Dark Money, by Jane Mayer
Review by Dave Gamrath
One-liner: Dark Money details how over the past 40+ years, far-right Libertarians, lead by the Koch brothers, have developed and funded a robust political machine in America, allowing them to effectively buy elections, to change many of the rules in politics to favor Republicans, to move public opinion strongly to the right, and even to create a populist movement “of the people” who work against their own economic self-interest and support policies that make the Top 1% richer at the expense of working class and poor.
Overview: Since the 1970s, the Koch brothers, Charles and David, have led the Libertarian charge to vilify the very idea of government and to support unfettered free market capitalism. Through their steady, broad scope strategy, they have funded countless think tanks, academic programs, front groups, ad campaigns, legal organizations, lobbyists and political candidates throughout the political spectrum, from local and state to federal elections, with the goal being to “tear government out by the root”. They’ve moved from being considered far-right fringe political activists to effectively running the Republican party. They’ve pushed for highly-limited government, drastically lower personal and corporate taxes, minimal social services for the working class and poor, much less oversight of industry, and in particular, killing environmental regulations.
The Koch’s have recruited multiple other billionaires and millionaires, and now at each of their semi-annual summits, raise hundreds of millions of dollars for their cause. For example, for the 2016 election they raised $889,000,000 for their political war chest. They have spent billions over the past decades and have gained the “best government money can buy” – for them, anyway. Economist Thomas Piketty, in his book Capital in the Twenty-First Century, explained how in economic law the fortunes of those with great wealth (and their inheritors) would increase faster than the rate at which wages will grow (the source of income for us regular folks), thus without aggressive government intervention, our already record economic inequality will rise inexorably. With Donald Trump as their unexpected hero, the Koch’s have succeeded in gutting regulations and winning a new tax law favoring the rich, thus assuring inequality will expand dramatically over the coming years.
The Koch’s have been successful at many levels. By investing in judicial races to win election of judges that favor them, and by investing in local races throughout the country to control state politics, the Koch’s have also achieved tremendous victories for keeping their candidates in power. They’ve killed campaign finance control through their funding of efforts that resulted in the Citizen’s United Supreme Court decision. As a result, the Koch’s billions of dollars now reflect only their “free speech” to buy any election they desire. They funded many victories at state-level elections in 2010 which allowed Republicans to gerrymander electoral maps (a once-a-decade census opportunity), shoving Democrats into highly concentrated districts and thus allowing Republicans to lose the majority of votes yet still control Congress. They’ve also led efforts to make it more difficult to vote if you are poor, disenfranchising minorities and others in the base of the Democratic party. Their political machine is just getting stronger, and the new Trump tax law will enable them to invest even more into this machine to ensure they keep winning far into the future.
Summary: Dark Money details the history of the Koch family, including how Charles and David’s father Fred made the initial family fortune in the energy sector working with Stalin and Hitler helping the Russians and Germans prior to WWII. Fred Koch often travelled to Nazi Germany and wrote admiringly about fascism in Germany and Mussolini in Italy. In 1958, Fred Koch became one of the original eleven members of the archconservative John Birch Society that specialized in far-fetched conspiracy theories about secret Communist plots to subvert America. Charles and David Koch also joined the John Birch Society. Fred Koch blazed the trail for his sons by tapping his fortune to subsidize his political activism.
Fred Koch initiated another strategy often used by his sons, taking advantage of elaborate estate planning, including setting up charitable trusts that enabled Fred to pass on his estate to his sons without inheritance taxes, so long as the sons donated the interest accruing on the charity’s principal for 20 years. In other words, by donating some interest income, the Koch’s got to keep their wealth in the family and avoid those pesky taxes. This lesson taught the Koch boys that being charitable can pay handsomely. It pays even more when the charities are focused on changing laws to benefit the rich and their free-market ideals. It’s a two for one: by financing the tools to achieve their overarching political and policy goals, they also save taxes, which is one of their biggest goals! Woo hoo!
Another fringe group that highly influenced Charles Koch was the Freedom School, which taught a revisionist version of American history in which the robber barons were heroes, not villains, and the Gilded Age was the country’s golden era. In the Freedom School, taxes were denigrated as a form of theft, and FDR’s New Deal as an evil form of socialism. A key element of the Koch’s philosophy is that government has no right to care for the weak and the poor; that should be left to private charities. Charles funded the Freedom School with tax deductible donations.
There was extensive friction amongst the four Koch brothers, with some pretty amazing attacks resulting. Charles and David connived to takeover their father Fred’s company; Bill founded his own carbon-heavy energy company and brought many lawsuits against Charles and David; and Frederick was pretty much excommunicated from the family for being gay (the nerve of him!). Charles basically is the driving force at Koch Industries. Dark Money’s author Jane Mayer details how he built the company into the huge conglomerate it is today, with “beyond phenomenal” performance. David and Charles are currently estimated to be worth about $50 billion EACH! So, even though they’ve spent billions on controlling our government, this investment has paid off handsomely. And with the new policies of the Trump Administration and the Republican Congress, their fortune will keep rising dramatically.
Mayer detailed how Koch Industries has been in constant battle with the EPA, and due to Koch’s blatant and purposeful actions to avoid EPA rules, they have been fined millions for polluting our environment. Charles Koch declared war on the EPA, and lobbied his fellow businessmen “do not cooperate voluntarily; instead, resist wherever and to whatever extent you legally can. And do so in the name of justice.” From 1980 to 2005, Koch Industries developed a stunning record of malfeasance, repeatedly lying to the EPA. The Koch’s directed their employees to lie, and rationalized that it was cheaper to pay a fine then to comply with the law. When honest employees “blew the whistle”, they suffered strong retaliation. The Koch’s went to extreme measures to avoid penalties, such as hiring private investigators to discredit accusers. They gave strong financial support to politicians that agreed to kill legislation against them. In 2012, the EPA’s database revealed Koch Industries to be the number one polluter of toxic waste in the country, releasing 950 million pounds of hazardous materials in 2012 alone.
In 1971, future Supreme Court Justice Lewis Powell crafted a 5000-word memo titled “Attack on the American Free Enterprise System” which laid out the blueprint for a conservative takeover of America. This famous “Powel Memo” is often referred to as the document that laid the foundation for Republican success since 1980. Powell stressed that Conservatives must capture public opinion by exerting influence over the institutions that shape it, which he identified as academia, the media, the churches, and the courts. The key to victory he predicted was “careful long-range planning and implementation” backed by a “scale of financing available only through joint effort.”
The Koch’s have played the role of Powell’s “Generals”, marshalling their rightwing, ultra-rich foot soldiers within their comprehensive political plan. The Koch’s define liberty as “the absence of government” and America’s purpose as being “the unfettered accumulation of enormous private wealth.” Charles Koch stated that government’s only legitimate role was to “serve as a night watchman, to protect individuals and property from outside threat, including fraud. That is the maximum.” The Koch’s paid top dollar to hire the best minds to change US politics to suit them, in three phases:
· Phase 1 – required the investment in intellectuals whose “ideas” would serve as raw products.
· Phase 2 – required investment in think tanks that would turn the ideas into marketable policies.
· Phase 3 – required investment in “citizens groups” that would, along with special interests, pressure elected officials to implement the policies.
Below is more specificity in the Koch’s political strategy. The key thing to note is just how completely they’ve attacked our political system, and that this machine is only getting stronger.
· Dark money – using all methods available (and creating new ones when needed), they hide as best they can the monies they are spending on their political machine. Example: creating a non-profit 501(c)(6) “business league” as an umbrella organization where donations to it are classified as “membership dues” and can get deducted as business expenses. The law around these as well as 501(c)(4) charities protects the donor’s identity, thus the true source of the money is hidden away.
· Buying the best – the Koch’s have hired the best and the brightest minds in US politics to lead their efforts, making many of these individuals quite wealthy.
· Creating their own political operation – by hiring top-level operatives, financing their own voter data bank, and commissioning state-of-the-art polling. They created a fund-raising operation that enlisted hundreds of other wealthy Americans to help pay for it. With organized chapters all across the country, the Koch’s have established what is in effect their own political party.
· Changing campaign funding laws – the Koch’s funded the effort that led to the Supreme Court Citizen’s United ruling, which effectively allows limitless money in politics, allowing billionaires to buy elections.
· Think tanks – funding literally hundreds of neutral-sounding think tanks, “the artillery” in the conservative movement’s war of ideas. These hyper-partisan think tanks conducted fraudulent research, introduced doubt into areas of settled academic and scientific scholarship, undermined genuinely unbiased experts, and give politicians a menu of conflicting statistics and arguments from which to choose, all to support the economic interests of the rightwing funders.
· Use of “charities” – the Koch’s and their disciples have perfected the art of creating charities (private foundations, schools, etc.) for the purpose of promoting their ideas and goals, as well as increasing their own power and wealth. They give generously to these charities, all the while taking tax deductions for these donations, effectively putting much of the cost of running their charities on the average US taxpayer. This strategic and largely covert philanthropic spending is their “great force magnifier”. In 2008 alone, public tax records show that the three main Koch family foundations gave money to 34 different political and policy organizations, many of which they founded and/or directed. Their charities funnel money simultaneously through three different kinds of channels:
1. Political contributions to party committees and candidates
2. Contributions through political action committees to influence lobbying
3. Founding numerous nonprofit groups that work to support their cause
They also give money to a dizzying maze of “social welfare” groups that disbursed hidden money into elections. It’s more than ironic that the Koch’s give so much to “charity”, given that in a 1999 speech Charles Kohn said “I agree with the 12th century philosopher, Maimonides, who defined the highest form of charity as dispensing with charity altogether…”
· Use of statistical analysis – use of the latest computer models to analyze where and how to spend their money in their political efforts, to ensure they get the biggest bang for their bucks.
· Gerrymandering electoral maps – funded by the Koch’s, Republicans they took advantage of the once-a-decade opportunity to redraw electoral maps that comes with the census update. Throwing funds at many state-level elections in 2010, Republican achieved massive victories, giving them control of governorships and state legislatures. With this control, Republicans set to gerrymandering electoral maps, by shoving Democrats into highly concentrated districts, and thus allowing Republicans to lose the majority of votes yet still control Congress. Now, not facing serious Democrat challengers in elections, Republicans elected some of the most extreme, uncompromising people ever, pushing Congress way to the far right. In the process they succeeded in wiping out a generation of lower-level Democratic office holders who could rise in the future.
· Writing policies for Republican lawmakers – forming and funding organizations, such as the American Legislative Exchange Council (ALEC), whose purpose is to write “desirable” free market legislation and provide this to local and state politicians throughout the country, assisting them with getting these new laws passed.
· Erecting barriers to voting – funding efforts to create new bureaucratic barriers to voting, designed to discourage poor and minority voters, such as new voter ID laws.
· Coalition building – the expand their base, the Koch’s work to join with other conservative groups, such as the Christian Coalition, to bring them into their Libertarian fold and get them to support unfettered free-market strategies.
· Public relations – in the “battle of ideas”, they hire the best PR firms in the country, to craft framing and messaging to convince mainstream Americans that Koch policies benefit greater America and not just the super-rich. These ideas are marketed with great deception. Example: Obamacare framed as “government takeover of healthcare” (so it must be terrible!). Another one: climate action – only “higher taxes, lost jobs and less freedom” will result from taking measures against climate change, as well as connecting climate action with gun control “they just want to take away your freedoms”. Examples abound. And these frames work wonderfully in swaying public opinion their way.
· Funding fake populist movements – funding what effectively are private political “sales forces” to go out and make noise supporting Koch policies for the 1%. Big-business industrialists run the groups, serving as anonymous quarterbacks. But they sell the group as being composed of regular Americans. Their first success at getting the working class to support them in big numbers was the Tea Party, a mass rebellion funded by billionaires, led by former GOP kingpins, educated by Koch-funded groups like Freedom Works, and ceaselessly promoted by millionaire celebrities like Sean Hannity and Glenn Beck, but somehow representing “the people”.
· “False” research – continuously funding books and other writings that lobbied for free market ideals, such as Losing Ground by Charles Murry that argued that government programs don’t help poor people, but rather keeps them poor, thus social safety nets should be disbanded.
· Youths – they have developed and implemented strategies for attracting youth, knowing youth represent the future, plus the Koch’s believe youths are “the only group that is open to a radically different social philosophy”.
· Promotion of “well being” – in 2012 polls showed that only 33% of Americans agreed with the statement that Republicans “care about people like you.” For that, the Koch’s launched the best public relations campaign that money can buy, to rebrand the 1% as the champions of the 99%. They began waging a campaign to persuade Americans that the “intent” of the Libertarians was virtuous. Of course, this was a challenge, because even the Koch’s own research showed that what Americans wanted from politics was quite different than what the Koch’s free-market business dominated world provided. So, the Koch’s led the funding of a new PR campaign to launch a movement for “well-being”, their new key buzz phase. “We’re all about creating well-being.” Within this, they attacked policies they hated, using false research and alternative facts, to con Americans into voting against their own self-interest.
Below is a brief description of how they are attacking some basic American institutions:
· Public education – the Koch’s want to abolish public education, which they call “compulsory” education of children, and believe it represents another overreach and misuse of government. Kicking government out of our lives includes kicking government out of the education business. Tactics include lobbying for tax dollars to be used for private and parochial schools, charter schools, school vouchers, etc., weakening public schools in the process and driving more reasons for “these bad public schools” to be closed. Other attacks include eliminating teacher’s assistants, reducing teacher pay, abolishing incentives for teachers to earn higher degrees and reduced funding for successful programs for at-risk preschoolers.
· Higher education – multiple strategies to flip academia to their viewpoints, including funding private institutes within prestigious universities through which they teach their radical free-market theories and the evils of government to unsuspecting students, while at the same time giving the Koch’s power within the universities to influence hiring decisions, etc. “The power to shape our civilization should belong exclusively to the free market”, thus it’s critical to shape young minds in universities. They were especially effective in law schools throughout the country, teaching courses that stressed regulations need to be assessed not just for their fairness for the public, but also for economic impact on corporations. I.E., “is it worth the cost to save the lives of those poor people?”. Through this, they minted troves of new right-wing-thinking young lawyers.
· Attacking the EPA – going after the EPA at every level, the Koch’s have funded the charge to kill action on climate change, prevent the protection of any new endangered species, permit uranium mining adjacent to the Grand Canyon, deregulate mountain-top removal mining, prevent coal ash from being designated a form of air pollution, etc. And with Trump, they’ve gotten much more than this.
· Media – through their think tanks they not only work to develop “sellable” framing of unfettered free-market capitalism views, but also have their “experts” practice message delivery at in-house studios. Some of their cohort’s own news outlets, ensuring their message is delivered nightly.
· Attacking scientists – the Koch’s and their kind have financed the attack on science, doing their best (and wildly succeeding) at creating doubt about scientific findings that could lead to policies hurting the Koch’s own bottom-line, such as climate change. From 2005 to 2008 alone, the Koch’s poured nearly $25 million into dozens of organizations fighting climate reform. More broadly, between 2003 and 2010, $588 million dollars was spent on a campaign to manipulate and mislead the public about the threat posed by climate change, in the form of 5299 grants to 91 different nonprofits, including think tanks, advocacy groups, trade associations, other foundations, and academic and legal programs. Part of their strategy was to “name names and go after individuals” in the scientific community, doing their best to discredit scientists and make their lives miserable.
The Koch’s have recruited multiple other billionaires and millionaires to their cause and their summits, including Richard Mellon Scaife, Lynde Bradley, John Olin, the Coors family of Colorado, the DeVos family of Michigan, Steven A. Cohen, Paul Singer, Stephen Schwartzman, Robert Mercer, J. Larry Nichols, Harold Hamm and many more. Many of these you’ve never heard of; they’re the “invisible rich”.
Through these efforts, Charles and David Koch have been wildly successful. In their view, their political spending has indeed been money well spent, making them vastly richer and exponentially more powerful. The Koch brothers have built and financed a private political machine that has crippled the Democrats and begun to supplant the Republican Party. Educational institutions and think tanks all over the country now promote their worldview, and double as a talent pipeline. A growing fleet of nonprofit groups mobilize public opinion behind their agenda. These groups train candidates and provide the technological and financial assistance necessary to run state-of-the-art campaigns. The money they put behind their chosen candidates is seemingly endless. Congressmen, senators and presidential hopefuls now flock to their seminars, eager to please them in hopes of earning their support.
The book ends just before the 2016 election of Donald Trump. The Koch’s were not Trump supporters, but, IMHO, must now believe that Trump has been a true blessing from heaven. Trump has not only boldly pushed for many policies they wanted, like recent tax reform for the rich and the full gutting of the EPA, but Trump has also DOUBLED the size of the Koch’s populist army, needed to keep winning elections. Their first populist army, The Tea Party, only represented about 18% of Americans. The Trump base is about double this at roughly 36% of Americans. The Koch’s likely never dreamed they could get where Trump has brought them so quickly. It’s easy to see how they can ignore the aspects of Trump that they find undesirable. Who cares? Look at what he’s delivering! For the Koch’s, orange is the new green (as in the color of money).
Reviewer Opinion: one of the most important (and distressing) books I’ve read; explains not only why liberals/progressives are losing; it explains why we’ve lost, and why it’s unlikely that we will regain long-term power in American politics unless dramatic changes are made to match the long-term strategies of the highly funded far-right.
Rating: thumb way up