Patience and secrecy cloak the Koch’s complex conspiracy
20 min read
The Lowdown’s report last month on the Koch Klan’s plutocratic coup against your and my democratic rights prompted a few expressions of incredulity, such as: Surely that can’t be true! Come on, a coup?
Many Americans are reluctant to accept that coup conspiracies are part of our country’s political history. We tend to buy the corporate establishment’s oft-repeated narrative that plots to overthrow the government are totally foreign to our national character. This is America, they bark, not some banana republic! We don’t do coups.
In fact, we do. The country itself was founded on an armed coup to replace the legal ruler, George III, with a gang of revolutionary upstarts.
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Never heard of it? Few have, for the financial establishment–along with its media and political henchmen–rushed out, clucking like mother hens to bury the story and protect the gentlemen of Wall Street implicated in the plot. But what a story! It was capitalist skullduggery by a few self-entitled Lords of Wealth trying to overthrow the government and enthrone a fascist regime friendly to themselves.
Fortunately, a real patriot was able to expose them, nipping their coup d’etat in the bud. Nonetheless, their attempt reveals the threat of concentrated wealth and the ever-present danger that the imperious rich pose to majority rule. Not only should this real-life drama be highlighted in our history books, but it would also make a blockbuster movie:
The Great Depression was at full force in 1933, spreading mass unemployment, waves of bankruptcies, and abject poverty. The people’s boiling political anger was scaring the aloof denizens of Wall Street silly, as more and more people joined in open rebellion against things the plutocrats considered sacrosanct: Unfettered capitalism and–scariest of all–against rich people themselves!
The President By promising a New Deal for millions of Americans impoverished by the Depression, Franklin D. Roosevelt had scored a landslide victory in 1932 over Wall Street’s man, Herbert Hoover. Then, in 1933, to the bankers’ horror, the new president launched myriad new government policies and programs to help people get back on their feet–including new taxes on wealth to fund the recovery.
The conspirators Such Wall Street multimillionaires as Grayson M.P. Murphy (banker and Anaconda Copper Mining head), Thomas Lamont (J.P. Morgan partner), and Robert Sterling Clark (heir to the Singer sewing machine fortune) were enraged by FDR’s moves. Class war, they wailed, claiming that their “liberty” to grab as much profit as they could was being shackled–and for no better reason than to fund “socialism!” Calling Roosevelt a traitor to his class, these men would later be named as instigators of the putsch to replace FDR with a military-backed government of capitalists–i.e., themselves.
The hero Smedley Darlington Butler–a name made for a Hollywood thriller! A retired Marine general, he became a well-known, influential advocate for veterans. The conspirators considered Butler the perfect choice to lead their takeover of Washington, and they spent a year wooing him, gradually laying out their plan.
Apparently, being super-rich doesn’t make you super-smart, for the scheme these millionaires devised was hapless and cockamamie: They planned to oust Roosevelt by enlisting and arming a private military force made up of thousands of destitute World War I vets who were protesting their failure to receive federal bonus payments they had been promised. But how to engage them in the plot?
Gerald MacGuire, Grayson Murphy’s bond salesman, was an ex-soldier and an active member of the American Legion veterans’ organization, so he was the one who first contacted the soldiers’ champion, Smedley Butler. After several meetings spent discussing veterans issues, MacGuire finally got down to business, explaining that the financial powers he represented wanted Butler to create a paramilitary corps of 500,000 vets and march on Washington to force FDR from the White House.
As Butler later related, MacGuire told him that the Wall Street cohort, plus a new group called American Liberty League (made up of the right-wing bosses of such corporate giants as DuPont, Colgate, General Foods, and GM), would fund the cause to the tune of $300 million–that’s $5.6 billion in today’s money! MacGuire also claimed that the Remington Arms Company would supply the weapons. As investigative journalist Sally Denton wrote in her 2011 book, The Plots Against the President, the conspirators were so out of touch with reality that they actually expected Roosevelt to accept the takeover without a fight. They figured that (1) he knew he was in over his head as president, so he’d welcome these stronger people taking control, and (2) as a member of the patrician class himself, FDR would happily agree to become a ceremonial figurehead, while the financiers and militarists installed a “secretary of general affairs” to run the country. Who was their choice to become this authoritarian SGA? General Smedley D. Butler.
…to the rescue! They chose the wrong general.
Butler, a patriot and lifelong soldier for democracy, was astounded and repulsed by the hubris and treachery of these American would-be aristocrats. He felt a duty to stop them.
The general enlisted Paul Comly French, an investigative reporter he knew and trusted, to help gather proof of the bankers’ intent. French even got an interview with MacGuire, who was surprisingly unguarded: “We need a Fascist government in this country,” he blurted to French, “to save the Nation from the communists who want to tear it down. The only men who have the patriotism [!!] to do it are the soldiers, and Smedley Butler is the ideal leader.”
Evidence in hand, Butler got a US House “Special Committee on Un-American Activities” to conduct a two-month investigation, which convinced its members that, as Time magazine later reported, “General Butler’s story of a Fascist march on Washington was alarmingly true.” The committee opened public hearings on November 20, 1934, with Butler giving detailed testimony. The next morning, French’s expose ran in both the Philadelphia Record and New York Post. The story was out and Butler’s gutsy stand had halted the putsch.
The establishment responded immediately by launching a coordinated counterattack assailing Butler and dismiss-ing the very idea of a coup as preposterous. J.P. Morgan’s spokesman, Lamont, ridiculed the claim that he was in on the plot as “perfect moonshine.” The media powers instantly piled on, led by a November 21 New York Times editorial calling Butler’s claim a “bald and unconvincing narrative … [that] sounds like a gigantic hoax … [and] does not merit serious discussion.”
And it didn’t get much, despite the damning conclusion of the House Committee’s final report in February 1935, that it “was able to verify all the pertinent statements made by General Butler,” adding that, “There is no question that these attempts were discussed, were planned, and might have been placed in execution when and if the financial backers deemed it expedient.”
Nonetheless, officials failed to punish the perpetrators of this outrageous assault on our democracy, and with the help of media, the coup attempt was sealed off from our history books and future generations. Once again, the we-don’t-do-coups myth prevailed.
It’s tempting to a laugh off 1933’s bumbling fat cats–we can just picture them cloistered in their posh private club, smoking $100 cigars, grumping about Roosevelt, and whispering about hiring an army to overthrow the whole damn democratic process. A “cocktail putsch,” as New York City’s Mayor Fiorello La Guardia dubbed it.
But, while their plot was harebrained, their plutocratic intent is no laughing matter. Their presumption of class privilege–the warped idea that their great wealth entitled them to rule over and even impoverish the many–is not unique. The Wall Street Putsch died in 1934, but it is just one manifestation of a deadly serious social disease that has infected the history of democratic struggles.
And now, that sickness has grown much more virulent, confronting us in the form of a complex, sophisticated web of efforts funded by Koch-led billionaires who share the same set of extreme, kleptocratic beliefs that guided last century’s class-war militants, including (1) making property rights supreme over all of the people’s various political rights; and (2) replacing the principle of majority rule with a new governing order that empowers the owner class (the “Makers,” as they dub themselves) to overrule regulations, taxes, unionization, and other collective actions that the lower classes (the “Takers”) try to impose on the property-rich minority.
The Koch coup is not one they’re planning to spring someday with a brash, illegal military takeover of Washington. Don’t look now, but they’ve already sprung it! It’s a quiet, multifaceted coup that has been underway for some 40 years and has been astonishingly successful … and disturbingly legal. Measure by measure, the Koch brothers and their allied property extremists have used their fortunes to gain a grip on nearly every level of government (including courts and whole states like Wisconsin, North Carolina, and Texas), corporatized many of our most basic laws and institutions, and largely had their plutocratic wish list adopted as the de facto agenda of the entire leadership of the Republican Party. They’ve been able to come so far because of three factors:
The Kochs’ ideological power grab has taken the long view. They have been willing to experiment, trying a variety of tactics–large and small, national and local–expanding those that work and abandoning those that don’t. And they have used “patient capital”: giving an idea time to prove itself before yanking the funding and jumping to the next trendy idea. (Progressive funders, take note.)
Quiet and compartmentalization
The Koch coup crept up on us because it abhorred publicity and couched each move as an independent effort by a separate group. The commonality of the changes was barely perceptible for decades, until 2010, when the Supreme Court grabbed the obscure Citizens United case to decree that corporate campaign cash qualified as free speech. It was only then that progressives woke to the reality that a coordinated corporate assault on democracy itself was being made by a panoply of Koch groups (at least three of which were prime funders and pushers of the court case).
Scope and scale
Even the word “VAST” doesn’t encompass the immensity of the Kochs’ offensive on democracy. This month’s Lowdown depicts key parts of the network they’ve deployed to steal democratic power from us. This is what we’re battling. Post it. Share it. Spread the word.
Mapping the Koch Conspiracy
The sophisticated system that powers the plutocrats’ coup
THE BROTHERS KOCH want nothing less than to supplant America’s core democratic principle of majority rule–the will of The People–with their core plutocratic principle of inviolable property rights–domination by the wealthy minority. Their notion is that “property” (accumulated wealth, and also the means to get it) is sacrosanct and cannot be restricted by the majority. Cloaking their efforts with layers of secrecy, deception, and dark-money front groups, the Kochs have used their enormous wealth and organizational skills to mount a far-ranging, ultra-sophisticated assault on American democracy.
From the brothers’ early involvement in the John Birch Society (Daddy Fred was a co-founder in 1958), they continued moving right. In the 1970s, both plunged into the abyss of a laissez-fairyland plutocracy. With the fervor of religious cultists, they’ve devoted themselves to the cause of “liberty”–by which they mean that government’s only proper role is keeping the avaricious pursuits of the owner class free from any interference by you, me, and the democratic us. In their construct, We The People can neither tax the riches of the owner class nor set rules on how it treats workers, consumers, nature, immigrants and society as a whole.
Even more shocking than their arrogance, is their success. For nearly 40 years, they and their über-rich allies have been battering the legal structures and mechanisms that give ordinary people some chance to control their own destinies. Among their goals:
Killing all restrictions on political spending by corporations and the rich
Suppressing the voting rights of students, people of color, the elderly, and others who tend to oppose Republican policies and candidates
Massacring labor unions
Eliminating the right of consumers, workers, and others to sue corporations, forcing them instead into corporate-controlled arbitration
Ripping to shreds the social safety net including food stamps, jobless benefits, Social Security, and Medicare/Medicaid
The cumulative effect of these and hundreds of other national, state, and local attacks is that the wealthy few are now grabbing ever more of our society’s wealth and power, shattering America’s commitment to the Common Good. It adds up to a coup–and yet, because it has been built slowly and with deliberate stealth over decades, the public has not yet fully grasped the enormity, complexity, and effectiveness of this unprecedented conspiracy of billionaires. Use this spread to wake others to the threat. It’s up to us to beat back the multi-tentacled KOCHTOPUS.
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HERE’S A PROBLEM: Much of our “watchdog” press seems committed to ignoring the anti-democracy impact of Koch money. Yes, they report the big numbers–e.g. $400 million pledged in 2018 by the Kochs’ Seminar Network–but we rarely hear how that money is spent or what it does. So let’s thank the independent reporters and researchers on that critical beat. For those who like politics rooted in facts, they are indispensable.
In particular, huge thanks to Lisa Graves, co-director of Documented and senior fellow at the Center for Media and Democracy for her enormous help in preparing our Koch-focus spread. CMD’s KochExposed is a tremendous resource for activists who want to learn more.
Thanks as well to Robert Maguire at the Center for Responsive Politics. Its opensecrets.org is the best tool going for tracking campaign money.
The Koch brothers understood early on that they would need to invest millions over many years to package, perfume, and surreptitiously push their unpopular, anti-majority ideas on the public. Spending millions, though, has never been a Koch problem, for they have billions:
Charles and David transformed their inherited fossil fuel fortune into Koch Industries, the second largest family-owned conglomerate in the US, with annual sales topping $115 billion. They freely tap this revenue to directly and massively finance their political agenda and, because the company is privately held, much of that spending is never publicly revealed.
Their $122.4 billion combined wealth ranks them just behind Jeff Bezos, the richest American, and well ahead of Gates, Buffett, and Zuckerberg.
Charles Koch Foundation ($580 million in net assets, 2015; $77 million in grants, 2016)
Charles Koch Institute ($270 million in net assets, 2015)
David H. Koch Charitable Foundation and David’s “personal philanthropy.”
The Seminarians The Kochs’ web of gazillionaire allies, blandly named The Seminar Network, aims to unite “the country’s top business and philanthropic leaders behind a shared commitment to a free and open society.”
When some 500 network donors gathered at a posh resort in January 2018, Charles boasted: “We’ve made more progress in the last five years than I had in the last 50 … . The capabilities we have now can take us to a whole new level.” The network has pledged to spend an additional $400 million on the 2018 elections.
Wash & Fold Dark Money Laundromats
The Kochs and friends have funneled vast tranches of unattributed money through groups such as:
Freedom Partners and Freedom Partners Action Fund–formerly, the Freedom Partners Chamber of Commerce (and before that the Association for American Innovation)–describes itself as a “non-profit, nonpartisan chamber of commerce” that promotes “the benefits of free markets and a free society.” The Washington Postcalled it the Kochs’ “de facto bank” for “feeding money to groups down-stream.” FP spent $129 million in 2014 (an election year) and another $99 million in 2015.
DonorsTrust and Donors Capital Fund offer secrecy to clients who don’t want to make their donations public. DT gave an estimated $400 million to “free market” causes between 1999 and 2013 and $68 million in 2015 alone. Mother Jonescalled it “the dark money ATM of the right.” In addition to right-wing standbys such as the Heritage Foundation, Donors Trust has also funded lesser-known nasties such as the anti-voting rights Project on Fair Representation and the anti-Muslim Clarion Project.
Tea partiers The “grassroots” tea party was set up with boodles of Koch money including $12 million to Citizens for a Sound Economy (now, Freedom Works) and additional largess through AFP.
The Independent Women’s Forum’s “mission is to [increase] the number of women who value free markets and personal liberty.”
60+ targets seniors.
Libre Initiative targets Latinos in its campaign for public funding of charter and private schools.
Generation Opportunity targets young people. (Libre, Concerned Vets, and Generation Opportunity are all part of the re-organized Freedom partners operation.)
Politicians, federal and state
In the 2016 congressional elections, Koch Industries executives and PACs gave $1.9 million, mostly to incumbent candidates on key committees, including 93 Republicans and one Democrat–and that doesn’t count “independent expenditures” through the Kochs’ web of dark money front groups. One senator com-pared Koch money to “the gun turrets at the perimeter of the gulag” enforcing GOP party loyalty.
On a state level, Koch Industries contributed hundreds of thousands each in 2017 to the Republican Governors Association, the Republican State Leadership Committee, and the Republican Attorneys General Association, Truthout found. Meanwhile, a Brennan Center analysis of campaign spending in six states found that dark money increased 38 times from 2006 to 2014.
After they elect pols, they lobby them. In addition to the army of lobbyists deployed by its front groups, Koch Industries spends $10 million on DC influence peddlers. In 2016, it paid 11 lobbying firms to push 75 bills. Nearly all aimed to boost profits at the expense of consumers, the environment, public safety, etc.
Our company has been outspoken in defense of economic freedom. Every company [should] do the same. Instead, we see far too many businesses that paint their tails white and run with the antelope.CHARLES KOCH on well, on corporate executives painting their tails white.
“We are dedicated to reforming the judicial space in a big way,” Mark Lucas, senior VP of Americans for Prosperity, said in January. AFP, a Koch front group, had just hired a former Federalist Society exec to focus “on the Supreme Court, the lower courts and beyond.” The ultra-right Federalist Society has been helping the Trump administration stack the federal courts with far-right ideologues. In fact, Charles Koch has aimed to change the interpretation of legal precedents for decades through “judicial education” seminars (a.k.a. “junkets for judges”) hosted with George Mason University and its Mercatus Center.
The rest of us
Koch Industries bought TV ads during the 2018 Super Bowl and the Winter Olympics to “quash ‘misperceptions’ by people who only associate the company with its owners’ political views,” according to the Wall Street Journal. To quash other “misperceptions,” David makes enormous gifts to cultural, higher educational, and medical institutions–totaling an estimated $1.5 billion over the years, including more than $50 million to the Smithsonian Museum and $23 million to public television. His name on buildings and exhibits, says Koch, “sends a message to the political groups in this country that don’t like the conservative Republican businessman.”
The Koch mole inside our government
One long-term Koch investment just paid off spectacularly when the Donald nominated Mike Pompeo to replace Rex Tillerson as secretary of state.
Back in 2010, the Kochs made Pompeo a wholly owned congressional subsidiary. Living in the brothers’ hometown, Wichita, Mike got lucky when the Kochs plowed venture capital into his business, making him a millionaire when he sold it in 2006. After another partnership with the conglomerate, he got an even better offer: to be the Kochs’ very own congress critter. Pompeo had zero experience, name recognition, or ideas, but he had Koch money, skilled political operatives from their Americans for Prosperity front group, and the backing of Koch-aligned tea party extremists. The candidate quickly embraced the brothers’ full agenda of corporate libertarianism. Sure enough, powered by the tea party insanity of the 2010 election, Pompeo became the Kochs’ personal asset inside the GOP Congress.
To ensure that investment, one of Koch Industries’ top Washington lobbyists was installed as Pompeo’s chief of staff. Last year, their in-vestment paid off big time when Donnie Trump picked Pompeo to head the CIA. The access and influence of an indebted secretary of state would give the Kochs an even more direct line to Trump himself.
The nearly $145 million the Charles Koch Foundation gave to colleges between 2005 and 2015 often came with strings, as when a 2008 agreement with Florida State University’s econ department gave the foundation a say in the school’s curriculum and hiring. One part of the FSU contract established a program to develop “common sense” (read Koch-friendly) workshops for teachers and course materials down through the grade school level.
George Mason University has been particularly blessed. “[G]round zero for deregulation policy in Washington,” according to one Democratic strategist, GMU’s Mercatus Center was founded and is funded with Koch money. Since the ’60s Charles Koch has also funded GMU’s Institute for Humane Studies, which functions as a recruitment firm for libertarian academic talent. But wait, there’s more! In April 2016, after receiving a cool $10 million from the Charles Koch Foundation, GMU renamed its law school for Antonin Scalia.
Youth Entrepreneurs targets high schoolers from “fragile communities” around the country with a “free market and liberty-based” curriculum. In 2014 the Koch-funded Bill of Rights Institute received a contract to develop materials for North Carolina teachers to use in a required course on “founding principles.” The Koch-funded Freedom Center at the University of Arizona developed a course in “Ethics, Economy, and Entrepreneurship,” now being taught in Arizona high schools. We could go on
Astroturf (the cashroots)
Americans for Prosperity–which opposes unions, health insurance mandates, federal spending generally, and efforts to fight climate change–receives massive funding from Freedom Partners, American Encore, and Donors Trust. With 2014 revenues of $83 million, AFP spends millions on TV ads during election cycles and, with paid organizers in 36 states, provides “boots on the ground” for the State Policy Network agenda (see Think Tanks).
National Federation of Independent Business has taken millions from operations linked to the Kochs and lobbies for the interests of large corporations over those of the small businesses it purports to protect.
The Bill Mill
American Legislative Exchange Council Koch-funded ALEC hands state legislators “model bills” that benefit corporate bottom lines. [See Lowdown issues May 2017 and September 2016.]
Campaign strategy and assistance
Aegis Strategic The Koch-created political consulting firm seeks out “electable advocates of the freedom and opportunity agenda” and helps them run effective campaigns and gain access to the Koch donor network. (Spotted by Aegis, Iowa pol Joni Ernst publicly thanked Freedom Partners for her rise from little-known state senator to right-wing US senator.)
The self-serving philanthropist
David Koch attempts to soften his image as an anti-environmental, fossil-fuel profiteer by donating mountains of money to popular, prestigious public institutions. But:
His hefty tax deductions mean that you and I subsidize his beneficence.
He is often rewarded with seat on recipients’ governing boards.
His name is plastered prominently (as if he owns them) on, for example, the David H. Koch Hall of Human Origins at the Smithsonian, the David H. Koch Dinosaur Wing at the American Museum of Natural History, and the David H. Koch Theater at Lincoln Center.
And the greenwashing works. Despite the Kochs’ coal and oil contributions to global warming and their funding of anti-science, climate change denial groups, PBS took David’s money and gave him top sponsor billing for Nova, its science show.
i360 and Themis With the i360 database topping 250 million US adults, including 190 million registered voters, the Kochs’ data operation is bigger than the Republican party’s. i360 and its nonprofit arm Themis provide the data analysis that Koch-sponsored groups and politicians use for sophisticated targeting.
See “The self-serving philanthropist” 👉
Union bashing and busting: National Right to Work Committee
No limits on guns: NRA Institute for Legislative Action
Climate change denial: 84 denier organizations have received over $100 million from the Kochs since 1997, Greenpeace has calculated.
Public funding for private and charter schools: The Libre Initiative is organizing in 11 states. (Charles has a deep history of hostility toward the very idea of public schools, which his Daddy Fred charged were commie infiltrated.)
Attacking anti-corruption campaign laws; pushing for privatization of our roads, public lands, and virtually anything else; attacking laws that protect our water and air; etc.
Through its many legal fronts–including the Institute for Free Speech, National Right to Work Legal Defense Foundation, Center for individual Rights, and Liberty Justice Center–the Kochs and their network have backed hundreds of court challenges to laws that they find inconvenient. Dispersing almost $300 million, they have backed campaign finance deregulation and chipped away at pro-union laws.
The Franklin Center is “an ambitious, right-leaning investigative nonprofit focused on state and regional issues,” according to the Columbia Journalism Review. The center’s website notes that Koch funds “help fill the void created as the nation’s newspapers cut back on their statehouse news coverage.”
Watchdog.org Most active in political swing states, this project of the Franklin Center is an online hub for reporting on state and local governments. Talent development and administrative support Freedom Partners Shared Services provides administrative support, human resources, and recruitment for Koch-funded entities, and, Politico says, “assist[s] with everything from scouting office space to accounting to furniture and security.”
American Enterprise Institute, Cato Institute, The Heritage Foundation, and Manhattan Institute are among the well-known Koch-funded idea and propaganda machines, but more obscure entities such as the State Policy Network are far more insidious. SPN is an umbrella organization for some 60 “pro-freedom” state-level think tanks that aim to cut state government employees’ pay, oppose public sector collective bargaining, reduce services in education and health-care, promote school vouchers, oppose efforts to combat greenhouse gas emissions, and reduce or eliminate income and sales taxes.