It seemed that the Trump administration and the Koch network were like opposing chess players who couldn’t clear the board. There was no clear winner. But Charles Koch pressed his advantage. His donor network announced that they would spend between $300 million and $400 million during the 2018 midterm elections, helping shape the most important political contest of Trump’s presidency.
The Koch network maximized its influence with this money by forging a connection with the one senior member of the Trump administration with whom Charles Koch had a long relationship—Vice President Mike Pence. As an Indiana congressman, Pence was a close ally of Americans for Prosperity, a relationship that lasted after Pence entered the White House. In June of 2017, while Charles Koch attended a meeting with his donor network in Colorado Springs, Koch took a detour to hold a private meeting with Pence and a handful of Pence’s staff members at the Broadmoor Hotel. The meeting lasted roughly an hour, and was not on Pence’s official schedule for that day. Koch and Pence discussed Trump’s legislative agenda, including the tax cuts and health care reform. Pence was later given responsibilities for helping manage Trump’s strategy for the 2018 midterms. Trump said that if the Democrats won control of the House or Senate, their first order of business would be impeachment proceedings, which would disrupt the presidency. The contest was vital, and Charles Koch ensured he would be a major player in it.
With this money hanging in the balance, Charles Koch traveled to Palm Springs in January of 2018 to host the meeting of his donors. As the event got underway, Charles Koch took the stage, standing behind the podium as an evening breeze blew through the luxury resort. He wore a suit jacket and blue shirt, with no tie. He looked profoundly confident, and told his colleagues that they were making great progress in the Trump era.
“I’m more excited about what we’re doing and about the opportunities than I’ve ever been,” he said. “We’ve made more progress in the last five years than I had in the previous fifty.”
In typical fashion, Koch then made a joke at his own expense, pointing out that some people might have wondered what he was doing all those fifty years, if he hadn’t achieved great results. The comment drew light laughter. But it was clear enough what he had been doing. He had been building a political network with a reach and influence that was arguably stronger than any other in corporate America. Only the CEO of Koch Industries could call upon a massive lobbying operation, an army of grassroots activists, a donor network with contributions in the billions of dollars, and a universe of political front groups and donor vehicles nearly impossible for outsiders to map. If the CEO of General Electric or any other publicly traded company tried to build a similar machine to influence public policy, and dedicated as much time and money to it as Charles Koch, then that CEO would almost certainly be curtailed by a board of directors. Thanks to his efforts to retain such tight control over Koch Industries, Charles Koch did not face this dilemma. His political network was enduring, and massive. And it would almost certainly outlive the Trump administration.
Charles Koch possessed an attribute that seemed to elude Donald Trump—he possessed almost limitless patience, and a time horizon that was measured in decades.
After the laughter passed during his speech, Charles Koch explained that his fifty years of work in politics had a clear directive, even if the results were slow in coming.
“You’ve got to build the foundation before you build the house,” he said. “That’s what I claim I was working on.”
* * *
I. The change that appeared to win over Meadows and the Freedom Caucus was curiously minute. An amendment introduced by Republican congressman Tom MacArthur allowed states to request a waiver from certain obligations imposed by Obamacare, essentially punting hard decisions about cutting health care coverage to state governors. A Brookings Institution analyst speculated that the MacArthur Amendment made the bill palatable in part because it allowed the House to pass the bill on to the Senate, making it the upper chamber’s problem.
II. This similar tax was called a Value Added Tax on sales inside a country. While not exactly the same as the border adjustment proposed by Paul Ryan, the widely used VATs frequently included border adjustments, allowing economists to study their impact.
III. The BAT wasn’t expected to be all good for exporters. Most experts expected that a BAT would eventually strengthen the dollar, making US products more expensive overseas. But the tax structure would still most likely benefit exporters over firms that shipped production overseas.
IV. West Texas Intermediate
V. In 2018, Americans for Prosperity attacked Collins with a campaign of Internet ads, direct mail, and radio spots as she sought reelection.
CHAPTER 25
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Control
(2018)
It was about six in the morning, in the middle of winter, when dawn started to break over Charles Koch’s family compound in Wichita. Behind the compound’s tall walls, treetops became visible in the faint light, their branches bare and sharp. The sky turned faintly purple, then pink. Outside the compound, a man sat alone in a large black Chevy Tahoe with tinted windows, apparently watching the walls. The man sat patiently. He looked down at his phone and waited, the light of its screen making his face glow. His headlights were extinguished and he was all but invisible to the morning traffic that passed by. Then, a little bit before six thirty, the man in the Tahoe flipped on his headlights and drove forward. At the same time, another black SUV emerged from Charles Koch’s compound, pulling out from an entrance that was partly obscured by shrubbery. The man in the Tahoe pulled out into traffic, his timing impeccable, and fell into line behind the other black SUV. Both cars headed north, toward Koch Industries headquarters.
Part of the myth about Charles Koch was that he drove himself to work every day, parking in front of Koch Industries headquarters and walking up the stairs to his office. His reality was different now. It was an open secret in Wichita that Charles Koch rode to work in a convoy of armored vehicles, chaperoned by armed security guards. This was seen as pragmatic. Since he had become politically active, Charles Koch was a magnet for death threats. He was a private man, little understood and widely hated. He was now also one of the richest men on earth, so security was necessary. Charles Koch’s great skill was analyzing and mitigating risk.
Traffic was light this early in the morning. The black SUVs drove past strip malls as they headed north. The sky continued to lighten, but only slightly. At this time of day, the commute to Koch headquarters lasted only a matter of minutes. The Koch Industries campus was visible from miles away. The Tower sat at the center of the campus, still the tallest building within several miles. The first rays of the morning sun glinted off the dark brown granite walls and the opaque windows. The parking lots around the Tower were still illuminated, this early in the morning, by bright lights that hung from the top of tall black poles. The lights made the campus look like a self-contained universe, a splendidly isolated pool of shining stars, surrounded by a wall. It was a beautiful sight in the morning. Kochland.
When he arrived at work, Charles Koch’s car pulled into a special parking garage with high security. The lot was near the bombproof chamber where mail was sorted before entering the building. Here was a universe that he, primarily, had authored. The people he encountered spoke a language he invented, worked in business units he oversaw, and granted him the kind of deference enjoyed by national leaders. When he entered the hallways of his office building, Charles Koch could take the elevator up to the third floor, or walk there through the spacious and well-lit stairwell.