Dark Money - Book Summary

Uncover how money directs the strings of American politics.

Perhaps you're familiar with the term "follow the money"—made famous in the 1976 film All the President’s Men. Here, an anonymous source advised the protagonists to trail the flow of money as a means to unearth political corruption. But is that very specter of money's corrupting pull in politics still relevant today?

Undeniably so.

This narrative delves into how two siblings, Charles and David Koch, together with their network of conservative associates, have employed their staggering wealth to sway and reconfigure American politics over recent years. We'll dig into the origins of this involvement, their unique tactics, and the profound influence they've had on America's political milieu.

So, let's trace this murky money trail and uncover its role in promoting an intensely conservative political ideology in the United States.

In this narrative, you'll discover:

1. The reasons behind the Koch brothers' determination to manipulate the political landscape;

2. How non-government organizations, such as think tanks, masterfully veil the flow of money; and

3. The manner in which the Koch brothers incited and harnessed the energy of the Tea Party movement.

The influential yet shadowy Koch brothers lead a billionaires' alliance aimed at steering American politics.

When American billionaires come to mind, you're likely to picture Mark Zuckerberg or Bill Gates. However, there are some far more influential yet far less recognizable figures playing the game.

Enter the billionaire siblings, Charles and David Koch. They helm Koch Industries, the nation's runner-up for largest private firm, a legacy of their father, Fred Koch, who established it in 1940.

Fred Koch laid the foundation of his wealth by erecting oil refineries for Josef Stalin's Soviet Union—a collaboration that ultimately saw his company being commissioned to construct a colossal oil refinery for Nazi Germany in 1934.

Fred Koch was indeed sympathetic to the Nazi cause at the time, even going to the extent of hiring a Nazi-sympathizing nanny to care for his children. In fact, this nanny was such an ardent supporter of the Nazi party that she returned to Germany in response to Hitler's invasion of France in 1940—when Charles was just five and David was merely a newborn.

As they came of age, Charles and David formed a formidable business partnership. Since the 1970s, they've been weaving an intricate tapestry of political donors and fundraising entities. With its countless links deeply entrenched in American politics, this network has fittingly been dubbed the "Kochtopus."

Their driving purpose is to propagate their libertarian ideals, which champion free markets and a streamlined government, void of regulations, taxes, or any obstacles that might hamper profit-making.

This mission spurred David Koch to briefly venture into politics, running for vice president as the Libertarian Party's nominee in 1980. That year, however, the Libertarian Party captured just around one percent of the national vote.

This short-lived political foray offered invaluable insights, leading the brothers to understand that politicians merely echo public sentiments—the true power lies in forming and influencing these echoed messages.

So, taking their cue from this realization, the Koch brothers have chosen to operate away from the limelight since then, dedicating their efforts toward a long-term, ambitious strategy.

The Koch network masterfully employs nonprofits to keep political contributions covert and exempt from taxes.

To effectively shape public discourse, the Koch brothers understood that they needed a discreet avenue for their ideologies to permeate society. The ingenious solution they struck upon was masking their political endeavors as acts of philanthropy.

The brothers promptly initiated the spread of their libertarian beliefs through non-profit entities like advocacy groups, think tanks, and private foundations. This tactic proved exceedingly effective, given that non-profits offer cost efficiency and minimal public disclosure requirements.

This setup ensured that all contributions could remain anonymous, with their amounts concealed from public scrutiny. Donors could generously open their wallets, secure in the knowledge that their acts would be kept under wraps.

This veil of secrecy birthed the concept of "dark money". Non-profits create a shroud of opacity around the influx of money—its origin, destination, and purpose remain undiscoverable.

But the appeal of non-profits to the Koch brothers isn't limited to this secrecy. Donations to non-profit organizations also bring the perk of being tax-deductible. Hence, by channeling their inheritance towards philanthropic foundations, the brothers manage to dodge inheritance taxes while simultaneously fueling their chosen causes.

In time, their network of institutions roped in several high-profile political figures, such as Senator Ted Cruz and Governor Chris Christie of New Jersey. Their organization received significant contributions from financial magnates like Charles Schwab and the co-founder of Amway, Richard DeVos—both of whom had donated at least a million dollars between 2010 and 2011.

The accumulation of these contributions armed the Koch brothers with formidable financial clout.

By 2013, they governed over 100,000 private foundations, boasting a cumulative asset value exceeding $800 billion. Among the oldest and most influential tentacles of the Kochtopus is the Heritage Foundation, which possesses assets worth $174 million.

Indeed, that's a staggering sum of money—all positioned to shape public policy, all eluding the vigilance of voters, all sidestepping political transparency laws, and all exploiting tax loopholes.

The Kochtopus extends its tendrils into educational initiatives and think tanks to achieve enduring influence.

For a thorough and sustained impact on public sentiment and to hedge against future opposition, the Koch brothers deemed educational institutions and initiatives a crucial component of their right-wing fundraising network.

Their strategy entailed making significant donations to esteemed universities, with the expectation that these institutions would provide fertile ground for cultivating a fresh crop of conservative ideologues. The goal was to extend their sway over society by producing future political leaders, steeped in the Koch doctrine. Not surprisingly, law schools swiftly became their primary hunting ground.

One of the early adopters of right-wing educational initiatives was the Olin Foundation, named after its founder John M. Olin, the chief of the weapons manufacturing company Olin Industries.

Olin was the brain behind Harvard's Mansfield’s Program on Constitutional Government, which benefitted from a hefty $3.3-million donation from the Olin Foundation. This program imparted a conservative interpretation of American governance, and its alumni went on to teach at premier institutions like Georgetown, Harvard, and Yale.

Apart from educational initiatives, conservative think tanks also became effective vehicles for bolstering the right-wing agenda, particularly by instigating skepticism regarding scientific data.

One such prominent conservative think tank is the George C. Marshall Institute, a recipient of donations from the Koch network.

The Institute is home to physicists Fred Seitz and Fred Singer, key players in contesting the scientific consensus around climate change. Even though Seitz and Singer had no specific expertise in this field, their message of doubt successfully captivated public attention.

While think tanks may argue that they offer a necessary counterpoint to scientific discourse, in reality, they disseminate misinformation of dubious academic value. They essentially present the findings of questionable research funded by those seeking results that would favor their cause.

The influence of these think tanks reached a peak during the Reagan administration. Every member of Congress received a copy of the Heritage Foundation's Mandate for Leadership as a guideline for action.

The Tea Party movement: A masterstroke in crafting the illusion of grassroots legitimacy.

By 2009, the Koch brothers had meticulously laid the foundation for a political upheaval. The time was ripe for the nonprofits and educational ventures they had nurtured over the years to spring into action in the form of the Tea Party movement, catapulting libertarianism into mainstream consciousness.

The roots of this political insurgency reach back to the Koch brothers' trusted aide, Richard Fink, and his Structure of Social Change manifesto drafted in the 1980s.

The manifesto offered a step-by-step guide to setting the stage for a credible political surge. The initial step entailed having the intellectuals at the think tanks influence the politicians at the helm. Once this was accomplished, the foot soldiers would be deployed to carry the message into the heart of communities.

This final step unfolded throughout the 90s and the early 2000s, with the Koch network injecting the necessary funds to orchestrate protests that appeared convincingly spontaneous. Despite being carefully planned and orchestrated, these demonstrations managed to hoodwink the general public into believing they were genuine grassroots movements.

To sell the facade of a bona fide political uprising, it was crucial to paint the libertarian message as a "grassroots" initiative, emanating from the average Joe. But given that the entire movement was a Koch fabrication, it earned the moniker of an "astroturf" movement — a term inspired by the brand of artificial grass.

The cause was further amplified by the abundant publicity it received from right-wing media.

Although CNBC reporter Rick Santelli is often accredited with sparking the Tea Party movement, he merely fell for the bait laid out by Wilbur Ross, Jr.

A close confidant of David Koch, Ross appeared on CNBC to lambaste President Barack Obama’s strategy for addressing the mortgage crisis. Santelli swallowed the bait and unleashed a diatribe against Obama’s plan, accusing it of "promoting bad behavior" and questioning why taxpayers should be burdened with paying for their neighbor's unaffordable second bathroom.

Adding fuel to the fire, Freedomworks, a think tank bankrolled by the Kochs, spent over a million dollars to have conservative media icon Glenn Beck share the think tank's "embedded content" on Fox News.

The landmark verdict of Citizens United versus the Federal Elections Commission: A shot in the arm for the Koch brothers' influence.

The political landscape witnessed a seismic shift in 2010, following the Supreme Court's ruling on the case of Citizens United v. Federal Elections Commission.

Victorious in their litigation, the conservative think tank Citizens United garnered a game-changing legal precedent affirming corporations' right to freedom of speech. This watershed moment allowed an unprecedented influx of money into the Koch network.

The real game-changer was the newly-granted liberty for both nonprofit and for-profit corporations to spend unlimited sums to endorse or oppose political candidates. Moreover, the cap on individual contributions to these corporations was soon abolished.

This ruling effectively negated longstanding laws designed to prevent the political landscape from being skewed by wealthy benefactors.

Another accomplishment of the ruling for conservative think tanks was the fragmentation it caused among liberal groups, as some liberals joined the battle to fight for expanded First Amendment rights.

However, the status quo remained unchanged when it came to donor anonymity, thereby increasing the dark money flowing through the political system.

After the verdict, Citizens United was inundated with contributions, such that they could allocate up to 49 percent of their total revenue towards political activity.

Additionally, they were free to redirect entire multimillion-dollar donations to other groups within the network for entirely different causes. This resulted in a labyrinthine network of untraceable money constantly changing hands, conveniently hidden from the public eye.

In light of these rule changes, the Koch network's influence expanded even further in the lead-up to the 2010 midterm elections, guaranteeing their success.

The REDMAP strategy: A masterplan by the Kochs that tipped the scales in favor of Republicans and influenced key state outcomes.

After the Democrats claimed victory in the 2008 presidential elections and fortified their majority in both the House and Senate, Republican tactician Ed Gillespie formulated a strategy christened REDMAP.

The plan was straightforward yet cunning: ensure as many Republicans as possible secure seats in Congress during the 2010 midterms, granting them the requisite legislative sway to redefine the congressional districts in 2011.

This practice of redrawing state congressional districts to favor a particular party—known as gerrymandering—formed the crux of the REDMAP strategy. By carefully manipulating district borders, they could cluster most Democratic-voting citizens into a single district.

While the Democrats would enjoy a significant majority in that lone district, they would be thinly spread elsewhere, leaving them with the minority of districts in each state.

This strategy was already laid out before the Citizens United verdict but reaped enormous benefits from it. Millions in dark money were channeled into promoting Republican candidates and launching fierce ad attacks against Democrats in vulnerable states.

North Carolina bears testimony to the stunning success of the REDMAP strategy. Republican benefactor and longstanding Koch ally, Art Pope, poured copious financial support into the state. Consequently, Republicans clinched 18 out of 22 local legislative races, marking a historic first for North Carolina with representation in both Congress and Senate in 140 years.

The strategy also paid off nationally, culminating in the Republicans seizing control of the House of Representatives in 2010. Now armed with majority control, the Republicans had carte blanche to redraw district boundaries, thereby skewing electoral outcomes for many years hence.

North Carolina bore the brunt of the disastrous aftermath of REDMAP's gerrymandering. As an embodiment of the Koch brothers' small-government crusade, the state saw dramatic cuts in unemployment benefits. Despite having the fifth-highest unemployment rate in the country, North Carolina received meager federal aid.

As seen through the lens of the Koch brothers' machinations, one doesn't necessarily need to occupy the White House to steer public policy and actualize their vision.

The Kochs leverage their Republican majority to obstruct the Obama administration and tackle climate change narratives.

The Kochs’ deep-seated animosity towards Barack Obama was a regular topic at their semi-annual gatherings of benefactors.

In June 2011, Charles Koch invoked a phrase famously used by Saddam Hussein to describe the impending conflict and their aspirations of stymieing Obama's initiatives. He dubbed it, “The mother of all wars.” Owing to the successful execution of REDMAP and the wave of radical Republican representatives it had elected, the Kochs orchestrated the government shutdown in 2013.

Mark Meadows is often identified as the brains behind the shutdown. He was among the North Carolina congressmen who capitalized on gerrymandering and won in the 2012 midterm elections.

Meadows penned an open letter to Republican leaders in the House of Representatives, inciting them to withhold the funds necessary to execute the Affordable Care Act, also known as Obamacare. The consequential stalemate was clear to all: if Democrats held their ground, the government would come to a standstill.

This new breed of Republicans in the Senate also stifled any potential of a balanced debate on subjects like climate change.

Interestingly, climate change was once a bipartisan concern, uniting Democrats and Republicans alike in acknowledging the impending peril of environmental degradation. Over time, many Republicans recanted their stance, dismissing climate change as a non-issue or a farce, buoyed by the ever-growing influence of the Koch network.

For the Kochs, climate change was an inconvenient narrative as their companies had faced multimillion-dollar lawsuits due to health and environmental risks posed by their industries.

In response, they spent years publicly discrediting acclaimed environmental scientists and propagating an alternative narrative—that governmental regulations on climate change were an assault on individual freedom.

Meanwhile, the Koch network's stranglehold on the Republican party was about to reach alarming levels, as we'll uncover next.

The American Dream at risk: The dangerous slide towards an oligarchy under the Koch network.

The American Dream is built on the belief that anyone, regardless of their origins, can actualize their ambitions. Yet, the actions of the Koch brothers seem to be transforming this dream into a nightmare by deepening the country’s economic chasm. The rich continue to amass wealth, and their power appears increasingly unassailable.

In fact, the Koch network has grown so vast that it has practically commandeered the Republican party.

Those who dare defy the Koch brothers pay a steep price. Notable among these dissenters was John Boehner, the erstwhile darling of the Kochs and former Republican Speaker of the House. Boehner’s refusal to acquiesce to the Kochs' demands led to his enforced resignation at the hands of ultra-conservative Representatives who owed their electoral victories to the Koch network.

This is a glaring example of how democratically elected officials can become puppets in the hands of a select few among the nation's wealthiest citizens.

Indicators suggest that America's political system is teetering dangerously close to an oligarchy, rather than a democracy. An oligarchy denotes a governance system controlled by the whims of the richest, completely disregarding the desires of ordinary citizens.

Yet, there exists one billionaire who remains impervious to the mighty Koch network: Donald Trump.

Trump has positioned himself as a champion of the working class, decrying the tax loopholes from which billionaires like the Kochs lucratively benefit.

But, Trump's choice of Mike Pence for vice president—a favorite of Charles Koch—tells a different story. Prior to the 2016 presidential elections, experts forecast that the Koch network would deploy a whopping $889 million to sway the results, exhibiting the lopsided advantage they wield over their adversaries.

The Kochs are not alone in their quest for dominance. Among the 200 attendees at their June 2010 retreat, at least eleven featured on Forbes' 400 Wealthiest Americans list, boasting a cumulative fortune of $129.1 billion.

Money may be a symbol of power, but that doesn't mean we should silently allow an elite group of wealthy men to seize control over the "Land of the Free." The United States is also the "Home of the Brave," and it's high time we reclaim it.

Wrapping up

The sphere of American politics is under the pervasive influence of a small coterie of billionaires, spearheaded by the Koch brothers. They have a single-minded focus to sculpt policies that favor their interests, even if it entails potential harm to the wider public or the environment. Aiding their pursuits is an intricate web of largely unaccounted dark money, empowering the Koch brothers to invest billions in getting their loyalists elected and propagating their ideologies.