Sons of Wichita: How the Koch Brothers Became America's Most Powerful and Private Dynasty (33 page)

“Well, I tell you what, Scott,” the caller said as their conversation wound down, “once you crush these bastards I’ll fly you out to Cali and really show you a good time.” “All right, that would be outstanding,” Walker replied. “Thanks for all the support in helping us to move the cause forward.”

Walker rang off with three words that his critics would never let him forget: “Thanks a million.”

David’s secretary delivered the news that a gonzo journalist for a Buffalo alt-weekly had posed as him, holding a lengthy conversation with Wisconsin’s embattled governor. And the cringe-inducing recording of the call was circulating online. The real David Koch’s face flushed with anger. Protested, heckled, maligned—now someone had appropriated his identity.

The events in Wisconsin catapulted Walker onto the national stage. The battle also cemented the Koch brothers’ image as the right-wing puppet masters orchestrating a national stealth campaign of self-interested conservative reforms.

The prank call doused gasoline on the Madison uprising. Walker’s comments to the David Koch imposter fed into the tyrannical figure conjured up by the governor’s enemies—the politician who refused to negotiate with Democrats and hadn’t mentioned a word about his drastic budget proposal on the campaign trail, but who happily spent twenty minutes detailing his plans to a billionaire supporter. The call also reinforced the link between the governor and the Koch brothers in the minds of protestors, even though, as the recording confirmed, the men had never met nor spoken.

Post–prank call, the Kochs found their names plastered everywhere in Madison, and they became the targets of more public venom than they’d ever experienced in their lives. One popular theme declared Walker a
KOCH WHORE
. Another sign read,
MR. WALKER, YOUR KOCH DEALER IS ON LINE 2
… A third:
SCOTT WALKER IS A KOCHLEAR IMPLANT
. Meanwhile, boycott lists of Koch products were taped to the marble walls of the capitol. Brawny paper towels, Dixie cups, Quilted Northern toilet paper, Lycra, anything made by Georgia-Pacific: All of it was verboten.

Activists began to see nefarious signs of a Koch-Walker nexus everywhere. They pointed breathlessly to the fact that Koch Industries
had recently opened a lobbying office in Madison, across the street from the state capitol. A provision in Walker’s bill allowing Wisconsin to offload state-owned power plants in no-bid transactions spiraled into rumors that Walker planned to give Koch Industries a sweetheart deal. Within Koch Industries’ public sector group—its public affairs, legal, and lobbying division—there was a debate about whether the company should respond to this conspiracy theory. Was the company really going to start issuing statements about deals it
wasn’t
interested in, and would the tinfoil-hat-wearing activists spreading this rumor even believe the company? The company ultimately put out a statement denying any interest in the plants, which are “obsolete and do not in any way fit the Koch companies’ current operations or their business plans moving forward.” Sure enough, it seemed to do little good. “Are you reassured?”
The New York Times
’s Paul Krugman asked in a column.

After the company issued the denial, Mark Holden, Koch’s lanky general counsel, left an angry voice mail for communications director Melissa Cohlmia. A former Akin Gump lawyer who hailed from Worcester, Massachusetts, Holden didn’t blame Cohlmia per se. He was just furious at the situation.
Why did the company need to dignify this garbage with a response? Screw you, Paul Krugman!

The brothers’ opponents seemed to miss the forest for the trees as they strained to find evidence of the Kochs’ hidden hand at work, a smoking gun that proved the governor of Wisconsin’s marching orders came straight out of Wichita. The Kochs had indeed helped to influence the events playing out in Wisconsin and elsewhere in the country, where Republicans were trying to ram through proposals that curbed the clout of unions—but not as the Kochs’ critics imagined. George Pearson, Charles’s first political advisor, had once said that his boss “did not see politicians as setting the prevalent ideology but as reflecting it.”

This explained the Kochs’ political modus operandi. They had spent decades bankrolling the idea factories that had generated the policy recommendations and research underlying some of the same budget-cutting reforms that conservative governors like Scott Walker were now trying to implement. They had helped to elect politicians like Walker, who were inclined to enact these policies, and utilized groups like Americans for Prosperity to hold lawmakers’ feet to the fire or mobilize reinforcements if they came under attack. Politicians were merely chess pieces advancing the agenda they’d been armed with.

Death threats (“The Koch brothers will DIE!!!!!”) poured into Koch Industries in the months to come and hackers affiliated with the group Anonymous attempted to attack and infiltrate the company’s computer networks. A vandal defaced Deerfield’s Koch Center, the $68 million math and science building David had financed at his old boarding school, with statements including “money does not equal power.” Activists projected a caricature of the industrialist on the side of the David H. Koch Theater at Lincoln Center with a thought bubble above it reading, “I bought this theater so I could hide my evil deeds.”

Owing to security concerns, David and Julia began sending their children to school in a bulletproof car and his family received round-the-clock protection from ex–Navy SEALs. David told his three kids to think of the bodyguards as nannies. A security team protected Charles and Liz as well; Charles had hired the guards without bothering to inform his wife, who was livid. Cameras camouflaged in the trees of their Wichita compound, located at a busy intersection of chain restaurants and shopping plazas and ringed by a six-foot concrete wall, scanned the grounds for intruders. Even with these security measures in place, people close to the Kochs worried about “the Lee Harvey Oswalds of the world,” as one family friend put it.

Jeff Jacobs, the CEO of the Boys & Girls Clubs of South Central
Kansas, recalled seeing helicopters hovering above the company’s headquarters and assault-rifle-carrying guards posted on its roof following one bomb threat. One day, with the backlash against the company in full swing, Jacobs visited Charles in his office. The men had never met but Jacobs had requested an introduction, just to thank the CEO for the good works he and his employees had done in the community, especially their support of the local Boys & Girls Club. Jacobs had expected a brief meeting, but the men talked for more than a half hour.

“This has got to be such a burden,” Jacobs said when he finally felt at ease enough with the billionaire to ask the question that had been on his mind. “I mean you could just run your business, make your money, go on vacation, and forget this policy stuff.” So why didn’t he?

“In America, we’ve kind of lost our way,” Charles explained. The American dream had smiled on the Koch clan. He felt an obligation to get the country back on track.

“What do you think, Mr. Koch, are you making any headway with any of this?” Jacobs asked. “I mean, you’re fighting a battle here.”

“Well, I’ll tell you, Preacher Man,” Charles responded, referring to Jacobs’s role as a local Catholic church deacon, “when you’re preaching to the choir, they get it, but there are some people who just don’t want to listen.”

Richard Fink, whose own Northern Virginia home was posted with guards, considered Wisconsin “an escalation” in “an orchestrated campaign” by the Obama administration and its Democratic allies to target Koch Industries and its owners. “With the Left trying to intimidate the Koch brothers to back off of their support for freedom and signaling to others that this is what happens if you oppose the administration and its allies, we have no choice but to continue to fight,” Fink said after the Walker prank call. “We will not step back at all.”

The Koch brothers and their strategist had spent much of their lives planting the seeds of change that had started to bloom around the country. “This is a big part of our life’s work,” Fink said. “We are not going to stop.”

In late June 2011, the Kochs assembled their network once again to plot an escalation of their own. The setting was Colorado’s lush Vail Valley, where the Kochs and nearly three hundred guests had the run of the Ritz-Carlton nestled at the base of the Beaver Creek ski mountain. The same weekend that Charles and David were cajoling their friends to hand over millions to dump into the upcoming elections, their brother Bill dropped seven figures of his own nearby in Denver. The only known photograph of Billy the Kid was up for auction; Bill plunked down $2.3 million for the rare picture after a round of bidding so intense that spectators jumped to their feet in applause once the auction ended.

The evening of Sunday, June 26, was warm and clear, with a light wind blowing in from the west. At the end of a long day of panel discussions and strategy talks, conference attendees gathered in an outdoor pavilion for the opening reception. Guests received the customary warning that what was said that weekend was strictly confidential. To prevent outsiders from eavesdropping, the pavilion was encircled with outward-facing speakers droning sound-masking noise.

Before dinner, catered by Wolfgang Puck’s Spago, Charles stepped to the microphone. “This is the mother of all wars we’ve got over the next 18 months, for the life or death of this country,” he said, likening Saddam Hussein’s description of the first Gulf War to the upcoming presidential election. “So, I’m not going to do this to put any pressure on anyone here, mind you. This is not pressure. But if this makes your heart feel glad and you want to be more forthcoming, then so be it. What I want to do is recognize
not all of our great partners, but those partners who have given more than a billion—a mill…”

Laughter rippled through the crowd as Charles recovered from his flub. “Well, I was thinking of Obama and his billion-dollar campaign, so I thought we gotta do better than that.” The CEO then read off the names of the more than two dozen donors who had chipped in a million dollars or more over the past year. “If you want to kick in a billion, believe me, we’ll have a special seminar just for you.”

Among the donors he recognized were investment guru Charles Schwab; Amway cofounders Richard and Helen DeVos; Foster Friess; Cintas CEO Dick Farmer; the Marshall clan; Variety Wholesalers scion Art Pope; and billionaire hedge fund manager Paul Singer.

“Ten more will remain anonymous, including David and me,” Charles joked. “… The plan is the next seminar I’m going to read the names of the ten million.”

David spoke briefly later that evening, introducing the keynote speaker, New Jersey’s brash governor Chris Christie. Not yet two years into his term, Christie was already being floated as presidential timber. He was a hard-charging former U.S. Attorney, who, like Scott Walker, had entered into a fiscal showdown with his state’s most powerful unions. Earlier that year, Christie had called on David at his Madison Avenue office, and they had spent close to two hours talking. David came away so impressed with Christie that he had invited the governor to headline June’s donor conference.

In his introduction, David hailed Christie for his “courage and leadership,” citing the recent passage of a bill in New Jersey downscaling the pension and health benefits of public employees and the governor’s decision to pull out of a regional initiative to reduce greenhouse gas emissions. “We sincerely hope and trust that he will continue to be a strong voice for market-oriented policy,” David said. “Who knows? With his enormous success in reforming
New Jersey, some day we might see him on a larger stage, where God knows, he is desperately needed.”

Known for his combative style and high-octane speeches, Christie gave a typically energetic performance. During a Q&A session afterward, he deflected questions about his White House ambitions. “You’re the first guy that I’ve seen who could beat Barack Obama,” gushed one donor, who also happened to be a close friend of presidential candidate Tim Pawlenty.

Christie clearly left an impression. Within a couple weeks of the Vail meeting, David and other members of the donor network (including Ken Langone, Charles Schwab, and Paul Singer) began strongly urging the New Jersey governor to jump in the presidential race. They had surveyed the field—Herman Cain, Jon Huntsman, Michele Bachmann, Mitt Romney, Newt Gingrich, Rick Santorum, and Tim Pawlenty—and saw no clear superstar with the charisma to oust Obama. Of these candidates, David Koch was the closest to Romney, the former Massachusetts governor, whose 2008 presidential bid he had supported. But David wanted to win. Christie had a certain type of straight-talking magnetism and the kind of pugilistic temperament it took to survive a bruising primary campaign and general election.

Ken Langone led the Draft Christie effort. “Ken was the person who really pushed it really hard,” remembered Christie’s chief political strategist Mike DuHaime. And David, he noted, “was one of the people that Ken Langone brought forward in the recruitment process.”

The month after the Vail seminar, Langone summoned Christie to the New York Health & Racquet Club in Manhattan. He wanted to show the governor precisely the kind of support he and his wealthy friends could deliver. Christie, joined by his wife and eldest son, Andrew, as well as DuHaime and another aide, had arrived expecting an intimate gathering. “I want you to come meet with me and a few friends,” is how Langone had pitched the meeting
to the governor. Dozens of influential people packed the room. Among the attendees was Rudy Giuliani’s right-hand man Tony Carbonetti, hedge fund billionaire Stanley Druckenmiller, and even Henry Kissinger, the eighty-eight-year-old former secretary of state. At the front of the room was a row of chairs for Christie and his entourage, and nearby was a table with a speakerphone. Morgan Stanley’s John Mack was on the line. So was David, who was traveling. “He spoke up and voiced his opinion that he would be with the governor if he decided to run,” DuHaime recalled. “He said, ‘If you run, I’ll be with you.’ ”