The Koch brothers’ guide to political ac­tivism

Donors at a Free­dom Part­ners re­treat are told to be more pub­lic “Iden­tify your­self, be­cause this isn’t some se­cret ca­bal”

Bloomberg Businessweek (Asia) - - CONTENTS - The bot­tom line A Koch-backed political net­work is pre­par­ing to spend a record $500 mil­lion in 2016 to ad­vance its con­ser­va­tive agenda. Edited by Al­li­son Hoff­man Bloomberg.com −Zachary Mider

Charles Koch should be on top of the world. The bil­lion­aire in­dus­tri­al­ist’s con­ser­va­tive Free­dom Part­ners net­work at­tracted a record 500 wealthy Amer­i­cans to its semi­an­nual re­treat in the Cal­i­for­nia desert oa­sis of In­dian Wells over the last week­end in Jan­uary, a record for the group. It’s pre­par­ing to spend $500 mil­lion this year on causes re­lated to free mar­kets and lim­ited govern­ment, also a record.

Yet when Koch stepped onto the stage to kick off the four-day sum­mit, his mes­sage to the crowd was grim. Af­ter lay­ing out his vi­sion of the kind of lib­er­tar­ian par­adise he as­pires to cre­ate, he said, “The tragedy is, in my view, that Amer­ica is mov­ing far­ther and far­ther away from this type of so­ci­ety.” He ex­horted his mem­bers to step out of the shad­ows and ad­vo­cate pub­licly for their be­liefs. “I’ve been iden­ti­fied lately, and it’s not so bad,” he said. “I’m still here. And mat­ter of fact, I’m stronger than ever. Come out and iden­tify your­self, be­cause this isn’t some se­cret ca­bal.”

The Repub­li­can pres­i­den­tial elec­tion has served as a stark re­minder of the lim­its of the power that wealthy donors can wield in U.S. pol­i­tics. Don­ald Trump dom­i­nated the polls for months with­out spend­ing much of his or any­one else’s money while can­di­dates given mil­lions by Koch al­lies flamed out. Scott Walker, an early fa­vorite of many Free­dom Part­ners donors, with­drew from the race af­ter only 71 days. Mem­bers wrote seven-fig­ure checks to su­per PACs sup­port­ing Jeb Bush, Chris Christie, and John Ka­sich, only to see them flat­line in the polls. (Other mem­bers of the net­work have backed Ted Cruz, who won the Feb. 1 Iowa cau­cuses, and Marco Ru­bio, who placed third, be­hind Trump.)

Free­dom Part­ners mem­bers, many of whom are own­ers of pri­vate com­pa­nies, pay $100,000 to join the net­work. The twice-yearly sem­i­nars take place at fancy re­sorts amid heavy se­cu­rity. Mem­bers of­ten bring spouses and find time for golf be­tween meet­ings. The Kochs al­lowed six news or­ga­ni­za­tions, in­clud­ing Bloomberg, to at­tend parts of the gath­er­ing in In­dian Wells, on the con­di­tion that re­porters not ap­proach donors or re­port on their pres­ence with­out per­mis­sion.

The meet­ings cover a broad range of projects that re­ceive Free­dom Part­ners fund­ing, in­clud­ing pro­vid­ing schol­ar­ships, fight­ing cam­pus speech codes, and build­ing net­works of con­ser­va­tive ac­tivists. The group is deeply in­volved in a push to re­duce in­car­cer­a­tion of non­vi­o­lent of­fend­ers, as well as an ef­fort in Congress to abol­ish the Ex­port-Im­port Bank of the United States.

Nei­ther Charles Koch nor his brother David has en­dorsed any­one in the Repub­li­can pri­maries, nor has Free­dom Part­ners made a rec­om­men­da­tion to its mem­bers. Al­though the or­ga­ni­za­tion typ­i­cally sup­ports Repub­li­can can­di­dates, only about a third of its spend­ing goes to elec­toral pol­i­tics, and the Kochs of­ten say they re­gard Repub­li­cans as only slightly less con­temptible than Democrats. In an ad hoc gift shop set up for the event, vis­i­tors browsed books on a rec­om­mended read­ing list handed out to at­ten­dees, which spanned clas­sic eco­nom­ics texts and re­cent aca­demic pub­li­ca­tions.

Marc Short, pres­i­dent of Free­dom Part­ners, says the group has been try­ing to make sense of the Trump phe­nom­e­non. “It’s a frus­tra­tion and even an un­der­stand­able anger that peo­ple feel, that their rep­re­sen­ta­tives in Wash­ing­ton don’t rep­re­sent their in­ter­ests any­more,” he says. “We agree with the frus­tra­tion, but we just feel like that’s the wrong pre­scrip­tion to solve the prob­lem.”

Mem­bers of the group spent al­most $400 mil­lion in 2015, of­fi­cials say, part of a plan to in­vest as much as $889 mil­lion elect­ing con­ser­va­tive can­di­dates friendly to Free­dom Part­ners’ pol­icy pro­pos­als. Much of that giv­ing has taken place through non­profit ve­hi­cles that mask donors’ names.

Tamra Farah of Colorado Springs, Colo., is fol­low­ing Koch’s ad­vice to be more pub­lic about her political giv­ing. Af­ter join­ing Free­dom Part­ners with her hus­band, Barry, she be­gan work­ing full time for Amer­i­cans for Pros­per­ity, the Kochs’ largest ac­tivist net­work, as its Colorado com­mu­ni­ca­tions di­rec­tor. She says she hasn’t paid much at­ten­tion to the pres­i­den­tial race. In­stead, she’s been go­ing door-to-door in Colorado to build sup­port for a re­peal of Oba­macare. She says, “We’re in this for the long haul.”

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