Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (57 page)

Scaife, who by then had donated
: Ed Feulner describes the scope of Scaife’s giving in the Luce Papers.

“I was lucky”
: Scaife, “Richly Conservative Life,” 22.

uprising at Cornell University
: An excellent report on the protest appears in Donald Alexander Downs,
Cornell ’69: Liberalism and the Crisis of the American University
(Cornell University Press, 1999).

“the most disgraceful”
: David Horowitz, “Ann Coulter at Cornell,”
FrontPageMag.com
, May 21, 2001.

“The catastrophe at Cornell”
: John J. Miller,
A Gift of Freedom: How the John M. Olin Foundation Changed America
(Encounter Books, 2006).

“saw very clearly”
: John J. Miller,
How Two Foundations Reshaped America
(Philanthropy Roundtable, 2003), 16.

“These guys, individually”
: Lizzy Ratner, “Olin Foundation, Right-Wing Tank, Snuffing Itself,”
New York Observer
, May 9, 2005.

Each side would argue
: James Piereson, for instance, who regards hugely well-endowed, establishment nonprofit organizations such as the Ford Foundation as liberal, argues that the Right has been routinely outspent by the Left.

“saving the free enterprise”
: Olin’s general counsel was Frank O’Connell, a labor lawyer who was famously tough on unions.

Olin followed closely
: This account of Olin’s history draws extensively on Miller,
Gift of Freedom
.

In the summer of 1970
: E. W. Kenworthy, “U.S. Will Sue 8 Concerns over Dumping of Mercury,”
New York Times
, July 25, 1970, 1.

Subsequently, the Justice Department
: The Olin Corporation dumped mercury into a landfill known as the 102nd Street site, which was also used by the Hooker Chemicals and Plastics Corporation.

Eventually, the Olin Corporation
: The maximum fine for each of the seven misdemeanor convictions was $10,000, thus the maximum fine in total was $70,000. “Olin Fined $70,000,” Associated Press, Dec. 12, 1979.

For decades, Saltville
: “End of a Company Town,”
Life
, March 26, 1971. See also Tod Newcombe, “Saltville, Virginia: A Company Town Without a Company,”
Governing.com
, Aug. 2012.

“They all knew the dangers”
: Harry Haynes, interview with author.

Dangerous levels of mercury
: Virginia Water Resources Research Center, “Mercury Contamination in Virginia Waters: History, Issues, and Options,” March 1979. See also EPA Superfund Record of Decision, Saltville Waste Disposal Ponds, June 30, 1987.

Life
magazine produced
: “End of a Company Town.”

“It’s a ghost town”
: Shirley “Sissy” Bailey, interview with author.

“Common sense should have”
: Stephen Lester, interview with author.

“It is possible”
: James Piereson, e-mail interview with author.

“The Olin family”
: William Voegeli, e-mail interview with author.

“My greatest ambition”
: Quoted in Ratner, “Olin Foundation, Right-Wing Tank, Snuffing Itself.”

“with definite left-wing attitudes”
: John M. Olin to the president of Cornell, 1980, in Teles,
Rise of the Conservative Legal Movement
, 185.

“It was like a home-study course”
: Miller,
Gift of Freedom
, 34.

By the late 1960s, Ford
: James Piereson describes the Ford Foundation’s leading role as liberal activist philanthropists in an incisive essay, “Investing in Conservative Ideas,”
Commentary
, May 2005.

“almost identical”
: Miller,
How Two Foundations Reshaped America
, 13.

“Since the 60’s, the vast bulk”
: William Simon,
A Time for Truth
(Reader’s Digest Press, 1978), 64–65.

“What we need”
: Miller,
Gift of Freedom
, 56.

“Capitalism has no duty”
: Simon,
Time for Truth
, 78.

“They must be given grants”
: Miller,
Gift of Freedom
, 57.

“Joyce was a true radical”
: Ralph Benko, interview with author.

“because they were emulated”
: Teles,
Rise of the Conservative Legal Movement
, 186.

“The only way you’re going”
: Miller,
How Two Foundations Reshaped America
, 17.

“the most influential schools”
: James Piereson, “Planting Seeds of Liberty,”
Philanthropy
, May/June 2005.

Princeton’s Madison Program
: Miller,
Gift of Freedom
.

“a savvy right-wing operative”
: Max Blumenthal, “Princeton Tilts Right,”
Nation
, Feb. 23, 2006.

“perhaps we should think”
: Piereson, “Planting Seeds of Liberty.”

the CIA laundered
: Most of the CIA funds arrived from an organization called the Dearborn Foundation. The Olin Foundation then disbursed the funds to a Washington, D.C.–based organization called the Vernon Fund.

the press exposed the covert propaganda
: In 1967,
Ramparts
magazine blew the cover on the covert CIA program. Additional reports revealed that the CIA had been secretly funneling money through as many as a hundred private foundations in the country that were acting as front groups and passing the money on covertly to Cold War anti-Communist projects. Some of the money was spread to domestic groups such as the National Student Association. Liberal organizations, including teachers’ unions, acted as fronts too.

Soon the Olin Foundation was investing
: Miller,
Gift of Freedom
.

“a wine collection”
: James Barnes, “Banker with a Cause,”
National Journal
, March 6, 1993.

“Lott’s claimed source”
: Adam Winkler,
Gunfight: The Battle over the Right to Bear Arms in America
(Norton, 2011), 76–77.

Another Olin-funded book
: See Jane Mayer and Jill Abramson,
Strange Justice: The Selling of Clarence Thomas
(Houghton Mifflin, 1994), for a more thorough analysis of Brock’s role in the confrontation between Thomas and Hill.

“If the conservative intellectual movement”
: Miller,
Gift of Freedom
, 5. Also Miller’s defense of Lott’s research as “rigorous,” 72.

“On the right, they understood”
: Steve Wasserman, interview with author.

“John Olin, in fact, was prouder”
: Miller,
Gift of Freedom
.

“I saw it as a way”
: Jason DeParle, “Goals Reached, Donor on Right Closes Up Shop,”
New York Times
, May 29, 2005.

“If you said to a dean”
: Teles,
Rise of the Conservative Legal Movement
, 189.

“was considered a marginal”
: Ibid., 108.

In 1985, however, the foundation
: Miller,
Gift of Freedom
, 76.

“the most important thing”
: Paul M. Barrett, “Influential Ideas: A Movement Called ‘Law and Economics’ Sways Legal Circles,”
Wall Street Journal
, Aug. 4, 1986.

“the most successful”
: Teles,
Rise of the Conservative Legal Movement
, 216.

“taking advantage of students’ financial need”
: Alliance for Justice,
Justice for Sale: Shortchanging the Public Interest for Private Gain
(Alliance for Justice, 1993).

A study by the nonpartisan
: Chris Young, Reity O’Brien, and Andrea Fuller, “Corporations, Pro-business Nonprofits Foot Bill for Judicial Seminars,” Center for Public Integrity, March 28, 2013.

Federalist Society
: The $5.5 million figure from Olin represents funding over two decades, as reported by Miller, Gift of Freedom, 94.

All of the conservative justices
: For a more complete index of influential members of the Federalist Society, see Michael Avery and Danielle McLaughlin,
The Federalist Society: How Conservatives Took the Law Back from Liberals
(Vanderbilt University Press, 2013).

“it possibly wouldn’t exist”
: Miller,
How Two Foundations Reshaped America
, 29.

“one of the best investments”
: Miller, “A Federalist Solution,”
Philanthropy
, Fall 2011. Irving Kristol was among the earliest fund-raisers for the Federalist Society.

a key $25,000 investment
: The Olin Foundation eventually donated a total of $6.3 million to the Manhattan Institute.

“It was a classic case”
: Charles Murray, interview with author.

Critics said it overlooked
: For a fuller analysis of
Losing Ground
, see Thomas Medvetz,
Think Tanks in America
(University of Chicago Press, 2012), 3.

“It took ten years”
: Ibid., 5.

Among them was the
Dartmouth Review
: Louis Menand, “Illiberalisms,”
New Yorker
, May 20, 1991.

ABC correspondent Jonathan Karl
: Karl was the first network television journalist invited by the Kochs to moderate a political panel discussion during a seminar for their donors, which he did in January 2015. ABC’s decision to participate in the otherwise-closed event stirred criticism and controversy but created a precedent when the
Politico
columnist Mike Allen moderated a candidates’ forum at a Koch fund-raising conference in August 2015, accepting an invitation that the CNN correspondent Jake Tapper turned down on principle.

“We’ve got money”
: Many details regarding the history of the creation of the Bradley Foundation are drawn from John Gurda’s
Bradley Legacy
, which was commissioned by Michael Joyce and published in 1992 by the Lynde and Harry Bradley Foundation.

During the next fifteen years
: Patricia Sullivan, “Michael Joyce; Leader in Rise of Conservative Movement,”
Washington Post
, March 3, 2006.

At least two-thirds
: According to James Barnes, “Banker with a Cause,”
National Journal
, March 6, 1993, 564–65, well over two-thirds of the $20 million that the Bradley Foundation doled out each year went to “conservative intellectual” support.

Continuing the strategic emphasis
: Katherine M. Skiba, “Bradley Philanthropy,”
Milwaukee Journal Sentinel
, Sept. 17, 1995.

“Typically, it was not just”
: According to Bruce Murphy, Joyce spent $1 million subsidizing Murray’s writing of
The Bell Curve
. Murphy, “When We Were Soldier-Scholars,”
Milwaukee Magazine
, March 9, 2006.

“the chief operating officer”
: Neal Freeman, “The Godfather Retires,”
National Review
, April 18, 2001.

“package for public consumption”
: “The Bradley Foundation and the Art of (Intellectual) War,” Autumn 1999, was a twenty-page confidential memo prepared for the foundation’s November 1999 board meeting, a copy of which was obtained by the author.

The event that multiplied
: Allen-Bradley’s trustees had initially valued the company at $400 million, although they later enlarged the valuation, according to a wonderful article on the sale of Allen-Bradley by James B. Stewart, “Loss of Privacy: How a ‘Safe’ Company Was Acquired Anyway After Bitter Infighting,”
Wall Street Journal
, May 14, 1985.

The deal created
: Ibid.; Gurda,
Bradley Legacy
, 153.

“symbol of a military”
: Peter Pae, “Maligned B-1 Bomber Now Proving Its Worth,”
Los Angeles Times
, Dec. 12, 2001.

Rockwell waged a strenuous
: Winston Williams, “Dogged Rockwell Bets on Reagan,”
New York Times
, Sept. 30, 1984. The B-1 would prove useless until 2001, when, after the government spent an additional $3 billion retrofitting the planes, they were finally deployed for conventional use in Afghanistan. A Congressional Research Service report in 2014, however, described the planes as “increasingly irrelevant.”

“teetered on the edge”
: Gurda,
Bradley Legacy
, 92.

“Karl Marx was a Jew”
: Bryan Burrough,
The Big Rich
(Penguin, 2009), 211.

“the two major threats”
: Gurda,
Bradley Legacy
, 115.

In 1966, a federal judge
: Ibid., 131.

“deprive future generations”
: Rich Rovito, “Milwaukee Rockwell Workers Facing Layoff Reach Agreement,”
Milwaukee Business Journal
, June 27, 2010.

“the most polarized”
: See Craig Gilbert, “Democratic, Republican Voters Worlds Apart in Divided Wisconsin,”
Milwaukee Journal Sentinel
, May 3, 2014.

leaving Milwaukee
: For more on Milwaukee, see Alec MacGillis’s insightful piece, “The Unelectable Whiteness of Scott Walker,”
New Republic
, June 15, 2014.

“overarching purpose”
: In a 2003 speech at Georgetown University, Michael Joyce said, “At Olin and later at Bradley, our overarching purpose was to use philanthropy to support a war of ideas to defend and help recover the political imagination of the [nation’s] founders.”

“He wasn’t always”
: Doreen Carlson, interview with author.

“He was practically swimming”
: Ibid.

“I was a young guy”
: Tom Meersman, “Koch Violations Arouse Concerns,”
Minneapolis Star Tribune
, Dec. 18, 1997.

Afterward, numerous scientific studies
: David Michaels,
Doubt Is Their Product
(Oxford University Press, 2008), 76, provides an excellent discussion of benzene, illustrating the oil industry’s efforts to block its regulation.

Four federal agencies
: A list of agencies classifying benzene as a carcinogen appears in Loder and Evans, “Koch Brothers Flout Law Getting Richer with Secret Iran Sales.”

“I didn’t even know”
: Meersman, “Koch Violations Arouse Concerns.”

“socialistic”
: Charles Koch’s 1974 speech as cited in Confessore, “Quixotic ’80 Campaign Gave Birth to Kochs’ Powerful Network.”

“I’m looking for some accountability”
: Meersman, “Koch Violations Arouse Concerns.”

“We should
not
cave”
: Charles Koch, “Business Community.”

“unceasingly advance”
: Ibid.

“Libertarianism is supposed to be”
: Tom Frank, interview with author.

“The refinery was just hemorrhaging”
: Loder and Evans, “Koch Brothers Flout Law Getting Richer with Secret Iran Sales.”

Rather than comply
: At first, the company had installed a new antipollution device, but when it proved deficient, instead of addressing the problem, the company disconnected the apparatus and falsified the record.

Defenders of Koch Industries
: John Hinderaker, a frequent defender of the Kochs, calls Barnes-Soliz “a poor employee who, anticipating termination, asserted false claims against her employer in order to set up a lawsuit,” in his Oct. 6, 2011, entry on
PowerLineBlog.com
.

“The government’s case”
: David Uhlmann, interview with author, and additional comments from him in Sari Horwitz, “Unlikely Allies,”
Washington Post
, Aug. 15, 2015.

For her whistle-blowing
: Barnes-Soliz’s account is derived from Loder and Evans, “Koch Brothers Flout Law Getting Richer with Secret Iran Sales.”

According to two statements
: Carnell Green, interviews with Richard J. Elroy, Sept. 18, 1998, and April 15, 1999; a copy of Elroy’s report was obtained by the author.

soil samples were later taken
: According to the analysis done by Cirrus Environmental’s laboratory, one sample contained 180 parts per million of mercury and the other 9,100 parts per million. The legal limit is 30 parts per million. Green’s OSHA complaint went nowhere because it was filed past the deadline, according to his statement.

“Green was just a nice”
: Jim Elroy, interview with author.

“They’re always operating”
: Schulman,
Sons of Wichita
, 216; Angela O’Connell, interview with author.

“repeatedly lied”
: Schulman,
Sons of Wichita
, 215.

“for the next four or five years”
: Author interview with David Nicastro.

In court papers
: Filings relating to a 1997 petition for a protective order,
Charles Dickey et al. v. J. Howard Marshall III
, describe Koch Industries as “among the best clients” of the private investigative firm Secure Source, run by Charles Dickey and David Nicastro. “Over the past three years they performed numerous investigations for Koch Industries and its numerous entities,” a filing on behalf of the firm states. By 2000, the firm had been dissolved following a legal settlement between the partners.

“They lie about everything”
: Angela O’Connell, interview with author.

“There were times”
: Schulman,
Sons of Wichita
, 226, gives a full account of these cases.

These misdeeds paled
: A vivid and meticulously researched account of the Smalley case appears in ibid., 211.

Koch Industries offered Danny
: Ibid., 214, writes that Smalley “wanted the opportunity to sit on the witness stand” so that he could make “Charles and David Koch understand just what they had taken from him.”

“I’m not saying”
: Ibid., 218.

An investigation
: The information about the National Transportation Safety Board report is based on Loder and Evans, “Koch Brothers Flout Law Getting Richer with Secret Iran Sales.”

“Swiss cheese”
: Ibid.

“Koch Industries is definitely responsible”
: Schulman,
Sons of Wichita
, 219.

“They said, ‘We’re sorry’ ”
: “Blood and Oil,”
60 Minutes II
, Nov. 27, 2000.

“quietly enraged”
: Senate committee member, interview with author.

In fact, the other companies
: The allegation that other companies turned Koch Industries in is according to a former official involved in the Senate investigation.

His specialty had been
: Elroy had compiled much of the evidence against Koch Industries, using two-hundred-millimeter lenses to photograph Koch employees as they gathered oil from scattered wells, and then he went door-to-door, he said, saying, “I’m from the FBI, and I want to talk to you about the oil you’ve been stealing. Are you taking it down the road and selling it?” He said that many replied, “No, the company makes us do it.” The company’s lawyer adamantly denied his allegations.

According to the Senate report
: The November 1989 report by the Special Committee on Investigations of the Select Committee on Indian Affairs of the U.S. Senate documents that a Koch employee “went so far as to interview the ex-wife” of a Senate investigator and that “Koch also attempted to look into the backgrounds of Committee staff.”

Kenneth Ballen
: Ballen established a nonprofit organization, Terror Free Tomorrow, to which William Koch made a contribution in 2007, but had no personal relationship with any of the Kochs during the period when the hearings were under way.

“It wasn’t like politics”
: Kenneth Ballen, interview with author.

Don Nickles
: Nickles received large campaign contributions from Koch Industries over the years; see Leslie Wayne, “Papers Link Donations to 2 on Senate Hearings Panel,”
New York Times
, Oct. 30, 1997. In 2014, Koch Industries’ Public Sector division hired Nickles’s lobbying company to fight campaign-finance reform; see Kent Cooper, “Koch Starts Lobbying on Campaign Finance Issue,”
RollCall.com
, June 9, 2014.

“We don’t know who”
: Wick Sollers, interview with author.

“It’s very intimidating”
: Robert Parry, “Dole: What Wouldn’t Bob Do for Koch Oil?,”
Nation
, Aug. 26, 1996.

“I did not want my family”
: “Blood and Oil.”

Nickles recommended the appointment
: The previous U.S. attorney had resigned.

“You can say this”
: Author interview with Nancy Jones.

“not even aware”
: Nickles’s and Leonard’s denials were obtained by Phillip Zweig and Michael Schroeder, “Bob Dole’s Oil Patch Pals,”
BusinessWeek
, March 31, 1996. The U.S. Bureau of Indian Affairs, like the grand jury, found no actionable wrongdoing stemming from the Senate’s report. However,
BusinessWeek
notes that key members of the Osage tribe, who had defended Koch Industries, later felt they and the Bureau of Indian Affairs had been duped. The magazine reported that “Charles O. Tillman Jr., principal chief of the Osage tribe, wrote in a Nov. 29, 1994, letter to Senator John McCain (R-Ariz.), a member of the investigative committee: ‘We are left with the inescapable conclusion that the Bureau of Indian Affairs was more concerned with putting a lid on your committee’s findings than in providing us with the truth.’ ”

“I was surprised”
: Zweig and Schroeder, “Bob Dole’s Oil Patch Pals.”

“You have to have intelligence”
: Burrough, “Wild Bill Koch.”

“It was to find anything”
: Republican operative, interview with author.

Becket Brown International
: See Gary Ruskin, “Spooky Business: Corporate Espionage Against Nonprofit Organizations,” Nov. 20, 2013.

“That blows my mind”
: Barbara Fultz, interview with author.

“They were just mis-measuring crude”
: Phil Dubose, interview with author.

He denied defrauding
: “If the producers believe your measurements are not as accurate as somebody else’s, they’re going to take volume away from you,” Charles Koch testified. “Tulsa Okla. Jury Hears Last Day of Testimony in Oil-Theft Trial,”
Tulsa World
, Dec. 11, 1999.

“It was the first time”
: Phil Dubose, interview with author.

although in 2010 the company
: “Toxic 100 Air Polluters,” Political Economy Research Institute, University of Massachusetts Amherst, 2010,
www.peri.umass.edu/toxicair_current/
.

In 2012, the Environmental Protection Agency’s database
: See the EPA’s Toxic Release Inventory data bank, 2012. The company’s ranking among the top thirty for all three forms of pollution was described by Tim Dickinson, “Inside the Koch Brothers’ Toxic Empire,”
Rolling Stone
, Sept. 24, 2014.

“disgusting”
: James Huff, interview with author.

“surprised”
: Harold Varmus, interview with author.

“involved in improper payments”
: Loder and Evans, “Koch Brothers Flout Law Getting Richer with Iran Sales.”

“It is beyond spectacular”
: See Mayer, “Covert Operations.”