Secret Quarter-Billion-Dollar Koch Brothers Political Operation Revealed

Economy, the Washington insider website, has the money-in-politics scoop of the year: It has unmasked a previously unknown political money laundering operation, set up by the energy billionaires and libertarian Koch brothers, that raised $256 million and secretly spent almost all of it last year against Democrats.

The “Koch brothers’ secret bank,” which is what the website calls the Virginia-based group, whose formal name is Freedom Partners, is the glue that has been holding together the right-wing pantheon of pro-corporate, anti-regulatory, anti-Obama, anti-labor front groups that are against everything from healthcare reform to labor unions to financial market reform to progressive taxation.

“The group has about 200 donors, each paying at least $100,000 in annual dues,” Politico reported, saying Freedom Partners would soon be filing papers with the IRS disclosing its existence. “It raised $256 million in the year after its creation in November 2011, the [IRS] document shows. And it made grants of $236 million—meaning a totally unknown group was the largest sugar daddy for conservative groups in the last election, second in total spending only to Karl Rove’s American Crossroads and Crossroads GPS, which together spent about $300 million.”

The fact that secretive right-wingers could amass and spend a quarter-billion dollars in a presidential election cycle and go undetected under federal campaign finance law is an astounding indictment of the American electoral system, revealing that all the laws intending to inform the public about who is slinging political mud are meaningless. The mockery goes even further when considering the section of the federal tax code the group is operating under: 501(c)6. That designation is for trade associations, which lets the group conceal its donors.

Trade asociations, like trade unions, were created to represent single industries or crafts. Freedom Partners’ "trade" is the business of political assassination. What follows is Politico’s list of the groups, causes and amounts received from the Kochs’ cartel. The group’s members are drawn from the energy barons’ semiannual political conferences, which feature speeches by Congress’ Republican leadership.

“The filing offers a rare tour of the conservative movement and how it gets its funds,” Politico said:

• Center to Protect Patient Rights, a group that vehemently opposes Obamacare: a total of $115 million, from three grants.

• Americans for Prosperity, an organizing and advocacy group that is courted by Republican presidential candidates: $32.3 million.

• The 60 Plus Association, a free-market seniors group that also opposes Obamacare: $15.7 million.

• American Future Fund, an Iowa group that spent a lot of money on ads in 2012, many for Mitt Romney: $13.6 million.

• Concerned Women for America Legislative Action Committee, which gets involved in a number of social policy debates: $8.2 million.

• Themis Trust, a Koch-based voter database that is made available to other conservative organizations: $5.8 million.

• Public Notice, a fiscal policy think tank: $5.5 million.

• Generation Opportunity, a group for “liberty-loving” young people: $5 million.

• The LIBRE Initiative, which targets a free-market message to Hispanic immigrants: $3.1 million.

• The National Rifle Association: $3.5 million.

• The U.S. Chamber of Commerce: $2 million.

• American Energy Alliance: $1.5 million.

• And several groups — including the State Tea Party Express, Tea Party Patriots and Heritage Action for America — got less than $1 million each.         

Marc Short, the group’s president (who was previously chief of staff for former Texas Republican Senator Kay Bailey Hutchison, and also for then-Rep. Mike Pence of Indiana), told Politico the group was primarily a bunch of wealthy self-made businesspeople who were not seeking publicity but felt their propersity was under attack in America.

“Short said his members are ‘concerned that the nation that they had grown up in and that their businesses have flourished in will not be there for their children and grandchildren’ and are ‘committed to trying to restore what they view are free markets in a free society in America,’” Politico reported. “Many, he said, are ‘Horatio Alger-type stories,’ and most of them not household names, who got rich after starting small businesses, from service to manufacturing to information technology.”

America loves underdogs, but contrary to Short’s spin, his members are capitalist overlords who are firmly entrenched in the top 1 percent of Americans who are only getting richer. As reported this week, the top 1 percent in America earned more money in 2012—one-fifth of America’s household income—than any year since 1928. In other words, Freedom Partners’ agenda is all about protecting private gain, greed and obstructing or dismantling government regulation of business, fairer taxation or investments in socially beneficial programs from healthcare to retirement security.

According to Politico, the group, which has 48 employees, is filled with a who’s who of corporate defenders and GOP ideologues. Its executive director is Richard Ribbentrop, a former head of the New York Stock Exchange’s Washington office, which, in addition to lobbying for Wall St. bailouts in 2008’s market collapse and then against new regulation of market excesses, also opposes financial transaction taxes—a huge potential revenue source. The group’s board includes longtime Koch employees, state and national GOP party officials, and Washington lobbyists.

Politico asked Short how his members felt about spending a quarter of a billion dollars in 2012 and losing the presidency, not retaking the Senate and alienating most Hispanic and Asian voters. “Our members are committed to the long term,” Short replied, “not to one individual cycle.”

In other words, a new era of class warfare in America is only just beginning. 

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