Editor’s note: This commentary is by David Russell, a consultant for the past 25 years for small, development stage or emerging businesses. During the last five years, his focus has been exclusively on renewable energy technology, including the installation of commercial scale solar projects. For 20 years prior to that, he was engaged in various aspects of the securities industry.
[J]ohn McClaughry’s sanctimonious review of the book “Good Profit” by Charles Koch deserves comment. The content of the book being reviewed reflects on the management style of Koch industries and provides intelligent pointers about techniques they have employed leading to their incredible success over the years. If McClaughry had left his comments to simply the book’s content I suppose most would have been satisfied to let it go at that. Very successful businessmen and how they ply their trade.
But Mr. McClaughry sought to politicize the occasion with snarky comments about Sen. Bernie Sanders demonizing these stalwarts, “They, according to Sanders’ imagination, are the secret owners of the Republican Party … They are, in Bernie lore, evil geniuses pocketing the rightful earnings of the oppressed working class, and using their wealth to roll back the socialism that America has accumulated over the past century.”
While it is quite true that Sanders has demonized the Kochs specifically because of their undue influence over the political process, the criticism has little to do with the way the Kochs run neither their businesses nor his views on capitalism. Admittedly, Sanders’ criticism has focused on the decline of the stakeholder culture of American corporations that used to protect the welfare of employees along with shareholder returns and customer service. In this regard the Kochs are coupled with other major American companies whose collective behavior has led to income inequality that rivals the robber baron period of the 19th century. If Sanders were to reflect on the Kochs business management style, it might touch on their disproportionate personal gain versus better pricing to customers or employee emoluments. But that isn’t the real focus of Sanders’ animus toward the Kochs.
What sends Sanders into “torrents of outrage,” to use McClaughry’s term, is the invidious and subversive elements of the Koch family as political actors. Sanders indictment of the Kochs is focused on the disposition of funds to achieve their political objectives. So why don’t we focus on how that works?
Sanders’ outrage is that the Kochs have spread a fortune over a host of activities across the political action array in order to achieve their political objectives.
The Kochs don’t tell John McClaughry what to think or what to write. However, according to an investigative report by the Vermont Political Observer dated April 14, 2015:
“Between 1998 and 2013, EAI [Author’s note: EAI is Mr. McClaughry’s organization, the Ethan Allen Institute] received at least $572,260 from out-of-state donors with ties to the Koch brothers’ sprawling network of right-wing foundations. This network is designed to limit public disclosure and provide tax breaks for “charitable donations” that promote the political interests of wealthy conservatives. The network is also designed to give donors plausible deniability by laundering their donations while still giving them control over how their money is used. Over the past ten years, EAI’s annual revenues have fluctuated between $132,000 and $201,000. So $572,280 is a whole lot of money by EAI standards.”
So, for the 15 years that we know about, organizations aligned with, financed or influenced by the Kochs have provided 15 to 20 percent of Mr. McClaughry’s income or that of his organization. Does that affect what he says or what issues he covers? Does it require writing favorable book reviews? Does it require making snarky comments about political rivals? The readers can make those judgments on their own.
What it points to is one data point in a widespread program of political action that have engaged the Koch brothers for the past 30 years detailed in an article that appeared in Salon e-newsletter last February.
What drives Sanders into “torrents of outrage” is not the right of any citizen to in engage in the political process. He would certainly agree that the Kochs have that right. What is an outrage is the invidious and secretive way that huge sums of money are being deployed for a political agenda that has, taken as a whole, impoverished the middle class through tax legislation, increasingly disenfranchised voters and literally bought political actors and the votes they cast. What Sanders knows and hopefully the public is beginning to know is that these “libertarians” who preach small government, civil liberties and free enterprise are nothing more than hypocrites who sloganeer while pillaging the common weal. What Sanders knows is that the actions of the Kochs are ultimately antidemocratic.
Take one of the Koch’s favorite recipients, the American Legislative Exchange Council (ALEC). According to the Nation magazine, “No one knows how much the Kochs have given ALEC in total, but the amount likely exceeds $1 million — not including a half-million loaned to ALEC when the group was floundering. ALEC gave the Kochs its Adam Smith Free Enterprise Award, and Koch Industries has been one of the select members of ALEC’s corporate board for almost twenty years.”
What does ALEC do? It drafts sample legislation to help conservative legislators better carry out their policy agenda. Need draft legislation for restricting voter access? ALEC is right there for you. Want to find ways to oppose climate change? Need to attack unions? Maybe you want draft right-to-work legislation? Promote privatized prisons? Privatized education? Anti-immigration laws? Restrict environmental protection efforts? Check it out.
Sanders’ outrage is that the Kochs have spread a fortune over a host of activities across the political action array in order to achieve their political objectives. To quote the Salon article: “During 2015 the Koch Network (a network of donors that is organized by the Koch Brothers) spent nearly $400 million to influence politics. That compares to the $404 million spent by the RNC and the $319 million spent by the DNC during the entire 2012 cycle. Increasingly, the Koch Network resembles a political party, with its own research and mobilization operations, as well as sophisticated data analytics that many candidates believe to be superior to the Republican National Committee’s (RNC) data capabilities.”
When you think that donations to EAI averaged less than $40,000 per year and ALEC less than a million, you can get a feel for just how invidious this process truly has become. What is worse is who, other than Bernie Sanders, knows about it?
It is not my place to call McClaughry disingenuous nor a fraud but I strongly object to those who willingly act as straw men or beards for the wealthy and whose patronizing tones employ populist memes that have no substance and may represent the hidden agenda of their patrons.
