Cato Institute: Koch Bros are engaged in a “hostile takeover”

Apparently, being almost completely bent to their will is not enough. These days there’s always room for more.

The Cato Institute is complaining of a “hostile takeover” by the Koch Bros (Wash Post, my emphases and some reparagraphing everywhere):

The Cato Institute’s president, Edward Crane, released a statement responding to the lawsuit filed yesterday by billionaires Charles and David Koch, calling the move “an attempt at a hostile takeover.”

Crane accuses Charles Koch of attempting to “transform Cato from an independent, nonpartisan research organization into a political entity that might better support his partisan agenda,” and vowed to keep the think tank “an independent, nonpartisan research organization.”

Although the lawsuit names Charles and David Koch as the plaintiffs, Crane’s statement only names Charles Koch. According to the Cato website, David H. Koch remains a member of the board of directors.

If you’re aware of this story, this is probably all you know. Let’s look a little deeper.

What does a “hostile takeover” mean in terms of a “think” tank like Cato? For starters, the Cato Institute has owners:

Although it is a non-profit, as initially incorporated, Cato is effectively owned by a board of shareholders. Until recently, this board consisted of Cato President and founder Ed Crane, Charles Koch, David Koch, and the late William Niskanen, each holding equal shares in the corporation.

According to a related Wash Post story:

At the heart of the dispute is the fate of the shares owned by Niskanen, who died in October at age 78 of complications from a stroke. The Koch brothers believe that they have the option to buy Niskanen’s shares, while Cato officials believe that the shares belong to Niskanen’s widow, Kathryn Washburn, according to the complaint.

So it’s lawsuit-on-lawsuit violence. (Aren’t these the people who think too many people file suits? Maybe it’s just too many “other” people.)

But why a lawsuit at all, you ask? Why does it matter?

No one knows for sure, but here’s one possibility, from yet a third Post story, quoting Cato board chair Bob Levy (who may or may not be right):

Cato’s board chairman, Bob Levy, said in an interview that the Koch brothers, who have the power to appoint half of the board, have been choosing “Koch operatives” for members, with an eye to push Cato toward support of the Republican Party.

“None of the new directors, with the exception of one, has a reputation as a libertarian,” Levy said. “There are a lot of murky areas between actively supporting candidates and what Cato does now, which is working on issues.”

Cato scholars often differ with Republicans, holding an noninterventionist foreign policy, for example, and more liberal positions on immigration, same-sex marriage and several other social issues.

Levy’s a Randian true believer, and he sees through that rosy lens. My outside eye will say what he says differently.

If Levy is right, this means that the Billionaire Coup has reached a stage where it’s no longer a semi-loose alliance between the Movement Conservative Project and the Republican Party, with friendly allied interests like “libertarianism” hanging in the satellite circles.

It means that one of the prime forces in the Billionaire Coup is starting to combine its diverse organs into a larger singularity, one where there’s little discernible difference between something called a “libertarian think tank” and something called the “Republican party.”

In other words, MoveCon corporate HQ is starting to fold its subsidiaries into one giant conglomerate — call it We Own Everything, Inc. Bye-bye separate brands.

And this separately-branded “think” tank — which pretends to independence the way a client state pretends to independence — is upset that its nominal ruler is being replaced by a mere provincial procurator.

Think I’m wrong about that client status? Read on.

Cato is not an “independent, non-partisan research” organization, contrary to its self-branding. Cato is and always was a Movement Conservative propaganda organ that sometimes does good work and sometimes just advances Movement goals, just as Heritage and AEI do. Cato does enough honest work to make it and their “scholars” credible, and enough propaganda to make you say, “Hmm.”

A fog shop, in other words. As I wrote a while back:

Cato advances a lot of curious positions, such as Social Security privatization and climate-change denial. Cato funds a large group of like-minded think tanks, and they’re pretty good friends with a guy named “Phillip Morris” — still.

Cato was created by Charles Koch (with help from Edward Crane); it was a Koch brothers’ joint from the start:

The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded as the Charles Koch Foundation in 1974 by Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the second largest privately held company
by revenue in the United States. It changed its name to the Cato Institute in December 1976.

The Institute’s stated mission is “to increase the understanding of public policies based on the principles of limited government, free markets, individual liberty, and peace. The Institute will use the most effective means to originate, advocate, promote, and disseminate applicable policy proposals[.]”

And here’s David Brock, from the invaluable first chapter of The Republican Noise Machine (which details the creation of MoveCon Project institutions like Cato):

Edward Crane, president of the Cato Institute, another important right-wing think tank founded in the mid-1970s, described the Republican Right’s goal this way: “As we grow, I don’t want us to shift toward the mainstream. I want the mainstream to shift toward us, and that’s our challenge.” [page 46] … Cato officials have said they won’t print any studies that come out favorably toward government programs. And right-wing think tank researchers have been fired for failing to follow the party line. “My contact with [Cato] was strange,” colulmnist Nat Hentoff has said. “They’re ideologues, like Trotskyites. All questions must be seen and solved within the true faith of libertarianism[.] [page 54]

Of course, there’s more where that came from; just check Brock’s index. Like I said, your basic MoveCon fog shop — it dresses like a chicken to confuse you when it quacks.

As a side note, keep in mind a slight discrepancy. Charles Koch is the nominal founder of Cato, along with Ed Crane. Further:

Charles Koch was the largest financial backer of Cato in its formative years. More recently, however, the brothers have cut back on their giving to the organization, donating nothing last year, according to Cato officials. The Kochs have given millions of dollars to a new libertarian center at George Mason University [Mercatus, a name to keep in mind].

A Cato spokeswoman last year said that Charles Koch and Crane had a “falling-out” in 1991.

And as the first quote of this piece noted above:

Although the lawsuit names Charles and David Koch as the plaintiffs, Crane’s statement only names Charles Koch. According to the Cato website, David H. Koch remains a member of the board of directors.

Both Kochs are suing him, but Crane’s only calling out Charles. Retainer-on-billionaire violence? If so, we’ll see who wins. (My money’s on Money every time, but you knew that, right?)


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

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