BY BILL WILSON AND ROY WENZLE
THE WICHITA EAGLE (MCT)
WICHITA, Kan. — In January 2009, just days after the inauguration of President Barack Obama, Charles and David Koch met in their company headquarters in Wichita with their longtime political strategist, Rich Fink.
The country was headed toward bankruptcy, they agreed. Fink told them bluntly that Obama’s administration represented the worst of what Charles and David fear most: a bloated, regulation-heavy, free-spending government that could plunge the country into another deep recession. That day, Fink advised two of the richest men in the nation that it would be the fight of their lives to stop the government spending spree and to change the course of the country, starting with the 2012 election.
“If we are going to do this, we should do it right or not at all,” Fink, 61, recalled telling the brothers. “But if we don’t do it right or if we don’t do it at all, we will be insignificant and we will just waste a lot of time and I would rather play golf.
“And if we do it right, then it is going to get very, very ugly.”
Three and a half years later, Obama accused the Koch brothers of engineering “a corporate takeover of our democracy.”
The brothers’ political spending and the network of conservative political organizations and think tanks they fund have sparked protests.
Well-oiled political machine
Two years of condemnations and criticism prompted Charles Koch to break his silence about politics. In his most extensive interview in 15 years, Charles Koch, along with his family and friends, talked about why he wants to defeat Obama and elect members of Congress who will stop what he calls catastrophic overspending.
Government recklessness threatens the country and his business, he said.
The Kochs say the price for their political involvement has been high: Death threats, cyberattacks on their business, hundreds of news stories criticizing them, calls for boycotts of the company’s consumer goods, and what the brothers see as ongoing and unjustified public attacks from the Obama administration.
The Kochs aren’t finished. Win or lose in November, they plan to start a new fight. They are organizing dozens of business and grassroots groups to build support for eliminating all corporate and agricultural subsidies.
The Kochs won’t say how much they are spending or specifically what they are doing to defeat Obama, but it’s enough to prompt critics to question how much political influence one family should have.
“The Koch political machine is the most elaborate, comprehensive financial dip into American politics since Standard Oil and the robber barons a century ago,” said Larry Jacobs, a political scientist at the University of Minnesota.
“This is the 21st-century version of how you buy yourself a government in America.”
Many millions spent
Charles and David Koch, each worth an estimated $31 billion, directly support causes and candidates at the national or state level.
Charles Koch refuted early media reports that put their tab to defeat Obama at $200 million.
“Well, the Obama campaign said they were going to spend a billion. No, we’re not going to spend that much,” he said, referring to the $200 million.
“We’re going to participate effectively in the election, let’s just put it that way,” David Koch said.
The Koch Industries Political Action Committee has spent $2.3 million in the 2012 election cycle, according to the Center for Responsive Politics.
They’ve spent more than $60 million lobbying Washington in the past decade and $12.7 million backing political candidates, usually Republicans, since 1990.
The total amount being spent isn’t public, thanks to campaign finance laws that allow nonprofit groups to keep the identity of their donors secret.
Americans for Prosperity plans to spend $110 million to defeat Obama, its director, Tim Phillips, told the national media in early August.
Both parties blamed
The Kochs believe the country is racing inevitably to economic disaster. They blame Republicans and Democrats alike.
They say that overspending, coupled with future shortfalls in Social Security, Medicaid and Medicare, along with interest on the national debt, will push the country into bankruptcy, just as surely as a family that consistently spends more than it makes will end up broke.
“We’re running well over a trillion-dollar-a-year deficits with our national debt climbing inexorably to greater and greater level,” David Koch said. “The Federal Reserve, of course, is buying the bonds the federal government issues to finance the debt. And my God, if this continues to increase, we’re going to have ever-increasing inflation, it could become runaway inflation that would raise interest rates on our national debt enormously, and our country could spiral into bankruptcy.”
The interest alone that the United States will owe to China in 2025 is projected to be enough to fund that country’s entire military, Fink said.
The Kochs say neither Obama nor Romney will address overspending or expanding government.
“You go through history, the rate of increase in federal government has been almost the same under Republicans as under Democrats,” Charles Koch said. But he said that under Romney the country’s economic decline will proceed more slowly.
Although the Kochs have long complained about corporate subsidies, saying they increase taxes and the price of goods, their company accepts subsidies for production of ethanol. Not accepting them would put the company at a competitive disadvantage, they say.
Impoverishing middle class?
The Kochs think government is an obstacle to making money that should be removed, said Jim Steele, who with Don Barlett just released “The Betrayal of the American Dream.” The book accuses the “ruling elite” — including the Kochs — of impoverishing the American middle class by pushing initiatives such as deregulation, outsourcing and balanced budgets to enrich themselves.
The Kochs have spent more than three decades building a vast, sophisticated network of think tanks, university researchers and citizen groups to advocate for limited government, lower taxes and limited regulation.
“We feel that the views of the foundations that they support … have been really instrumental in undermining the economic well-being of the middle class,” Steele said.
Free markets to the Kochs mean freedom to make money, Steele said.
“I think they view government as an intrusion in their liberty to make money,” he said. “Any government regulation is seen as an intrusion that would interfere with that process.”
Steele said the Kochs are using money they gleaned from lower taxes on dividends and on the wealthy to finance a disinformation campaign against Obama.
Steele said claims by Republicans that Obama is responsible for the current budget deficit are preposterous.
“His predecessor ran up the deficit, and because of the issues with Bush II, the economy slows down, tax collections are down and that contributes to the deficit.
“So now they’re going to run ads basically with free money, the money they’ve saved not paying taxes on their dividends, to accuse him of the deficit problems.
“It’s truly preposterous.”