Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (58 page)

“What a jackass”
: Bill Wilson and Roy Wenzl, “The Kochs’ Quest to Save America,”
Wichita Eagle
, Oct. 13, 2012.

“creepy when you have to deal”
: Ed Crane, interview with author.

As Fink later described it
: A version of Richard Fink’s paper “The Structure of Social Change” appeared under the title “From Ideas to Action: The Roles of Universities, Think Tanks, and Activist Groups,”
Philanthropy
10, no. 1 (Winter 1996).

the Kochtopus
: According to David Gordon, a libertarian at the Von Mises Institute, who was involved at Cato during its early years, the name was coined by Samuel Edward Konkin III, whom he describes as an “anarcho-libertarian.”

“so brutalized by the process”
: W. John Moore, “The Wichita Pipeline,”
National Journal
, May 16, 1992.

“corporate defense”
: Parry, “Dole.”

“It was the investigation”
: Brian Doherty, interview with author.

“Establishment” politician
: David Koch’s views on Bob Dole, according to his brother Bill, as quoted in Parry, “Dole.”

Dole reportedly helped
: For more on the Kochs and Dole, see the excellent piece by Zweig and Schroeder, “Bob Dole’s Oil Patch Pals.”

Had it passed
: For more on the legislative wheeling and dealing, see Center for Public Integrity,
The Buying of the President
(Avon Books, 1996), 127–30.

Koch Industries did succeed
: Dan Morgan, “PACs Stretching Limits of Campaign Law,”
Washington Post
, Feb. 5, 1988.

“I’ve always believed”
: Charles Green, “Bob Dole Looks Back,”
AARP Bulletin
, July/Aug. 2015.

“I see the White House”
: William Rempel and Alan Miller, “Donor Contradicts White House,”
Los Angeles Times
, July 27, 1997.

The conservative Republican
: In his history of Charles Koch’s “Stealth” political operation, Coppin writes, “It was believed by members of the investigating committee that Koch Industries used economic Education Trust and Citizens for the Republic as front organizations to hide Koch’s paying for the anti-Docking ads.”

the Federal Election Commission
: Elizabeth Drew,
The Corruption of American Politics: What Went Wrong and Why
(Carol, 1999), 56.

Carolyn Malenick
: Malenick acknowledged that the scheme had pushed the envelope in new ways but insisted that Triad merely balanced the money spent legally by labor unions. The notion that labor had a spending advantage was commonplace among conservatives, although, according to Drew (Ibid.), in 1996 business outspent labor by as much as twelve times. See the FEC judgment against Malenick:
http://www.fec.gov/law/litigation/final_judgment_and_order_02CV1237.pdf
.

What made the Koch family’s
: Of course, liberals give huge quantities of money, too. Their most prominent donor during these years, the financier George Soros, runs the Open Society Foundations, which have spent as much as $100 million a year in America. Soros has also made huge private contributions to various Democratic outside groups, triggering fines for campaign-finance violations in 2004. But the causes Soros backs—such as decriminalizing marijuana and strengthening civil liberties—don’t benefit his fortune in obvious ways according to Michael Vachon, his spokesman, who argues that “none of his contributions are in the service of his own economic interests.” For more on Soros, see Mayer, “Money Man.”

“unprecedented in size”
: See Charles Lewis et al., “Koch Millions Spread Influence Through Nonprofits, Colleges,” Investigative Reporting Workshop, July 1, 2013.

“My overall concept”
: Moore, “Wichita Pipeline.”

“Who else would give”
: Teles,
Rise of the Conservative Legal Movement
, 239.

“In recent years”
: Moore, “Wichita Pipeline.”

the Kochs’ multidimensional political spending
: See Mayer, “Covert Operations.”

Only the Kochs know
: Private foundations are legally required to publicly disclose their grants, but the recipients have no obligation to disclose the identities of their donors. Thus if the recipients pass the donations to secondary groups, the money trail becomes obscured.

“a shell game”
: Koch associate, interview with author.

Rothbard called the putsch
: David Gordon, “Murray Rothbard on the Kochtopus,”
LewRockwell.com
, March 10, 2011.

“cannot tolerate dissent”
: The Rothbard memo is described in Schulman,
Sons of Wichita
, 156–57.

“staunchly anti-regulatory center”
: Al Kamen, “I Am OMB and I Write the Rules,”
Washington Post
, July 12, 2006, A13.

“a lobbying group disguised”
: Coppin, “Stealth,” pt. 2.

“Of all the teachers”
:
The Writings of F. A. Harper
(Institute for Humane Studies, 1979).

Anxious at one point
: Charles’s micromanagement at IHS and the Cato Institute is described in a richly reported article by Mullins, “Battle for the Cato Institute.”

“all human behavior”
: Robert Lekachman, “A Controversial Nobel Choice?,”
New York Times
, Oct. 26, 1986.

“libertarian mecca”
: Julian Sanchez, “FIRE vs. GMU,”
Reason.com
, Nov. 17, 2005.

Liberals, however, regarded
: According to the Mercatus Center’s Web page, it “does not receive financial support from George Mason University or any federal, state, or local government.” Yet Mercatus is headed “by a faculty director who is appointed by the provost of George Mason University.”

“almost a Marxist faith”
: Daniel Fisher, “Koch’s Laws,”
Forbes
, Feb. 26, 2007.

“In that, I echo Martin Luther”
: Charles Koch, acceptance speech for the Richard DeVos award, at the Council for National Policy in Naples, Fla., Jan. 1999. Cited in Fang,
Machine
, 120.

“He thinks he’s a genius”
: Ed Crane, interview with author, 2010. Crane’s comment on Charles Koch appeared unattributed when first published in
The New Yorker
, but when asked, Crane confirmed to David Koch that he was the source, a fact that has been widely published since.

“Richie exploited MBM”
: Cato official interview with author. Richard Fink declined to be interviewed, according to Steve Lombardo, a spokesman for Koch Industries.

“Koch has been constantly”
: Thomas McGarity, interview with author.

The EPA, she argued
: Susan Dudley, the Mercatus fellow who concocted the pro-smog argument against the Clean Air Act, became the head of the Office of Information and Regulatory Affairs in the George W. Bush administration, overseeing the development and implementation of all federal regulations.

By 2015, according to an internal list
: The colleges and universities with programs subsidized by Koch family foundations as of August 2015 appear here:
http://www.kochfamilyfoundations.org/pdfs/CKFUniversityPrograms.pdf
.

“After a whole semester”
: Heather MacDonald, “Don’t Fund College Follies,”
City Journal
(Summer 2005).

Charles Koch’s foundation gave additional
: IRS 990 forms for the Charles G. Koch Charitable Foundation; Lee Fang, “Koch Brothers Fueling Far-Right Academic Centers at Universities Across the Country,”
ThinkProgress
, May 11, 2011.

The foundation required the school
: According to the Charles Koch Foundation grant, “Prior to the extension of any offer for the Donor Supported Professorship Positions [professors hired with Koch grants], the Dean of the College of Business and Economics, in consultation with professor Russell Sobel or his successor, shall present the candidate’s credentials to CGK Foundation.” In addition, the foundation insisted on the right to withdraw funding from any professor hired by its grant who displeased it.

The Kochs’ investment
: For more on the Kochs’ coal interests, see
http://www.kochcarbon.com/Products.aspx
.

“Are workers really better off”
: Evan Osnos, “Chemical Valley,”
New Yorker
, April 7, 2014.

“We support professors”
: John Hardin, “The Campaign to Stop Fresh College Thinking,”
Wall Street Journal
, May 26, 2015.

“entire academic areas”
: John David, “WVU Sold Its Academic Independence,”
Charleston Gazette
, April 23, 2012.

“Even great ideas”
: Charles Koch’s 1999 speech at the Council on National Policy, ibid.

“What we needed was a sales force”
: Continetti, “Paranoid Style in Liberal Politics.”

In a revealing private letter
: DeMille Foundation correspondence appears in Sophia Z. Lee,
The Workplace and the Constitution: From the New Deal to the New Right
(Cambridge University Press, 2014), chap. 3. The first quotation is from Donald MacLean (DeMille Foundation) to Joseph C. Fagan (Wisconsin State Chamber of Commerce), Oct. 13, 1954. The second quotation is from MacLean to Reed Larson, Aug. 15, 1956.

Although the Kochs were the founders
: See Dan Morgan, “Think Tanks: Corporations’ Quiet Weapon; Nonprofits’ Studies, Lobbying Advance Big Business Causes,”
Washington Post
, Jan. 29, 2000.

“I can’t prove it”
: Dan Glickman, interview with author.

“Our belief is that the tax”
: “Politics That Can’t Be Pigeonholed,”
Wichita Eagle
, June 26, 1994.

CSE’s ads
: David Wessel and Jeanne Saddler, “Foes of Clinton’s Tax-Boost Proposals Mislead Public and Firms on the Small-Business Aspects,”
Wall Street Journal
, July 20, 1993, A12.

“They can fly under the radar”
: Morgan, “Think Tanks.”

“The split was about control”
: Dick Armey, interview with author.

Phillips was not charged
: Phillips’s organization, the Faith and Family Alliance, passed cash to Abramoff’s gambling clients on at least one documented occasion.

“Grover told me Ralph”
: Bruce Bartlett, interview with author.

“I’m gonna be for that guy”
: Tim Phillips, transcript of an unpublished interview with the documentary filmmaker Alex Gibney, April 19, 2012.

“I was intrigued by the idea”
: Ibid.

a former futures trader
: Rick Santelli was a vice president of Drexel Burnham Lambert.

The immediate provocation
: The Homeowner Affordability and Stability Plan was a temporary relief package for homeowners facing an $8 trillion loss in housing wealth after the market’s alarming 2008 collapse.

Ross, a personal friend
: Ross in October 2014 hosted a party to celebrate David Koch. Mara Siegler, “David Koch Celebrated by Avenue Magazine,”
New York Post
, Oct. 2, 2014.

His private equity company
: For more on Ross’s interests in home mortgages, see Carrick Mollenkamp, “Foreclosure Tsunami Hits Mortgage-Servicing Firms,”
Wall Street Journal
, Feb. 11, 2009.

Critics would later point out
: Before Obama took office, Bush’s Treasury secretary, Henry “Hank” Paulson, had already spent $125 billion on bank bailouts, and an additional $20 billion was in the pipeline.

“The Boston Tea Party”
: Michael Grunwald,
The New New Deal: The Hidden Story of Change in the Obama Era
(Simon & Schuster, 2012), 280.

“It was the guy in Chicago”
: Fink’s protestations were made to
The Wichita Eagle
as well as to the
Frum Report
’s Tim Mak. He acknowledged the Kochs had been asked to fund the Tea Party, but he said none of the activists’ proposals met their standards, which required well-defined goals and measurable timelines and benchmarks.

“I’ve never been to a tea-party event”
: Andrew Goldman, “The Billionaire’s Party,”
New York
, July 25, 2010.

“Oh,
please
”
: Elaine Lafferty, “ ‘Tea Party Billionaire’ Fires Back,”
Daily Beast
, Sept. 10, 2010.

“a new strain of populism”
: Mark Lilla, “The Tea Party Jacobins,”
New York Review of Books
, May 27, 2010.

“mass rebellion”
: Theda Skocpol and Vanessa Williamson,
The Tea Party and the Remaking of Republican Conservatism
(Oxford University Press, 2012).

“The problem with the whole libertarian movement”
: Jane Mayer, “Covert Operations,”
New Yorker
, Aug. 30, 2010.

“I think that’s actually”
: Wilson and Wenzl, “Kochs’ Quest to Save America.”

“a never-ending campaign”
: Vogel,
Big Money
, 42.

“If we had run more ads”
: See Frank Rich, “Sugar Daddies,”
New York
, April 22, 2012, on Simmons’s quotation, which was derived from an interview with
The Wall Street Journal
’s Monica Langley, “Texas Billionaire Doles Out Election’s Biggest Checks,” March 22, 2012.

“There was a growing sense”
: Daschle interview with
Frontline
, “Inside Obama’s Presidency,” Jan. 16, 2013.

“nothing more, and nothing less”
: Daniel Schulman reports, for instance, that the brothers were involved on such a detailed level in Americans for Prosperity, they employed the outside political operatives who created the group’s ads. Schulman,
Sons of Wichita
, 276.

“Bankers, brokers and businessmen”
: Charles G. Koch, “Evaluating a President,”
KochInd.com
, Oct. 1, 2010.

“prolonged and deepened”
: Charles Koch’s disparagement of the New Deal appears in Charles Koch, “Perspective,”
Discovery: The Quarterly Newsletter of the Koch Companies
, Jan. 2009, 12.

The company that syndicated
: Kenneth Vogel of
Politico
broke the story of the payments to Limbaugh, Mark Levin, and Glenn Beck. Kenneth P. Vogel and Lucy McCalmont, “Rush Limbaugh, Sean Hannity, Glenn Beck Sell Endorsements to Conservative Groups,”
Politico
, June 15, 2011.

“We’re not here to cut deals”
: Grunwald,
New New Deal
, 142.

“If the Purpose of the Majority”
: Ibid., 142–43.

“In the past, it was rare”
: Steve LaTourette (who retired at the end of the 2012 session), interview with author.

“What they said”
: Grunwald,
New New Deal
, 145.

“It was stunning”
: Ibid., 190.

“They turned on Obama so early”
: Bill Burton, interview with author.

Five years later, a survey
: Justin Wolfers, “What Debate? Economists Agree the Stimulus Lifted the Economy,”
New York Times
, July 29, 2014.

TaxDayTeaParty.com
: Fang,
Machine
, 32.

The founder of the Sam Adams Alliance
: Fang, in ibid., describes Rich as the founder of the Sam Adams Alliance. Rich declined to respond to interview requests.

Rich in particular
: See, for instance, Russ Choma, “Rich Rewards: One Man’s Shadow Money Network,”
OpenSecrets.org
, June 19, 2012.

He almost invariably declined
: Howard Rich failed to respond to several attempts I made to reach him for comment as well.

“My 32 years”
: Marc Fisher, “Wisconsin Gov. Scott Walker’s Recall: Big Money Fuels Small-Government Fight,”
Washington Post
, March 25, 2012.

But after the referendum succeeded
: Dan Morain, “Prop. 164 Cash Trail Leads to Billionaires,”
Los Angeles Times
, Oct. 30, 1992.

“the Kochian deep pockets”
: Sarah Barton, The Ear,
Rothbard-Rockwell Report
, July 1993.

“a prairie fire of populism”
: Timothy Egan, “Campaign on Term Limits Taps a Gusher of Money,”
New York Times
, Oct. 31, 1991.

“I ignited the spark”
: Ibid.

But an investigation
: Bill Hogan, “Three Big Donors Bankrolled Americans for Limited Government in 2005,” Center for Public Integrity, Dec. 21, 2006.

“We’re not going to be shut up”
: Jonathan Rauch, “A Morning at the Ministry of Speech,”
National Journal
, May 29, 1999. In the summer of 2008: Eric Odom provided his own account of these events, insisting the Tea Party was a spontaneous outpouring but ignoring the issue of who funded the Sam Adams Alliance or Rob Bluey. Odom, “The Tea Party Conspirators and the Real Story Behind the Tea Party Movement,”
Liberty News
, Aug. 30, 2011.

“a card-carrying member”
: Ben Smith and Jonathan Martin, “BlogJam: Right-Wing Bluey Blog,”
Politico
, June 18, 2007.

They sent out Twitter messages
: All summer long, as oil and gasoline prices hit highs, energy industry moguls including Larry Nichols, chairman of the giant Oklahoma oil and gas company Devon Energy, who attended the Kochs’ donor summits, had been pushing hard to expand offshore drilling. Several other Koch network members, including the Las Vegas casino owner Sheldon Adelson, Dick Farmer of Cintas, and Stan Hubbard of Hubbard Broadcasting, were also involved, funding a pro-drilling front group called American Solutions, run by Newt Gingrich.

He noted that Americans for Prosperity
: Lee Fang’s early report questioning whether the Tea Party was an “Astroturf” movement manufactured in Washington led the way in getting the press to look more closely. His first major story was “Spontaneous Uprising?,”
ThinkProgress
, April 9, 2009.

“It was very much a put-up job”
: Thomas Frank, interview with author.

“I was a member of the Tea Party”
: Peggy Venable, interview with author.

“spent hours and hours on the phone”
: Dick Armey, interview with author.

“We thought it would be a useful tool”
: Dick Armey, interview with author about Glenn Beck payments. See also Vogel and McCalmont, “Rush Limbaugh, Sean Hannity, Glenn Beck Sell Endorsements to Conservative Groups.”

Beck, whose views were shaped
: Sean Wilentz, “Confounding Fathers,”
New Yorker
, Oct. 18, 2010.

“That rant from Santelli”
: Frank Luntz, interview with author.

“In an atmosphere primed”
: John B. Judis, “The Unnecessary Fall,”
New Republic
, Aug. 12, 2010.

professed to be discomfited
: A source who spoke at length with Fink shared his thinking with the author.

“the most radical president”
: Continetti, “Paranoid Style in Liberal Politics.”

“It was hard for me to believe”
: “Obama’s Interview Aboard Air Force One,”
New York Times
, March 7, 2009.

forced to refund $32 million
: Purva Patel, “Woodforest Bank to Hand Back $32M in Overdrafts,”
Houston Chronicle
, Oct. 13, 2010.

Daschle was expected to become
: Daschle was named to serve a dual role as HHS secretary and White House health czar but was forced to withdraw due to a controversy about unpaid taxes in early February.

She and a handful of other multimillionaires
: The ballot initiative, which had been drafted by the Goldwater Institute, was narrowly defeated in November 2008.

“What organizations are doing this?”
: Eliana Johnson, “Inside the Koch-Funded Ads Giving Dems Fits,”
National Review Online
, March 31, 2014.

“I can’t tell you”
: Kim Barker and Theodoric Meyer, “The Dark Money Man,” ProPublica, Feb. 14, 2014.

Fact-checkers later revealed
: “Dying on a Wait List?,”
FactCheck.org
, Aug. 6, 2009.

“If you want an assassination”
: Peter Hart, interview with author.

“The think tanks became the creators”
: Frank Luntz, interview with author.

In playing this role
: In his book
Rich People’s Movements
, Isaac William Martin describes the historic role of “policy entrepreneurs.”

a conservative idea hatched
: For more on Republican support of the individual mandate, see Ezra Klein, “A Lot of Republicans Supported the Individual Mandate,”
Washington Post
, May 12, 2011.

“We knew we had to make”
: Johnson, “Inside the Koch-Funded Ads Giving Dems Fits.”

“create a movement”
: Amanda Fallin, Rachel Grana, and Stanton Glantz, “To Quarterback Behind the Scenes, Third-Party Efforts: The Tobacco Industry and the Tea Party,”
Tobacco Control
, Feb. 2013.

it had mocked Al Gore’s environmental jeremiad
: Antonio Regalado and Dionne Searcey, “Where Did That Video Spoofing Gore’s Film Come From?,”
Wall Street Journal
, Aug. 3, 2006.

Pretty soon
: David Kirkpatrick, “Groups Back Health Reform, but Seek Cover,”
New York Times
, Sept. 11, 2009.

“This year has been really”
: Dan Eggen, “How Interest Groups Behind Health-Care Legislation Are Financed Is Often Unclear,”
Washington Post
, Jan. 7, 2010.

“public education programs”
: Ken Vogel, “Tea Party’s Growing Money Problem,”
Politico
, Aug. 9, 2010.

“We met for 20 or 30 years”
: Bill Wilson and Roy Wenzl, “The Kochs Quest to Save America,”
Wichita Eagle
, Oct. 3, 2012.

Not only had he been invited
: Mark Holden, the general counsel to Koch Industries, described Noble as “an independent contractor” and “a consultant” to the company, in an interview with Kenneth Vogel,
Big Money
, 201.

“pack the hall”
: Lee Fang, “Right-Wing Harassment Strategy Against Dems Detailed in Memo,”
ThinkProgress
, July 31, 2009.

“We packed these town halls”
: Johnson, “Inside the Koch-Funded Ads Giving Dems Fits.”

“couldn’t have done it”
: Grover Norquist, interview with author.

“I thought on health care”
: One of the few in the media to question whether the Tea Party protests were, as he put it, “orchestrations of incivility” rather than a brand-new widespread movement was Rick Perlstein, who warned in an essay in
The Washington Post
, “Conservatives have become adept at playing the media for suckers.” He argued that “the tree of crazy,” as he called the far-right protesters, was ever present in American politics, but in the past a more robust press corps, as well as more responsible conservatives, such as William F. Buckley, had “unequivocally labeled the civic outrage represented by such discourse ‘extremist’—out of bounds.” See Rick Perlstein, “Birthers, Health Care Hecklers, and the Rise of Right-Wing Rage,”
Washington Post
, Aug. 16, 2009.

“wasn’t really tracking”
: David Axelrod, interview with author.

When fewer than sixty-five thousand
: Some dispute the crowd estimate.

Membership in the Liberty League
: See Kevin Drum, “Old Whine in New Bottles,”
Mother Jones
, Sept./Oct. 2010.

330,000 activists
: Devin Burghart, “View from the Top: Report on Six National Tea Party Organizations,” in
Steep: The Precipitous Rise of the Tea Party
, ed. Lawrence Rosenthal and Christine Trost (University of California Press, 2012).

It was hard not to notice
: Lee Fang first noted the similarity between the pageantry at the Defending the American Dream Summit and that at presidential nominating conventions. Fang,
Machine
, 121.