by Jane Mayer
“a wish list”: Leslie Kaufman, “Republicans Seek Big Cuts in Environmental Rules,” New York Times, July 27, 2011.
“rips the heart out”: “A GOP Assault on Environmental Regulations,” Los Angeles Times, Oct. 10, 2011.
Contrary to the partisan hype: Solyndra went bankrupt, as did several other firms supported by the huge government loan guarantee program, but as National Public Radio reported, despite $780 million in losses from defaults on loans, the program made $810 million in interest, yielding a $30 million profit. Jeff Brady, “After Solyndra Loss, U.S. Energy Loan Program Turning a Profit,” NPR, Nov. 13, 2014.
A huge investor: Dixon Doll’s firm, DCM, invested in Abound Solar.
“like night and day”: Hamburger, Hennessey, and Banerjee, “Koch Brothers Now at Heart of GOP Power.”
“If you look”: Coral Davenport, “Heads in Sand,” National Journal, Dec. 3, 2011.
“citizen’s arrest”: Kenneth P. Vogel, “The Kochs Fight Back,” Politico, Feb. 2, 2011.
“spumed and sputtered”: Golf partner of the Kochs, interview with author. The Kochs laying blame on the media for death threats and the need for bodyguards is based on author interviews with two of their interlocutors.
“They somehow thought”: Vogel, “Kochs Fight Back.”
Michael Goldfarb: See Jim Rutenberg, “A Conservative Provocateur, Using a Blowtorch as His Pen,” New York Times, Feb. 23, 2013. See more at http://rightweb.irc-online.org/profile/center_for_american_freedom/#_edn13.
Later, he founded: When the Kochs signed him on, Goldfarb was vice president of a public relations firm called Orion Strategies, LLC. The Washington Free Beacon was published by a nonprofit organization that hid its donors, called the Center for American Freedom. Its chairman was Goldfarb. Its 990 IRS disclosure shows that the Goldfarb-led nonprofit reported paying one for-profit vendor for public relations work: his own firm, Orion Strategies, LLC.
“Do unto them”: See Matthew Continetti, “Combat Journalism: Taking the Fight to the Left,” Washington Free Beacon, Feb. 6, 2012.
“I mean no disrespect”: Eliza Gray, “Right vs. Write,” New Republic, Feb. 22, 2012.
“tactics that have helped”: See Kenneth Vogel, “Philip Ellender: The Kochs’ Unlikely Democratic Enforcer,” Politico, June 14, 2011.
“a wake-up call”: Liz Goodwin, “Mark Holden Wants You to Love the Koch Brothers,” Yahoo News, March 25, 2015.
It’s uncommon for a private detective: In a story about the company’s unusually aggressive dealings with reporters, in which The Washington Post described me as “the Kochs’ Public Enemy No. 1,” their spokesmen said only that the brothers had “no knowledge” of the plagiarism allegations made against me. See Paul Farhi, “Billionaire Koch Brothers Use Web to Take on Media Reports They Dispute,” Washington Post, July 14, 2013.
This time the sender: Friess later said he had no involvement in the proposed investigative story on me.
“intellectual ammunition”: See Schulman, Sons of Wichita, 320, which quotes Robert Levy, then Cato’s chairman, describing David Koch’s telling him that he wanted more “ammunition” for Americans for Prosperity and to support the Republican Party.
If anything, the Kochs’ ham-fisted reaction: Kenneth Vogel and Tarini Parti, “Inside Koch World,” Politico, June 15, 2012.
The bidding during the final: Interview with a guest at the resort during the seminar weekend.
“There’s a lot of sharp knives”: Halperin and Heilemann, Double Down, 346.
Tea Party leaders: See Skocpol and Williamson, Tea Party and the Remaking of Republican Conservatism.
While rich free-market enthusiasts: For more on the differences in the policy preferences of the rich and others concerning entitlement spending, see Martin Gilens, Affluence and Influence: Economic Inequality and Political Power in America (Princeton University Press and Russell Sage Foundation, 2012), 119.
It was an intriguing idea: Chapter 7 of the House of Representatives’ ethics manual bans all “unofficial office accounts” including “in-kind contribution of goods and services for official purposes.” Specifically, members are prohibited from accepting “volunteer services” from paid political consultants “pertaining to the development and implementation of [the member’s] legislative agenda.”
Much of it moved: Overseeing the project at TC4 Trust, and later at a subgroup called Public Notice, was the same operative, a former Bush administration press officer named Gretchen Hamel, who had given a presentation at the January 2011 Koch seminar titled “Framing the Debate on Spending.”
The TC4 Trust was little more: OpenSecrets.org did the groundbreaking reporting on the TC4 Trust. See, for instance, Novak, Maguire, and Choma, “Nonprofit Funneled Money to Kochs’ Voter Database Effort, Other Conservative Groups.”
“It wasn’t about developing policy”: Ed Goeas, interview with author.
As President Obama worked up: Paul Ryan’s eventual pitch, which was found misleading by several nonpartisan fact-checkers, claimed that it was Obama, not he, who planned to cut Medicare. In reality, Obama’s health-care act anticipated steady increases in Medicare spending but predicted a future reduction in the rate of increase, thanks to projected savings. Obama critics soon echoed the line of attack, though. Rush Limbaugh, for instance, claimed on his radio show, “Paul Ryan doesn’t rape Medicare to the tune of $500 billion! Your guy did!”
“When oligarchs control”: Neera Tanden, interview with author.
A 2008 study: For the study of the four hundred top taxpayers and tax rates during the twentieth century, see James Stewart, “High Income, Low Taxes, and Never a Bad Year,” New York Times, Nov. 2, 2013.
Fully 60 percent: A concise and illuminating report on capital gains taxes, from which the statistics here are drawn, is Steve Mufson and Jia Lynn Yang, “Capital Gains Tax Rates Benefiting Wealthy Feed Growing Gap Between Rich and Poor,” Washington Post, Sept. 11, 2011. They note that 80 percent of capital gains during the previous twenty years went to just 5 percent of Americans, of which half were among the wealthiest 0.1 percent of the population.
Soon, though, those at the very top: Jeffrey A. Winters, Oligarchy (Cambridge University Press, 2011), 228.
“tax-cutting spree”: See Hacker and Pierson, Winner-Take-All Politics, 48.
“Our goal”: Charles Koch, “Business Community.”
“Wealthy people self-tax”: Friess as quoted by Freeland, Plutocrats, 246–47.
“I agree with”: Charles Koch’s speech to the Council for National Policy, Jan. 1999.
“This is false”: Leon Wieseltier, interview with author.
According to one 2006 report: Public Citizen and United for a Fair Economy, Spending Millions to Save Billions: The Campaign of the Super Wealthy to Kill the Estate Tax, April 2006, http://www.citizen.org/documents/EstateTaxFinal.pdf.
One member of their network: Cris Barrish, “Judge Shuts Down Heiress’ Effort to Alter Trust with Adoption Plot,” Wilmington News Journal, Aug. 2, 2011.
“It used to be”: Corn, Showdown, 76.
“failed to withstand”: Barry Ritholtz, “What Caused the Financial Crisis? The Big Lie Goes Viral,” Washington Post, Nov. 5, 2011.
“right-wing lunacy”: Noam Scheiber, The Escape Artists: How Obama’s Team Fumbled the Recovery (Simon & Schuster, 2011).
According to a New York Times analysis: These projections of the fallout from cuts in Ryan’s budget refer to its 2012 iteration and appeared in Jonathan Weisman, “In Control, Republican Lawmakers See Budget as Way to Push Agenda,” New York Times, Nov. 13, 2014.
“Robin Hood in reverse”: See Jonathan Chait, “The Legendary Paul Ryan,” New York, April 29, 2012.
“the most courageous”: David Brooks, “Moment of Truth,” New York Times, April 5, 2011.
“The right had succeeded”: See Freeland, Plutocrats, 265. She writes, “In April and May of 2011, when unemployment was 9 percent,…the fi
ve largest papers in the country published 201 stories about the budget deficit and only sixty-three about joblessness.”
“We made a mistake”: Bob Woodward, The Price of Politics (Simon & Schuster Paperbacks, 2013), 107.
A Democratic underdog: The race in New York’s Twenty-Sixth Congressional District was won by the Democrat, Kathy Hochul.
But the House Republicans: See Draper, When the Tea Party Came to Town, 151.
“We led”: Ibid.
The donors were excited: The assertion that the donors felt their investment was worth it is based on an interview with someone familiar with their thinking, who asked not to be identified.
“an apocalyptic cult”: Thomas E. Mann and Norman J. Ornstein, It’s Even Worse Than It Looks: How the American Constitutional System Collided with the New Politics of Extremism (Basic Books, 2012), 54.
“deal with it as adults”: Naftali Bendavid, “Boehner Warns GOP on Debt Ceiling,” Wall Street Journal, Nov. 18, 2010.
“if we don’t solve”: Frum, in “Crashing the Party,” describes Stanley Druckenmiller’s position as “amazing” and radical.
“delay tough decisions”: In addition, Koch-backed advocates had long argued against closing the carried-interest loophole. In 2007, when Congress debated closing it, Adam Creighton, a Koch fellow at the Tax Foundation, a research group supported by Charles Koch, argued that “this is not going to raise tax revenue at all.”
“they start wetting their pants”: Stephen Moore, former Club for Growth president. Matt Bai, “Fight Club,” New York Times Magazine, Aug. 10, 2003.
The president and Boehner: In the grand bargain, Obama would agree to cut spending in exchange for the debt ceiling extension and for the Republicans “cleaning out the garbage” in the tax code, as Boehner put it. Boehner wouldn’t agree to raise tax rates, but he would agree to eliminate some tax loopholes.
He was among the House’s top: See Alec MacGillis, “In Cantor, Hedge Funds and Private Equity Firms Have Voice at Debt Ceiling Negotiations,” Washington Post, July 25, 2011.
So although one study: The 2006 study is cited in Hacker and Pierson, Winner-Take-All Politics, 51.
“Boehner begged David”: Author interviews with family adviser, a congressional source, and Emily Schillinger.
“With no basis in fact”: Mann and Ornstein, It’s Even Worse Than It Looks, 23.
Cantor later told: Ryan Lizza, “The House of Pain,” New Yorker, March 4, 2013.
“I think he came in truly trying”: Neera Tanden, interview with author.
CHAPTER TWELVE: MOTHER OF ALL WARS
Or so they thought: Brad Friedman, “Inside the Koch Brothers’ 2011 Summer Seminar,” The Brad Blog, June 26, 2011.
The New York Times’s resident: Nate Silver, “Is Obama Toast? Handicapping the 2012 Election,” New York Times Magazine, Nov. 3, 2011.
“Wouldn’t it be easier”: Halperin and Heilemann, Double Down, 345.
Four years later: For more on Christie’s record, see Cezary Podkul and Allan Sloan, “Christie Closed Budget Gaps with One-Shot Maneuvers,” Washington Post, April 18, 2015, A1.
“Who knows?”: Friedman, “Inside the Koch Brothers’ 2011 Summer Seminar.”
Christie had campaigned: See Joby Warrick, “Foes: Christie Left Wind Power Twisting,” Washington Post, March 30, 2015.
From the start: Freedom Partners made grants of $1 million or more in 2012 to the following groups:
Center to Protect Patient Rights: $115 million
Americans for Prosperity: $32.3 million
60 Plus Association: $15.7 million
American Future Fund: $13.6 million
Concerned Women for America Legislative Action Committee: $8.2 million
Themis Trust: $5.8 million
Public Notice: $5.5 million
Generation Opportunity: $5 million
Libre Initiative: $3.1 million
National Rifle Association: $3.5 million
U.S. Chamber of Commerce: $2 million
American Energy Alliance: $1.5 million
David Koch’s group: Technically, the Kochs’ spokesmen insisted that David Koch was only chairman of the Americans for Prosperity Foundation, but in his introduction of David Koch during the June 2011 seminar Kevin Gentry seemed to describe him simply as “chairman of Americans for Prosperity.”
For the Koch network: The Koch Industries PAC donated $43,000 to Walker’s gubernatorial campaign, and David Koch donated $1 million to the Republican Governors Association in 2010.
Some, like the liberal: John Podesta, the founder of the Center for American Progress, in 2015 signed on as the chairman of Hillary Clinton’s presidential campaign.
“the big government”: See Jason Stein and Patrick Marley, More Than They Bargained For: Scott Walker, Unions, and the Fight for Wisconsin (University of Wisconsin Press, 2013), 37.
The Bradley Foundation: See Patrick Healey and Monica Davey, “Behind Scott Walker, a Longstanding Conservative Alliance Against Unions,” New York Times, June 8, 2015. The paper reported that in 2009 the Bradley Foundation gave a grant of $1 million to the Wisconsin Policy Research Institute and provided one-third of the budget of the MacIver Institute, both of which drew up lists of proposals for the incoming governor, at the top of which was curbing the power of the state employee unions. The MacIver Institute had numerous ties to the Wisconsin chapter of the Koch advocacy group Americans for Prosperity. Three members of the MacIver Institute’s board also served as directors of Americans for Prosperity in Wisconsin. One of these, David Fettig, was a Koch seminar attendee as well.
“one of the most powerful”: Daniel Bice, Bill Glauber, and Ben Poston, “From Local Roots, Bradley Foundation Builds a Conservative Empire,” Milwaukee Journal Sentinel, Nov. 19, 2011.
As a college dropout: In 2010, an offshoot of Americans for Prosperity calling itself Fight Back Wisconsin organized Tea Party rallies across the state featuring Scott Walker, who was then Milwaukee county executive. Later, the secretly funded group helped him get out the vote. Meanwhile, in a bit of philanthropic back-scratching, the Bradley Foundation in 2010 gave $520,000 to the Americans for Prosperity Foundation.
“We go back”: Adele M. Stan, “Wall Street Journal Honcho Shills for Secret Worker ‘Education’ Program Linked to Koch Group,” Alternet, June 3, 2011.
Once in office: See Michael Isikoff, “Secret $1.5 Million Donation from Wisconsin Billionaire Uncovered in Scott Walker Dark-Money Probe,” Yahoo News, March 23, 2015. Laurel Patrick, Walker’s press secretary, issued a strong denial to Yahoo News concerning any favoritism shown Menard. She denied “that the governor had provided any special favors for Menard and said Walker was ‘not involved’ in the decision to award his firm tax credits, which were approved by the Wisconsin Economic Development Corporation for expansions of existing facilities in order to create jobs. (She also noted that Menard’s firm had been awarded $1.5 million in tax credits in 2006 under Democratic Gov. James Doyle. State records show these were reduced to $1 million when the company failed to meet its full job-creation requirements.)
According to a 2007 profile: See Mary Van de Kamp Nohl, “Big Money,” Milwaukee Magazine, April 30, 2007.
One employee described: Ibid.
That case was followed: See Bruce Murphy, “The Strange Life of John Menard,” UrbanMilwaukee.com, June 20, 2013. Donald Trump’s wife, Melania, also filed a separate $50 million suit against John Menard, claiming damages from his cancellation of a promotional deal with her line of skin care products. Menard’s lawyers described the Trump deal as void.
Soon after the governor: Diane Hendricks donated $10,000, the maximum allowable amount, to Walker’s campaign in 2011, while her company donated $25,000 to the Republican Governors Association. In 2012, she donated $500,000 to fight the effort to recall Walker. In 2014, she donated $1 million to Wisconsin’s Republican Party.
Thanks to complicated accounting: According to an account by Cary Spivak, “Beloit Billion
aire Pays Zero in 2010 State Income Tax Bill,” Milwaukee Journal Sentinel, May 30, 2012, the tax director for Hendricks’s company, ABC Supply, described her zero personal state income tax payment as an anomaly, stemming from the reclassification of her company from an S corporation, in which she had paid the taxes, to one in which the company paid the $373,671 state tax bill for the second half of 2010.
Walker unwittingly lent: The prank phone caller was Ian Murphy. For his account, see “I Punk’d Scott Walker, and Now He’s Lying About It,” Politico, Nov. 18, 2013.
After Walker triumphed: See Adam Nagourney and Michael Barbaro, “Emails Show Bigger Fund-Raising Role for Wisconsin Leader,” New York Times, Aug. 22, 2014.
According to one tally: See Brendan Fischer, “Bradley Foundation Bankrolled Groups Pushing Back on John Doe Criminal Probe,” Center for Media and Democracy’s PR Watch, June 19, 2014.
“We will not step back”: Schulman, Sons of Wichita, 304.
“The secret of my influence”: Novak, Maguire, and Choma, “Nonprofit Funneled Money to Kochs’ Voter Database Effort, Other Conservative Groups.”
“Koch has been targeted”: Matea Gold, “Koch-Backed Political Network Built to Shield Donors,” Washington Post, Jan. 5, 2014.
This consolidation of power: Total traceable election spending by all candidates, parties, and outside groups reached $7 billion, while the amount spent by independent groups and super PACs reached $2.5 billion, of which $1.25 billion came from traditional PACs and $950 million came from super PACs with unlimited contributions. In comparison, $1.576 billion was spent by the Democratic and Republican Parties, according to the Federal Election Commission’s report “FEC Summarizes Campaign Activity of the 2011–2012 Election Cycle,” April 19, 2013. Spending by “outside political committees” topped party spending for the first time, according to the FEC commissioner Ellen Weintraub’s statement, Jan. 31, 2013.
On its own: I reached the sum of $407 million by adding up disclosures, but Matea Gold, in her excellent post-2012 feature on the Koch network’s spending, cites the figure $400 million. See Gold, “Koch-Backed Network, Built to Shield Donors, Raised $400 Million in 2012 Elections,” Washington Post, Jan. 5, 2014.