Koch-Backed Network Aims to Spend Nearly $1 Billion on 2016 Elections

By Matea Gold

A network of conservative advocacy groups backed by Charles and David Koch aims to spend a staggering $889 million in advance of the next White House election, part of an expansive strategy to build on its 2014 victories that may involve jumping into the Republican primaries.

The massive financial goal was revealed to donors January 26th during an annual winter meeting hosted by Freedom Partners, the tax-exempt business lobby that serves as the hub of the Koch-backed political operation, according to an attendee. The amount is more than double the $407 million that 17 allied groups in the network raised during the 2012 campaign.

The figure comes close to the $1 billion that each of the two major parties’ presidential nominees are expected to spend in 2016, and it cements the network’s standing as one of the country’s most potent political forces. With its resources and capabilities — including a national field operation and cutting-edge technology — it is challenging the primacy of the official parties. In the 2012 elections, the Republican National Committee spent $404 million, while the Democratic National Committee shelled out $319 million.

The new $889 million goal reflects the anticipated budgets of all the allied groups that the network funds. Those resources will go into field operations, new data-driven technology and policy work, among other projects, along with likely media campaigns aimed at shaping the congressional and White House elections.

The three-day conference was held at a luxury resort perched on a rocky hillside near Palm Springs, Calif., with stunning views of the palm-tree-speckled desert floor below. The event drew 450 attendees, a record number, as well as the largest number of first-time contributors to the network.

Saturday’s opening dinner, held on the resort’s wide lawn under strings of twinkling lights, celebrated a crop of new U.S. senators whose victories helped put the Senate back in GOP control. Their bids were lifted by the Freedom Partners network, which had pledged to spend close to $300 million in the run-up to the November elections.

Sens. Steve Daines (Mont.), Joni Ernst (Iowa), Tom Cotton (Ark.), Thom Tillis (N.C.), David Perdue (Ga.) and Cory Gardner (Colo.) were on hand to thank donors, according to people familiar with the event.

But much of the weekend was spent looking ahead to 2016.

Freedom Partners President Marc Short said in an interview that “2014 was nice, but there’s a long way to go,” noting that the group’s ultimate goal is to make free-market ideals central in American society. “Politics is a necessary means to that end,” he said, but not the only one.

Much of the conclave served as an information-gathering exercise for network officials, who are assessing whether financiers will coalesce around a single candidate in the GOP presidential contest. At this point, some contributors have said they have little interest in putting money into a bloody internal fight, and many others are not yet set on a candidate.

Among the favorites are Wisconsin Gov. Scott Walker, former Florida governor Jeb Bush, Sen. Marco Rubio(Fla.) and Sen. Rand Paul (Ky.).

“It’s not as if there’s one perfect champion and five bad individuals,” said one person familiar with donors’ views, who spoke on the condition of anonymity to share private conversations.

The Kochs’ moves are being carefully watched by operatives throughout the party, who are well aware of how the brothers could alter the trajectory of the race if they took sides in the primaries.

“It’s not like a Chicago political boss where Charles would say, ‘We’re all for this guy,’ ” said conservative activist Grover Norquist, who has attended past Koch donor seminars. “But if he said, ‘I really like this guy’ and did an op-ed, it would matter.”

The network’s influence was underlined by the number of prospective 2016 contenders who flocked to Rancho Mirage to mingle with the deep-pocketed crowd. Walker arrived Saturday from Iowa, after addressing conservative activists at a forum in Des Moines. That night, over an al fresco dinner of filet mignon, the Wisconsin governor thanked the Freedom Partners donors for their past support and touted his efforts to curb state spending.

Sunday night, Paul, Rubio and Sen. Ted Cruz (Tex.) were on hand to participate in a panel about the economy and foreign policy moderated by ABC’s Jonathan Karl.

The three senators aimed some of their comments at the business leaders in the audience, touting their support for cutting taxes and regulations, and dismissed a question about whether wealthy donors have too much influence on politics.

“There are a bunch of Democrats who have taken as their talking points that the Koch brothers are the nexus of all evil in the world,” said Cruz, calling that thinking “grotesque and offensive.”

“I don’t know a single person in this room who has ever been to my office. . . asking from government any special access,” Rubio added. “By and large what they want is to be left alone.”

The panel was available to news organizations via a live Web stream, part of a new posture of openness embraced by the usually private organization. For the first time, Freedom Partners shared details about the donor conclave, including excerpts of Charles Koch’s welcoming remarks.

Still, some critics scoffed at the idea that the group was being transparent. On Saturday, a handful of protesters stood at the base of the curving driveway that leads up to the resort, waving a large American flag and holding signs denouncing the Kochs.

“They claim they’re being more open,” said Tracy Turner, a 49-year-old retiree from Palm Springs, noting that the news media was barred from the event. “Clearly, that’s not the case. They’re scripting it very carefully.”

Started by Charles Koch in 2003 and originally hosted by Koch Industries, the twice-a-year donor seminars are now sponsored by Freedom Partners.

The network has evolved into a sophisticated political operation that mirrors those of the official parties. Along with its main political advocacy arm, Americans for Prosperity, the network finances groups such as Concerned Veterans for America, the Libre Initiative and Generation Opportunity. Last year, it added a super PAC to its arsenal, but most of the allied groups are nonprofits that do not disclose their donors.

Network officials used the conference to lay out ambitious goals to promote free-market principles in government, business and the media. There were also frank assessments of what they need to do to refine their tactics.

One area seen as a major improvement over 2012 was how the network uses data to improve its voter outreach. Another major 2014 investment — expanding a national field organization — was also viewed as promising, but officials believe it will take time to make it more effective.

In the coming year, allied groups in the network will put a renewed focus on the issue of “crony capitalism” and will pressure Democrats and Republicans alike on issues such as tax-code reform and the Export-Import Bank, according to people familiar with the plans.

Denver investor John Saeman, a veteran cable executive who has been a longtime supporter of the network, described the mood as “measured.”

“It’s very much of staying the course,” he said during a break between sessions. “This is a battle for hearts and minds.”

In his speech Saturday night, Charles Koch exhorted his fellow donors to deepen their commitment.

“It is up to us,” he said. “Making this vision a reality will require more than a financial commitment. It requires making it a central part of our lives.”Φ

Matea Gold is a national political reporter for The Washington Post, covering money and influence.