Dark Money by Jane Mayer
Written on the eve of the 2016 presidential election, Jane Meyer's exhaustive research into wealthy donors reveals that private foundations funded by them were subsidized by the government to work against that very government.
Barack Obama had no idea of the non-cooperative environment he was going up against in January 2009. The Koch brothers, Charles and David, had worked for decades to revive the ideas of the old John Birch Society.
The Kochs, and before them, Richard Scaife, introduced the idea of private foundations as an inheritance dodge. Others, representing a who's who of the moneyed elite -- Paul Weyrich, the Olin family (ammunition), Joe Coors, a holdover of the John Birch era, William Simon, Rockwell International had all funded foundations that were able to represent themselves as benevolent organizations but bent on fighting taxation and regulation.
The non-profits had borrowed ideas from the board of Philip Morris' pro-smoking campaign which encouraged guerilla warfare, and with that long-range planning strategy, the Cato institute was funded in 1974 by Charles Koch.
Various social welfare groups had sprung up since the 1970s, which under the U.S. Tax Code did not have to divulge the source of their funds and were also tax-deductible. Before Citizen's United, these 501(c)(4) nonprofit corporations -- like the for profit's -- were restricted from spending for or against candidates in elections.
They had concentrated instead on establishing think-tanks, academic programs, legal centers, and issue advocacy organizations as a form of an ideological production line. By the early '80s, distrust of government exceeded distrust of business
By 2006 Koch was grossing $90 billion annually.
Karl Rove told an audience of moneymen in 2010, "people call us a vast right-wing conspiracy, but we're really a half-assed right-wing conspiracy. Now, it's time to get serious." He was speaking, of course, of the supreme court decision on the 'Citizen's United' case earlier in the year, which allowed unlimited political spending by corporations.
In 2006, only 2 percent of "outside" political spending came from "social welfare groups" that hid their donors. By 2010 this number exploded to 40%. Social welfare groups could spend any amount of money, without revealing who they were by using amorphous sounding names like "Americans for Prosperity", "Americans for Limited Government", or "Center to Protect Patient Rights."
The Citizen's United decision was made in part on the belief that political spending would be transparent. The Kochs and their billionaire partners took great pains to hide what they were doing with the money they raised. This was a selling point they used in their fundraisers as they funneled their gifts through 501(c)(6) tax-deductible instruments which shielded the identity of the donor and in effect, weaponized political philanthropy, with a subsidy from the Federal government.
The Koch enterprise in Maryland was instrumental in launching the tea party.
Altogether, there were seventeen allied front groups dedicated to conservative causes.
The Kochs had developed, in essence, their own political party -- large enough to rival the Republican party itself. These IRS qualified tax breaks allowed the Kochs to build a "full-service political factory". It was run like a shell game: masked identities of real donors, all leading back to deep-pocketed Right Wing organizations.
By 2012 outside groups may have outspent political parties and campaigns. The top 0.4 percent outspent the bottom 68%.
By 2014 there existed a bona fide oligarchy -- those at the top were purchasing the power to stay there.
The charitable subsidy was $800B in 2016.
Mitch McConnell and Joni Ernst are examples of a Koch success. As players in the establishment of the "James Madison Center for Free Speech", they rode the Betsy DeVos funneled funds to bring lawsuits against campaign finance restrictions.
They rose to twice cripple a democratically elected president and began to supplant the GOP by establishing a talent pipeline through educational institutions and secret seminars which supplied a growing fleet of nonprofits to mobilize public opinion.
Donors exercised power from the shadows, meeting in secret, hiding money trails, paying others to front for them. Peter Buffett called it the "charitable-industrial complex".
The Koch's fortunes had tripled from $14B each in 2009 to $41.6B each in 2015.
Through exhaustive investigation, Mayer connects all the organizations with their donor groups and exposes their long-term, cynical agenda as a direct line from the John Birch Society to today's players. The book is a wake-up call for those who still believe in the integrity of the electoral process.
As Louis Brandeis predicted -- "We may have democracy, or we may have wealth concentrated in the hands of a few, but we may not have both."