The Koch brothers, major funders of right-wing, libertarian causes, have built a sprawling, complex network that raised hundreds of millions of dollars for the 2012 elections, all without having to disclose who the donors are. According to an analysis by the Washington Post’s Matea Gold and the Center for Responsive Politics, the Koch-backed network raised at least $407 million, which was mostly spent on voter mobilization and television ads against President Obama and the Democratic Party.
The billionaire brothers, named Charles and David, have become the most prominent--and reviled--funders of right-wing causes because of their lavish spending.
The amount of money raised by the Koch network was more than other conservative groups, and matched the cash spent by a national coalition of labor unions that helps the Democrats. Because many of the groups are tax-exempt or limited liability companies, the source of the money is unknown. As the Post explained, “tracing the flow of the money is particularly challenging because many of the advocacy groups swapped funds back and forth.” Swapping funds back and forth shields donors from disclosing their names and allows the groups to say they are spending the money on “social welfare” activities. The claims of spending on “social welfare” allow groups to register as 501c4s, which are tax-exempt and don’t have to disclose their donors. The Obama administration recently proposed new regulations that would rein in these types of groups.
“It is a very sophisticated and complicated structure,” Lloyd Hitoshi Mayer, a University of Notre Dame professor who tracks the tax-structure of political nonprofits, explained to the Washington Post. “It’s designed to make it opaque as to where the money is coming from and where the money is going. No layperson thought this up. It would only be worth it if you were spending the kind of dollars the Koch brothers are, because this was not cheap.”
Charles and David Koch provided money to their own network, though it’s unclear exactly how much. They also organized like-minded donors to be a part of their network that provides funding to conservative groups.
The Post reports that the network’s money made its way to two nonprofit groups that effectively served as the “banks” which provided cash to other groups. One key player in the network is Americans for Prosperity, which spent millions of dollars trying to defeat Obama in the 2012 elections.