Tom Hamburger is a Washington Post reporter covering the intersection of money and politics.
To understand the motives of the conservative billionaire Koch brothers, look to their childhood — and what a rigid, harrowing youth it was, according to a new book by New Yorker writer Jane Mayer.
In “Dark Money,” Mayer relies on interviews and previously undisclosed documents to trace a family fortune that was built in part on business ties with the Third Reich, and an early childhood colored by a fearsome German governess and a strict, demanding father who favored corporal punishment. She obtained a confidential history of Charles Koch’s effort to shape American politics that was commissioned by his brother Bill. The report, written by George Mason University historian Clayton Coppin, suggested that Charles has “a hatred of the government so intense that it could only be understood as an extension of childhood conflicts with authority.”
Playing a potentially formative role, Mayer suggests, was a governess hired for the eldest Koch sons, Charles and Frederick, who have since gone separate ways. Frederick has pursued his interest in the arts and philanthropy in New York City while Charles has run Wichita-based Koch Industries, one of the world’s largest privately held corporations. In their youth, their governess, wearing a starched white uniform and a pointed cap, enforced a terrifying regimen that required the boys to have a morning bowel movement or be subject to castor oil and enema treatments, according to Mayer.
The boys’ father, Fred Koch, cared about his sons, Mayer writes, but could be a terrifying disciplinarian. He built the family fortune through early deals in Stalin’s Russia and, Mayer reveals for the first time, through business relationships in Nazi Germany. Fred was involved in building Germany’s third-largest oil refinery, a project Mayer says was encouraged personally by Hitler.
The book quotes letters Koch wrote as late as 1938 favorably comparing Germany’s work ethic with what he saw as the indolent attitude in the United States after the New Deal. “When you contrast the state of mind of Germany today with what it was in 1925 you begin to think that perhaps this course of idleness, feeding at the public trough, dependence on government etc., with which we are afflicted is not permanent and can be overcome,’’ he wrote.
When the United States entered World War II in 1941, Mayer reports, Fred Koch sought to enlist in the U.S. military but was instructed instead to use his engineering skill to develop high-octane fuel for U.S. warplanes. In Allied bombing raids in 1944, American B-17s finally destroyed the Hamburg refinery that he helped build, Mayer writes.
Koch Industries responded to news reports of the book’s charges before its publication. In a letter that went to more than 100,000 Koch employees worldwide and that was posted on a company website, President and Chief Operating Officer Dave Robertson said: “We expect to have deep disagreements and strong objections with [Mayer’s] interpretation of the facts and their sourcing. Of the many false and inaccurate claims that have leaked out so far, the implication that Fred Koch sympathized with one of the most tyrannical regimes in history is reprehensible and represents the lowest form of journalism.”
The letter said that the company had “conducted an extensive archival search” and determined that Winkler-Koch Engineering, as the company was known earlier, handled more than 500 projects between 1928 and 1934, one of which was to build a cracking unit for the refinery in the Hamburg area. The contract for that unit was signed in 1933 and the refinery became operational in 1935, according to the letter, “nearly six years before Germany invaded Poland.” Robertson added, “To cherry-pick one project among hundreds during this time frame and then use it out of context in order to further an agenda-driven storyline is grossly inaccurate.”
In her book, Mayer takes readers through decades-long efforts by Charles and David Koch and other conservative billionaire families to influence U.S. politics. She makes the case that anti-government campaigns by the Kochs and others have undermined American democracy and have helped wealthy elites block progress on problems such as climate change and income inequality.
While Mayer delves into the activities of Richard Mellon Scaife and other conservative billionaires who have spent heavily on political causes, she focuses mainly on Charles and David Koch. The brothers operated for most of their lives on the fringes of GOP politics but now command a central position. The increase in their status and sway is explained, she writes, by the brothers’ carefully calibrated efforts to pull together like-minded wealthy families whose influence has soared to levels unseen since the era of the robber barons, when corporate giants controlled individual members of Congress. The Supreme Court’s Citizens United decision — which allowed corporations to contribute unlimited money to political causes — “was in many respects a return to the Gilded Age,” she writes.
For 2016, the Kochs and their political allies have together committed to spend hundreds of millions of dollars. Their spending, largely through nonprofits that do not disclose their contributors, was portrayed at a secret meeting of Koch donors as part of “a movement” to create national “well being,” Mayer writes. In her telling, these “dark money” expenditures made in the guise of philanthropy are intended mostly to promote the financial well-being of the Kochs and other similarly situated dynasties.
While she discusses the financial and personal motivations of leading donors on the right, Mayer devotes relatively little attention to the role of billionaires on the left and mega-donors’ impact on Democrats. That, combined with the fact that she was not granted an interview with either David or Charles Koch, gives her book an unrelentingly critical, polemical tone.
But Mayer has not set out to write a nuanced portrait of the brothers. In her introduction, she calls out the Kochs for using “their fortune to impose their minority views on the majority” of Americans while working to undo checks on great wealth that have been in place since the Progressive Era. In the following chapters, she attempts to prove it.
The Kochs are accustomed to being attacked by Democratic politicians, advocacy groups and muckraking journalists. But Mayer’s book is so deeply researched and studded with detail that it seems destined to rattle the Koch executive offices in Wichita as other investigations have not. It could inspire a more intense discussion about the impact of this wealthy conservative cadre on the Republican Party and the recent course of American politics.
Other Koch biographies, including Daniel Schulman’s “Sons of Wichita,” have described the harrowing rivalries that developed among the brothers in their early years. Mayer details the sad state of the siblings’ adult relationships and its consequences. A 1982 sealed deposition from Bill Koch, for example, describes how Charles and David attempted to blackmail their brother Frederick by threatening to reveal to their father his alleged homosexuality unless Frederick turned over his shares in the family business. The hostility led to lawsuits, acrimony and a propensity to use private investigators to unearth dirt on sibling rivals and other perceived enemies.
Mayer quotes from interviews she conducted with investigators hired by the siblings and with other investigators attached to the government who have looked into possible criminal activity by the family-owned firm.
Two former prosecutors and an FBI agent told Mayer they suspected they were targets of Koch Industries’ private espionage efforts while they were investigating the company for alleged misdeeds. She quotes one of them, Wick Sollers, a former federal prosecutor and Senate investigator who is now the managing partner of the King & Spalding law firm in Washington, as saying: “Someone was trying to intimidate and silence the Kochs’ critics. I’m not political, but it was troubling.”
Mayer and the Kochs have had a sour relationship since 2010, when the New Yorker published her first major piece on the family, “Covert Operations,” which detailed the high-priced efforts of David and Charles Koch to undermine the major policy initiatives of a newly elected president, Barack Obama. The Kochs denounced her reporting then as biased and inaccurate. After the piece’s publication, she says, a source told her that the Kochs had hired an investigative firm to dig up “dirt, dirt, dirt” on her, and “if they couldn’t find it, they’d create it.”
Mayer’s book is especially useful in providing new perspective on the role that philanthropic organizations play in the strategy of the super-rich. Quoting in part from an unpublished memoir written by the late Scaife, she shows how two wealthy families used private foundations to avoid taxes while feeding the machinery of the right. Scaife estimated in his memoir that he personally spent $1 billion over 50 years, more than 60 percent of it to push conservative causes through 133 organizations.
Mayer’s final chapter, “Selling the New Koch: A Better Battle Plan,” describes the Kochs’ campaign to pursue their political goals while softening their tough reputation, a lesson she believes Charles Koch learned from his studies of the John Birch Society, of which his father was a founding member. Recently, the company has run nationwide advertising aimed at letting the public know that Koch’s diverse employees appreciate working for the growing, highly successful conglomerate. The Kochs also recently formed a very public alliance with the United Negro College Fund, a move that accompanied a bipartisan push to reform criminal sentencing guidelines. The changes would help imprisoned minorities but could also provide relief to corporate executives who face criminal charges.
Many reporters, including those at The Washington Post, have written about the Kochs’ massive network of nonprofit organizations that permit donors, both corporate and individual, to contribute money secretly to influence not only politics but American education. Discussing programs aligned with the Koch-funded organizations in 238 colleges and universities across the country, Mayer notes that these programs, among other things, recruit students to work on campaigns while seeking to eliminate liberal bias from instruction at the college and even the high school level. In Topeka, Kan., a Koch-backed group provides online education to public school students, lessons that contend Franklin Roosevelt didn’t alleviate the Depression and that government, rather than business, caused the 2008 recession.
Mayer repeatedly argues that the Kochs’ political ambitions are entwined with the family’s narrow personal interests, even as she quotes Charles Koch dismissing the idea as “ludicrous” in a recent interview in USA Today.
She ends the book with a quote attributed to Charles as a boy. “When called upon to split a treat with others he would say with a wise-guy grin, ‘I just want my fair share — which is all of it.’ ”
By Jane Mayer
Doubleday. 449 pp. $29.95