Why Are We Just Finding Out About The Koch Bank?

New documents reveal a trade organization put together by the Koch Brothers is the source of over a quarter of a billion dollars in dark money in 2012.

David Koch - Caricature

Back in 2011, Charles Koch held his annual meeting with donors to strategize for the 2012 elections. You might recall the audio recording we published from that meeting where he compared President Obama to Saddam Hussein, and congratulated the members in the room who had donated a million dollars or more to his efforts to buy the United States government.

In a pre-emptive move, the president of Freedom Partners, a trade association organized under section 501(c)(6) in a similar fashion to the US Chamber of Commerce, has released their IRS disclosure filing to Politico in advance of it becoming public.

The 38-page IRS filing amounts to the Rosetta Stone of the vast web of conservative groups — some prominent, some obscure — that spend time, money and resources to influence public debate, especially over Obamacare.

The group has about 200 donors, each paying at least $100,000 in annual dues. It raised $256 million in the year after its creation in November 2011, the document shows. And it made grants of $236 million — meaning a totally unknown group was the largest sugar daddy for conservative groups in the last election, second in total spending only to Karl Rove’s American Crossroads and Crossroads GPS, which together spent about $300 million.

Follow the Money

TPM:

The list of groups that benefited from Freedom Partners’ funding is a roster of conservative organizations large and small: $115 [million] to the Center to Protect Patient Rights, $32.3 million to Americans for Prosperity, $15.7 million to the 60 Plus Association, $13.6 million to the American Future Fund, $8.2 million to the Concerned Women for America Legislative Action Committee, $3.5 million to the National Rifle Association, $3.1 million to the LIBRE Initiative, $2 million to the U.S. Chamber of Commerce. And that’s just the start.

Originally named the Association for American Innovation, Freedom Partners is organized as a 501(c)6 tax-exempt chamber of commerce. The designation allow it to keep its donors secret (but is different from the 501(c)4 “social welfare” group status that became popular after the Supreme Court’s 2010 Citizens United decision.) On its website, which was registered in early September, Freedom Partners claims to have over 200 members. And according to Politico, those members are drawn from the semiannual conferences hosted by Charles and David Koch, the billionaire businessmen and conservative donors. Each member of Freedom Partners pays at least $100,000 in annual dues.

“Other than payment of dues, the only requirement for membership is sharing our mission,” Freedom Partners states on its site.

Follow the People

Who are those people who share the Kochs' mission? Nearly all of them are billionaires. According to Mother Jones, the list of attendees at that 2011 meeting included:

  • John Childs (JW Childs Associates)
  • Dean "Dino" Cortopassi, Big Ag in Stockton, CA
  • Joe Craft, Chairman of Alliance Resource Partners in Tulsa, OK
  • Rich and Helen DeVos, School Reformers and Amway billionaires
  • Dick Farmer, Cintas Corporation
  • Foster and Lynn Friess
  • Jerry and Lean Fullinwider, Texas oil man with ties to Ross Perot
  • Richard and Leslie Gilliam, coal mining and gold mining
  • Ken and Ann Dias Griffin, Citadel hedge fund and Aragon Global Management
  • Richard Haworth, Manufacturer of office interiors in Holland, MI
  • Diane Hendricks, Wisconsin billionaire who bankrolled Scott Walker
  • Ethelmae Humphreys, Tamko Building Products and board member at the Cato Institute
  • Kenneth Levy, New Jersey Equity Manager
  • Elaine Marshall, widow of E. Pierce Marshall, whose father J. Howard Marshall served on the Koch Industries board of directors.
  • Art Pope, North Carolina billionaire who now serves as Governor Pat McCrory's budget director
  • Corbin Robertson, CEO and chairman of Natural Resource Partners, Houston, TX
  • Karen Wright, CEO of the Ariel Corporation, also serves on American Petroleum Institute's board of directors.

There were others who were not at the 2011 meeting, but were commended for giving more than $1 million to Koch causes. Notable among those names was Charles Schwab, Paul Singer, John "Jack" Templeton, Jr, and Arkansas big ag billionaire Ron Cameron.

That's the beginning of the list, but certainly not the end. It's likely we could include the recently deceased Bob Perry and James Leininger, two Texas conservative billionaires known for giving to conservative causes. Sheldon Adelson is likely to be in there somewhere as well.

Follow the Causes

What causes besides electing Republicans and killing Obamacare would have united them? Here are a few, based upon the grant-giving made by organizations that received infusions of cash from this group:

  • Anti-Choice: Concerned Women For America, the anti-choice group run by Beverly LaHaye, received large grants from this group and other allied sources. NARAL has a great graphic you can share here.
  • Voter ID/Voting Rights
  • Union Busting
  • Education "Reform"
  • Austerity - Gretchen Hamel's austerity propaganda project "Bankrupting America" and Public Notice were recipients of funds from this and related entities

And your point is...

Before you shrug and assume this is yet again another round of Billionaire Blanket Bingo, I think it's worth remembering a couple of things. First, this organization self-disclosed in order to frame their flood of dark money in better light than it might otherwise have received. I don't know if it will work, but it does suggest they're willing to make a disclosure in order to try and manage the predictable swarm of pushback over their activity.

Second, and more important, this organization certainly pushed a lot of cash into the 2012 cycle, but it wasn't the only source for that cash. Worse, at times large cash "grants" moved through two and three organizations in order to disguise the source of the funds. Think about the millions flowing into California in 2012 for anti-tax and anti-union measures. Through the efforts of our Attorney General here, they were able to trace the funds through Americans for Job Security and the Center to Protect Patient Rights, but not further back. It seems obvious now that this organization was the original funding source, but funds were laundered through other nonprofits before making their way to California.

It is September, 2013. The election took place nearly one year ago, and we are just now discovering the existence of an organization that pushed over one quarter of one billion dollars into the last election cycle with no accountability for donors or activity. Most, if not all of it was pushed through non-profit 501(c)(4) organizations in order to further disguise the source. Lots of people, myself included, have spent hundreds of hours trying to piece together the money trail. Lee Fang wrote an entire book on it!

The lesson from this is that if we have to put up with this kind of money flowing into our elections, the sources of that money should be disclosed in real time without the benefit of bogus nonprofit shields.

If nothing else lays the phony IRS scandal to rest, this disclosure should do it.

Update: Great illustration and discussion here of the way these organizations shovel money around.

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