Koch Bros. are engineering a “merger & acquisition” of the Republican party

The quote in the headline is from digby, but I modified it somewhat. She called it a merger and acquisition of the “conservative movement.” But in my mind, the Koch brothers were already doing that, via campaign-funding groups like Americans for Prosperity (AFP) and its state chapters.

Now the Koch Bros. are moving in on the party apparatus itself.

There are several pieces to this story. The first is an important distinction. As I’ve noted before there are two Tea Parties in the country — Tea Party voters and Tea Party office-holders. These are not the same people, not by a lot.

As I wrote some time ago:

Read my earlier piece on the distinction between Tea Party voters (people with real beliefs) and Tea Party candidates (employees with bosses in a tightly controlled organization). It’s an important distinction in my view; these two groups should not be conflated with language like “the Tea Party.” There is no “the Tea Party” — there are true-believers without power, and people with power who use those believers. Both tend to be called “the Tea Party” but they’re two different balls of wax, at least as I see it.

The Kochs aren’t taking over the Tea Party voters, except to publicly position Tea Party candidates — via ad campaigns — as representing their real concerns. (Did you know that real Tea Party voters hate the bank bailouts as much as you do, and maybe more? Not so the Tea Party candidates.)

Second, the Kochs have been at war with the last-gen “leaders” of the Republican party — the Boehners and the McConnells, the Schmidts and the Norquists — for a while now. For example, listen to this conversation with Mike Papantonio and Ring Of Fire Radio or read my original write-up here.

Now the Kochs are upping their ante, increasing the support and funding mechanism for their preferred candidates. Politico (my emphasis; h/t the inestimable digby):

Koch World 2014

Is $35 billion enough for David Koch? He'd tell you no.

Is $36 billion enough for David Koch?
He’d tell you no.

If the Koch brothers’ political operation seemed ambitious in 2010 or 2012, wait for what’s in store for 2014 and beyond. …

The Koch political operation has become among the most dominant forces in American politics, rivaling even the official Republican Party in its ability to shape policy debates and elections. But it’s mostly taken a piecemeal approach, sticking to its sweet spots, while leaving other tasks to outsiders, or ad hoc coalitions of allies.

That’s changing. This year, the Kochs’ close allies are rolling out a new, more integrated approach to politics. That includes wading into Republican primaries for the first time to ensure their ideal candidates end up on the ticket, and also centralizing control of their network to limit headache-inducing freelancing by affiliated operatives.

The shift is best illustrated in the expansion of three pieces of the Koch political network expected to be showcased or represented at the three-day meeting in Palm Springs, whose evolving roles were described to POLITICO by several sources.

Center for Shared Services: a nonprofit recruiter and administrative support team for other Koch-backed groups, which provides assistance with everything from scouting office space to accounting to furniture and security.

Freedom Partners: a nonprofit hub that doled out $236 million in 2012 to an array of conservative nonprofits that is now expanding its own operation so that it can fulfill many of the functions of past grantees.

Aegis Strategic: a political consulting firm started last year by Koch-allied operatives who will recruit, train and support candidates who espouse free-market philosophies like those beloved by the Kochs, and will also work with nonprofit groups in the Koch network, like Freedom Partners, with which it has a contract to provide policy analysis.

How is this not a hostile takeover of the Republican Party? Simply put, the Koch Bros want to run it, the way they want to run, say, Georgia Pacific, after it too was folded into the loving arms of Koch Industries.

Third, they want to engage other billionaires with them in the effort. Which means, they want to drain support from billionaire donors to Republican party causes, and funnel that support through their own organizations. To do that, they’re running a conference in Palm Springs for like-minded rich folks. The Palm Springs Desert Sun (my emphasis and paragraphing):

Following a tradition started in 2003, conservative billionaire brothers Charles and David Koch are expected to hold a desert conference this weekend [the last weekend in January] that brings together some of the Republican Party’s most influential and deep-pocketed donors. Representatives of the Wichita, Kan.-based Koch Industries did not respond to repeated Desert Sun requests for details, however sources familiar with the conference told Politico that the conference will take place and is expected to last three days. …

The Kochs tend to buy out a Coachella Valley hotel during the last weekend of January for invitation-only summits that have attracted philanthropists, business leaders, presidential contenders and even U.S. Supreme Court justices. Their latest hotel of choice — the Renaissance Esmeralda in Indian Wells — has no available rooms for this weekend.

The hotel’s sales director, Kathy Daw, told The Desert Sun that the hotel’s restaurants will not be open to the public starting Saturday [January 27] — a privacy measure that has been used during previous Koch events.

As you read further in the Desert Sun article, note that the 2011 Koch conference attracted “125 federal judges who happened to be at the same hotel.” Happened to be?

What’s different about this year’s Koch Conference?

The Kochs have been doing this conference (one of two they host every year) since 2003. What’s different this time? First, read above about the new and newly integrated candidate support infrastructure — the Center for Shared Services, Freedom Partners, Aegis Strategic. Now add in the scale of the money involved. Politico (again, my emphasis and paragraphing):

The Koch network raised an astounding $400 million in the run-up to 2012, spending much of it assailing President Barack Obama and congressional Democrats. After the Election Day letdown, the Kochs did an in-depth analysis to find out what went wrong and what they could do better. Among the areas identified for improvement were greater investments in grassroots organizing, better use of voter data and more effective appeals to young and Hispanic voters, according to sources.

Still, the big question was whether the donors who attend the conferences would keep stroking big checks or scale back their efforts. There’s no way to measure that definitively, since most of the groups in the network don’t disclose their finances regularly or reveal their donors. Early indications, though, suggest enthusiasm is high. Groups in the Koch network — led by the brothers’ main political vehicle Americans for Prosperity — spent $25 million between the summer and early this month on ads bashing Democrats over Obamacare, which have been credited for hurting Democratic senators who are vulnerable in 2014.

James Davis, an official at Freedom Partners told POLITICO that his group has expanded rapidly, “and we expect to continue to grow.”

Three things to note about the Kochs, perhaps four:

One, they’re among the world’s wealthiest people. Forbes has them tied, individually, for 6th place. Together, they’re in 2nd place, just behind Mexico’s Carlos Slim and ahead of Bill Gates. And that’s before they cash in their $84 billion when Keystone tar starts to flow. (As I noted earlier, Bloomberg places their fortune at considerably more — in first place as a combined fortune — but at that level, does it matter?)

Two, they’re very very good at corporate strategy and control, as well as “mergers and acquisitions.” See here, here, here and here on the Koch takeover of the Cato Institute.

Three, they are willing to sacrifice control of Congress (temporarily) by running Tea Party candidates like Christine “I am not a  witch” O’Donnell in order to solidify their control of the Republican party first. For (former) party regulars like Steve Schmidt, people who try to win elections, that’s heresy. For the Kochs, it’s simply securing the perimeter before moving the machine forward to the next objective.

And the fourth? Look at the ROI on the dollar investment, in terms of the base net wealth. The Kochs own at least $72 billion — that’s the stack of chips they’re playing with. Five percent of that — a paltry portion  really — is $7 billion (EDIT: oops, $3.6 billion). Would you spend 5% of your net worth to own one of the two American political parties, and the one most likely to beat the crap out of the other one as hard as it possibly can? Look for that $400 million in 2012 to be small potatoes as this moves forward.

What’s the Koch goal?

The Republicans have the House, likely until 2020. Soon the Kochs will have the party, which will give the House to the Kochs (they and their Koch Conference friends). They have two good shots at the Senate, 2014 and 2016. And they’ve already set up their next shot at the White House by putting Koch (and Wall Street) favorite Paul Ryan in the 2012 Veep seat next to failed candidate Romney. As Rick Perlstein says, Republicans always nominate the “next in line.” Well, Paul Ryan has a strong claim to that, and a pretty face.

So what’s the goal? If I were the Kochs, I’d aim for a takeover of all three branches by 2016. Why not? Do these men think small? Ask yourself: Would you aim lower, if you were evil, greed- and power-obsessed, richer than god, very good at “mergers and acquisitions” — and if all the power in the country were actually within your reach in the next three years?

Didn’t think so. Stay tuned. We’ve entered “interesting times” indeed.


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Gaius Publius is a professional writer living on the West Coast of the United States.

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