Jane Mayer has written a very disturbing book about the influence of big money (and I mean very big money) on American politics and society. She details how a handful of billionaire families have utilized tax-exempt private foundations to influence legislation and regulation to benefit their personal financial interests, ostensibly in the interest of “social welfare.”
Section 501(c)(4) of the Internal Revenue Code authorizes the creation of tax exempt corporate entities devoted to “social welfare.” These entities are allowed to engage in electoral politics, and since the Supreme Court’s 2010 Citizens United decision, they have done so with a vengeance. Moreover, unlike other entities engaged in electoral politics, 501(c)(4) organizations do not have to disclose the identities of their contributors. Most prominent among the family foundations enjoying this tax largess is that owned by Charles and David Koch.
These two brothers control Koch Industries, the second-largest privately owned company in the United States (with 2013 revenues of $115 billion). The family business was started by their father Fred, who developed a new method for the refinement of heavy crude oil into gasoline. Fred Koch, a great influence on his sons, was one of the 11 founders of the John Birch Society, a far-right advocacy group supporting anti-communism and limited government. The brothers, with profits from their Kansas-based company, have become a major source of support for conservative candidates and causes in American politics that will benefit their financial operations.
In particular, Mayer describes how the Kochs have funded ostensibly “scientific” research to create the notion that climate change is a hoax. They claim they were driven by principle, “but their positions dovetailed seamlessly with their personal financial interests.” Of course, regulation of the emission of green house gases like carbon dioxide would greatly increase the cost of doing business for many of the Koch businesses.
But the Kochs have not confined their activities to sponsoring the publication of dubious scientific papers. Mayer reports that they have frequently used private detectives to dig up dirt on the private lives of their adversaries and legitimate climate scientists. Moreover, there appears to be plenty of evidence that the Koch’s businesses violated numerous environmental regulations and may have been criminally liable.
Mayer also documents the extent to which the Kochs have used their money and influence to transform the political system, especially at the state level, to one that would favor their antigovernment philosophy. As Alan Ehrenhalt writes in his review of this book for “The New York Times”:
“What the Kochs and their allies have created, in her view, is a private political bank capable of bestowing unlimited amounts of money on favored candidates, and doing it with virtually no disclosure of its source. They have established a Republican Party in which donors, not elected officials, are in charge. In 2011, when House Speaker John Boehner was desperate for Republican votes to prevent the government from defaulting on its debt, he went to see David Koch in Manhattan to plead for help. ‘It had taken years,’ Mayer writes, but the brothers ‘were becoming a rival center of power to the Republican establishment.’”
In some instances, Mayer overstates her case. She sees every conservative cause as intrinsically evil, and any funding of such causes as sinister. She does an injustice to the “Law and Economics Movement” because of support it received from the Olin Foundation, one of her bugbears. John M. Olin, who also made his fortune from the fossil fuel industry – in particular from the coal industry – believed universities were “brainwashing centers” for the liberal left, and dedicated his donations to countering this alleged influence.
Olin endowed the still-influential “Law and Economics” curriculum in law schools nationwide, which stresses the importance and “neutrality” of the free market, instead of giving equal or greater value to social considerations that might not be the most economically efficient. The Olin Foundation spent $68 million underwriting its growth. But this movement was already quite influential at the University of Chicago in the early 1960’s without any help from John Olin. The Law and Economics philosophy influenced a whole generation of lawyers, leading to the junking of many anticompetitive regulations, a re-examination of antitrust law, a great reduction in the enforcement of the Robinson-Patman Act, and the abolition of the Interstate Commerce Commission.
This small criticism aside, Mayer’s writing had me cringing at the thought of the Kochs, Olins, and a host of even crazier right-wingers promulgating their nonsense, and in many cases, not being required to disclose their identities. In this election cycle, for example, “The New York Times” reported that the political network overseen by the Kochs planned to spend close to $900 million, “to influence legislation and campaigns across the country, leveraging Republican control of Congress and the party’s dominance of state capitols to push for deregulation, tax cuts and smaller government.”
As Bill McKibben characterized the influence of these conservative billionaires in “The New York Review of Books”:
“…the Kochs, and the closely connected group of billionaires they’ve helped assemble, have . . . distorted American politics in devastating ways, impairing the chances that we’ll effectively respond to climate change, reducing voting rights in many states, paralyzing Congress, and radically ratcheting up inequality.”
Evaluation: This well-researched and well-documented important book should be read by all citizens, even if it will probably raise your blood pressure.
Published by Doubleday, 2016