Bankrolling the Koch Brothers: RBC Not So Nice

In his book Flash Boys, Michael Lewis referred to the corporate culture of Royal Bank of Canada, in contrast to that of the big Wall Street banks, as “RBC Nice.”  Today’s post is about an instance of “RBC Not So Nice.”

According to an article ( in the New York Times on November 18, the infamous Koch brothers – climate change deniers and right-wing libertarians par excellence – are on the verge of taking control of Time Inc., which publishes Time, People, and Sports Illustrated magazines. The offer is being made by Meredith Corporation, an Iowa-based magazine publisher (Family Circle, Better Homes and Gardens). Where the Koch brothers come in is that they are providing $600 million in cash to Meredith through their private equity arm, Koch Development Corporation.

Where Royal Bank of Canada comes in is that Meredith Corporation has lined up an additional $3 billion in financing from Citibank, Barclays, Credit Suisse, and RBC.

There is considerable speculation about the Koch brothers’ motives in backing the deal. The New York Times article quotes Stanley Hubbard, an owner of radio and television stations and ideological associate of the Koch brothers: “Knowing the Kochs, I think they’d have to see it as a business that could at the same time further their political interests … they probably see Time magazine as a left-wing rag. I’m sure they would like to see it be more objective [sic] and also to straighten it out to make it a profitable venture.” So there is a reasonable chance that the Koch brothers are part of this deal to buy even more political influence than they already have.

One can only speculate about how investment consortia are put together. What is interesting about this one is that it does not include some of the major US players, such as Chase, Goldman Sachs, Bank of America, and Wells Fargo. Perhaps they decided the Koch brothers are too controversial and didn’t want to be part of this deal. The four players include Citibank – Wall Street’s weak sister – and three foreign banks (Barclays, Credit Suisse, RBC). Perhaps the three foreign banks are currying favor, or at least looking for profile, with the Trump Administration.

I happen to be a shareholder in RBC. I wouldn’t want it lending to tobacco companies and I wouldn’t want it lending to right-wing climate change deniers, especially if it is to finance their acquiring a prestigious publication to advance their views. This seems to me to be an appropriate topic for shareholder pressure on RBC and a shareholder motion at its next AGM.

I hope readers of this blog who agree with me will pass it along. Sometimes shareholder and community pressure compels corporations to act ethically.


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