The Ethical Implications of Koch Industries NCAA Basketball Investment


The Ethical Implications of Koch Industries NCAA Basketball Investment

With the Final Four coming up and March Madness winding down, it’s time for us to talk about the biggest political story of the tournament: Wichita State.

And no, we’re not talking about coach Greg Marshall letting Alex Lomax renege on his letter of intent we’re talking about the Koch Brothers.

If you’re a fan of Wichita State basketball, you may have noticed ads for Koch Industries up on their sidelines. For those who don’t know much about the Koch brothers, they’re the billionaire brothers that Bernie Sanders accused of trying to “hijack the American political process”. Their behavior has been well documented in the media, with opinions of their behavior split almost evenly along party lines. NPR’s Steve Inskeep summed up both sides of the argument quite well during an interview in January of 2016:
“Critics of the Koch brothers will argue that they are spending lots of money in the political process to create a political and regulatory environment that’s good for their business interests, that it’s all about making more money for them. Charles Koch, if you were to talk to him, would argue that he’s actually just arguing for his beliefs and sometimes even argues for beliefs that would be bad for his business, like saying that subsidies that is companies get are bad.”

To understand the Koch brothers agenda, one must simply look at the platform espoused by the candidates they support. As Brad Woodhouse wrote for CNN:

“[They’ve] has repeatedly championed tax breaks for big oil companies… They’ve played cheerleader for Rep. Paul Ryan’s extreme budget plans that would turn Medicare into a voucher program… They worked to end a celebrated school integration program in Wake County, North Carolina, and fought to stop a fix aimed at helping Louisiana homeowners in high-risk flood zones avoid paying more for flood insurance… Some have even called for eliminating the federal minimum wage altogether.”

They’re most notable for the amount of money their network spends on politics. In the lead up to the 2016 election, they spent approximately $20 million on lobbying. So far this cycle, Koch industries has contributed $5.6 million to political candidates in 2018, and spent $9.5 million on lobbying. Those numbers make them the 10th biggest political contributor listed on Opensecrets.org (a nonpartisan research group that tracks money in U.S. politics).

But, Koch Industries and the Koch family are very active as donors outside of politics as well, and that’s where Wichita State comes in. In 2014, Koch Industries and the Fred and Mary Koch Foundation gave $11.25 million to Wichita State. In 2017, the Charles Koch Foundation gave a $3.6 million grant to help Wichita State create the Institute for the Study of Economic Growth. They’ve also paid more than $10 million to help transform the Wichita State men’s basketball program. In fact, the team (the Shockers) have been playing in “Charles Koch Arena” since 2003.
In 2014, Wichita State basketball Coach Gregg Marshall told reporters: “I would be hard pressed to find two things that are more important to this community than Koch Industries and Shocker basketball.

Of course, it makes sense that Marshall would say that — since it was the Koch Brothers who convinced him to take the job. In 2007, Marshall pretty sure he’d be coaching at Alabama, until Charles Koch called him personally. Koch / Wichita offered to double Marshall’s previous salary, and he took the job.

Ten years later, the Koch Brothers continue to play a major role in the school’s development, and the school now plays a role in Koch Industries hiring process. For one thing, their Wichita State basketball connection features prominently in new Koch Industries new recruiting videos.
And, while Wichita State lost to Marshall in the first round of the tournament, it seems lkely that they’ll be back again next year with even more Koch advertising. So, the real question is: what does any of this mean?
A piece in The New Yorker came under fire for writing about the Koch-Wichita connection. They were accused of politicizing college athletics and trying to “ruin” March Madness. And, while I doubt they want to ruin student-athletics, the sentiment isn’t entirely without merit.

For one thing,The Charles Koch Foundation has given money to 300 different schools, and David Koch has helped to finance MIT’s basketball team. Plus, I’m sure if you looked hard enough, it wouldn’t take long to find schools who were getting their money from a Democratic equivalent (maybe a Soros or a Pritzker).

I get that a lot of people don’t like the Koch’s — but, personally, if it’s between elections and stadiums, I prefer it the Koch Brothers use their money to buy stadiums. And if the fear is that all this big money will somehow taint the NCAA, I think that ship sailed somewhere between Boston College and Bobby Knight.
However, if anything, these connections do underscore that fact that college basketball, much like political campaigning, has become far too expensive for it’s own good. The cost of doing business is now so overinflated that it requires special interest participation to function and, sadly, whenever you have this much money invested in an industry, it becomes more corruptible.
This is the result of a league that now pays coaches upwards of $3 million a season in the name of “competitive salaries’, then clutches their pearls when it’s revealed that their staff were offering financial incentives to recruit professional quality talent.
That is to say that big money investments like those made by Koch Industries, are a symptom of a larger problem. And if the systems don’t change, the cost of doing is business is only going to go up — and, at some point, someone is going to expect a return on their investment… And that’s where things get really tricky.