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On Monday, Bloomberg published a much-talked-about web preview of an upcoming expose on Koch Industries Inc., a company run by brothers and conservative political figures Charles and David Koch. The article, which is set to appear in Bloomberg Markets magazine’s November issue, accuses the company of paying illegal bribes in overseas markets and skirting laws banning sales to Iran. The preview, titled “Koch Brothers Flout Law With Secret Iran Sales,” did not fail to draw the attention of officials within the sizable Koch business empire (Bloomberg calls it “one of the world’s largest privately held companies”), and by Monday afternoon Mark Holden, the general counsel of Koch Industries, posted a lengthy refutation of the article on KochFacts.com. The post opens with pointed language from Holden about his view of the Bloomberg report: “Bloomberg’s substandard reporting contains major inaccuracies. They relied heavily on unreliable sources despite our warnings and the documented evidence we gave them that these sources were misrepresenting the facts.” He goes on dispute many of the article’s assertions in a point-by-point fashion, under the banner “Here are the facts on the issues raised by Bloomberg, which we provided to them but they chose to disregard.” Perhaps the most serious accusation leveled by the Bloomberg report involves selling materials for a chemical plant in Iran. Reporters Asjylyn Loder and David Evans write: “Internal company records show that Koch Industries used its foreign subsidiary to sidestep a U.S. trade ban barring American companies from selling materials to Iran. Koch-Glitsch offices in Germany and Italy continued selling to Iran until as recently as 2007, the records show.” Holden replies to the charge by saying, “During the relevant timeframe covered in the article, U.S. law allowed foreign subsidiaries of U.S. multinational companies to engage in trade involving countries subject to U.S. trade sanctions, including Iran, under certain conditions. . . Koch-Glitsch had protocols in place that were consistent with applicable U.S. laws allowing such sales at the foreign subsidiary level.” Without mentioning a specific date of implementation, Holden adds, “Years ago, Koch adopted an approach more conservative than that required by U.S. law and decided that none of its subsidiaries would engage in trade involving Iran, even where such trade is permissible under U.S. law. That policy continues to exist today.” While the full article remains unpublished, the Bloomberg preview and Koch GC’s statement form an extended accuse-and-refute dialogue across the two web pages. The longer article will appear in Bloomberg Markets under the headline “The Secret Sins of Koch Industries.”

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