Why the Koch Brothers and Koch Industries are at the top of our list.

How they betrayed and defrauded Libertarians and the Ron Paul Revolution

by Melinda Pillsbury-Foster

No one person or corporation is entirely responsible for what is happening to people across America, and to the land, water, and air which encloses and sustains all of us today. However, the Kochs, as the owners of Koch Industries, are responsible for their choices to a far greater degree than officers and stock holders in a normal corporation would be. The choices made were directly their responsibility, though the active decision maker was, undoubtedly, Charles.

Charles, aided by his brother, David, systematically manipulated the legal and regulatory structure of government, paid for by Americans, to effectively operate without accountability. Although other major oil companies follow the same strategy, Koch Industries, lead by Charles, is the leader of the pack.

If they were running the local grocery store, a Hell's Angel's motorcycle gang, or a used car lot, they would be an annoyance. The long term effects would have been limited. But the scope of their goals and the money they spend to achieve these threatens all of us. They must be stopped. This is why attacking them on issues of the environment is a mistake. Instead, they need to be confronted on the Merchantilist fiction they call a 'free market.'

In his essay, “What is a Free Market?,” Murray Rothbard said this. “Some critics of the free-market argue that property rights are in conflict with "human" rights. But the critics fail to realize that in a free-market system, every person has a property right over his own person and his own labor, and that he can make free contracts for those services. Slavery violates the basic property right of the slave over his own body and person, a right that is the groundwork for any person's property rights over nonhuman material objects. What's more, all rights are human rights, whether it is everyone's right to free speech or one individual's property rights in his own home.”

Your rights stop at the other guy's property line and nose. For the Kochs the only property lines and noses in the game are their own. The baseline of the Koch strategy, outlined as the Koch Method (see What the Kochs Do as a Corporation - Understanding the Koch Method)

Re-reading Murray's essay after all these years did not reveal anything new for me. But it did remind us the issue is not free market economics, but ethics and what constitutes criminal behavior. Many points reported in this article came from first hand observations of those involved. From 1973 until 1988 I was a member of the Libertarian Party and, for most of that time, was very actively involved from the local to the national level.

Murray and I were both members of the Radical Caucus and talked regularly.

In an article published in Bloomberg titled, Koch Brothers Flout Law Getting Richer With Secret Iran Sales, written by By Asjylyn Loder and David Evans, appearing October 3, 2011, information on an internal business strategy, referred to as the Koch Method, came to public attention. The 'method' mandates lying, cheating, and stealing to win. Just don't get caught. 

The Koch Method perfectly replicates what I experienced in the Libertarian Party at the hands of Crane and his flunkies. This gives weight to the conclusion the Koch Method originated with the Kochs and was shared with Crane, who may well have augmented these techniques as a political operative working for the Kochs.

The method ignores the well-being of those not working for them. Others contribute but are viewed as cash cows, assets to be kept in the dark and defrauded of money and labor. This is in absolute alignment with the Kochs business practices.

Using the cover of what they characterize as a 'free market' the Kochs force others to pay the most substantial cost their business must account for, the loses accrued when your product causes damage to others. If they were acting ethically Charles and David would recognize their obligation to make anyone damaged by them whole. They could take out comprehensive insurance and operate within guidelines which would minimize the possibility of doing harm to others. But that would likely be far more expensive than simply ignoring those they harm, lawyering up, and exerting the political influence for which they pay. Punitive damages are intended to drive home the message in such instances.

The Kochs are not free market and not ethical. Instead, they claim to be, evoking the power of rhetoric instead of rubber-hits-the-road reality.

Other corporations and groups spend money. But not only do the Kochs spend more, they intentionally act to keep Americans unaware of what their real goals and unable to respond in their own defense. It has been four years since the Citizens United Decision was handed down by the Supreme Court and the impact is now clear.

The 2010 decision was predicated on a presumption of a transparency the Kochs have continued to evade. These techniques have been shared with others and find startling parallels in the mortgage meltdown. 

 

These manipulations by the Kochs began far earlier than is generally known, and knowing the story sheds light on their behavior and the motives driving it.

The Koch political intrigues and frauds actually began with the Libertarian Party in 1977 and the first attempt at starting an organization to lend cover to their agenda for control, highly successful from their perspective, was Cato Institute. 

Today they have dispensed with pretense and now have assumed public  control of the think-tank they always owned.  

Far from ever having been benefactors, the Kochs ruthlessly, and with forethought, paid Ed Crane to deliver the Libertarian Party to them to be used as a political weapon under their control. Crane and his minions profited enormously through their attempts. This was undertaken without regard for the time and money capital ordinary people had invested in a political movement intended to return control to people at the local level.

This was an unthinkable violation of trust.

The Kochs eventually failed to control the Libertarian Party. But they left it with a centralized structure, reorganized by Crane for the Kochs. After this failure they orchestrated an effort to destroy the nascent political party, aimed at convincing the most effective activists to re-register Republican. Beginning in 1985 activists were called in multiple attempts to persuade them to leave, re-registering Republican. This marks the shift from the use of a third party to the GOP as the Koch focus.

Crane knew exactly what he was doing, and why. At the 1977 National Convention in San Francisco Crane openly told Karl Bray and Gail Lightfoot, later a several term state chairman for California, he was finished with politics and intended to start a not-for-profit and make some real money. Gail recalled this conversation to me earlier this week.

Crane was paid for these services. This was a gross and unforgivable violation of the trust invested in someone acting as an officer of the organization.

The reason a political voice was needed was so the ideas of individual freedom could be heard. But the strongest voice is not heard in rhetoric but in the far more eloquent language of action.

In those early years most libertarian activists wanted a return to local control, individual rights, and justice for everyone. Local governance, reserving power to the people, is inherent in the Constitution. Centralized power delivers control to an elite.

Ed Crane was elected National Chairman in 1974 and served until he left to become the head of CATO Institute, while also running the Clark for President campaign, first for the nomination and then Clark's campaign for president. The agreement with state and local parties was to exchange lists. But I soon noticed no larger donors were on the lists we received. This was confirmed when a local couple I knew from other activities commented they did not even know Los Angeles had an active Libertarian organization. Our first Central Committee meeting for LA numbered over 250.

The manipulations never ended, including a refusal to send copies of the White Papers already issued to the media and major donors because of the reaction which would result. These professionally produced materials began the positioning of the LP as 'low-tax liberal.'

Because of the degree to which Crane was already distrusted a beard was provided to muddy the reality of who was in charge. Crane served officially as 'communications chairman.'

The position of National Chairman gave Crane access to mailing lists, which he used to start Cato, and connections to build a power base for himself. He used everything entrusted to him by the LP for his own purposes and as a source for meeting young and credulous women. Bill Clinton would have blushed. At least Bill did not require his interns to have sex with him to keep their jobs. Today, Crane is wealthy because of behavior which was without conscience. No longer working for the Kochs he doubtless received a generous settlement.  Today he is selling tweets online.  

The perfect pick for the Kochs, Crane was open to make deals and had the sophistication and charisma to pull a group of similar thinking operatives in around him. As a group, they were characterized by their arrogance and willingness to violate the trust of those of us working for real change. They did this solely for their own profit. Think of them as intuitive followers of Leo Strauss.

The group remains, today, a cohesive whole, still sucking the Koch tit. These same people still cycle through boards and positions in the organizations started to carry out the work the Kochs want. These individuals were, in large part, identified by Dr. Murray Rothbard in 1981 when his failure to cooperate with the Kochs redefinition of the phrase, “free market” resulted in his ejection from the Cato board. I have added some names to the list, which is HERE.

The Koch involvement allowed the message of Libertarianism to be re-branded in 1980, when, instead of being used by the Koch candidate, Ed Clark, the ideas for freedom helped elect Ronald Reagan president.

In lock step with the agenda being followed by the NeoCons, the 1980 campaign stole the rhetoric, delivering a far more centralized and powerful federal government into the hands of corporations.

In 1980 many believed Ronnie had Libertarian leanings when nothing could have been further from the truth.

His original supporters learned, to their dismay, Ronnie was neither a Conservative or a Libertarian. He was an actor looking for a steady job.

The LP was not Ronnie's the first victim. Ronnie began the ongoing process of reframing the term, 'Conservative' during his two terms as governor in California and then as president. Ronnie was a Rockefeller Republican, a corporate, hire.

In the 1960s the Kryst0ls were still Democrats and the word, “Neoconservative” not generally heard. A real Conservative is anti-war. Robert Taft, a real Conservative, was vilified as an isolationist during World War II. He was attacked by the left for failing to support the Nuremberg Trials, which were carried out, he said, using post facto laws.

There are strong affiliations between the Kochs and the NeoCons, who have taken over the work once carried out by the Rockefeller Republicans on behalf of the corporations. Many of these came through what we called the Crane Machine, activated to do the bidding of the Kochs.

Charles Koch had grown up hearing about conservative politics from his father, Fred. But rejected many of his ideas, according to Gus diZerega, a former member of the John Birch Society who had known Charles' father, Fred. diZerega was interviewed by Jane Mayer for her article, “Covert Action,” published in the New Yorker on August 30, 2010. Fred's former friend suggested that the Charles' youthful idealism about libertarianism had, “largely devolved into a rationale for corporate self-interest.” The article goes on to say of Charles, “Perhaps he has confused making money with freedom.”

It is equally likely the assumption of idealism is naive. Charles appears to have known exactly what he was doing, witness his use of the same methods to run his business.

It is far more likely Charles, reacting to his father's idealism, became at an early age a corporatist determined to centralize power and hold control for himself.

Although Fred Koch did not die until 1967 Charles was already firmly in control of the business interests which would become Koch Industries, having been named CEO in 1966 when his father was forced by ill-health to retire.

In 1960 Ronald Reagan was recruited to go into politics in California by a group of Rockefeller Republicans. He was to run as a Conservative. With no discernible credentials, Ronnie began working to get the nomination for the office of governor in California by joining groups and getting to know people. Reagan was intensely charismatic and charming. Even if you disagreed with him, you liked him.

My father, Dr. Arthur F. Pillsbury, got to know Ronnie when he began stopping in to the Republican Club Dad ran at UCLA. Dad was a Conservative but although he liked Ronnie personally did not entirely trust him. Ronnie asked Dad to go with him when he was elected as governor and again asked when Ronnie was elected to the presidency in 1980. Dad had been an appointee to the first EPA in 1969, an effort which involved both Republicans and Democrats for clean water and clean air.

But grass-roots conservatives had their reasons for doubting Ronnie's motives and his honesty.

One of the groups Ronnie managed to persuade to support him was the United Republicans of California (UROC), which was founded by Joe Shell, a good friend of Barry Goldwater and the primary candidate for governor who was edged out when Richard Nixon was sent, by the same people, to run against him in the California primary in 1962.

Joe reported several attempts on his life during the primary when the outcome was close. Joe shared these stores with me when we were both working on the Dolores White campaign for 20^th State Senate in California in 1991.

Joe told me the story of the Speech, delivered by Ronnie in 1964, provided Ronnie with standing as a Conservative, was delivered at the 1964 Nominating Convention for the GOP, held in San Francisco. The speech was actually written for Goldwater, paid for by Joe Shell.

Those living at the time believe it was written by Karl Hess, later active in the Libertarian Party. Nancy Reagan called Joe continuously begging him to let Ronnie deliver the speech. Joe, ever after regretted having done so because it persuaded potential supporters Reagan was a Conservative, which he was not.

Far from following a conservative agenda as governor, Ronnie left California far more centralized and unresponsive to citizen activism. Connie Ruffley, who is the present CEO for UROC, reports Ronnie also sidelined the organization because so many of its members could not believe Ronnie would so betray them.

But seeing was believing. Enough UROC members did understand and take action.

The two terms Reagan spent as governor persuaded enough members of UROC they have been deceived to move them to write, and pass, a resolution asking Americans not to support Ronnie if he ran for president or vice president. To ensure this information was not lost Connie sent me the last copy, which I entered in my computer, and put up.

It was a bitter time for real Conservatives.

In 1972 Ed Crane was a down at the heels financial advisor, according to an associate, and recently out of college, when he found the Libertarian Party. Ed attended the first National Convention as a delegate in 1972.

In its first years the LP was an effective political organization which was local and grass roots. This changed through steps taken by Crane, beginning after he was elected Chairman in 1974.

The second Libertarian Presidential candidate was Roger MacBride, who produced the TV series, Little House on the Prairie. Rose Wilder Lane, his adopted grandmother, left him the rights to the books, inherited from her mother, Laura Ingalls Wilder.

The message of the Little House books was one which taught generations of children the values of self-reliance and freedom along with caring for those we love.

Roger autographed books for all of my kids. I grew up on The Little House books.

A Republican Elector from Vermont, Roger sent shock waves out politically when he cast his vote in December for the LP candidates, John Hospers and Toni Nathan. It was a history making moment.

It was through Roger, a wealthy man himself, that Crane met the Kochs. He immediately began working with them to take over the Libertarian Party for their own purposes. The next presidential campaign would ensure Reagan was elected president. They would then continue the process of changing the meaning of the phrase, “free market economics.”

The candidate Roger favored for the 1980 campaign was a self-made millionaire who had started several high-tech companies. Bill Hunscher was willing to take 18 months off to run a grass roots campaign, going to every part of the country to encourage local activism.

If your grocery store uses a scanner, you have seen one of the products he took to market.

To obtain the nomination for the Kochs Crane persuaded Ed Clark, the chief legal counsel for Arco, to run with David Koch as his running mate. David Koch could then pump millions into a race which Crane controlled. The message delivered would be very different than activists expected.

To ensure the nomination money was made available to pay for transportation and hotel costs to people willing to register, be seated as delegates, and vote for Ed Clark. Hunscher and MacBride had played fair. None of their supporters were subsidized.

The speeches and campaign material prepared for the Clark campaign positioned Clark, and the Libertarian Party, as low-tax liberal, leaving the Libertarian rhetoric for Ronald Reagan. No activist was allowed to see the White Papers sent to the media because of the reaction Crane knew there would be.

Millions were spent, but the vote totals were pathetic. Activists were left in shock, unable to understand how our message had been stolen. Ronnie blazed to victory on a rhetoric he never believed.

In the wake of the campaign Murray Rothbard, who was originally on the CATO board, was fired and the Kochs, instead, promoted the less than free market ideas of Milton Friedman.

The Crane machine lost control of the LP when Alicia Clark, Ed's wife, who now understood he had been used, was elected National Chairman against the Crane candidate Kent Guida. Alicia, formerly the CEO of a Mexican corporation, was treated with contempt by the arrogant flunkies doing the bidding of Ed Crane. Outrageously, the LP National Executive Director was one of these. Eric O'Keefe, was spending far more time on the phone with Ed Crane, at Party expense, than with Alicia. He was also ignoring her directions, instead following the continuing mandates set by Crane.

Alicia took steps. She had a software engineer who provided computer services for the LP, Craig Franklin, change the locks on the office, and then fired O'Keefe. The reaction was volcanic. The Crane Machine had not believed anyone would really confront them. They had failed to see the steel in Alicia's spine.

After failing to control the selection of candidate for 1984 the Crane Machine began a concerted effort to destroy the LP by persuading activists to re-register Republican.

The Libertarian Party never recovered.

With their strategist, Eric O'Keefe, they began plotting to take over the GOP while also working through organizations they could control, which they would create using a 'cookie cutter' model. A number of these would show addresses which matched the home address of another long time cabal member, Paul Jacob.

From Eric's site.“Howie Rich and Eric to form U.S. Term Limits, with Crane on the board, at the end of 1991.  U.S. Terms Limits then executed a plan based on an ambitious strategy memo Eric authored, calling for a blitz of initiatives in a number of states so we could allow voters to circumvent the opposition of incumbent politicians.  U.S. Terms Limits helped organizations in 23 states put congressional term limit initiatives in front of voters, and they embraced the approach, passing them by sweeping margins.  The New Hampshire legislature joined them.“

The first attempt, made jointly with Newt Gingrich in 1994, to take over the GOP faltered as they coordinated on the Contract on America using materials provided to Gingrich through their operative, John Fund, then on the editorial board of the Wall Street Journal. The original idea was mine. I handed John a copy of the brochure I was passing out at the Republican Convention in California in 1992. It was not until someone asked me about this in 1999 I realized what had happened. Fund had told them about giving Newt my literature. 

The individuals, all Koch insiders, who appeared on the boards of these cookie cutter entities were shuffled frequently.

The roll out of their plans was not without glitches.

In 2006 an ornery journalist from Oregon, Hart Williams, started researching Howie and his cronies and came up with truly shocking revelations. Hart kept at it, building a series of articles which destroyed the secrecy on which the Howie-lead group had depended. It was Hart who spawned the “NEW YORK CITY!?” response to the 2006 class of cookie cutter initiative campaigns. Hart is still working on exposing the Kochs and the Howie cabal on his website, Hart Williams.

Since both the Crane Machine and the Kochs abhor this kind of notice they responded by attacking Hart, without effect. It is likely they still keep a nervous watch.

It is true the KXL might not be approved – but the Kochs, and others, have already accounted for this by making alternative plans to sell their products to China. Alternate plans for pipelines, which do not enter the United States, are also in motion.

The number of cookie cutter organizations the Kochs have funded, intended to bring the public opinion under their control, are so numerous it is difficult to track all of them. Today, this includes LLCs, Trusts, and entities owned by these more publicly visible organizations, allowing the source of money and how it is used to be hidden.

Over the last twenty years the Kochs have grown more sophisticated. More experts have been hired, studying the law and providing them with ways to evade the reasons the laws were made in the first place. Organizations such as ProPublica have done yeoman's work in documenting how this is done though the details on specific organizations are still not always available.

The flow of known funds, and how this is accomplished today, can be viewed on their site, the two of the most interesting are, Who Controls the Kochs’ Political Network? ASMI, SLAH and TOHE, The Dark Money Man: How Sean Noble Moved the Kochs’ Cash into Politics and Made Millions

Rich Fink, today on the board for Americans for Prosperity, was active at its inception in the summer of 2007. Their first conference failed to draw, so they made people offers they could not refuse, essentially buying an audience.

In an article I wrote about the event that year titled, Hillary, Ron Paul, and the End of Fascism

I noted the prices, which were a steal, Early registration was only $49 and $29 for students, and included breakfast, lunch, and a special "Tribute to Ronald Reagan" dinner. Room prices at the Mayflower Hotel for one night costs 459.00(USD). David Koch was underwriting the event so they could get enough people in to look like a real conference.

Preventing an independent political movement made the Ron Paul Revolution, which was from its beginning spontaneous and based on the efforts of the grass-roots, a threat to the Koch's plans. Again, Crane and his minions intervened.

The Ron Paul Revolution, as opposed to the official Ron Paul Campaign, which was managed by hired help found through such organizations as CATO, ensured Paul would not be an issue after the primary by providing flawed lists for GOTV and other uses and through other manipulations. Crane and the Kochs had clearly realized Dr. Paul could not be controlled.

As the primaries began state after state reported the same problems, these occurring in Iowa, New Hampshire and South Carolina at least. The lists were supplied by the RP Campaign, who insisted they be used, despite reported problems well in advance. In New Hampshire poll watchers were ordered to leave the polls at the time their jobs should have begun.

Paul would eventually claim credit for the Tea Parties because spontaneous local groups began to spring up in the wake of an event held on December 16, 2007, the anniversary of the original Tea Party 234 years previously. The event was organized by elements of the Revolution. Money collected from the money bomb held was delivered to the official campaign where it was spent to pay lavish salaries.

Over the next months steps were taken to set up conditions to buckle the original spontaneous Tea Party Movement to a national leadership controlled by the Kochs under the aegis of the Republican Party. Sarah Palin was one of the individuals slotted for this.

Rich Fink is a director for Americans for Prosperity, placed down the list, which follows the Koch line on the KXL Pipeline. (From the site) “Almost 2,000 days have passed since the application for the Keystone XL pipeline was submitted. It seems the only thing holding up the President from making a decision is one word: politics.”

Charles and David have now started their own spin off of the Bilderberger Meetings, these taking place twice a year when it is necessary to explain to other billionaires which candidates and causes they should support. These started in 2003. In 2012 Charles Koch wrote this letter to attendees about their goals, which purport to be in support of a free market, ironically written by a leader in an industry whose profits are entirely dependent on the 20^th Century Mercantilism he has sold in place of free market economics.

Over the years these conferences have grown, in conjunction with what is not discussed, the dirty tricks which help the Kochs evade the law on funding and how politics is practiced.

The 2014 conference took place in Palm Springs.

The Kochs profit mightily from their manipulations and interferences with the market in energy, using government for their benefit. But they feel entirely free to manipulate public opinion covertly, using their funds to marginalize the most essential of American institutions, the right of people to locally govern themselves.

The Kochs have used their wealth to evade the transparency which is essential if a people are to govern themselves in accordance with the Constitution. The original model for government placed the weight of power in the hands of the people at the most local level. The Kochs have participated in the ongoing centralization of power which puts control into the hands of a group of corporations, lead by the Kochs in this case.

The Kochs and Ed Crane were never Libertarians by any understanding of the term I accept. They did, however, recognize how the philosophy could be used to mute a negative reaction to policy in the same way Alan Greenspan muted resistance from those who supported the philosophy of Ayn Rand.

Both the Kochs and the Crane-Howie Cabal saw themselves as appointed advocates for the ideas of Ayn Rand, who growing numbers now understand was following principles which eerily replicate characteristics of psychopathy, as mentioned in this article, titled, “How Ayn Rand became the new right's version of Marx,” by George Monbiot, appearing in The Guardian.

The ideas Ayn Rand fail to affirm the human connections, love, tenderness, compassion, charity, which remain the foundation of human life. Her own life reflects the philosophy by which she really lived and, today, the facts are known from her previously unpublished work.

The Kochs have treated politics as if it is a game where cheating is acceptable, which it is not. It is the means by which people determine their direction, essential to keeping the power in the hands of the people, as outlined by the Constitution. Politics, as is true with all human relations, must build, not destroy, trust.

The political process depends on accurate and reliable information in exactly the same way a business, to be successful, must have such reliability. To have denied this to Americans by stealth is an ugly act.

Together they have imposed on unwitting Americans initiatives which severely impacted their local communities using Koch money which has eaten away both our trust in each other and our confidence in ourselves.

The solution remains to return control to the people, at the most level and punish those who have worked covertly to keep this from happening.

The fact is, people are solving their own problems locally. Food banks are building local supplies which aim at feeding everyone within their county. Local programs, dependent only on the care and generosity of people, are restoring dignity and hope. New technologies are beginning to take us off the grids of greed to a very different future.

When people put politics as usual aside and work together anything is possible.

This process can be put in fast forward by providing open and free sharing for ideas, a Sharing Tank, as opposed a 'think-tank,' which invents policies which are never adequately tested before use. Today, we call it Open Source. My grandfather called it the Knowledge Commons. By any name it creates common ground so together, we can learn from each other.

The problems we face are grave and immediate. But ours is still the power. Thomas Paine said, “We have it in our power to begin the world over again.” It is time to start.