The memo reads, “Grounded in the theme of ‘The New American Tax Revolution’ or ‘The New Boston Tea Party,’ the campaign activity should take the form of citizens representing the widest constituency base mobilized with signage and other attention-drawing accouterments such as lapel buttons, handouts, petitions and even costumes.”116
Ultimately, the tobacco companies failed and were hit with a massive $200 billion settlement in 1998. But in 2002, David Koch’s CSE purchased a website domain name: USTeaParty.com. Eventually, plans for this Tea Party were put on hold. After all, a Republican Royalist, George W. Bush, was in the White House, and Royalists were in control of Congress, so there was no reason to cause any trouble.
Only after the Royalists crashed our economy, and were banished from Congress, would the so-called Tea Party be revived. And sure enough, it was revived by CSE. Only, by now, CSE had split into two Astroturf corporate-funded organizations: Americans for Prosperity and FreedomWorks. Unlike “grassroots,” Astroturf organizations are propped up by a wealthy elite and rely on corporate cash rather than genuine activism.
Meet the Kochs
Few did more to put the Powell Memo into motion than the billionaire Koch brothers, David and Charles.
They run the massive transnational conglomerate known as Koch Industries, dealing in everything from petroleum refining and distribution, to chemical processing and ranching.
Koch Industries is the second largest privately held company in the United States, taking home nearly $100 billion in annual revenue. And the Koch brothers occupy spot 4 on the Forbes 400 Richest People in America list, each worth $31 billion. Together, they are wealthier than Warren Buffett, who is in spot 2 on the list.
They inherited Koch Industries from their father, Fred Koch, who in 1927 discovered a more efficient way of processing crude into gasoline, which he pitched to Joseph Stalin in the Soviet Union and made a fortune.
Despite his collaboration with the communists, Fred Koch was an unapologetic Economic Royalist. Long before Lewis Powell’s memo, Fred helped found the John Birch Society in 1958. It was a group of far-right, fierce anticommunists, who also worked against the civil rights movement in America. They subscribed to the radical economics of neoliberalism, which was still shut out of the mainstream political and economic debate at the time.
But Fred would instill in his sons, Charles and David, this same radical Royalist ideology that would soon gain favor around the world in the 1980s.
Writing in The New Yorker, Jane Mayer talks about the political influence on the Koch brothers, such as the John Birch Society to which they were exposed through their father.
“Members of the John Birch Society,” she writes, “developed an interest in a school of Austrian economists who promoted free-market ideals. Charles and David Koch were particularly influenced by the work of Friedrich von Hayek… [and his] belief in unfettered capitalism.”
She adds, “Charles and David also became devotees of a more radical thinker, Robert LeFevre, who favored the abolition of the state… LeFevre liked to say that ‘government is a disease masquerading as its own cure.’”
David Koch even ran for president in 1980 on the Libertarian ticket, but only received 1 percent of the vote. As Mayer writes, “The brothers realized that their brand of politics didn’t sell at the ballot box. Charles Koch became openly scornful of conventional politics. ‘It tends to be a nasty, corrupting business,’ he told a reporter at the time. ‘I’m interested in advancing libertarian ideas.’”
And they had a lot of money to do just that.
The Rise of the Kochtopus
When Lewis Powell told Eugene Syndor that the Chamber of Commerce needed to spend more money influencing politics, education, the media, and school curriculums, he might have been better off just addressing the letter to the Koch brothers.
At the onset of the Jimmy Carter presidency, in 1977, they bankrolled the CATO Institute, a think tank devoted to espousing Libertarian—or Royalist—ideology.
Brian Doherty, a senior editor at Reason magazine, interviewed the brothers multiple times. He quoted Charles describing the strategy behind their funding to “bring about social change.” It was, Charles said, a “vertically and horizontally integrated” endeavor “from idea creation to policy development to education to grassroots organizations to lobbying to litigation to political action.”
After CATO, the Kochs spent millions creating the Mercatus Center at George Mason University, devoted to neoliberal economics and climate change denial.
The Wall Street Journal noted, “When it comes to business regulation in Washington, Mercatus, Latin for market, has become the most important think tank you’ve never heard of.” The article goes on to say, “Mercatus, with its free-market philosophy, has become a kind of shadow regulatory authority.”
The Mercatus Center is so effective that when oil men George W. Bush and Dick Cheney moved in to the White House in 2001, they sought suggestions for which environmental regulations they should immediately kill off. Of the twenty-three regulations to bite the dust, fourteen were suggested by the Mercatus Center, which has been given more than $14 million by the Kochs since 1998.117
But Koch-funded Royalist spin machines aren’t exclusive to George Mason University.
At Florida State University, Charles Koch inked a multimillion-dollar deal with the economics department to advance Royalist economics. As the St. Petersburg Times reported, “A foundation bankrolled by Libertarian businessman Charles G. Koch has pledged $1.5 million for positions in Florida State University’s economics department. In return, his representatives get to screen and sign off on any hires for a new program promoting ‘political economy and free enterprise.’”118
The article highlights just how pervasive the Koch influence is in the Florida State University deal. “Under the agreement with the Charles G. Koch Charitable Foundation… faculty only retain the illusion of control. The contract specifies that an advisory committee appointed by Koch decides which candidates should be considered. The foundation can also withdraw its funding if it’s not happy with the faculty’s choice or if the hires don’t meet ‘objectives’ set by Koch during annual evaluations.” In other words, the Kochs get final say on new professors—especially ones who don’t subscribe to the Kochs’ own free-market economic philosophy. In 2009, Charles Koch nixed nearly 60 percent of the university faculty’s suggestions.119
The Kochs have similar strings-attached deals with public universities all across the country, including West Virginia University, Troy University, Utah State University, and Clemson University. All in all, over 150 higher-education institutions receive some sort of financial contribution from the Koch brothers—often in the form of quid pro quos. Our higher-education system is being used by Economic Royalists such as the Kochs to fund economic brainwashing and a hearts-and-minds assault against the government.
And the Kochs make no secret that their money comes with strings attached. “If we’re going to give a lot of money, we’ll make darn sure they spend it in a way that goes along with our intent,” he told Doherty. “And if they make a wrong turn and start doing things we don’t agree with, we withdraw funding.”
The Kochs have been behind mind-boggling amounts of political spending.
Koch Industries itself has spent more than $50 million lobbying since 1998. But Jane Mayer, with The New Yorker, cautions, “Only the Kochs know precisely how much they have spent on politics.”