. But Koch has managed to defend – and even expand – its turf, trading in largely unregulated derivatives, once dubbed “financial weapons of mass destruction” by billionaire Warren Buffett.

In theory, the Enron Loophole is no longer open – the government now has the power to police manipulation in the market for energy derivatives. But the Obama administration has not yet been able to come up with new rules that actually do so. In 2011, the CFTC mandated “position limits” on derivative trades of oil and other commodities. These would have blocked any single speculator from owning futures contracts representing more than a quarter of the physical market – reducing the danger of manipulation. As part of the International Swaps and Derivatives Association, which also reps many Wall Street giants including Goldman Sachs and JPMorgan Chase, Koch fought these new restrictions. ISDA sued to block the position limits – and won in court in September 2012. Two years later, CFTC is still spinning its wheels on a replacement. Industry traders like Koch are, Greenberger says, “essentially able to operate as though the Enron Loophole were still in effect.”

Koch is also reaping the benefits from Dodd-Frank’s impacts on Wall Street. The so-called Volcker Rule, implemented at the end of last year, bans investment banks from “proprietary trading” – investing on their own behalf in securities and derivatives. As a result, many Wall Street banks are unloading their commodities-trading units. But Volcker does not apply to nonbank traders like Koch. They’re now able to pick up clients who might previously have traded with JPMorgan. In its marketing materials for its trading operations, Koch boasts to potential clients that it can provide “physical and financial market liquidity at times when others pull back.” Koch also likely benefits from loopholes that exempt the company from posting collateral for derivatives trades and allow it to continue trading swaps without posting the transactions to a transparent electronic exchange. Though competitors like BP and Cargill have registered with the CFTC as swaps dealers – subjecting their trades to tightened regulation – Koch conspicuously has not. “Koch is compliant with all CFTC regulations, including those relating to swaps dealers,” says Holden, the Koch lawyer.

That a massive company with such a troubling record as Koch Industries remains unfettered by financial regulation should strike fear in the heart of anyone with a stake in the health of the American economy. Though Koch has cultivated a reputation as an economically conservative company, it has long flirted with danger. And that it has not suffered a catastrophic loss in the past 15 years would seem to be as much about luck as about skillful management.

The Kochs have brushed up against some of the major debacles of the crisis years. In 2007, as the economy began to teeter, Koch was gearing up to plunge into the market for credit default swaps, even creating an affiliate, Koch Financial Products, for that express purpose. KFP secured a AAA rating from Moody’s and reportedly sought to buy up toxic assets at the center of the financial crisis at up to 50-times leverage. Ultimately, Koch Industries survived the experiment without losing its shirt.

More recently, Koch was exposed to the fiasco at MF Global, the disgraced brokerage firm run by former New Jersey Gov. Jon Corzine that improperly dipped into customer accounts to finance reckless bets on European debt. Koch, one of MF Global’s top clients, reportedly told trading partners it was switching accounts about a month before the brokerage declared bankruptcy – then the eighth-largest in U.S. history. Koch says the decision to pull its funds from MF Global was made more than a year before. While MF’s small-fry clients had to pick at the carcass of Corzine’s company to recoup their assets, Koch was already swimming free and clear.

Because it’s private, no one outside of Koch Industries knows how much risk Koch is taking – or whether it could conceivably create systemic risk, a concern raised in 2013 by the head of the Futures Industry Association. But this much is for certain: Because of the loopholes in financial-regulatory reform, the next company to put the American economy at risk may not be a Wall Street bank but a trading giant like Koch. In 2012, Gary Gensler, then CFTC chair, railed against the very loopholes Koch appears to be exploiting, raising the specter of AIG. “[AIG] had this massive risk built up in its derivatives just because it called itself an insurance company rather than a bank,” Gensler said. When Congress adopted Dodd-Frank, Gensler added, it never intended to exempt financial heavy hitters just because “somebody calls themselves an insurance

In “the science of success,” Charles Koch highlights the problems created when property owners “don’t benefit from all the value they create and don’t bear the full cost from whatever value they destroy.” He is particularly concerned about the “tragedy of the commons,” in which shared resources are abused because there’s no individual accountability. “The biggest problems in society,” he writes, “have occurred in those areas thought to be best controlled in common: the atmosphere, bodies of water, air. . . .”

But in the real world, Koch Industries has used its political might to beat back the very market-based mechanisms – including a cap-and-trade market for carbon pollution – needed to create the ownership rights for pollution that Charles says would improve the functioning of capitalism.

In fact, it appears the very essence of the Koch business model is to exploit breakdowns in the free market. Koch has profited precisely by dumping billions of pounds of pollutants into our waters and skies – essentially for free. It racks up enormous profits from speculative trades lacking economic value that drive up costs for consumers and create risks for our economy.

The Koch brothers get richer as the costs of what Koch destroys are foisted on the rest of us – in the form of ill health, foul water and a climate crisis that threatens life as we know it on this planet. Now nearing 80 – owning a large chunk of the Alberta tar sands and using his billions to transform the modern Republican Party into a protection racket for Koch Industries’ profits – Charles Koch is not about to see the light. Nor does the CEO of one of America’s most toxic firms have any notion of slowing down. He has made it clear that he has no retirement plans: “I’m going to ride my bicycle till I fall off.”

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Joan of Arc

I know this now. Every man gives his life for what he believes. Every woman gives her life for what she believes. Sometimes people believe in little or nothing yet they give their lives to that little or nothing. One life is all we have and we live it as we believe in living it. And then it is gone. But to sacrifice what you are and live without belief, that's more terrible than dying.--

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Beannacht

On the day when
the weight deadens
on your shoulders
and you stumble,
may the clay dance
to balance you.

And when your eyes
freeze behind
the grey window
and the ghost of loss
gets in to you,
may a flock of colours,
indigo, red, green,
and azure blue
come to awaken in you
a meadow of delight.

When the canvas frays
in the currach of thought
and a stain of ocean
blackens beneath you,
may there come across the waters
a path of yellow moonlight
to bring you safely home.

May the nourishment of the earth be yours,
may the clarity of light be yours,
may the fluency of the ocean be yours,
may the protection of the ancestors be yours.
And so may a slow
wind work these words
of love around you,
an invisible cloak
to mind your life.

John O'Donohue, Echoes of Memory