How the billionaire Koch brothers became 2 of the most influential political donors in America
Pat RalphJan 30, 2019, 00:24 IST
Charles Koch (left) and David Koch (right)The Seminar Network via YouTube/Getty Images
Charles and David Koch have been titans of industry and politics for decades.
The company their father founded, now known as Koch Industries, is the second-largest company in the US with an annual revenue of $100 billion.
While David, 78, has stepped away from the Koch network's activities due to declining health, Charles, 83, is still shaping the political conversation.
Libertarians who favor small government and few taxes, the Kochs have tangled with President Donald Trump of late, as they oppose many of his policies, including tariffs, the travel ban, and immigration.
The Koch network, started and led by billionaires Charles and David Koch, has played an instrumental role in the American political system over the last several decades.
The Koch brothers' influence in politics has been particularly felt in Republican and Libertarian circles, as the group has primarily raised money for conservative candidates who align with their political philosophies.
Their influence has only increased and become more scrutinized since the Citizens United Supreme Court decision in 2010, which allowed corporations to make an unlimited number of donations to candidates.
Charles and David's father, Fred Koch, founded the family business in Wichita, Kansas in 1940. Fred was originally an engineer before becoming an industrialist.
While Charles joined the family business in 1961, David did not join the company until 1970 after working at a number of consulting firms. The two both got their Bachelor's and Master's degrees in engineering from the Massachusetts Institute of Technology.
The business was originally called Rock Island Oil & Refinery Company. But when Charles became the company's president in 1966, he renamed it Koch Industries in honor of his father.
Koch Industries is now the second-largest company in the US with an annual revenue of $100 billion.
In the political world, Fred was a founding member of the John Birch Society, a group dedicated to combatting communism and limiting the size and role of government.
That influence led Charles to co-found the Cato Institute in 1977 to promote libertarian causes, such as free markets and individual liberty. With an operating income of $37 million in 2017, it is one of the most influential think tanks in the US.
David once ran for vice president on the Libertarian Party ticket in 1980. But he and presidential candidate Ed Clark only won 1% of the vote.
He ran on the platform to abolish several significant government programs, including social security, welfare, minimum wage laws, the Federal Reserve Board, and corporate taxes.
After David lost in 1980, Charles said traditional politics "tends to be a nasty, corrupting business." He added that he was "interested in advancing libertarian ideas."
David left the Libertarian Party in 1984 and joined the GOP after it supported eliminating all taxes.
That same year, the Koch brothers created a conservative political group called Citizens for a Sound Economy. The group was dedicated to free markets and called for personal involvement in public policy activism. In 2004, it was renamed FreedomWorks.
Charles has also gone on to start the Institute for Humane Studies, the Mercatus Center at George Mason University, and the Bill of Rights Institute to further his policy initiatives. He has also funded scholarships and research grants for economists.
The Koch's donations to advocacy groups has led to them sometimes oppose politicians they supported in elections. For example, they once donated $10 million to the ACLU to fight the implementation of the PATRIOT Act under former President George W. Bush.
In 2004, the Koch brothers founded Americans for Prosperity, their primary political organization. It's considered one of the most influential conservative advocacy groups in the country today.
The Koch brothers have also been strong advocates against climate change and its impact on the planet. In the mid-2000s, they became the biggest donors of groups that questioned the severity of climate change and how humans are causing it.
The Koch brothers reportedly gave $246 million to non-profits and public policy research related to libertarian causes from 2004-08.
In 2008, the Koch brothers donated to over 30 political and policy organizations that they either founded or help direct.
Because of the size and scope of influence that the group has, the Koch political network has been described as a rival to the Republican National Committee itself.
Americans for Prosperity played a significant role in the growth of the Tea Party Movement in the 2010 midterm elections, as the Koch brothers spent $45 million organizing rallies, mobilizing voters, building policy, and pushing ads.
In 2011, Charles' foundation contributed $25,000 to a conservative and libertarian public policy think tank called The Heartland Institute, which often attacks climate science. The Koch brothers also donated $2.6 million to candidates that year.
In the 2012 presidential and congressional elections, the Koch brothers and their network of donors spent $400 million.
Two recipients of Koch-network funding that year were Republican presidential nominee Mitt Romney and former Wisconsin Gov. Scott Walker.
The Koch brothers have also been opposed to the Obama-era Affordable Care Act and Dodd-Frank.
The Koch brothers largely opposed the Obama administration and criticized it for what they saw as "big government" policies with increased spending and eroding individual liberty.
But in 2015, they and former President Barack Obama were on the same page about one thing: He praised their efforts at reforming the criminal justice system.
At a 2015 meeting with GOP donors, the Koch brothers said they were prepared to spend almost $900 million in the 2016 presidential and congressional campaigns.
After the GOP primary, the Koch's did not donate to Trump and strictly gave to Senate and House races.
While there is no evidence that he donated to her campaign or supported her, Charles said in July 2016 it was possible that Democratic nominee Hillary Clinton would make a better president.
"Since it appears that neither presidential candidate is likely to support us in [our] efforts," Charles said in 2016, "we're focused on maximizing the number of principled leaders in the House and Senate who will."
Despite primarily supporting Republican candidates, David supports abortion rights and same-sex marriage. The Koch network opposed the Iraq War and has backed a non-interventionist foreign policy.
In a Washington Post opinion piece in 2016, Charles said he agreed with former presidential candidate and current Sen. Bernie Sanders on the unfairness of corporate welfare and the need for criminal justice reform.
The Koch network has been critical of Trump's travel ban and, in June 2018, financed a multi-million dollar campaign to oppose Trump's tariffs.
In June, David announced he would be leaving the business and politics world of the Koch network due to declining health.
Charles said to donors at a meeting in July 2018 that he is open to backing Democratic candidates if they align with the group's platform and philosophy. Koch said "the divisiveness of this White House is causing long-term damage."
Trump took to Twitter to respond to the Koch network's rebuke of his administration, calling them "overrated."
In August 2018, Republican National Committee chairwoman Ronna McDaniel said accused the Koch network of putting business ahead of politics, as the RNC has now distanced itself from the Koch family.
And in January 2019, the Koch network announced already that it would not be supporting Trump in the 2020 presidential election.
A spokesman for Americans for Prosperity, a Koch-funded group, told the Washington Post it will "support policy champions in Senate, House and state races, build broad-based policy coalitions, and to launch a major new initiative to fight poverty in America."