Cap Times: Biz Beat: Wisconsin & Southern buyer calls Koch its largest customer

-By Mike Ivey

December 2, 2011- The Kansas-based new owners of Wisconsin & Southern Railroad Co. want to make one thing perfectly clear: Their purchase is a railroad deal, pure and simple.

"We're poised to help the economy of Wisconsin take off," says Ed McKechnie, spokesman for Watco Transportation Services.

Watco announced earlier this week it had acquired controlling ownership of Wisconsin & Southern (WSOR). It said the private deal — no dollar figures were released — will allow WSOR to expand throughout the Midwest, find new markets and provide cost-effective connections for Wisconsin businesses.

But given the political activity of WSOR founder Bill Gardner — who has admitted to $70,000 in illegal and excessive campaign contributions to Gov. Scott Walker and others and was sentenced to two years' probation — some wondered if there was more to the story.

"There's certainly been a lot of speculation," says Frank Huntington of the Wisconsin DOT's railroad division.

And a quick Google search reveals a link between Watco and Koch Industries, the Wichita-based natural resources conglomerate: Koch is the largest customer of Watco and the Koch brothers have been big Walker supporters.

So is there more to the story?

Absolutely not, says McKechnie, who says there is no cross-ownership or shared board members of the two Kansas-based firms. Sure, Koch is a customer but that's as far as it goes, he says.

"They have no more relationship with us than a wheat farmer in Kansas, a potato farmer in Idaho or U.S. Steel Co. in Alabama" has, says McKechnie.

The sale does not need approval of state regulators but instead falls under review of the Federal Surface Transportation Board.


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