THE BIG IDEA:
COLORADO SPRINGS—The wealthy donors who finance the Koch network are frustrated that national Republicans are not doing more to capitalize on having unified control of the federal government. But at their summer seminar here in the Rocky Mountains, which wrapped up last night, many were ecstatic—even giddy—about significant conservative gains that have been made this year in state capitals across the country.
Republicans now control the governorship and legislature in 25 states, compared to only six states for Democrats. Last November, the GOP seized all the levers of lawmaking in four new states – Iowa, Kentucky, Missouri and New Hampshire – making it much easier to pass far-reaching legislation.
The network, led by the billionaire brothers Charles and David Koch, has spent hundreds of millions of dollars on low-profile races and building out grassroots operations in 36 states over the past decade.
In 2017 alone, several of these states have reduced union power, scaled back regulations, cut taxes, blocked Medicaid expansion, promoted alternatives to public education, loosened criminal sentencing laws and eased requirements to get occupational licenses.
Because President Trump is such an all-consuming story, most of these moves received scant national attention. But the 400 donors who descended on the Broadmoor resort over the past few days have been paying close attention and are keenly interested in the outcome of these state-level fights.
“Even in the past six months we’ve seen a lot of success: We have two new right-to-work states, school choice wins in five states, and a dozen states have reduced spending or taxes,” Roger Pattison, director of member relations for the Koch network, said at a dinner on Saturday night. “I could go on and on.”
“We’re coming off the most successful legislative session that this network has ever had, and it’s a result of your investments,” added Luke Hilgemann, chief executive of Americans for Prosperity, which is part of the constellation of Koch-funded groups.
Gov. Matt Bevin (R-Ky.) signs Senate Bill 11, also known as the Leeper Act, at the Paducah Area Chamber of Commerce earlier this month. The legislation lifts the state’s 33-year-old moratorium on nuclear power plant construction. (Ryan Hermens/The Paducah Sun via AP)
The two introduced a panel with three Republican governors: Eric Greitens of Missouri, Matt Bevin of Kentucky and Greg Abbott of Texas. Each outlined sweeping changes that have been possible in their states because of unified GOP control and urged donors to keep the spigots open.
“You have to invest in governors because we’re getting things done,” said Greitens, who took office in January after eight years of a Democratic governor.
Bevin pointed out that Sen. Cory Gardner (R-Colo.), the chairman of the National Republican Senatorial Committee, was sitting in the audience. “It’s probably frustrating to him to bang his head against the wall, as it is for others, but the inability to get certain things done … at the national level ultimately requires that we have things happening from the bottom up,” the governor told the crowd. “Your investment at this level … can make a powerful, powerful difference. … This network’s ability to put boots on the ground is transformative for states like Kentucky.”
Making the case that recent GOP grains are fragile, Abbott noted that Texas is one of just four states in which Hillary Clinton in 2016 outperformed Barack Obama in 2012. He expressed concern that Clinton carried Harris County, which includes Houston and some of its surrounding suburbs, even though he had won it in 2014. If Democrats win the Lone Star State, he said, they will have a long-term lock on the White House. “A lot of people really take Texas for granted,” said Abbott, who is up for reelection next year.
Koch network officials reiterated plans to spend between $300 million to $400 million on policy and politics in the 2018 cycle and said it will probably be in the higher end of that range. A lot of that will go toward state efforts.
Since most state legislatures are part-time and have now adjourned for the year, the network is already sketching out ambitious plans to hit the ground running in early 2018.
Tim Phillips, the president of AFP, noted that more progress has been made to limit the power of organized labor, which he describes as “worker freedom,” “in the last five years than in the previous five decades.” Bevin and Greitens have both signed right-to-work laws this year, which ban labor unions from collecting mandatory dues from employees they represent in collective bargaining. Six states have now enacted such legislation since 2012, including longtime union strongholds like Wisconsin and Michigan. “Did you think that would have been possible five years ago?” Phillips said.
Phillips revealed at a strategy session that the network’s next targets include Ohio, Minnesota and New Hampshire. “I know Washington tends to suck most of the oxygen out of the room … but the untold story is the dramatic policy advancements … at the state level,” he said. “At the state level, we’re seeing a once-in-a-generation renaissance.”
Gov. Doug Ducey (R-Ariz.) addresses the crowd after being inaugurated in Phoenix in 2015. (Ross D. Franklin/AP)
Doug Ducey, the former chief executive of Cold Stone Creamery, was a member of the Koch network before he got elected governor of Arizona in 2014. He still attends the seminars. Yesterday he said that a panel during the January conclave in California helped inspire his education agenda for the most recent session. He brought one of the speakers he had heard to Phoenix to meet with state legislators and business leaders. He just signed a bill that makes every school-aged child in his state eligible for an Educational Savings Account, which gives parents flexibility to spend public money on expenses like private school tuition or tutors. Ducey said “healthy competition” from charter schools and other alternatives is making public education better. “I needed the power of the network,” he told donors.
Stacy Hock, a philanthropist in Austin and a major donor to the Koch network, helped launch a group last year called Texans for Education Opportunity that is pursuing similar objectives. Abbott, the Texas governor, has called a special session to focus on education, and her group is gearing up. Hock urged other Koch donors to reach out to her if they want to create similar advocacy operations in their home states.
“The value of this network cannot be overstated,” she said during a panel on Monday. “Individuals trying to affect policy change at the state level is daunting, but the ability to stand on the shoulders of the giant that is this network to make yourself more impactful and strategic changes the game. It might have taken decades to build such a sophisticated operation, but we had a tremendous impact in just our first session of operation. … Education policy is a dogfight. The entrenched interests are deeply embedded and very protective of their castle.”
Mark Holden, general counsel of Koch Industries, works in his office in Wichita, Kansas, in 2015. He is the point man for criminal justice reform efforts by the Koch network. (Nikki Kahn/The Washington Post)
Finally, the network is pressing states to overhaul their criminal justice systems. Koch groups worked with the Obama administration and a broad coalition last year on a major federal bill to reduce mandatory minimum sentences, among other changes. Jeff Sessions, as a senator from Alabama, was one of the strongest opponents of that effort. Now the attorney general, he recently issued strict new charging guidelines, including for drug crimes. With the pathway to change blocked off for now in Washington, the network is redoubling its efforts in state capitols.
During this legislative session, Koch World was closely involved with law-and-order discussions in Louisiana, Michigan, Kentucky, Arizona, Iowa, Illinois, Pennsylvania and Ohio. Next year officials hope to work in several other states, including Missouri and Florida.
“The states are leading the way … That’s where 90 percent of the action is,” said Mark Holden, the general counsel of Koch Industries and chairman of Freedom Partners, a funding arm of the network, in an interview. “Whether the states know it or not, whether the federal government knows it or not, we’re going back to what federalism is all about. The best way to solve an issue is to be proximate to it.”
