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Kelly File

A 'Kelly File' special: Charles Koch

This is a rush transcript from "The Kelly File," December 25, 2015. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST, "THE KELLY FILE":  Just about one month from now, voters in the Iowa will be the first in the nation to make their official pick for the presidential nomination in what has already been a hard-fought and controversial race for the White House.  Tonight, we get the rare chance to speak with one of the men virtually every Republican wants on his or her team, an entrepreneur.  An American pioneer.  And a man Democrats love to hate.  

Welcome to "The Kelly File," everyone.  I'm Megyn Kelly.  Charles Koch is one of the richest men in the country, indeed the world.  And his very name has almost become code for some on the Left for what they believe is wrong with big money in politics.  Yet, there is so much more to this businessman than his political donations.  Tonight, we take a look at the man behind the myth from his childhood when his dad insisted he wasn't raising some country club kid and made Charles work the family ranch and hard.  

To his reluctant decision to take over the family business, ultimately turning Koch industries to one of the most successful companies on the planet.  We will discuss his political philosophy.  That just might surprise you.  And of course the personal attacks from President Obama on down.  Even the death threats he's received from some of his detractors.  

Tonight our full interview with Charles Koch, like you've never seen him before.

(BEGIN VIDEOTAPE)

KELLY (voice-over):  Charles Koch, captain of industry, innovator, and some say GOP kingmaker, which has made him a target of the Democrats for years.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  What is un-American is when shadowy billionaires pour unlimited money into our democracy to rig the system to benefit themselves and the wealthiest one percent.

UNIDENTIFIED MALE:  They don't care what anybody says, except for themselves and the corporate masters like the Koch Brothers.  They have one master and that's the money.

UNIDENTIFIED FEMALE:  When people hear the name, Koch Brothers, it has a negative connotation.

HILLARY CLINTON, D-PRESIDENTIAL CANDIDATE:  I will stand up to all the attacks from the supper PACs and the Koch Brothers every chance I get.

KELLY:  Even President Obama has joined in.  Putting Charles and his brother David, who, together, employ nearly 60,000 Americans on a so-called enemies' list during campaign 2012.

PRES. BARACK OBAMA, D-UNITED STATES:  When you start seeing massive lobbying efforts backed by fossil fuel interests or conservative think tanks or the Koch Brothers, that's a problem.

KELLY:  The Koch Brothers seen they donate to Republicans and they support fossil fuels, among other forms of energy.  They own pipelines and lots of successful products you likely know very well.

Koch grew up in Wichita, Kansas.  The son of Fred Koch, who struck it rich in the energy business, and who, along with wife, Mary, raised four sons on the family ranch.  Charles married wife Liz four decades ago, they've raised two children and appear devoted to one another.  Charles eventually took over his father's business and grew it into the second largest private firm in America.  The company, worth $21 million in 1961, is now worth $100 billion.

Charles and David have donated hundreds of millions to help fight cancer, poverty and to encourage entrepreneurship in addition to their political donations.  So, how exactly did Charles Koch, a man demonized by the President, the former Senate Majority Leader, and the House Minority Leader, to name a few, become so feared and so successful.  For the first time, he tells us from his home in Wichita, banked up a little, thanks to foot surgery and wearing a cast decorated by his wife, ready to talk about life, politics and his new book, "Good Profit."

So, your book, "Good Profit," reads to me like a love letter to your father.  How big of an influence was he on you?

CHARLES KOCH, KOCH INDUSTRIES CO-OWNER & CEO:  Both my parents were tremendous influence for me.  And my father's influence came from -- he decided, well, probably before we were born that as he put it, I'm not going to have any kids who are country club bums.  So I bore the brunt of it for whatever reason.  And he had me working all my spare time -- virtually all of my spare time.  Because I ducked around as much as I could, starting at age six.  Started by digging up dandy lions.  You know, you don't pull out dandy lions in the roots because it will grow right back.  So, you got to dig down hundred degree heat in the summer here.  

Digging down at six-years-old.  Feeling sorry for myself.  All my friends were out playing, swimming.  I was working, it would say, why does my father hates me and their father loves them?  And then from then on, I graduated to other things.  Shoveling out stalls, digging ditches.  Digging post holes.  Whatever.  And that was the best thing.  

KELLY:  He worked you.

KOCH:  He wanted to instill the work ethic.  And, because he knew if you don't learn to work to be more productive to improve your efficiency, to cooperate with other people at an early age, you may never learn those habits.  So, you can't make a contribution, you can't be successful.  

KELLY:  Uh-hm.

KOCH:  And then as I've said, I bore the brunt of it.  And years later, when I asked my father, I said, Pop, why were you so much harder on me than my younger brothers?  He said, son, you plum wore me out.

KELLY:  So years later, despite some of the troubles you had growing up, you wound up at MIT.  And you write in the book that you never has any intention of going and working for your dad but you later found out that he had a different plan in mind for you.  

KOCH:  Yes.  Well, he was -- one of his favorite sayings was, you can tell the Dutch but you can't tell them much.  And the thought of going back and working for him, he was such a disciplinarian growing up, I had no idea I would do that.  I was working for a consulting firm in Boston and --   

KELLY:  And you had an older brother.  You assume he would take over as I guess.

KOCH:  No, I didn't.  Because he was interested in the arts, ad literature and music.  

KELLY:  So, who did you think would be the heir apparent?  Your younger twin brothers?

KOCH:  Well, I had no idea.  I mean, or whether there would be.  So -- but my father kept calling me in Boston trying to get me to come back and work for the company.  I kept turning him down.  Finally, he called me and said, son, my health is not good.  I don't have that long to live.  Either you come back to run the company or I'm going to have to sell it.  And we have a separate company called Koch engineering, which makes process equipment.  And it has sales of like $2 million and it is break even.  It's a mess.  You can come back and run it and I'll let you run it any way you want.  The only thing you need to get my permission for is to sell it.  And I said, hey, this sounds better.  

KELLY:  I'm actually going to be able to run it.  

KOCH:  I came back.  He lived longer than he thought.  He lived six years.  That was 1961 when I came back and he lived until 1967.  And he was a treat to work with.  

KELLY:  Tell us about the first piece of advice your dad gave you when you took over as CEO.  The very first thing he told you to do.  

KOCH:  Well, he said that -- his first word when I arrived is, son, I hope your first deal is a loser, otherwise, you'll think you're a lot smarter than you are.  But he had tremendous values, tremendous integrity, humility, work ethic and terrific thirst for knowledge.  And he always told me, he said, son, learn everything you can, you'll never know when it's useful, when it will really help you.  

(END VIDEOTAPE)

KELLY:  To build his $100 billion empire, Charles Koch made hiring decisions based on a person's values.  Over talent.  Up next, he explains why integrity and the ability to admit mistakes are crucial.            

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

KELLY:  Koch Industries, now you took it from a business that was earning $21 million a year to $100 billion business.  How do you maintain humility?  

KOCH:  Well, it wasn't earning 20, the value was about 21 million.  And well, is being realistic.  I'm good at certain things.  I'm not good at others.  And I need a lot of help.  I didn't do it by myself.  I had tremendous help.  Tremendous people.  And so, there's no reason to think I have all the answers because I don't.  I've made more mistakes than most people.  So that keeps you humble.  

KELLY:  You wrote in the book about the trap of overconfidence in a business and a person.  

KOCH:  Oh, absolutely.  Yes.  Hubris arrogance is just one step ahead of loss of integrity.  Because if you think you're better than other people, you know more than you're going to think, as many leaders have, that the rules don't apply to them.  So, they lose their integrity.  Once you lose your humility, you tend to lose your integrity.  

KELLY:  And the book is called "Good Profit."  You talk in the book a lot about, how of course you want make money.  Not just your company but American companies should want to make money but it is equally important how you make it and with whom.  

KOCH:  Well, the starting point in my philosophy, the starting point, you know, for long-term success is not thinking how I do maximize my profit.  It's how do I create the most profit, the most value for others, for my customers and in society.  And, and then as you're able to do that, then you can worry about I want to be compensated for all the value I'm creating for others.  And that needs to be every -- if a business person wants to be successful over time, that needs to be the attitude.  And the attitude through the entire organization.  

KELLY:  You say that you have always prized values over talent in your hiring decisions.  Really?

KOCH:  Absolutely.  I've had the philosophy that John Adams expressed in the kind of system they were trying to create in this country, that this is a system for moral people.  It will work for no other.

KELLY:  You're telling me some hot shot salesman from New York who come down here, top of his game, and, you know, I'm sure, he may bend the rules here or there, but he's a producer.  You won't hire that guy?

KOCH: No, absolutely not. This is going to bend the rules, we won't have it. And in our interview process, that's what we look for.

KELLY:  How?  How do you figure out somebody's values, their integrity, in a job interview?

KOCH:  We put the candidate in different situations.  Like we have somebody that the candidate doesn't think important, we take him down to the cafeteria, we see how the candidate treats that person, how they treat staff at the cafeteria.  And we see how they answer questions.  We ask them, gosh, did you have any problems where you work?  Did you make any mistakes?  If they say, no, oh, no, but the company was so screwed up and they wouldn't listen to me.  We don't want that person.

KELLY: What is the inability to admit mistakes tell you about somebody?

KOCH: They don't have any humility and probably don't have any integrity because that's impossible.  If you're trying to do anything, you make mistakes.  And that's how you learn.  

KELLY:  Don't you want all the hot shot MBA's from Harvard and Wharton and elsewhere?

KOCH:  We find we do better from community colleges, from rural colleges, like after I was president of Koch Industries, our next presidents were -- well, one didn't graduate from college.  Went a couple of years to, let's see, Murray State Culture College.  Went for a couple years.  Another was from Texas A&M.  Another was University of Tulsa.  And the current president is from Emporia State.

KELLY:  Why?  How does that happen?

KOCH:  Because they have the values -- what we believe are the values required for long-term success.  We're not in it to make a quick buck.  
We're in it to maximize value over time.  

KELLY:  At Koch Industries, even you get evaluated, is that true?

KOCH:  That's true.  

KELLY:  How does that work?

KOCH:  That works great.  I learn a lot.  

KELLY:  Aren't you afraid of a bruised ego?

KOCH:  No.  Here's the thing.  And I think all of us need this attitude.  Do you want to have your feelings hurt a little bit because you've got some negative feedback?  Or do you want to continue down the disastrous track you're on and have a huge disaster.  Talk about a bruised ego.  Well, it may ruin your career.  

KELLY:  You abhor false phrase, you write about this in the book, in business and in child rearing, you say we're seeing too much of that today, explain that.  

KOCH:  Well, I apply this, my same philosophy, in all aspect of life.  And applied it in raising our children.  So the first thing to me is apparent that I thought I needed to do as a father was to give our -- is to only ask our children to do things that I would do.  To only preach values that I was willing to live by.  Because your children can spot hypocrisy a mile away.  They'll spot it after than anybody.  And then they are turned off.  They have no respect for you or what you believe.  And the second one is you don't try to get them to be like you or by some image.  You understand what they have an aptitude for and what they have a passion for.  And you encourage the full development of that.  And then you try to instill what I believe are the values required for success.  

KELLY:  You're not a big fan of the participation trophy?

KOCH:  No.  No.  No.  It needs to be earned success.  Otherwise it doesn't mean anything.  

KELLY:  Is it true that any employee at Koch can earn more than his boss?

KOCH:  Oh, absolutely.  We try to reward people according to the value they create.  Value they create in society and the value they create for the company.  

KELLY:  And that you will hire based on talent even if you don't have an open spot necessarily?

KOCH:  We're on values, yes.  If we find somebody who has a great combination of talent that we think we can use and values consistent with our principles, we want to hire them.  

KELLY:  How can you hold to a budget under those circumstances?

KOCH:  Well, we're not big on budgets.  We want to evaluate everything to according, will it create value and eliminate whatever doesn't create value.  

KELLY:  You also talk about how the willingness to fail can also improve one's personal happiness.  The willing to try to experiment and risk failure.  

KOCH:  Right.  If you never fail then you're probably not doing very much.  You're certainly not innovating.  You're not improving.  Because the only way you improve is to try new things.  

KELLY:  What if you're a big success and you don't want to risk it?

KOCH:  Well, then that's -- and that's -- that's one of my principles.  Success is one of the worst enemies of success.  That is, many times failure leads to more success than success because success tends to breed complacency and lack of humility.  

(END VIDEOTAPE)

KELLY:  Critics suggest Charles Koch opposes green energy and government subsidies because they hurt the Koch bottom-line.  Not so, says Koch.  

Up next, why he believes corporate welfare is a disaster for all of us.  And Koch opens up about President Obama's personal attacks on him.  

(BEGIN VIDEO CLIP)

KELLY:  On the comments made by President Obama, beneath the dignity of the office?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

JOEL WALDMAN, FOX NEWS CORRESPONDENT:  Live from America's News Headquarters, I'm Joel Waldman.  Folks across the Southeast spending Christmas trying to clean up after this week's severe weather.  An outbreak of storms including tornadoes killed at least 14 people.  Most of the deaths were in Mississippi and Tennessee.  Tonight, the National Weather Service confirming another tornado, this one in Birmingham, Alabama.  The reports of significant damage search and rescue efforts are under way.  

A suspicious Christmas morning fire, former President Bill Clinton's childhood home in Hope, Arkansas.  The flames were shooting eight feet into the air when firefighters arrived.  One room in the home was damaged.  Investigators suspect arson because of the smell of an accelerant at the scene.  The house was designated at a national historic site in 2011.

I'm Joel Waldman.  Now back to a "Kelly File" special.  

(BEGIN VIDEOTAPE)

KELLY:  One of your core principles seems to be government should stay out of it and you do not believe in what you call corporate welfare.  Explain that.  

KOCH:  Well, corporate welfare I think is a disaster for this, this country.  It's crippling our economy.  It is contributing to a permanent underclass and corrupting the business community.  And when I say, when I talk about corporate welfare, people think of that, well -- that's just direct cash subsidies but the whole economy now is riddled with it.  It's not only cash subsidies.  It is government to guarantees. Government loans.  Mandating they buy your product rather than somebody else's.  Getting regulations on your competitor to hamper them.  Limits on trade.  All of which makes the -- the average person worse off and makes certain privileged business people wealthy.  So the riches the haves of the expenses the have nots.  

KELLY:  Let's talk about -- let's talk about green energy because that one area in which you and your brother David have taken some criticism, the Obama administration says, we have to help these solar companies, for example.  They need a running start and they're not going to get it unless they have government subsidies.  You say absolutely not.  Your critics come back and say, well, that's because you benefit.  You're in favor of fossil fuels, not solar energy.  

KOCH:  We oppose all corporate welfare, whether we benefit or not.  And you will find that our policy positions mainly hurt our profitability rather than help it.  So, what we look at is a policy or are our actions contributing to helping people improve their lives.  Or is it hurting them?  Is it making their lives worse?  And all of this corporate welfare including this so-called green welfare is making people's lives worse.  Because it's increasing the cost of energy.  Which is mostly born by the poor.  It's making the U.S. less competitive and it's even under the EPA studies, it's doing nothing for any future climate.  

KELLY:  What about China?  We've heard one of the presidential candidates, Donald Trump talked repeatedly about how they are devaluing their currency and that the next president needs to put a stop to that by perhaps imposing a tariff on their goods.  

KOCH:  Well, I mean, tariffs are disaster.  The way -- the principal way that human beings have gotten out of extreme poverty is free trade.  And because then we can have the division of labor by comparative advantage.  That is China can concentrate on what they do best.  We concentrate on what we do best.  And we exchange.  If you ever think, well, I have to make all my clothes.  And I have to make -- produce all my food.  You would be living a starvation level and living in a cave probably.  

KELLY:  But he says, we're getting the short end of the deal.  He talks about Mexico, too.  About how U.S. manufacturers are building plants now in Mexico.  He says, you want to sell those cars in the United States, you're going to have to pay extra.  That's going to stop you from building the plant down there.  

KOCH:  OK.  That will help some manufacturers, maybe save them, who are less efficient than they are in Mexico or in China.  But it hurts everybody else.  Because now the cars or whatever they are producing are more expensive and probably not the quality because they're eliminating competition.  What we need is a system that, that increases competition and increases innovation rather than destroys them.  

KELLY:  Now, this is been an issue, your stand, for economic freedom.  Not just in your business world but in the political world.  And not long ago, President Obama himself came out and attacked you.  It's not the first time.  But he said that the Koch Brothers are trying to prevent new clean energy businesses from succeeding.  You came out and in a rare public statement said, you are flabbergasted by that accusation.  Why?

KOCH:  Because the opposite is true.  All of our policies are based on whether it will make -- enable people to improve their lives or it will make their lives worse.  And we're all for green energies.  They say, we're investing a tremendous amount to develop ways to improve energy.  And to -- and to reduce by-products.  And this -- so what he said is the opposite of the truth.  And we oppose subsidies that we get that are ingrained in the economy that help big companies like us and hurt start-ups.  So these current policies aren't exactly helping the small business.  They are destroying it.  And the median income has dropped -- over the last eight years has dropped.  It hasn't gone up.  And so the poor and the middle class are being hurt by these two-tiered system that is being created.  What I mean by two-tiered system is a system that is destroying opportunities for the disadvantaged and creating welfare for the wealthy.  

KELLY:  Well, on the comments made by President Obama, beneath the dignity of the office?

KOCH:  Well, I think it is to misrepresent what a company stands for and attacking private citizens for trying to help people improve their lives.  

KELLY:  Do you believe that the Democrats, including the President have tried to make boogie men out of you and your brother, David?

KOCH:  Oh, definitely.  That's a full-time job on their part.  I mean, and that's -- that's why I've never been that fond of politics.  And only got into it recently, kicking and screaming.  And I don't -- what I give to charities, the part that goes -- or to -- that I donate, the part that goes to politics is a very, very small piece of that.  Because I don't think politicians are going to reverse the trajectory of this country.  I think it is going to depend on the American people understanding what is fair and what makes their lives better.  And so I have been working for over 50 years on better understanding that and communicating that.  

KELLY:  Why do you think they've been so relentless in their attacks?  Harry Reid, your brother David pointed out, mentioned the Koch brothers 289 times from the Senate floor.  They have painted you as evil, they actually put you - the White House actually put you on an enemies list back in the 2012 campaign.

KOCH:  Well I mean - I mean that's very sad that that's what we're - what we've come to, because in fact what we're trying to do is the opposite.

KELLY:  Does it bother you?

KOCH:  Well I mean as Harry Truman said, if you can't stand the heat, don't go in the kitchen, and so that's mine - I would prefer everybody just think I'm wonderful, but that just isn't going to happen.  So - but the way I look.

KELLY:  But is it dangerous?  I know you've gotten death threats.

KOCH:  Yes, I get a lot of death threats, but the way I look at it is I feel I have a moral obligation to do the best I can to make the country better for everybody, and that threatens certain people, because they're going to have much less power.  I want the power to go back to people making decisions over their own lives rather than some experts making it.

And so I look at it, I'd rather die for something, then live for nothing.  And I - the analogy I like to use is that I feel probably the way Martin Luther said when he was on trial.  He said here I stand, I can do no other.  So I - if I weren't doing the best I could to improve things, I'd be so frustrated I couldn't live with myself.

KELLY:  Many Americans believe the Koch brothers are conservative to the core, but Charles Koch actually describes himself as a classical liberal.  But is he a man ready to declare his support for any particular presidential candidate?  We'll ask him next.

(COMMERCIAL BREAK)

KELLY:  Some say they believe our best days are behind us in America.  Do you believe that?

KOCH:  Well as I said, I believe with the technology out there, if we will change the regulatory regime, the tax regime, to be forward-looking, and get rid of these subsidies and controls and mandates, and let people be free to use this technology, we could have the - a better world, a better society than anyone ever dreamed of.

KELLY:  Are you a libertarian?

KOCH:  No, I'm a - I have been a libertarian in my past, but now I consider myself a classical liberal.

KELLY:  Classical liberal, what does that mean?

KOCH:  Classical liberal is someone who wants a society that maximizes peace, civility, tolerance, and well-being for everyone, one that opens opportunities for everyone to advance themselves, that opens it to innovation that improves people's lives, and a society in which people succeed by helping others improve their lives.  And that's what I'm working for.

KELLY:  So the L-word will have people asking is he going to vote for Hillary Clinton?

KOCH:  Well, you could ask that.

KELLY:  What's the answer?

KOCH:  Well, I mean putting aside all the things that are said about Hillary today, my main difference with her is on the vision of what kind of society will make people's lives better.  And I go back to a quote attributed to her when she was promoting Hillarycare in 1993.

And that is that if people are left to their own devices in selecting their own healthcare, they won't spend enough on it for themselves and their family, therefore the government needs to take over healthcare because the government will do it better.

So this is a vision of society in which people are too evil or stupid to run their own lives, but those in power are perfectly capable of running everybody else's lives because they're so much smarter.  It's what Hayek called the fatal conceit, or William Easterly called the tyranny of experts, because that's what it is, it's tyranny.

And all of history shows that that makes people's lives worse, better because no one has enough knowledge or is smart enough to run everybody else's lives.

KELLY:  So this discussion will now have people thinking aha, he likes Rand Paul.  He has libertarian leanings, he wants government out of our lives.  Is Rand your guy?

KOCH:  No, I don't have a guy.  I have - I have these principles, and what I'm trying to accomplish, and what we need, to me, is a candidate that will help change the trajectory of the country from all this wasteful, irresponsible spending, that's heading us for a financial cliff, not just by the Democrats, but by the Republicans.

The reason we tend to support Republicans is they're taking this toward the cliff at only 70 miles an hour, and the Democrats are taking us 100 miles an hour.  So I'm sad to say it's the lesser of evils.  But what we - what would be great to have somebody who would change this trajectory and move us away from this irresponsible spending that we can't afford, and away from this trend toward a two-tiered society.

KELLY:  You've been critical of Republicans and Democrats alike, including George W.  Bush on spending issues in particular.  You don't have a guy yet in the 2016 election.  Can you - can you say whether there is a potential person?  I mean on both sides of the aisle, do you see anyone who might potentially stand for the principles in which you believe.

KOCH:  Well, it's possible.  The problem is that the practice of any - of almost every politician, not all, only 90-some percent, there's a difference between the rhetoric and then what they practice in office, and that's the problem we had with George W.  Bush.

I mean he's a fine person and meant well, but his - the irresponsible spending, out-of-control spending, harmful regulations, getting us in counterproductive wars, so I mean that's when we really got involved in politics, we started this seminar network in 2003 under the Bush administration to oppose those policies.

KELLY:  They say you're going to spend $900 million on the presidential race this cycle.  Is that true?

KOCH:  No, not even close, and it's not we, it's this whole seminar network, and it's a projection on what donors to this network will want to give.  I - my - the portion of what I give that goes to candidates is very small.

But - so we budgeted $250 million, but not all the presidential, that would go to all the races, whether that's senatorial, gubernatorial, state races, and so on.  And just a portion of that $250 million would go to the presidential, and that's strictly going to be determined by what the donors to this network want to support.

KELLY:  You know that the response by some has been they're shadowy groups, that's what Harry Reid said, they don't disclose the donors to Americans for Prosperity, your PAC, and Howard Dean says .

KOCH:  No, our PAC is - our PAC is public.

KELLY:  OK, and - but they accuse you of not disclosing all the donors, and then they say - Howard Dean has said they're trying to buy the elections, they're trying to rig the election for the right.

KOCH:  Everything I give is - pretty much is public.  What I give - most of what I give is to my foundations, and what I give politically, I give to a couple of PAC's, and to some individual candidates, all that is public.

Now, not every donor wants to, or is willing to get the kind of abuse and attacks that we do, or death threats, so they're not willing to have their names out.  And I think the other side is pushing for that, because they want to intimidate people so they won't oppose.

If you look at the total effort to keep the trajectory going the way it is, with more government control over people's lives, you will find it totally overwhelms this $250 million.  So it's - but you have to count the platform people in government, what the politicians and the bureaucrats have.

KELLY:  Why do you think you and your brother have donated at least hundreds of millions, by our record over $1 billion, to charitable organizations to fight cancer, to help African Americans in urban centers, you name it, across the board.  It doesn't receive that much publicity.  Why?

KOCH:  Well, it doesn't fit their story line.  And that's one reason I don't like politics, is there's so much spin in it, and the truth gets lost, and that's not the kind of world I see, and then it, as I said, a key to a free society is free speech and tolerance, and all of this, these personal attacks just undermine that.

So what we're - what I'm personally working for is a much more tolerant society.  And this requires that the government not mandate things that a lot of people don't agree with.  As (Basteat) said, for a law to be respected, it has to be respectable.  People have to believe this law makes sense and it's going to help us improve their lives, rather than hurt it.

KELLY:  What about the urban centers?  What about people who are on food stamps, and need - they say they need the government's help.  What is your solution to helping them?

KOCH:  It's criminal justice reform, that's one thing we've been working on, and thankfully this administration and many Democrats are working with us on that.

KELLY:  Is it true you have a partnership with Van Jones?

KOCH:  Van Jones .

KELLY:  Charles Koch and Van Jones.

KOCH:  And the White House we're working with them, and we're delighted, and we're hopeful on another set of issues, that is this occupational licensing which keeps people from - who don't have anything from getting jobs, or at best, starting a small business.

And the White House now has said that they see this is - this can be harmful.  So we're hopeful as we - as we ramp up on that, to get - have - to be able to work with them, and people on both sides of the aisle, and that's what we're looking for, are issues that we can get non-partisan, or across all political parties, all political persuasions to work on, because everybody agrees this will help make our society better.

The other thing that we're working to is to help improve the educational system so every kid has some of the advantages I had to be taught at an early age the values and skills required for success.  And we need that in the educational system.  So we have programs to help do that.

KELLY:  Now I know you go out there, you and your wife Liz go out there, and you speak to a lot of these communities that need help.  And you have a message to  young kids, I know that you say that most of them think oh, the worst job is flipping burgers.  What is your advice to those people?

KOCH:  My - the studies show that one of the key requirements to getting out of poverty is to get a job, any job, and keep it.  There is no dead-end job.  If you don't get a job, you don't learn the habits and values required for success.

KELLY:  You tell them if you're going to be a burger flipper, you be the best darn burger flipper they've ever seen, and that's the route forward.

KOCH:  And what you find, the kids who go to work for these fast food restaurants, if they're disciplined and they're creating - they'll work up to assistant manager, they'll probably get a piece of the business, and their lives will transform.

KELLY:  So what drives the wildly successful businessman to continue pushing politicians and others, when he could be sitting back enjoying the fruits of his labor?  We'll discuss that, plus the moment that brought Charles Koch to tears, when our interview with Charles Koch concludes.

(COMMERCIAL BREAK)

KELLY:  What drives you today?  I mean you have - you and your brother together have $100 billion.  What drives you now?

KOCH:  Well as I say, I believe I have a moral obligation to use whatever abilities I have, to help people improve their lives.  And as I said, I'd rather die for something than live for nothing, so that gives purpose to my life.

And that's the other thing we want and we try to do with employees, to have them get the fulfillment, and the satisfaction for making a contribution, a real contribution to society, and being rewarded for it.  
So it isn't a question of sacrifice, it's a win-win philosophy, a philosophy of mutual benefit.

KELLY:  At 79 years old you still work nine hours a day, you come home and have dinner.

KOCH:  Well more than that.

KELLY:  You come home and have dinner with Liz, and then you work again after dinner.

KOCH:  Well OK, now.

KELLY:  (Inaudible)

KOCH:  Thank you so much.

KELLY:  Why?  Why do you still work so hard?

KOCH:  Because I feel a passion for what we're trying to do.  I mean - I mean why does somebody who's old as a writer keep writing?  Because that's who they are, that's their nature, and to be happy, you have to fulfill your nature.

That's what Aristotle taught so many centuries ago, that the road to happiness isn't to go drink more, or consume more.  The road to happiness is fully develop your abilities, and then apply them to do good

KELLY:  To what extent has President Obama, or the policies that he has enacted, been an inspiration to you to keep pushing on the political front and these other fronts we've discussed?

KOCH:  I'm not sure what you mean by inspiration.

KELLY:  I mean you're pushing to change the society in which we live, to hold on to certain core values.  Do you feel that we've lost those over the past seven or more years?  I mean what - trying to get at - you want to change the society in which we live.  What does the society we are in look like under this president in particular?

KOCH:  Well I don't think there's a directional difference.  I mean under past administrations, Republic and Democrat, we've been headed in this direction, it's just, as I said, a slight difference in speed, in heading for what I think is a cliff, and undermining the culture with this movement toward this two-tiered society, this corruption of corporate welfare, of welfare for the wealthy, and then creating obstacles to the disadvantaged to improve themselves.

So it's all the same, and I - as I said, I've been working on this for over 50 years, and I haven't changed my - well I've modified, tried to learn what works and what doesn't, and so I've changed in that regard, but directionally I haven't changed, I'm still working on the same things.

You could say well, you're doing a pretty lousy job, because we're (going) - but I like to think in some cases we've helped improve the situation.

KELLY:  We talked a little bit about your dad, and his influence on you.  How about your mom, mighty Mary?  What lessons did she leave you with?

KOCH:  Well I think it's a tremendous lesson, and I quote Adam Smith in the book about her which he referred to, the perfection of human nature comes from restraining the selfish and indulging the beneficial affections, from restraining our selfish and indulging our beneficial affections, and that summed up my mother.

As a matter of fact, somebody asked her for help, she would do anything, and I think her health - she overdid it though, she was so worried about helping people who needed her help, that I think it finally broke her health.

She just felt so obligated, and then felt she wasn't worthy, she couldn't help these people enough.  I mean - and everybody else thought she was wonderful, because she could do everything, she could fish, hunt, do everything better than my father, and of course he loved that, and everybody loved her because she had such a compassion for people.

So, I hope I've gotten some of that from her. I'm not nearly as good a person as she was, but I don't know many people who are.

KELLY:  And your work ethic must clearly come from your dad, because after his death, he had one final message for you, and you opened up a safe deposit box, and in it you found a letter he had written to you and your brother years earlier.

You quote the letter in your book, I have it here, it's dated January 22nd, 1936, and it begins "My dear boys."  It goes on for four paragraphs.  Would you mind reading some of this to us?

KOCH:  Sure, if I can keep from tearing up.  If you choose to let this money - and what he's referring to was an insurance policy, I think was about $100,000. If you - if you choose to let this money destroy your initiative and independence, then it will be a curse to you, and my action in giving it to you will have been a mistake.  I shall regret very much to have you miss the glorious feeling of accomplishment.  Remember that often adversity is a blessing in disguise, and is certainly the greatest character builder.  That's tough.

KELLY:  The glorious feeling of accomplishment.

KOCH:  Yes.

KELLY:  Charles Koch, thank you.

KOCH:  Well thank you, Megyn.  Appreciate it.

KELLY:  We'll be right back.

(COMMERCIAL BREAK)

KELLY:  What did you think of Charles Koch?  Was he what you expected?  (Less fury)?  Go to facebook.com/thekellyfile and follow me on Twitter @MegynKelly.  Let me know what you think.  Thanks for watching, everyone.  I'm Megyn Kelly; this is "The Kelly File."

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