CORRECTION: A prior version of this story was incorrect. Freedomworks is not funded by the Koch brothers.
The Cato Institute and prominent Republican donors Charles and David Koch are set to settle their legal fight over control of the libertarian think tank, ending a high-profile dispute that split the conservative movement.
“Looks like we’ve come to an accommodation with the Koch brothers," Cato founder and President Ed Crane said in a Tuesday e-mail to employees.
Crane said that staffers will be briefed on Monday on the "settlement” by Cato Chairman Bob Levy and John Allison, a prominent libertarian and former BB&T chief executive officer, who mediated the negotiations. “It will be great to get all this unpleasantness behind us,” Crane said.
In a follow up email to staff, Crane cautioned that negotiations are ongoing.
The deal will settle a lawsuit that the Koch brothers filed in February over shares that determine control of Cato. It results from the original division of shares between the two Koch brothers, Crane, and the late Cato Chairman William Niskanen.
After Niskanen died of stroke complications in October, the Koch brothers claimed that a founding shareholder agreement gave them the option to buy his shares. Crane held that they should go to Niskanen’s widow, which would leave him in effective control of the organization.
The lawsuit sparked concern that the Koch brothers, whose influence is the subject of widespread discussion by liberals and who have funded tea party-linked groups such as Americans for Prosperity, would seize control and force Cato, which has retained a strong nonpartisan, libertarian identity, to more closely hew to Republican positions; the worry was that the institute would end up resembling organizations such as the Heritage Foundation and the American Enterprise Institute.
The settlement involves an agreement to dissolve the shareholder agreement. In addition, Crane is expected to retire under a deal that allows him to select his successor, though the Koch brothers could veto the choice.
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