Home / NEWS / They snubbed Trump. But the Koch network has still exerted a surprising influence over the White House

They snubbed Trump. But the Koch network has still exerted a surprising influence over the White House

During the presidential campaign, about the only common ground between billionaire conservative Charles Koch and Republican nominee Donald Trump was a colorful disregard for each other.

Koch complained the choice between Trump and Hillary Clinton was like opting for cancer or a heart attack. And Trump bashed big-money donors, deriding his Republican rivals as “puppets” who went knocking on Koch’s door for backing.

Not surprisingly, the Koch network largely sat out the 2016 presidential election and, Trump went on to win without them. Normally such a high-profile snub would carry a steep political price, shutting doors to the new administration.

But in recent months, Koch’s sprawling network of conservative advocacy groups has exerted surprising influence in the Trump administration, scoring some early accomplishments and pushing its priorities to the top of the White House agenda.

It started with the quick rollback of a dozen Obama-era environmental and labor regulations — a to-do list orchestrated by Koch-backed groups even before Trump was sworn into office.

By spring, the Koch-backed Concerned Veterans for America was instrumental in passage of the Veterans Affairs Accountability and Whistleblower Protection Act, a long-fought Koch effort to make it easier to fire employees at the beleaguered Veterans Affairs department, providing a blueprint for how to make an end-run around civil service protections that could be replicated across other federal departments.

In July, the Kochs celebrated the official demise of the border-adjustment tax, a tax-reform proposal backed by House Speaker Paul D. Ryan that was bitterly opposed by many business groups, including the brothers. GOP congressional leaders and the White House announced that idea would not be part of the upcoming tax-reform package.

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The network’s job has been made easier by the administration’s hiring of Koch-affiliated alumni to key positions at the White House to help shape policy for a president who arrived without his own deeply staffed bench.

“The vacuum in Trump not having his own network is filled by people who’ve been cultivated for years by the Koch network,” said Richard L. Hasen, a professor at the UC Irvine law school and an expert in campaign finance.

Also helpful is a Republican-led Congress made up of many lawmakers who depend on the network’s backing for reelection, and fear being attacked if they stray from the libertarian, small-government orthodoxy. Even without being active in the presidential race, the network spent $250 million in the 2016 election.

The early results show that Koch donors have remained a powerful force in politics despite not spending on Trump’s presidential campaign.

As the 81-year-old Koch welcomed hundreds of wealthy donors to the network’s annual seminar in Colorado Springs, Colo., this summer, he marveled at how far the group has come in the decade-plus since its founding.

“When I look at where we are, at the size and effectiveness of this network, I’m blown away,” Koch said as guests and lawmakers mingled at the posh Broadmoor resort. “We are more optimistic now about what we can accomplish than we’ve ever been.”

To be sure, the failure of Congress to pass healthcare legislation stands as a glaring setback for the Koch network, which first made a splash on the national political stage during the 2009 fight to repeal and replace the Affordable Care Act, also known as Obamacare.

And many of their individual donors are so frustrated by the fumble after having spent millions to sweep Republicans to the House majority in 2010 and the Senate in 2014 that they are withholding campaign cash for the upcoming midterms until Republican lawmakers deliver.

But 200 days into the new administration, Charles and his brother, David — who are tied at No. 8 on the Forbes list of the world’s wealthiest individuals — appear as influential as ever.

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On Saturday, the network will welcome Vice President Mike Pence, a longtime ally, to deliver the keynote address at its annual activist summit in Richmond, Va. Pence met privately with the Koch team at the Colorado event.

Democrats have been furious, reviving the specter of what they call the “Kochtopus,” with its sprawling reach into almost every aspect of federal government policy and its secret donors whose millions of dollars keep lawmakers in line.

Senate Minority Leader Charles E. Schumer (D-N.Y.) warned congressional Republicans not to cater to wealthy donors’ priorities during the upcoming tax debate this fall.

“Don’t give breaks to the top 1% — everyone knows they don’t need it,” Schumer railed on the Senate floor. “Have the courage to break free from the Koch brothers and the special interests.”

Koch supporters relish such criticism. “We enjoy getting attacked by the angry left,” said Texas donor Doug Deason, who was among those attending the network’s summer seminar. “It means we’re getting something accomplished.”

The coming battle over tax reform may prove the biggest test of the Kochs’ influence, but their early defeat of the border-adjustment tax provided momentum.

Trump spoke favorably of Ryan’s idea at an annual GOP retreat in January, viewing it as an extension of his own campaign promise of slapping tariffs on overseas goods as a way to promote domestic production.

But opponents argued it would increase prices for American consumers. Some Koch-owned companies in its conglomerate of oil, gas and other industries also would face higher taxes.

The network started attacking the GOP plan, running ads against specific House Republicans and criticizing the chairman of the Ways and Means Committee, Rep. Kevin Brady of Texas, who spearheaded Ryan’s tax overhaul effort.

After months of intense campaigning by the Koch network — 10,000 phone calls to lawmaker offices and $2 million spent on tax-reform ads and advocacy overall — the proposal was shelved.

Last week, Treasury Secretary Steven Mnuchin was featured at a Koch-backed event in Washington with Marc Short, the White House legislative director, about the administration’s tax plan moving forward. Short is a former aide to Pence and one-time president of Freedom Partners, a Koch-aligned group.

Through its vast array of think tanks, conservative groups and political operations, the network stitches together organizations around the Kochs’ libertarian-leaning small-government pursuits, funded by donations from more than 700 members who pay $100,000 annual dues to attend the summits.

As donors enjoyed drinks last June on a cool Colorado evening — first-time givers were marked with a silver star on their name tags — Koch brought his team to the stage to talk about their accomplishments. The group announced it intends to spend nearly $400 million on the upcoming 2018 midterm elections, an operation that at times can overshadow the work of the political parties.

“I think we’re really going to start doing some good, where we see it every day now,” Koch told those gathered under the evening sun.

lisa.mascaro@latimes.com

@LisaMascaro

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This article originally said the Koch network spent $750 million in the 2016 election. The network spent a total of $750 million on all operations, but just $250 million on the election.


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