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Some big name firms are balking at shunning Russia, despite Ukraine invasion

"A core group is brazenly digging in," says a Yale professor who has compiled a list of companies that includes Koch Industries, Subway and more.
Image: SUbway in Moscow
A Subway fast-food restaurant in Moscow.Andrey Rudakov / Bloomberg via Getty Images

While hundreds of well-known American companies like McDonald's and Coca-Cola are shutting down or suspending their operations in Russia in the wake of its invasion of Ukraine, a Kansas-based oil, gas and manufacturing giant is sitting tight for now.

Koch Industries, whose subsidiary Guardian Industries operates two glass-manufacturing plants in Russia that employ 600 people, said closing up shop now would put its workers there “at greater risk and do more harm than good.”

“The horrific and abhorrent aggression against Ukraine is an affront to humanity,” Koch Industries President Dave Robertson said in a statement, adding that the company is “complying with all applicable sanctions, laws and regulations governing our relationships and transactions within all countries where we operate.”

But Koch Industries, which has contributed millions of dollars to the Republican Party and has other operations in Moscow, is hardly the only well-known firm bucking the tide of companies exiting Russia, according to a list compiled by Jeffrey Sonnenfeld, a senior professor at the Yale University School of Management. 

As of Friday, there were 26 other companies that Sonnenfeld has categorized as “digging in” and defying international calls to get out of Russia.

“Most companies, as they are exposed in the daylight, curtail their Russian operations by withdrawing, suspending or trimming back and tossing piles of generic platitudes about the sympathy for the suffering of innocent Ukraine citizens,” Sonnenfeld told NBC News. “But a core group is brazenly digging in, burying themselves in complicity with the most bloody evil regime, as collaborators with tyranny thinking that they can tough out the criticism if they are not exposed to consumer backlash due to the industrial nature of their enterprises.”

Companies that are maintaining their operations in Russia included well-known brands like Subway, which has 446 fast-food franchise locations in the country; U.S.-based multinationals like Emerson Electric, which produces electric motors and storage systems; and the global energy company Schlumberger.

Emerson Electric halted operations in Ukraine after the Russians invaded, The St. Louis Business Journal reported. NBC has reached out to the company to learn whether it plans to shutter its Russian operation.

Also on the list was Natura and Co., the Brazilian-based company behind Avon cosmetics, The Body Shop and other beauty products, and Halliburton, the oil services colossus that once employed former Vice President Dick Cheney.

The global food giant Cargill, which had been on the list as recently as Thursday, said in a statement that the Ukrainian people are “living an unthinkable and horrible reality” and that the company, as of Friday, has been “scaling back” its business activities in Russia.

“We will continue to operate only our essential food and feed facilities in Russia,” the company said. “Food is a basic human right and should never be used as a weapon.”

Shortly after NBC News reached out for comment to Pirelli, a well-known tire manufacturer that had been on the list Thursday, the company announced it was hitting the brakes on all new investments in Russia and curtailing operations at its tire factories.

A spokesperson for Subway, in a statement, said that their “thoughts are with the people of Ukraine” but that the company has no “corporate operations in Russia.”

“We don’t directly control these independent franchisees and their restaurants, and have limited insight into their day-to-day operations,” the company said.

There was no response at first from Halliburton or Natura to requests for comment.

But late Friday, Halliburton announced it had suspended "future business in Russia," including business with "certain state-owned Russian customers."

“The war in Ukraine deeply saddens us," Halliburton chief Jeff Miller said in a statement. “Since the start of this conflict, we prioritized employee safety and compliance with all relevant sanctions.”

Few American firms have been doing business with Moscow for as long as Koch Industries — or are as politically active in the U.S.

Koch Industries gave at least $3.4 million to GOP groups and Republican candidates' campaigns in 2020, according to records compiled by Open Secrets, a nonpartisan nonprofit that follows the money in U.S. politics.

But the biggest recipient of Koch cash was Americans for Prosperity, a libertarian and conservative political advocacy group founded by Charles Koch, who runs the company, and his brother, David, who died in 2019.

Best known for fueling the tea party movement and whipping up climate change skepticism and opposition to the Affordable Care Act, Americans for Prosperity got $8 million from Koch Industries in 2020, the records show. 

President Joe Biden, a Democrat whose position on climate change is anathema to many in the conservative ecosystem and who has been criticized by some Republicans for not taking a harder line against Moscow, also appears on the Open Secrets report as one of the biggest recipients of campaign cash linked to Koch Industries, the records show.

But the $63,745 Biden got in 2020 was from employees who work for Koch Industries, not from the company itself, the records show.

Despite its capitalist credentials, Koch Industries founder Fred Koch began building his family’s fortune by helping a Communist, Josef Stalin, establish the Soviet Union’s oil refinery industry in the 1930s.

“Over time, however, Stalin brutally purged several of Koch’s Soviet colleagues,” Jane Mayer of The New Yorker wrote in an August 2010 profile of Fred Koch’s sons and their attempts to undermine then-President Barack Obama’s agenda. “Koch was deeply affected by the experience, and regretted his collaboration.”

CORRECTION (March 18, 2022, 2:16 p.m. ET): A previous version of this article misstated the company that Fred Koch founded. He started the company that became Koch Industries, not Halliburton.