The phone call was just the first of many messages that Koch Industries would send to Inglis.
* * *
Jonathan Phillips stood in the gallery of the chamber of the US House of Representatives, looking down on the wide-open floor area with its concentric half circles of seats for the members of Congress. It was Friday, June 26, 2009, the day that the House would vote on the Waxman-Markey bill. Phillips wasn’t at all sure that the bill was going to pass. Support was narrow, and any defections from the Democrats could sink it. It appeared that some defections were in the offing. Pelosi seemed to be working the crowd, making deals, quieting concerns. “Pelosi was doing I don’t know what sort of horse trading,” Phillips recalled. “Those are the type of tough votes where she’s making promises, you know?”
Over the next several hours, Republicans and conservative Democrats voiced their opposition to the bill based on a shared foundation. They didn’t attack the evidence about climate change or challenge the need to promote renewable sources of energy. Instead, they attacked the Waxman-Markey bill as an economic disaster; an expensive tax on everyone that would raise the prices of electricity, gasoline, and energy. The theory behind the cap-and-trade system, of course, was that market forces would help solve the price problem over time as companies invented new technologies that were carbon free and introduced them to the market.
After nearly eight hours of procedural maneuvers and debate, Ed Markey rose to speak. He didn’t seek to rebut many of the attacks one by one, but answered them with a call to take part in history. “This bill has the ambition of the moon landing, the moral imperative of the Civil Rights Act, and the scope of the Clean Air Act all wrapped up in one,” he said.
After exhausting their arguments, the Republicans prepared to make their closing statement. They reserved the privilege for a rising star in the House, a former conservative talk-radio host from Indiana who was first elected to the House in 2001, named Mike Pence.
Pence walked to the rostrum and looked down for a moment before beginning his speech. He was a striking figure, a handsome man with a square jaw and stark white hair. His training in show business was apparent the moment he started to speak. While other congressmen stumbled through their speeches, reading awkwardly from a script, Pence was at ease.
“It’s hard to know where to start,” he said, shaking his head. And then he paused, a long, dramatic pause that ate up much of his allotted speaking time but had great effect.
Everyone was listening. “This economy is hurting. American families are struggling under the weight of the worst recession in a generation,” he said, with great sadness and great compassion in his voice. “In the midst of the worst recession in a generation, this administration and this majority in Congress are prepared to pass a national energy tax that will raise the cost of energy on every American family.”
And then Pence did something that none of his colleagues seemed to have done during the course of an eight-hour day. He looked directly into the C-Span camera and talked directly to the viewers there, whoever they might be. He pointed his finger at them and exhorted them to get up and make a difference. “If you oppose the national energy tax, call your congressman right now!” he bellowed. “Alexander Hamilton said it best: ‘Here, sir, the people govern.’ We can stop this bill. We can do better. And so we must.”
It was an impassioned speech, but Pence’s rallying cry seemed oddly out of place. There didn’t seem to be some great crowd of voters in the C-Span audience ready to mount a rebellion against the Obama agenda. Pence finished his speech and stepped back in the gallery, looking like a pied piper with no one to follow him.
After several hours, the debate was finished, and the roll call vote began. Phillips and his colleagues watched as the votes were tallied, and their elation grew with every minute. The margin of victory became insurmountable. A one- or two-vote margin turned into a seven-point margin. The bill passed 219 to 212. Gene Green, the conservative Texas Democrat from oil refinery country, voted for the bill, as did Rick Boucher, from coal country. Remarkably, eight Republicans broke ranks to support the bill, more than Phillips or anyone on his committee might have expected.
When the vote was tallied, Phillips and his colleagues went to the staff office of the Energy and Commerce Committee. These were nice offices, a big space that was far removed from the basement warren where Phillips had worked for years. Bottles of champagne were popped open, glasses were passed around. Both Waxman and Markey were in the room, talking with staffers. Both men gave a speech. There was a tremendous sense of accomplishment in the room. As they drank and laughed and clapped each other on the back, everyone seemed sure that the bill would pass the Senate within months, probably by Christmas.
“We did what we set out to do,” Phillips said. “I totally felt like this is what I came to Congress for.”
* * *
Every quarter, Charles Koch held meetings in the company boardroom to evaluate the progress of each major division in his company. He peppered the business leaders with questions, probing their presentations for weak points and questioning their plans for the future. By the middle of 2009, Charles Koch was getting similar presentations from his political operatives. He sat at the large, polished wood table and listened as top operatives in his political network walked through the events of the past months, shared their analysis of the landscape, and laid out their plans for the future.
In the middle of 2009, the news from the political operation was unrelentingly bad. The Waxman-Markey bill had passed the House and was fast-tracked toward the Senate. To make matters worse, Obama’s stimulus bill was doling out billions of dollars to Koch’s emerging competitors in the wind, solar, and renewable-energy industries.
As with any business unit, Charles Koch absorbed this information with apparent dispassion. He asked for data and analyzed it closely. One senior political operative recalled sending Charles Koch a spreadsheet with polling data on voter attitudes. The presentation included “top line” figures, showing broad voter attitudes that were accompanied by several “cross tabs” of detailed data that broke down the results by demographic group. As the operative was presenting his findings to Charles Koch and other directors of the company, Koch interrupted to question them about the data.
Charles Koch asked about figures in the cross tables. He wanted to know why women in one geographic area felt the way they felt. The operative was shocked at the level of granular knowledge behind the question. Charles Koch was paying just as close attention to his political efforts as his corporate endeavors.
It seemed even more surprising that Charles Koch could keep all of these political operations straight in his own head. The contours of Koch’s political machine were intentionally obscured and complex. Outside analysts would spend years trying to piece together all of its various pieces. The political machine consisted of at least dozens of shell groups funded by anonymous donors, some of them staffed by current and former employees of Koch Industries. The network included the main lobbying office in Washington, DC; all of the contract lobbyists it hired; a relatively obscure activist group called Americans for Prosperity with chapters in several states; at least several private political consultancies; the Koch Industries corporate PAC; various think tanks; academic programs and fellowships; and a consortium of wealthy donors that Charles and David Koch convened twice a year to pool large donations for Koch’s chosen causes. And these elements were just the most visible pieces of the Koch political machine.