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From Funding Climate Deniers to Shadowy Groups, Koch Brothers Network Spent $400 Million in 2012

StoryJanuary 07, 2014
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The Washington Post and the Center for Responsive Politics have just published an exposé revealing how a labyrinth of 17 tax-exempt groups and limited liability companies tied to the billionaire Koch Brothers raised at least $407 million during the 2012 campaign. The staggering amount is equivalent to the combined spending of all unions in state, federal and local races — it dwarfs nearly all other sources of political spending in 2012. The groups were designed to help conceal the sources of the money, much of which went to voter mobilization and television ads attacking President Obama and congressional Democrats. For more, we are joined by Lisa Graves, executive director of the Center for Media and Democracy, and publisher of PRWatch.org and ALECExposed.org.

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We end today’s show with an in-depth look at one of the biggest political operations in the country: a vast network of politically active nonprofit groups funded by the billionaire industrialists Charles and David Koch and other conservative donors. The Washington Post and the Center for Responsive Politics have just published an exposé called “Koch-Backed Political Coalition, Designed to Shield Donors, Raised $400 Million in 2012.” It reveals how a labyrinth of 17 tax-exempt groups and limited liability companies raised at least $407 million during the 2012 campaign. The staggering amount is equivalent to the combined spending of all unions in state, federal and local races. It dwarfs nearly all other sources of political spending in 2012. The groups were designed to help conceal the sources of the money, much of which went to voter mobilization and television ads attacking President Obama and congressional Democrats.

A Koch Industries and the Koch brothers’ spokesman, Robert Tappan, provided a statement to The Washington Post that read in part, quote, “This type of activity is undertaken by individual donors and organizations on all ends of the political spectrum—on the left, the middle, and the right. In many situations, the law does not compel disclosure of donors to various causes and organizations,” he said.

Well, for more, we go to Madison, Wisconsin where we’re joined by Lisa Graves, executive director of the Center for Media and Democracy, publisher of PRWatch.org and ALECExposed.org.

Lisa Graves, welcome back to Democracy Now! How cold is it in Madison, Wisconsin, Lisa?

LISA GRAVES: It’s 17 degrees below here this morning in Madison without the wind chill. So it’s quite cold here, but it’s not as hot as it is in Australia, where they’ve got huge—a huge drought underway, so it’s hard to know where to be.

AMY GOODMAN: You know, in a funny way, I would like to start there, in a place that isn’t so funny, actually, the whole issue of extreme weather. This is something you have looked at. If you could talk about the Koch brothers and the whole issue of climate change and climate change denial?

LISA GRAVES: Well, there’s been tremendous work by Greenpeace and DeSmogBlog and others, who have taken a very close look at who’s funding climate denial, who are the companies or individuals who are funding groups that are pushing out the idea that climate change is a hoax and that extreme changes in weather are nothing to worry about. And those studies have indicated that a lot of that money has come from Big Oil, as you might imagine, that includes money from Exxon, money from various Koch family enterprises or philanthropies, along with others. And so, when you look at the groups that are putting out information trying to say that climate change isn’t happening or that you shouldn’t worry about it, a lot of those groups have received funding, at least in part, by some of these Big Oil interests or the CEOs and foundations that are connected with some of these Big Oil and Big Coal interests, like the Kochs.

AMY GOODMAN: Lisa Graves, where does the Kochs’ wealth come from?

LISA GRAVES: The Koch brothers have grown their family business, Koch Industries, over the last several decades, over the last three or four decades, into a multibillion-dollar operation. It’s largely built on oil and gas and pipelines, but it’s expanded to include the purchase of Georgia-Pacific paper mills and paper products. It’s a global enterprise. They also have an extraordinary amount of wealth that has been obtained through trading in derivatives and through energy derivatives, as well as other sorts of energy futures.

And one of the things that is most stunning that we’ve seen this past year is a study that indicates that their wealth has skyrocketed over the last five years. As most people’s wealth in this country has stagnated or plummeted, the wealth of the Koch brothers has increased. They’re two of the richest billionaires in the world. And one of the little-known facts is that Koch Public Sector, their lobbying arm, lobbied against the Wall Street reforms of derivatives, more regulation of derivatives.

AMY GOODMAN: I want to get your reaction to the Washington Post report by Matea Gold, “Koch-Backed Political Coalition, Designed to Shield Donors, Raised $400 Million in 2012.” Why don’t you go through, first of all, this whole issue of shielding donors, not knowing where the money is coming from that is affecting elections all over the country?

LISA GRAVES: Well, it’s been a long-standing practice in the United States for ordinary charities, like the Red Cross or others, to have anonymous donors, to have donors that are not disclosed to a charity. But what we’re seeing is really a growth in the amount of money that’s going to what are known as C4 nonprofits. C4s are tax-exempt, but the donations to them are not a tax deduction. And we’ve seen an enormous rise in the activity of C4 political—or, C4 organizations that are really political, that are running ads in our elections.

And what this really important story in The Washington Post reveals is this network that’s been created that spent more than $400 million—that’s, you know, a half-a-billion dollars—during largely the 2012 elections, and no one even knew the names of some of the groups that were behind it, let alone the individuals who were funding it. And so, this fall, just a few months ago, we learned that there was a thing called Freedom Partners, that was stocked with Koch-connected staffers—people from Koch Industries or from the Koch charities, from other Koch operations, were either on the board or on the staff of this entity—that it was doling out, you know, well over $100 million, over $200 million, really, to an array of groups, and that those groups were—a lot of those groups were running ads in the elections. Those ads were so-called issue ads, but they were plainly designed to influence the outcome of the election, in my opinion.

AMY GOODMAN: In this, Matea Gold writes, “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.”

She goes on to say, “The resources and the breadth of the organization make it singular in American politics: an operation conducted outside the campaign finance system, employing an array of groups aimed at stopping what its financiers view as government overreach. Members of the coalition target different constituencies but together have mounted attacks on the new health-care law, federal spending and environmental regulations.”

So, explain how this cloaking is done.

LISA GRAVES: Well, it’s quite clear that the Koch brothers, in their semi-annual retreats at posh resorts like in Colorado and other places, have been gathering together billionaires and millionaires to help fund these sorts of operations. And this is the product of those efforts. And so, it’s the Koch brothers and their cronies, is one way to think about it. And what has been assembled, in part through the leadership of Koch operatives, is a really complex maze of groups, as The Washington Post reports. I don’t think that you’d see something like this outside of usually a John Grisham novel or some sort of a really complicated fictional scheme where you see a number of—a number of limited liability corporations that have an alphabet soup set of names, just initials that you can’t really decipher. No one knows who controls, who are the principals or the leaders of those limited liability corporations. Money is being passed from Freedom Partners and other of these Koch-connected enterprises into these limited liability corporations, and the money is sent out to some of these other groups, like CPPR that operated out of—operates out of Arizona.

AMY GOODMAN: That’s newly—

LISA GRAVES: And then those groups in turn give money to other groups.

AMY GOODMAN: That’s newly being talked about, what the—the Arizona connection.

LISA GRAVES: That’s right. So, you have a group that describes itself as being for protecting patients’ rights, the Coalition to Protect Patients’ Rights, that has been led by Sean Noble. It was implicated in the California campaign finance investigation this past year, which led to a record $1 million fine, one of the largest fines in U.S. history, for the way the money was passed, and people didn’t know where the money came from. That was both through CPPR and another group, ARL, out of Arizona.

CPPR has now been—is now one of the groups that we see has been giving money to Wisconsin during the 2012 election year, as well. And in Wisconsin, there’s an ongoing criminal investigation, known as a John Doe investigation, into some of the groups that may have received some of this money, although it’s not clear—it’s very secret. But one of the group leaders, Eric O’Keefe, here in Wisconsin, he went to The Wall Street Journal, it appears, and spoke with them about the investigation and subpoenas that were issued to some of these nonprofit groups in Wisconsin that were running ads. But that’s just a part here in Wisconsin.

Nationally, you know, what you see are the way these groups, and the way The Washington Post describes them, as focused on particular constituents, whether it’s the Christian Coalition constituency or the Latino constituency or the youth constituency, and running a lot of ads. And so, I’m not suggesting that there’s criminal or civil violations here. I think the campaign finance system is plainly broken. I think this illustrates how broken the law has become in the wake of the judicial activists on the Supreme Court in that Citizens United decision. And I think Congress ought to investigate it. Congress has the right to investigate whether our elections have integrity or not, how people are attempting to influence the outcome of the elections. And I think that they ought to be investigating this and trying to help impose reforms to protect the integrity of our elections, which I think have really been undermined by all of this dark money flowing in directly to groups who are running ads to influence our elections.

AMY GOODMAN: Last month, MSNBC host Rachel Maddow drew attention to how Florida State University allowed Charles Koch to buy influence over its faculty hiring process.

RACHEL MADDOW: In 2011, the Tampa Bay Times discovered that Florida State’s Economics Department had quietly cut a deal with a billionaire to essentially give that billionaire control over who the department hires. In exchange for money, that guy gets veto power over who the university hires to teach. Quote: “A foundation bankrolled by Libertarian businessman Charles G. Koch has pledged $1.5 million for positions in Florida State University’s economics department. In return, his representatives get to screen and sign off on any hires for a new [department] program. … The contract specifies that an advisory committee appointed by Koch decides which candidates should be considered. The foundation can also withdraw its funding if it’s not happy with the faculty’s choice or if the hires don’t meet 'objectives' set by Koch during annual evaluations.”

Forget naming rights to the stadium or whatever. Conservative billionaire Charles Koch purchased hiring rights for the faculty at Florida State’s Economics Department. And, yes, Florida State has the word “State” in its name because it is a public university. And, yes, it is objectively insane that the state of Florida allowed that to happen.

AMY GOODMAN: That was MSNBC host Rachel Maddow talking about Florida State University. Lisa Graves?

LISA GRAVES: Well, that’s not surprising. The Kochs have a reputation for really trying to ensure that they have a return on their investment and trying to ensure that the money there spent gets results. After the 2012 election and the failure of Romney to win that race, there was a lot of handwringing among Republican or right-wing circles, and one of the Kochs was quoted talking about how they needed to review the money that was spent and basically see what worked and see what didn’t, which is interesting, because the Kochs have talked about this as really a First Amendment issue. Their spokesperson has talked about this as the necessity of secrecy and protecting First Amendment rights.

But in this country, for more than 40 years, we’ve had a history of trying to ensure transparency in our elections. That’s why it’s called “dark money,” because money that’s meant to benefit candidates, that is given to candidates or to political action committees or to parties, is supposed to be disclosed, so the American people know who’s trying to influence their candidates, who’s trying to help buy those seats, and who might wield incredible influence on elected politicians. And that’s why the money is supposed to be—supposed to be open. But through the Supreme Court’s decisions and—in Citizens United and other cases, there’s been a proliferation of these nonprofit groups that are actively engaged in influencing the election without necessarily saying vote for or against this person, and that money has been secretized.


LISA GRAVES: More money was spent than ever before in 2012.

AMY GOODMAN: We have to leave—


AMY GOODMAN: We have to leave it there. I want to thank you for being with us. Stay warm, if you can. Lisa Graves is executive director of the Center for Media and Democracy.

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