On a drizzly Monday morning in mid-September, about 200 staffers from the Koch brothers’ [no relation] conservative advocacy network were summoned to the fifth floor auditorium of the Charles Koch Institute’s Arlington, Virginia, headquarters, and presented with some bleak news: their efforts to reshape American politics were faltering and were being scaled back amid concerns about lower-than-projected fundraising. (Pictured above: Charles Koch)
In recent years, the deep-pocketed network’s forays into federal elections and policy fights had resulted in “very little success,” the managers were told by top Koch official Mark Holden, according to three people familiar with the meeting.
Another official detailed plans for a merger of existing network groups, announcing that the groups would be narrowing the universe of voters they were seeking to mobilize from 10 million to 5 million.
Holden predicted “donor malaise” in 2017, and said the network was consolidating its groups to become “more effective” and to “avoid drama.” He predicted difficult changes ahead, comparing them to the years of cold-hearted but successful football player personnel moves by Bill Belichick, coach of Holden’s beloved New England Patriots.
When the staffers filed out of the auditorium, past a massive mural of the network’s lead benefactor Charles Koch – a piece of wall art composed of hundreds of photos of Austrian economists and network volunteers – they were in a state of shock.
“Nobody talked on the way back. It was somber,” said a staffer who attended the meeting. In the weeks that followed, numerous network staffers began sending out resumés looking for new jobs, while others left suddenly, according to operatives inside and outside the network.
The network’s staffers – and the political world as a whole – had grown accustomed to the rapid expansion of the constellation of advocacy groups helmed by the billionaire industrialist brothers Charles and David Koch. Over the last seven years, their operation grew to the point where it resembled a privatized political party, heading into the cycle pledging to spend $889 million through an infrastructure that rivaled that of the Republican National Committee.
Since then, though, the Koch operation has decided to sit out the presidential race, reduced its spending goal to $750 million, failed to maintain the support of some top donors including Las Vegas casino mogul Sheldon Adelson, announced that it was consolidating or eliminating some of the groups and initiatives in the network, and irked Republicans by opting not to advertise heavily on television in the final month of the campaign.
Now, with Republican Donald Trump on the verge of a crushing loss in the presidential race as the Kochs watch from the sidelines, there are mounting questions about whether their vaunted political and advocacy operation may have peaked. The answer could resonate well beyond November 8, since the Koch network would otherwise be expected to play a major role in the post-Trump rebuilding of the conservative movement.
In interviews, some insiders traced the network’s decline – or at least its decline in growth – to its decision to sit out the presidential race, at first out of disagreement over whether to play in the crowded GOP primary, and then out of distaste for Trump.
Other insiders contend the network is shifting away from politics as a whole to focus on advancing policies rooted in the Kochs’ libertarian-infused brand of small-government conservatism.
The network’s official line is that it is neither stepping back from politics, nor reducing its overall footprint, but is merely reorganizing its operations to become more efficient and effective at shaping electoral and policy fights well into the future.
“The world is constantly changing, and we have to do so in our network as well, and that’s why we reorganized last month – or announced it, and are still in the process of it,” Holden told POLITICO on Tuesday.
The general counsel of the Koch brothers’ multi-national industrial conglomerate Koch Industries, Holden has taken an increasingly central role in the Kochs’ advocacy operation in recent years. He chairs the board of the network’s central group Freedom Partners Chamber of Commerce and also chairs the executive committee of the network’s main grassroots arm, Americans for Prosperity, which absorbed a trio of smaller groups in the reorganization.
He rejected the idea that the consolidation represented a diminution of the network’s ambition, casting it instead as the first step towards the network’s post-election plans.