The Koch Brothers’ Unusual Feud With President Trump
Charles Koch Isn't Quite Putting His Money Where His Mouth Is: He’s Not Actually Backing Any Democrats. But There Are A Few Republicans He Isn’t Either…And That Is Irking Trump
When we read that Charles Koch is now saying under certain conditions he might be willing to support a free-trading Democrat, we figured that was just some kind of signal to key donors to his political network that he isn’t fully sold on the Trump “cult” yet. Long-time Conservatives and Libertarians, who like Koch diverge from the President on trade tariffs and immigration, for starters, might’ve needed some reassurance. They might also support NATO and be shaken by Trump’s apparent subservience to Russian Leader Vladimir Putin.
Trump seems to be taking Koch’s message that way, this morning in a pair of Tweets calling the Koch Brothers (Charles and David, although the latter Koch is recently retired from their everyday activities): “globalist”, a “total joke in real Republican circles” and “highly overrated”. “I have beaten them at every turn” he says, which is curious, since mostly they’ve supported the same candidates. Also curious is the way Trump wraps up his mini Twitter rant: “Two nice guys with bad ideas.”
In the end, we still expect Koch to support candidates who will stand by Trump. And that appears true, by-and-large, if you look at the people they’ve announced they plan to back. And Trump has given Koch a lot of stuff he’s wanted: a dramatic undoing of E.P.A. regulations (Koch Industries’ main business is chemicals), and a huge tax cut. Also, while former Trump advisor Steve Bannon made a point of belittling Koch during the campaign and portraying him as washed up and dimming in influence (that continues: but after all, Bannon’s a competitor for the same dollars), many Koch disciples made their way into senior positions in the White House. Most notably Vice President Mike Pence, who’s been linked to Koch for years. Secretary of State Mike Pompeo too, who was not so long ago the Representative from Koch’s Kansas base. (Pompeo used to be known as “the Congressman from Koch”.) And recently-resigned White House legislative liaison Marc Short, who according to the Wall Street Journal cited “diminishing returns” as the reason for leaving his position. Short, who ran a powerful Koch organization prior to coming to the White House (after he’d worked for then Congressperson Mike Pence) previously told the Journal “I’m having fun, in a sick way.”
And we suspect even if Charles Koch is dead serious, it’s going to be hard to find a Democrat prepared to accept a great big bear hug from the Koch patriarch. (Of course that’s not exactly how the Koch organization works: outside of out-and-out endorsements, he still could decide on his own to make and run ads in support of a Democrat in a certain market — but it’d have to be done very skillfully because among the Democratic base any whiff of support from Koch could be poison).
Still, the Koch organization laid the rhetoric on pretty strong, saying they’re witnessing a “tremendous lack of leadership” in Washington as well as a “deterioration of the core institutions of society.” They also said “we’ve got to change the trajectory of this country” and “the divisiveness of this White House is causing long-term damage”. For Koch, a lot of that is about tariffs and the protectionist trade policy Trump has embraced, as well as huge increases in spending without deep cuts in government to pay for it.
Koch himself kept his personal criticism one step away from the President (one might even say that’s an improvement from before the 2016 election when he likened Trump and Hillary Clinton as a choice between cancer and a heart attack). Koch saying: “We’ve had divisiveness long before Trump became president and we’ll have it long after he’s no longer president. I’m into hating the sin, not the sinner.”
But then his organization did something interesting: they came out with a list of Republicans they’ll be backing. And it omits several very competitive races.
- In North Dakota, Koch won’t support the Republican running against Democratic Senator Heidi Heitkamp. Heitkamp supported the rollback earlier this year of the Dodds-Frank financial regulations put into place after the Great Recession. Apparently, this is her reward. The campaign manager for her opponent — who ironically is a Koch network donor — is of course trying to spin it positively, saying it’s proof the Republican candidate “isn’t bought”.
- In Nevada, Koch isn’t backing Republican incumbent Dean Heller, who’s considered vulnerable in a state that delivered one of Trump’s few negative surprises in the form of a 2016 loss.
- And Indiana might be the most interesting, since as we said, Vice President Mike Pence is a Koch acolyte, and he’d really like to deliver a Senate victory to Trump. Yet Koch is not directly supporting the Republican challenger to the Democratic incumbent there either.
Let’s not forget of course, this doesn’t mean that Koch might not — directly or indirectly — throw his support behind any or all of these candidates eventually. And that he’s already actively supporting tons of divisive Trump-supporting and supported candidates like Rick Scott, who’s running for Senate in Florida. Not to mention the aggressive spending Koch is putting behind Trump’s latest choice for the Supreme Court, Brett Kavanaugh.
While we often caution against drawing connections where very likely none exist, we thought it was interesting that immediately after Koch made his pronouncement, the New York Times published a story about how Trump was considering giving even bigger tax breaks to the very wealthiest of Americans by allowing them to factor in inflation when figuring their capital gains. One of the most interesting and controversial aspects of this plan is Trump would just do it by ordering changes to the way his Treasury Department (which runs in the I.R.S.) collects capital gains taxes, rather than asking Congress to pass a new law.
If you look at that Times story closely, Treasury Secretary Steve Mnuchin actually spoke about this possibility almost 2 weeks ago at a meeting of international bankers in Argentina. And Trump’s alma mater, the Wharton School of Business, apparently knew about it way back in March, when it issued an analysis finding the benefits of the plan would accrue almost exclusively to the top 10% of earners in the country, with almost 2/3rds going to the top one-tenth of one percent.
The fact that it’s being reported only now very likely means someone pointed out what Mnuchin said to the Times’ reporters. So then let’s ask ourselves who would benefit the most from those types of tax breaks? Perhaps someone who’s one of the top 10 wealthiest individuals in the country, like Charles Koch and his newly retired brother, David? And who would want them to know they can expect more goodies from President Trump down the pike?