I’ve been wanting to write something about the Koch brothers’ lawsuit against the Cato Institute, but I haven’t really been able to put what I wanted to say into words. Turns out I don’t have to, because many of the people who work there have done it for me.
First, some background. David Koch founded the Cato Institute and the organization papers give equal shares of control to four people: David and Charles Koch, Ed Crane (president of the organization) and William Niskanen, who recently died. The legal question at issue in the suit is whether Niskanen’s share passes to his widow or whether that share disappears, giving the Koch brothers full control of the organization.
But that’s really only the latest step. It’s now coming out that the Koch brothers have been very active behind the scenes in asserting more control over the group for quite some time now. Jerry Taylor, a senior fellow at Cato, tells the story over at Volokh:
Last year, they used their shares to place two of their operatives – Kevin Gentry and Nancy Pfotenhauer – on our board against the wishes of every single board member save for David Koch. Last Thursday, they used their shares to force another four new board members on us (the most that their shares would allow at any given meeting); Charles Koch, Ted Olson (hired council for Koch Industries), Preston Marshall (the largest shareholder of Koch Industries save for Charles and David), and Andrew Napolitano (a frequent speaker at Koch-sponsored events). Those four – who had not previously been involved with Cato either financially or organizationally – were likewise opposed by every member of our board save for Gentry, Pfotenhauer, and David Koch. To make room for these Koch operatives, we were forced to remove four long-time, active board members, two of whom were our biggest donors. At this moment, the Kochs now control seven of our 16 board seats, two short of outright control.
Why are they forcing out Cato board members, all strong, principled libertarians who have been heavily involved with Cato – financially and organizationally – for years? The answer was given in early November of last year when David Koch, Richard Fink (he of many Koch hats), and Kevin Gentry met with Cato board chairman Bob Levy. They told Bob that they intended to use their board majority to remove Ed Crane from Cato and transform our Institute into an intellectual ammo-shop for American for Prosperity and other allied (presumably, Koch-controlled) organizations. That statement of intent is certainly consistent with what we’ve been hearing from both Kevin Gentry and Nancy Pfotenauer. They’ve frequently complained during their short time on our board that Cato wasn’t doing enough to defeat President Obama in November and that we weren’t working closely enough with grass roots activists like those at AFP…
Let’s take a look at a few of these new board members of ours. Kevin Gentry is a social conservative activist who’s also vice-chair of the Virginia GOP. Nancy Pfotenauer is a former spokesperson for the McCain campaign who has argued on television in favor of theIraqwar and the “don’t ask, don’t tell” policy pertaining to gays in the military. Ted Olson is a Republican super-lawyer who’s never identified himself as a libertarian.
Just before the last shareholders meeting, the Koch brothers also nominated –but were unable to elect – eight additional individuals for our board. Those nominees included the executive vice president of Koch Industries, a staff lawyer for Koch Industries, a staff lawyer for the Charles Koch Foundation, a former Director of Federal Affairs for Koch Industries, a former Executive Director of the National Republican Senatorial Committee (and who was, incidentally, a McCain bundler), and a lifelong Wichita friend of Charles Koch. Aside from those functionaries, they also nominated a couple of people with public profiles that make the jaw drop:
John Hinderaker of the Powerline blog, whose firm counts Koch Industries as a client. Hinderaker has written, “It must be very strange to be President Bush. A man of extraordinary vision and brilliance approaching to genius, he can’t get anyone to notice. He is like a great painter or musician who is ahead of his time, and who unveils one masterpiece after another to a reception that, when not bored, is hostile.” Hinderaker supports the Patriot Act and the Iraq War and calls himself a neocon.
Tony Woodlief, who has been president of two Koch-created nonprofits and vice president of the Charles Koch Foundation. Woodlief has blogged about “the rotten heart of libertarianism,” calling it “a flawed and failed religion posing as a philosophy of governance” while complaining about libertarians “toking up” at political meetings.
Now, who’s more likely to “ensure that Cato stays true to its fundamental principles of individual liberty, free markets, and peace into the future” – these Republican operatives and bloggers or the ousted board members who are among the most independent, principled, and energetic libertarians you’ll ever find?
It is important to note, as Taylor does, that the Koch brothers have supplied less than 5% of Cato’s funding over the last decade, and less than 10% throughout the history of the organization. Taylor also notes that the Koch brothers have been all but non-existent in terms of influence over Cato until the last few years:
Shareholder control has been dormant for decades. The shareholders have not met – in person or on the telephone – from 1981 through 2008. No shareholder had asked for a meeting over that time despite a requirement of annual meetings. In every sense, the Board of Directors has run the Cato Institute, not the shareholders. Whatever success Cato has had, it is success that was produced by the Cato’s board of directors, management, staff, and donors – not the shareholders who, save for Ed and Bill Niskanen, have been uninvolved in Cato for decades.
But now they want to stack the board of directors with people loyal to their vision of Republican-favored policies. My friend Jason Kuznicki, also a Cato employee and someone I respect immensely, adds to the discussion:
When I learned that the Kochs were suing Cato, I’m sorry to say that one of the first things I felt was vindication. I’d been saying for years that Cato was essentially an independent shop. The suit makes no sense unless I was right all along.
I’ve worked at Cato for five and a half years. In that time I have never seen a single decision made in consideration of the Koch brothers’ wishes. Cato has always appeared to be run by two people: its president, Ed Crane, and its executive vice president, David Boaz. It was like that when I was hired, and it’s like that now.
Even they don’t call all the shots, either; plenty of things get published that they actually disagree with, including some of my stuff. The people who spin elaborate fantasies about the Kochs acting as our puppet masters were, and are, dead wrong. They’ve been wrong since at least the early 90s, if not earlier. I’ve been saying so for years. Now the whole Cato Institute is in open revolt against the Kochs, a revolt that grew up with astonishing speed…
A socially conservative, hawkish Cato wouldn’t be Cato anymore. It would be the west annex of the Heritage Foundation…
The real work that Cato does, above all of its specific issue advocacy, is to show that the ordinary constellations of opinion, both left and right, aren’t necessarily so good. Many of Cato’s ideas are already out there, on the left or the right. What Cato does is fit them together in a way that we find is much more consistent and principled. We might be wrong, but at the very least we’re a reasonable challenge to the status quo.
What does Cato say that no other think tank says? Militarism is not the foreign policy best suited to the free market. In fact, it’s the worst foreign policy for a free market. The War on Drugs is not only unnecessary in a free market, but ending it would be a straightforward implementation of free market principles. And the freedom to buy and sell is a sick joke without robust civil liberties for all. Conversely, most people want their civil liberties partly so that they can earn a living and enjoy economic opportunities.
That is what Cato is about. That is also apparently why the Kochs are trying to destroy it…
What we are witnessing here is a very important moment in the history of conservative-libertarian fusionism. Possibly its death knell. To the extent that any of my colleagues have spoken, it’s fair to say that this is what they have said as well.
I don’t fear being fired anymore. They’d have to fire all of us if they wanted Cato to do their bidding. If they did, we’d just reorganize somewhere else. The donors and the audience would follow the productive people who actually did the work, not the people who sat on their shares and waited for Bill Niskanen to meet his maker.
He’s not alone. Julian Sanchez has already issued a pre-resignation letter, saying he will quit if the Kochs win their battle for control. There is an open revolt going on, and if the Kochs succeed in taking full control of the group they may find the building virtually empty when they get there. And that’s a good thing.
Now, I know that Raging Bee and many other liberals will fume and spout off in the comments and elsewhere about this, but I don’t care. Naomi Klein was wrong from the start when she claimed that Cato and Heritage were blood brothers in the fight for a right wing utopia. They may agree on lower taxes and less regulation, but there were huge disagreements between them that mirror the disagreements between libertarians and conservatives in general. And those disagreements are over very important issues.
Cato, and libertarians in general, are strongly opposed to our government’s perpetual military interventions abroad; Heritage and conservatives in general never met a chance to bomb a third-world nation that they didn’t love. Libertarians are strongly opposed to the death penalty and work tirelessly to expose the many injustices in law enforcement and the courts — police misconduct and brutality, prosecutorial immunity, access to DNA evidence, the abuses of forensic science, the need for strict controls on eyewitness identification and interrogations, the militarization of law enforcement and the incredible and racist destruction brought on by the war on drugs. Conservatives tend to be strongly pro-law enforcement and opposed to any reforms that would make the system more fair and just.
I believe that Cato Institute scholars, and libertarians in general, are wrong about wanting less economic regulation (though they are often right about the poor design of many regulations). The last thing I want is to tear down the many protections put in place for the environment, worker and consumer safety and much more. But when it comes to civil liberties, the work they do is consistent, important and — most importantly — exactly where liberals ought to be on those issues (and where many liberal organizations, like the ACLU, already are).
Ezra Klein wrote about this and agrees with me that progressives should be taking much of the output of Cato far more seriously:
I am not exactly a libertarian. I’m a technocrat. I believe in the government’s ability, and occasionally its responsibility, to help solve problems that the market can’t or won’t resolve on its own. I find much of Cato’s hard-line libertarianism — to the point of purging Will Wilkinson and Brink Lindsey, libertarians who explored making common cause with liberals on select issues — naive, callous and occasionally absurd. And yet, it’s among a handful of think tanks whose work I regularly read and trust.
That’s because Cato is, well, “the foremost advocate for small-government principles in American life.” It advocates those principles when Democrats are in power, and when Republicans are in power. When I read Cato’s take on a policy question, I can trust that it is informed by more than partisan convenience. The same can’t be said for other think tanks in town.
The Heritage Foundation, for instance, is a conservative think tank that professes to pursue goals similar to Cato’s. Where Cato’s motto is “individual liberty, free markets, and peace,” Heritage’s mission is the advancement of “conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.”
In practice, however, whatever the Republican Party wants, so does Heritage. In 1989, Heritage helped develop the idea of universal health care delivered by the private sector through an individual mandate. In the early 1990s, it helped Senate Republicans build that concept into a legislative alternative to President Bill Clinton’s proposed reforms. In the early 2000s, Heritage worked with then-Governor Mitt Romney to implement the plan in Massachusetts. Then, when Obama won office and Democrats adopted Heritage’s idea, Heritage promptly fell into step with the Republican Party and turned ferociously against it.
Similarly, when Representative Paul Ryan was developing his budget and needed a friendly think tank to run the numbers, he turned to the Heritage Foundation. And boy, they made those numbers sprint. Heritage’s analysis showed Ryan’s budget driving down unemployment to 2.8 percent. When the mockery that ensued proved too much for the think tank to bear, it quietly replaced the analysis with another that didn’t include unemployment predictions.
On my radio show on Tuesday, my guest Jeremiah Bannister and I talk about this quite a bit. I believe that what Jason Kuznicki said about this being an important moment in the libertarian/conservative fusion is true. And I believe this is an opportunity to build a new set of alliances between progressives and libertarians, a “liberaltarian” fusion (and I’m hardly alone; Markos Moulitsas has been saying this for years). There is a great deal of common ground here, more common ground than there has ever been between libertarians and conservatives, and together maybe we could have the kind of influence over Democrats that Heritage and AEI have long had over Republicans.
Maybe we could actually force the Democratic leadership to take civil liberties seriously, something that Obama, Reid and Pelosi have refused to do in spectacular fashion. Maybe we could actually build a consensus in favor of less executive power, greater accountability and justice and fairness in a law enforcement apparatus that doesn’t give a damn about those things now. I think the opportunity is there and we should seize it.
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