Has the power of big money in politics suddenly shrunk? There are many reasons to think so. Despite having spent surprisingly little on his Presidential campaign, and running in opposition to the Republican élite, Donald Trump is now the undisputed G.O.P. front-runner, after picking up seven more states on Super Tuesday. Jeb Bush, the Republican candidate with the best-funded Super PAC, was forced to drop out last month. By the time Bush suspended his campaign, the Super PAC Right to Rise had spent almost ninety million dollars on his behalf, with almost nothing to show for it. Marco Rubio and Ted Cruz, who both have their own roster of ultra-wealthy backers, appear to be in a struggle for the G.O.P. élite’s last leaky lifeboat.
This wasn’t the storyline that most political observers predicted. Charles and David Koch, the billionaire industrialist brothers whose names have become shorthand for influence-buying, had signaled their intention to spend an astounding eight hundred and eighty-nine million dollars of their own and their allied donors’ cash during the 2016 election cycle. But they appear completely unable to stop Trump, whom they are said to regard as unworthy and unreliable. Adding to the indignity, the candidate that David Koch identified last fall as his personal favorite, Wisconsin Governor Scott Walker, performed so poorly, despite his billionaire backers, that he dropped out before the Iowa caucuses.
On the Democratic side, Hillary Clinton, the Party’s presumed money magnet, has been seriously rattled by Bernie Sanders, whose anti-establishment campaign is fueled by small donors.
So, is the age of plutocratic politics over? It might be nice to think so, but jumping to that conclusion right now would be a big mistake.
To begin with, despite a few rumors to the contrary, the Kochs and their network of four hundred or so of the country’s richest conservative donors have not yet begun to spend in the Presidential contest. Last month, one of the Kochs’ top political operatives, Marc Short, left their main spending group, Freedom Partners, to join the Rubio campaign, triggering speculation that the billionaire brothers would throw their outsized financial support behind Rubio, too. Stoking the speculation further, almost simultaneously, the American Future Fund, a “social welfare” group that is not required to identify its donors, but has often been used as a front for the Koch network’s money, began airing ads accusing Trump of ripping off enrollees at his so-called university. But last week, James Davis, a spokesman for Freedom Partners, called the speculation that the Kochs were backing Rubio, or spending against Trump, “completely false,” telling BuzzFeed that “We have not intervened in the presidential primary, and we do not plan to engage.”
Instead, according to a well-informed insider, the Kochs and their donor network have decided to remain “firmly” uncommitted during the Republican primaries. Spending against Trump, the insider says, “was seriously considered, and then dismissed.” The members of their donor network are divided about which of the other Republican candidates to back, and the Kochs themselves are leery of alienating Trump, for fear that he may be unstoppable. “Things can always change,” the insider added, “but I don’t think they will.”
Far from sidelining the Kochs and their network in the Presidential race, however, this just means that they will spend more on negative campaigns in the general election. If the Republican nominee turns out to be Trump, the insider predicts, despite the Kochs’ misgivings about him, they will spend heavily against the Democratic standard-bearer. And should the nominee turn out to be Rubio or Cruz, both of whom they favor over Trump, he predicts the Kochs will spend even more.
Presidential elections, where big money is most diluted, however, have never been the primary focus of the Kochs’ ideological spending.
Instead, they have looked to smaller investments with much bigger payoffs, such as down-ballot races, lobbying, think tanks, academic programs, and grass-roots lobbying groups that inject their ultra-free-market ideas into the American mainstream.
As a new academic study, “The Koch Effect: The Impact of a Cadre-Led Network on American Politics,” by Harvard professors Theda Skocpol and Alexander Hertel-Fernandez, points out, the Kochs have financed seventy-six per cent of all “GOP-conservative organizations” created since 2002. (I wrote about the study in my latest piece for the magazine.) The largest of the Koch-backed political organizations, Americans for Prosperity, operates almost like a private political party, with paid directors in thirty-five states, which, the authors note, instead of functioning as a third party has effectively subsumed much of the G.O.P.
This year, maintaining Republican control of the Senate and the House will be top priorities for the Kochs and their network. The billionaire brothers are also continuing to focus on strengthening the G.O.P.’s bench of candidates in the states. Republican governors, attorneys general, and state legislatures are key to their efforts to dominate policy in areas important to Koch Industries. “Recruit, groom, and elect” is the Kochs’ approach, the insider says. “It is both a short-term and a long-term game.”
The Kochs are intent, too, on preventing President Obama from appointing a Supreme Court Justice who could be at odds with their views. There are multiple ties between the Koch network and two dark-money “social-welfare” groups that have already mobilized against any Supreme Court nominee that Obama might choose—America Rising Squared, which is digging for dirt on potential nominees, and the Judicial Crisis Network, which has started airing ads aimed at intimidating Democrats who would push for confirmation hearings.
In essence, the Harvard study concludes, the Kochs and their allied donors have far financial influence over American politics that extends far beyond the Presidential race. They have acted as an ideological magnet, pulling the Republican Party far to the right on economic issues, in alignment with their own and other donors’ financial interests. On issue after issue, Republican candidates have sworn fealty to the Kochs’ ultra-free-market positions. The study calculates that Republican members of the House and Senate largely voted as Americans for Prosperity told them to eighty-eight per cent of the time last year, up from seventy-three per cent of the time in 2007. More eye-catching, the positions that A.F.P. took, and that the elected representatives adopted, put them far to the right of the general voting population, including many Republicans voters.
It now appears that this influence-buying by special-interest donors has opened up a gap between the Republican élites and the rank-and-file voters that is big enough for Trump to fly his private jet through. On issues such as protecting, rather than privatizing, Social Security and other so-called entitlement programs, which the vast majority of voters in both parties favor but which many big donors oppose, and closing the carried-interest tax loophole for hedge-fund managers, Trump can sound like a populist by championing the majority’s views, at the expense of those favored by the G.O.P.’s élite backers.
It remains to be seen what sort of arrangement big money and Trump will make if he wins the Republican nomination. Despite the Kochs’ reputed disdain for Trump, there are more connections between the Kochs and Trump’s ostensibly non-establishment campaign than might be suspected. Trump’s national campaign director, Corey Lewandowski, previously ran the New Hampshire chapter of Americans for Prosperity. Scott Hagerstrom, Trump’s Michigan campaign director, and Alan Cobb, his Kansas director, are also key veterans of the Kochs’ political operations. Meanwhile, many of Trump’s policy positions, at least so far as they can be ascertained, are also in line with those of the Kochs, including his contempt for efforts to limit climate change and his opposition to raising the minimum wage.
Trump certainly wouldn’t have been the first choice of the G.O.P.’s big-money men, but that doesn’t mean they will keep their wallets in their vest pockets if the alternative is Hillary Clinton.
The brothers, as the Koch insider puts it, are “playing a more patient, nuanced game these days. It is like the ‘whales’ that are big gamblers and pick casinos carefully. In this case,” he says, “the whale is carefully considering where to place its political bet.”
