David Koch Seeded Major Tea-Party Group, Private Donor List Reveals

Exclusive tax documents confirm the conservative billionaire provided start-up funds for Americans for Prosperity.

David Koch, executive vice president of Koch Industries, attends a meeting of the Economic Club of New York, Monday, April 11, 2011. 
AP
Alex Seitz Wald
Add to Briefcase
See more stories about...
Alex Seitz-Wald
Sept. 24, 2013, 7:41 a.m.

Tax doc­u­ments ob­tained ex­clus­ively by Na­tion­al Journ­al con­firm that con­ser­vat­ive bil­lion­aire Dav­id Koch, along with a hand­ful of ma­jor cor­por­a­tions, provided the seed money a dec­ade ago to start the found­a­tion be­hind Amer­ic­ans for Prosper­ity, a con­ser­vat­ive group that played a key role in help­ing to or­gan­ize the tea-party move­ment in­to a po­tent polit­ic­al force.

Koch’s re­la­tion­ship with the group is no secret — he’s the chair­man of the board of the Amer­ic­ans for Prosper­ity Found­a­tion — but he down­plays his in­volve­ment in a way that crit­ics charge is disin­genu­ous. An of­fi­cial Koch web­site states that AFP is merely “among the hun­dreds of or­gan­iz­a­tions that have re­ceived mon­et­ary sup­port” from Dav­id Koch, his broth­er Charles, or the com­pany they own, Koch In­dus­tries. “AFP and AFP Found­a­tion op­er­ate in­de­pend­ently of Koch In­dus­tries. We are not in­volved in their day-to-day op­er­a­tions and we do not dir­ect the activ­it­ies of either or­gan­iz­a­tion,” the com­pany’s web­site con­tin­ues.

But a donor list filed with the IRS labeled “not open for pub­lic in­spec­tion” from 2003, the year of AFP’s first fil­ing, lists Dav­id Koch as by far the single largest con­trib­ut­or to its found­a­tion, donat­ing $850,000. And an earli­er doc­u­ment also ob­tained ex­clus­ively by Na­tion­al Journ­al lists mil­lions more in fin­an­cial con­tri­bu­tions from the con­ser­vat­ive in­dus­tri­al­ist to AFP’s pre­de­cessor.

Fol­low­ing Koch on the AFP Found­a­tion donor list are a num­ber of cor­por­a­tions, in­clud­ing State Farm, which gave $275,000, 1-800-Con­tacts, which donated $80,000, and John­son & John­son and Shaw In­dus­tries, which each gave $50,000. Shaw, a car­pet and floor­ing man­u­fac­turer, is a wholly owned sub­si­di­ary of Berkshire Hath­away, the com­pany con­trolled (iron­ic­ally) by pro-Obama bil­lion­aire War­ren Buf­fett. Also lis­ted are a num­ber of well-known and deep-pock­eted con­ser­vat­ive found­a­tions, in­clud­ing the Pennsylvania-based Sarah Scaife Found­a­tion and the North Car­o­lina-based John Wil­li­am Pope Found­a­tion.

The doc­u­ment, a Form 990 Sched­ule B, is es­sen­tially list of the largest con­trib­ut­ors to a non­profit or­gan­iz­a­tion, filed an­nu­ally with the IRS. It’s meant to be kept private, with only re­dac­ted ver­sions re­leased to the pub­lic, but a source re­trieved the AFP Found­a­tion Sched­ule B from a pub­licly ac­cess­ible state at­tor­ney gen­er­al’s web­site, where it had been ap­par­ently up­loaded in er­ror, as has been known to oc­cur on oc­ca­sion. AFP, a 501(c)(4) group, and its found­a­tion, a 501(c)(3), are leg­ally sep­ar­ate, but they op­er­ate func­tion­ally as two parts of the same or­gan­iz­a­tion, in an ar­range­ment com­mon among polit­ic­al non­profit or­gan­iz­a­tions.

AFP was star­ted in 2004 after it split “due to philo­soph­ic­al dif­fer­ences” from a pre­de­cessor called Cit­izens for a Sound Eco­nomy, which also spun off Freedom­Works, one of the groups cur­rently lead­ing the charge against Obama­care. A sep­ar­ate pre­vi­ously un­re­por­ted Sched­ule B from Cit­izens for a Sound Eco­nomy Edu­ca­tion­al Fund lists a num­ber of big cor­por­ate and found­a­tion dona­tions, but re­cords Dav­id Koch as the largest fun­der.

That doc­u­ment, from 2001, states that the Dav­id H. Koch Char­it­able Found­a­tion provided the single largest con­tri­bu­tion, $2.35 mil­lion, while Dav­id Koch per­son­ally donated $1 mil­lion, and Koch In­dus­tries chipped in an­oth­er $952,500, for a total of more than $4 mil­lion.

Cor­por­ate dona­tions in­clude $750,000 from Gen­er­al Elec­tric, $275,250 from Ex­xon Mo­bil, $255,000 from State Farm, $100,000 from Philips Light­ing, and $350,036 from the law firm Wilmer, Cul­ter, & Pick­er­ing, now known as Wilmer­Hale. There are also nu­mer­ous found­a­tion grants, in­clud­ing a $450,000 con­tri­bu­tion from the Charles G. Koch Char­it­able Found­a­tion.

State Farm, the only com­pany lis­ted on both firms, has a his­tory of ag­grav­at­ing lib­er­als, from its re­fus­al to pur­chase ad­vert­ising on the now-de­funct pro­gress­ive talk-ra­dio net­work Air Amer­ica, to its sup­port for the Amer­ic­an Le­gis­lat­ive Ex­change Coun­cil. But in the years since its $275,000 dona­tion to AFP, a spokes­per­son said, the in­sur­ance com­pany has giv­en only an ad­di­tion­al $3,500 to Amer­ic­ans for Prosper­ity. “We sup­port a vari­ety of groups across the polit­ic­al spec­trum in the in­terest of en­cour­aging thor­ough dis­cus­sion of is­sues of con­cern,” State Farm’s Anna Bry­ant said. The oth­er com­pan­ies did not re­spond to or de­clined re­quests for up­dated con­tri­bu­tion in­form­a­tion.

AFP spokes­per­son Levi Rus­sell re­viewed the donor list and said his group doesn’t main­tain re­cords on site from that far back, but said the Sched­ule B is most likely au­then­t­ic, giv­en its proven­ance. He con­firmed that since the or­gan­iz­a­tion was foun­ded in 2004, the first tax fil­ing would have been for 2003.

Lisa Graves, the ex­ec­ut­ive dir­ect­or of the Cen­ter for Me­dia and Demo­cracy, a pro­gress­ive watch­dog group and long­time Koch ant­ag­on­ist that has re­leased nu­mer­ous leaked doc­u­ments from con­ser­vat­ive groups, but was not the source on these doc­u­ments, said the donor lists of­fer some new clues about the Koch Broth­ers’ shad­owy donor net­work.

“To my know­ledge, a Sched­ule B from AFP or CSE has nev­er been made pub­lic,” she said. Cam­paign fin­ance re­port­ers and watch­dog groups closely track grants made by non­profit groups, but con­tri­bu­tions dir­ectly from in­di­vidu­als or private com­pan­ies like Koch In­dus­tries are kept private — “It’s all off-book, ba­sic­ally,” Graves said — so cur­rent es­tim­ates likely vastly un­der­count con­tri­bu­tions. The new doc­u­ments, she said, “re­veal that there’s a high like­li­hood of lots of Koch fund­ing that hasn’t been re­por­ted.”

In­deed, just this month we learned that the Koch broth­ers cre­ated a group that quietly spent over $250 mil­lion dur­ing the 2012 elec­tion with zero pub­lic no­tice, thanks to a fairly nov­el use of a tax des­ig­na­tion nor­mally re­served for cham­bers of com­merce and trade as­so­ci­ations. That group, Free­dom Part­ners, con­trib­uted $32.3 mil­lion to Amer­ic­ans for Prosper­ity.

Un­for­tu­nately, it’s im­possible to know how much more money is float­ing around out there un­til someone else hits the wrong but­ton and ac­ci­dent­ally up­loads an oth­er­wise hid­den doc­u­ment to a pub­lic data­base. It says a lot about the cur­rent cam­paign fin­ance dis­clos­ure re­gime that we must rely on cler­ic­al er­rors for a glimpse at how mil­lions of dol­lars are spent to in­flu­ence the polit­ic­al sys­tem.

What We're Following See More »
$618 BILLION IN FUNDING
By a Big Margin, House Passes Defense Bill
2 days ago
THE DETAILS

The National Defense Authorization Act passed the House this morning by a 375-34 vote. The bill, which heads to the Senate next week for final consideration, would fund the military to the tune of $618.7 billion, "about $3.2 billion more than the president requested for fiscal 2017. ... The White House has issued a veto threat on both the House and Senate-passed versions of the bill, but has not yet said if it will sign the compromise bill released by the conference committee this week."

Source:
SUCCEEDS UPTON
Walden to Chair Energy and Commerce Committee
2 days ago
THE DETAILS

"Republicans have elected Rep. Greg Walden (R-OR) the next chairman of the powerful House Energy and Commerce Committee. Walden defeated Reps. John Shimkus (R-IL) and Joe Barton (R-TX), the former committee chairman, in the race for the gavel" to succeed Michgan's Fred Upton.

Source:
BIPARTISAN SUPPORT
Senators Looking to Limit Deportations Under Trump
3 days ago
THE DETAILS

"Democratic and Republican members of the Senate Judiciary Committee are working on legislation that would limit deportations" under President-elect Donald Trump. Leading the effort are Judiciary Committee members Dick Durbin (D-IL) and Lindsey Graham (R-SC). Sen. Jeff Flake (R-AZ) is also expected to sign on.

Source:
REQUIRES CHANGE IN LAW
Trump Taps Mattis for Defense Secretary
3 days ago
BREAKING

Donald Trump has selected retired Marine Gen. James 'Mad Dog' Mattis as his secretary of defense, according to The Washington Post. Mattis retired from active duty just four years ago, so Congress will have "to pass new legislation to bypass a federal law that states secretaries of defense must not have been on active duty in the previous seven years." The official announcement is likely to come next week.

Source:
MEASURE HEADED TO OBAMA
Senate OKs 10-Year Extension of Iran Sanctions
3 days ago
THE LATEST
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login