Whitney Tilson worries about the Koch Brothers taking over America – via his education blog – presented without comment.
STOP THE PRESSES! Run, don’t walk, to read Jane Mayer’s Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, which I just finished reading. Mayer, a reporter for the New Yorker since 1995, exposes the secret web of ultra-wealthy individuals, families and businesses, most notably the Koch Brothers, who have pushed, with enormous success, a radical libertarian agenda, which traces back to the John Birch Society, that – surprise! – aligns perfectly with their self-interest, most notably to pay lower taxes and reduce (ideally to zero) regulation of Koch Industries, which, “researchers at the University of Massachusetts Amherst, using statistics from the Environmental Protection Agency, found was one of only three companies in America that ranked in the top thirty for air, water, and climate pollution.”
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It is truly frightening how much power the “Koch Network” has – in many ways, it’s larger and more influential than the Republican Party – and how it’s used this power. Here are excerpts from an in-depth article Meyer published in the New Yorker in January, which mirrors her book (my emphasis added):
Starting in 2010, a controversial series of rulings by the federal judiciary and the Supreme Court essentially licensed unlimited political spending by corporations, unions, and individuals. Charles and David—a seventy-five-year-old patron of the arts, who is the wealthiest resident of Manhattan—were unusually prepared to take advantage of this shift. They had set up a broad alliance of donors and advocacy organizations to support conservative candidates who share their “pro-business” opposition to regulation, entitlements, and taxes. This network has since become one of the most powerful political forces in the country: a libertarian advocacy group backed by the brothers, Americans for Prosperity, has directors in thirty-four states. According to Politico, twelve hundred people work full-time for the Koch network—more than three times the number of people who work for the Republican National Committee.
A new, data-filled study by the Harvard scholars Theda Skocpol and Alexander Hertel-Fernandez reports that the Kochs have established centralized command of a “nationally-federated, full-service, ideologically focused” machine that “operates on the scale of a national U.S. political party.” The Koch network, they conclude, acts like a “force field,” pulling Republican candidates and office-holders further to the right. Last week, the Timesreported that funds from the Koch network are fuelling both ongoing rebellions against government control of Western land and the legal challenge to labor unions that is before the Supreme Court.
Onstage in Wichita, Charles barely discussed his political spending. And he did not mention that, for the 2016 election cycle, he has organized a small circle of ultra-wealthy conservatives to spend nearly nine hundred million dollars on campaigns and advocacy—an unprecedented sum. The identities of the circle’s other members have remained secret. This private jackpot is more than twice the sum that was spent by the Republican National Committee in the 2012 Presidential-election race. Most of the leading Republican Presidential candidates have attended gatherings of the donor circle in the hope of winning its financial backing.
The Koch brothers have been widely criticized by Democrats for their systematic attempt to use money to sway elections. In 2014, Guy Cecil, then the executive director of the Democratic Senatorial Campaign Committee, declared, “The Koch brothers are spending a fraction of their personal fortune to buy a Senate that is good for them and bad for almost every other family in America.”
… Rena Steinzor, a law professor at the University of Maryland, who argued for tougher treatment of corporate crime in her 2014 book, “Why Not Jail?,” agrees with Uhlmann. “The Koch brothers are playing a long game that has as its ultimate goal reducing the federal government to a size so small it is difficult for us to comprehend,” she warns. “It would literally be confined to currency, roads, and foreign affairs. Public-health protections would be gone.”
Here are excerpts on how the Kochs are spending huge sums to improve their image:
…As the Kochs prepare to launch the most ambitious political effort of their lives, they appear to be undergoing the best image overhaul that their money can buy.
…”They are embarked on an extraordinary exercise in rebranding,” David Axelrod, the former political adviser to President Barack Obama, said of the Kochs.
… Mike Paul, the president of Reputation Doctor, a public-relations firm based in Manhattan, also views efforts such as the libre Initiative as attempts to improve the Kochs’ image. He points out that a string of huge legal judgments against Koch Industries had given the brothers a reputation as “the heads of the Toxic Empire.” In 1999, a jury ordered the company to pay nearly three hundred million dollars—then the largest wrongful-death judgment of its kind in history—after one of its butane pipelines exploded, killing two teen-agers. (The company appealed, then settled the case for an undisclosed amount.) More recently, researchers at the University of Massachusetts Amherst, using statistics from the Environmental Protection Agency, found that Koch Industries was one of only three companies in America that ranked in the top thirty for air, water, and climate pollution. Paul suggested that the Kochs, in order “to win people over,” decided that they had to “look more compassionate—and so their theme is that they care about the poor.”
…Conservatives didn’t have a policy problem, Brooks assured the audience: free-market economics still offered the best solutions for America. Republicans just needed different packaging for their message. “In other words, if you want to be seen as a moral, compassionate person, talk about fairness and helping the vulnerable,” Brooks said. “You want to win? Start fighting for people! . . . Lead with vulnerable people. Lead with fairness!” He added, “Telling stories matters. By telling stories, we can soften people.”
Not all conservatives accepted Brooks’s argument that the Republicans had simply sold their message poorly. “Maybe it’s also the content of the message,” Matthew Continetti, the editor of the Washington Free Beacon, wrote in a column. But as the Koch brothers planned their next moves they embraced Brooks’s notion that, if conservatives wanted to stop being stereotyped as representing just the one per cent, they had to be seen as champions of the other ninety-nine per cent.
The need for a new sales pitch was urgent. Around the time that Arthur Brooks was advising conservatives to appear more compassionate, the Times reported on its front page that Koch Industries had piled thirty-foot-high mounds of petroleum coke—a by-product of oil refining that is sold abroad as fuel—next to a poor, inner-city neighborhood in Detroit. Residents complained that the filthy soot was coating everything. Gary Peters, then a Democratic congressman from Detroit and now a U.S. senator, recalls, “It was getting into residents’ lungs in poor neighborhoods where people already had to put up with quite a lot.”
… As Brooks had concluded in an earlier speech on well-being, standing beside a sign reading, “h-a-p-p-i-n-e-s-s,” “The earned-success system that brings you happiness is the system of free enterprise that lifts people out of poverty.”
The term “well-being” also cropped up in an initiative launched by Americans for Prosperity’s charitable foundation. (David Koch sits on the foundation’s board.) The initiative, which was named the Bridge to Wellbeing, incorporates such charitable events as Tapas and Topics, where snacks are dispensed along with advice on “how you can advance economic freedom in your community.”
Lastly, here are excerpts on how the Kochs are cynically partnering with liberal groups to bring about criminal justice reforms:
Fink, during his speech to the donors, explained that another way to “earn the respect and good feeling” of the “middle third” was to publicize partnerships with unlikely allies. He talked up Koch Industries’ partnerships with the United Negro College Fund and the National Association of Criminal Defense Lawyers, both of which the company had financially supported, on a smaller scale, for years.
… In 2004, the company gave the National Association of Criminal Defense Lawyers money to help it start a new initiative that would focus on ways to strengthen white-collar-criminal defense. The initiative featured numerous joint projects with the conservative Heritage Foundation, which also was determined to combat “over-criminalization.” The anti-government tenor of the effort meshed perfectly with the Kochs’ outlook. As Holden puts it, “The criminal-justice system is a big-government program that has failed miserably.”
David Uhlmann, who is now a law professor at the University of Michigan, argues, “The Koch brothers are not interested in criminal-justice reform because they suddenly became interested in the number of poor and minority Americans who are in prison. By their own admission, they became interested because they were prosecuted in Corpus Christi. They and their allies want to take us back to 1970, before the regulatory state.”
Random trivia #1: The Koch brothers’ father helped create the initial family fortune by building oil refineries under Stalin and Hilter – the latter was a pet project of Hitler’s and helped fuel the Nazi war machine.
Random trivia #2: David Koch in 1980 ran for Vice-President of the United States on the Libertarian Party ticket. According to Meyer, “The platform of the Libertarian Party in 1980 called for an end to all prosecutions of tax evaders and the abolition of a number of federal agencies whose regulations Koch Industries and other businesses have chafed at, including the E.P.A., the Occupational Safety and Health Administration, and the Federal Election Commission, whose campaign-spending limits the brothers opposed.”
For further reading, here is a link to Meyer’s original piece on the Koch Brothers from August 2010, entitled Covert Operations: The billionaire brothers who are waging a war against Obama. The Kochs were so upset by the article that they hired six people plus a private investigative firm to dig up dirt to smear Meyer – fortunately with no success.
Why is America living in an age of profound economic inequality? Why, despite the desperate need to address climate change, have even modest environmental efforts been defeated again and again? Why have protections for employees been decimated? Why do hedge-fund billionaires pay a far lower tax rate than middle-class workers?
The conventional answer is that a popular uprising against “big government” led to the ascendancy of a broad-based conservative movement. But as Jane Mayer shows in this powerful, meticulously reported history, a network of exceedingly wealthy people with extreme libertarian views bankrolled a systematic, step-by-step plan to fundamentally alter the American political system.
The network has brought together some of the richest people on the planet. Their core beliefs—that taxes are a form of tyranny; that government oversight of business is an assault on freedom—are sincerely held. But these beliefs also advance their personal and corporate interests: Many of their companies have run afoul of federal pollution, worker safety, securities, and tax laws.
The chief figures in the network are Charles and David Koch, whose father made his fortune in part by building oil refineries in Stalin’s Russia and Hitler’s Germany. The patriarch later was a founding member of the John Birch Society, whose politics were so radical it believed Dwight Eisenhower was a communist. The brothers were schooled in a political philosophy that asserted the only role of government is to provide security and to enforce property rights.
When libertarian ideas proved decidedly unpopular with voters, the Koch brothers and their allies chose another path. If they pooled their vast resources, they could fund an interlocking array of organizations that could work in tandem to influence and ultimately control academic institutions, think tanks, the courts, statehouses, Congress, and, they hoped, the presidency. Richard Mellon Scaife, the mercurial heir to banking and oil fortunes, had the brilliant insight that most of their political activities could be written off as tax-deductible “philanthropy.”
These organizations were given innocuous names such as Americans for Prosperity. Funding sources were hidden whenever possible. This process reached its apotheosis with the allegedly populist Tea Party movement, abetted mightily by the Citizens United decision—a case conceived of by legal advocates funded by the network.
The political operatives the network employs are disciplined, smart, and at times ruthless. Mayer documents instances in which people affiliated with these groups hired private detectives to impugn whistle-blowers, journalists, and even government investigators. And their efforts have been remarkably successful. Libertarian views on taxes and regulation, once far outside the mainstream and still rejected by most Americans, are ascendant in the majority of state governments, the Supreme Court, and Congress. Meaningful environmental, labor, finance, and tax reforms have been stymied.
Jane Mayer spent five years conducting hundreds of interviews-including with several sources within the network-and scoured public records, private papers, and court proceedings in reporting this book. In a taut and utterly convincing narrative, she traces the byzantine trail of the billions of dollars spent by the network and provides vivid portraits of the colorful figures behind the new American oligarchy.
Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, is a book that must be read by anyone who cares about the future of American democracy.