Who are the Koch Brothers? – Part 2

Published: March 10, 2014

By Jim Lichtman
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On January 5 of this year, The Washington Post wrote that “The political network spearheaded by conservative billionaires Charles and David Koch has expanded into a far-reaching operation of unrivaled complexity, built around a maze of groups that cloaks its donors, according to an analysis of new tax returns and other documents.”

So complex and far-reaching are the Koch’s political activities that Wikipedia devotes a full page to a list of clubs, funds, institutes and 501(c)(4) nonprofits.

If we want more sunshine on where the money raised by the Brothers Koch comes from and where it goes, why not follow the Woodward and Bernstein Deep Throat dictum, “follow the money”?

“Lloyd Hitoshi Mayer, a University of Notre Dame Law School professor who studies the tax issues of politically active nonprofits, said he has never seen a network with a similar design in the tax-exempt world. ‘It is a very sophisticated and complicated structure,’ said Mayer, who examined some of the groups’ tax filings. ‘It’s designed to make it opaque as to where the money is coming from and where the money is going. No layperson thought this up. It would only be worth it if you were spending the kind of dollars the Koch brothers are, because this was not cheap.’

“Tracing the flow of the money is particularly challenging,” the Post writes, “because many of the advocacy groups swapped funds back and forth. The tactic not only provides multiple layers of protection for the original donors but also allows the groups to claim they are spending the money on ‘social welfare’ activities to qualify for 501(c)(4) tax-exempt status.”

The Washington Post along with the Center for Responsive Politics, a nonpartisan group that tracks money in politics, took up a comprehensive study based on IRS tax filings from 2012.

“The left has its own financial muscle, of course,” The Post says, “unions plowed roughly $400 million into national, state and local elections in 2012. A network of wealthy liberal donors organized by the group Democracy Alliance mustered about $100 million for progressive groups and super PACs in the last election cycle, according to a source familiar with the totals.”

However, “The donor network organized by the Kochs — along with funding an array of longtime pro-Republican groups such as the U.S. Chamber of Commerce, the National Rifle Association and Americans for Tax Reform — distributed money to a coalition of groups that share the brothers’ libertarian, free-market perspective.”

The Post and Center created a flow-chart of how the money moves through a labyrinth of related organizations. What it does not show is a list of donors. The Kochs, however, are very skillful at creating a legion of so-called grassroots organizations.

“Most of the funds originated with two groups,” The Post writes, “the Freedom Partners Chamber of Commerce and TC4 Trust.” Among the groups identified from the 2012 election cycle:

Americans for Prosperity, the Virginia-based nonprofit that finances grass-roots activities across the country and ran an early and relentless television ad assault against President Obama during the 2012 campaign. More than $44 million of the $140 million the organization raised in the last cycle came from the Koch-linked feeder funds.

The 60 Plus Association, which casts itself as a conservative alternative to AARP.

American Commitment, a new group that reported spending nearly $1.9 million on spots attacking Obama and congressional Democrats in 2012 and that runs online petitions against the federal health-care law and in support of the Keystone XL pipeline.

The American Energy Alliance, the 501(c)(4) arm of the Institute for Energy Research. The advocacy group, whose president is a former Koch Industries lobbyist, ran a 17-state bus tour in 2012 highlighting the benefits of domestic energy production.

The American Future Fund, a Des Moines-based nonprofit… $63 million of its $68 million war chest in 2012 came from network feeder funds.

The Center for Shared Services, an organization in Alexandria that serves as a human resources hub for the network.

Concerned Veterans for America, which in 2012 held events spotlighting the unemployment rate among veterans and the difficulties members of the military face in casting ballots. The group was funded almost entirely by TC4 in 2012.

Concerned Women for America, a conservative Christian women’s activist group that received more than $8 million fromFreedom Partners. The organization ran a social-media campaign and get-out-the-vote effort aimed at young women in 2012.

“Evangchr4 Trust, a pastor outreach effort that gave nearly $1.2 million to CitizenLnk, an advocacy arm of the conservative Christian group Focus on the Family.

Generation Opportunity, a nonprofit aimed at millennials that ran a national get-out-the-vote effort in 2012 emphasizing the unemployment rate among youths.” Click on the “Meet our Staff” link – a gene-splice of Facebook and Coke vs. Pepsi ads.

The Libre Initiative Trust, a Mission, Texas-based group aimed at promoting “the principles and values of economic freedom” to Latinos.

“Public Engagement Group Trust, a low-profile nonprofit based in Arlington County that says its mission is to raise public awareness of issues such as government spending and free markets. It received nearly $3.5 million from Freedom Partnersand TC4.

Public Notice, a policy nonprofit that highlights the impacts of government spending. Its executive director, Gretchen Hamel, was listed as a program leader for TC4 on the group’s first tax filing.

And “Themis Trust, which houses the data used by the groups in the network.”

For the 2014 and 2016 election cycles, many of the names will change, but the characters behind them wont’. For the Brothers Koch, this isn’t about money; it’s about the need to control the message, and the political agenda in Washington, and the Kochs largely clandestine authority over that message.

The solution?

Several lawmakers and the IRS are working to prevent “social welfare” organizations and other non-profits from being used as political agents. Needless to say, there will be considerable resistance to any attempt to change or modify the status quo.

19th century Supreme Court Justice Louis Brandeis said it best: “The greatest dangers to liberty lurk in the insidious encroachment by men of zeal… Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.”


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