Despite Donald Trump cementing the GOP nomination, the Koch network keeps its distance
Charles Koch, addressing hundreds of members of the powerful and wealthy conservative donor network he and his brother David have assembled, wanted to clear the air.
“The first thing I want to do is correct a rumor the media keeps stimulating, and that is I’m probably going to support Hillary,” said Koch. “That is a blood libel.”
It was a crowd-pleasing line — if inflammatory, given the actual blood libel’s history as a spark for centuries of anti-Semitic violence. The deeply anti-Clinton audience, most of whom have committed at least $100,000 to the Koch cause, responded to the 80-year-old billionaire industrialist with claps and cheers.
But lest he be interpreted as endorsing Donald Trump, Koch immediately followed the barb with a clarification: “At this point, I can’t support either candidate.”
For months, the brothers — who are among the nation’s best known and most controversial independent political actors — have resolutely resisted jumping into the presidential race. This weekend, at their biannual donor confab held at a stately Colorado Springs resort, the message was unambiguous: They really, truly mean it.
The first thing I want to do is correct a rumor the media keeps stimulating, and that is I’m probably going to support Hillary. That is a blood libel.
— Charles Koch
Throughout the weekend, the Kochs and their operatives tried to draw the focus away from this year’s top prize, the White House. Instead, they emphasized the need to invest in Senate and House races and, more fundamentally, to find avenues of influence entirely outside the political realm.
Many attendees said they backed the decision to opt out of the presidential campaign. But some acknowledged the Kochs run the risk of alienating donors who are loathe to sit on the sidelines of 2016’s marquee race, fearing the consequences of a Hillary Clinton victory.
“I know some people in this group are deadly afraid of things like Supreme Court justice nominations,” said Andy Nunemaker, a Wisconsin software executive who said he supports the Kochs’ position. “That’s up to those individuals to go and support the candidate.”
The ideological differences between Trump and the Koch brothers run deep. Trump has run an explicitly populist campaign, marked by protectionist rhetoric on trade and a forceful argument that immigration has harmed the American worker. Though Trump makes glancing references to the national debt, he has shown no appetite for cutting Social Security or other entitlement programs.
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The Kochs preach a libertarian-leaning philosophy that extols free trade, supports expanded immigration and advocates deep cuts in federal spending, including the entitlement programs for the elderly that Trump would keep intact.
Charles Koch said in an April television interview that Trump’s proposal to temporarily ban Muslims from entering the country was “monstrous” and likened it to Nazi Germany. In the same interview, Koch said it was possible that Clinton could be a better president than a Republican would, the source of the rumor he blamed on the media Sunday.
Mark Holden, a top Koch Industries official and chairman of the Freedom Partners Chamber of Commerce, said backing Trump simply isn’t a good investment.
“We’re not there at the presidential level…. And we’re not just going to go in because, ‘oh well, it’s a Republican or Democrat,’” he said, ticking off the operation’s criteria for involvement.
“We feel we need to have an aligned candidate — values and beliefs and on policy. Can we make a difference? Are they running a good campaign? None of that’s going on right now.”
A number of donors said they agreed; some continue to harbor reservations about Trump.
“I don’t like the conflict. He doesn’t bring people together,” said Andy Simms, a first-time attendee who owns car dealerships in Northern California. “This whole thing about… inciting people at the expense of others is disappointing to me.”
Simms, a moderate Republican, said he remains undecided about how he will vote in November. So is Nunemaker, also a newcomer to the Koch gathering. This year’s presidential choices left him “a bit apprehensive,” he said.
Stanley Hubbard, the Minnesota broadcasting executive, is backing Trump after opposing him in the primaries. Before the gathering, he told Reuters that he wanted the Kochs to support Trump to ensure a Republican would pick the next Supreme Court justices. But as the weekend progressed, he accepted the brothers’ stance.
“At first, I was thinking they should get involved, but when I hear their strategy and their reasoning, they’re probably smart to concentrate on the House and Senate,” Hubbard said. “They don’t want to dilute their abilities.”
One Trump ally, Doug Deason of Texas, said he also preferred the Koch network to stay out of the presidential campaign. But he, along with his father, Darwin Deason, who made a fortune investing in data processing, have pushed for Charles to sit down with the GOP candidate.
“We just feel very strongly that Charles is very influential in politics,” Deason said, “and he could help influence people who are holding out to not hold out and vote for Trump.”
The three-day gathering hosted about 300 donors — who have committed at least $100,000 annually to the constellation of advocacy groups and philanthropic organizations — along with 100 potential new contributors.
Attendees spent their days at a sprawling Italianate complex on the banks of a man-made lake, dotted with white swans and the occasional paddle boat. Indoors, their days were filled with strategy sessions and policy panels. A library displayed Charles Koch’s favorite reads, including books by the economists Milton Friedman and Friedrich Hayek.
The Koch family fortune began with Fred Koch Sr., who invented an oil refining process in the 1920s. Koch Industries, now the second-largest privately held company in the country, holds investments in products as widely varied as chemical manufacturing and Dixie cups.
The weekend program featured appearances from a number of Republican luminaries, including House Speaker Paul D. Ryan of Wisconsin, who is scheduled to speak Monday afternoon, and Sens. Mike Lee of Utah, Tim Scott of South Carolina and John Cornyn of Texas.
Eleven news outlets, including the Los Angeles Times, were allowed access to parts of the weekend’s proceedings under ground rules that allowed quoting the speakers in public sessions, but not identifying guests without their permission.
The partial media access — which has been gingerly incorporated into these meetings since last August — marks a relative openness for an organization that, under its nonprofit status, has shielded its donors’ identities. The Koch network funds an operation that has swelled to 1,600 paid employees in 38 states, an enormous footprint that has made the network a favorite boogeyman of the left.
Koch-backed groups have been prolific spenders in elections dating back to 2010, helping fuel GOP victories in Congress and in many states. In 2012, the Kochs spent heavily on behalf of Republican nominee Mitt Romney’s presidential campaign; one of their organizations, Americans for Prosperity, spent $140 million on advertising and field operations, including ads explicitly opposing President Obama.
This year, Americans for Prosperity plans to spend about $110 million, with much of those resources directed to its burgeoning field program. Another affiliated group, Freedom Partners Action Fund, has spent more than $20 million on paid ads in six Senate races and intends to spend total of $42 million this year. All told, Koch-related groups plan to spend around $250 million on politics this year.
None of that money will overtly back Trump or target Clinton, although the GOP candidate may reap some benefits. Officials said they may use anti-Clinton messages on behalf of Senate candidates in Ohio, Pennsylvania and Florida — all pivotal states in the presidential contest. The Koch network’s sophisticated data operation works with with the Republican National Committee, which could make up for the Trump campaign’s non-existent voter targeting efforts.
But donors at the summit were urged to explore non-electoral efforts to promote the small government ethos. Attendees were presented various philanthropic opportunities, including supporting charter school expansion and research positions at universities.
“If we just focus on politics, we’re going to lose,” Charles Koch said at a cocktail reception Friday night. “We’re going to continue to deteriorate.”
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