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Tax Forms Reveal Koch Brothers Spent Millions to Shape State Politics in 2017

Sunday, February 25, 2018 By Alex Kotch, Truthout | Report
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Though positions advocated by the Koch brothers and their network are unpopular with Americans, big money can give life to even the unlikeliest of proposals.Though positions advocated by the Koch brothers and their network are unpopular with Americans, big money can give life to even the unlikeliest of proposals. (Image: Jared Rodriguez / Truthout)

The conservative billionaire mega-donors Charles and David Koch poured millions of dollars into state politics in 2017, according to tax forms recently released by the Internal Revenue Service, despite it being a year with relatively few state elections.

The brothers' massive investments in federal Republican politicians and groups have been more heavily scrutinized, but the influence they and their vast political spending network have on state politics is too often overlooked.

The Koch political network has funneled money and organizing into state politics for some time, contributing to huge state legislative gains by Republicans over the last decade. Having cultivated a large number of state officials who share their beliefs, or feel indebted to them, the Kochs are able to heavily influence right-wing policy change, even at the federal level. One current initiative is a radical Convention of the States, which would bypass an often gridlocked Congress and convene representatives from each state to alter the US Constitution with federal spending caps and any number of unforeseen changes. Another goal is gerrymandering the US Senate by allowing state legislators and governors, not the people, to pick US senators.

Last year, Koch Industries, the giant, private fossil fuel and materials conglomerate co-owned by the Koch brothers, lavished state-level super PACs, such as the Republican Governors Association, the Republican State Leadership Committee and the Republican Attorneys General Association with hundreds of thousands of dollars each. Groups like these use donations from wealthy conservatives and corporations to help elect state legislative, gubernatorial and cabinet secretary candidates who, in many cases, lower taxes, slash regulations and hinder collective bargaining -- policies that aid the profits of big businesses like Koch Industries and line up with the Koch brothers' libertarian ideology.

David Koch, the richest resident of New York City with a net worth of $60.7 billion as of February 22, personally donated $500,000 to the New York Republican Party in 2017. According to the National Institute on Money in State Politics, Charles Koch has not personally yet donated to state candidates since 2014; however, campaign finance report deadlines will soon arrive in some states, and these reports could reveal any such contributions.

"The positions advocated by the Koch brothers and their network are incredibly unpopular with Americans, and yet in our political system, big money can give life to even the unlikeliest of proposals," Laura Friedenbach, communications director of the progressive money-in-politics nonprofit Every Voice, told Truthout. "Big donors and their allies have successfully rigged the rules of our democracy in ways that give them, their political spending, and out-of-touch politicians too much influence."

Democratic donors also contribute to super PACs and dark money groups that spend on state elections, but in the last decade, Republican spending groups -- which are often better funded -- have proved more effective in influencing local policies.

Since 2010, Republicans have gained control of 18 additional state legislatures. However, recent elections in Virginia and other states demonstrate what appears to be a Democratic wave, in part due to the unpopularity of President Donald Trump and the dearth of major legislation passed by the GOP-controlled Congress.

To complement super PAC spending and campaign contributions, the Koch political network also spent millions of dollars on outside advertisements in state races. For example, the most well-known "dark money" nonprofit partially funded and overseen by the Kochs, Americans for Prosperity (AFP), spent at least $2.8 million on TV ads, digital ads and mailers attacking Virginia Democratic gubernatorial candidate Ralph Northam, intended to benefit the unsuccessful bid of Republican Ed Gillespie.

Virginia Republicans suffered some tough losses in last year's elections, but that hasn't deterred Freedom Partners, the "central bank" of the political network, from advocating work requirements for Medicaid recipients, or AFP from opposing a Medicaid expansion in the state.

Gillespie was a keynote speaker at an annual AFP event in August. The Defending the American Dream Summit is an annual weekend gathering for "defenders of freedom to come together to learn, be inspired, and celebrate liberty."

"Ed Gillespie has long been a champion for policies that promote economic prosperity and improve people's lives," said AFP President Tim Phillips. "I'm excited for our activists to learn more about his approach to advancing free market principles in Virginia and how he plans to keep the American Dream alive and well for this generation and many more to come."

In typical Koch fashion, one anti-Northam mailer attacked the candidate for supporting higher taxes on sales, gas, home and car sales. A digital video criticized Northam for opposing an "education savings account" proposal that would give parents who removed their children from public school 90 percent of the state funds that would have been spent on those children, which they could spend on private school tuition and other educational costs.

The Koch network, which advocates charter and private school expansion, is supporting similar education savings account bills around the country. In Arizona, Gov. Doug Ducey, a Koch favorite, signed a 2017 bill creating private school vouchers, which pay for children to attend private, often religious, schools. Now an anti-voucher measure is on the state's 2018 ballot, and the Kochs' LIBRE Initiative, a project targeting Latino voters, is campaigning against it.

"The Koch network of funders considers vouchers the 'low-hanging fruit' of what can be accomplished in the public policy world," Mary Bottari, deputy director of the Center for Media and Democracy, which studies and reports on the Koch network, told Truthout. "The terrible tragedy is that empirical research is increasingly showing that vouchers are actually harming kids."

Both the Arizona law and Virginia's measure on vouchers -- which passed the state legislature but was vetoed by then-Gov. Terry McAuliffe -- mirror model legislation crafted by the American Legislative Exchange Council (ALEC), a corporate bill mill made up of big business representatives and conservative state lawmakers. ALEC receives funding from Koch Industries, which has been on the group's governing board, and the Charles Koch Foundation.

And the Koch network is embedded in the ALEC leadership. Frayda Levin, an AFP board member, and Michael Morgan, a Koch Industries lobbyist, are on ALEC's Private Enterprise Advisory Council. ALEC recently hired former AFP analyst Grant Kidwell to chair its Energy, Environment and Agriculture task force.

Donors to the Republican Governors Association can't technically earmark their donations for specific candidates, but they can convey their "interest" in certain races or say they are making a donation "at the request of a candidate," according to The Wall Street Journal.

In 2017, Koch Industries donated $525,000 to the Republican Governors Association, per recently released tax forms, which gave $5.25 million to Gillespie's campaign and gave almost $8 million to another super PAC, A Stronger Virginia. That PAC contributed the largest total out of all donors, $7.5 million, to the Gillespie campaign.

The New Jersey governor's race, also held in 2017, broke the state record for independent spending ($24.5 million), which included $2.3 million from the Republican Governors Association backing GOP candidate Kimberly Guadagno, who lost.

The Republican State Leadership Committee, to which Koch Industries and Koch Companies Public Sector LLC donated $154,000, put roughly $2 million into Virginia races in 2017, including $810,000 to lieutenant governor candidate Jill Vogel, $700,000 to the Virginia Republican Party and over $500,000 to the Dominion Leadership Trust, a committee set up by House Speaker Bill Howell to aid Republican state candidates.

Koch Industries donated nearly $60,000 directly to Virginia state campaigns last year, including $20,000 to Gillespie, $10,000 to Adams and $7,500 to the Dominion Leadership Trust.

Koch Industries and Koch Companies Public Sector LLC collectively donated over $215,000 in 2017 to the Republican Attorneys General Association (RAGA), a super PAC that spends large amounts to help elect GOP state attorneys general. RAGA donated at least $6.9 million last year to Virginia attorney general candidate John Adams, the Virginia Republican Party and the Dominion Leadership Trust, as well as to party organizations in other states, such as Florida, Michigan and Washington, according to the group's most recent tax forms. As a top-tier donor to RAGA, Koch Industries had "posting access" to an exclusive online policy bulletin board, according to documents recently revealed by The Intercept.

Koch Industries and its corporate political action committee, KochPAC, made over $137,000 in direct donations to state candidates' campaigns and state party groups, per data compiled by the National Institute on Money in State Politics.

By maintaining and expanding Republican majorities in state legislatures across the country, the Koch network will help the party control the 2020 redistricting of state and federal districts.

In 2010, led by the Republican State Leadership Committee's REDMAP program, the party successfully took control of a majority of state legislatures, allowing the GOP to draw legislative and congressional voting districts in those states the following year, after the 2010 Census was released. The result in several states, including North Carolina and Pennsylvania, were partisan and racial gerrymanders. In 2021, state lawmakers will again redraw these maps after the 2020 Census, and political donors like the Kochs want to prevent Democrats from regaining majorities and controlling this process.

In addition to privatizing education and cutting taxes, the Koch network has plenty of other designs for the states. AFP supports an anti-union "Right to Work" amendment to the North Carolina constitution and expanded offshore gas drilling in nearby Atlantic waters. In Kentucky, AFP applauded Gov. Matt Bevin's push to impose Medicaid work requirements and his plan to repeal film tax credits.

Requests for comment from Freedom Partners, Koch Industries and KochPAC were not returned.

"The ALEC-Koch machine has long advocated this list of policies -- corporatizing public education, dismantling public health care, backing policies to lower wages and destroy public and private sector unions," said Bottari. "These policies benefit no one except corporations and the wealthy trying to rig our economy for their own benefit."

Copyright, Truthout. May not be reprinted without permission.

Alex Kotch

Alex Kotch is an independent investigative journalist focused on money in politics, and he's been published by over 20 outlets including VICE.com, Salon, Exposed by CMD, AlterNet, DeSmog and Rewire. Follow him on Twitter @alexkotch and see more of his work at alexkotch.com.

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Tax Forms Reveal Koch Brothers Spent Millions to Shape State Politics in 2017

Sunday, February 25, 2018 By Alex Kotch, Truthout | Report
  • font size decrease font size decrease font size increase font size increase font size
  • Print

Though positions advocated by the Koch brothers and their network are unpopular with Americans, big money can give life to even the unlikeliest of proposals.Though positions advocated by the Koch brothers and their network are unpopular with Americans, big money can give life to even the unlikeliest of proposals. (Image: Jared Rodriguez / Truthout)

The conservative billionaire mega-donors Charles and David Koch poured millions of dollars into state politics in 2017, according to tax forms recently released by the Internal Revenue Service, despite it being a year with relatively few state elections.

The brothers' massive investments in federal Republican politicians and groups have been more heavily scrutinized, but the influence they and their vast political spending network have on state politics is too often overlooked.

The Koch political network has funneled money and organizing into state politics for some time, contributing to huge state legislative gains by Republicans over the last decade. Having cultivated a large number of state officials who share their beliefs, or feel indebted to them, the Kochs are able to heavily influence right-wing policy change, even at the federal level. One current initiative is a radical Convention of the States, which would bypass an often gridlocked Congress and convene representatives from each state to alter the US Constitution with federal spending caps and any number of unforeseen changes. Another goal is gerrymandering the US Senate by allowing state legislators and governors, not the people, to pick US senators.

Last year, Koch Industries, the giant, private fossil fuel and materials conglomerate co-owned by the Koch brothers, lavished state-level super PACs, such as the Republican Governors Association, the Republican State Leadership Committee and the Republican Attorneys General Association with hundreds of thousands of dollars each. Groups like these use donations from wealthy conservatives and corporations to help elect state legislative, gubernatorial and cabinet secretary candidates who, in many cases, lower taxes, slash regulations and hinder collective bargaining -- policies that aid the profits of big businesses like Koch Industries and line up with the Koch brothers' libertarian ideology.

David Koch, the richest resident of New York City with a net worth of $60.7 billion as of February 22, personally donated $500,000 to the New York Republican Party in 2017. According to the National Institute on Money in State Politics, Charles Koch has not personally yet donated to state candidates since 2014; however, campaign finance report deadlines will soon arrive in some states, and these reports could reveal any such contributions.

"The positions advocated by the Koch brothers and their network are incredibly unpopular with Americans, and yet in our political system, big money can give life to even the unlikeliest of proposals," Laura Friedenbach, communications director of the progressive money-in-politics nonprofit Every Voice, told Truthout. "Big donors and their allies have successfully rigged the rules of our democracy in ways that give them, their political spending, and out-of-touch politicians too much influence."

Democratic donors also contribute to super PACs and dark money groups that spend on state elections, but in the last decade, Republican spending groups -- which are often better funded -- have proved more effective in influencing local policies.

Since 2010, Republicans have gained control of 18 additional state legislatures. However, recent elections in Virginia and other states demonstrate what appears to be a Democratic wave, in part due to the unpopularity of President Donald Trump and the dearth of major legislation passed by the GOP-controlled Congress.

To complement super PAC spending and campaign contributions, the Koch political network also spent millions of dollars on outside advertisements in state races. For example, the most well-known "dark money" nonprofit partially funded and overseen by the Kochs, Americans for Prosperity (AFP), spent at least $2.8 million on TV ads, digital ads and mailers attacking Virginia Democratic gubernatorial candidate Ralph Northam, intended to benefit the unsuccessful bid of Republican Ed Gillespie.

Virginia Republicans suffered some tough losses in last year's elections, but that hasn't deterred Freedom Partners, the "central bank" of the political network, from advocating work requirements for Medicaid recipients, or AFP from opposing a Medicaid expansion in the state.

Gillespie was a keynote speaker at an annual AFP event in August. The Defending the American Dream Summit is an annual weekend gathering for "defenders of freedom to come together to learn, be inspired, and celebrate liberty."

"Ed Gillespie has long been a champion for policies that promote economic prosperity and improve people's lives," said AFP President Tim Phillips. "I'm excited for our activists to learn more about his approach to advancing free market principles in Virginia and how he plans to keep the American Dream alive and well for this generation and many more to come."

In typical Koch fashion, one anti-Northam mailer attacked the candidate for supporting higher taxes on sales, gas, home and car sales. A digital video criticized Northam for opposing an "education savings account" proposal that would give parents who removed their children from public school 90 percent of the state funds that would have been spent on those children, which they could spend on private school tuition and other educational costs.

The Koch network, which advocates charter and private school expansion, is supporting similar education savings account bills around the country. In Arizona, Gov. Doug Ducey, a Koch favorite, signed a 2017 bill creating private school vouchers, which pay for children to attend private, often religious, schools. Now an anti-voucher measure is on the state's 2018 ballot, and the Kochs' LIBRE Initiative, a project targeting Latino voters, is campaigning against it.

"The Koch network of funders considers vouchers the 'low-hanging fruit' of what can be accomplished in the public policy world," Mary Bottari, deputy director of the Center for Media and Democracy, which studies and reports on the Koch network, told Truthout. "The terrible tragedy is that empirical research is increasingly showing that vouchers are actually harming kids."

Both the Arizona law and Virginia's measure on vouchers -- which passed the state legislature but was vetoed by then-Gov. Terry McAuliffe -- mirror model legislation crafted by the American Legislative Exchange Council (ALEC), a corporate bill mill made up of big business representatives and conservative state lawmakers. ALEC receives funding from Koch Industries, which has been on the group's governing board, and the Charles Koch Foundation.

And the Koch network is embedded in the ALEC leadership. Frayda Levin, an AFP board member, and Michael Morgan, a Koch Industries lobbyist, are on ALEC's Private Enterprise Advisory Council. ALEC recently hired former AFP analyst Grant Kidwell to chair its Energy, Environment and Agriculture task force.

Donors to the Republican Governors Association can't technically earmark their donations for specific candidates, but they can convey their "interest" in certain races or say they are making a donation "at the request of a candidate," according to The Wall Street Journal.

In 2017, Koch Industries donated $525,000 to the Republican Governors Association, per recently released tax forms, which gave $5.25 million to Gillespie's campaign and gave almost $8 million to another super PAC, A Stronger Virginia. That PAC contributed the largest total out of all donors, $7.5 million, to the Gillespie campaign.

The New Jersey governor's race, also held in 2017, broke the state record for independent spending ($24.5 million), which included $2.3 million from the Republican Governors Association backing GOP candidate Kimberly Guadagno, who lost.

The Republican State Leadership Committee, to which Koch Industries and Koch Companies Public Sector LLC donated $154,000, put roughly $2 million into Virginia races in 2017, including $810,000 to lieutenant governor candidate Jill Vogel, $700,000 to the Virginia Republican Party and over $500,000 to the Dominion Leadership Trust, a committee set up by House Speaker Bill Howell to aid Republican state candidates.

Koch Industries donated nearly $60,000 directly to Virginia state campaigns last year, including $20,000 to Gillespie, $10,000 to Adams and $7,500 to the Dominion Leadership Trust.

Koch Industries and Koch Companies Public Sector LLC collectively donated over $215,000 in 2017 to the Republican Attorneys General Association (RAGA), a super PAC that spends large amounts to help elect GOP state attorneys general. RAGA donated at least $6.9 million last year to Virginia attorney general candidate John Adams, the Virginia Republican Party and the Dominion Leadership Trust, as well as to party organizations in other states, such as Florida, Michigan and Washington, according to the group's most recent tax forms. As a top-tier donor to RAGA, Koch Industries had "posting access" to an exclusive online policy bulletin board, according to documents recently revealed by The Intercept.

Koch Industries and its corporate political action committee, KochPAC, made over $137,000 in direct donations to state candidates' campaigns and state party groups, per data compiled by the National Institute on Money in State Politics.

By maintaining and expanding Republican majorities in state legislatures across the country, the Koch network will help the party control the 2020 redistricting of state and federal districts.

In 2010, led by the Republican State Leadership Committee's REDMAP program, the party successfully took control of a majority of state legislatures, allowing the GOP to draw legislative and congressional voting districts in those states the following year, after the 2010 Census was released. The result in several states, including North Carolina and Pennsylvania, were partisan and racial gerrymanders. In 2021, state lawmakers will again redraw these maps after the 2020 Census, and political donors like the Kochs want to prevent Democrats from regaining majorities and controlling this process.

In addition to privatizing education and cutting taxes, the Koch network has plenty of other designs for the states. AFP supports an anti-union "Right to Work" amendment to the North Carolina constitution and expanded offshore gas drilling in nearby Atlantic waters. In Kentucky, AFP applauded Gov. Matt Bevin's push to impose Medicaid work requirements and his plan to repeal film tax credits.

Requests for comment from Freedom Partners, Koch Industries and KochPAC were not returned.

"The ALEC-Koch machine has long advocated this list of policies -- corporatizing public education, dismantling public health care, backing policies to lower wages and destroy public and private sector unions," said Bottari. "These policies benefit no one except corporations and the wealthy trying to rig our economy for their own benefit."

Copyright, Truthout. May not be reprinted without permission.

Alex Kotch

Alex Kotch is an independent investigative journalist focused on money in politics, and he's been published by over 20 outlets including VICE.com, Salon, Exposed by CMD, AlterNet, DeSmog and Rewire. Follow him on Twitter @alexkotch and see more of his work at alexkotch.com.