Koch Network Donors Have Already Shelled Out $20 Million to GOP Super Pacs

By Peter Stone, Guardian UK

07 October 15

Several prominent Koch network donors have written checks of between $100,000 and $11m to the Super Pacs of Marco Rubio, Carly Fiorina, Jeb Bush and others this election cycle

onservative mega-donors allied with the sprawling political and fundraising network spearheaded by the billionaire Koch brothers have already contributed at least $20m to a handful of Super Pacs backing Republican presidential candidates, the Guardian can reveal.

Several prominent Koch network donors have written checks of between $100,000 and $11m to the super Pacs – organizations independent of the candidates’ campaigns which, unlike the campaigns, may raise unlimited amounts of money from individual donors – backing senators Marco Rubio of Florida and Ted Cruz of Texas, as well as former Florida governor Jeb Bush and Carly Fiorina, the former Hewlett-Packard CEO who reports over the weekend claimed was being considered for donations from the Kochs themselves.

A number of donors allied with the Kochs also chipped in millions to the Super Pac backing Wisconsin’s governor, Scott Walker, who dropped out of the race last month, sparking a subsequent free-for-all for their allegiance and big checks.

The Koch donor network is a group of over 200 wealthy conservatives overseen by Charles G Koch and David H Koch that meets twice a year at exclusive resorts to discuss small government and free-market policy priorities and raise funds for nonprofits that push their agenda.

Campaign finance reports and interviews with donors and operatives suggest that the powerful donor network, which intends to spend almost $900m on political and advocacy drives this election cycle, remains divided about its presidential choices.

Of the $900m target for total spending in the 2016 election cycle, about $300m is slated to go to political spending, according to published reports.

Two conservative sources say that the network has raised and has commitments for about $600m. Most of the Koch network spending will be done by nonprofits which, unlike super Pacs, do not have to disclose their donors.

The tens of millions that Koch network donors have already given to Super Pacs supporting GOP presidential candidates seems to come on top of their other spending goals. Two of these presidential Super Pacs are run by operatives with ties to nonprofit groups that have been backed by Koch network donors.

Over the summer, Rubio, Bush, Fiorina, Cruz and Walker made presentations at a Koch network fundraising and policy retreat at a posh resort in Dana Point, California, which drew hundreds of wealthy donors including Charles and David Koch. The brothers, who together are worth almost $100bn and control the multinational industrial giant Koch Industries, have suggested they may personally help a few candidates who meet their deregulatory, low-tax and free-market policy priorities.

The summer donor retreat was hosted by Freedom Partners, the Koch network’s fundraising hub that is set up as a business trade group and has over 200 members who donate at least $100,000 a year. Last year, Freedom Partners launched its own Super Pac, Freedom Partners Action Fund, which raised almost $29m and is expected to spend $100m or more in 2016.

Even before the summer retreat, network donors were coughing up big checks to Super Pacs, which sprang up after the supreme court in 2010 overturned decades of campaign finance law and allowed corporations, individuals and unions to give unlimited sums to ostensibly independent groups promoting federal candidates.

Koch network donors who have contributed to Super Pacs backing Republican presidential candidates in this election cycle include:

• Arizonan Randy Kendrick, a wealthy conservative who has donated $100,000 to a pro-Rubio Super Pac and is also a leading fundraiser for his campaign committee in her home state of Maryland. Kendrick is a regular attendee at the Kochs’s semiannual retreats.


• Ken Griffin, who runs Citadel, a large Chicago hedge fund, and has donated to Koch network projects. Griffin also chipped in $100,000 to the pro-Rubio Super Pac, and $100,000 to the pro-Jeb Bush super Pac, Right to Rise USA.


• Hedge-fund mogul Robert Mercer, a big donor to the Koch network, who poured $11m into the pro-Cruz Pac, Keep the Promise I, of which $500,000 was shipped to the Fiorina-supporting Super Pac, Carly for America.


• Helen Schwab, the wife of investor Charles Schwab, a longtime donor to the Koch network, who gave $1.5m to the Jeb Bush-supporting Super Pac, Right to Rise USA.

Other heavy hitters in the Koch network, such as multibillionaire casino owner Sheldon Adelson and hedge-fund billionaire Paul Singer, have not yet given to Super Pacs, but have met with top GOP contenders including Rubio, Bush and Fiorina.

Adelson, sources say, gave or pledged a seven-figure check to a Rubio-allied nonprofit that does not have to disclose its donors.

Koch network donors attest to the fundraising muscle that the semiannual network retreats offer. “Anybody who goes to the Koch conferences is willing to put their money where their beliefs are,” said Stan Hubbard, a billionaire broadcaster from Minnesota who has attended a few meetings. “The Koch meetings are an important audience to go before.”

Hubbard, who was an early backer of Walker and chipped in $50,000 to a Super Pac backing him called Unintimidated, indicated shortly before Walker pulled out of the race that he was going to give the maximum federal donation of $2,700 to the campaigns of Rubio, Fiorina, the New Jersey governor, Chris Christie, and Ben Carson.

Asked if he would donate again to a Super Pac, Hubbard said: “Anybody who looks like they’d be a great candidate and is searching for help, we’d certainly consider.”

Another big contributor to Walker’s Super Pac who has been been a Koch network donor for a few years is Wisconsin billionaire Diane Hendricks. The founder of ABC Supply Co, Hendricks gave $5m to Walker’s Unintimidated Super Pac.

In addition, some of the Super Pacs and campaigns are being run by operatives who have either worked for nonprofits funded by Koch donors or have lobbied for Koch Industries. For instance, the president of the pro-Cruz Super Pac, Keep the Promise I, is Kellyanne Conway, a GOP pollster who has been a consultant to a few Koch backed advocacy groups including Americans for Prosperity, and attended some Koch donor retreats.

Likewise, the executive director of the Fiorina-supporting Super Pac, Stephen DeMaura, is a Washington operative who recently led Americans for Job Security, a nonprofit which received millions of dollars in the 2012 elections from Koch allied donors. AJS was embroiled in a California campaign finance scandal that led to a $1m fine against two Arizona groups to which it funneled millions of dollars that were spent on California ballot initiatives without properly disclosing the actual donors. And Fiorina’s campaign manager is Frank Sadler, a former lobbyist for Koch Industries.

The Koch network is helping GOP candidates in other ways too. Americans for Prosperity, which intends to spend over $200m in the coming elections on advocacy and political drives, has hosted a few rallies in key primary states, including New Hampshire and Nevada, where Koch favored candidates including Rubio, Bush and Cruz have been featured guests.

“They’re going to keep inviting favored candidates to key state events, saving the campaigns money and supplying them with made-for-TV exposure,” said a GOP source familiar with Americans for Prosperity’s plans.

Other Koch entities are providing donors with guidance on which candidates might be worth looking at more closely. Just days before Walker dropped out, Freedom Partners hosted a conference call to update dozens of donors on the status of network plans and the latest appraisals of candidates. Two donors say that on the call Koch operatives indicated that both Fiorina and Ben Carson were added to their list of viable candidates along with Rubio, Cruz and Bush.