Dark Money, 45 and the 115th Congress: Why Jane Mayer Matters Now

If the rush since January 20th to gut the country’s environmental laws and scientific agencies makes no sense to you, allow Jane Mayer to explain. Since her landmark 2010 New Yorker profile of the siblings who control Koch Industries, Mayer has been piecing together the story of a five-decade-long movement dedicated to dismantling much of the federal government. The result, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, was published in early 2016, ten months before the general election.

Reading it now is painful.  The existential threat to liberal democracy that it warns against has become reality. Yet read it we should to understand that the Trump administration and the 115th Congress did not begin the assault on the federal regulations that rein in polluters. They merely brought it to its climax.

The country has been captured and billionaires are dividing the spoils.

Fred C. Koch. Source: Wikipedia
Fred C. Koch built refineries in Russia, Germany and the US and was a founding member of the John Birch Society and helped make Kansas a “right to work” state.

Central to Dark Money is a donor network dominated by brothers Charles and David Koch, two of four sons of millionaire Kansas oil refiner Fred Koch. Born in 1935 and 1940 respectively, Charles and David somehow found ideological room to the right of their father, a co-founder of the John Birch Society who believed that “the colored man looms large in the communist plan to take over America.”

At the time they took over their father’s company in 1967, Charles was a devoted sponsor of the Colorado-based “Freedom School,” a libertarian center so radical that it denied the holocaust, and promoted scrapping the U.S. constitution. It was through the Freedom School that Charles discovered the teachings of the Austrian economist F.A. Hayek, the man credited with having inspired the “think tank” model for covertly spreading libertarian ideas using notionally independent foundations.

As Gus DiZerega, a friend of Charles at the time, recalls, “It was a stewpot of ideas, but if you grew up with more money than God, and felt weird about it, this version of history, where the robber barons were heroes, would certainly make you feel a whole lot better about it.”

David Koch. Photo: Creative Commons/Gage Skidmore

The 1970s did nothing to improve the image of government in the Koch brothers’ eyes. Congress passed the Clean Air and Clean Water acts and the Nixon administration created the Environmental Protection Agency and Occupational Safety and Health Administration. From the outset of the Earth Day era, the Kochs were investigated, prosecuted and fined: Once for overcharging $10 million for propane, another time for cheating Indian tribes out of $31 million worth of oil drawn from their lands, again for flouting OSHA-required benzene protection to deadly result at a Minnesota refinery. The company incurred record-setting fines for leaking pipelines that spilled oil across six states, and for hemorrhaging benzene from a Corpus Christi oil refinery.

The full scope of environmental crimes by Koch Industries can only be guessed at. Court records in a 1999 lawsuit produced testimony of a Louisianan “gauger” who’d worked for the company for 27 years. “The Kochs never did play by the rules,” testified Phil Dubose. “They had their own playing field. They just didn’t abide by anything. Not the EPA or anything else. They constantly polluted. If they got fined, it didn’t matter because they made so much money doing it. We never reported things like a busted pipeline out in the field. Otherwise we’d get fined. When we spilled oil, we never reported the real amount. We were told to do that, to keep our costs down.”

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AS THE FINES noted by Mayer neared $350 million, the brothers were no longer millionaires. Instead, they ranked alongside Queen Elizabeth of England in Fortune Magazine’s list of billionaires.  It was, of all things, the U.S. tax code that allowed Kochs, along with their fellow heirs to the country’s fossil fuel and petrochemical fortunes, to redirect huge swaths of their philanthropy from conventional causes— orphanages, museums, fighting disease—into an organized assault on government. From the 1970s onwards, the Kochs, John Olin of the Olin Corporation, Gulf Oil heir Richard Mellon Scaife and AEG’s Philip Anschutz would remake a huge sector of American philanthropy into an exercise in self-interest.

Charles Koch. Source: Wikipedia

By 1981, Scaife’s massive top up of Coors family seed money in the then-young Heritage Foundation made possible the foundation’s “Mandate for Leadership.” Its ideas so impressed Ronald Reagan that he had a copy made for every member of Congress. Over the next five years, hewing to foundation recommendations, the top income tax rate was cut from 70 percent to 28 percent and taxes on the bottom four-fifths of earners rose. Reagan also abolished economic controls on oil and gas and cut taxes on oil profits. By the end of his first term, Scaife was donating $1 million a year to the Heritage Foundation.

Not to be outdone, the Kochs founded the Cato Institute and would go on to fund many more organizations, including Americans for Prosperity and the Mercatus Center. Meanwhile, Olin was using his charity to establish “beachhead” libertarian centers in universities and the judiciary.

Donor network detail from Dark Money.

There is much in the book about citizens’ groups that were no more than post office boxes and whose organizers are the operating definition of scurrilousness. Yet the scariest reading comes when Mayer charts libertarian inroads into academia and law. Starting with a 1985 $18 million gift to Harvard Law School, Olin’s foundation even managed to create a new discipline, “Law and Economics.” This urged impacts to business to be considered in deciding the legality of, say, pollution controls. Five years later, “law and economics” was being taught at more than 70 law schools and Olin-funded fellows began getting Supreme Court clerkships at a rate of one a year. The University of California, Los Angeles was the only campus Mayer found to have rejected Olin fellowships on the grounds it was “taking advantage of students’ financial need to indoctrinate them with a particular ideology.”

Soon the Kochs, Shell Oil, ExxonMobil and fellow travelers from the pharmaceutical and insurance industries had joined Olin in funding libertarian education and junkets for the judiciary. A study done by the Center for Public Integrity found that between 2008 and 2012 close to 185 federal judges attended seminars sponsored by conservative interests. In 1985, suddenly awash with defense-budget cash, a foundation associated with the Milwaukee components company Allen Bradley was poised to fund more than 600 fellowships to libertarian-leaning organizations.

A stand out among the mushrooming non-profit policy shops was the James Madison Center for Free Speech. Founded in the late 1990s, two central organizers were now-Senate Majority Leader Mitch McConnell and Trump Education Secretary, Betsy DeVos of the “Amway” DeVoses. Running the office was an Indiana attorney, James Bopp, Jr., who was also backed by the National Rifle Association and the anti-abortion National Right to Life Committee. His purpose: bring down campaign finance restrictions. Its non-profit status, observes Mayer, allowed it “to take tax deductions for subsidizing long shot lawsuits….” It hit payola when one of its long shots was Citizens United.

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AS AN increasingly elaborate network of non-profits created under the guise of public interest moved money for radical right causes, there remained for the rainmakers an intractable problem: science. Even the 1971 successful appointment of a Libertarian icon and former tobacco executive, Lewis Powell, Jr., to the Supreme Court hadn’t reversed medical acceptance that smoking causes cancer.

The 1999 “hockey stick” graph co-authored by Penn State climatologist Michael Mann and decried as a hoax by Oklahoma Senator James Inhofe.

By the 1990s, global warming was the new lung cancer. Even wildly creative gambits, such as the Koch-funded Mercatus Center argument that smog prevented skin cancer, only went so far. After climatologists in 1999 produced what became known as the “hockey stick graph” showing a sharp rise in temperatures over thousand-year period, even George W. Bush, a Republican from Texas, didn’t dare deny human-induced climate change.

The Kochs, however, had no such compunction. In 2003, the brothers began hosting bi-annual donor summits, bringing fellow anti-tax billionaires together in luxury hotels to raise money and coordinate spending. Between 2004 and 2008, Mayer found that the Kochs’ Washington lobbying expanded twenty-fold, exceeding even expenditure by ExxonMobil.

The scrubbing of the donations through layers of shell companies makes it impossible to pinpoint the amount of money that went toward climate change denial. However, Mayer found a man who tried. Studying spending between 2003 and 2010, Robert Brulle, a sociologist at Drexel University, found that “some 140 conservative foundations funded the campaign. During the seven-year period he studied, these foundations distributed $448 million in the form of 4,299 grants to ninety-one different nonprofit organizations.”

Penn State University climatologist Michael E. Mann, co-author of the “hockey stick” study attacked by Oklahoma Senator James Inhofe and a network of climate change deniers.

At the helm of the war on science was Senator James Inhofe, a Republican from Oklahoma. Global warming, Inhofe declared, was “the greatest hoax perpetrated on the American people.” He likened NASA scientist James Hansen to the Unabomber and declared the hockey-stick climatologist, Penn State’s Michael E. Mann, a “charlatan.” The assaults, Mayer notes, were orchestrated with help of the same political operative behind the 2004 swiftboat attacks on John Kerry and John McCain.

After a 2010 Gallup poll showed that the percentage of Americans who believed the world was warming had dropped by 14 points from 2008, hockey stick climatologist Mann said, “In the scientific community, the degree of confidence in climate change is rising. In the public, it’s either steady or falling. There’s a divergence. That wedge is what the industry has bought.”

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IT IS FAR from pleasant or easy to follow Mayer as she lifts the lids of these garbage cans of American politics, but it is unfailingly informative. If you ever wondered what was behind accusations that the Women’s March protestors were paid, it might be because the Tea Party rebellion to which it is so often compared was in fact in part a Koch network-funded “Astroturf,” or fake grass roots, campaign. Otherwise, why would any ordinary citizen feel moved to dress up as a “carbon cop,” and go torment their Congressional rep over a cap-and-trade bill?

It isn’t necessarily shocking to read that crowds who spat on Hillary Clinton in 1994 as she went on her health care reform tour were organized by money from the tobacco giant RJ Reynolds. It is chilling to learn that rioters at town halls during the rollout of Obamacare were organized in coordination with the Koch network by the same operatives. The same forces, disguised as “charities,” raised funds for voter suppression and gerrymandering operations.

As Mayer’s book went to press in late 2015, both houses of Congress were captive to the their most extreme right-wing caucuses. Only one prize lay beyond the Koch network reach: the White House. Anyone tempted to take succor in the fact that Trump did not court the Kochs—and he was most certainly not Charles Koch’s candidate of choice—should read this book. Charles Koch’s man, reports Mayer, was Indiana governor Mike Pence, whose chief of staff the Kochs hired and whose transition produced a cabinet that reads like a guest list at a Koch donor summit.

Scaife and Olin are dead. Coming up behind them are financial industry crossovers from the Democrats after President Obama had the temerity to suggest closing the carried interest loophole and taxing stock trades. Mayer makes special note of New York-based hedge fund manager Robert Mercer. Mercer, she found, was the source of the money behind a wave of attacks on moderate Republicans willing to work on climate change. Instead of arguing about the hockey stick graph, the ads accused them of backing a mosque at Ground Zero.

Since Dark Money’s release in January 2016, Robert Mercer has also been revealed as co-owner of the alt-news organization Breitbart and funder of Cambridge Analytica, the online data analysis firm serving political strategists and thought to have been key in driving the Brexit vote and election of Donald Trump. Mercer’s daughter, Rebekah, was part of the Pence transition team that selected Scott Pruitt for the EPA. Pruitt, the Washington Post notes, has been staffing the agency with former aides to Senator Inhofe, the man who dismisses climate change as a hoax and brought a snowball into the upper chamber as proof.

Rebekah Mercer also sits on the board of the Heritage Foundation, whose “Blueprint for Balance: 2017” is a follow up to the Reagan-era “Mandate for Leadership.” Like Reagan before him, Trump seems to be using it as his playbook. Among its recommendations: end funding for the United Nations Intergovernmental Panel on Climate Change. Eliminate Funding for the Paris Climate Change Agreement. Eliminate the National Endowment for the Humanities. Eliminate the National Endowment for the Arts. Allow development of natural resources (logging, drilling and mining).

There’s more, much more that they plan to eliminate, but you get the point. The government has fallen and the ransacking has begun.

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, 576p Penguin paperback

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