Politics & Policy

Cautious Optimism Abounds at Koch Network’s Winter Meeting

Businessman David Koch arrives at the Metropolitan Museum of Art (Reuters: Carlo Allegri)
After a whirlwind cycle that saw many victories and a few setbacks, the billionaire brothers are girding for the fights to come.

Indian Wells, Calif. — “Elections are one thing,“ Brian Hooks, co-chair of the Koch Seminar Network told an audience of 550 well-heeled donors Sunday. “But if we’ve learned anything over the years, it’s that the biggest mistake that groups can make after an election is to pack it up and go home.” He quoted the network’s founder, Charles Koch, declaring, “the measure of success is not whether our candidates win; it’s what the winning candidates do as a result of our involvement.”

The Koch network can accurately boast that it has become one of the most consequential forces in American politics, with what it calls a “permanent grassroots infrastructure in 36 states.” Americans for Prosperity is the most visible arm of the network, but in recent years others have sprung up: the Libre Initiative, aimed at America’s Latino communities; Generation Opportunity, which focuses on Millennials; Concerned Veterans for America, which addresses veterans’ issues; and the newest arm, Stand Together, which endeavors to build social capital.

Last year’s elections capped an odd but ultimately happy year for the network. The Kochs sat out the presidential election after deciding that Donald Trump’s populism was fundamentally at odds with their own libertarian philosophy. But seven of eight Koch-backed Senate Republicans and 96 percent of all Koch-backed candidates nationwide won on Election Day, meaning that after eight years spent opposing the Obama administration, the brothers now have a once-in-a-generation opportunity to enact their agenda.

“This network will be more active than we’ve ever been when it comes to public policy,” Hooks said. “We’re going to support this administration and Congress when they put up principled public policy, and we’re going to have the courage to oppose bad policies, regardless of who proposes them.”

The group foresees collectively spending $300 million to $400 million on political operations in the coming cycle, “depending upon the opportunities before us,” according to Americans for Prosperity President Tim Phillips. For perspective, the network spent $250 million last cycle.

At this point, the Koch network sees the Trump presidency as a distinctly mixed bag. Hooks generated the winter meeting’s biggest news by criticizing Trump’s sweeping, controversial executive order on immigration. “We believe it is possible to keep Americans safe without excluding people who wish to come here to contribute and pursue a better life for their families,” he said. “The travel ban is the wrong approach and will likely be counterproductive.”

The Kochs and their network of donors and activists are wary of another big-government Republican presidency. Hooks likes to cite an old video of Vice President Mike Pence, back when he was a congressman, discussing the failed opportunities for conservatives during the Bush administration and warning, “beware of unified government under either party.” It’s safe to say the Kochs won’t be supporting any bipartisan infrastructure package that might emerge in the coming months. “A trillion-dollar stimulus was a bad idea under a Democrat, and it’s a bad idea when a Republican proposes it,” Hooks said.

At this point, the Koch network sees the Trump presidency as a distinctly mixed bag.

Andy Koenig, vice president of policy at Freedom Partners Chamber of Commerce, said there are a lot of ways to help streamline infrastructure projects that don’t include a giant spending bill, most notably ensuring that highway funds are actually used for highways instead of mass-transit projects, and a repeal of the Davis-Bacon Act, which requires federal contractors to pay union wages on all construction projects.

Perhaps the biggest fight between the Koch network and congressional Republicans will come over the potential “border-adjustment tax,” a tariff on imports that could reach 20 percent, with the costs likely be passed along to consumers. “That’s just a tax that’s going to be passed on to people who shouldn’t be taxed,” Phillips said.

Finally, it’s clear that the attendees in Indian Wells aren’t comfortable with the top-down style of Trump and some of the cultural passions unleashed by his political rise. “There is this potent new evil brew of authoritarian ideas, people feeling economic stress, and some cultural decay,” warned economist Tyler Cowen. “What we discovered last year was that the proportion of the electorate on the right that is still devoted to those principles of the American creed is way smaller than I thought it was,” political scientist and sociologist Charles Murray told the Koch donors. “Completely apart from the individual person of the president, I think we see an environment that is fertile for authoritarianism in the United States now.”

The sky isn’t falling, of course — at least not yet. The Koch network is cautiously optimistic about Trump’s upcoming Supreme Court pick. Sean Lansing, chief operating officer at Americans for Prosperity, said that his organization’s volunteers have found that voters cared a great deal about the future of the Supreme Court and were “very fired up about this issue and eager to engage.” Most Koch summit attendees were cheerfully optimistic about the forthcoming pick. Senator Mike Lee of Utah said Trump’s list of potential Supreme Court nominees was “a fantastic list in the longer iteration and the shorter iteration.” (He’s on the longer version of the list.) “I’m very confident that whoever the president nominates is going to get confirmed.”

Koch network leaders are also pleased that Trump has removed the regulatory obstacles to the Keystone Pipeline. They look forward to Scott Pruitt’s running the Environmental Protection Agency and Tom Price’s running the Department of Health and Human Services. And they’re optimistic that criminal-justice reform will pass Congress and become law under the new administration.

Perhaps the biggest reason for optimism in Koch World is Pence, a longtime ally who those within the network hope will have a major role in shaping the administration’s policy decisions.

“If you think [Dick] Cheney had power in the Bush White House, wait until you see what happens with Mike Pence,” said Doug Deason, a Texas businessman and political donor.

Less-noticed but comparably important will be the network’s efforts to shape legislation at the state level.

Teresa Oelke, AFP’s Senior Vice President for State Operations, noted that the group is on the verge of two early wins for the year, as right-to-work legislation rapidly advances in Missouri and New Hampshire. In Wisconsin, GOP lawmakers have reintroduced the REINS (Regulations from the Executive in Need of Scrutiny) act, which would require state agencies to get legislative approval for any regulation with an economic impact of more than $10 million. And in North Carolina, New Hampshire, and Kansas, AFP will be pushing against Renewable Portfolio Standards, which require that a certain percentage of energy in a state come from renewable sources.

But while explicitly political action remains a huge part of the network’s mission, there’s a growing emphasis on bipartisan and nonpartisan activities at the top. Addressing the attendees Sunday, the 81-year-old Charles Koch emphasized that an eagerness to work with apolitical and even left-wing organizations was a key strength: “You don’t need to have the same vision on everything; all you have to agree on is the particular vision you’re partnering on, and complementary capabilities.”

He added that he had no intention of slowing down.

“Slowing down? Are you kidding me, slowing down? I’ve invested all these years, all this money, a good part of my life, and I’m going to slow down when we’re right on the verge of breakthroughs of fantastically helping people improve their lives?” He laughed. “No!”

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