The Kochs and Cato
Would Koch control doom the Cato Institute?


Especially since the Kochs have been hands-off shareholders so far, this is de facto how Cato has been run: Decisions are made by the board of directors, all of whom have apparently always been strict, true-believer libertarians. In fact, one Cato scholar explains that, if Cato’s credo is “be as radical as you can while still remaining relevant,” the members of the board are known for pushing scholars in the radical direction, rather than constraining them for the sake of relevance. Koch control, they fear, would mean that the directors would start emphasizing the relevant over the radical. If the existing shareholders agreement allows that, Levy, Crane, and others seem intent on altering the contract, despite, as Wes Edwards notes, the idea that contracts are a “key principle of libertarianism.”

The libertarians’ problem with Koch control is not that the Kochs will push the think tank in an unacceptable ideological direction, though some Cato supporters are still wary that the Kochs would emphasize economic policy at the expense of civil-liberties issues. The greater concern is that Cato would be forced into more partisan political advocacy and activism; one suggestion is that that Cato has not done enough to oppose President Obama’s reelection (as an example, last week, two Cato scholars weighed in for U.S. News and World Report that President Obama shouldn’t be blamed for rising gas prices).

Koch representatives note that the Kochs have close control over a range of less partisan entities, such as the Institute for Humane Studies and the Mercatus Center (though such groups have indeed come under attack for their putative Koch control). Cato supporters contend, however, that the Kochs plan to use the Cato Institute in a different way: “to become an intellectual ammo-shop for American for Prosperity and other allied organizations,” as one Cato supporter put it, using the Cato brand to provide those groups with added intellectual and ideological legitimacy.

But fundamentally, Cato’s concern is that the institute’s legitimacy will be dramatically reduced by closer affiliation with and majority control by the Kochs, and this concern appears to be well-founded.

Cato has already begun to experience the difficulties of being a Koch-controlled organization: One Cato scholar described to me that he had begun work on a major book with another prominent expert in his field, to be published by the Cato Institute. But as soon as the story broke on Thursday, the unaffiliated scholar began to express reservations, and, at the very least, has asked that they delay work until the case has been resolved and Cato’s new status is established. One Cato scholar, Julian Sanchez, has already declared that he will quit if the Kochs triumph. Furthermore, Bob Levy explains that some of Cato’s largest individual donors have declared that “we will not give a single dollar until we know the Kochs do not have more of a say over Cato.” Levy argues, in fact, that Cato rejected the above-mentioned standstill agreement in order to resolve the dispute as soon as possible, because the issue threatens Cato’s very status as a functional organization. Ed Crane, like Cato the Younger, would not remain much longer at the institute if the Kochs’ become its Caesars; he will most likely leave or be removed as president, taking many of the institute’s scholars and donors with him.

Levy suggests that Koch control is unacceptable because “Cato has to be totally independent of corporate and political interests.” Of course, all donors have agendas, funding must come from somewhere, and the Kochs are not categorically more “corporate and political” than other people. But perception is everything, and there is surely almost no more damaging “corporatist” and partisan-Republican label today than that of the Koch brothers. As Levy explains, even if the Kochs bring no untoward influence, “the perception itself would be enough to destroy our credibility, and credibility is the essence of operating as a think tank.”


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