Koch World 2014

Kenneth P. Vogel

Read more: http://www.politico.com/story/2014/01/koch-brothers-2014-elections-102555.html#ixzz2rWLG6Pwc

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This year, the Kochs’ close allies are rolling out a new, more integrated approach to politics. 

That includes wading into Republican primaries for the first time to ensure their ideal candidates end up on the ticket, and also centralizing control of their network to limit headache-inducing freelancing by affiliated operatives.

The shift is best illustrated in the expansion of three pieces of the Koch political network expected to be showcased or represented at the three-day meeting in Palm Springs, whose evolving roles were described to POLITICO by several sources.

• Center for Shared Services: a nonprofit recruiter and administrative support team for other Koch-backed groups, which provides assistance with everything from scouting office space to accounting to furniture and security.

• Freedom Partners: a nonprofit hub that doled out $236 million in 2012 to an array of conservative nonprofits that is now expanding its own operation so that it can fulfill many of the functions of past grantees.

• Aegis Strategic: a political consulting firm started last year by Koch-allied operatives who will recruit, train and support candidates who espouse free-market philosophies like those beloved by the Kochs, and will also work with nonprofit groups in the Koch network, like Freedom Partners, with which it has a contract to provide policy analysis.

(PHOTOS: 2016: Who’s next?)

The Koch network raised an astounding $400 million in the run-up to 2012, spending much of it assailing President Barack Obama and congressional Democrats. After the Election Day letdown, the Kochs did an in-depth analysis to find out what went wrong and what they could do better. Among the areas identified for improvement were greater investments in grassroots organizing, better use of voter data and more effective appeals to young and Hispanic voters, according to sources.

Still, the big question was whether the donors who attend the conferences would keep stroking big checks or scale back their efforts. There’s no way to measure that definitively, since most of the groups in the network don’t disclose their finances regularly or reveal their donors. Early indications, though, suggest enthusiasm is high.

Groups in the Koch network — led by the brothers’ main political vehicle Americans for Prosperity — spent $25 million between the summer and early this month on ads bashing Democrats over Obamacare, which have been credited for hurting Democratic senators who are vulnerable in 2014.

James Davis, an official at Freedom Partners told POLITICO that his group has expanded rapidly, “and we expect to continue to grow.”

(PHOTOS: Republican 2016 contenders)

The 2014 potential of AfP, Freedom Partners and the other groups in the network depends in large part on the reception they get at this weekend’s gathering – the annual winter installment in the Kochs’ long-running series of twice-a-year meetings. Koch Industries spokesman Rob Tappan declined to comment on the Palm Springs meeting, but the company’s website includes a statement describing the events as bringing together “some of America’s greatest philanthropists and most successful business leaders” to “discuss solutions to our most pressing issues and strategies to promote policies that will help grow our economy, foster free enterprise and create American jobs.”

Many of the right’s most generous benefactors – folks like Minnesota media mogul Stan Hubbard, Wall Street investor Ken Langone and Wyoming mutual fund guru Foster Friess – are regulars. The gatherings, which attendees call “seminars” and are typically held at tony resorts, routinely attract some of the top operatives and biggest names in Republican politics, as well as rising stars tapped by the Kochs’ operatives.

The last seminar, held in August outside Albuquerque, N.M., drew Rep. Paul Ryan, House Majority Leader Eric Cantor, New Mexico Gov. Susana Martinez and Iowa state legislator Joni Ernst, who is running in a crowded GOP Senate primary.

The seminars typically conclude with pledge sessions that can raise tens of millions of dollars. 

In 2012, that cash mostly went into a pair of non-profit conduits — Freedom Partners and the Center to Protect Patient Rights — whose operatives then doled it out to a range of nonprofits blessed by the Koch operation, including some groups asked to make presentations to donors at the seminars.

(POLITICO's full elections coverage)

But several sources suggested that Freedom Partners’ growth and expansion into a more central strategic role within the network means that the roles — and possibly funding — of the Center to Protect Patient Rights and other groups in the network will diminish. In other words, Freedom Partners will bring in-house many Koch network functions that had been outsourced. 

That could reduce the chances of a repeat of situations like that which the Center to Protect Patient Rights and one of its beneficiary nonprofits found themselves in California, where they paid $1 million last year to settle an investigation into alleged campaign finance violations. The settlement stipulated that the violation “was inadvertent, or at worst negligent,” but the investigation brought unwanted attention to the Kochs, who repeatedly stressed that they had no involvement in the matter and distanced themselves from the operative who ran the Center to Protect Patient Rights, Sean Noble, explaining that he was just a consultant.

Freedom Partners, by contrast, is run by Marc Short, a former Koch employee, and staffed by other Koch loyalists, although Koch Industries issued a statement saying the group “operates independently of Koch Industries.” The group, established in November 2011, is technically a business league, and its members pay at least $100,000 in annual dues. “Our membership has grown out of concern that the administration’s policies are hurting Americans by crippling businesses and our economy,”

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