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How a network led by the billionaire Koch brothers is riding the Trump wave


Charles Koch had tough words for Trump during the campaign, but several mega-donors who backed Koch-linked advocacy groups poured in millions into fundraising for him. Photograph: The Washington Post/Getty images

Peter Stone in Washington – Wednesday 7 December 2016

Despite deciding not to back Donald Trump financially with ads during the presidential election, the sprawling donor and advocacy network led by the multibillionaire Koch brothers is emerging as a winner in the transition.

Longtime ally Mike Pence is leading the transition team, and several veteran Koch network donors, operatives and political allies are poised to join the Trump administration when the new president takes office in January.

While Charles Koch and some network officials had tough words for Trump for some of his incendiary campaign rhetoric and positions this year, several mega-donors who back Koch-linked advocacy groups poured millions into Super Pacs and other fundraising efforts to boost Trump, and some of these donors have not been shy about flexing their muscles during the transition.

The Koch network, which says it spent about $250m this election cycle on politics and policy efforts, comprises several hundred donors who help underwrite numerous free-market, small-government advocacy groups. The network is spearheaded by Charles and David Koch, the libertarian-leaning brothers who control the $115bn-a-year energy and industrial behemoth Koch Industries.

Several Koch network donors who backed Trump, such as Robert Mercer, Joe Craft, Doug Deason, Harold Hamm, Diane Hendricks and Stan Hubbard, have reason to be pleased that his early cabinet picks align with their views on expanding fossil fuels, spurring charter schools, repealing and replacing Obamacare, and slashing government regulations and taxes.

One of Trump’s early cabinet selections, for instance, was Betsy DeVos as education secretary: DeVos is part of a multibillionaire family that have long been hefty donors to advocacy groups linked to the Kochs and championed charter schools and school choice, both popular causes in Koch world.

David Koch attends the Met Costume Institute Gala in New York in 2016.

David Koch and his brother control the $115 billion-a-year energy and industrial behemoth Koch Industries. Photograph: Carlo Allegri/Reuters

Further, Trump’s key energy adviser for months has been fracking multibillionaire Hamm, who has been mentioned as a potential energy secretary. While Hamm is expected to keep running his oil and natural gas company Continental Resources, two transition sources say he has pushed for Oklahoma governor Mary Fallin to be named interior secretary, and the state’s attorney general Scott Pruitt to run the Environmental Protection Agency (EPA), which he has sued to block climate change curbs.

Rebekah Mercer, the daughter of billionaire hedge fund executive Robert Mercer, who ploughed $2m into a pro-Trump Super Pac that she ran, is on the transition’s executive committee. Mercer has talked with chief White House strategist Stephen Bannon about having an outside group hire the big data firm Cambridge Analytica, which her father is a key investor in and Bannon sits on the board of, for messaging and communications drives to boost administration goals, according to a digital strategist familiar with the firm.

“I think most of the network is pretty pleased” with the cabinet selections to date, said Texas investor Doug Deason who, in tandem with his billionaire father Darwin Deason, poured almost $1m into the Republican National Committee to help Trump and other GOP candidates. “They’re pleased Trump has softened his rhetoric.”

Deason, who said he is “passionate about school choice”, also said that he spoke to Pence for a half hour around Thanksgiving – and then followed up with texts – to tout Rudy Giuliani for secretary of state and, as Hamm did, Pruitt to head the EPA. Giuliani is a partner of Deason’s at Giuliani Deason Capital Interests, a private equity firm.

The early moves by Trump and his transition team have also pleased Hubbard, a billionaire media owner. “I’m feeling a lot better about him than I did earlier,” Hubbard told the Guardian. “Trump’s picked good people for his cabinet.”

Donald Trump’s selection for education secretary, Betsy DeVos, is part of a multibillionaire family that have long been hefty donors to advocacy groups linked to the Kochs.

Donald Trump’s selection for education secretary, Betsy DeVos, is part of a multibillionaire family that have long been hefty donors to advocacy gruop’s linked to the Koch’s. Photograph: Press via/REX/Shutterstock

Hubbard and other donors are also betting that Pence, who some Koch network donors once hoped might lead the GOP ticket, will be a powerful force in the administration. “My guess is that Pence will be a lot more active than most vice-presidents,” said Hubbard.

Besides overseeing the transition, Pence has been working closely with House speaker Paul Ryan, whom he served with in the House before he was Indiana governor, to coordinate plans for Obamacare’s repeal, a hugely controversial and risky effort, but a top priority for the Koch network and many Republicans.

Still the Koch network, which spent $42m on ads to help GOP Senate candidates, is expected to have some dust-ups with the Trump administration: Trump’s protectionist trade stances and some of his policy goals, such as a massive infrastructure spending program, pose potential conflicts with Koch world’s free-market views.

But Koch network officials sound cautiously upbeat about the incoming Trump administration. “We are encouraged by the Trump administration’s stated commitment to reduce corporate tax and regulatory burdens and make America more competitive,” James Davis of Freedom Partners, the network’s financial hub, said in an email. Davis added that the network would “try to find areas to work together” with the new administration.

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