"Jane Mayer / The Koch Brothers and the Weaponizing of Philanthropy"
Stanford University: EthicsinSociety (April 7, 2021)
Jane Mayer / "Dark Money"
Politics and Prose Bookstore/Coffeeshop (February 17, 2021)
Why is America living in an age of profound economic inequality? Why, despite the desperate need to address climate change, have even modest environmental efforts been defeated again and again? Why have protections for employees been decimated? Why do hedge-fund billionaires pay a far lower tax rate than middle-class workers? The conventional answer is that a popular uprising against “big government” led to the ascendancy of a broad-based conservative movement. But as author Jane Mayer shows in her powerful, meticulously reported new book, a network of exceedingly wealthy people with extreme libertarian views bankrolled a systematic, step-by-step plan to fundamentally alter the American political system.
Mayer was in conversation with Rob Reich and Lucy Bernholz to discuss the future of American democracy.
This event was co-sponsored with Stanford PACS, and was part of The Ethics of Democracy series.
[1:07] Rob Reich: "... [subtitle of the book]: “Dark Money: the Hidden History of the Billionaires. Behind the Rise of the Radical Right. … The Weaponizing of Philanthropy.”
Jane Mayer: “… a small group of extraordinarily wealthy and conservative Americans who felt, around 1970 or so that they were really on the fringe. That they were left out. They didn’t like the direction of the country. For the most part, they had corporate fortunes. They didn’t like the environmental movement. They didn’t like the anti-war movement that was going on. And they felt that, basically, the country was headed in the wrong direction. And that they needed to wage a war of ideas. So when I’m talking about weaponizing philanthropy, and it’s actually a quote from somebody who was part of it, someone named Jim Pearson, described these philanthropies as ‘the artillery.’ And what they were trying to do was wage a war of ideas that would turn the country around and change the way Americans thought, which would eventually change the way they voted. And it was, in some ways, a planned take-over, really. To take over American politics with their fortunes. But instead of doing it in an overt way, by just running for office, they decided to use what they had as a special weapon which was their fortunes and to give it away, to target it, to spend it in ways that would really change the country. And, if possible, to take a tax deduction while they were doing it.”
[3:42] Rob Reich: “It’s good that you mention the tax deduction there because one of the things – fixing just on the ordinary understanding of philanthropy which is something celebrated and praised – I wonder if you would accept some of the following description of the main players in the first third of the book: The Scaifes, the Olins, the Bradley’s of the world, the Koch brothers at the time. These are folks who, by and large, having made their great fortunes by generating profits from public moneys, in many of the instances in the companies they ran, then sought through as many legal means as possible to diminish their tax burden as low as it can go, and then, further, took an additional tax break to set up their foundations. So, having diminished their contributions to the Treasury to as small as it was possible to make it – first having enriched themselves partly through the Treasury’s dollars – took a further tax deduction to create their foundations which were aimed at diminishing the size of the state itself, and then asked for citizens to be grateful in return.”
[4:49] Jane Mayer: “…[for the Olins] much of the fortune comes from defense contracts. Same with the Bradley Foundation which continues to be one of the biggest players on the right. And it is an irony because a lot of what it spends money on is attacking the US government, the idea of big government, and yet it would not be what it is without those huge defense contracts that so enriched it. It might be different in the case of the Scaife family. Richard Mellon Scaife is one of the characters in this book,, and he’s from the Mellon Banking and Gulf Oil fortune. Oil had tremendous subsidies from the US government, it is true, and so that fortune too was helped along a lot by the way the tax laws work. Each of these families, Scaife inherited so much money by the time he was twenty-one the family’s lawyer talked to him and said ‘You need to start a foundation because it’s a really good way to save on your taxes.’ And so in all of these families you can see that philanthropy is, among other things, a tax strategy, a tax avoidance strategy for them.”
[6:32] Lucy Bernholz “The weaponization metaphor goes further than that. Because I think that anyone who has looked at large philanthropy in this country has seen kind of the defensive use of philanthropy when a corporation – or a titan or wealthy individual – is being attacked by others. So I think you can take this all the way back to the creation of the Rockefeller Foundation and the Ludlow Massacre in the sense that where in order to salvage or preserve a legacy as a do-gooder, philanthropy is often the defensive weapon in the case of corporate doings or otherwise. But what is so incredible in the story you’re telling, particularly about the Olins and the Scaifes and the Bradleys and the Kochs is this sense that there’s actually an offensive strategy for political change. There’s an ideology behind what they’re doing, and a direction and consistency over time that has few parallels.”
[7:30] …uncontroversial today but originally controversial because some in Congress and Teddy Roosevelt (a Republican) they looked at it as a form of plutocratic power that was going to interfere with democracy. ...
... [10:00] “The enemy is respectable opinion. It’s the liberals in universities, judges, and preachers in pulpits who are liberal, and newspaper people. … and if you want to change the country, you’re going to have to change all of those.” [emphasis added]
[16:44 "It becomes a big semantic issue. It depends on what you call the Left and the Right. From the standpoint of the Koch brothers who really do define the far right fringe, everybody is on the left of them. So they see the universities as bastions of left-wing thinking because they don't all teach Hayek and nothing else, or Von Mises. ... It's not the most useful. You're going to get yourself stuck in a bunch of word games. Anyway, they felt that their point of view was not being taught at that point in the seventies enough. And so they deliberately went out and tried to fund it, get it moving, and get ... They wanted to reach kids. ... the future if you can convert them to your point of view. ... "
[18:47] I would say something about why this is weaponized versus like before. If you look at universities and think tanks, like the Brookings Institute, founded by a Republican who said in the charter of the Brookings institute that he wanted people of all points of view. And I think that a lot of the universities thought the same thing. That they wanted many points of view. They were designed to seek truth, not to serve one ideology or another. They were inspired to try and find solutions to problems whatever the ideology. This is a very different kind of mindset. This was a mindset that said 'We want to change things so that they think more like we do.' And that is why they looked at this as the artillery, and this was a – in their own words – a war of ideas. They didn't got there just to find the truth but to win the war."
[19:51] Lucy Bernholz: "It's also interesting to think how those semantics have taken hold. By labelling their own ideas one thing, they push everyone else to either label or be labelled. And you now cannot listen to a news report without the reporter presenting the 'liberal' view and the 'conservative' view and labelling them as such. This strange marketing spin of creating a balance of ideas and a market place of ideas, they've actually really tipped that balance in significant ways, or at least called attention to it in ways that – it may never have been truly neutral or balanced, but there was more possibility for interchange, I would assume."
[20:42] Jane Mayer: "The risk is that you wind up saying that there are two sides to absolutely everything. So that you have a newcast that will have a climatologist talking about Global Warming and then you'll have someone from the Cato Institute (secretly funded by the fossil fuel industry) who will say 'The Polar Bears have never been happier.' So are they all equal? When I'm a reporterr, should I give them equal standing? And if I don't, I know what's going to happen. I'm going to be attacked as biased. And so they've created, sometimes, kind of a 'balance' when there shouldn't always be a balance."
[21:29] Lucy Bernholz: "And there's another piece of that, too. Which is the self-interest. Which is where, philanthropists, we debate quite a bit about the role of self-interest in philanthropy where we sort of assume a type of self-interest in political spending. But a lot of what the book documents is this alignment between the political spending, the philanthropic spending, and the Koch's own bottom line. They never seem to veer away from one another. There's a mutual reinforcement pattern there that's consistent throughout."
[22:05] Jane Mayer: "I think they probably are, to some extent -- to a great extent -- true believers. People always are saying: 'Are they doing this because to just want to get rich or are they doing this because they really do believe. And the thing is, there is actually no difference in their philosophy. But it's really true. Because Charles Koch believes that what's good for Koch industries is good for America. He really does believe that. He believes he's a 'job creator'. He thinks the 'free market' is wiser than government in terms of finding the right solutions to things. And when he accumulates more wealth, he can do more for society with it than the government can with his taxes. So it is actually his philosophy that he is a virtuous person doing good by doing well. There is not a lot of daylight between those positions."
. . . [24:10] Jane Mayer: "... that becomes this murky problem. Since their philosophy is that what's good for America is the accumulation of their own wealth, their philanthropy tends to favor the accumulation of their own wealth. But they define that as in the public interest, which is what the tax law says philanthropy is supposed to be. And so who is it to say otherwise. Generally, it's the IRS that is supposed to say otherwise."
[25:41] "I think it's a Faustian bargain that everybody is entering into. And I think there is a lot in it for the donors.
. . .
[27:00] transparency part of the solution.
. . .
[more transcription as time allows]
Introduction: In her fourth book Mayer draws on court records, extensive interviews, and many private archives to examine the growing political influence of extreme libertarians among the one percent, such as the Koch brothers, tracing their ideas about taxation and government regulation and their savvy use of lobbyists to further an agenda that advances their own interests at the expense of meaningful economic, environmental, and labor reform.
Mayer is in conversation with James Bennet, the editor-in-chief of The Atlantic.
Founded by Carla Cohen and Barbara Meade in 1984, Politics & Prose Bookstore is Washington, D.C.'s premier independent bookstore and cultural hub, a gathering place for people interested in reading and discussing books. Politics & Prose offers superior service, unusual book choices, and a haven for book lovers in the store and online. Visit them on the web at http://www.politics-prose.com/
[22:33] Jane Mayer: "I'd like people to understand that this isn't just about elections. They've won some elections. They've lost some elections. But what they've been aiming at is something much more ambitious, which is about changing the conversation in America and the way people think. So that if you can turn Americans against government and make the government seem dysfunctional, that's a real win for them." [emphasis aded]
". . ."
[more transcription as time allows]