This year’s election season is set to be the most expensive ever, with some estimates topping $10 billion. Three groups will each spend about a billion dollars on behalf of a presidential nominee. The first two are who you’d expect: Democrats and Republicans, the country’s dominant political parties. But the third group is not a political party and does not have a single candidate running for office. Instead, it’s a network of right-wing advocacy groups backed by the billionaire energy tycoons, Charles and David Koch.
According to its own estimates, the Koch network aims to spend nearly $900 million on the 2016 presidential and congressional races, more than doubling its amount in 2012. The Kochs’ political machine now eclipses the official Republican Party in key areas, with about three-and-a-half times as many employees as the Republican National Committee. Charles and David Koch’s 2016 spending comes as part of an effort to funnel hundreds of millions of dollars to conservative candidates and causes over the last four decades. Their net worth is a combined $82 billion, placing them fifth on the Forbes 400 list of wealthiest Americans.
The Kochs’ political operations have exploded in the six years since the Supreme Court’s Citizens United decision, which removed limits on campaign spending by ruling that donor money is a form of free speech. Citizens United has allowed the Kochs and others to spend millions in dark money—political donations where the source is kept secret.
The story of the Koch brothers and an allied group of billionaire donors is told in a new book by The New Yorker magazine reporter Jane Mayer. It’s called Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Jane Mayer traces how the Kochs and other billionaires, including Mellon banking and Gulf Oil heir Richard Mellon Scaife, chemical tycoon John M. Olin, electronics magnates Harry and Lynde Bradley, have leveraged their business empires to create a political machine with unprecedented influence over politics at the national, state and local level.
Beyond elections, these billionaires have also influenced the political sphere by using their money to create right-wing think tanks, endow university positions, fund research favorable to their right-wing agenda, including climate change denial, opposing healthcare reform and thwarting government regulation. The Kochs’ political empire is so vast, it’s been dubbed “The Kochtopus,” the organizations including Americans for Prosperity, Citizens for a Sound Economy.
Mayer’s book contains a number of revelations and new details. She begins with the Kochs’ father, industrialist Fred Koch. Mayer reveals that Fred Koch helped build an oil refinery in Nazi Germany—a project approved personally by Adolf Hitler. The refinery was critical to the Nazi war effort. Its oil fueled German warplanes. Before that, Fred Koch built a refinery for Joseph Stalin’s Russia. Fred Koch went on to become an original leader of the right-wing John Birch Society. Charles Koch was a member when the group campaigned against the civil rights movement in the ’60s.
Jane Mayer also uncovers evidence confirming rumors the Koch brothers tried to blackmail their own brother, Frederick, into giving up his share of the family company by threatening to out him as gay. It also emerges that the EPA has named the Kochs’ company, Koch Industries, the single biggest U.S. producer of toxic waste. Mayer recounts her own potential brush with the Koch’s empire. After she profiled the brothers in a 2010 piece for The New Yorker, a private firm was hired to discredit her reporting. Although there’s no definite proof, Mayer says that clues leading back to the Kochs were everywhere. And she explores the Kochs’ multiyear effort to undermine President Obama, starting with a secretive meeting of right-wing donors the week of his inauguration.
Jane Mayer talking:
he built what became the third-largest refinery in Germany during the buildup to World War II. And it was a refinery that, from the start, was meant to help the military effort of the Third Reich. It was clear that Hitler was looking for ways to refine their own oil so that they could fuel the war machine that he was building up at that point. The refinery was begun, the contract was begun in ’34—that is, 1934—and was finished in 1935. And one of the things that the father Koch was especially good at—he was apparently a brilliant engineer himself—was refining oil in a really high-octane fuel that would be good for the Luftwaffe, for the warplanes. It had to be done in a special way.
there were other American companies that worked there, too. Ford, especially, has been singled out. It’s true, though, what they’re saying, if facts are facts. They’ve basically confirmed their father built the refinery, he designed the cracking unit, which is what refined the fuel, and that became a key asset for the Nazi war machine.
The book does not say that Fred Koch or the sons were Nazis. And that would be a ridiculous statement. It says, specifically, Fred Koch’s views of the Nazis are unknown, but he worked with them, he made money from them, and this chapter was kept hidden from the Koch Industries history that’s up online.
one of many secrets about the Kochs. I mean, the truth is, this book, it grew out of a 2010 story I did for The New Yorker, which turned out to be just the tip of the iceberg. There’s so much that was not known, that took—it took five years to document all of this.
the partner in this is a man named William Rhodes Davis, who was working with Fred Koch. He was a Nazi sympathizer. The U.S. considered him a Nazi agent, actually. And he was the partner in this project, and he needed an OK from Hitler. And to get it, he had to go speak with Hitler himself. Hitler greenlighted the project. It was—and then gave him an autographed copy of Mein Kampf.
Fred Koch was back and forth to Germany a lot. One of the things that—he almost went on the Hindenburg, and he was, at the last minute, detained—the dirigible that blew up in New Jersey in, you know, the pre—right before the war started. He imported, or somehow the family wound up with, a German nanny, who brought up the two oldest boys, Frederick and Charles—Charles who’s known today as one of the two Koch brothers. And the nanny herself was a Nazi sympathizer of such fervor that when Hitler invaded France in 1940, she had been with the Koch family for five years, but she said she needed to leave. She wanted to go back to be with the Führer to celebrate. It was strange. It was a strange—you know, it’s a fascinating family. It was a strange upbringing. I’m not saying that they were Nazis, but what I am saying is that this family was politically, from the start, filled with very strange influences.
the father then also worked for Stalin and built the oil refineries there in Stalin’s first five-year plan. And he comes back to the U.S., and he’s horrified by what he’s seen of Stalin, and he becomes just an absolutely—a sort of vitriolic anti-communist. And that leads to him being a founding member of the John Birch Society. And he passes those views on to his sons. And both David Koch and Charles Koch, the two that are known as the Koch brothers, were members of the John Birch Society, which was—kind of defined the anti-communist, right-wing fringe in America in the ’50s, ’60s. So…
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the book is not just about the Kochs. And the Kochs, on their own, probably would not be able to have the kind of influence they have. But what they’ve done is kind of a magic trick. They’ve attracted around them—they’ve purposefully built what they call an unprecedented network—it’s a pipeline, they talk about it, too—where they’ve gathered about 400 other extraordinarily wealthy conservatives with them to create a kind of a billionaire caucus almost. And that’s the group that met, just as Obama was being inaugurated. Soon after that, they met to figure out: How can we obstruct this? They regarded it as a catastrophe that Obama had been elected, and they wanted to see if they could stop change from taking place in the country and keep the order the way it had been for them during the Bush years, and maybe even push it further to the right.
So this is not—it’s an organization that I think people need to understand is not just about elections. They’ve been playing a long game that started 40 years ago, when Charles Koch really got involved in politics in the beginning. And they wanted to change not just who rules the country, but how the country thinks. They’re very antigovernment. They are—and they have pushed this kind of antigovernment line for 40 years through many different channels. And it’s kind of a war of ideas as much as anything else.
many operatives who have worked for the Kochs are interviewed in this book. And one of them told me, they’re not just under the radar, they are underground. And they, for many years, just were almost invisible. They used to—the Kochs, themselves, used to call Koch Industries the biggest company that you’ve never heard of. It’s the second-largest private company in America. It has $115 billion of business a year. And most people didn’t know what it was. Many Americans use their products, they don’t realize—Dixie cups, Stainmaster carpet, Lycra, Georgia-Pacific lumber, there’s Quilted Northern toilet paper. There are so many products that they’ve flooded the American market with, yet most people don’t realize that that is coming from these two brothers who own most of the company and are pouring the money into far-right-wing politics.
I interviewed hundreds of people for this. And there—I have many new documents also. I mean, one of the things that was interesting to me, I mean, I went into this kind of wondering why does the government seem so dysfunctional. As you said, why can’t something be done about global warming in Congress? All of the scientific community is going one way, Congress is going the other. American public opinion supports doing something about global warming, the Congress won’t do anything. What’s holding it up? Money, the fossil fuel interests and others. And you can see it in here.
There’s a—and it begins long ago. In about 1976, there was a plan laid by Charles Koch to build what he called a radical movement to change the way that America voted and thought. And he said we need to, quote-unquote, “destroy” the statist paradigm and start a movement. And he modeled it on the John Birch Society. He loved the secrecy of the John Birch Society. And there’s a paper that is quoted in here that he wrote in 1976 about how he was going to found a movement and launch it. So, this has been a long, long-running project. And he’s built it up. He’s an engineer. He’s extraordinarily wealthy. And he has worked with a number of very smart people to build this network that tries to sort of push, push, push the country in his direction.
the Pine Bend refinery in Minnesota. Their fortune is built on fossil fuels. I mean, they are refiners, and they have tremendous numbers of pipelines, and they own a huge amount of the tar sands that are up in Canada. And so, if America moved off fossil fuels, it would be catastrophic for their business. It’s a direct interest that they’ve got in this. And so, one of the things I do is try to follow the money in the denial of climate change, and an awful lot of it goes back to the Kochs and their circle. They have a number of other fossil fuel companies that are part of their network, their group, this group of 400 or so. The members are secret, but there’s one guest list that actually was left behind somewhere, so we’ve been able to see a little bit of who the members are—at least at one point. And it includes many well-known players and a number of fossil fuel interests.
hedge fund people. Stephen Schwarzman of Blackstone, Steve Cohen of SAC Capital. there are a number of very well-known finance figures who are extraordinarily wealthy. And one of the things that this group has worked hard to do is to keep sort of tax breaks for billionaires, really, for hedge funds. One is the carried interest loophole, it’s called, and they wanted to keep it open. There was talk in Congress that the Democrats might try to close it. And so this brought a flood of money from the finance community into this group to shut—to keep that loophole open for them. It means that hedge fund managers pay taxes at 15 percent, which is lower than almost—you know, any decently paid American pays more in taxes than many of these people.
It’s an amazing family feud that took place inside this family. There are four brothers, as you say. Two of them formed one team, two formed the other team. They were in court for 20 years against each other, fighting over who was going to get to run the company and have more access to the family fortune. And one of the brothers, who was estranged—his name is Bill Koch—commissioned a history. He hired a historian, who had actually been hired previously by Koch Industries to do its own history. So, it was a historian who worked at George Mason University, and he did a history for Bill Koch of what the other brother, Charles, was doing politically. It’s called “Stealth” because he describes a secret plan by Charles to try to manipulate American politics. It’s fascinating. It’s full of new details, including this paper that I mentioned that Charles wrote in 1976 that no one’s seen before.
the battle between the brothers, an attempt by Charles and David to blackmail their own oldest—the eldest brother, Frederick, and to out him as gay, according to the deposition. this gives you an idea of just how rough these guys play. You’ve got three brothers trying to set up the fourth, who they thought was gay. And they basically hold a kangaroo court. They invite him in under false pretexts. He walks into the room. The three of them are facing him in chairs, and he’s supposed to sit across from them. And they accuse him of being gay. They say, “We’re going to tell our father you’re gay, unless you give us your shares in the company.” The brother that was accused, his name’s Frederick. He’s the oldest. He stood up and said, “I never want to hear about this again,” and he walked out of the room. But all of this is described in a deposition that’s remained sealed during all these years. Gives you just a glimpse, I think, of maybe how ruthless these players are.
for 20 years, there was fighting between these two sets of brothers, the two against two. And in the end, Charles and David triumphed, and they run the company, own the company, for the most part. There are a few other shares that a few scattered other people have, but basically they own virtually the whole company. And the two that were left out got decent-sized inheritances and went off on their own ways.
In 2012, the EPA said that Koch Industries was the largest or the single biggest producer of toxic waste in the United States. In 2014, according to the Toxic Release Inventory, Koch Industries had consistently appeared among the top five U.S. producers of toxic waste.
there’s a University of Massachusetts in Amherst study, too, that says that they’re one of only three companies that has been among the top producers of air pollution, water pollution and climate pollution. They have a huge history of environmental violations. And they say they’ve worked hard to improve on that. And I think they probably are better than they were way back in the ’90s maybe, but at that point they had some of the largest environmental judgments against them that had ever been brought in the U.S. So they have a checkered history on this subject. And I was there in Wichita when Charles Koch gave that speech, and it certainly caught my ear when he mentioned that one of the things you need to do is have a good environmental record. I’m glad he thinks that’s important.
what you have to understand is the Kochs have built kind of an assembly line to manufacture political change. And it includes think tanks, which produce papers. It includes advocacy groups, that advocate for policies. And it includes giving money to candidates. And you put those three together, and they’ve pushed against doing anything about climate change on all those three fronts at once. So you get papers that look like they’re real scientific opinions doubting that climate change is real, you get advocacy groups saying we can’t afford to do anything about it, and you get candidates who have to sign a pledge that—their largest political group is Americans for Prosperity. They have a pledge that says that if you want to get money from this—from their donors, you have to sign a pledge saying that, if elected, you will do nothing about climate change that requires spending any money on the problem. And 156 members of Congress currently have signed that pledge. So, it sort of is a recipe for how to tie the hands of the country from doing anything on this.
they’ve created a think tank and helped fund it in almost every state. In fact, in every state, there’s at least one of these think tanks. It’s called the State Policy Network. And they’ve worked with the group ALEC, that you all probably know about, which sort of funnels corporate money into lobbying in state legislatures. there’s a reason that they won the name “The Kochtopus.” It’s kind of tentacles on many different levels out there and a lot of attention to state legislatures, where money goes a lot further.
David Koch actually ran to become vice president of the United States in 1980. And this is—one of the questions I had was—so he ran in 1980 on the Libertarian ticket, and he got something like 1 percent of the vote. which gives you an indication: They were so far right, they were running against Ronald Reagan because they thought he was too liberal. And so, at that time, you have—they really defined the furthest fringe in America, and even conservatives denounced their views. William F. Buckley called their views anarcho-totalitarianism. So, what interested me, as a question, as a reporter, was: How did this group, these two brothers and the others around them, get from the furthest fringe to the center of gravity in the Republican Party? It’s pulled their way so far during these 30 years since then.
Freedom School was in Colorado Springs, Colorado. Even before he ran as vice president on the Libertarian Party, he was, I guess, a young man in his thirties and was very attracted to this school called the Freedom School that was run by a man named [Robert] LeFevre, who had had a very odd background. He had had a lot of legal brushes. And they taught a kind of a fanatical libertarianism that was almost anarchism. The head of the school, this LeFevre, called it—himself an “autarchist,” instead of an anarchist. They wanted to shrink the government to the point where they couldn’t tax, the government couldn’t tax. They wanted to get rid of the EPA. They wanted to get rid of pretty much much of the federal government. And the historical view of this group was that the robber barons were America’s heroes and that the Gilded Age really was the golden age. And it was a completely revisionist view of America. And Charles Koch was so supportive of it, he became a trustee of the school.
The John Birch Society called President Dwight Eisenhower, a communist. they thought Dwight Eisenhower was a communist. They saw communist conspiracies behind all kinds of things. And I have to say that I’m told that Charles Koch didn’t buy all the far-fetched conspiracy theories, and he really went in a slightly different direction. He was more preoccupied with becoming a kind of a radical economic libertarian, meaning that he wanted to get the government to just let businesses do what they wanted to do and let the free market rule America. And so he’s fought to keep taxes really low, get rid of almost all regulations on business. This is really what he’s focused on, not so much on communism.
when Obama was elected, there was a dilemma within the Republican Party. It was: Do we work with him and try to get as much as we can—the sort of the old-fashioned way of politics, where you make compromises—or do we just simply go on strike and try to demonize him and obstruct everything, shut down the government? And there was a big argument, actually, that took place in front of the Koch donor group very early on. And the side that won, and won over the hearts of this donor group, was the side of Jim DeMint, who was then the senator from South Carolina, who said, “Obstruct, obstruct, obstruct.” He would later quit, right, and go to become the head of the Heritage Foundation.
But at that point, it was a choice, and this group put its money in to stop Obama any way you can. And so, part of also what I try to tell the story of here—and you have to kind of follow the money through the chapters—but is that it’s not just an election force. It’s—this club has become a force of obstruction against governing, so that when Obama proposes the healthcare plan, this group funnels money to many, many different front groups that then, unseen to the American public, pop up and oppose the healthcare plan and disrupt meetings. I don’t know if people remember those town hall meetings during, I think it was, the summer of 2010, when there was just kind of pandemonium breaking out. And a lot of that were—there were actually sort of plans laid among this group to pour money in, get people all riled up and make them think that this was going to have death squads, things like that, that were—that got people very upset.
They put a lot of money into the tea party. I started writing about them in the summer of 2010. And at that point, the spokesmen for the Kochs were saying they had nothing to do with the tea party. I then went down to a weekend meeting that the biggest Koch group was holding, Americans for Prosperity, in Austin, Texas, and there they were giving seminars to tea party members on how to organize. So they really—and the people I interviewed down there evidently hadn’t gotten the sound bites, because there were saying, “Are you kidding? The tea party? We’ve been into the tea party before it was cool.”
And so, it’s—I think what’s interesting to me is that, as you’ve been saying, there have always been Democrats with a lot of money, Republicans with a lot of money. The history of the country has been, you know, of certainly big money players. What you’ve got here is almost like a third party that is the money party. It’s a conservative, outside pressure group that is acting as a force field, pulling the Republican Party, particularly, to the right.
With three-and-a-half times as many employees as the Republican National Committee. And a larger budget by two times the budget that the Republican National Committee had in the 2012 presidential campaign. So you’re talking about really a pretty professionally organized operation. There’s a new paper that I thought was really interesting by Theda Skocpol, who’s a professor at Harvard. It came out just last week. It’s called “The Koch Effect.” And it describes what’s been built by them and their allied donors as akin to a national party.
Mark Holden is a very eloquent advocate for criminal justice reform. And the Kochs have long cared about criminal justice reform. But what people may not realize is that they’ve pushed a different kind of reform than most liberals have. What they would like to do is get rid of many crimes that have to do with pollution, that have to do with corporate crimes, tax crimes. They want to weaken prosecution of companies like their own.
Now, there is a tiny overlap. If you did a Venn diagram of where the far right and everybody else overlaps, they would like to see sentencing reform for drug offenders at this point, which—nonviolent drug offenders, which you’ve—you know, it’s an important issue. It’s good they’re talking about it. It’s not something they’ve cared about until 2014. And I have a new piece out in The New Yorker which notes that in 2014 they launched a huge public relations campaign to change their image. They’re involved in what David Axelrod described as one of the biggest rebranding efforts anybody’s ever launched. And I see this as certainly part of it.
And the reason I do is—you’ll see, if you read this book—there are tapes. There are tapes that were leaked out from one of their meetings, where they describe how they need to change their image. After they did not win the presidency in 2012, despite the money they put behind Mitt Romney, they went back to the drawing board, and they tried to figure out what they were doing wrong. And they did a huge number of polls. And they came to the conclusion that the public thought they were greedy and didn’t trust them. And so, they speak in this tape about how we need to prove that we have good intent and we care about other people. And at that point, they launched a number of programs that have to do with doing good works for the poor. So, I see this as quite related to that.
As I said earlier, what I wrote about before was the tip of the iceberg. But this is a really—it’s a comprehensive political machine manufacturing political change in the country. And it operates on many, many levels, with tons of money. And I think, you know, you—it’s hard to describe it, unless you read the story, but it filters through so many different levels, that it’s fascinating. And I think it’s—you know, in some ways, it’s a testimony to Charles Koch. He is an engineer who looked at American politics and thought, “How do you manufacture change here? What widgets does it need? What do you do?” And he’s been a terrifically successful businessman, and he’s brought the country far in the direction that was considered fringe many—not that many years ago.
I think it’s interesting that these New York finance people are in it, because for the most part they don’t share this radical worldview. They just care about wealth accumulation, basically. And, you know, I mean, David Koch’s involvement himself in this—I mean, he’s the wealthiest resident of Manhattan. His name is on every cultural institution here. He travels in circles that are full of open-minded people. Yet he’s backing this machine that’s pushing the country in a direction that I think many Manhattanites might be surprised at.
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Jane Mayer
staff writer for The New Yorker and author of the new book, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. She is also author of The Dark Side: The Inside Story of How the War on Terror Turned into a War on American Ideals.
— source democracynow.org