Newly uncovered archive documents show that Charles Koch’s fortune helped subsidize the litigation that secured the controversial Buckley v. Valeo decision, which created loopholes in the Federal Election Campaign Act that was signed into law on February 7, 1971.
These documents are the subject of an op-ed about Charles Koch and his impact on our election laws, our courts, and other policy in the Guardian today.
That decision also paved the way for his brother David to have no limits on his funding of his race to become Vice President in 1980. It is also the foundation for the claim that money is speech that undergirds the U.S. Supreme Court’s discredited Citizens United decision in 2010, which unleashed Koch to bundle millions of his money with millions from his billionaire friends to outspend candidates in his quest to dominate the U.S. Senate and more.
Koch claimed to the public in 2014 that “It was only in the past decade that I realized the need to also engage in the political process.”
Documents signed by him, on his letterhead, or to him–unveiled today by KochDocs–show that is not true and that Koch actually began using his fortune from Koch Industries to engage in the political process, fundraise for presidential candidates, become the major funder of a national political party, bundle campaign donations, and underwrite attacks on federal anti-corruption laws regulating elections, starting in the 1970s.
Key Findings Reveal Koch Role in Elections/Politics
The documents reveal:
- Koch was personally fundraising, on Koch Industry letterhead, from oil tycoons to fund the presidential campaign of Roger MacBride in 1975. With Koch’s help, MacBride ran unsuccessfully for president in 1976. (MacBride was the heir to the fortune from Laura Ingalls Wilder’s Little House on the Prairie books, designated by her daughter Rose Wilder, who was a devotee of Ayn Rand.)
- Koch approached MacBride and the Libertarian Party in 1975 about making a larger donation than the Federal Election Campaign Act (FECA) permitted. The Libertarian Party hired John Bolton of the law firm Covington and Burling to seek an opinion from the newly created Federal Election Commission to allow him to make a large donation to the Party.
- Koch’s friend, Edward H. Crane III–who had relocated from San Francisco to DC to aid the Libertarian Party–kept Koch apprised of the Buckley litigation and the wait for the FEC’s advisory opinion to help Koch. Immediately after the U.S. Supreme Court issued its decision in Buckley, on Feb. 3, 1976, the FEC issued Advisory Opinion 1975-129 allowing the Party to receive up to $25K per year from a single donor, ten times the amount of the original cap in the FECA as amended. Crane transmitted the Supreme Court’s opinion to Koch’s lawyer at Koch Industries along with the opinion it sought on his behalf, and also informed Koch of both.
- Koch then wrote and sent a check to the Libertarian Party for $10K and bundled checks from his brother David and his mother for a total of $25K, after receiving the decision and opinion.The day after Crane wrote to say he had received the funds, the Libertarian Party paid Covington for its work on the Buckley case, in addition to paying a separate sum for Bolton’s work on the advisory opinion.
- Covington had previously notified Crane of expenses in 1975 and 1976 for the Buckley litigation, but it did not send any money until Koch sent his. There is no indication in the archives that any other donor had sought to give the Party more than the $2,500 cap in the FECA, and the timing indicates that Koch and the money he arranged from his family was the biggest sum ever provided to the Libertarian Party up to that date.
- Other documents show Koch promising to match donations up to $50K, despite the limits in the advisory opinion, in the years following.
- Still other documents show that Koch was a major funder of the Libertarian Party’s post-Buckley litigation to get other parts of the FECA overruled by the Supreme Court.
- The materials also show that the loophole that the Buckley decision created is what allowed David Koch to self-fund the party in its run for the White House in 1980.
Notably, in 1974, Koch founded the Charles Koch Foundation Inc., with his righthand man George Pearson and MacBride. (The registered office of that non-profit was Koch Industries.) In July 1976, after Buckley and the FEC Advisory Opinion obtained for Koch, he changed his foundation’s name to the Cato Institute and named Crane to be the staff leader of it. Cato was then deployed to provide content for Libertarian Party position papers and the Party shared mailing/donor lists with Cato, and more.
The Foundation of Citizens United and the Flood of Dark Money
Fast forwarding to 2010, with new justices, the Supreme Court issued its decision in Citizens United, extending the Buckley decision to re-interpret the First Amendment to bar Congress from limiting the spending to influence elections by non-profit groups and striking down provisions requiring the disclosure of donors to groups spending on ads running shortly before elections to influence the results.
Those rules were passed in 2002 under the Bipartisan Campaign Reform Act, known as McCain-Feingold, after congressional investigations into dark money election spending that was escaping limits and disclosures applicable to candidates, political parties, and PACs. One of those investigations was into secretive efforts to use pop-up groups to run ads to dominate Congressional races in Kansas in 1996. This was accomplished via a secretly funded-entity calling itself “Triad Management Services,” which in turn gave money to innocuous-sounding groups with names like “Citizens for Reform,” which ran controversial ads to aid Republicans seeking federal office. Triad’s funding was tied to an entitity called the Economic Education Trust, but its funders were not known and not publicly disclosed at the time.
The Republican-controlled Congress did not issue subpoenas to determine who funded that election scheme, but subsequently the Wall Street Journal reported that a whistleblower named Kenneth Barfield, “a Republican political consultant who was on Koch’s payroll in 1996 acknowledged his involvement with the Economic Education Trust and said Koch helped finance the trust” and provided documents to support his statements to the paper.
Since the Citizens United decision, Charles Koch has donated and bundled hundreds of millions of dollars to influence federal and state elections, without any rules requiring the disclosure of the names of the donors and amounts.
The newly revealed archive material shows that Koch’s hostility to campaign finance laws and his involvement in elections goes back decades, to the 1970s, beginning with efforts to get around or undo the FECA, which was signed into law by President Nixon to be a more effective system to limit corruption of elections and politicians than the Federal Corrupt Practices Act it replaced.
Here are the core documents:
Juy 1975, Koch reviews MacBride’s manifesto, “A New Dawn for America: the Libertarian Challenge,” prepared for publication in 1976 to advance his presidential run.
This letter to Koch in September 1975 notes that Crane had moved to DC and that the Libertarian Party leadership had gone to Wichita to meet Koch’s mother about funding the party.
This document from the Libertarian Party to Charles Koch notes that MacBride mentioned that Koch wanted to make a large donation to the party but that they would need an advisory opinion from the FEC to get an exception from the FECA because it was greater than the caps on donations. It also notes that John Bolton would aid in seeking such an opinion.
This letter from Koch to the party notes he had not heard from Bolton yet.
This is the letter to Koch about Bolton seeking the FEC Advisory Opinion and preparing an escrow agreement.
This is the draft escrow agreement Bolton prepared to help the Party get the funds from Koch before the FEC ruled, but Koch rejected this arrangement, preferring to wait for the Court and the FEC to rule.
This letter from December 1975 to Koch from the Party discusses the pending ruling in Buckley.
This letter from Charles Koch rejects the escrow agreement in favor of awaiting the ruling.
This document here is a letter dated December 1975 from Charles Koch, on Koch Industries letterhead, soliciting money from a “Rocky Mountain Oilman” for the LP’s 1976 presidential campaign, as he was awaiting the Supreme Court decision and an FEC ruling about his own contributions to the LP to exceed the limits set by the FECA.
This letter from Ed Crane at the Libertarian Party to Koch discusses MacBride’s book and notes that they are still waiting for the Supreme Court decision and the advisory opinion.
This letter from February 3, 1976, is from Crane to Koch transmitting the Advisory Opinion and noting that the Supreme Court decision and the opinion have also been sent to Koch’s lawyer at Koch Industries.
This is the letter to John Roper at Koch Industries, Koch’s lawyer, mentioned above–although it is misdated 1975 even though it encloses an Advisory Opinion issued in 1976.
This is a summary from Covington noting the issues left open by the Buckley decision.
This is the statement of expenses from Covington dated February 9, 1976, to the Libertarian Party.
This is the enclosure, dated February 9, of the Covington bill that lists who had submitted payments for the Buckley expenses, with no mention of Libertarien Party payments.
This is the letter, dated February 12, 1976, from Charles Koch to the Libertarian Party bundling donations from his brother and mother along with his check for $10K.
This is the letter dated February 18, 1976, from Crane to Koch noting that the Party had received his donation and thanking him for it.
This is the letter from the next day, February 19, 1976, from the Libertarian Party to Covington for the expenses it committed to cover for the Buckley litigation.
This is the letter from Covington noting the Libertarian Party subsidy for Buckley.
This is a letter to Koch about Libertarian Party support and activities.
Here is Koch’s response to an update from the LIbertarian Party, complaining about how few people support their principles.
This is Koch’s right-hand man, George Pearson, transmitting $1K to the Party for Koch to support MacBride’s campaign for the White House. The other donation was restricted to general support for the Party under the Advisory Opinion.
This is the Party’s acknowedgement of the gift to support MacBride running TV ads.
This letter from 1977 shows the Libertarian Party sharing names from its mailing list with Ed Crane for the Cato Institute.
This letter from Koch to the Libertarian Party from 1978 notes that Koch had promised to match $50K in donations and transmits $10K toward that promise.
Here is the party’s acknowledgement of this match, which may have exceeded FECA limits at the time.
This letter from 1979 from the Libertarian Party to Koch notes that he is a major funder of the litigation to strike down remaining parts of Federal Election Campaign Act.