David Koch’s ill-fated 1980 bid for the vice presidency has been covered by Jane Mayer and Rachel Maddow, among others, but Nicholas Confessore’s analysis of Koch’s run in today’s New York Times is perhaps the creepiest and most fascinating look at the man who bought the right.
Back then, Koch was a member of the Libertarian Party, and a “40-year-old bachelor living in a rent-stabilized apartment in New York City.” He and his brother Charles—the offspring of John Birch Society co-founder Fred Koch—had already become skilled at deploying propaganda to benefit their business interests:
Politics was a dangerous game for those in business, Charles Koch argued in a 1974 speech to libertarian thinkers and business leaders in Dallas. Subsidies and special treatment demanded by corporations had helped turn Americans against free enterprise. Business had colluded with the Nixon administration to design price controls and other ‘socialistic measures.’
The most effective response was not political action, Mr. Koch argued, but investment in pro-capitalist research and educational programs.
‘The development of a well-financed cadre of sound proponents of the free enterprise philosophy is the most critical need facing us today,’ he said, according to a copy of his speech in a Libertarian Party archive at the University of Virginia, one of thousands of documents reviewed by The New York Times for this article. The Times was alerted to the archive by American Bridge, a liberal political organization that has been critical of the Kochs.
By the end of 1974, Mr. Koch had helped found what would become the Cato Institute, today one of the country’s leading libertarian research institutions. He was joined in that effort by Ed Crane, chairman of the three-year-old Libertarian Party. The two men believed that libertarian ideas had to be more accessible to the average person if they were to change the country. Over dinners at Charles Koch’s house in Wichita, Kan., and in correspondence with both brothers and their mother, Mr. Crane worked to persuade the family that a vibrant party organization was critical to advancing that goal.
The family would become the Libertarian Party’s most important donors.
But their other consuming interest was business: Charles Koch, then in his first decade as president of Koch Industries, had aggressively expanded the firm’s holdings in oil refineries, petroleum products and commodities, while David Koch worked as an executive at the company’s engineering subsidiary.
As the brothers became more politically active, Koch Industries repeatedly butted against the federal government’s new energy regulations. One month before Charles Koch’s speech in Dallas, a federal audit found that Koch and two other companies had broken federal oil price controls. In 1975, a Koch subsidiary was cited for $10 million in overcharges on propane gas.
The family’s frustrations were captured in a fund-raising letter that Charles Koch wrote on behalf of the 1976 Libertarian presidential candidate, Roger MacBride, a co-creator of the ‘Little House on the Prairie’ television series. Mr. Koch excoriated Presidents Richard M. Nixon and Gerald R. Ford for backing price controls, and attacked legislation to impose fuel economy standards as ‘one of the many demonstrations of the bankruptcy of the Republican alternative to Democratic interventionism.’
Confessore notes that David and Charles Koch were able to successfully exploit the disastrous January 1976 Supreme Court ruling in the Buckley v. Valeo case, which “opened two loopholes in a two-year-old campaign finance law that had placed tight controls on what candidates, parties, and private individuals could spend on campaigns: A candidate could spend an unlimited amount of his or her money running for office, and an individual was free to spend an unlimited amount of money promoting candidates so long as the spending was not coordinated with them.”
In 1979, the Kochs decided to back the Libertarian presidential bid of Ed Clark, a lawyer who had run for governor of California the year before. David Koch joined the ticket that summer as a way to finance Clark’s campaign and continue his demonization of US energy policy:
David Koch became an enthusiastic campaigner. He spoke on college campuses, before groups of business executives and at rallies for grass-roots libertarian activists. The ticket drew particular notice in Alaska, where sentiment was rising against federal takeovers of land. All told, Mr. Koch campaigned in 27 states.
‘He liked it, and he thought he got a good response, so he did more and more of it as time went on,’ Mr. Clark recalled in a telephone interview. Questions about the Kochs’ motives arose on the trail. A campaign document written to prepare Mr. Clark for tough questions from the press included a section on the ticket’s close ties to the oil and gas industry.
‘Most of your campaign is financed by the oil-billionaire Koch family,’ read the hypothetical question, which continued: ‘Wouldn’t a Clark administration simply be ‘Rule by Big Oil’?’
Koch Industries’ clashes with the federal government were also intensifying. The Department of Energy continued to audit the company for violating federal oil price controls and overcharging retail energy customers.
In June 1980, The Wall Street Journal reported that Koch Industries had been subpoenaed as part of a federal criminal investigation into fraudulently obtained oil and gas leases in Wyoming and other Western states. That August, Koch Industries sued to block federal regulators from applying a rule that would have cut output at the firm’s lucrative Minnesota refinery.
In an energy policy speech that May in Portland, Ore., David Koch railed against what he saw as overregulation. Presidents Nixon and Carter had bequeathed an ‘Alice in Wonderland’ energy policy, he argued, a mix of subsidies and price controls that had stymied market forces and caused high prices and shortages.
Ultimately, the Clark-Koch ticket only garnered “barely more than 1 percent” in the 1980 presidential election. In the aftermath of that disaster, David and Charles Koch decided to hijack the GOP:
Within a few years, a new faction won control of the Libertarian Party, and Charles and David Koch gradually withdrew.
But the two brothers did not leave politics. In 1985, the Kochs and a new adviser, Richard Fink, formed Citizens for a Sound Economy, a free enterprise-oriented group that evolved into Americans for Prosperity, the organization today led by David Koch that is the centerpiece of the brothers’ political activity. This year, it will spend a reported $125 million on the midterm elections, most of it aimed at defeating Democrats.
They have also worked to fulfill Charles Koch’s vision for a ‘well financed cadre’ of free market proponents, funding think tanks and pro-free market research, endowing professorships, and providing money for internships and scholarships. Between 2007 and 2012, according to one analysis, Koch family foundations contributed $30.5 million to 221 colleges and universities.
Today, the donor club overseen by the Kochs, known as Freedom Partners, generates hundreds of millions of dollars each election cycle. Since 1980, the Republican Party has moved closer to the Koch family’s views on government regulation. Its rising members now court the Kochs and like-minded donors at twice-yearly ‘seminars’ that the brothers organize. In 2012, David Koch was a delegate to the Republican National Convention.
‘I think the Republican Party has a great chance of being successful and that’s why I support it,’ Mr. Koch told reporters at an [Americans for Prosperity] reception in Tampa, Fla., that year. ‘The Libertarian Party is a great concept. I love the ideals, but it got too far off the deep end, and so I dropped out.’
Confessore also notes that in the 1980 election, “The breakout minor candidate that year was [Republican-turned-independent] John Anderson, while [eventual winner] Ronald Reagan built a coalition of social conservatives, foreign policy hawks, disaffected Democrats and traditional conservatives that dominated American politics for the next decade.” Reagan and Anderson actually debated each other in September 1980, and one can envision Koch fuming at Anderson’s rhetoric on energy. In that debate, Anderson declared that “we are going to have to create a new conservation ethic in the minds of the American people,” further asserting:
…I would rather see us reduce the consumption of imported oil than have to send American boys to fight in the Persian Gulf. But at the same time, I think it’s going to take a dramatic measure of that kind to convince the American people that we will have to reduce the use of the private automobile. We simply cannot have people sitting one behind the wheel of a car in these long traffic jams going in and out of our great cities. We are going to have to resort to van pooling, to car pooling. We’re going to have to develop better community transportation systems, so that with buses and light rail, we can replace the private automobile in those places where it clearly is not energy-efficient. I think that, with respect to housing, when we are consuming, even though our per capita income today is about the same as that of the Federal Republic of Germany, we are consuming about, by a factor of two, the amount of energy that they consume in that country. Surely, there are things that we can do in the retrofitting, in the redesign of our homes, not only of our houses, but of our commercial structures, as well, that will make it possible for us to achieve. According to one study that was published a short time ago - the Harvard Business School study - indicated that just in the commercial sector alone of the economy, we could save between 30% and 40% of the energy that we consume in this country today. So I think, yes, we will have to change in a very appreciable way, some of the lifestyles that we now enjoy.
David Koch made it his goal to destroy this vision, and to manipulate the American political system to prevent these ideas from being discussed. We will dishonor and shame our children if we allow him to succeed.
Feed the Political AnimalDonate
Washington Monthly depends on donations from readers like you.