Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (40 page)

Soon after, Republicans in the House were proposing measures that Representative Norm Dicks, a Democrat from Washington, called “
a wish list for polluters.” In addition to halting action on global warming, they tried to prevent the protection of any new endangered species, permit uranium mining adjacent to the Grand Canyon, deregulate mountaintop mining, and prevent coal ash from being designated a form of air pollution. In an effort to subvert the EPA’s core mission, they also proposed legislation requiring it to consider the costs of its regulations, without regard to the scientific and health benefits, which the editorial page of the
Los Angeles Times
said “
rips the heart out of the 40-year-old Clean Air Act.”

Two months into their tenure, Republicans on the House Energy and Commerce Committee also led a crusade against alternative, renewable energy programs. They successfully branded the government’s stimulus support for Solyndra, a California manufacturer of solar panels, and other clean energy firms an Obama scandal. In fact, the loan guarantee program in the Energy Department that extended the controversial financing to the company began under the Bush administration.
Contrary to the partisan hype, it actually returned a profit to taxpayers. Moreover, while Solyndra’s investors were portrayed as Obama supporters, among its biggest backers were members of the conservative Walton family, the founders of Walmart.
A huge investor in another solar company that went bust after taking the same Energy Department loans was the venture capitalist Dixon Doll, a major contributor to the Kochs’ donor network. But as the House held hearings and various conservative front groups whipped up outrage about “crony capitalism,” the facts were buried in favor of a narrative that helped the fossil fuel industry.

Congressman Upton insisted that he hadn’t changed his position on environmental issues. But Jeremy Symons, then a senior vice president of the nonpartisan National Wildlife Federation, said that the transformation was “
like night and day.” He continued, “In the past the committee majority viewed the Clean Air Act as an effective way to protect the public. Now the committee treats the Clean Air Act and the EPA as if they are the enemy. Voters didn’t ask for this pro-polluter agenda, but the Koch brothers spent their money well and their presence can be felt.”

At the end of 2011, only twenty of the sixty-five Republican members of Congress who responded to a survey were willing to say that they believed climate change was causing the planet to warm. Tim Phillips gladly took credit for the dramatic spike in expressed skepticism. “
If you look at where the situation was three years ago and where it is today, there’s been a dramatic turnaround,” he told the
National Journal
. “Most of these candidates have figured out that the science has become political,” he said. “We’ve made great headway. What it means for candidates on the Republican side is, if you…buy into green energy or you play footsie on this issue, you do so at your political peril. The vast majority of people who are involved in the [Republican] nominating process—the conventions and the primaries—are suspect of the science. And that’s our influence. Groups like Americans for Prosperity have done it.”

F
red Koch, the family patriarch, had a saying, according to a former associate, which was that “the whale that spouts is the one that gets harpooned.” As he had warned, the downside to the brothers’ increasing visibility was growing public scrutiny. As the donors gathered for their January summit outside Palm Springs at the beginning of 2011, protesters swarmed the hitherto-secret meeting for the first time. Greenpeace, the theatrical environmental group, flew its 135-foot-long “airship” over the resort. Its Day-Glo green blimp was emblazoned with huge blowups of Charles and David’s faces along with the words “Koch Brothers: Dirty Money.”

The Koch network was no longer a secret. A squadron of local police in riot gear cordoned off the long, winding driveway to the Rancho Mirage resort, which was in virtual lockdown, while a ragtag assortment of protesters out front waved signs proclaiming, “Koch Kills!” and “Uncloak the Kochs!” Some twenty-five arrests were made, and the Kochs’ private security guards, wearing gold-colored
Ks
in their lapels, threatened to add one more when they caught the
Politico
reporter Kenneth Vogel in the resort’s café. Unless he left the premises immediately, they warned, they would make a “
citizen’s arrest,” forcing him to spend “a night in the Riverside County Jail.”

Inside the fortified resort, some of America’s most celebrated corporate chieftains huddled with Charles Koch, including the DeVos family of Amway, Ken Langone of Home Depot, and Tully Friedman, the private equity tycoon who was also chairman of the American Enterprise Institute. Like besieged royalty, David Koch and his wife, Julia, in dark sunglasses, made a brief appearance from one of the hotel’s balconies, from which they grimly surveyed the street theater below.

The heavy-handed security reflected a more combative stance on the part of the Kochs toward the backlash that their outsized role in the public arena was stirring. Confidants described the brothers as obsessed with leaks and stung by the critical press coverage. They seemed surprised and resentful that their growing political influence had resulted in heightened scrutiny. They were accustomed to thinking of themselves as private citizens, and public-spirited ones at that. A golf partner said David “
spumed and sputtered” about
The New Yorker
and other publications that had scrutinized the brothers, blaming the media for spurring death threats and forcing his family to hire personal bodyguards.

The Kochs also spoke darkly and inaccurately about the Obama White House conspiring with reporters to smear them. “
They somehow thought that they could run tens of millions of dollars in ads, but fly under the radar screen, and that nobody was going to find out,” a conservative source familiar with the Kochs told
Politico
. “So they’re scrambling now because they weren’t nearly as prepared as they should have been.”

To handle the growing number of critics, particularly in the press, they brought in a new team of public relations advisers specializing in aggressive tactics.
Michael Goldfarb, for instance, a Republican political operative whom the company hired at this point to improve its image, was described by
The New York Times
as “a conservative provocateur” who used “a blowtorch as his pen.” Goldfarb had worked for Sarah Palin’s vice presidential campaign, where he described his job as “attack the press.”
Later, he founded an online publication called
The Washington Free Beacon
that practiced what its editor called “combat journalism” against “liberal gasbags.” Its motto was “
Do unto them.” In a profile, one conservative journalist told
The New Republic
, “
I mean no disrespect, and I like him personally, but he is the single shadiest person on the right.”

Joining Goldfarb was Philip Ellender, co-president of Koch Companies Public Sector, who oversaw the company’s lobbying and public relations operations in Washington and who had a reputation, as
Politico
described it, for using “
tactics that have helped cement the view that the Kochs play rough.” Ellender oversaw a crisis communication project that included frequent polling to assess damage to the company’s public image. To fight back, he launched a pugnacious corporate Web site called KochFacts that waged ad hominem attacks, questioning the professionalism and integrity of reporters whose work the company found unflattering, ranging from
The New York Times
to
Politico
. Brass-knuckle tactics were nothing new for the Koch brothers, but they were now deploying them against legitimate news reporters.

I got a taste of these tactics on the afternoon of January 3, 2011, when an e-mail popped onto my screen from David Remnick, the editor of
The New Yorker
, where I had been a staff writer since 1994. Remnick is a brilliant and busy editor who doesn’t bother his writers unnecessarily. When he gets in touch, there’s usually a good reason.

In his e-mail, Remnick explained that ten minutes earlier he’d received a baffling inquiry about me from Keith Kelly, the reporter who covered the media industry for the
New York Post
. Unsure how to respond, Remnick forwarded it and asked, “Can you help me out on this stuff?” He added courteously, “Sorry to bother you with this.”

“Hi,” Kelly’s inquiry began, breezily. “We’re hearing that a right-wing blogger may be preparing to let fly some pretty serious claims against Jane Mayer. On the one hand, it may be seen as payback for her bringdown of the Koch Brothers in August 2010.”

His reference was to a ten-thousand-word article I had written for
The New Yorker
five months earlier, titled “Covert Operations,” with the reading line “The billionaire brothers who are waging a war against Obama.” The story revealed in depth for the first time how the publicity-shy Koch brothers had stealthily leveraged their vast fortune to exert outsized influence over American politics. It also showed that their environmental and safety record was woefully at odds with their burnished public images as selfless philanthropists.

I had previously devoted the same amount of space in
The New Yorker
to profiling another such plutocratic donor, George Soros, a billionaire investor who spent a fortune underwriting liberal organizations and candidates. Soros hadn’t liked the story, but he’d accepted that tough questions were to be expected from the press in a democracy. In contrast, when the
New Yorker
story on the Kochs came out, the brothers were enraged. Their company’s general counsel, Mark Holden, later described the story as “
a wake-up call,” admitting, “We didn’t have a response that was ready to go.” Spearheading an aggressive damage-control effort, he soon sent a letter of complaint to the magazine. He was unable to identify any factual errors but argued that contrary to the article’s title, “Covert Operations,” there was nothing secretive or “covert” about them. Yet the Kochs, unlike Soros, had declined to grant
The New Yorker
an interview. Instead, after our story ran, David Koch denounced it in
The Daily Beast
as “hateful,” “ludicrous,” and “plain wrong.” But his complaints lacked specificity, requiring no corrections, and so the magazine stood by the story, and we moved on. The calm, however, was deceptive.

In a squat Washington office building three blocks from the White House, a boiler room operation formed. Beginning in the summer of 2010, as the Kochs were ramping up spending on the midterm elections, half a dozen or so highly paid operatives labored secretly in borrowed office space in the back of the lobbying firm run by the former congressman J. C. Watts. Their aim, according to a well-informed source, was to counteract
The New Yorker
’s story on the Koch brothers by undermining me. “Dirt, dirt, dirt” is what the source later told me they were digging for in my life. “If they couldn’t find it, they’d create it.”

Reprising the intimidating tactics that critics of Koch Industries had complained of for years, a private investigative firm with powerful political and law enforcement connections was retained. The firm, it appears, was Vigilant Resources International, whose founder and chairman, Howard Safir, had been New York City’s police commissioner under the former mayor Rudolph Giuliani. The firm advertised itself as upholding “the highest standards of confidentiality and discretion.”

It’s uncommon for a private detective to be hired to conduct a retaliatory investigation into a reporter’s character. It is after all the job of the press to cover politics. How much, if at all, the Kochs were personally involved in these activities remains unclear. Often private investigators are hired indirectly, working for law firms retained by the principals, so that they can claim attorney-client privilege, preserve deniability, and erase fingerprints. Asked whether he had investigated me, Howard Safir said only, “I don’t comment. I don’t confirm or deny it.” His son, Adam Safir, who worked with him in the firm, also declined to comment. An effort to interview Charles and David Koch resulted in an e-mail from their company’s spokesman, Steve Lombardo, saying simply, “We will have to decline.” Asked in a follow-up e-mail whether the company had mounted a private investigation into me, he declined to respond.

However, clues leading back to the Kochs were everywhere. Sources described Goldfarb, Ellender, and other Koch Industries personnel as deeply involved in the project. Leading it, one source said, was Nancy Pfotenhauer, a longtime member of the Kochs’ inner circle who has served as a Koch Industries spokesperson, as the head of its Washington office, and as the president of Americans for Prosperity.

I had no inkling about this until that fall, when, a few months after my story ran, a blogger called me to ask if I had heard the rumor that I was the target of some sort of cloak-and-dagger private detective’s investigation. I laughed it off. At a Christmas party that winter, I was equally nonchalant when a former reporter pulled me aside with an odd warning. “This may be nothing,” she said, but a private investigator she knew had mentioned there were a couple of conservative billionaires who wanted help digging up dirt on a Washington reporter. The reporter had written a story they disliked. “It occurred to me afterward that the reporter they wanted to investigate might be you.”

These warnings flashed through my mind as I read the e-mail that Remnick forwarded from the
New York Post
reporter that afternoon in January. Kelly, the
Post
reporter, was hoping to get comment on “allegations” that he said were about to be published against me, claiming that I had “borrowed heavily” from other reporters’ work. Before I had the chance to respond, though, a second set of e-mails reached both Remnick and me.
This time the sender was Jonathan Strong, then a reporter at the online conservative news site
The Daily Caller
, whose editor, Tucker Carlson, was a senior fellow at the Cato Institute. Strong, too, it appeared, was about to publish a hit piece on me. His e-mails were ominous, asking Remnick outright whether my work fell “within the realm of plagiarism.” He provided several samples of my writing and demanded an answer by ten o’clock the next morning.