Inside the Koch-Funded Ads Giving Dems Fits

by Eliana Johnson
A years-long campaign is bearing fruit.

In one of the ads Americans for Prosperity (AFP) has put on the air this year, a thirtysomething actress stands against a white backdrop and looks into the camera. “People don’t like political ads,” she says plaintively. “I don’t like them either. But health care isn’t about politics, it’s about people, and millions of people have lost their health insurance, millions of people can’t see their own doctors, and millions are paying more and getting less.” At the close, a narrator urges viewers to “tell Mary Landrieu to stop thinking about politics and start thinking about people.” Such ads have also run against Mark Pryor in Arkansas, Mark Udall in Colorado, and incumbent Democratic House members in Arizona, Florida, and New Hampshire.

Ads like the “white ad,” as it has become known, are not new to 2014. They are part of a sustained assault against Obamacare mounted with the help of the donor network organized by Charles and David Koch and the array of social-welfare groups it funds.

The ads themselves, which have inflamed Democrats this election season, represent five years of knowledge, accumulated through polls and focus groups, about how to use the health-care issue to pull Americans into the GOP camp. With AFP having spent over $30 million so far this year to bring down sitting Democratic senators, the ads also symbolize the changing nature of American politics. Since the Supreme Court’s 2010 Citizens United decision, unlimited outside spending by 501(c)(4) social-welfare groups has finally allowed Republicans to match the political muscle of labor unions, whose spending was also blown open by the decision, but which have long poured money into Democratic coffers.

That newfound equity is one reason why the AFP ads have sent Democrats into a tailspin and led them to make the ads, and two of the people funding them, a major campaign issue of 2014. Senate majority leader Harry Reid devoted much of a news conference and an entire speech on the Senate floor to attacking the Koch brothers, calling their efforts “un-American” and accusing them of trying to rig the political system in their favor. The Democratic Senatorial Campaign Committee has launched a digital campaign around the rallying cry “The GOP is addicted to Koch!”

“The Koch Brothers have already spent $30 million this year savaging Democratic Senate candidates in an effort buy a U.S. Senate that is good for their family and bad for just about every other family in America,” the group said. AFP president Tim Phillips dismisses attacks like this as the “villain approach” to politics and says he’s not only skeptical of their efficacy but finds them morally repugnant. “If you google AFP, you’ll find that we’ve never gone after George Soros. It’s the right of every American to be involved in the political process — and frankly, the responsibility.”

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The Koch network’s anti-Obamacare assault began in 2009 with Sean Noble, a former chief of staff to Arizona congressman John Shadegg and then an adviser to the Koch brothers, and Randy Kendrick, the wife of Arizona Diamondbacks part-owner Ken Kendrick and a prominent donor to the Kochs’ formidable fundraising network.

Noble had worked with Arizona state legislators in 2008 on Proposition 101, an amendment to the state constitution that would have prohibited employer and individual mandates in health insurance. When it was defeated, Noble says, Kendrick urged him to take the health-care fight national.

“Randy Kendrick said, ‘Who do I have to give money to? What organizations are doing this?’” Noble tells me. When he surveyed the landscape, Noble found only 501(c)(3) groups such as the Galen Institute and the Pacific Research Institute, which, unlike 501(c)(4)s, are prohibited from participating in campaign-related activity. There weren’t any groups operating in the (c)(4) space devoted to putting the brakes on a national health bill.

For Kendrick, events added a sense of urgency to the cause. It was November of 2008: President Obama had won the election, and rumors swirled that he was set to nominate former South Dakota senator Tom Daschle to serve as secretary of the Department of Health and Human Services — a nomination eventually derailed by news that Daschle had for years failed to pay taxes on a car and driver lent to him by a wealthy friend.

Kendrick had read Daschle’s 2008 book Critical: What We Can Do About the Health-Care Crisis and saw it as a blueprint for the legislation the Obama administration would look to enact. She was alarmed. Daschle noted polls and research showing that the political climate in 2008 was more favorable to a fundamental reform of the nation’s health-care system than it was in the early 1990s, when Hillarycare sputtered out. He pointed to growing support for “a so-called individual mandate” and urged readers to help overcome “the mistaken belief that we have the best health care in the world.”

The result of Kendrick and Noble’s efforts was the Center to Protect Patient Rights (CPPR), which was incorporated in April 2009 and funded largely through donations from the Koch network. The two attended a June 2009 Koch donor seminar in Aspen, Colo., where, Noble says, a federal takeover of health care was for the first time introduced to donors as an issue of urgent importance.

Before lunch on the third and final day of the seminar, Noble says, Kendrick delivered an “impassioned speech” on the topic. “People were moved to tears by how invested she was in this,” Noble says, and at the lunch that followed her remarks, donors spontaneously pledged $13 million to the cause. Since then, similar lunches have raised over $100 million.

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With that largesse, CPPR produced dozens of ads that targeted hundreds of Democratic congressmen in the 2010 midterm elections, when Republicans regained 63 seats and recaptured the House majority in the largest midterm romp since 1938. Noble coordinated the disbursement of over $50 million to several other groups that paid to put the ads on the air: Americans for Prosperity, the 60 Plus Association, Americans for Job Security, Americans for Limited Government, and the American Future Fund. Two years later, California officials​ levied a $1 million fine on CPPR when they determined the group failed to disclose the intermediary sources of independent expenditures it made to oppose two ballot propositions in the state.

CPPR funneled money to multiple groups, Noble says, both to protect the anonymity of donors and because IRS regulations prohibit any individual (c)(4) group from spending more than 50 percent of its time on candidate-related political activity.

In 2010, though, the activity of the groups was extraordinarily well-orchestrated, with no two groups airing ads in the same congressional district. Attack ads against Democratic incumbents blanketed the country: The 60 Plus Association spent to air ads in Arizona’s 1st congressional district, Florida’s 2nd and 24th, Indiana’s 2nd, Minnesota’s 8th, New York’s 20th, Ohio’s 16th, Pennsylvania’s 3rd, and Wisconsin’s 3rd and 8th, for example, while Americans for Job Security put up ads in New York’s 24th, North Carolina’s 2nd and 8th, Ohio’s 18th, and Virginia’s 9th. The American Future Fund put up spots in Alabama’s 2nd, Colorado’s 7th, New Mexico’s 1st, and Washington’s 2nd.

To craft and produce the ads, Noble brought in GOP pollster and wordsmith Frank Luntz and ad guru Larry McCarthy, the latter famous for producing the 1988 Willie Horton ad that helped to sink Michael Dukakis’s presidential campaign.

In a series of focus groups, Luntz concluded that ads with an “ideological” feel to them wouldn’t work. “They weren’t credible or relevant to people in their day-to-day lives,” he says. “There was one political operative who thought rationing was the big issue. That wasn’t conceivable to people.” Neither was talk of death panels.

Instead, Luntz found that emotional appeals were more effective and that women were considered more credible than men on the issue. “Women are more focused on quality of life and peace of mind,” Luntz says. This year, all of AFP’s testimonial ads feature middle-class women speaking from their homes: Donna Marzullo and Helen DePrima in New Hampshire, Shannon Wendt and Julie Boonstra in Michigan, and a woman identified as Wanda in Marion, Ark. (Fact-checkers have called into question the accuracy of the testimonials delivered in some of these ads, as well as Reid’s contention that they are “absolutely false” and “made up from whole cloth.”)

“What Frank did,” Noble says, “is he took political guys like me and like Larry and had to kind of shake us into understanding that we needed to treat this differently than we would a political campaign, that we had to do this not by beating someone over the head but by persuading.” Luntz, he says, “took the strengths of our arguments and amplified them.”

CPPR’s initial efforts were aimed at preventing Obamacare’s passage, and one of the first ads Noble and McCarthy produced was a personalized warning about the dangers of nationalized health care. Over Memorial Day weekend in 2009, it went on the air in eight states that were home to crucial members of the Senate Finance Committee — including Republicans Susan Collins and Chuck Grassley — which was responsible for voting the bill that would become the Affordable Care Act out of committee and into the full Senate.

In the ad, “Survivor,” paid for by one of AFP’s 501(c)(4) arms, PatientsUnitedNow, Ontario native Shona Holmes told viewers about her experience with the Canadian health-care system. “I survived a brain tumor, but if I had relied on my government for health care, I’d be dead,” she said. “I am a Canadian citizen, and as my brain tumor got worse, my government health-care system told me I had to wait six months to see a specialist. In six months, I would have died.” The ad blanketed the airwaves on Fox News; CNN’s Dana Bash flew to Ontario to interview Holmes and tell her story; and Jake Tapper, then of ABC News, took questions about her case to Canadian prime minister Stephen Harper.

Noble and his team at CPPR, which functioned out of the office of his consulting firm, DC London, in Washington, D.C., also worked with Americans for Prosperity and several other groups to turn out voters opposed to the emerging bill at the town-hall forums that senators were hosting in their home states during the 2009 August recess. “We knew we had to make that summer absolute hell,” Noble says.

Local AFP chapters activated their networks, and CPPR placed calls to seniors who were considered Republican base voters, people over the age of 65 who had voted consistently in GOP primaries, urging them to come out to the town halls and arming them with talking points. The Cook Political Report wondered in September 2009 whether 2010 would prove to be the year “angry white seniors” decided the election in favor of Republicans, much the way “angry white males” were said to have turned the tide in 1994.

“We packed these town halls with people who were just screaming about this thing,” Noble recalls. Scenes from those meetings, of constituents blowing up at their elected representatives and of public forums descending into chaos, blanketed the news throughout August.

At a forum in Philadelphia where Arlen Specter (since deceased) appeared with Health and Human Services secretary Kathleen Sebelius, the crowd, with spectators lining the walls, exploded when Specter admitted that he hadn’t personally read the legislation — which ran over 1,000 pages — but instead had assigned it out to his staff. “We expected we could turn out 250 people there,” Noble says. “Over 1,000 showed up.”

“You have to make judgments very fast,” Specter explained as the audience shouted him down. Sebelius didn’t make any friends when she jumped to his defense. “The Senate bill isn’t written,” she said, “so don’t boo the senator for not reading a bill that isn’t written.” The crowd booed her in turn.

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CPPR’s strategy changed when the House passed the Affordable Care Act and President Obama signed it into law in March 2010. Noble and his team set their sights on returning the House to the GOP.

“We made a deliberate recommendation that you gotta focus on the House,” Noble says. “That’s where this bill passed. Pelosi broke so many arms of Democrats that had no business voting for that bill. Obamacare clearly was the watershed moment that provided the juice to deliver the majority back to the Republicans in the House.”

On June 8, 2010, an Excel spreadsheet listed 64 Democratic congressmen in order of the likelihood of their defeat. The list of targets expanded to 88 in June and to 105 in August. Each of the House districts identified was given a “win potential” between 1 and 5 and a score between 1 and 40 based on the voting record of each member and the composition of the district, among other things. The 105 candidates were ultimately divided into three tiers based on the likelihood of a GOP victory, and resources were allotted accordingly. On Election Day, Republicans snatched 48 of the 50 seats in “tier 1” from Democrats and 61 of the 80 seats in the top two tiers.

Noble and company went up with ads in June 2010, earlier than outside groups had ever gone on the air before. By August, some of the most vulnerable Democrats had been damaged so badly that the ads were no longer needed. That was the case in Colorado’s fourth district, where Democratic incumbent Betsy Markey was running for reelection against Republican Cory Gardner. For a week in June and two weeks in August, Americans for Prosperity ran an ad against Markey that featured a series of her constituents, one of whom declared, “Markey betrayed us by voting for a government health-care plan.” With Markey’s own polling showing her approval rating at 38 percent, Noble says, “we did not spend another dime in that race from August until Election Day.”

Between June and November, CPPR and the constellation of groups to which it disbursed millions of dollars in funds sought to tie Democrats not to President Obama, who inspires warm feelings among most Americans, but to House speaker Nancy Pelosi. They used her name like a dirty word. The 60 Plus Association told Floridians that “Alan Grayson and Suzanne Kosmas are putting Nancy Pelosi’s liberal agenda ahead of seniors.” The American Future Fund told South Dakota voters that Stephanie Herseth Sandlin “votes to support Nancy Pelosi’s agenda more than 90 percent of the time.” Americans for Job Security put constituents from North Carolina’s second congressional district on the air to tell voters that their congressman, Bob Etheridge, “voted for Nancy Pelosi’s health-care plan.”

Luntz’s research had demonstrated the need to tie Democratic congressmen to a more national figure. President Obama and Harry Reid proved far less likely than Pelosi to push swing voters into the Republican camp. “When we tied them to Pelosi, swing voters were more likely to vote against them 65 percent of them time,” Noble says. “She was absolutely toxic for her conference with swing voters.” Surprisingly, she produced a more negative reaction among women than did Reid and Obama.

The political climate was so hostile to Democrats that Noble wound up running ads against Democrats who fell into tier 3, incumbents he’d determined it would be difficult to pick off. “There was some interesting stretching of the field that no one thought was possible,” he says.

In late October, the 60 Plus Association dumped $100,000 into an ad buy in Minnesota’s eighth congressional district, where incumbent Jim Oberstar, the chairman of the Transportation Committee, had served for over three decades. His opponent, a young Navy captain and virtually a political unknown, was deeply underfunded. The spot featured a picture of Oberstar with a grinning Pelosi looming in the background. “He votes with his party 97 percent of the time,” a narrator said, “for $500 billion in Medicare cuts, Nancy Pelosi’s budgets, and debts future generations can’t afford.” Cook Political Report analyst David Wasserman noted that “even many local Republicans can’t get their head around the idea that Navy Captain Chip Cravaack, who in July had $24,000 in the bank to Oberstar’s $1.1 million and warned that the U.S. was headed towards socialism under President Obama, is a serious threat to the 36-year House veteran and Transportation Committee chair.” On Election Day, Cravaack eked out a victory by 1.6 percentage points.

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AFP has taken the lead in the ad wars again this year. The Center to Protect Patient Rights, under Noble’s leadership, recently rebranded itself as American Encore, a group that will focus on a broader set of issues including the proposed IRS regulations and the free-enterprise system.

AFP’s goal is to help recapture the Senate. AFP president Tim Phillips thinks it’s possible to do so by pressing the Obamacare issue. “Some say the further you get from the passage of a law, the tougher it gets to move America,” he tells me, “but Obamacare is different because the impact is evolving, Americans’ experiences with the law are evolving, and most of them are bad.” Noble puts it more sharply. “What we warned people was going to happen is now happening,” he says, “so it’s a natural extension of the debate. Now we’re saying ‘We told you so’ without saying ‘We told you so.’”

In the ads themselves, warnings from Canadians like Shona Holmes have been replaced by testimonials offered on a state-by-state basis from those who say they’ve been hurt by the health-care law. AFP has linked local victims with their lawmakers’ support for the bill.

Noble is confident that just as the issue allowed Republicans to recapture the House in 2010, it will give the GOP the “juice” to reclaim the Senate in 2014. “It’s kind of like this great story,” he says. “We don’t know how it’s going to end, but Democrats are going to lose twice over it.” Much to the chagrin of angry Democrats, the ad war is one that shows no signs of letting up. According to Phillips, “We think of this as year five of what very well could be a decade-long or more effort to defeat government-run health care.”

If Harry Reid thinks he’s fed up with the Kochs now, he may just be getting the first taste of what their political network has in store.

— Eliana Johnson is media editor of National Review Online.