United States. And Greenpeace issued a report identifying the
company as a “kingpin of climate science denial.” The report
showed that, from 2005 to 2008, the Kochs vastly outdid
ExxonMobil in giving money to organizations fighting legislation
related to climate change, underwriting a huge network of
foundations, think tanks, and political front groups. Indeed,
the brothers have funded opposition campaigns against so many
Obama Administration policies—from health-care reform to the
economic-stimulus program—that, in political circles, their
ideological network is known as the Kochtopus.
In a statement, Koch Industries said that the Greenpeace
report “distorts the environmental record of our companies.” And
David Koch, in a recent, admiring article about him in New
York, protested that the “radical press” had turned his
family into “whipping boys,” and had exaggerated its influence
on American politics. But Charles Lewis, the founder of the
Center for Public Integrity, a nonpartisan watchdog group, said,
“The Kochs are on a whole different level. There’s no one else
who has spent this much money. The sheer dimension of it is what
sets them apart. They have a pattern of lawbreaking, political
manipulation, and obfuscation. I’ve been in Washington since
Watergate, and I’ve never seen anything like it. They are the
Standard Oil of our times.”
A few weeks after the Lincoln Center gala,
the advocacy wing of the Americans for Prosperity Foundation—an
organization that David Koch started, in 2004—held a different
kind of gathering. Over the July 4th weekend, a summit called
Texas Defending the American Dream took place in a chilly hotel
ballroom in Austin. Though Koch freely promotes his
philanthropic ventures, he did not attend the summit, and his
name was not in evidence. And on this occasion the audience was
roused not by a dance performance but by a series of speakers
denouncing President Barack Obama. Peggy Venable, the organizer
of the summit, warned that Administration officials “have a
socialist vision for this country.”
Five hundred people attended the summit, which served, in
part, as a training session for Tea Party activists in Texas. An
advertisement cast the event as a populist uprising against
vested corporate power. “Today, the voices of average Americans
are being drowned out by lobbyists and special interests,” it
said. “But you can do something about it.” The pitch made no
mention of its corporate funders. The White House has expressed
frustration that such sponsors have largely eluded public
notice. David Axelrod, Obama’s senior adviser, said, “What they
don’t say is that, in part, this is a grassroots citizens’
movement brought to you by a bunch of oil billionaires.”
In April, 2009, Melissa Cohlmia, a company spokesperson,
denied that the Kochs had direct links to the Tea Party, saying
that Americans for Prosperity is “an independent organization
and Koch companies do not in any way direct their activities.”
Later, she issued a statement: “No funding has been provided by
Koch companies, the Koch foundations, or Charles Koch or David
Koch specifically to support the tea parties.” David Koch told
New York, “I’ve never been to a tea-party event. No one
representing the tea party has ever even approached me.”
At the lectern in Austin, however, Venable—a longtime
political operative who draws a salary from Americans for
Prosperity, and who has worked for Koch-funded political groups
since 1994—spoke less warily. “We love what the Tea Parties are
doing, because that’s how we’re going to take back America!” she
declared, as the crowd cheered. In a subsequent interview, she
described herself as an early member of the movement, joking, “I
was part of the Tea Party before it was cool!” She explained
that the role of Americans for Prosperity was to help “educate”
Tea Party activists on policy details, and to give them
“next-step training” after their rallies, so that their
political energy could be channelled “more effectively.” And she
noted that Americans for Prosperity had provided Tea Party
activists with lists of elected officials to target. She said of
the Kochs, “They’re certainly our people. David’s the chairman
of our board. I’ve certainly met with them, and I’m very
appreciative of what they do.”
Venable honored several Tea Party “citizen leaders” at the
summit. The Texas branch of Americans for Prosperity gave its
Blogger of the Year Award to a young woman named Sibyl West. On
June 14th, West, writing on her site, described Obama as the
“cokehead in chief.” In an online thread, West speculated that
the President was exhibiting symptoms of “demonic possession
(aka schizophrenia, etc.).” The summit featured several paid
speakers, including Janine Turner, the actress best known for
her role on the television series “Northern Exposure.” She
declared, “They don’t want our children to know about their
rights. They don’t want our children to know about a God!”
During a catered lunch, Venable introduced Ted Cruz, a former
solicitor general of Texas, who told the crowd that Obama was
“the most radical President ever to occupy the Oval Office,” and
had hidden from voters a secret agenda—“the government taking
over our economy and our lives.” Countering Obama, Cruz
proclaimed, was “the epic fight of our generation!” As the crowd
rose to its feet and cheered, he quoted the defiant words of a
Texan at the Alamo: “Victory, or death!”
Americans for Prosperity has worked closely with the Tea
Party since the movement’s inception. In the weeks before the
first Tax Day protests, in April, 2009, Americans for Prosperity
hosted a Web site offering supporters “Tea Party Talking
Points.” The Arizona branch urged people to send tea bags to
Obama; the Missouri branch urged members to sign up for
“Taxpayer Tea Party Registration” and provided directions to
nine protests. The group continues to stoke the rebellion. The
North Carolina branch recently launched a “Tea Party Finder” Web
site, advertised as “a hub for all the Tea Parties in North
Carolina.”
The anti-government fervor infusing the 2010 elections
represents a political triumph for the Kochs. By giving money to
“educate,” fund, and organize Tea Party protesters, they have
helped turn their private agenda into a mass movement. Bruce
Bartlett, a conservative economist and a historian, who once
worked at the National Center for Policy Analysis, a
Dallas-based think tank that the Kochs fund, said, “The problem
with the whole libertarian movement is that it’s been all chiefs
and no Indians. There haven’t been any actual people, like
voters, who give a crap about it. So the problem for the Kochs
has been trying to create a movement.” With the emergence of the
Tea Party, he said, “everyone suddenly sees that for the first
time there are Indians out there—people who can provide real
ideological power.” The Kochs, he said, are “trying to shape and
control and channel the populist uprising into their own
policies.”
A Republican campaign consultant who has done research on
behalf of Charles and David Koch said of the Tea Party, “The
Koch brothers gave the money that founded it. It’s like they put
the seeds in the ground. Then the rainstorm comes, and the frogs
come out of the mud—and they’re our candidates!”
The Kochs and their political operatives declined requests
for interviews. Instead, a prominent New York public-relations
executive who is close with the Kochs put forward two friends:
George Pataki, the former governor of New York, and Mortimer
Zuckerman, the publisher and real-estate magnate. Pataki, a
Republican who received campaign donations from David Koch,
called him “a patriot who cares deeply about his country.”
Zuckerman praised David’s “gentle decency” and the “range of his
public interests.”
The Republican campaign consultant said of the family’s
political activities, “To call them under the radar is an
understatement. They are underground!” Another former Koch
adviser said, “They’re smart. This right-wing, redneck stuff
works for them. They see this as a way to get things done
without getting dirty themselves.” Rob Stein, a Democratic
political strategist who has studied the conservative movement’s
finances, said that the Kochs are “at the epicenter of the
anti-Obama movement. But it’s not just about Obama. They would
have done the same to Hillary Clinton. They did the same with
Bill Clinton. They are out to destroy progressivism.”
Oddly enough, the fiercely capitalist Koch
family owes part of its fortune to Joseph Stalin. Fred Koch was
the son of a Dutch printer who settled in Texas and ran a weekly
newspaper. Fred attended M.I.T., where he earned a degree in
chemical engineering. In 1927, he invented a more efficient
process for converting oil into gasoline, but, according to
family lore, America’s major oil companies regarded him as a
threat and shut him out of the industry. Unable to succeed at
home, Koch found work in the Soviet Union. In the
nineteen-thirties, his company trained Bolshevik engineers and
helped Stalin’s regime set up fifteen modern oil refineries.
Over time, however, Stalin brutally purged several of Koch’s
Soviet colleagues. Koch was deeply affected by the experience,
and regretted his collaboration. He returned to the U.S. In the
headquarters of his company, Rock Island Oil & Refining, in
Wichita, he kept photographs aimed at proving that some of those
Soviet refineries had been destroyed in the Second World War.
Gus diZerega, a former friend of Charles Koch, recalled, “As the
Soviets became a stronger military power, Fred felt a certain
amount of guilt at having helped build them up. I think it
bothered him a lot.”
In 1958, Fred Koch became one of the original members of the
John Birch Society, the arch-conservative group known, in part,
for a highly skeptical view of governance and for spreading
fears of a Communist takeover. Members considered President
Dwight D. Eisenhower to be a Communist agent. In a
self-published broadside, Koch claimed that “the Communists have
infiltrated both the Democrat and Republican Parties.” He wrote
admiringly of Benito Mussolini’s suppression of Communists in
Italy, and disparagingly of the American civil-rights movement.
“The colored man looms large in the Communist plan to take over
America,” he warned. Welfare was a secret plot to attract rural
blacks to cities, where they would foment “a vicious race war.”
In a 1963 speech that prefigures the Tea Party’s talk of a
secret socialist plot, Koch predicted that Communists would
“infiltrate the highest offices of government in the U.S. until
the President is a Communist, unknown to the rest of us.”
Koch married Mary Robinson, the daughter of a Missouri
physician, and they had four sons: Freddie, Charles, and twins,
David and William. John Damgard, the president of the Futures
Industry Association, was David’s schoolmate and friend. He
recalled that Fred Koch was “a real John Wayne type.” Koch
emphasized rugged pursuits, taking his sons big-game hunting in
Africa, and requiring them to do farm labor at the family ranch.
The Kochs lived in a stone mansion on a large compound across
from Wichita’s country club; in the summer, the boys could hear
their friends splashing in the pool, but they were not allowed
to join them. “By instilling a work ethic in me at an early age,
my father did me a big favor, although it didn’t seem like a
favor back then,” Charles has written. “By the time I was eight,
he made sure work occupied most of my spare time.” David Koch
recalled that his father also indoctrinated the boys
politically. “He was constantly speaking to us children about
what was wrong with government,” he told Brian Doherty, an
editor of the libertarian magazine Reason, and the author
of “Radicals for Capitalism,” a 2007 history of the libertarian
movement. “It’s something I grew up with—a fundamental point of
view that big government was bad, and imposition of government
controls on our lives and economic fortunes was not good.”
David attended Deerfield Academy, in Massachusetts, and
Charles was sent to military school. Charles, David, and William
all earned engineering degrees at their father’s alma mater,
M.I.T., and later joined the family company. Charles eventually
assumed control, with David as his deputy; William’s career at
the company was less successful. Freddie went to Harvard and
studied playwriting at the Yale School of Drama. His father
reportedly disapproved of him, and punished him financially.
(Freddie, through a spokesperson, denied this.)
In 1967, after Fred Koch died, of a heart attack, Charles
renamed the business Koch Industries, in honor of his father.
Fred Koch’s will made his sons extraordinarily wealthy. David
Koch joked about his good fortune in a 2003 speech to alumni at
Deerfield, where, after pledging twenty-five million dollars, he
was made the school’s sole “lifetime trustee.” He said, “You
might ask: How does David Koch happen to have the wealth to be
so generous? Well, let me tell you a story. It all started when
I was a little boy. One day, my father gave me an apple. I soon
sold it for five dollars and bought two apples and sold them for
ten. Then I bought four apples and sold them for twenty. Well,
this went on day after day, week after week, month after month,
year after year, until my father died and left me three hundred
million dollars!”
David and Charles had absorbed their father’s conservative
politics, but they did not share all his views, according to
diZerega, who befriended Charles in the mid-sixties, after
meeting him while browsing in a John Birch Society bookstore in
Wichita. Charles eventually invited him to the Kochs’ mansion,
to participate in an informal political-discussion group. “It
was pretty clear that Charles thought some of the Birch Society
was bullshit,” diZerega recalled.
DiZerega, who has lost touch with Charles, eventually
abandoned right-wing views, and became a political-science
professor. He credits Charles with opening his mind to political
philosophy, which set him on the path to academia; Charles is
one of three people to whom he dedicated his first book. But
diZerega believes that the Koch brothers have followed a wayward
intellectual trajectory, transferring their father’s paranoia
about Soviet Communism to a distrust of the U.S. government, and
seeing its expansion, beginning with the New Deal, as a
tyrannical threat to freedom. In an essay, posted on Beliefnet,
diZerega writes, “As state socialism failed . . . the target for
many within these organizations shifted to any kind of
regulation at all. ‘Socialism’ kept being defined downwards.”
Members of the John Birch Society developed an interest in a
school of Austrian economists who promoted free-market ideals.
Charles and David Koch were particularly influenced by the work
of Friedrich von Hayek, the author of “The Road to Serfdom”
(1944), which argued that centralized government planning led,
inexorably, to totalitarianism. Hayek’s belief in unfettered
capitalism has proved inspirational to many conservatives, and
to anti-Soviet dissidents; lately, Tea Party supporters have
championed his work. In June, the talk-radio host Glenn Beck,
who has supported the Tea Party rebellion, promoted “The Road to
Serfdom” on his show; the paperback soon became a No. 1
best-seller on Amazon. (Beck appears to be a fan of the Kochs;
in the midst of a recent on-air parody of Al Gore, Beck said,
without explanation, “I want to thank Charles Koch for this
information.” Beck declined to elaborate on the relationship.)
Charles and David also became devotees of a more radical
thinker, Robert LeFevre, who favored the abolition of the state
but didn’t like the label “anarchist”; he called himself an “autarchist.”
LeFevre liked to say that “government is a disease masquerading
as its own cure.” In 1956, he opened an institution called the
Freedom School, in Colorado Springs. Brian Doherty, of Reason,
told me that “LeFevre was an anarchist figure who won Charles’s
heart,” and that the school was “a tiny world of people who
thought the New Deal was a horrible mistake.” According to
diZerega, Charles supported the school financially, and even
gave him money to take classes there.
Throughout the seventies, Charles and David continued to
build Koch Industries. In 1980, William, with assistance from
Freddie, attempted to take over the company from Charles, who,
they felt, had assumed autocratic control. In retaliation, the
company’s board, which answered to Charles, fired William.
(“Charles runs it all with an iron hand,” Bruce Bartlett, the
economist, told me.) Lawsuits were filed, with William and
Freddie on one side and Charles and David on the other. In 1983,
Charles and David bought out their brothers’ share in the
company for nearly a billion dollars. But the antagonism
remained, and litigation continued for seventeen more years,
with the brothers hiring rival private investigators; in 1990,
they walked past one another with stony expressions at their
mother’s funeral. Eventually, Freddie moved to Monaco, which has
no income tax. He bought historic estates in France, Austria,
and elsewhere, filling them with art, antiques, opera scores,
and literary manuscripts. William founded his own energy
company, Oxbow, and turned to yachting; he spent an estimated
sixty-five million dollars to win the America’s Cup, in 1992.
With Charles as the undisputed chairman and C.E.O., Koch
Industries expanded rapidly. Roger Altman, who heads the
investment-banking firm Evercore, told me that the company’s
performance has been “beyond phenomenal.” Charles remained in
Wichita, with his wife and two children, guarding his privacy
while supporting community charities. David moved to New York
City, where he is an executive vice-president of the company and
the C.E.O. of its Chemical Technology Group. A financial expert
who knows Koch Industries well told me, “Charles is the
company. Charles runs it.” David, described by associates as
“affable” and “a bit of a lunk,” enjoyed for years the life of a
wealthy bachelor. He rented a yacht in the South of France and
bought a waterfront home in Southampton, where he threw parties
that the Web site New York Social Diary likened to an “East
Coast version of Hugh Hefner’s soirées.” In 1996, he married
Julia Flesher, a fashion assistant. They live in a
nine-thousand-square-foot duplex at 740 Park Avenue, with their
three children. Though David’s manner is more cosmopolitan, and
more genial, than that of Charles, Brian Doherty, who has
interviewed both brothers, couldn’t think of a single issue on
which the brothers disagreed.
As their fortunes grew, Charles and David Koch became the
primary underwriters of hard-line libertarian politics in
America. Charles’s goal, as Doherty described it, was to tear
the government “out at the root.” The brothers’ first major
public step came in 1979, when Charles persuaded David, then
thirty-nine, to run for public office. They had become
supporters of the Libertarian Party, and were backing its
Presidential candidate, Ed Clark, who was running against Ronald
Reagan from the right. Frustrated by the legal limits on
campaign donations, they contrived to place David on the ticket,
in the Vice-Presidential slot; upon becoming a candidate, he
could lavish as much of his personal fortune as he wished on the
campaign. The ticket’s slogan was “The Libertarian Party has
only one source of funds: You.” In fact, its primary source of
funds was David Koch, who spent more than two million dollars on
the effort.
Many of the ideas propounded in the 1980 campaign presaged
the Tea Party movement. Ed Clark told The Nation that
libertarians were getting ready to stage “a very big tea party,”
because people were “sick to death” of taxes. The Libertarian
Party platform called for the abolition of the F.B.I. and the
C.I.A., as well as of federal regulatory agencies, such as the
Securities and Exchange Commission and the Department of Energy.
The Party wanted to end Social Security, minimum-wage laws, gun
control, and all personal and corporate income taxes; it
proposed the legalization of prostitution, recreational drugs,
and suicide. Government should be reduced to only one function:
the protection of individual rights. William F. Buckley, Jr., a
more traditional conservative, called the movement “Anarcho-Totalitarianism.”
That November, the Libertarian ticket received only one per
cent of the vote. The brothers realized that their brand of
politics didn’t sell at the ballot box. Charles Koch became
openly scornful of conventional politics. “It tends to be a
nasty, corrupting business,” he told a reporter at the time.
“I’m interested in advancing libertarian ideas.” According to
Doherty’s book, the Kochs came to regard elected politicians as
merely “actors playing out a script.” A longtime confidant of
the Kochs told Doherty that the brothers wanted to “supply the
themes and words for the scripts.” In order to alter the
direction of America, they had to “influence the areas where
policy ideas percolate from: academia and think tanks.”
After the 1980 election, Charles and David
Koch receded from the public arena. But they poured more than a
hundred million dollars into dozens of seemingly independent
organizations. Tax records indicate that in 2008 the three main
Koch family foundations gave money to thirty-four political and
policy organizations, three of which they founded, and several
of which they direct. The Kochs and their company have given
additional millions to political campaigns, advocacy groups, and
lobbyists. The family’s subterranean financial role has fuelled
suspicion on the left; Lee Fang, of the liberal blog
ThinkProgress, has called the Kochs “the billionaires behind the
hate.”
Only the Kochs know precisely how much they have spent on
politics. Public tax records show that between 1998 and 2008 the
Charles G. Koch Charitable Foundation spent more than
forty-eight million dollars. The Claude R. Lambe Charitable
Foundation, which is controlled by Charles Koch and his wife,
along with two company employees and an accountant, spent more
than twenty-eight million. The David H. Koch Charitable
Foundation spent more than a hundred and twenty million.
Meanwhile, since 1998 Koch Industries has spent more than fifty
million dollars on lobbying. Separately, the company’s
political-action committee, KochPAC,
has donated some eight million dollars to political campaigns,
more than eighty per cent of it to Republicans. So far in 2010,
Koch Industries leads all other energy companies in political
contributions, as it has since 2006. In addition, during the
past dozen years the Kochs and other family members have
personally spent more than two million dollars on political
contributions. In the second quarter of 2010, David Koch was the
biggest individual contributor to the Republican Governors
Association, with a million-dollar donation. Other gifts by the
Kochs may be untraceable; federal tax law permits anonymous
personal donations to politically active nonprofit groups.
In recent decades, members of several industrial dynasties
have spent parts of their fortunes on a conservative agenda. In
the nineteen-eighties, the Olin family, which owns a
chemicals-and-manufacturing conglomerate, became known for
funding right-leaning thinking in academia, particularly in law
schools. And during the nineties Richard Mellon Scaife, a
descendant of Andrew Mellon, spent millions attempting to
discredit President Bill Clinton. Ari Rabin-Havt, a
vice-president at the Democratic-leaning Web site Media Matters,
said that the Kochs’ effort is unusual, in its marshalling of
corporate and personal funds: “Their role, in terms of financial
commitments, is staggering.”
Of course, Democrats give money, too. Their most prominent
donor, the financier George Soros, runs a foundation, the Open
Society Institute, that has spent as much as a hundred million
dollars a year in America. Soros has also made generous private
contributions to various Democratic campaigns, including
Obama’s. But Michael Vachon, his spokesman, argued that Soros’s
giving is transparent, and that “none of his contributions are
in the service of his own economic interests.” The Kochs have
given millions of dollars to nonprofit groups that criticize
environmental regulation and support lower taxes for industry.
Gus diZerega, the former friend, suggested that the Kochs’
youthful idealism about libertarianism had largely devolved into
a rationale for corporate self-interest. He said of Charles,
“Perhaps he has confused making money with freedom.”
Some critics have suggested that the Kochs’ approach has
subverted the purpose of tax-exempt giving. By law, charitable
foundations must conduct exclusively nonpartisan activities that
promote the public welfare. A 2004 report by the National
Committee for Responsive Philanthropy, a watchdog group,
described the Kochs’ foundations as being self-serving,
concluding, “These foundations give money to nonprofit
organizations that do research and advocacy on issues that
impact the profit margin of Koch Industries.”
The Kochs have gone well beyond their immediate
self-interest, however, funding organizations that aim to push
the country in a libertarian direction. Among the institutions
that they have subsidized are the Institute for Justice, which
files lawsuits opposing state and federal regulations; the
Institute for Humane Studies, which underwrites libertarian
academics; and the Bill of Rights Institute, which promotes a
conservative slant on the Constitution. Many of the
organizations funded by the Kochs employ specialists who write
position papers that are subsequently quoted by politicians and
pundits. David Koch has acknowledged that the family exerts
tight ideological control. “If we’re going to give a lot of
money, we’ll make darn sure they spend it in a way that goes
along with our intent,” he told Doherty. “And if they make a
wrong turn and start doing things we don’t agree with, we
withdraw funding.”
The Kochs’ subsidization of a pro-corporate
movement fulfills, in many ways, the vision laid out in a secret
1971 memo that Lewis Powell, then a Virginia attorney, wrote two
months before he was nominated to the Supreme Court. The antiwar
movement had turned its anger on defense contractors, such as
Dow Chemical, and Ralph Nader was leading a public-interest
crusade against corporations. Powell, writing a report for the
U.S. Chamber of Commerce, urged American companies to fight
back. The greatest threat to free enterprise, he warned, was not
Communism or the New Left but, rather, “respectable elements of
society”—intellectuals, journalists, and scientists. To defeat
them, he wrote, business leaders needed to wage a long-term,
unified campaign to change public opinion.
Charles Koch seems to have approached both business and
politics with the deliberation of an engineer. “To bring about
social change,” he told Doherty, requires “a strategy” that is
“vertically and horizontally integrated,” spanning “from idea
creation to policy development to education to grassroots
organizations to lobbying to litigation to political action.”
The project, he admitted, was extremely ambitious. “We have a
radical philosophy,” he said.
In 1977, the Kochs provided the funds to launch the nation’s
first libertarian think tank, the Cato Institute. According to
the Center for Public Integrity, between 1986 and 1993 the Koch
family gave eleven million dollars to the institute. Today, Cato
has more than a hundred full-time employees, and its experts and
policy papers are widely quoted and respected by the mainstream
media. It describes itself as nonpartisan, and its scholars have
at times been critical of both parties. But it has consistently
pushed for corporate tax cuts, reductions in social services,
and laissez-faire environmental policies.
When President Obama, in a 2008 speech, described the science
on global warming as “beyond dispute,” the Cato Institute took
out a full-page ad in the Times to contradict him. Cato’s
resident scholars have relentlessly criticized political
attempts to stop global warming as expensive, ineffective, and
unnecessary. Ed Crane, the Cato Institute’s founder and
president, told me that “global-warming theories give the
government more control of the economy.”
Cato scholars have been particularly energetic in promoting
the Climategate scandal. Last year, private e-mails of climate
scientists at the University of East Anglia, in England, were
mysteriously leaked, and their exchanges appeared to suggest a
willingness to falsify data in order to buttress the idea that
global warming is real. In the two weeks after the e-mails went
public, one Cato scholar gave more than twenty media interviews
trumpeting the alleged scandal. But five independent inquiries
have since exonerated the researchers, and nothing was found in
their e-mails or data to discredit the scientific consensus on
global warming.
Nevertheless, the controversy succeeded in spreading
skepticism about climate change. Even though the National
Oceanic and Atmospheric Administration recently issued a report
concluding that the evidence for global warming is unequivocal,
more Americans are convinced than at any time since 1997 that
scientists have exaggerated the seriousness of global warming.
The Kochs promote this statistic on their company’s Web site but
do not mention the role that their funding has played in
fostering such doubt.
In a 2002 memo, the Republican political consultant Frank
Luntz wrote that so long as “voters believe there is no
consensus about global warming within the scientific community”
the status quo would prevail. The key for opponents of
environmental reform, he said, was to question the science—a
public-relations strategy that the tobacco industry used
effectively for years to forestall regulation. The Kochs have
funded many sources of environmental skepticism, such as the
Heritage Foundation, which has argued that “scientific facts
gathered in the past 10 years do not support the notion of
catastrophic human-made warming.” The brothers have given money
to more obscure groups, too, such as the Independent Women’s
Forum, which opposes the presentation of global warming as a
scientific fact in American public schools. Until 2008, the
group was run by Nancy Pfotenhauer, a former lobbyist for Koch
Industries. Mary Beth Jarvis, a vice-president of a Koch
subsidiary, is on the group’s board.
Naomi Oreskes, a professor of history and science studies at
the University of California, San Diego, is the co-author of
“Merchants of Doubt,” a new book that chronicles various
attempts by American industry to manipulate public opinion on
science. She noted that the Kochs, as the heads of “a company
with refineries and pipelines,” have “a lot at stake.” She
added, “If the answer is to phase out fossil fuels, a different
group of people are going to be making money, so we shouldn’t be
surprised that they’re fighting tooth and nail.”
David Koch told New York that he was unconvinced that
global warming has been caused by human activity. Even if it has
been, he said, the heating of the planet will be beneficial,
resulting in longer growing seasons in the Northern Hemisphere.
“The Earth will be able to support enormously more people
because far greater land area will be available to produce
food,” he said.
In the mid-eighties, the Kochs provided
millions of dollars to George Mason University, in Arlington,
Virginia, to set up another think tank. Now known as the
Mercatus Center, it promotes itself as “the world’s premier
university source for market-oriented ideas—bridging the gap
between academic ideas and real-world problems.” Financial
records show that the Koch family foundations have contributed
more than thirty million dollars to George Mason, much of which
has gone to the Mercatus Center, a nonprofit organization. “It’s
ground zero for deregulation policy in Washington,” Rob Stein,
the Democratic strategist, said. It is an unusual arrangement.
“George Mason is a public university, and receives public
funds,” Stein noted. “Virginia is hosting an institution that
the Kochs practically control.”
The founder of the Mercatus Center is Richard Fink, formerly
an economist. Fink heads Koch Industries’ lobbying operation in
Washington. In addition, he is the president of the Charles G.
Koch Charitable Foundation, the president of the Claude R. Lambe
Charitable Foundation, a director of the Fred C. and Mary R.
Koch Foundation, and a director and co-founder, with David Koch,
of the Americans for Prosperity Foundation.
Fink, with his many titles, has become the central nervous
system of the Kochtopus. He appears to have supplanted Ed Crane,
the head of the Cato Institute, as the brothers’ main political
lieutenant. Though David remains on the board at Cato, Charles
Koch has fallen out with Crane. Associates suggested to me that
Crane had been insufficiently respectful of Charles’s management
philosophy, which he distilled into a book called “The Science
of Success,” and trademarked under the name Market-Based
Management, or M.B.M. In the book, Charles recommends instilling
a company’s corporate culture with the competitiveness of the
marketplace. Koch describes M.B.M. as a “holistic system”
containing “five dimensions: vision, virtue and talents,
knowledge processes, decision rights and incentives.” A top Cato
Institute official told me that Charles “thinks he’s a genius.
He’s the emperor, and he’s convinced he’s wearing clothes.”
Fink, by contrast, has been far more embracing of Charles’s
ideas. (Fink, like the Kochs, declined to be interviewed.)
At a 1995 conference for philanthropists, Fink adopted the
language of economics when speaking about the Mercatus Center’s
purpose. He said that grant-makers should use think tanks and
political-action groups to convert intellectual raw materials
into policy “products.”
The Wall Street Journal has called the Mercatus Center
“the most important think tank you’ve never heard of,” and noted
that fourteen of the twenty-three regulations that President
George W. Bush placed on a “hit list” had been suggested first
by Mercatus scholars. Fink told the paper that the Kochs have
“other means of fighting [their] battles,” and that the Mercatus
Center does not actively promote the company’s private
interests. But Thomas McGarity, a law professor at the
University of Texas, who specializes in environmental issues,
told me that “Koch has been constantly in trouble with the E.P.A.,
and Mercatus has constantly hammered on the agency.” An
environmental lawyer who has clashed with the Mercatus Center
called it “a means of laundering economic aims.” The lawyer
explained the strategy: “You take corporate money and give it to
a neutral-sounding think tank,” which “hires people with
pedigrees and academic degrees who put out credible-seeming
studies. But they all coincide perfectly with the economic
interests of their funders.”
In 1997, for instance, the E.P.A. moved to reduce surface
ozone, a form of pollution caused, in part, by emissions from
oil refineries. Susan Dudley, an economist who became a top
official at the Mercatus Center, criticized the proposed rule.
The E.P.A., she argued, had not taken into account that
smog-free skies would result in more cases of skin cancer. She
projected that if pollution were controlled it would cause up to
eleven thousand additional cases of skin cancer each year.
In 1999, the District of Columbia Circuit Court took up
Dudley’s smog argument. Evaluating the E.P.A. rule, the court
found that the E.P.A. had “explicitly disregarded” the “possible
health benefits of ozone.” In another part of the opinion, the
court ruled, 2-1, that the E.P.A. had overstepped its authority
in calibrating standards for ozone emissions. As the
Constitutional Accountability Center, a think tank, revealed,
the judges in the majority had previously attended legal
junkets, on a Montana ranch, that were arranged by the
Foundation for Research on Economics and the Environment—a group
funded by Koch family foundations. The judges have claimed that
the ruling was unaffected by their attendance.
“Ideas don’t happen on their own,” Matt
Kibbe, the president of FreedomWorks, a Tea Party advocacy
group, told me. “Throughout history, ideas need patrons.” The
Koch brothers, after helping to create Cato and Mercatus,
concluded that think tanks alone were not enough to effect
change. They needed a mechanism to deliver those ideas to the
street, and to attract the public’s support. In 1984, David Koch
and Richard Fink created yet another organization, and Kibbe
joined them. The group, Citizens for a Sound Economy, seemed
like a grassroots movement, but according to the Center for
Public Integrity it was sponsored principally by the Kochs, who
provided $7.9 million between 1986 and 1993. Its mission, Kibbe
said, “was to take these heavy ideas and translate them for mass
America. . . . We read the same literature Obama did about
nonviolent revolutions—Saul Alinsky, Gandhi, Martin Luther King.
We studied the idea of the Boston Tea Party as an example of
nonviolent social change. We learned we needed boots on the
ground to sell ideas, not candidates.” Within a few years, the
group had mobilized fifty paid field workers, in twenty-six
states, to rally voters behind the Kochs’ agenda. David and
Charles, according to one participant, were “very controlling,
very top down. You can’t build an organization with them.
They run it.”
Around this time, the brothers faced a political crisis. In
1989, the Senate Select Committee on Indian Affairs investigated
their business and released a scathing report accusing Koch Oil
of “a widespread and sophisticated scheme to steal crude oil
from Indians and others through fraudulent mismeasuring.” The
Kochs admitted that they had improperly taken thirty-one million
dollars’ worth of crude oil, but said that it had been
accidental. Charles Koch told committee investigators that oil
measurement is “a very uncertain art.”
To defend its reputation, Koch Industries hired Robert
Strauss, then a premier Washington lobbyist; the company soon
opened an office in the city. A grand jury was convened to
investigate the allegations, but it eventually disbanded,
without issuing criminal charges. According to the Senate
report, after the committee hearings Koch operatives delved into
the personal lives of committee staffers, even questioning an
ex-wife. Senate investigators were upset by the Kochs’ tactics.
Kenneth Ballen, the counsel to the Senate committee, said,
“These people have amassed such unaccountable power!”
By 1993, when Bill Clinton became President, Citizens for a
Sound Economy had become a prototype for the kind of
corporate-backed opposition campaigns that have proliferated
during the Obama era. The group waged a successful assault on
Clinton’s proposed B.T.U. tax on energy, for instance, running
advertisements, staging media events, and targeting opponents.
And it mobilized anti-tax rallies outside the Capitol—rallies
that NPR described as “designed to strike fear into the hearts
of wavering Democrats.” Dan Glickman, a former Democratic
congressman from Wichita, who supported the B.T.U. tax,
recalled, “I’d been in Congress eighteen years. The Kochs
actually engaged against me and funded my opponent. They used a
lot of resources and effort—their employees, too.” Glickman
suffered a surprise defeat. “I can’t prove it, but I think I was
probably their victim,” he said.
The Kochs continued to disperse their money, creating
slippery organizations with generic-sounding names, and this
made it difficult to ascertain the extent of their influence in
Washington. In 1990, Citizens for a Sound Economy created a
spinoff group, Citizens for the Environment, which called acid
rain and other environmental problems “myths.” When the
Pittsburgh Post-Gazette investigated the matter, it
discovered that the spinoff group had “no citizen membership of
its own.”
In 1997, another Senate investigation began looking into what
a minority report called “an audacious plan to pour millions of
dollars in contributions into Republican campaigns nationwide
without disclosing the amount or source,” in order to evade
campaign-finance laws. A shell corporation, Triad Management,
had paid more than three million dollars for attack ads in
twenty-six House races and three Senate races. More than half of
the advertising money came from an obscure nonprofit group, the
Economic Education Trust. The Senate committee’s minority report
suggested that “the trust was financed in whole or in part by
Charles and David Koch of Wichita, Kansas.” The brothers were
suspected of having secretly paid for the attack ads, most of
which aired in states where Koch Industries did business. In
Kansas, where Triad Management was especially active, the funds
may have played a decisive role in four of six federal races.
The Kochs, when asked by reporters if they had given the money,
refused to comment. In 1998, however, the Wall Street Journal
confirmed that a consultant on the Kochs’ payroll had been
involved in the scheme. Charles Lewis, of the Center for Public
Integrity, described the scandal as “historic. Triad was the
first time a major corporation used a cutout”—a front
operation—“in a threatening way. Koch Industries was the poster
child of a company run amok.”
During the Clinton Administration, the
energy industry faced increased scrutiny and regulation. In the
mid-nineties, the Justice Department filed two lawsuits against
Koch Industries, claiming that it was responsible for more than
three hundred oil spills, which had released an estimated three
million gallons of oil into lakes and rivers. The penalty was
potentially as high as two hundred and fourteen million dollars.
In a settlement, Koch Industries paid a record
thirty-million-dollar civil fine, and agreed to spend five
million dollars on environmental projects.
In 1999, a jury found Koch Industries guilty of negligence
and malice in the deaths of two Texas teen-agers in an explosion
that resulted from a leaky underground butane pipeline. (In
2001, the company paid an undisclosed settlement.) And in the
final months of the Clinton Presidency the Justice Department
levelled a ninety-seven-count indictment against the company,
for covering up the discharge of ninety-one tons of benzene, a
carcinogen, from its refinery in Corpus Christi, Texas. The
company was liable for three hundred and fifty million dollars
in fines, and four Koch employees faced up to thirty-five years
in prison. The Koch Petroleum Group eventually pleaded guilty to
one criminal charge of covering up environmental violations,
including the falsification of documents, and paid a
twenty-million-dollar fine. David Uhlmann, a career prosecutor
who, at the time, headed the environmental-crimes section at the
Justice Department, described the suit as “one of the most
significant cases ever brought under the Clean Air Act.” He
added, “Environmental crimes are almost always motivated by
economics and arrogance, and in the Koch case there was a
healthy dose of both.”
During the 2000 election campaign, Koch Industries spent some
nine hundred thousand dollars to support the candidacies of
George W. Bush and other Republicans. During the Bush years,
Koch Industries and other fossil-fuel companies enjoyed
remarkable prosperity. The 2005 energy bill, which Hillary
Clinton dubbed the Dick Cheney Lobbyist Energy Bill, offered
enormous subsidies and tax breaks for energy companies. The
Kochs have cast themselves as deficit hawks, but, according to a
study by Media Matters, their companies have benefitted from
nearly a hundred million dollars in government contracts since
2000.
In 2004, Citizens for a Sound Economy was accused of
illegitimately throwing its weight behind Bush’s reëlection. The
group’s Oregon branch had attempted to get Ralph Nader on the
Presidential ballot, in order to dilute Democratic support for
John Kerry. Critics argued that it was illegal for a tax-exempt
nonprofit organization to donate its services for partisan
political purposes. (A complaint was filed with the Federal
Election Commission; it was dismissed.)
That year, internal rivalries at Citizens for a Sound Economy
caused the organization to split apart. David Koch and Fink
started a new group, Americans for Prosperity, and they hired
Tim Phillips to run it. Phillips was a political veteran who had
worked with Ralph Reed, the evangelical leader and Republican
activist, co-founding Century Strategies, a campaign-consulting
company that became notorious for its ties to the disgraced
lobbyist Jack Abramoff. Phillips’s online biography describes
him as an expert in “grasstops” and “grassroots” political
organizing. The Kochs’ choice of Phillips signalled an even
greater toughness. The conservative operative Grover Norquist,
who is known for praising “throat slitters” in politics, called
Phillips “a grownup who can make things happen.”
Last year, Phillips told the Financial Times that
Americans for Prosperity had only eight thousand registered
members. Currently, its Web site claims that the group has “1.2
million activists.” Whatever its size, the Kochs’ political
involvement has been intense; a former employee of the Cato
Institute told me that Americans for Prosperity “was
micromanaged by the Kochs.” And the brothers’ investment may
well have paid off: Americans for Prosperity, in concert with
the family’s other organizations, has been instrumental in
disrupting the Obama Presidency.
In January, 2008, Charles Koch wrote in his company
newsletter that America could be on the verge of “the greatest
loss of liberty and prosperity since the 1930s.” That October,
Americans for Prosperity held a conference of conservative
operatives at a Marriott hotel outside Washington. Erick
Erickson, the editor-in-chief of the conservative blog
RedState.com, took the lectern, thanked David Koch, and vowed to
“unite and fight . . . the armies of the left!” Soon after Obama
assumed office, Americans for Prosperity launched “Porkulus”
rallies against Obama’s stimulus-spending measures. Then the
Mercatus Center released a report claiming that stimulus funds
had been directed disproportionately toward Democratic
districts; eventually, the author was forced to correct the
report, but not before Rush Limbaugh, citing the paper, had
labelled Obama’s program “a slush fund,” and Fox News and other
conservative outlets had echoed the sentiment. (Phil Kerpen, the
vice-president for policy at Americans for Prosperity, is a
contributor to the Fox News Web site. Another officer at
Americans for Prosperity, Walter Williams, often guest-hosts for
Limbaugh.)
Americans for Prosperity also created an offshoot, Patients
United Now, which organized what Phillips has estimated to be
more than three hundred rallies against health-care reform. At
one rally, an effigy of a Democratic congressman was hung; at
another, protesters unfurled a banner depicting corpses from
Dachau. The group also helped organize the “Kill the Bill”
protests outside the Capitol, in March, where Democratic
supporters of health-care reform alleged that they were spat on
and cursed at. Phillips was a featured speaker.
Americans for Prosperity has held at least eighty events
targeting cap-and-trade legislation, which is aimed at making
industries pay for the air pollution that they create. Speakers
for the group claimed, with exaggeration, that even back-yard
barbecues and kitchen stoves would be taxed. The group was also
involved in the attacks on Obama’s “green jobs” czar, Van Jones,
and waged a crusade against international climate talks. Casting
his group as a champion of ordinary workers who would be hurt by
environmentalists, Phillips went to Copenhagen last year and
staged a protest outside the United Nations conference on
climate change, declaring, “We’re a grassroots organization. . .
. I think it’s unfortunate when wealthy children of wealthy
families . . . want to send unemployment rates in the United
States up to twenty per cent.”
Grover Norquist, who holds a weekly meeting for conservative
leaders in Washington, including representatives from Americans
for Prosperity, told me that last summer’s raucous rallies were
pivotal in undermining Obama’s agenda. The Republican leadership
in Congress, he said, “couldn’t have done it without August,
when people went out on the streets. It discouraged
deal-makers”—Republicans who might otherwise have worked
constructively with Obama. Moreover, the appearance of growing
public opposition to Obama affected corporate donors on K
Street. “K Street is a three-billion-dollar weathervane,”
Norquist said. “When Obama was strong, the Chamber of Commerce
said, ‘We can work with the Obama Administration.’ But that
changed when thousands of people went into the street and
‘terrorized’ congressmen. August is what changed it. Now that
Obama is weak, people are getting tough.”
As the first anniversary of Obama’s election approached,
David Koch came to the Washington area to attend a triumphant
Americans for Prosperity gathering. Obama’s poll numbers were
falling fast. Not a single Republican senator was working with
the Administration on health care, or much else. Pundits were
writing about Obama’s political ineptitude, and Tea Party groups
were accusing the President of initiating “a government
takeover.” In a speech, Koch said, “Days like today bring to
reality the vision of our board of directors when we started
this organization, five years ago.” He went on, “We envisioned a
mass movement, a state-based one, but national in scope, of
hundreds of thousands of American citizens from all walks of
life standing up and fighting for the economic freedoms that
made our nation the most prosperous society in history. . . .
Thankfully, the stirrings from California to Virginia, and from
Texas to Michigan, show that more and more of our
fellow-citizens are beginning to see the same truths as we do.”
While Koch didn’t explicitly embrace the Tea Party movement
that day, more recently he has come close to doing so, praising
it for demonstrating the “powerful visceral hostility in the
body politic against the massive increase in government power,
the massive efforts to socialize this country.” Charles Koch, in
a newsletter sent to his seventy thousand employees, compared
the Obama Administration to the regime of the Venezuelan
strongman Hugo Chávez. The Kochs’ sense of imperilment is
somewhat puzzling. Income inequality in America is greater than
it has been since the nineteen-twenties, and since the seventies
the tax rates of the wealthiest have fallen more than those of
the middle class. Yet the brothers’ message has evidently
resonated with voters: a recent poll found that fifty-five per
cent of Americans agreed that Obama is a socialist.
Americans for Prosperity, meanwhile, has announced that it
will spend an additional forty-five million dollars before the
midterm elections, in November. Although the group is legally
prohibited from directly endorsing candidates, it nonetheless
plans to target some fifty House races and half a dozen Senate
races, staging rallies, organizing door-to-door canvassing, and
running ads aimed at “educating voters about where candidates
stand.”
Though the Kochs have slowed Obama’s momentum, their larger
political battle is far from won. Richard Fink, interviewed by
FrumForum.com this spring, said, “If you look at where we’ve
gone from the year 2000 to now, with the expansion of government
spending and a debt burden that threatens to bankrupt the
country, it doesn’t look very good at all.” He went on, “It
looks like the infrastructure that was built and nurtured has
not carried the day.” He suggested that the Kochs needed “to get
more into the practical, day-to-day issues of governing.”
In 1991, David Koch was badly injured in a
plane crash in Los Angeles. He was the sole passenger in first
class to survive. As he was recovering, a routine physical exam
led to the discovery of prostate cancer. Koch received
treatment, settled down, started a family, and reconsidered his
life. As he told Portfolio, “When you’re the only one who
survived in the front of the plane and everyone else died—yeah,
you think, ‘My God, the good Lord spared me for some greater
purpose.’ My joke is that I’ve been busy ever since, doing all
the good work I can think of, so He can have confidence in me.”
Koch began giving spectacularly large donations to the arts
and sciences. And he became a patron of cancer research,
focussing on prostate cancer. In addition to his gifts to
Sloan-Kettering, he gave fifteen million dollars to New
York-Presbyterian Hospital, a hundred and twenty-five million to
M.I.T. for cancer research, twenty million to Johns Hopkins
University, and twenty-five million to the M. D. Anderson Cancer
Center, in Houston. In response to his generosity,
Sloan-Kettering gave Koch its Excellence in Corporate Leadership
Award. In 2004, President Bush named him to the National Cancer
Advisory Board, which guides the National Cancer Institute.
Koch’s corporate and political roles, however, may pose
conflicts of interest. For example, at the same time that David
Koch has been casting himself as a champion in the fight against
cancer, Koch Industries has been lobbying to prevent the E.P.A.
from classifying formaldehyde, which the company produces in
great quantities, as a “known carcinogen” in humans.
Scientists have long known that formaldehyde causes cancer in
rats, and several major scientific studies have concluded that
formaldehyde causes cancer in human beings—including one
published last year by the National Cancer Institute, on whose
advisory board Koch sits. The study tracked twenty-five thousand
patients for an average of forty years; subjects exposed to
higher amounts of formaldehyde had significantly higher rates of
leukemia. These results helped lead an expert panel within the
National Institutes of Health to conclude that formaldehyde
should be categorized as a known carcinogen, and be strictly
controlled by the government. Corporations have resisted
regulations on formaldehyde for decades, however, and Koch
Industries has been a large funder of members of Congress who
have stymied the E.P.A., requiring it to defer new regulations
until more studies are completed.
Koch Industries became a major producer of the chemical in
2005, after it bought Georgia-Pacific, the paper and
wood-products company, for twenty-one billion dollars.
Georgia-Pacific manufactures formaldehyde in its chemical
division, and uses it to produce various wood products, such as
plywood and laminates. Its annual production capacity for
formaldehyde is 2.2 billion pounds. Last December, Traylor
Champion, Georgia-Pacific’s vice-president of environmental
affairs, sent a formal letter of protest to federal health
authorities. He wrote that the company “strongly disagrees” with
the N.I.H. panel’s conclusion that formaldehyde should be
treated as a known human carcinogen. David Koch did not recuse
himself from the National Cancer Advisory Board, or divest
himself of company stock, while his company was directly
lobbying the government to keep formaldehyde on the market. (A
board spokesperson said that the issue of formaldehyde had not
come up.)
James Huff, an associate director at the National Institute
for Environmental Health Sciences, a division of the N.I.H.,
told me that it was “disgusting” for Koch to be serving on the
National Cancer Advisory Board: “It’s just not good for public
health. Vested interests should not be on the board.” He went
on, “Those boards are very important. They’re very influential
as to whether N.C.I. goes into formaldehyde or not. Billions of
dollars are involved in formaldehyde.”
Harold Varmus, the director of the National Cancer Institute,
knows David Koch from Memorial Sloan-Kettering, which he used to
run. He said that, at Sloan-Kettering, “a lot of people who gave
to us had large business interests. The one thing we wouldn’t
tolerate in our board members is tobacco.” When told of Koch
Industries’ stance on formaldehyde, Varmus said that he was
“surprised.”
The David H. Koch Hall of Human Origins, at
the Smithsonian’s National Museum of Natural History, is a
multimedia exploration of the theory that mankind evolved in
response to climate change. At the main entrance, viewers are
confronted with a giant graph charting the Earth’s temperature
over the past ten million years, which notes that it is far
cooler now than it was ten thousand years ago. Overhead, the
text reads, “HUMANS EVOLVED IN RESPONSE
TO A CHANGING WORLD.” The message, as amplified by the
exhibit’s Web site, is that “key human adaptations evolved in
response to environmental instability.” Only at the end of the
exhibit, under the headline “OUR
SURVIVAL CHALLENGE,” is it noted that levels of carbon
dioxide are higher now than they have ever been, and that they
are projected to increase dramatically in the next century. No
cause is given for this development; no mention is made of any
possible role played by fossil fuels. The exhibit makes it seem
part of a natural continuum. The accompanying text says, “During
the period in which humans evolved, Earth’s temperature and the
amount of carbon dioxide in the atmosphere fluctuated together.”
An interactive game in the exhibit suggests that humans will
continue to adapt to climate change in the future. People may
build “underground cities,” developing “short, compact bodies”
or “curved spines,” so that “moving around in tight spaces will
be no problem.”
Such ideas uncannily echo the Koch message. The company’s
January newsletter to employees, for instance, argues that
“fluctuations in the earth’s climate predate humanity,” and
concludes, “Since we can’t control Mother Nature, let’s figure
out how to get along with her changes.” Joseph Romm, a physicist
who runs the Web site ClimateProgress.org, is infuriated by the
Smithsonian’s presentation. “The whole exhibit whitewashes the
modern climate issue,” he said. “I think the Kochs wanted to be
seen as some sort of high-minded company, associated with the
greatest natural-history and science museum in the country. But
the truth is, the exhibit is underwritten by big-time polluters,
who are underground funders of action to stop efforts to deal
with this threat to humanity. I think the Smithsonian should
have drawn the line.”
Cristián Samper, the museum’s director, said that the exhibit
is not about climate change, and described Koch as “one of the
best donors we’ve had, in my tenure here, because he’s very
interested in the content, but completely hands off.” He noted,
“I don’t know all the details of his involvement in other
issues.”
The Kochs have long depended on the public’s not knowing all
the details about them. They have been content to operate what
David Koch has called “the largest company that you’ve never
heard of.” But with the growing prominence of the Tea Party, and
with increased awareness of the Kochs’ ties to the movement, the
brothers may find it harder to deflect scrutiny. Recently,
President Obama took aim at the Kochs’ political network.
Speaking at a Democratic National Committee fund-raiser, in
Austin, he warned supporters that the Supreme Court’s recent
ruling in the Citizens United case—which struck down laws
prohibiting direct corporate spending on campaigns—had made it
even easier for big companies to hide behind “groups with
harmless-sounding names like Americans for Prosperity.” Obama
said, “They don’t have to say who, exactly, Americans for
Prosperity are. You don’t know if it’s a foreign-controlled
corporation”—or even, he added, “a big oil company.”
♦
Read more
http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer?currentPage=all#ixzz0xm4BBb6i
On May 17th, a black-tie audience at the Metropolitan Opera House
applauded as a tall, jovial-looking billionaire took the stage. It was
the seventieth annual spring gala of American Ballet Theatre, and David
H. Koch was being celebrated for his generosity as a member of the board
of trustees; he had recently donated $2.5 million toward the company’s
upcoming season, and had given many millions before that. Koch received
an award while flanked by two of the gala’s co-chairs, Blaine Trump, in
a peach-colored gown, and Caroline Kennedy Schlossberg, in emerald
green. Kennedy’s mother, Jacqueline Kennedy Onassis, had been a patron
of the ballet and, coincidentally, the previous owner of a Fifth Avenue
apartment that Koch had bought, in 1995, and then sold, eleven years
later, for thirty-two million dollars, having found it too small.
The gala marked the social ascent of Koch, who, at the age of seventy,
has become one of the city’s most prominent philanthropists. In 2008, he
donated a hundred million dollars to modernize Lincoln Center’s New York
State Theatre building, which now bears his name. He has given twenty
million to the American Museum of Natural History, whose dinosaur wing
is named for him. This spring, after noticing the decrepit state of the
fountains outside the Metropolitan Museum of Art, Koch pledged at least
ten million dollars for their renovation. He is a trustee of the museum,
perhaps the most coveted social prize in the city, and serves on the
board of Memorial Sloan-Kettering Cancer Center, where, after he donated
more than forty million dollars, an endowed chair and a research center
were named for him.
One dignitary was conspicuously absent from the gala: the event’s third
honorary co-chair, Michelle Obama. Her office said that a scheduling
conflict had prevented her from attending. Yet had the First Lady shared
the stage with Koch it might have created an awkward tableau. In
Washington, Koch is best known as part of a family that has repeatedly
funded stealth attacks on the federal government, and on the Obama
Administration in particular.
With his brother Charles, who is seventy-four, David Koch owns virtually
all of Koch Industries, a conglomerate, headquartered in Wichita,
Kansas, whose annual revenues are estimated to be a hundred billion
dollars. The company has grown spectacularly since their father, Fred,
died, in 1967, and the brothers took charge. The Kochs operate oil
refineries in Alaska, Texas, and Minnesota, and control some four
thousand miles of pipeline.
Koch Industries owns:
Brawny paper towels,
Dixie cups,
Georgia-Pacific lumber, Stainmaster carpet, and Lycra,
among other products. Forbes ranks it as the second-largest private
company in the country, after Cargill, and its consistent profitability
has made David and Charles Koch—who, years ago, bought out two other
brothers—among the richest men in America. Their combined fortune of
thirty-five billion dollars is exceeded only by those of Bill Gates and
Warren Buffett.
•from the issue
•cartoon bank
•e-mail this
The Kochs are longtime libertarians who believe in drastically lower
personal and corporate taxes, minimal social services for the needy, and
much less oversight of industry—especially environmental regulation.
These views dovetail with the brothers’ corporate interests. In a study
released this spring, the University of Massachusetts at Amherst’s
Political Economy Research Institute named Koch Industries one of the
top ten air polluters in the
Read more http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer?currentPage=all#ixzz0xm4NRQiO
United States. And Greenpeace issued a report identifying the company as
a “kingpin of climate science denial.” The report showed that, from 2005
to 2008, the Kochs vastly outdid ExxonMobil in giving money to
organizations fighting legislation related to climate change,
underwriting a huge network of foundations, think tanks, and political
front groups. Indeed, the brothers have funded opposition campaigns
against so many Obama Administration policies—from health-care reform to
the economic-stimulus program—that, in political circles, their
ideological network is known as the Kochtopus.
In a statement, Koch Industries said that the Greenpeace report
“distorts the environmental record of our companies.” And David Koch, in
a recent, admiring article about him in New York, protested that the
“radical press” had turned his family into “whipping boys,” and had
exaggerated its influence on American politics. But Charles Lewis, the
founder of the Center for Public Integrity, a nonpartisan watchdog
group, said, “The Kochs are on a whole different level. There’s no one
else who has spent this much money. The sheer dimension of it is what
sets them apart. They have a pattern of lawbreaking, political
manipulation, and obfuscation. I’ve been in Washington since Watergate,
and I’ve never seen anything like it. They are the Standard Oil of our
times.”
A few weeks after the Lincoln Center gala, the advocacy wing of the
Americans for Prosperity Foundation—an organization that David Koch
started, in 2004—held a different kind of gathering. Over the July 4th
weekend, a summit called Texas Defending the American Dream took place
in a chilly hotel ballroom in Austin. Though Koch freely promotes his
philanthropic ventures, he did not attend the summit, and his name was
not in evidence. And on this occasion the audience was roused not by a
dance performance but by a series of speakers denouncing President
Barack Obama. Peggy Venable, the organizer of the summit, warned that
Administration officials “have a socialist vision for this country.”
Five hundred people attended the summit, which served, in part, as a
training session for Tea Party activists in Texas. An advertisement cast
the event as a populist uprising against vested corporate power. “Today,
the voices of average Americans are being drowned out by lobbyists and
special interests,” it said. “But you can do something about it.” The
pitch made no mention of its corporate funders. The White House has
expressed frustration that such sponsors have largely eluded public
notice. David Axelrod, Obama’s senior adviser, said, “What they don’t
say is that, in part, this is a grassroots citizens’ movement brought to
you by a bunch of oil billionaires.”
In April, 2009, Melissa Cohlmia, a company spokesperson, denied that the
Kochs had direct links to the Tea Party, saying that Americans for
Prosperity is “an independent organization and Koch companies do not in
any way direct their activities.” Later, she issued a statement: “No
funding has been provided by Koch companies, the Koch foundations, or
Charles Koch or David Koch specifically to support the tea parties.”
David Koch told New York, “I’ve never been to a tea-party event. No one
representing the tea party has ever even approached me.”
At the lectern in Austin, however, Venable—a longtime political
operative who draws a salary from Americans for Prosperity, and who has
worked for Koch-funded political groups since 1994—spoke less warily.
“We love what the Tea Parties are doing, because that’s how we’re going
to take back America!” she declared, as the crowd cheered. In a
subsequent interview, she described herself as an early member of the
movement, joking, “I was part of the Tea Party before it was cool!” She
explained that the role of Americans for Prosperity was to help
“educate” Tea Party activists on policy details, and to give them
“next-step training” after their rallies, so that their political energy
could be channelled “more effectively.” And she noted that Americans for
Prosperity had provided Tea Party activists with lists of elected
officials to target. She said of the Kochs, “They’re certainly our
people. David’s the chairman of our board. I’ve certainly met with them,
and I’m very appreciative of what they do.”
Venable honored several Tea Party “citizen leaders” at the summit. The
Texas branch of Americans for Prosperity gave its Blogger of the Year
Award to a young woman named Sibyl West. On June 14th, West, writing on
her site, described Obama as the “cokehead in chief.” In an online
thread, West speculated that the President was exhibiting symptoms of
“demonic possession (aka schizophrenia, etc.).” The summit featured
several paid speakers, including Janine Turner, the actress best known
for her role on the television series “Northern Exposure.” She declared,
“They don’t want our children to know about their rights. They don’t
want our children to know about a God!”
During a catered lunch, Venable introduced Ted Cruz, a former solicitor
general of Texas, who told the crowd that Obama was “the most radical
President ever to occupy the Oval Office,” and had hidden from voters a
secret agenda—“the government taking over our economy and our lives.”
Countering Obama, Cruz proclaimed, was “the epic fight of our
generation!” As the crowd rose to its feet and cheered, he quoted the
defiant words of a Texan at the Alamo: “Victory, or death!”
Americans for Prosperity has worked closely with the Tea Party since the
movement’s inception. In the weeks before the first Tax Day protests, in
April, 2009, Americans for Prosperity hosted a Web site offering
supporters “Tea Party Talking Points.” The Arizona branch urged people
to send tea bags to Obama; the Missouri branch urged members to sign up
for “Taxpayer Tea Party Registration” and provided directions to nine
protests. The group continues to stoke the rebellion. The North Carolina
branch recently launched a “Tea Party Finder” Web site, advertised as “a
hub for all the Tea Parties in North Carolina.”
The anti-government fervor infusing the 2010 elections represents a
political triumph for the Kochs. By giving money to “educate,” fund, and
organize Tea Party protesters, they have helped turn their private
agenda into a mass movement. Bruce Bartlett, a conservative economist
and a historian, who once worked at the National Center for Policy
Analysis, a Dallas-based think tank that the Kochs fund, said, “The
problem with the whole libertarian movement is that it’s been all chiefs
and no Indians. There haven’t been any actual people, like voters, who
give a crap about it. So the problem for the Kochs has been trying to
create a movement.” With the emergence of the Tea Party, he said,
“everyone suddenly sees that for the first time there are Indians out
there—people who can provide real ideological power.” The Kochs, he
said, are “trying to shape and control and channel the populist uprising
into their own policies.”
A Republican campaign consultant who has done research on behalf of
Charles and David Koch said of the Tea Party, “The Koch brothers gave
the money that founded it. It’s like they put the seeds in the ground.
Then the rainstorm comes, and the frogs come out of the mud—and they’re
our candidates!”
The Kochs and their political operatives declined requests for
interviews. Instead, a prominent New York public-relations executive who
is close with the Kochs put forward two friends: George Pataki, the
former governor of New York, and Mortimer Zuckerman, the publisher and
real-estate magnate. Pataki, a Republican who received campaign
donations from David Koch, called him “a patriot who cares deeply about
his country.” Zuckerman praised David’s “gentle decency” and the “range
of his public interests.”
The Republican campaign consultant said of the family’s political
activities, “To call them under the radar is an understatement. They are
underground!” Another former Koch adviser said, “They’re smart. This
right-wing, redneck stuff works for them. They see this as a way to get
things done without getting dirty themselves.” Rob Stein, a Democratic
political strategist who has studied the conservative movement’s
finances, said that the Kochs are “at the epicenter of the anti-Obama
movement. But it’s not just about Obama. They would have done the same
to Hillary Clinton. They did the same with Bill Clinton. They are out to
destroy progressivism.”
Oddly enough, the fiercely capitalist Koch family owes part of its
fortune to Joseph Stalin. Fred Koch was the son of a Dutch printer who
settled in Texas and ran a weekly newspaper. Fred attended M.I.T., where
he earned a degree in chemical engineering. In 1927, he invented a more
efficient process for converting oil into gasoline, but, according to
family lore, America’s major oil companies regarded him as a threat and
shut him out of the industry. Unable to succeed at home, Koch found work
in the Soviet Union. In the nineteen-thirties, his company trained
Bolshevik engineers and helped Stalin’s regime set up fifteen modern oil
refineries. Over time, however, Stalin brutally purged several of Koch’s
Soviet colleagues. Koch was deeply affected by the experience, and
regretted his collaboration. He returned to the U.S. In the headquarters
of his company, Rock Island Oil & Refining, in Wichita, he kept
photographs aimed at proving that some of those Soviet refineries had
been destroyed in the Second World War. Gus diZerega, a former friend of
Charles Koch, recalled, “As the Soviets became a stronger military
power, Fred felt a certain amount of guilt at having helped build them
up. I think it bothered him a lot.”
In 1958, Fred Koch became one of the original members of the John Birch
Society, the arch-conservative group known, in part, for a highly
skeptical view of governance and for spreading fears of a Communist
takeover. Members considered President Dwight D. Eisenhower to be a
Communist agent. In a self-published broadside, Koch claimed that “the
Communists have infiltrated both the Democrat and Republican Parties.”
He wrote admiringly of Benito Mussolini’s suppression of Communists in
Italy, and disparagingly of the American civil-rights movement. “The
colored man looms large in the Communist plan to take over America,” he
warned. Welfare was a secret plot to attract rural blacks to cities,
where they would foment “a vicious race war.” In a 1963 speech that
prefigures the Tea Party’s talk of a secret socialist plot, Koch
predicted that Communists would “infiltrate the highest offices of
government in the U.S. until the President is a Communist, unknown to
the rest of us.”
Koch married Mary Robinson, the daughter of a Missouri physician, and
they had four sons: Freddie, Charles, and twins, David and William. John
Damgard, the president of the Futures Industry Association, was David’s
schoolmate and friend. He recalled that Fred Koch was “a real John Wayne
type.” Koch emphasized rugged pursuits, taking his sons big-game hunting
in Africa, and requiring them to do farm labor at the family ranch. The
Kochs lived in a stone mansion on a large compound across from Wichita’s
country club; in the summer, the boys could hear their friends splashing
in the pool, but they were not allowed to join them. “By instilling a
work ethic in me at an early age, my father did me a big favor, although
it didn’t seem like a favor back then,” Charles has written. “By the
time I was eight, he made sure work occupied most of my spare time.”
David Koch recalled that his father also indoctrinated the boys
politically. “He was constantly speaking to us children about what was
wrong with government,” he told Brian Doherty, an editor of the
libertarian magazine Reason, and the author of “Radicals for
Capitalism,” a 2007 history of the libertarian movement. “It’s something
I grew up with—a fundamental point of view that big government was bad,
and imposition of government controls on our lives and economic fortunes
was not good.”
David attended Deerfield Academy, in Massachusetts, and Charles was sent
to military school. Charles, David, and William all earned engineering
degrees at their father’s alma mater, M.I.T., and later joined the
family company. Charles eventually assumed control, with David as his
deputy; William’s career at the company was less successful. Freddie
went to Harvard and studied playwriting at the Yale School of Drama. His
father reportedly disapproved of him, and punished him financially.
(Freddie, through a spokesperson, denied this.)
In 1967, after Fred Koch died, of a heart attack, Charles renamed the
business Koch Industries, in honor of his father. Fred Koch’s will made
his sons extraordinarily wealthy. David Koch joked about his good
fortune in a 2003 speech to alumni at Deerfield, where, after pledging
twenty-five million dollars, he was made the school’s sole “lifetime
trustee.” He said, “You might ask: How does David Koch happen to have
the wealth to be so generous? Well, let me tell you a story. It all
started when I was a little boy. One day, my father gave me an apple. I
soon sold it for five dollars and bought two apples and sold them for
ten. Then I bought four apples and sold them for twenty. Well, this went
on day after day, week after week, month after month, year after year,
until my father died and left me three hundred million dollars!”
David and Charles had absorbed their father’s conservative politics, but
they did not share all his views, according to diZerega, who befriended
Charles in the mid-sixties, after meeting him while browsing in a John
Birch Society bookstore in Wichita. Charles eventually invited him to
the Kochs’ mansion, to participate in an informal political-discussion
group. “It was pretty clear that Charles thought some of the Birch
Society was bullshit,” diZerega recalled.
DiZerega, who has lost touch with Charles, eventually abandoned
right-wing views, and became a political-science professor. He credits
Charles with opening his mind to political philosophy, which set him on
the path to academia; Charles is one of three people to whom he
dedicated his first book. But diZerega believes that the Koch brothers
have followed a wayward intellectual trajectory, transferring their
father’s paranoia about Soviet Communism to a distrust of the U.S.
government, and seeing its expansion, beginning with the New Deal, as a
tyrannical threat to freedom. In an essay, posted on Beliefnet, diZerega
writes, “As state socialism failed . . . the target for many within
these organizations shifted to any kind of regulation at all.
‘Socialism’ kept being defined downwards.”
Members of the John Birch Society developed an interest in a school of
Austrian economists who promoted free-market ideals. Charles and David
Koch were particularly influenced by the work of Friedrich von Hayek,
the author of “The Road to Serfdom” (1944), which argued that
centralized government planning led, inexorably, to totalitarianism.
Hayek’s belief in unfettered capitalism has proved inspirational to many
conservatives, and to anti-Soviet dissidents; lately, Tea Party
supporters have championed his work. In June, the talk-radio host Glenn
Beck, who has supported the Tea Party rebellion, promoted “The Road to
Serfdom” on his show; the paperback soon became a No. 1 best-seller on
Amazon. (Beck appears to be a fan of the Kochs; in the midst of a recent
on-air parody of Al Gore, Beck said, without explanation, “I want to
thank Charles Koch for this information.” Beck declined to elaborate on
the relationship.)
Charles and David also became devotees of a more radical thinker, Robert
LeFevre, who favored the abolition of the state but didn’t like the
label “anarchist”; he called himself an “autarchist.” LeFevre liked to
say that “government is a disease masquerading as its own cure.” In
1956, he opened an institution called the Freedom School, in Colorado
Springs. Brian Doherty, of Reason, told me that “LeFevre was an
anarchist figure who won Charles’s heart,” and that the school was “a
tiny world of people who thought the New Deal was a horrible mistake.”
According to diZerega, Charles supported the school financially, and
even gave him money to take classes there.
Throughout the seventies, Charles and David continued to build Koch
Industries. In 1980, William, with assistance from Freddie, attempted to
take over the company from Charles, who, they felt, had assumed
autocratic control. In retaliation, the company’s board, which answered
to Charles, fired William. (“Charles runs it all with an iron hand,”
Bruce Bartlett, the economist, told me.) Lawsuits were filed, with
William and Freddie on one side and Charles and David on the other. In
1983, Charles and David bought out their brothers’ share in the company
for nearly a billion dollars. But the antagonism remained, and
litigation continued for seventeen more years, with the brothers hiring
rival private investigators; in 1990, they walked past one another with
stony expressions at their mother’s funeral. Eventually, Freddie moved
to Monaco, which has no income tax. He bought historic estates in
France, Austria, and elsewhere, filling them with art, antiques, opera
scores, and literary manuscripts. William founded his own energy
company, Oxbow, and turned to yachting; he spent an estimated sixty-five
million dollars to win the America’s Cup, in 1992.
With Charles as the undisputed chairman and C.E.O., Koch Industries
expanded rapidly. Roger Altman, who heads the investment-banking firm
Evercore, told me that the company’s performance has been “beyond
phenomenal.” Charles remained in Wichita, with his wife and two
children, guarding his privacy while supporting community charities.
David moved to New York City, where he is an executive vice-president of
the company and the C.E.O. of its Chemical Technology Group. A financial
expert who knows Koch Industries well told me, “Charles is the company.
Charles runs it.” David, described by associates as “affable” and “a bit
of a lunk,” enjoyed for years the life of a wealthy bachelor. He rented
a yacht in the South of France and bought a waterfront home in
Southampton, where he threw parties that the Web site New York Social
Diary likened to an “East Coast version of Hugh Hefner’s soirées.” In
1996, he married Julia Flesher, a fashion assistant. They live in a
nine-thousand-square-foot duplex at 740 Park Avenue, with their three
children. Though David’s manner is more cosmopolitan, and more genial,
than that of Charles, Brian Doherty, who has interviewed both brothers,
couldn’t think of a single issue on which the brothers disagreed.
As their fortunes grew, Charles and David Koch became the primary
underwriters of hard-line libertarian politics in America. Charles’s
goal, as Doherty described it, was to tear the government “out at the
root.” The brothers’ first major public step came in 1979, when Charles
persuaded David, then thirty-nine, to run for public office. They had
become supporters of the Libertarian Party, and were backing its
Presidential candidate, Ed Clark, who was running against Ronald Reagan
from the right. Frustrated by the legal limits on campaign donations,
they contrived to place David on the ticket, in the Vice-Presidential
slot; upon becoming a candidate, he could lavish as much of his personal
fortune as he wished on the campaign. The ticket’s slogan was “The
Libertarian Party has only one source of funds: You.” In fact, its
primary source of funds was David Koch, who spent more than two million
dollars on the effort.
Many of the ideas propounded in the 1980 campaign presaged the Tea Party
movement. Ed Clark told The Nation that libertarians were getting ready
to stage “a very big tea party,” because people were “sick to death” of
taxes. The Libertarian Party platform called for the abolition of the
F.B.I. and the C.I.A., as well as of federal regulatory agencies, such
as the Securities and Exchange Commission and the Department of Energy.
The Party wanted to end Social Security, minimum-wage laws, gun control,
and all personal and corporate income taxes; it proposed the
legalization of prostitution, recreational drugs, and suicide.
Government should be reduced to only one function: the protection of
individual rights. William F. Buckley, Jr., a more traditional
conservative, called the movement “Anarcho-Totalitarianism.”
That November, the Libertarian ticket received only one per cent of the
vote. The brothers realized that their brand of politics didn’t sell at
the ballot box. Charles Koch became openly scornful of conventional
politics. “It tends to be a nasty, corrupting business,” he told a
reporter at the time. “I’m interested in advancing libertarian ideas.”
According to Doherty’s book, the Kochs came to regard elected
politicians as merely “actors playing out a script.” A longtime
confidant of the Kochs told Doherty that the brothers wanted to “supply
the themes and words for the scripts.” In order to alter the direction
of America, they had to “influence the areas where policy ideas
percolate from: academia and think tanks.”
After the 1980 election, Charles and David Koch receded from the public
arena. But they poured more than a hundred million dollars into dozens
of seemingly independent organizations. Tax records indicate that in
2008 the three main Koch family foundations gave money to thirty-four
political and policy organizations, three of which they founded, and
several of which they direct. The Kochs and their company have given
additional millions to political campaigns, advocacy groups, and
lobbyists. The family’s subterranean financial role has fuelled
suspicion on the left; Lee Fang, of the liberal blog ThinkProgress, has
called the Kochs “the billionaires behind the hate.”
Only the Kochs know precisely how much they have spent on politics.
Public tax records show that between 1998 and 2008 the Charles G. Koch
Charitable Foundation spent more than forty-eight million dollars. The
Claude R. Lambe Charitable Foundation, which is controlled by Charles
Koch and his wife, along with two company employees and an accountant,
spent more than twenty-eight million. The David H. Koch Charitable
Foundation spent more than a hundred and twenty million. Meanwhile,
since 1998 Koch Industries has spent more than fifty million dollars on
lobbying. Separately, the company’s political-action committee, KochPAC,
has donated some eight million dollars to political campaigns, more than
eighty per cent of it to Republicans. So far in 2010, Koch Industries
leads all other energy companies in political contributions, as it has
since 2006. In addition, during the past dozen years the Kochs and other
family members have personally spent more than two million dollars on
political contributions. In the second quarter of 2010, David Koch was
the biggest individual contributor to the Republican Governors
Association, with a million-dollar donation. Other gifts by the Kochs
may be untraceable; federal tax law permits anonymous personal donations
to politically active nonprofit groups.
In recent decades, members of several industrial dynasties have spent
parts of their fortunes on a conservative agenda. In the
nineteen-eighties, the Olin family, which owns a
chemicals-and-manufacturing conglomerate, became known for funding
right-leaning thinking in academia, particularly in law schools. And
during the nineties Richard Mellon Scaife, a descendant of Andrew
Mellon, spent millions attempting to discredit President Bill Clinton.
Ari Rabin-Havt, a vice-president at the Democratic-leaning Web site
Media Matters, said that the Kochs’ effort is unusual, in its
marshalling of corporate and personal funds: “Their role, in terms of
financial commitments, is staggering.”
Of course, Democrats give money, too. Their most prominent donor, the
financier George Soros, runs a foundation, the Open Society Institute,
that has spent as much as a hundred million dollars a year in America.
Soros has also made generous private contributions to various Democratic
campaigns, including Obama’s. But Michael Vachon, his spokesman, argued
that Soros’s giving is transparent, and that “none of his contributions
are in the service of his own economic interests.” The Kochs have given
millions of dollars to nonprofit groups that criticize environmental
regulation and support lower taxes for industry. Gus diZerega, the
former friend, suggested that the Kochs’ youthful idealism about
libertarianism had largely devolved into a rationale for corporate
self-interest. He said of Charles, “Perhaps he has confused making money
with freedom.”
Some critics have suggested that the Kochs’ approach has subverted the
purpose of tax-exempt giving. By law, charitable foundations must
conduct exclusively nonpartisan activities that promote the public
welfare. A 2004 report by the National Committee for Responsive
Philanthropy, a watchdog group, described the Kochs’ foundations as
being self-serving, concluding, “These foundations give money to
nonprofit organizations that do research and advocacy on issues that
impact the profit margin of Koch Industries.”
The Kochs have gone well beyond their immediate self-interest, however,
funding organizations that aim to push the country in a libertarian
direction. Among the institutions that they have subsidized are the
Institute for Justice, which files lawsuits opposing state and federal
regulations; the Institute for Humane Studies, which underwrites
libertarian academics; and the Bill of Rights Institute, which promotes
a conservative slant on the Constitution. Many of the organizations
funded by the Kochs employ specialists who write position papers that
are subsequently quoted by politicians and pundits. David Koch has
acknowledged that the family exerts tight ideological control. “If we’re
going to give a lot of money, we’ll make darn sure they spend it in a
way that goes along with our intent,” he told Doherty. “And if they make
a wrong turn and start doing things we don’t agree with, we withdraw
funding.”
The Kochs’ subsidization of a pro-corporate movement fulfills, in many
ways, the vision laid out in a secret 1971 memo that Lewis Powell, then
a Virginia attorney, wrote two months before he was nominated to the
Supreme Court. The antiwar movement had turned its anger on defense
contractors, such as Dow Chemical, and Ralph Nader was leading a
public-interest crusade against corporations. Powell, writing a report
for the U.S. Chamber of Commerce, urged American companies to fight
back. The greatest threat to free enterprise, he warned, was not
Communism or the New Left but, rather, “respectable elements of
society”—intellectuals, journalists, and scientists. To defeat them, he
wrote, business leaders needed to wage a long-term, unified campaign to
change public opinion.
Charles Koch seems to have approached both business and politics with
the deliberation of an engineer. “To bring about social change,” he told
Doherty, requires “a strategy” that is “vertically and horizontally
integrated,” spanning “from idea creation to policy development to
education to grassroots organizations to lobbying to litigation to
political action.” The project, he admitted, was extremely ambitious.
“We have a radical philosophy,” he said.
In 1977, the Kochs provided the funds to launch the nation’s first
libertarian think tank, the Cato Institute. According to the Center for
Public Integrity, between 1986 and 1993 the Koch family gave eleven
million dollars to the institute. Today, Cato has more than a hundred
full-time employees, and its experts and policy papers are widely quoted
and respected by the mainstream media. It describes itself as
nonpartisan, and its scholars have at times been critical of both
parties. But it has consistently pushed for corporate tax cuts,
reductions in social services, and laissez-faire environmental policies.
When President Obama, in a 2008 speech, described the science on global
warming as “beyond dispute,” the Cato Institute took out a full-page ad
in the Times to contradict him. Cato’s resident scholars have
relentlessly criticized political attempts to stop global warming as
expensive, ineffective, and unnecessary. Ed Crane, the Cato Institute’s
founder and president, told me that “global-warming theories give the
government more control of the economy.”
Cato scholars have been particularly energetic in promoting the
Climategate scandal. Last year, private e-mails of climate scientists at
the University of East Anglia, in England, were mysteriously leaked, and
their exchanges appeared to suggest a willingness to falsify data in
order to buttress the idea that global warming is real. In the two weeks
after the e-mails went public, one Cato scholar gave more than twenty
media interviews trumpeting the alleged scandal. But five independent
inquiries have since exonerated the researchers, and nothing was found
in their e-mails or data to discredit the scientific consensus on global
warming.
Nevertheless, the controversy succeeded in spreading skepticism about
climate change. Even though the National Oceanic and Atmospheric
Administration recently issued a report concluding that the evidence for
global warming is unequivocal, more Americans are convinced than at any
time since 1997 that scientists have exaggerated the seriousness of
global warming. The Kochs promote this statistic on their company’s Web
site but do not mention the role that their funding has played in
fostering such doubt.
In a 2002 memo, the Republican political consultant Frank Luntz wrote
that so long as “voters believe there is no consensus about global
warming within the scientific community” the status quo would prevail.
The key for opponents of environmental reform, he said, was to question
the science—a public-relations strategy that the tobacco industry used
effectively for years to forestall regulation. The Kochs have funded
many sources of environmental skepticism, such as the Heritage
Foundation, which has argued that “scientific facts gathered in the past
10 years do not support the notion of catastrophic human-made warming.”
The brothers have given money to more obscure groups, too, such as the
Independent Women’s Forum, which opposes the presentation of global
warming as a scientific fact in American public schools. Until 2008, the
group was run by Nancy Pfotenhauer, a former lobbyist for Koch
Industries. Mary Beth Jarvis, a vice-president of a Koch subsidiary, is
on the group’s board.
Naomi Oreskes, a professor of history and science studies at the
University of California, San Diego, is the co-author of “Merchants of
Doubt,” a new book that chronicles various attempts by American industry
to manipulate public opinion on science. She noted that the Kochs, as
the heads of “a company with refineries and pipelines,” have “a lot at
stake.” She added, “If the answer is to phase out fossil fuels, a
different group of people are going to be making money, so we shouldn’t
be surprised that they’re fighting tooth and nail.”
David Koch told New York that he was unconvinced that global warming has
been caused by human activity. Even if it has been, he said, the heating
of the planet will be beneficial, resulting in longer growing seasons in
the Northern Hemisphere. “The Earth will be able to support enormously
more people because far greater land area will be available to produce
food,” he said.
In the mid-eighties, the Kochs provided millions of dollars to George
Mason University, in Arlington, Virginia, to set up another think tank.
Now known as the Mercatus Center, it promotes itself as “the world’s
premier university source for market-oriented ideas—bridging the gap
between academic ideas and real-world problems.” Financial records show
that the Koch family foundations have contributed more than thirty
million dollars to George Mason, much of which has gone to the Mercatus
Center, a nonprofit organization. “It’s ground zero for deregulation
policy in Washington,” Rob Stein, the Democratic strategist, said. It is
an unusual arrangement. “George Mason is a public university, and
receives public funds,” Stein noted. “Virginia is hosting an institution
that the Kochs practically control.”
The founder of the Mercatus Center is Richard Fink, formerly an
economist. Fink heads Koch Industries’ lobbying operation in Washington.
In addition, he is the president of the Charles G. Koch Charitable
Foundation, the president of the Claude R. Lambe Charitable Foundation,
a director of the Fred C. and Mary R. Koch Foundation, and a director
and co-founder, with David Koch, of the Americans for Prosperity
Foundation.
Fink, with his many titles, has become the central nervous system of the
Kochtopus. He appears to have supplanted Ed Crane, the head of the Cato
Institute, as the brothers’ main political lieutenant. Though David
remains on the board at Cato, Charles Koch has fallen out with Crane.
Associates suggested to me that Crane had been insufficiently respectful
of Charles’s management philosophy, which he distilled into a book
called “The Science of Success,” and trademarked under the name
Market-Based Management, or M.B.M. In the book, Charles recommends
instilling a company’s corporate culture with the competitiveness of the
marketplace. Koch describes M.B.M. as a “holistic system” containing
“five dimensions: vision, virtue and talents, knowledge processes,
decision rights and incentives.” A top Cato Institute official told me
that Charles “thinks he’s a genius. He’s the emperor, and he’s convinced
he’s wearing clothes.” Fink, by contrast, has been far more embracing of
Charles’s ideas. (Fink, like the Kochs, declined to be interviewed.)
At a 1995 conference for philanthropists, Fink adopted the language of
economics when speaking about the Mercatus Center’s purpose. He said
that grant-makers should use think tanks and political-action groups to
convert intellectual raw materials into policy “products.”
The Wall Street Journal has called the Mercatus Center “the most
important think tank you’ve never heard of,” and noted that fourteen of
the twenty-three regulations that President George W. Bush placed on a
“hit list” had been suggested first by Mercatus scholars. Fink told the
paper that the Kochs have “other means of fighting [their] battles,” and
that the Mercatus Center does not actively promote the company’s private
interests. But Thomas McGarity, a law professor at the University of
Texas, who specializes in environmental issues, told me that “Koch has
been constantly in trouble with the E.P.A., and Mercatus has constantly
hammered on the agency.” An environmental lawyer who has clashed with
the Mercatus Center called it “a means of laundering economic aims.” The
lawyer explained the strategy: “You take corporate money and give it to
a neutral-sounding think tank,” which “hires people with pedigrees and
academic degrees who put out credible-seeming studies. But they all
coincide perfectly with the economic interests of their funders.”
In 1997, for instance, the E.P.A. moved to reduce surface ozone, a form
of pollution caused, in part, by emissions from oil refineries. Susan
Dudley, an economist who became a top official at the Mercatus Center,
criticized the proposed rule. The E.P.A., she argued, had not taken into
account that smog-free skies would result in more cases of skin cancer.
She projected that if pollution were controlled it would cause up to
eleven thousand additional cases of skin cancer each year.
In 1999, the District of Columbia Circuit Court took up Dudley’s smog
argument. Evaluating the E.P.A. rule, the court found that the E.P.A.
had “explicitly disregarded” the “possible health benefits of ozone.” In
another part of the opinion, the court ruled, 2-1, that the E.P.A. had
overstepped its authority in calibrating standards for ozone emissions.
As the Constitutional Accountability Center, a think tank, revealed, the
judges in the majority had previously attended legal junkets, on a
Montana ranch, that were arranged by the Foundation for Research on
Economics and the Environment—a group funded by Koch family foundations.
The judges have claimed that the ruling was unaffected by their
attendance.
“Ideas don’t happen on their own,” Matt Kibbe, the president of
FreedomWorks, a Tea Party advocacy group, told me. “Throughout history,
ideas need patrons.” The Koch brothers, after helping to create Cato and
Mercatus, concluded that think tanks alone were not enough to effect
change. They needed a mechanism to deliver those ideas to the street,
and to attract the public’s support. In 1984, David Koch and Richard
Fink created yet another organization, and Kibbe joined them. The group,
Citizens for a Sound Economy, seemed like a grassroots movement, but
according to the Center for Public Integrity it was sponsored
principally by the Kochs, who provided $7.9 million between 1986 and
1993. Its mission, Kibbe said, “was to take these heavy ideas and
translate them for mass America. . . . We read the same literature Obama
did about nonviolent revolutions—Saul Alinsky, Gandhi, Martin Luther
King. We studied the idea of the Boston Tea Party as an example of
nonviolent social change. We learned we needed boots on the ground to
sell ideas, not candidates.” Within a few years, the group had mobilized
fifty paid field workers, in twenty-six states, to rally voters behind
the Kochs’ agenda. David and Charles, according to one participant, were
“very controlling, very top down. You can’t build an organization with
them. They run it.”
Around this time, the brothers faced a political crisis. In 1989, the
Senate Select Committee on Indian Affairs investigated their business
and released a scathing report accusing Koch Oil of “a widespread and
sophisticated scheme to steal crude oil from Indians and others through
fraudulent mismeasuring.” The Kochs admitted that they had improperly
taken thirty-one million dollars’ worth of crude oil, but said that it
had been accidental. Charles Koch told committee investigators that oil
measurement is “a very uncertain art.”
To defend its reputation, Koch Industries hired Robert Strauss, then a
premier Washington lobbyist; the company soon opened an office in the
city. A grand jury was convened to investigate the allegations, but it
eventually disbanded, without issuing criminal charges. According to the
Senate report, after the committee hearings Koch operatives delved into
the personal lives of committee staffers, even questioning an ex-wife.
Senate investigators were upset by the Kochs’ tactics. Kenneth Ballen,
the counsel to the Senate committee, said, “These people have amassed
such unaccountable power!”
By 1993, when Bill Clinton became President, Citizens for a Sound
Economy had become a prototype for the kind of corporate-backed
opposition campaigns that have proliferated during the Obama era. The
group waged a successful assault on Clinton’s proposed B.T.U. tax on
energy, for instance, running advertisements, staging media events, and
targeting opponents. And it mobilized anti-tax rallies outside the
Capitol—rallies that NPR described as “designed to strike fear into the
hearts of wavering Democrats.” Dan Glickman, a former Democratic
congressman from Wichita, who supported the B.T.U. tax, recalled, “I’d
been in Congress eighteen years. The Kochs actually engaged against me
and funded my opponent. They used a lot of resources and effort—their
employees, too.” Glickman suffered a surprise defeat. “I can’t prove it,
but I think I was probably their victim,” he said.
The Kochs continued to disperse their money, creating slippery
organizations with generic-sounding names, and this made it difficult to
ascertain the extent of their influence in Washington. In 1990, Citizens
for a Sound Economy created a spinoff group, Citizens for the
Environment, which called acid rain and other environmental problems
“myths.” When the Pittsburgh Post-Gazette investigated the matter, it
discovered that the spinoff group had “no citizen membership of its
own.”
In 1997, another Senate investigation began looking into what a minority
report called “an audacious plan to pour millions of dollars in
contributions into Republican campaigns nationwide without disclosing
the amount or source,” in order to evade campaign-finance laws. A shell
corporation, Triad Management, had paid more than three million dollars
for attack ads in twenty-six House races and three Senate races. More
than half of the advertising money came from an obscure nonprofit group,
the Economic Education Trust. The Senate committee’s minority report
suggested that “the trust was financed in whole or in part by Charles
and David Koch of Wichita, Kansas.” The brothers were suspected of
having secretly paid for the attack ads, most of which aired in states
where Koch Industries did business. In Kansas, where Triad Management
was especially active, the funds may have played a decisive role in four
of six federal races. The Kochs, when asked by reporters if they had
given the money, refused to comment. In 1998, however, the Wall Street
Journal confirmed that a consultant on the Kochs’ payroll had been
involved in the scheme. Charles Lewis, of the Center for Public
Integrity, described the scandal as “historic. Triad was the first time
a major corporation used a cutout”—a front operation—“in a threatening
way. Koch Industries was the poster child of a company run amok.”
During the Clinton Administration, the energy industry faced increased
scrutiny and regulation. In the mid-nineties, the Justice Department
filed two lawsuits against Koch Industries, claiming that it was
responsible for more than three hundred oil spills, which had released
an estimated three million gallons of oil into lakes and rivers. The
penalty was potentially as high as two hundred and fourteen million
dollars. In a settlement, Koch Industries paid a record
thirty-million-dollar civil fine, and agreed to spend five million
dollars on environmental projects.
In 1999, a jury found Koch Industries guilty of negligence and malice in
the deaths of two Texas teen-agers in an explosion that resulted from a
leaky underground butane pipeline. (In 2001, the company paid an
undisclosed settlement.) And in the final months of the Clinton
Presidency the Justice Department levelled a ninety-seven-count
indictment against the company, for covering up the discharge of
ninety-one tons of benzene, a carcinogen, from its refinery in Corpus
Christi, Texas. The company was liable for three hundred and fifty
million dollars in fines, and four Koch employees faced up to
thirty-five years in prison. The Koch Petroleum Group eventually pleaded
guilty to one criminal charge of covering up environmental violations,
including the falsification of documents, and paid a
twenty-million-dollar fine. David Uhlmann, a career prosecutor who, at
the time, headed the environmental-crimes section at the Justice
Department, described the suit as “one of the most significant cases
ever brought under the Clean Air Act.” He added, “Environmental crimes
are almost always motivated by economics and arrogance, and in the Koch
case there was a healthy dose of both.”
During the 2000 election campaign, Koch Industries spent some nine
hundred thousand dollars to support the candidacies of George W. Bush
and other Republicans. During the Bush years, Koch Industries and other
fossil-fuel companies enjoyed remarkable prosperity. The 2005 energy
bill, which Hillary Clinton dubbed the Dick Cheney Lobbyist Energy Bill,
offered enormous subsidies and tax breaks for energy companies. The
Kochs have cast themselves as deficit hawks, but, according to a study
by Media Matters, their companies have benefitted from nearly a hundred
million dollars in government contracts since 2000.
In 2004, Citizens for a Sound Economy was accused of illegitimately
throwing its weight behind Bush’s reëlection. The group’s Oregon branch
had attempted to get Ralph Nader on the Presidential ballot, in order to
dilute Democratic support for John Kerry. Critics argued that it was
illegal for a tax-exempt nonprofit organization to donate its services
for partisan political purposes. (A complaint was filed with the Federal
Election Commission; it was dismissed.)
That year, internal rivalries at Citizens for a Sound Economy caused the
organization to split apart. David Koch and Fink started a new group,
Americans for Prosperity, and they hired Tim Phillips to run it.
Phillips was a political veteran who had worked with Ralph Reed, the
evangelical leader and Republican activist, co-founding Century
Strategies, a campaign-consulting company that became notorious for its
ties to the disgraced lobbyist Jack Abramoff. Phillips’s online
biography describes him as an expert in “grasstops” and “grassroots”
political organizing. The Kochs’ choice of Phillips signalled an even
greater toughness. The conservative operative Grover Norquist, who is
known for praising “throat slitters” in politics, called Phillips “a
grownup who can make things happen.”
Last year, Phillips told the Financial Times that Americans for
Prosperity had only eight thousand registered members. Currently, its
Web site claims that the group has “1.2 million activists.” Whatever its
size, the Kochs’ political involvement has been intense; a former
employee of the Cato Institute told me that Americans for Prosperity
“was micromanaged by the Kochs.” And the brothers’ investment may well
have paid off: Americans for Prosperity, in concert with the family’s
other organizations, has been instrumental in disrupting the Obama
Presidency.
In January, 2008, Charles Koch wrote in his company newsletter that
America could be on the verge of “the greatest loss of liberty and
prosperity since the 1930s.” That October, Americans for Prosperity held
a conference of conservative operatives at a Marriott hotel outside
Washington. Erick Erickson, the editor-in-chief of the conservative blog
RedState.com, took the lectern, thanked David Koch, and vowed to “unite
and fight . . . the armies of the left!” Soon after Obama assumed
office, Americans for Prosperity launched “Porkulus” rallies against
Obama’s stimulus-spending measures. Then the Mercatus Center released a
report claiming that stimulus funds had been directed disproportionately
toward Democratic districts; eventually, the author was forced to
correct the report, but not before Rush Limbaugh, citing the paper, had
labelled Obama’s program “a slush fund,” and Fox News and other
conservative outlets had echoed the sentiment. (Phil Kerpen, the
vice-president for policy at Americans for Prosperity, is a contributor
to the Fox News Web site. Another officer at Americans for Prosperity,
Walter Williams, often guest-hosts for Limbaugh.)
Americans for Prosperity also created an offshoot, Patients United Now,
which organized what Phillips has estimated to be more than three
hundred rallies against health-care reform. At one rally, an effigy of a
Democratic congressman was hung; at another, protesters unfurled a
banner depicting corpses from Dachau. The group also helped organize the
“Kill the Bill” protests outside the Capitol, in March, where Democratic
supporters of health-care reform alleged that they were spat on and
cursed at. Phillips was a featured speaker.
Americans for Prosperity has held at least eighty events targeting
cap-and-trade legislation, which is aimed at making industries pay for
the air pollution that they create. Speakers for the group claimed, with
exaggeration, that even back-yard barbecues and kitchen stoves would be
taxed. The group was also involved in the attacks on Obama’s “green
jobs” czar, Van Jones, and waged a crusade against international climate
talks. Casting his group as a champion of ordinary workers who would be
hurt by environmentalists, Phillips went to Copenhagen last year and
staged a protest outside the United Nations conference on climate
change, declaring, “We’re a grassroots organization. . . . I think it’s
unfortunate when wealthy children of wealthy families . . . want to send
unemployment rates in the United States up to twenty per cent.”
Grover Norquist, who holds a weekly meeting for conservative leaders in
Washington, including representatives from Americans for Prosperity,
told me that last summer’s raucous rallies were pivotal in undermining
Obama’s agenda. The Republican leadership in Congress, he said,
“couldn’t have done it without August, when people went out on the
streets. It discouraged deal-makers”—Republicans who might otherwise
have worked constructively with Obama. Moreover, the appearance of
growing public opposition to Obama affected corporate donors on K
Street. “K Street is a three-billion-dollar weathervane,” Norquist said.
“When Obama was strong, the Chamber of Commerce said, ‘We can work with
the Obama Administration.’ But that changed when thousands of people
went into the street and ‘terrorized’ congressmen. August is what
changed it. Now that Obama is weak, people are getting tough.”
As the first anniversary of Obama’s election approached, David Koch came
to the Washington area to attend a triumphant Americans for Prosperity
gathering. Obama’s poll numbers were falling fast. Not a single
Republican senator was working with the Administration on health care,
or much else. Pundits were writing about Obama’s political ineptitude,
and Tea Party groups were accusing the President of initiating “a
government takeover.” In a speech, Koch said, “Days like today bring to
reality the vision of our board of directors when we started this
organization, five years ago.” He went on, “We envisioned a mass
movement, a state-based one, but national in scope, of hundreds of
thousands of American citizens from all walks of life standing up and
fighting for the economic freedoms that made our nation the most
prosperous society in history. . . . Thankfully, the stirrings from
California to Virginia, and from Texas to Michigan, show that more and
more of our fellow-citizens are beginning to see the same truths as we
do.”
While Koch didn’t explicitly embrace the Tea Party movement that day,
more recently he has come close to doing so, praising it for
demonstrating the “powerful visceral hostility in the body politic
against the massive increase in government power, the massive efforts to
socialize this country.” Charles Koch, in a newsletter sent to his
seventy thousand employees, compared the Obama Administration to the
regime of the Venezuelan strongman Hugo Chávez. The Kochs’ sense of
imperilment is somewhat puzzling. Income inequality in America is
greater than it has been since the nineteen-twenties, and since the
seventies the tax rates of the wealthiest have fallen more than those of
the middle class. Yet the brothers’ message has evidently resonated with
voters: a recent poll found that fifty-five per cent of Americans agreed
that Obama is a socialist.
Americans for Prosperity, meanwhile, has announced that it will spend an
additional forty-five million dollars before the midterm elections, in
November. Although the group is legally prohibited from directly
endorsing candidates, it nonetheless plans to target some fifty House
races and half a dozen Senate races, staging rallies, organizing
door-to-door canvassing, and running ads aimed at “educating voters
about where candidates stand.”
Though the Kochs have slowed Obama’s momentum, their larger political
battle is far from won. Richard Fink, interviewed by FrumForum.com this
spring, said, “If you look at where we’ve gone from the year 2000 to
now, with the expansion of government spending and a debt burden that
threatens to bankrupt the country, it doesn’t look very good at all.” He
went on, “It looks like the infrastructure that was built and nurtured
has not carried the day.” He suggested that the Kochs needed “to get
more into the practical, day-to-day issues of governing.”
In 1991, David Koch was badly injured in a plane crash in Los Angeles.
He was the sole passenger in first class to survive. As he was
recovering, a routine physical exam led to the discovery of prostate
cancer. Koch received treatment, settled down, started a family, and
reconsidered his life. As he told Portfolio, “When you’re the only one
who survived in the front of the plane and everyone else died—yeah, you
think, ‘My God, the good Lord spared me for some greater purpose.’ My
joke is that I’ve been busy ever since, doing all the good work I can
think of, so He can have confidence in me.”
Koch began giving spectacularly large donations to the arts and
sciences. And he became a patron of cancer research, focussing on
prostate cancer. In addition to his gifts to Sloan-Kettering, he gave
fifteen million dollars to New York-Presbyterian Hospital, a hundred and
twenty-five million to M.I.T. for cancer research, twenty million to
Johns Hopkins University, and twenty-five million to the M. D. Anderson
Cancer Center, in Houston. In response to his generosity,
Sloan-Kettering gave Koch its Excellence in Corporate Leadership Award.
In 2004, President Bush named him to the National Cancer Advisory Board,
which guides the National Cancer Institute.
Koch’s corporate and political roles, however, may pose conflicts of
interest. For example, at the same time that David Koch has been casting
himself as a champion in the fight against cancer, Koch Industries has
been lobbying to prevent the E.P.A. from classifying formaldehyde, which
the company produces in great quantities, as a “known carcinogen” in
humans.
Scientists have long known that formaldehyde causes cancer in rats, and
several major scientific studies have concluded that formaldehyde causes
cancer in human beings—including one published last year by the National
Cancer Institute, on whose advisory board Koch sits. The study tracked
twenty-five thousand patients for an average of forty years; subjects
exposed to higher amounts of formaldehyde had significantly higher rates
of leukemia. These results helped lead an expert panel within the
National Institutes of Health to conclude that formaldehyde should be
categorized as a known carcinogen, and be strictly controlled by the
government. Corporations have resisted regulations on formaldehyde for
decades, however, and Koch Industries has been a large funder of members
of Congress who have stymied the E.P.A., requiring it to defer new
regulations until more studies are completed.
Koch Industries became a major producer of the chemical in 2005, after
it bought Georgia-Pacific, the paper and wood-products company, for
twenty-one billion dollars. Georgia-Pacific manufactures formaldehyde in
its chemical division, and uses it to produce various wood products,
such as plywood and laminates. Its annual production capacity for
formaldehyde is 2.2 billion pounds. Last December, Traylor Champion,
Georgia-Pacific’s vice-president of environmental affairs, sent a formal
letter of protest to federal health authorities. He wrote that the
company “strongly disagrees” with the N.I.H. panel’s conclusion that
formaldehyde should be treated as a known human carcinogen. David Koch
did not recuse himself from the National Cancer Advisory Board, or
divest himself of company stock, while his company was directly lobbying
the government to keep formaldehyde on the market. (A board spokesperson
said that the issue of formaldehyde had not come up.)
James Huff, an associate director at the National Institute for
Environmental Health Sciences, a division of the N.I.H., told me that it
was “disgusting” for Koch to be serving on the National Cancer Advisory
Board: “It’s just not good for public health. Vested interests should
not be on the board.” He went on, “Those boards are very important.
They’re very influential as to whether N.C.I. goes into formaldehyde or
not. Billions of dollars are involved in formaldehyde.”
Harold Varmus, the director of the National Cancer Institute, knows
David Koch from Memorial Sloan-Kettering, which he used to run. He said
that, at Sloan-Kettering, “a lot of people who gave to us had large
business interests. The one thing we wouldn’t tolerate in our board
members is tobacco.” When told of Koch Industries’ stance on
formaldehyde, Varmus said that he was “surprised.”
The David H. Koch Hall of Human Origins, at the Smithsonian’s National
Museum of Natural History, is a multimedia exploration of the theory
that mankind evolved in response to climate change. At the main
entrance, viewers are confronted with a giant graph charting the Earth’s
temperature over the past ten million years, which notes that it is far
cooler now than it was ten thousand years ago. Overhead, the text reads,
“HUMANS EVOLVED IN RESPONSE TO A CHANGING WORLD.” The message, as
amplified by the exhibit’s Web site, is that “key human adaptations
evolved in response to environmental instability.” Only at the end of
the exhibit, under the headline “OUR SURVIVAL CHALLENGE,” is it noted
that levels of carbon dioxide are higher now than they have ever been,
and that they are projected to increase dramatically in the next
century. No cause is given for this development; no mention is made of
any possible role played by fossil fuels. The exhibit makes it seem part
of a natural continuum. The accompanying text says, “During the period
in which humans evolved, Earth’s temperature and the amount of carbon
dioxide in the atmosphere fluctuated together.” An interactive game in
the exhibit suggests that humans will continue to adapt to climate
change in the future. People may build “underground cities,” developing
“short, compact bodies” or “curved spines,” so that “moving around in
tight spaces will be no problem.”
Such ideas uncannily echo the Koch message. The company’s January
newsletter to employees, for instance, argues that “fluctuations in the
earth’s climate predate humanity,” and concludes, “Since we can’t
control Mother Nature, let’s figure out how to get along with her
changes.” Joseph Romm, a physicist who runs the Web site
ClimateProgress.org, is infuriated by the Smithsonian’s presentation.
“The whole exhibit whitewashes the modern climate issue,” he said. “I
think the Kochs wanted to be seen as some sort of high-minded company,
associated with the greatest natural-history and science museum in the
country. But the truth is, the exhibit is underwritten by big-time
polluters, who are underground funders of action to stop efforts to deal
with this threat to humanity. I think the Smithsonian should have drawn
the line.”
Cristián Samper, the museum’s director, said that the exhibit is not
about climate change, and described Koch as “one of the best donors
we’ve had, in my tenure here, because he’s very interested in the
content, but completely hands off.” He noted, “I don’t know all the
details of his involvement in other issues.”
The Kochs have long depended on the public’s not knowing all the details
about them. They have been content to operate what David Koch has called
“the largest company that you’ve never heard of.” But with the growing
prominence of the Tea Party, and with increased awareness of the Kochs’
ties to the movement, the brothers may find it harder to deflect
scrutiny. Recently, President Obama took aim at the Kochs’ political
network. Speaking at a Democratic National Committee fund-raiser, in
Austin, he warned supporters that the Supreme Court’s recent ruling in
the Citizens United case—which struck down laws prohibiting direct
corporate spending on campaigns—had made it even easier for big
companies to hide behind “groups with harmless-sounding names like
Americans for Prosperity.” Obama said, “They don’t have to say who,
exactly, Americans for Prosperity are. You don’t know if it’s a
foreign-controlled corporation”—or even, he added, “a big oil company.”
♦
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