Big men on campus: The Koch brothers' university donations are a veiled political weapon

How massive Koch donations to universities miraculously lead to legislation the billionaire brothers' support

Published June 19, 2016 12:00PM (EDT)

David and Charles Koch   (AP/Phelan M. Ebenhack/MSNBC/Photo montage by Salon)
David and Charles Koch (AP/Phelan M. Ebenhack/MSNBC/Photo montage by Salon)

Through his family foundations, billionaire industrialist and conservative political mega-donor Charles Koch gave $108 million to 366 colleges and universities from 2005-14, and he’s donated millions more since then.

Much of that money established free-market academic centers on campuses; dozens of Koch-funded centers exist, and in Arizona, where Koch’s political money helped elect GOP Gov. Doug Ducey and conservative state legislators, three centers at public schools will now receive annual state funding.

The Koch money also installs professors who will publish libertarian-minded economics papers and teach students about the benefits of abolishing taxes and ending regulation, and it funds graduate students in these programs, grooming them to become the next great Koch scholars.

Universities, often stripped of general funding by Koch-backed lawmakers, enter into private grant agreements, some that give the Charles Koch Foundation (CKF) a say in hiring decisions and curriculum, introducing major ethical concerns: A politically polarized billionaire industrialist is using his family fortune to take over university departments and control what they’re teaching and publishing.

For someone who so dearly loves the free market, what does he think about academic freedom?

The strategy originated in the late 1970s, when Koch and his right-hand man, Richard Fink, devised the “Structure of Social Change,” a plan to turn America into a libertarian land free from taxes and regulation. The plot begins with the funding of free-market academic programs, where professors produce anti-tax and anti-regulation policy papers that, in step two, Koch-funded think tanks like the Cato Institute use to create easily digestible policy proposals. Next, “citizen activists” (in reality, Koch-funded political groups masquerading as “social welfare” nonprofits such as Americans for Prosperity) rally support for the policies and pressure lawmakers to enact them.

Of course, since the plan hatched, Koch and his brother, David, have become known for their massive political spending operation, a vast web consisting of a Koch “central bank,” secret-money “social welfare” nonprofits, limited liability corporations, trusts and now a super PAC, all exchanging huge sums in order to make political expenditures benefiting conservative candidates for the presidency and all the way down to local school boards.

After several decades of implementing the “Structure of Social Change” and spending on politics, the plan is working. Koch-backed conservatives are U.S. senators, governors, and state legislators, who, along with sympathetic public utility commissioners and other officials, enact a Koch agenda that slashes public funds, strikes down regulations and cuts taxes, all to the benefit of petrochemical conglomerate Koch Industries, the reason the Koch brothers are worth $43 billion a piece.

Studies by academic centers such as George Mason University’s Mercatus Center, a recipient of millions of dollars in donations from the Charles Koch Foundation, make their way into Republican-written legislation like this bill sponsored by U.S. Rep. Tom Price (R-GA), who has attended at least one of the Kochs’ donor summits and Americans for Prosperity events. Employees of Koch Industries and the company PAC have been top contributors to Price’s campaigns. Another bill, sponsored by U.S. Sen. Mike Enzi (R-WY), also cites Mercatus research. Enzi, too, has received campaign donations from the Koch Industries PAC.

In 2015, Price and Enzi teamed up to oust Doug Elmendorf from his position as director of the Congressional Budget Office, installing economist Keith Hall, who was a senior research fellow at Mercatus for over two years and also has a background in government. As one might expect, Hall thinks government spending won’t pull people out of poverty; raising the minimum wage even to $10.10 per hour would increase income inequality; and the Affordable Care Act and regulation are both dangers to the labor force.

In an important June 7 piece for the Huffington Post, Democratic U.S. Sens. Elizabeth Warren, Charles Schumer and Sheldon Whitehouse explain this piece of the social change puzzle, one that Koch and Fink may not have anticipated decades ago: Koch-funded academic figures are skipping steps in the “Structure of Social Change,” making their way directly from a university center into the halls of government.

“The Kochs understand what many forget,” write the senators. “At all levels of government, personnel is policy. They are dumping enormous resources into placing their own ideological extremists who share their destructive worldview into state and local governments, Congress, and even federal agencies.”

The senators highlight Republican Charles Blahous, who is up for a second term as a public trustee for Social Security. The thing is: He’s “a prominent opponent” of the program, the Senators write, who tried to privatize it as he led a George W. Bush-appointed commission. Blahous is director of the Mercatus Center’s Spending and Budget Initiative and a senior research fellow. There, he has published papers bemoaning “the fiscal consequences of the Affordable Care Act,” among other writings.

Hester Pierce, the senators write, is a nominee for a seat on the Securities and Exchange Commission. Like Hall and Blahous, she is a member of the Mercatus team, director of its Financial Markets Working Group and a senior research fellow. She already serves on the Investor Advisory Committee, which advises the SEC. Pierce encouraged the SEC not to require compliance with the Dodd-Frank financial regulations that came in the wake of the financial crash of 2008 and was aimed at preventing a future recession, and she’s written an entire book opposing the law.

Koch has by far given the most money to George Mason University: at least $87.7 million since 2005, including a recent gift of $10 million to the law school in an agreement that renamed it after the late, conservative Supreme Court Justice Antonin Scalia. $8.7 million has gone to the Mercatus Center, which was originally founded under a different name at Rutgers University by Fink, who is now executive vice president of Koch industries and on the boards of several Koch foundations and political organizations. When the Kochs ponied up millions in the 1980s, Fink moved his center to GMU and renamed it. The Mercatus board of directors includes Charles Koch; Fink; Brian Hooks, president of the Charles Koch Foundation; and Vernon Smith, a senior fellow at the libertarian Cato Institute, which Koch co-founded.

The Mercatus Center has wielded wide influence in politics for some time. In 2004, the Bush White House chose 14 regulations to eliminate or alter based on recommendations submitted by the center.

$23.4 million from CKF has gone to the Institute for Humane Studies (IHS), another free-market center housed at GMU. According to the Center for Media and Democracy, two other Koch-led foundations gave IHS over $4.6 million in past decades. IHS’s most recent tax return lists Koch as the chair of the board, and other directors include Fink; Koch brothers’ close ally and political mega-donor Art Pope of North Carolina, who has also donated millions to IHS; Christopher Coyne, director of a free-market program at the Mercatus Center; and Scott Beaulier, who has set up Koch-funded free-market centers at both Troy University and Arizona State University.

And CKF has donated large sums to tons of other schools, including millions each to Florida State University (where a Koch-funded economics program hosts a teacher-training program that advocates “sacrificing lives for profits”), Clemson University, Troy University, Utah State University and the University of Arizona. Professors from these and other Koch-funded schools meet every year at the conference of the Association of Private Enterprise Education, which is also funded by CKF and the Charles Koch Institute. The association features an array of connected Koch-funded professors, many of whom are associated with the Mercatus Center or IHS; scholars from Koch-funded think tanks; and industry representatives from Koch Industries and other big businesses. Thanks to recordings by UnKoch My Campus, we now have inside knowledge of how these professors collude to set up free-market centers at their universities, divert state and university funds into their programs and influence government policy.

If it’s not clear by now, Mercatus, IHS and other on-campus think tanks exist to promote the ideology of the Koch brothers and other conservative oligarchs. That free-market focused Koch devotees are making their way into influential government positions when America needs economic stimulation, more jobs, higher wages, affordable healthcare, higher-paid teachers and better-funded schools, increased environmental regulation to at least attempt to save this planet, effective gun laws—I could go on—the last thing we need are Koch legions with powerful positions in government, set on reducing its size, deregulating as much as possible and aiding big corporations, working in concert with the disastrous Republican representation in the House and Senate, at the expense of the middle class and the poor.

With ever-growing Koch influence on campus and an increasingly hard-right Republican Party that’s likely to hold the House for years to come, get ready for more Koch-manufactured “scholars” to rise to government positions.

But we have U.S. Senators calling out Koch’s giant higher ed donations and the emerging path from Koch-funded academic to government official. We have the ballot (when it’s not suppressed). We have activists. We have government watchdogs.

And the public must know: Mercatus, IHS and similar academic centers are anything but “nonpartisan” research institutions. They are political weapons in Charles Koch’s arsenal.

By Alex Kotch

Alex Kotch is an investigative reporter based in Brooklyn, New York, and a contributor to the Center for Media and Democracy. A campaign finance expert, Alex helped launch the money-in-politics website Sludge, and his work has been published by more than two dozen media outlets, including International Business Times, The American Prospect, The Nation and

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