Arts + Life
4:10 pm
Wed May 21, 2014

How The Koch Brothers Remade America's Political Landscape

Originally published on Wed May 21, 2014 5:08 pm

Brothers Charles and David Koch are the subject of the new book Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty. The author, Daniel Schulman, describes the Kochs as having pumped hundreds of millions into remaking the American political landscape, trying to bring their libertarian views into the mainstream.

In addition to backing individual candidates who reflect their views, the Koch brothers have played key roles in the Libertarian Party and in the formation of the Tea Party. Their father, who founded Koch Industries, was also a founding member of the far right group the John Birch Society.

Koch Industries is now the second largest private corporation in the U.S., with $115 billion in annual revenue and a presence in 60 countries. Charles and David are tied in sixth place on the list of the wealthiest men on the planet.

Daniel Schulman is a senior editor in the Washington bureau of Mother Jones, and a founding member of the magazine's investigative journalism team. He tells Fresh Air's Terry Gross about how the Kochs have contributed to today's political landscape.


Interview Highlights

On the Kochs' political stances

Their ideology is very much a libertarian one. They are currently considered Republican kingmakers, but there are really a lot of places where their philosophy doesn't jive with the mainstream Republican one. For instance, they're generally anti-war. They're civil libertarians; they are not social conservatives in any sense of the word. David Koch has said he's pro-gay marriage. You wouldn't see these guys advocating against reproductive rights. The area that is the sweet spot for them with today's GOP is really economic issues, and they are staunch economic conservatives — perhaps more hard-line than even the Republican mainstream...Charles has said in past that his view of government is that it really should be a night watchman that only exists to protect private property rights and to preserve the laws of supply and demand.

On the Kochs' political influence

In the Obama era, you've seen their political network grow by leaps and bounds. Part of this was because there was a major conservative backlash to Obama and the Kochs managed to capitalize on that. Part of this, too, was because the Democrats made the Kochs such boogeymen. They essentially drove a lot of Republicans into their arms.

The Kochs have always had an uneasy relationship with the Republican Party, or they traditionally did, because their politics aren't exactly Republican, they're very much more libertarian, and there's only a narrow subset of issues on which they actually agree with Republicans. But by demonizing the Kochs, [Democrats] made them hugely popular within the conservative movement.

On the size of Koch Industries

Koch Industries is massive. ... [It] really started as an oil and cattle ranching empire, but it's grown, really, by leaps and bounds beyond that. They're in petrochemicals. They're the third largest commodities trader in world. They own Georgia-Pacific, so brands such as Brawny, Angel Soft toilet paper, Dixie cups, those things are manufactured by Georgia-Pacific. ... Most people probably don't know the name Koch Industries, but what they don't realize is that every single day they're encountering products that were produced in some way by them.

On the Kochs' position on climate change

Across the board, the Kochs are anti-regulation. They really haven't met a regulation that they liked. In terms of climate change policy, you've seen them fund an array of groups that have sowed doubt about the existence of climate change. They view climate change and any regulation surrounding it as a major threat to their business model, which is a lot having to do with oil and petrochemicals. ... They have certainly funded an array of groups that have tried to create doubt about the very existence of it...

David is a man of science — I consider Charles a man of science too. [Charles] has two advanced degrees from MIT, one in nuclear engineering. These guys are not anti-science in any sense of the word, so to be putting any money towards denying the existence of climate change, where there is a scientific consensus about that, seems wrong to me.

On the Kochs' role in creating the Tea Party

There was this bygone strain of thinking that you saw in the John Birch Society — that their father had founded and of which Charles had been a member — where you really saw socialism around the corner of every move of government. And you really saw that strain of thinking come to the fore in the Obama era, and it really was no accident. The Kochs spent many years funding an intellectual infrastructure through a variety of think tanks. And in terms of actual organizing and financing of the Tea Party, their advocacy group, Americans for Prosperity, really was there at the forefront organizing tea parties and whipping up the movement. So I'd say they played a pretty major role in the Tea Party movement. I know they downplay their involvement.

On Charles Koch as one of the founders of the libertarian movement

I think the reason we're talking about libertarianism today and the reason that it's a popular ideology owes quite a bit to Charles Koch. His funding of libertarianism really started in the '60s and he has been methodically institution-building ever since then.

The Charles Koch Foundation, in 1977, would be transformed into The Cato Institute, which is the libertarian movement's marquee think tank these days. It wasn't until later that David Koch joined in his brother's ideological projects. One thing I learned when researching this book is that there is quite a big distinction between the philanthropy of David and Charles Koch. David is more of a philanthropist in the classic sense of the word: He funds medical research, science; he funds the arts. Charles' lifelong mission has been to change the political culture and mainstream libertarian ideas and he's been doing this for more than five decades.

On why Schulman wanted to write this book

The Koch brothers, in the 2010 time frame, had become so vilified, I really wanted to understand their origins, their upbringing, the roots of their company, the roots of their ideology. And the more I dug into their family story I found they had just a phenomenally fascinating tale, tragic in some ways. And in a lot of ways this is a family that is much more significant than a lot of people realize, and their impact is going to be felt long into the future.

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Transcript

TERRY GROSS, HOST:

This is FRESH AIR. I'm Terry Gross. The Koch Brothers, Charles and David, are the subject of the new book "Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty." The author, my guest Daniel Schulman, describes the Kochs as having pumped hundreds of millions of dollars into remaking the American political landscape, trying to bring their libertarian views into the mainstream.

In addition to backing individual candidates who reflect their views, the Koch Brothers played key roles in the Libertarian Party and in the formation of the Tea Party. Their father, Fred, who founded Koch Industries, was a founding member of the far right group The John Birch Society. Koch Industries is now the second-largest private corporation in the U.S., with $115 billion in annual revenue and a presence in 60 countries. Charles and David are tied in sixth place on the list of the wealthiest men on the planet.

Daniel Schulman is a senior editor in the Washington Bureau of Mother Jones and a founding member of the magazine's investigative journalism team. Daniel Schulman, welcome to FRESH AIR. What did you want to learn by writing this book about the Koch family?

DANIEL SCHULMAN: You know, the Koch Brothers in 2010 timeframe had become so vilified, I really wanted to understand their origins, their upbringing, the roots of their company, the roots of their ideology. And the more I sort of dug into their family story, I found they had just a phenomenally fascinating tale, tragic in some ways. And in a lot of ways, you know, this is a family that is much more significant than a lot of people realize, and their impact is going to be felt long into the future.

GROSS: So before we get into the history of the Koch family's business and politics, just give us an overview of how much they contribute to politics now.

SCHULMAN: Well, the way they contribute to politics these days is really through this vast political fundraising network they had. In the last election cycle, they and their allies basically directed about $400 million into the election via a network of nonprofit advocacy groups. They run biannual seminars for their donors where they raise funds for political causes, and they route these funds through several different conduits essentially.

One of their groups right now is called Freedom Partners, and essentially monies that's raised at the donor seminars is routed through Freedom Partners off to an array of other nonprofits, including one called Americans for Prosperity, which was created and is partly financed by the Koch Brothers.

GROSS: And why do they need so many different organizations as opposed to just one?

SCHULMAN: I think part of it is to obscure the flow of money to some degree. I think also a lot of these groups do different things. They're very savvy and methodical about the way they go about this. That's for sure. And in recent years their political operation has very much resembled a shadow political party that occupies a center of gravity within today's Republican Party.

They are very much able to raise as much as the Republican National Committee. They have ground resources through Americans for Prosperity. They can run ads through any number of nonprofit entities. They have a data microtargeting operation called Themis. They have a candidate recruitment arm called Aegis. They're very sophisticated.

GROSS: What do the Koch Brothers, Charles and David, stand for politically?

SCHULMAN: Charles and David, their ideology is very much a libertarian one. They are currently considered Republican kingmakers, but there are really a lot of places where their philosophy doesn't jive with the mainstream Republican one. For instance, they're generally anti-war. They're civil libertarians. They are not social conservatives in any sense of the word. David Koch has said that he's pro-gay marriage.

You wouldn't see these guys advocating against reproductive rights. The area that's the sort of sweet spot for them with today's GOP is really economic issues, and they are staunch economic conservatives, perhaps more hard-line than even the Republican mainstream, I should say.

Charles has said in the past that his view of government is that it really should be a night watchman that only exists to protect private property rights and to preserve the laws of supply and demand. Now, that really doesn't resemble, in any way, the type of government we have these days.

You know, David Koch ran for vice president in 1980 on the Libertarian Party ticket, advocating abolishing Social Security. They were talking about getting rid of the income tax. Those were the sorts of things that they were talking about in those days. These are very much free market purists.

GROSS: And just give us an overview of how big their business is.

SCHULMAN: Koch Industries is massive. It's - you know, they have a presence in 60 countries. They have coming on 100,000 employees. They have revenues of $115 billion a year. This really started as an oil and cattle ranching empire, but it's grown really by leaps and bounds beyond that. They're in petrochemicals. They're the third largest commodities trader in the world. They own Georgia Pacific. So brands such as Brawny, Angel Soft toilet paper, Dixie Cups, those things are manufactured by Georgia Pacific, and which is owned by Koch Industries.

They own a company called Invista, through which they produce StainMaster Carpets and Lycra that you would find in any sort of Spandex. You know, most people probably don't know the name Koch Industries, but what they don't realize is that every single day they are encountering products that were produced in some way by them.

GROSS: So if they support virtually no government and virtually no taxes, where do they stand on social services the government provides?

SCHULMAN: I think, you know, I think they're not pro-entitlement. But at the same time, this extends across the board for them. Charles Koch, in the '70s, you know, really lashed out against the business community because he said that they were diluting the free-market message by accepting corporate welfare while at the same time advocating against welfare for the poor. So ideally he's against government handouts of any kind.

GROSS: Let's talk about the Koch family. Let's go back to Charles and David's father Fred. What was the business he first built?

SCHULMAN: Now, Fred Koch in 1925 joined two partners to found a company called Winkler Koch Engineering. Basically this company built oil refinery equipment, and very early on they essentially got run out of the U.S. refining market by a company called Universal Oil Products, which had patented a refining process. And Winkler Koch is forced to seek work outside of the U.S.

Their first major client ends up being Stalin's Soviet Union, where Fred Koch ends up helping to modernize the Soviet Union's oil industry, which had really been decimated at that point. And this played a role in helping the Soviet Union industrialize. Fred Koch's time in the Soviet Union had a really profound impact on him, and by extension his children.

What he witnessed there he was horrified by: the oppression, the way that people were living. He came back to the United States, having made $5 million in the Soviet Union helping to build these refineries, and vowed to do everything he could to defeat the spread of communism. And that really became his life's crusade.

In the 1950s he was literally present in the room at the birth of the John Birch Society, which was this ultra-conservative faction of conservatives that was really sort of marginalized by the conservative movement later on because they were considered way too radical. Robert Welch, who was the founder of the John Birch Society, had called Dwight Eisenhower a dedicated, conscious agent of the communist conspiracy. So he was literally calling the president of the United States a communist agent.

So Fred was a founding member of the John Birch Society, and as a result, Wichita became a hive of John Birch Society organizing. It was pretty controversial at the time. They were accused of infiltrating the local PTA with Birchers, similar to what you hear today sometimes with the Tea Party. They were also accused of asking students to spy on their teachers in school to see what they were teaching their children.

UNICEF collection boxes became a controversial thing, and teachers that handed them out to students in Wichita schools became targets of the John Birch Society members, essentially calling them to harass them.

GROSS: So let's talk about Charles and his brother David politically. They take over the father's business after their father dies. The father had been a founding member of the John Birch Society. Charles had been a member of the Charles Birch Society. Then Charles leaves the John Birch Society. Why does he leave it?

SCHULMAN: It was quite interesting, actually. This was at a time when the Vietnam War was starting, and Charles came out vigorously against the Vietnam War in the pages of the Wichita Eagle. He and another fellow Birch Society member ran an ad opposing the war. This angered the leadership of the John Birch Society, which were taking a very kind of tightrope line on this.

Robert Welch considered America's involvement in Vietnam basically a communist trap. He had said that. But so as not to anger the patriotic folks within his ranks, he supported the war. By these high profile members coming out against it, it made it look as if there was disagreement in the ranks, and as a result Charles was not quite pushed out but he resigned after there was some back and forth with high-level Birch Society members.

GROSS: So in 1974, after leaving the John Birch Society, Charles Koch starts the Charles Koch Foundation, a nonprofit created to finance what we would now call libertarian projects. So is Charles Koch one of the founders of the libertarian movement?

SCHULMAN: Oh, absolutely, and I think the reason we're talking about libertarianism today and the reason that it's a popular ideology owes quite a bit to Charles Koch. You know, his funding of libertarianism really started in the '60s, and he has been methodically institution-building ever since then.

The Charles Koch Foundation in 1977 would be transformed into the CATO Institute, which is the libertarian movement's marquis think-tank these days. It wasn't until later that David Koch joined in his brother's ideological projects. And one thing I learned when researching this book is that there is quite a big distinction between the philanthropy of David and Charles Koch.

David is really much more of a philanthropist in the classic sense of the word. He funds medical research, science. He funds the arts. Charles' lifelong mission has been to change the political culture and mainstream libertarian ideas, and he's been doing this for more than five decades.

GROSS: Does David share Charles' political philosophy?

SCHULMAN: Oh, absolutely. They're very - they have very similar views on that sort of thing, and a lot of that had to do with their upbringing. Their father held a number of very anti-government views, was a staunch anti-communist, and you can see a lot of that reflected in their philosophy today.

GROSS: So if you're just joining us, my guest is Daniel Schulman, author of the new book "Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty." Let's take a short break; then we'll talk some more. This is FRESH AIR.

(SOUNDBITE OF MUSIC)

GROSS: This is FRESH AIR, and if you're just joining us, my guest is Daniel Schulman, author of the new book "Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty." It focuses on Charles and David Koch and how they built the corporation founded by their father into the second-largest privately held corporation in the United States and how they used their fortunes to fund political organizations that would further the Kochs' political views. And Daniel Schulman is a senior editor in the Washington bureau of Mother Jones magazine.

In the 1980 presidential race, David Koch ran as the vice presidential candidate on the Libertarian ticket. Before this, the Kochs had been funders of political ideologies and political candidates. How did he become a candidate himself?

SCHULMAN: Well, it's an interesting story. Charles at the time was actually asked if he wanted to run. He didn't. And he asked his brothers Bill and David if they wanted to run. And the idea behind it is that by running a Koch on the ticket, it would allow them to circumvent the current campaign finance laws because the candidate would be able to self-finance their own campaign as much as they liked.

Now, no one thought that the Libertarian Party ticket was going to win. The whole point of it really was to educate people about libertarian concepts. That was the whole point of this campaign. And that's how David Koch ended up running.

It was controversial within the libertarian movement at the time because libertarian allies at that point were worried that David Koch was not essentially as hardcore as some of the others in their ranks. And as it happened, the Clark-Koch campaign was quite controversial because it wasn't as hardcore as libertarians wanted them to be on issues such as the income tax.

They wanted to call for an abolition of the income tax, and David and Ed Clark, who was the presidential candidate, came up just short of that.

GROSS: So was it after this election that Charles Koch shuts down some of his libertarian projects and starts focusing more on Washington, D.C.?

SCHULMAN: What happened essentially is that the Libertarian Party more or less imploded after that election into a lot of infighting, some of which had to do with people who were upset that Charles and his brother seemed to have kind of a monopoly on the libertarian movement at that point.

So at this point there were a lot of kind of radical thinkers that were involved with libertarianism. It was kind of a volatile stew of people who could often not agree on very much other than their disdain for government. Charles strove for some level of respectability for libertarian ideas, and here you had kind of the sci-fi geeks and, you know, weirdoes, for lack of a better word, who were sort of sullying this image that he was trying to put forth.

GROSS: So just to step back and look at the big picture for a second, it's so interesting that the Koch family is involved with the founding of the far right, staunchly anti-communist John Birch Society and with the founding of, you know, the far right, staunchly anti-government Libertarian Party.

SCHULMAN: You know, the interesting thing about the Libertarian Party is that they really tried for a certain period of time to create a left-right alliance because if you kind of look at the...

GROSS: Right, and thank you for correcting my far right because it's kind of - it's probably wrong to categorize them as that.

SCHULMAN: Yeah, no, I think there's - you know, there's certainly - if you look at the Venn diagram of political beliefs, there are a number of issues where liberals and libertarians would agree, certainly on issues such as civil liberties, immigration, anti-war issues, reproductive rights, marriage equality and those sorts of things you would find, you know, liberals in agreement with libertarians. And it's really on economic issues that you would see libertarians in agreement with Republicans.

GROSS: Koch Industries has come up against environmental regulations and has been accused in the past of violating those regulations. How have the Koch Brothers tried to influence environmental policy?

SCHULMAN: Well, across the board the Kochs are anti-regulation. They really haven't met a regulation that they liked. In terms of climate change policy, you've seen them fund an array of groups that have sowed doubt about the existence of climate change. They view climate change and any regulation surrounding it as a major threat to their business model, which is, you know, still a lot having to do with oil and petrochemicals and things of that nature.

So they've long fought regulations of all sorts, including environmental ones.

GROSS: So, you know, a question about their position on climate change, they oppose any regulations that are intended to reverse climate change or limit the effects of climate change. But a lot of the people who oppose these regulations also deny that climate change exists, so that they deny that human action is responsible for climate change. And the Koch Brothers' attempts to fund a movement to limit regulations, are they also funding groups that deny climate change? Because they don't strike me as anti-science.

I mean David in particular is, you know, deeply immersed in the history of evolution. He funded an evolution exhibit at a museum in Washington.

SCHULMAN: That's a fantastic question, and this is something that I wrestled with quite a bit when I was trying to get my arms around their beliefs, because in many ways, as much as people say that these guys are out there just to line their pockets, I really came away with the belief that they're very genuine in their philosophy and their belief that it is the best way, the best route for America.

Now, on the issue of climate change, I do think it's a bit disingenuous. I understand if they would want to fight against regulations governing climate change, but they certainly have funded an array of groups that have tried to create doubt about the very existence of it. And as you said, David is a man of science. I consider Charles a man of science too. He has two advanced degrees from MIT, one in nuclear engineering.

These guys are not anti-science in any sense of the word. So to be putting any money towards denying the existence of climate change, where there is a scientific consensus about that, seems wrong to me.

GROSS: Daniel Schulman will be back in the second half of the show. His new book is titled "Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty." Schulman is the editor in the Washington bureau of Mother Jones and a founding member of the magazine's investigative journalism team. I'm Terry Gross, and this is FRESH AIR.

(SOUNDBITE OF MUSIC)

GROSS: This is FRESH AIR. I'm Terry Gross, back with Daniel Schulman, author of the new book "Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty." It describes how Charles and David Koch have pumped hundreds of millions of dollars into remaking the American political landscape, trying to bring their libertarian views into the mainstream. Their company, Koch Industries is now the second largest private corporation in the U.S. Charles and David are tied in sixth place on the list of the wealthiest men on the planet.

Let's talk a little bit about the Koch family, because, you know, part of your book is about the drama within the family. And just to describe a little bit, Charles is - is he the oldest brother?

SCHULMAN: He's the second-oldest brother, actually. Most people talk about the two Koch brothers, but there are, in fact, four Koch brothers. Frederick Koch is the eldest. He was born in 1933. Then came Charles in 1935, and the fraternal twins David and Bill were born in 1940.

GROSS: And the fraternal twins had this huge split. I mean, the family, the sons had a huge split. And you describe them, you know, with Charles and David on one side and Bill, and sometimes Frederick, on the other. I don't know how involved Frederick was, but certainly, Bill was at odds with Charles and David. And there were lawsuits against each other. You say that they spied on - they actually had, you know, hired people to spy on each other. What were the divisions about?

SCHULMAN: Basically, this came down to a dispute over control of the family company. But the themes and the emotions, they really went back to childhood. Frederick Koch sort of went his own way. He did not share his father's interests in business. He did not like the work camp-like environment that his dad fostered, because he - their father really wanted to forge his sons into men and put them to work during the summers on his ranches and things of that nature.

Frederick was much more interested in the arts. He gravitated towards his mother's interests, and he sort of went to boarding school after the seventh grade and really didn't look back. Now, Charles became his father's de facto successor at an early age. He was worked very hard by Fred Koch, who - Charles has said he felt that his dad was picking on him, and he clearly was, because he thought him as his heir.

Bill and David were younger at the time that Fred Koch died, so Charles was the logical choice to take over the company. He'd already been working there for six years.

So what happens in the '70s, you know, Bill had started working for the company in 1974. David had been there since 1970. The company had come under scrutiny by an array of government regulators. They had run afoul at the Department of Energy. They were under investigation by the IRS. And a lot of this traced to Charles' anti-government philosophy, essentially operating as if he was in a free-market society when, in fact, that wasn't exactly the case. And Bill and other shareholders in the company - which included extended members of the family - had concerns about the way the company was operating.

More so, they had concerns about liquidity. And what that meant is that they couldn't extract money from the company. And meanwhile, Charles was obsessed with growing his company. He was plowing many of the profits back into the company, and shareholders felt that they weren't getting the dividends that they wanted, especially Bill, who really had a lot of other interests in the finer things in life and wasn't able to indulge them.

So what ends up happening is Bill ends up lining a coalition among shareholders who are sort of disaffected by the way the company is being run. He enlists his brother Frederick, who had had a kind of contentious relationship with Charles. Charles had tried to buy out Frederick's shares in 1967, directly after their father's death, and I think Frederick took umbrage to that. Frederick joined with Bill and some other shareholders, and their goal was to reconstitute the Koch Industry's board with nine members and basically depose Charles as the chairman of the board in order to give them greater oversight over the management and direction of the company. And that really ignited what would end up being a feud that lasted almost to 2001.

GROSS: Do Bill and Frederick share Charles' and David's political views?

SCHULMAN: Not really. Bill, to some degree, does, but, you know, interestingly enough, he considered running for Senate in Kansas as a Democrat in 1998. And in the past election, you did see him donating a fair bit to Restore Our Future, which was the Mitt Romney superPAC. But he believed that Charles' anti-government views and the fact that he was plowing a lot of money into libertarian causes was just kind of crazy.

GROSS: And at some point, Charles Koch decides that his new philosophy is going to be compliance with governmental laws, because he'd had it with the investigations and the lawsuits, and he changes the direction of the company a little bit.

SCHULMAN: Charles had said in his own book - which lays out his market-based management philosophy - which is really the free-market philosophy on which Koch Industries runs - that he was behaving and the company was behaving as if they operated in a free-market society when, in fact, that wasn't the atmosphere that they were operating in. In the '90s, they ran into a host of problems with environmental regulators. They had a major pipeline explosion that killed two teenagers, and resulted in one of the largest jury awards in the nation's history: $296 million. I think Charles realized he was under attack by all sorts of government regulators, and he realized he needed to change the way he operated.

GROSS: If you're just joining us, my guest is Daniel Schulman. He's the author of the new book "Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty."

Let's take a short break, then we'll talk some more about the Koch Brothers. This is FRESH AIR.

(SOUNDBITE OF MUSIC)

GROSS: This is FRESH AIR, and if you're just joining us, my guest is Daniel Schulman, author of the new book "Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty." It focuses on Charles and David Koch and how they built the corporation founded by their father into the second-largest privately held corporation in the United States, and how they used their fortunes to fund political organizations that would further their libertarian views.

Describe for us the role of the Koch Brothers in creating the Tea Party movement.

SCHULMAN: Well, the interesting thing I think you see is that there was this bygone strain of thinking that you saw in the John Birch Society that their father had founded, and of which Charles had been a member, where you really saw socialism around the corner of every move of government. And you really saw that strain of thinking come to the fore in the Obama era, and it really was no accident. The Kochs spent many years funding an intellectual infrastructure through a variety of think tanks. And in terms of actual organizing and financing of the Tea Party, their advocacy group, Americans for Prosperity, really was there at the forefront, organizing Tea Parties and whipping up the movement. So I'd say they played a pretty major role in the Tea Party movement. I know that they downplay their involvement.

The other group that was a major Tea Party backer was Freedom Works. And while the Kochs are not affiliated with Freedom Works, they had been affiliated with the predecessor. They had started a group called Citizens for a Sound Economy, which in the early 2000s, split off to Americans for Prosperity, which the Kochs and their allies were running, and Freedom Works on the other side, which was run by Dick Armey and Matt Kibbe.

GROSS: So, the Koch Brothers helped finance and provide organizational support for the Tea Party. Do you think the Koch Brothers also helped provide a political direction for the Tea Party, helped, you know, kind of focus for political direction of it?

SCHULMAN: Oh, I think through Americans for Prosperity, their - you know, Americans for Prosperity is definitely involved in sort of setting the agenda on things like advocating against the debt ceiling hike and Obama - advocating against Obamacare and things of that nature. So, you know, in many ways, the Tea Party is a leaderless movement at this point, but there are certainly groups out there like Americans for Prosperity, who are helping to drive the agenda in some areas.

GROSS: At the same time the Koch Brothers have also, you know, provided a lot of financial backing to Republican candidates. And I'm wondering if you see the Koch Brothers as having moved the Republican Party further to the right or further to a libertarian perspective.

SCHULMAN: I absolutely think that they've played a role in moving the Republican Party to a more libertarian perspective. And you can kind of see that in the rise of politicians like Rand Paul, who, in many ways, shares a lot of the same philosophy of the Koch Brothers do on a lot of key issues. You see - have seen government spending become an overriding issue in the Congress. And this is very much one of their key issues.

GROSS: How has their funding philosophy changed? And I guess what I'm asking is what is their approach - the Koch Brothers' approach - now in trying to move politics in a libertarian perspective and get candidates with a libertarian point of view - whether they call themselves libertarian or not - into office?

SCHULMAN: I think it's sort of been part of the same strategy that they've been using and refining for many years. Essentially, Charles' top political advisor, a guy named Richard Fink, once kind of set out their strategy, and it was very straightforward. He basically said, you know, at the top level, you have educational institutions, your universities, that create abstract ideas. So the Kochs have funded a huge array of universities, free-market economics programs and things of that nature. Now, at the second level, you have your public policy thin-tanks, places like Cato. Now, they refine these abstract ideas and turn them into policy proposals.

At the next layer down, you have your grassroots activists, so groups like Citizens for a Sound Economy or Americans for Prosperity. Now, these are the people you rally in favor of these policies to hopefully affect legislative change. So that, in essence, has been their strategy. Now, in the Obama era, you've seen their political network grow by leaps and bounds. Part of this was because there was just a major conservative backlash to Obama, and the Kochs managed to capitalize on that. Part of this, too, was because the Democrats made the Kochs such bogeyman, they essentially drove a lot of Republicans into their arms.

You know, the Kochs have always had sort of an uneasy relationship with the Republican Party, or they traditionally did because their politics aren't exactly Republican. They're very much more libertarian, and there's only a narrow subset of issues on which they actually agree with Republicans. But by demonizing the Kochs, they made them hugely popular within the conservative movement.

GROSS: So you think that the Democrat's demonization of the Koch Brothers drove the Koch Brothers into the arms of the Republican Party?

SCHULMAN: I think, in some ways, it helped to create the myth of who the Koch Brothers were. And, you know, their seminars - where basically, they bring together conservative contributors - these used to be very sleepy, boring affairs. They weren't trying to keep people away. They were trying to get people in the door. By 2009, 2010, as their names are popping up more and more, you know, they're getting overwhelmed with requests to attend these seminars. These are the hot ticket in the Republican world. And at these seminars, you know, on the last day, they're holding these lunches where they're raising tens of millions of dollars in - over the course of lunch, over the space of an hour. And so I do think that the Democratic demonization did have a role in making the Koch Brothers as powerful as they are right now. Part of it is a mythology.

GROSS: Well, you know, right now, there's a movement in the Democratic Party to really call more attention to their Koch Brothers. Harry Reid is calling for a constitutional amendment that would prevent billionaire donors from organizing a, quote, "hostile takeover" of America. Some Democrats are using the slogan that America is becoming addicted to Koch. And, I mean, there really is a campaign to talk about them, to call attention to the fact that these billionaires are having such a powerful role in the direction of American politics. What impact do you think that's actually having?

SCHULMAN: You know, I think it's a very dicey strategy by Reid. He's actually come out and called the Koch brothers un-American. Now, that's kind of an absurd thing to say, and it's almost a McCarthy-ite - it's almost McCarthy-ite rhetoric. You know, from my vantage point I think the Democrats have really gone overboard in hammering the Kochs in the way they have.2

I'm not sure that this is going to be a very successful election strategy. Here you have Senate candidates who are, in essence, running against the Koch brothers. I do realize that part of this is partially a fundraising strategy. I think by invoking the Koch's name in fundraising appeals they're probably getting a good response.

But in my view it's a dicey strategy and it could certainly backfire. But certainly, you have not seen Harry Reid and Senate Democrats backing down from it.

GROSS: As you've pointed out, the Koch brothers share some but not all views of the Republican Party. Views that they share include small government, limiting taxes. Though, you know, the Koch brothers are probably more extreme on the shrinkage of the government that they'd like to see and the elimination of taxes that they'd like to see. You know, no or limited regulation of business.

But issues that they disagree on are some pretty important, big issues - reproductive rights, gay marriage, immigration. The Koch brothers did not support the war in Iraq. They disapproved of that strongly. So apparently they're willing to sacrifice those values for the ones that they do share with the Republican Party?

SCHULMAN: You could certainly look at it that way, because they are certainly not putting their money where their mouths are when it comes to those issues. Part of it might be that they're afraid of angering their newfound Republican allies. Because, again, you know, the Kochs in the '70s and '80s really viewed as gadflies.

The National Review, in fact, in the late 1970s - the Republican magazine who now, you know, comes out in defense of the Koch brothers - ran a polemic attacking Charles Koch as basically the bank roller of the Libertarian movement which they called, you know, a threat to America. So it's only quite recently that the Kochs have become quite popular in the mainstream of the Republican Party.

But I don't know how much they really want to call attention to the places where they disagree. It could be that they're afraid to alienate their newfound allies.

GROSS: Do you think that the Koch brothers represent something new in the intersection of business and politics?

SCHULMAN: I think in some ways they represent something old. They've been at this for many, many, many years. But in terms of businessmen funding campaigns and driving the political conversation, that certainly is something new. And in the rise of what could almost be called the Koch Political Party, you know, that is a function of the decentralization of politics that we just haven't seen before.

And I think you're going to start seeing much more of this start to happen. Certainly on the right but on the left as well where, you know, party power isn't going to be as important. And you really could have a couple hundred extraordinarily wealthy people driving the conversation, driving policy, driving politics in the United States.

GROSS: Is there any final point you'd like to leave us with?

SCHULMAN: Absolutely. You know, one thing that I think people should know is that, you know, while the Kochs and their politics are phenomenally interesting, this is not all this family is about. And their legacy extends well beyond politics into cultural affairs, business, the arts, medical research. This is really a family that are the Rockefellers or the Carnegies of our time. And they're going to have an impact long into the future.

GROSS: Daniel Schulman, thank you so much for talking with us.

SCHULMAN: Thank you.

GROSS: Daniel Schulman is the author of the new book "Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty." You can read an excerpt on our website freshair.npr.org. Coming up, Maureen Corrigan reviews Francine Prose's new novel set in Paris in the 1920s and '30s about a lesbian who becomes a spy for the Nazis. This is FRESH AIR. Transcript provided by NPR, Copyright NPR.

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