The Koch Brothers have been much in the news lately, at least if you follow political news. The two brothers own Koch Industries, which itself is a holding company for a lot of other companies it owns. The brothers are Charles and David Koch, but Koch Industries was actually built up by their father Fred, who long ago went to his reward.
Aside from their obscene wealth, the Koch Brothers have been known for their extremely conservative views. Moreover, they have not been afraid to put their money where their mouths are. Their money helped elect Scott Walker as Wisconsin’s governor. Together their political action committee, KochPAC, spent huge amounts of money on the 2012 elections, to little effect. As an investment, it was an unwise one, but its magnitude was stunning: over $400M. Their PACs alone spent nearly three times more in the 2012 election than the top ten labor unions combined.
Koch Industries is into lots of industries, principally industrial in nature. Their profits depend on getting natural resources cheaply to market. It’s not surprising then that Charles and David are premier anti-environmentalists, who vehemently deny that global warming is a problem and are trying to keep their industries from being impacted by pesky and costly pollution laws. Koch Carbon has created a lot of petroleum coke as a byproduct from refining oil shipped from Canadian tar sands. The product, called petcoke, has been piled up many stories high along parts of the Great Lakes. A huge noxious cloud of dust from a petcoke pile was captured on video last year. Its presence doesn’t bother the Coke Brothers, who don’t have to breathe the stuff, but it was of great concern to residents of Detroit and Windsor, Ontario, who were on the receiving end of these polluted dust clouds.
While primarily into industrial activities, Koch Industries has influence in some surprising areas. One of them is real estate. Many parts of the country are controlled by a handful of national realtor firms, and often these firms are controlled by the Koch Brothers. Ever hear of Realogy? I hadn’t. Realogy is a Koch Brothers holding company for its real estate holdings. There is a good chance you have heard some of these real estate firm names: Coldwell Banker, Century 21, Southbys, ERA and Better Homes and Gardens RE. They are all front companies for Realogy.
It’s not surprising that the Koch Brothers are into real estate. Real estate commissions are quite profitable, typically six percent of a house’s purchase price. A house selling for $250,000 actually costs $265,000, when you add in the typical real estate commissions. (It’s more than that, of course, when you add in all those other fees that come with buying a house.) Often the fee is split between two realtors: the seller’s agent and the buyer’s agent. If you consider how many houses are sold across the country annually, you can see that real estate commissions amount to a huge amount of money. Of course the individual agents keep a lot of it: it amounts to their salary. However, they also kick back a lot of it to their companies. Companies like Coldwell Banker ship their profits back to Realogy. Realogy’s profits of course go principally to Koch Industries and help fund the Koch Empire. It helps explain why the Koch Brothers PACs can find more than $400M to spend influencing elections in 2012 alone. For a company this big, $200M amounts to the change found under the family’s sofa cushions.
Curiously, most of the agents who work for these companies have no idea where these profits go. It’s likely that many of them are like me: environmentalists. They would probably be aghast to learn a substantial amount of this money is spent to help elect politicians who will be anti-environmentalist. I’m not a realtor, but I am a likely home seller and buyer in the next year or so. I would have known none of this had I not spoken to a realtor, who shall remain anonymous, with progressive leanings, who gave me the inside dope on all this.
What this means for us home sellers and purchasers is that unless we are very careful we are indirectly contributing to the destruction of our planet. If next year when I expect to put our house on the market I choose a realtor who works for a company controlled by Realogy, I could be indirectly contributing hundreds of dollars or more to PACs controlled by the Koch brothers, which will go principally to electing people who will further harm the planet.
I am so glad to get this insider information. If you are an environmentalist and in the housing market, then you should be glad to be reading this post too. In fact, I hope you will take a moment to “like” it or hit one of the share buttons for this post, and broadcast it to your friends. Perhaps, before listing your house, you should choose a realtor firm not associated with Realogy. Among the national firms not part of Realogy are ReMax and Keller Williams. Perhaps, before hiring a buyer agent, you should do the same. That does not necessarily mean that ReMax and Keller Williams may not be channeling some of their profits into these anti-environmentalist causes. But it seems less likely that they are.
Deciding who to hire as your realtor or buyer agent of course is a complex decision. Typically you are more interested in the agent than the company they are affiliated with, and his or her track record. If you are an environmentalist, you can look for good agents that simply aren’t associated with these firms. You can also choose small, local and independent realtor firms. These firms don’t have to send their profits to a national office. They can keep the money in their community instead. And that sounds environmentally friendly.
You can bet that before I sign a contract with a realtor, I’ll be assured that my money will not indirectly support any Koch Brothers PAC, or any anti-environmental cause. I hope you will do the same.