Recently I have finished reading the book Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer. Mayer has been investigating and reporting on this topic for some time and this book is a fairly deep dive into what she has found out. It covers the period up to, but not including, the Trump campaign.
I had been generally aware of the topic of big money in politics and its effects on our democracy. But my eyes have been opened much wider after reading this, and I am more alarmed. I think the various unprecedented things Donald Trump has said and done, and the also alarming revelations about the role of Russia in the past election, have maybe obscured a bit another kind of threat to American democracy, one that has been a long time building and that also had a considerable role in past elections. And like the Russian interference, much of it is a story of covert influence, subterfuge and skirting of laws.
The principal actors here, however, are not foreign but in the U.S. Primary among them are the Koch brothers, Charles and David. They are among the wealthiest Americans, with a fortune over $60 billion, and this is primarily in the form of ownership in Koch Industries. Koch Industries is the second-largest private company in the U.S., with annual revenues over $100 billion, although like other private companies, it is not required to disclose its finances. It was founded by Charles and David’s father, Fred Koch, and was originally in the refining business, but now is a conglomerate with multiple businesses, including petroleum, paper, mining, and chemicals.
There is a bunch of history about the company, including a rather sordid story of how the other two Koch brothers, William and Frederick, were cut out of the company, and interesting bits about Fred Koch working for Hitler’s Germany and Stalin’s USSR, but I won’t go into that here.
Fred Koch was a founding member of the John Birch Society, which at the time was the far-right fringe of American politics. Charles and David no doubt got a nice big dose of right-wing politics from their father. The Birch Society was rabidly anti-Communist and against Big Government in all forms. But it was prone to conspiracy theories that in the end hurt its credibility and reputation. Birchers were marginalized within the Republican Party and their influence remained slight.
Charles’s political inclinations are towards libertarianism. He was influenced early on by a quasi-anarchist named Robert LeFevre and later by the pro-capitalist and anti-Keynesian economic theorist Friedrich Hayek. He is vehemently anti-tax and anti-regulation. While this does seem to spring from sincere conviction, it is also highly aligned with the interests of Koch Industries, which is involved in numerous highly polluting lines of business, and has a long history of environmental violations, sanctions and fines. Koch and his brother are also in favor of a radical shrinkage of government spending, including especially social programs. (Libertarians have also historically wanted less government regulation of personal behavior, although the U.S. Libertarian Party has tried to skirt around advocating a woman’s right to abortion, which seems inconsistent.)
By the way, if you think libertarianism is sort of reasonable, I invite you to read the party’s platform. It is quite a radical program—for example , “repeal of the income tax, the abolishment of the Internal Revenue Service and all federal programs and services not required under the U.S. Constitution.” They also oppose practically all Federal regulation, including minimum wage laws, environmental regulations, and all regulation of drugs, including both currently illicit drugs and pharmaceuticals.
Libertarianism used to be considered, like the Birch Society, out on the fringes of political discourse. In 1980, David Koch ran on the Libertarian Party ticket as a vice presidential candidate. He and presidential candidate Ed Clark got slightly over 1% of the popular vote, which was at the time a record high for the party, but showed that it was a long way from being successful at the national level.
Still, what has happened over the past 30-40 years is that libertarian ideas have spread, to the point where self-avowed libertarians have practically taken over the right wing of the Republican Party, and increasingly have real influence on policy. Most of the GOP is still not as radical as the Libertarian Party is, but they are headed there. This is not at all accidental. It has been planned, and funded heavily, by the Koch brothers and like-minded billionaires. Mayer’s book sheds a lot of light on how this has been accomplished.
By the late 1980’s, the Kochs had partnered with a man named Richard Fink, who drew up for them a blueprint for injecting their preferred ideology into American politics. The first phase involved investing in intellectuals who would develop and popularize right-wing ideas. Then think tanks would turn these into policies. And finally, citizen’s groups would be formed that would pressure legislators to enact the policies.
The Kochs started giving a lot of money to Republican politicians, even ones that weren’t particularly aligned with libertarianism, and their company started spending serious money on lobbying. From the early days, they took steps to hide their involvement. In 1996, a mysterious group named Triad Management Services paid for attack ads against multiple Democratic candidates. Half of their money came from a nonprofit named Economic Education Trust, which was believed to be a front group for the Kochs. Triad’s president was eventually fined by the FEC, but the Kochs were not charged.
The Kochs controlled large charitable foundations, which were not supposed to directly engage in political advocacy. But these foundations could give to educational efforts that promoted libertarianism, such as the Koch-funded Mercatus Center at George Mason University, which espouses and teaches right-wing economic theories. (Eventually the Kochs funded programs at hundreds of universities. One economics major was quoted complaining that his textbook taught that Keynes was wrong, sweatshop labor wasn’t so bad, etc.)
The Kochs were also involved in setting up and funding the Federalist Society, which espouses a conservative judicial philosophy aligned with laissez-faire capitalism. This is now a huge organization with over 50,000 members and is a major force in putting very conservative judges into office.
Some of the money from the Kochs and other billionaire donors was funneled through an organization called Donors Trust, which is a so-called donor-advised fund—similar to a private foundation, but without the requirement to disclose the identity of donors or grantees. The Kochs also started using more obscure types of organization. Their primary advocacy group is Americans for Prosperity, which is organized as a 501(c)(4) “social welfare organization.” Another such group was the Center to Protect Patient Rights, originally set up as an anti-Obamacare group, but later used to funnel huge amounts of money to other organizations and for other purposes. The Kochs also used 501(c)(6) “business leagues,” such as Americans for Job Security. These organizations have “members,” who do not have to be publicly disclosed. And once PACs and super PACs became a thing the Kochs were heavily involved in those too. The interlocking and intertwined organizations make it hard to “follow the money.” They also make it very hard to police a line between non-profit educational or advocacy work and what is direct political activity. It is all in the service of the Koch brothers’ agenda. Some people call this group of organizations and activities the Kochtopus.
(This obfuscation of donors and use of front groups is weirdly reminiscent of the 1930’s era Popular Front, during which time the Communist Party infiltrated multiple organizations and set up others as front groups, often obscuring its involvement. But that didn’t involve anything like the colossal amounts of money that is going into politics in the 21st century. And it wasn’t really successful: while it did extend the Party’s influence for a while, by the 1950’s Communists were being purged and their front organizations exposed.)
While the Kochs are the centerpiece of Mayer’s book, they were not the only ones to set up organizations of this kind—for example Mayer mentions the Heritage Foundation, with very wealthy backers including Joseph Coors and Richard Mellon Scaife.
Increasingly though the Kochs have magnified their efforts by becoming part of a larger network of billionaire donors, many of whom coordinate their efforts with the Kochs or support Koch-initiated activities. For example, oilmen like Larry Nichols, head of Devon Energy (heavily involved in fracking) and Art Pope, a North Carolina retail magnate with conservative views. And there are many more. Starting in 2003, the Kochs began holding an annual very secretive, invitation-only donor summit, at which plans can be shared and activities coordinated. Initially this got off to a slow start, but now is a big thing with many very wealthy attendees.
However, all of this activity was nothing compared to what it has become after the Citizens United decision in 2010. There were formerly restrictions on political donations, which could be circumvented to some extent. But after Citizens United, the floodgates were opened and huge quantities of money could be injected into political campaigns.
In 2010, 40 percent of political spending came from 501(c)(4) “social welfare” groups with undisclosed donors. On the Republican side, much of their activity was coordinated and deployed to attack ads against vulnerable Democratic candidates. Many of them were blindsided by attacks coming from outside their district and from sources they couldn’t even trace. The achievement of a Republican House majority in 2010 is probably due to these efforts.
In 2012 the already mind-boggling quantities of money being spent on elections went up even more. The Koch network spent an estimated $407 million in this election. In 2014 Koch-allied political spending actually rivaled what the Republican Party itself could raise. The Kochs also set up their own voter targeting operation, using a company called i360, which was more sophisticated than the GOP’s. Americans for Prosperity had 550 paid staffers and other Koch-based advocacy groups were active in many states. The Kochs were practically acting like a political party themselves. The person on the ballot might have (R) next to their name, but that person might have been recruited by a Koch organization, funded by one, and using voter data provided by another. The GOP was having to play along.
Also note: the candidates that the Kochs prefer are on the right wing of the party and share their libertarian focus. They have been instrumental in getting far-right, Tea Party aligned candidates elected, especially to the House and in local races. (The Kochs didn’t initiate the Tea Party, but were involved in funding and trying to steer it in a direction that they favored, again often through front groups.)
Mayer’s book ends before the 2016 election. Interestingly, 2014 might have been the high point of the Kochs’ political influence. The Koch network initially budgeted something close to $900 million for the 2016 election. There was rumor that they favored Scott Walker as a candidate, but he dropped out early on. They never did much care for Donald Trump, and Trump boasted that he didn’t need their help. The Kochs do not subscribe to Trump’s anti-immigration views, and in other respects Trump isn’t actually right-wing enough for them. For example, they have recently been unhappy with the attempted re-write of the Affordable Care Act (they want it abolished outright). But I think the Kochs are probably quite happy with Trump choices like Scott Pruitt to run the EPA. They have succeeded in many respects in pushing the GOP farther to the right and in getting politicians favoring at least some elements of their ideology elected, although they failed with Romney and Trump wasn’t quite what they were aiming for. There are reports the Kochs are going to focus more on advocacy and education going forward, although as we have seen that is ultimately tied in with advancing their political agenda, too. Also, with or without the Kochs, dark money, and big money in politics, is not going away.
All of this is very alarming. The skyrocketing influence of “dark money” is a serious threat to democracy. It is putting real political power, as well as a lot of covert influence that eventually translates into political power, into the hands of what is really a very small number of very wealthy people. And because they have a vested interest in the current, corrupt political financing system, which has worked out well for them, I really am not optimistic about changing it any time soon. Indeed, Citizens United has made it very hard to do that, although it is possible some future Supreme Court may revisit this and see it another way. Maybe in the far, far future, given how the Court is likely to trend under Trump. There is also hope for other reforms, such as disclosure rules making it harder to hide donors, although again I wouldn’t expect that soon.
Note this is not a case of “both sides do it.” The right wing likes to make a big deal out of George Soros’s use of his fortune for political purposes. But Soros has mostly stepped back from direct involvement in electoral politics, especially at the national level, although he did donate to Clinton’s campaign. Democrats in general have ramped up the levels of money that go into their candidates and they have used some of the same mechanisms and legal loopholes the right has, such as Super PACs. There are well-funded left-wing think tanks. But what you don’t see on the left is the combination of propaganda, think tanks, non-profits that fund slanted “educational” programs, university-based recruiting of students and faculty, recruitment and indoctrination of lawyers and judges, all of it funded with coordinated and obfuscated donations to candidates, organizations and front groups, with a fairly consistent and radical ideological line behind all of it. The left is not that organized or unified.
Still, money isn’t everything. Vast sluices of money couldn’t get Romney elected. And shining light on secretive financing and covert funding of right-wing ideology is one way to lessen its influence, and may eventually lead to reform.