COLORADO SPRINGS — Thirteen years after billionaire industrialist Charles Koch gathered a small group of his fellow libertarian donors in a Chicago hotel to discuss how to promote their economic theories, the network he launched is one of the country’s most potent political forces, with 1,600 staffers across 38 states.
But Koch’s refusal to harness his singular operation in support of the Republican presidential nominee, Donald Trump, has put him at odds with some of his wealthiest peers — and forced the network to defend its relevance at the time of its greatest reach.
That tension rippled behind the scenes this weekend as about 400 donors met in Colorado Springs at a luxury resort encircling a man-made lake where white swans paddled in the shadow of the Rocky Mountains. Between panels extolling free speech and conservative policy victories on the state level, Koch and his top deputies heard out donors worried about the network’s decision to sit on the sidelines.
“I told him that it was very important that Hillary Clinton not get elected,” said Stanley Hubbard, a Minnesota media mogul who said his biggest concern is how she would reshape the Supreme Court.
Koch’s decision not to embrace Trump threatens to alienate some heavyweight network backers who have rallied to the nominee’s side in recent months — mega- donors such as Wisconsin roofing billionaire Diane Hendricks, Oklahoma oilman Harold Hamm and New York hedge-fund magnate Robert Mercer, none of whom attended this weekend’s conclave.
“A lot of donors are saying, ‘Why are we spending money on Senate candidates and not trying to beat Hillary?’ ” said one well-connected Republican familiar with the views of major-party financiers, who spoke on the condition of anonymity to describe private conversations.
Network officials sought to defuse some of the frustration by announcing that Koch-backed groups would feature the Democratic presidential nominee, Clinton, in Senate campaign ads, tying her policy stances to those of Democratic contenders in battlegrounds states such as Ohio.
And on Sunday, Koch made his most forceful rejection yet of the possibility that he would personally support Clinton in this year’s presidential race, calling such an idea “a blood libel.” But he reiterated that he would not get behind Trump, whose rhetoric about immigrants and Muslims has appalled the 80-year-old chief executive of Koch Industries.
Later, in a closed session for donors in one of the Broadmoor resort’s rose-colored villas, Koch and senior network officials detailed their reasons for staying out of the presidential contest. The 700 major contributors who support the organization were divided over the GOP nominee, they told attendees, and they think the network will have a greater influence by focusing on Senate races instead of splitting its resources.
But their main argument came down to credibility: If the network lent its weight to bolster Trump, who does not share the organization’s positions on such core issues as free trade and limited government, how could it deny similar support to any other Republican in the future?
The reaction was supportive, according to multiple people in the room. “I think they made a very good case,” Hubbard said.
Tim Busch, chief executive of an upscale hotel chain in California, said that although he is personally supporting Trump because of his antiabortion stance, he understood the reasoning. “They can’t support him because he’s contrary to what they’re about,” Busch said. “I’m sure there are people who are dissatisfied. But you’ve got to make decisions based on your principles.”
Still, some Republicans allied with Trump argue that he is being held to a different standard than the presidential nominee in the 2012 election, former Massachusetts governor Mitt Romney, who was accepted grudgingly by many on the right and got robust backing from the Koch operation.
“In 2012, many donors, and certainly conservative voters, were unhappy with Romney but were told, ‘We can’t have Obama,’ ” said GOP pollster Kellyanne Conway, a senior Trump adviser who is close to the Mercers. “Where is that argument now?
“Mr. Trump has a number of donors within the Koch network that support him, and we welcome more of them in our campaign to defeat Hillary Clinton and her anti-free-market policies,” she added.
Koch officials acknowledged that some donors are unhappy but said the organization was going to remain focused on candidates who share its free-market principles.
“Our network brings together hundreds of members with an aligned vision and values to advance a free and open society,” said Mark Holden, chairman of Freedom Partners Chamber of Commerce, the network’s funding arm. “Not surprisingly in a group this large, filled with passionate people with strong opinions on various issues and strategies, sometimes partners disagree. And on occasion, they decide to support additional activities outside of our network.”
The friction comes in the throes of an election in which the Koch operation was aiming to have its largest influence yet. After years of investing millions in a massive voter database and a permanent ground force across the country, the network could boast of helping Republicans sweep statehouses and secure congressional victories in 2010 and 2014.
But this year, its array of nonprofit advocacy groups was poised for something even bigger: to succeed for the first time in getting its favored candidate into the White House.
Instead, the Koch operation scaled back its plans. After originally aiming to spend $889 million in the 2016 cycle, the network is now on track to invest $750 million, with roughly a third — $250 million — financing the policy and political campaigns of groups such as Americans for Prosperity, Freedom Partners Action Fund, Concerned Veterans for America, the Libre Initiative and Generation Opportunity, officials said.
Koch spent the weekend stressing that politics is just a piece of what the network finances in its efforts to spread free-market principles.
“I recognize reluctantly that politics needs to be a piece of this strategy, but we’ve got to keep in mind, just one piece,” he told donors Saturday night as they sipped wine and cocktails in a ballroom. “If we just focus on politics, we’re going to continue to lose, we’re going to continue to deteriorate,” Koch said, drawing scattered applause from the audience.
On Sunday, Koch laid out the immediate political priorities: electing like-minded candidates to Congress and cultivating conservative leaders at the state level. So far, the network is active in six competitive Senate races, on its way to spending $42 million on paid ads in states such as Ohio, Pennsylvania and Florida.
“To address the current political crisis, our first objective is to stop the worst federal policies, regardless of who is the next president,” Koch said. “And we’ve got to remember that Republican presidents advance a lot of bad policies, just like Democrats.”
A select group of top Republican elected officials were on hand for the gathering, including Sens. John Cornyn (Tex.), Cory Gardner (Colo.), Mike Lee (Utah) and Tim Scott (S.C.); Reps. Jason Chaffetz (Utah), Mike Coffman (Colo.) and Mike Pompeo (Kan.); and Govs. Matt Bevin (Ky.), Doug Ducey (Ariz.) and Scott Walker (Wis.). House Speaker Paul D. Ryan (Wis.) addressed the group Monday.
The Washington Post and other news outlets were invited to cover portions of the weekend’s events, on the condition that they did not name donors in attendance without their permission.
At least 300 major donors who had each committed at least $100,000 annually to support the network’s political, policy and educational efforts participated in the weekend events. A hundred other potential contributors also attended.
Longtime donor Frayda Levin, who serves on the board of Americans for Prosperity, said she was not worried that the network would falter if major donors leave over the decision not to support Trump.
“What happens in any network is people come and go,” she said. “You’ve got to remember: We have come from 2008, where Obama won and they had both houses of Congress. You know how devastated the network was emotionally? That was much harder. People backed away. It’s true of any movement. It ebbs and flows.”