Leading into the US mid-term elections, I wrote an article about the incredible spending levels associated with elections on the United States. I recall finding some spending estimates and doing a little math which showed that political parties and outside interests were going to spend approximately $8000 US per vote cast in the election. If you figure that 90% of the voters aren’t going to change their minds, that means it’s about $80K for every swing vote. The numbers astound me.

One of the readers of that blog wrote me an email and it basically said “you’re only scratching the surface. You should check out the book Dark Money by Jane Mayer.” So I did. Twice. It was a revelation. 

The book, published in 2016, is something like 1100 pages long. It is an exhaustive (and exhausting) exposition of how a few hundred ultra-rich conservatives are flooding money into extreme right wing political interests.

Who are these politically active billionaires? Chief among them are Charles Koch and his now deceased brother David Koch, Richard Mellon Scaife, John Olin, the DeVos family, Harry and Lynde Bradley,  and Joseph Coors but there are many others. These and others named in the book link back to names and business that are in some cases quite familiar. We’re talking about Coors Brewing, Walmart, Home Depot, Amway marketing, Mars candy, Bechtel construction. Others are richer but less well known. The Koch brothers, with an estimated worth of $85B made fortunes in oil and gas, mining, chemicals and pipelines. Larry Nichols and Harry Hamm made billions in the natural gas/fracking industry. Corbin Robertson, of Quintana Resources Capital, owns the rights to 21 billion tons of coal reserves, while Sheldon Adelson, of the Las Vegas Sands casino and gambling industry is worth about $31.4B.

These are not, by and large, honest and upright corporate citizens. In 2012, Koch Industries was judged by the Environmental Protection Agency to be the #1 producer of toxic wastes in the United States, and ranked as the 5^th worse polluter. They were fined $10M for over-pricing propane. They were fined another $10M for falsifying records about illegal benzene emissions, and fined $30M for violations of the Clean Water Act (oil spills). The Olin Corporation was charged with dumping 26 pounds of mercury per day into the Niagara river, and dumping 66000 tons of chemical waste into a landfill in Niagara. In 1982, the Amway guys paid a $20M fine for defrauding Canada plus an additional $38M to settle a related civil suit. The book records numerous other legal entanglements for these fighters for freedom, perhaps none bigger than the investigation by the IRS into $6B worth of “phony and abusive tax machinations” by hedge fund financier Robert Mercer.

Mayer tracks the money spent by numerous billionaires through various fronts for various purposes over a course of about fifty years, and to be honest it becomes difficult to follow the dollars. I had previously found, when researching my prior articles on election spending, that one has to be careful to compare apples to apples at all times. There is direct election spending by the candidates’ organizations, there is indirect spending in support of a candidate by “independent” organizations and there is “issue spending” in which the political action committee doesn’t directly support a candidate, but attacks an issue in a transparent attempt to support one candidate over the other. So you have to be careful in how you present the flow of money. That being said, the book follows the money from a trickle in the 1970’s to a flood fifty years later. Mayer offers this example of how things have grown. In 1972, a $2M donation by W. Clement Stone to Richard Nixon’s campaign caused public outrage and led to campaign finance rules. By 2016, those rules had been totally subverted, and the Koch organization were projected to have $889M to spend on the 2016 elections.

What was all that money used for? Initially the Kochs used it for direct election spending in support of a candidate. In 1980 David Koch ran for Vice-President as a member of the Libertarian party. By running as a candidate, Koch was able to spend as much personal money as he wanted, by-passing most of the spending rules. He took a pasting, and the Kochs came to understand that the Libertarian platform wouldn’t sell. The Libertarian platform has been summarized as “the Bill of Rights should be reduced to “The right to own property.” The Kochs had attended a school called the Freedom School, whose dean preached that “government is a disease masquerading as its own cure”.  The big goal for these guys is to keep government small. Eliminate social support programs to the greatest extent possible, because that brings about government spending and results in tax increases. Eliminate government regulations of any kind because compliance with regulations lowers profits. Fight the closing of tax loopholes that had been brought about by previous generations of fat cats, because we want to remain fat cats.

The problem is, how do you sell a program like that? After that 1980 election the Libertarians concluded that they had to educate the public to think like them. They developed a three-pronged, long term strategy. The first stage was to invest in intellectuals to drive their ideas and ideology into the mainstream. To that end, they created a wide range of subsidized programs in universities to preach their gospel to the young and change the way that people think about government. Initially they created programs in some smaller schools, but soon realized that they needed to bring the top-flight universities on board, and soon they were bringing their brand of “freedom economics” to ivy-league universities. For example, they created the James Madison Program in American Ideals at Princeton University, and the Mercatus Center at George Mason University, and funded individual professors who would teach what the billionaires wanted to sell. In particular, they funded programs in law schools that taught “Law and Economics” programs, which preached that laws needed to be analyzed for economic impact as well as (or more than) their legality and fairness. Among the law schools receiving such funding were Harvard ($10M),  Yale($7M), and Chicago ($7M), with $2M going to each of  Columbia, Cornell, Georgetown and Virginia. By 2014, the Kochs alone were “funding pro-corporate programs at 283 colleges and universities”. The Kochs were not alone in these efforts. John Olin, the Bradley Foundation and the Scaife-Mellon family were also involved in these efforts to subvert academia. It is likely that the number of educational institutions that have been tainted in this way numbers in the thousands.

The second stage was to invest in “think tanks” – organizations with seemingly public service missions and impressive academic credentials to turn those ideas into policies to be recommended to government, adopted as party platforms and become central to the political landscape. Think tanks were given righteous sounding names like The Heritage Foundation, Institute for Humane Studies, The Carthage Foundation, Center for Immigration Studies ( surprise, it was anti-immigration and anti-semitic), and the Americans for Prosperity Foundation. There are many, many more of these mentioned in the book. They are part of a funding funnel which I’ll deal with later, but they also serve to give credibility to the promotion of many ultra-conservative policies.

The third stage is to create a groundswell of public opinion supporting the policies that serve to implement conservative ideologies. Guess what? A number of “grass root” organizations did not grow organically from citizens’ discontent, but were created, funded and mobilized by the Koch network. Citizens for the Environment, Citizens for a Sound Economy, and the Center to Protect Patient Rights all have their funding traced back to the billionaires group. The first argued for protecting the environment by ignoring climate change and abolishing the EPA. The second fought for the billionaire tax loopholes and the reduction in income tax rates, and the third generated an incredible opposition to Obamacare. 

How are the Freedom Partners getting this done? The answer is found in the fact that philanthropic giving is mostly not subject to taxation. So, you create a large number of “philanthropic organizations” to serve some public-spirited sounding mission, and then you pour money into and through those organizations to serve your political interests. There are literally thousands of these benevolent sounding organizations out there. By 1985, there were 30000 philanthropic organizations. By 2013, that had grown to 100,000 organizations with assets exceeding $800B. In his memoir, Richard Mellon Scaife bragged that he funded 133 of the conservative movements top 300 philanthropic institutions.

An important element of the funding flood was the ongoing erosion of election spending controls. In one court case, the supreme court eliminated limits on how much an individual might spend on contributions to political action committees. That was deemed acceptable because the injection of a political action committee between the donor and the candidate would eliminate any risk of the donor expecting political favours. That momentous and incredibly stupid decision was followed by one that was even worse. In 2010, a group called Citizens United sued to remove the limits on corporate donations to political action committees, with the argument that corporations should have the same freedom of speech as individual citizens. When that decision was made, in 2010, it opened the floodgate for investment by those who had money. It did not, of course, change anything for those who have limited resources. In 2012, the top 0.04% of donors contributed the same amount as the bottom 68%.

Are they being successful in their efforts? Well, let us look at some of the impacts they’ve had on the political landscape in the United States, and what they’ve achieved for themselves.

1. They have changed the political landscape to one of openly partisan warfare. These “Freedom Partners” are essentially taking over the Republican Party. The Heritage Foundation has been invited to caucus with the Republican National Committee. In 2016, the Freedom Partners had 1600 paid staffers in thirty-five states, and had a bigger payroll than the Republican National Committee. They sponsored and developed the “Tea Party” caucus within the Republican Party which threatened incumbent Senators and Congressmen with challenges in the primaries if they failed to adequately support their right- wing causes.

One of the many organizations set up to serve the Kochs’ political interests is the American Legislative Exchange Council, or ALEC. Funded by the Scaifes and the Kochs, the organization drafted conservative legislation for Congressmen to propose. Business and trade groups paid expensive fees for conferences which drafted model legislation intended to address business concerns. Here’s the bit that makes me sick. One of ALEC’s members/clients was the for-profit prison industry. Keep the client happy, right? ALEC sponsored legislation changes to introduce draconian prison sentences and began promoting mandatory minimum sentences for drug offenses.

2) They have changed the judiciary. In addition to altering the way that law is taught with their sponsorship of the “Law and Economics” curriculum, the Freedom Partners sponsors Law and Economics seminars. Attending judges are treated to two week all-expenses-paid immersion training in Law and Economics. By one count, 40% of federal judiciary has participated. A study by the non-partisan Center for Public Integrity found that between 2008 and 2012, close to 185 federal judges attended judicial seminars sponsored by conservative interests, several of which had cases before the courts.

The Olin Foundation started the Federalist Society which is described as “a powerful professional network of forty-two thousand right-leaning lawyers with 150 law school campus chapters and about seventy-five lawyers groups nationally. All of the conservative justices on the Supreme Court are members.” It is the Federalist Society which has promoted the savagely partisan nature of the confirmation hearings for Federal judges.

3) Gun Laws – the guiding premise of the Libertarians is that the smaller government is, the better. Watergate destroyed much of the public trust in big government. By the 1980’s survey data said that people who distrusted government out-numbered those who distrusted business.  

The Freedom Partners turned that distrust to their advantage, and to that end, they have made “Freedom” their battle cry. When they fight for lower taxes for themselves, they are fighting for your tax freedom. When they fight for elimination of regulations that would affect their profits, they are fighting for freedom.  

To encourage voters who will support their right wing agenda, the Freedom Partners have become strong supporters of a number of single issue groups like anti-abortion activists and the pro-guns lobby. John R Lott Jr, the recipient of an Olin Foundation fellowship, published a book entitled “More Guns Less Crime”. The book, which claims to prove that relaxed gun laws produce less violent crime has been reviewed by the US National Research reviewed the book and reported that the data available did not support “unambiguous conclusions or strong policy statements. When queried on data, it became clear that Mr Lott relied on a single telephon survey and could not produce the data because he’d lost all the data in a computer crash. There were numerous articles supporting the book, issued in the Journal of Law and Economics published by the Chicago University Press. Yes, that would be the same Chicago University that received $7M in support of their Law and Economics program from the billionaire cabal. 

4) Environmental Protection Agency and Climate Change

One of the issues on which the Freedom partners is most vocal is their hate for regulations promulgated by the despised Environmental Protection Agency, and linked to that, their opposition to climate change science and policy. Prior to George W Bush taking office, he was a supporter of the need for climate change. But under his administration, regulations on coal and fracking were weakened and he handed out $15B in subsidies to the oil, gas and coal industries.

Prior to the 2012 presidential election, Mitt Romney had written a book in 2010 in which he stated his belief that climate change was happening and was caused by man. As a campaign statement, he stressed the need to eliminate global warming. But as the campaign picked up steam, his tune was changed, and suddenly he was opposed to spending money on trying to reduce CO2 emissions.

Starting in 1998, the conservatives made a concerted effort to cast doubt on climate science. In 2003, 75% of registered Republicans were convinced that climate change was a problem. By 2008, after massive infusions of money combatting climate change science, fewer than 50% of the public in general felt that global warming was a problem. President Obama was never able to bring his cap and trade bill into effect, and after gaining control of Congress, Republicans cut the EPA budget by 16%.

5) Political discourse, and belief in mainstream news. The Koch team funded right wing tv personalities. In 2011, Politico reported that Glenn Beck, Rush Limbaugh, and Sean Hannity among others were all selling on-air endorsement of right wing scripted positions. Limbaugh’s company, Premiere Networks, for example, received $2M per year from the Heritage Foundation. Then came President Trump with the never-ending big lie. And to top it all off, the State Policy Network, another of the seemingly endless stream of organizations funded by the Freedom Partners founded the Franklin Center for Government and Public Integrity which generated a seemingly endless stream of “highly ideological” news stories. 

6) Taxes – Prior to Ronald Reagan taking office the top income tax rate was 70%. By 1986, that had dropped to 28% while taxes on the lower 80% of earners increased. The Hedge Fund loophole which cuts hedge fund earnings to a 15% tax rate has never been defeated. Under Bush, dividend tax rates were reduced from 39.6% to 15%. A 2008 study showed that the top 400 earners paid an average tax rate of less than 20% on earnings that averaged over $200M in the year. That means they had a marginal tax rate lower than the tax rate applied to the average guy earning a penny more than $34501. Another study showed that in the last three decades of the century, the top 1% got their tax rate slashed by a third, while the top 0.01% had their tax rate reduced by 50%. Economic inequality, as a consequence, has steadily increased in America.

So, these people are out there, and they are having significant impacts on the way that America is run.

In my last little effort, I wrote about conspiracy theories, and of my inability to believe in them. Well, I believe in this one. In that last blog, I established my criteria for judging whether something was really a conspiracy.  So, let me review that list of criteria.

First, does this group have a leader or a leadership group? The answer is yes. It has been led for years by Charles and David Koch, and the leadership group includes about 400 of the richest and most powerful people on the planet. And this group behaves like a coherent unit. They meet regularly, they host fund-raising seminars, they establish plans and they act on them.

Second, a conspiracy must have a goal. Going back to the Libertarian party objectives, they’ve always had policy objectives. The Libertarian platform in 1980 when David Koch ran for VP was as follows:

• Repeal of campaign financing laws
  • Abolition of government health care,
  • Abolition of Social security
  • Abolition of income tax, corporation taxes, capitol gains taxes. 
  • Abolish the Securities and Exchange Commission, The EPA, the FBI and the CIA. 
  • Abolish laws on minimum wage and child labour. 
  • Abolish Food and Drug Administration, OSHA, seat belt laws, welfare.
  • Government to be reduced to protection of individual property rights. 

Although the Kochs have moderated their tone, and adopted the Republican party to carry their water, their actions show consistently that they are still advocating for the absolute elimination of anything that smells like big government.

My third criterion was that real conspiracies always have some profit motive at their root. It is clear from the growing income inequality and from the trend to lower taxes for the very rich that whatever crap these people may spout about rugged individualism and the desire to make Americans stand on their own two feet, their real motivation is greed.

The fourth criterion was that a conspiracy must have some level of secrecy about it. Well, this group has been in operation for about fifty years, and they stayed pretty well under the radar for about the first forty years. And they have taken actions to ensure that their real aims were not revealed to the public. One of the many “think tank” organizers, Oliver Smedley, wrote to another that they need to “be cagey and disguise their organization as neutral and nonpartisan.” Further, he wrote, it is “imperative we should give no indication in our literature that we are working to educate the public upon certain lines which might be interpreted as having a political bias.”

Koch conference attendees were told to “be mindful of that security and confidentiality of meeting notes and materials”. Libertarians were told that they should avoid the use of the word “anarchism” to hide their real intentions and to avoid the negative connotations of that word. Charles Koch wrote “In order to avoid undesirable criticism, how the organization is controlled and directed should not be widely advertised.” And at a 2011 conference on how to improve the effect of gerrymandering, attendees were told “make sure your security is real”, “your computer is in a private location” “emails are the tool of the devil” “Use personal contact or a safe phone”. In short, these people acted like conspirators in keeping their plans and goals secret and by disguising their actions to create the image that they were serving a socially desirable purpose. As they embarked on the path to funding “tame” intellectuals and developing tax free organizations as funding funnels, organizers were told 

• Cultivate credible leaders and a positive image.
• Work with people in the media and the arts.
• “Advocate funding private institutes within prestigious universities so as to retain ideological control over the teachings”
• “They must’ take pains to funnel desperately needed funds to scholars, social scientists and writers who understand the relationship between political and economic freedom.”
• Finally, and revealingly “Often a program can be given a philosophical or principled identify by giving it the name of an important historical figure such as the James Madison Program in American Ideals at Princeton University.” (So now you know why there are so many institutions like the Heritage Foundation, the Franklin Center for Government and Public Integrity, the David Horowitz Freedom Center whose very names seem to inspire trust.)

So yes, these people do indeed act like conspirators.

Finally, I suggested that a real conspiracy must have some limitations. Everyone can’t be in on it, or it isn’t a conspiracy. Well given the time span (50 years) and the hundreds of billions of dollars involved here, this is a manageably small group. We’re told that the core is some 400 people. There are, obviously, many others engaged in doing the work in the think tanks and academic institutions but the evidence would seem to indicate that many of them are sheep, being led down a path by a set of devious shepherds. 

I found the Mayer book compelling, and I came to conclude that a real major-league conspiracy has been operating under our noses for years. 

That didn’t deprive me of my perpetual skepticism. So my first reaction was “who is this Jane Mayer woman? Is her book a dependable source of information?” My researches suggest that she’s a left-leaning journalist, and for those who regard left-leaning as communist socialist devils, that may be enough to cause them to discount her work. But she’s an award-winning author who has worked for major news organizations like the New York Times. Her book is well annotated and she points to sources for her information. So, I believe that her facts are facts, and I’m inclined to believe what she has concluded from those facts. So, a right wing conspiracy exists.

Aha, I hear the right wing say – but what about left-wing conspiracy? Well, the truth is that outrageous spending is not confined to the Republicans. There are some huge contributors to Democrat causes too. The biggest contributor to Democrats in the 2016 election cycle was Thomas and Kathryn Steyer of San Francisco who donated more than $90M. There were about ten who gave more than ten million dollars to Democrat fortunes in that year, the most well-known of whom are George Soros and Michael Blomberg. Are these people conspiring to pervert education, subvert the judiciary and subvert the role of the Democrat National Committee? They could be. I don’t know. I’ve seen no evidence of it, but the thought that someone is investing $90M with no expectation of a quid pro quo leaves me a little skeptical too. 

I expect that I will have something more to say on this subject in future epistles. But this missive has already gone on far enough. Let me know what you think.

Dennis