How the Koch network learned to thrive in the Trump era

After pointedly declining to support Donald Trump in the 2016 campaign, the conservative network is embracing pieces of the administration's policy agenda, playing down disagreements.


The Kochs have boarded the Trump train. 

After pointedly declining to support Donald Trump during the 2016 presidential campaign, billionaire industrialists Charles and David Koch and their network of conservative donors are pragmatically embracing pieces of the administration's policy agenda. 

The strategy was on vivid display this weekend at a resort here in the desert outside Palm Springs, California, where more than 500 megadonors who each contribute at least $100,000 annually to Koch-linked groups gathered for their twice-annual seminar. 

On areas of agreement with the president - from tax cuts to deregulation and judicial nominations - the leaders of the network now go out of their way to heap praise on Trump. 

On areas of disagreement where they were once outspoken - such as supporting free trade, advocating more open borders and opposing deficit spending - network officials now tread carefully to downplay divisions and avoid antagonizing Trump. 

"You've got to meet people where they are," said Mark Holden, a top network official and the general counsel of Koch Industries. 

The approach is giving Koch officials a seat at the table - entree to the White House that they hope will allow them to shape Trump's approach on issues such as immigration and infrastructure this year. 

Tim Phillips, president of Americans for Prosperity, the network's main advocacy arm, praised Trump's staff for involving the network in talks "from day one" about what a tax code overhaul might look like. 

Phillips said 2017 was "the most productive year . . . in the existence of this network" at the federal level. "A lot of the policies they've put forward in the first year have been good ones," he said. He added, "We really don't get caught up in all the other extraneous stuff out there." 

In the coming year, as the network looks to further influence federal policy, it will also be working to protect the GOP majorities in Congress that it spent tens of millions to secure. In all, Koch-aligned groups plan to spend between $300 million and $400 million on politics and policy in the 2018 cycle - likely in the high end of that range, officials said. That's up from $250 million in the 2016 elections. 

At a dusk cocktail reception on Saturday, Charles Koch, 82, described his "collaboration philosophy" as being willing to work with anyone, even if they agree on only one issue. 

"We have now increasingly followed the philosophy that made Frederick Douglass such an effective social-change entrepreneur," Koch said, referring to the famous abolitionist, as donors sipped cocktails on a lush green lawn with views of the pink-hued mountains. "And that is, as he put it, 'Unite with anybody to do right, and no one to do wrong.' " 

That has meant seizing on small victories. One of the network's top priorities has been an overhaul of the criminal justice system. For the past several years, leaders of the group have pushed to roll back mandatory minimum sentencing laws and stiffen the burden of proof for the government to put people in prison. 

The effort looked doomed when Trump ran as a law-and-order candidate and appointed Attorney General Jeff Sessions, who had been the single biggest opponent of such reforms when he was in the Senate. Indeed, Sessions has ordered U.S. attorneys to prosecute crimes to the fullest extent of the law. 

Rather than loudly criticize Sessions, the network has sought out common ground and sympathetic allies inside the administration. It decided to focus on pushing legislation and programs to help convicts reenter society, in part because network officials believe they have persuaded Sessions and Trump to support those efforts. 

Holden, who was once a corrections officer in Massachusetts, said he has spent the past seven months in talks about the effort with Jared Kushner, the president's son-in-law and a senior White House adviser. Kushner's father, Charles, was sentenced to two years in prison in 2005 after being convicted on federal charges of tax evasion, witness tampering and making illegal donations. 

"That experience informed him. How could it not? He talks about it all the time. He's as passionate as I am," Holden said of Kushner in an interview. 

That kind of pragmatism has guided the network's approach to other issues, such as immigration. 

At last year's seminar, held here a week after Trump's inauguration, the group put out a strongly worded statement criticizing Trump's travel ban. In 2016, Charles Koch called Trump's proposal to ban Muslim immigrants "antithetical to our approach" and described the suggestion that Trump might require Muslims to register as "reminiscent of Nazi Germany." 

But this weekend, the Koch network put out a carefully worded statement that praised the immigration framework Trump rolled out last week. It offered support for granting permanent legal status to "dreamers," the undocumented immigrants who were brought to the country illegally as children, but also said the network cannot support "arbitrary" caps on legal immigration. 

Brian Hooks, president of the Charles Koch Foundation, urged reporters to emphasize the nuanced critique and noted that his team has been talking about the issue with the White House. He said it was especially important to convey that the Koch network thinks the Trump proposal is "thoughtful, specifically in how it offers legal certainty for 'dreamers.' " 

"We think this is progress, and we want to be a part of the progress," said Hooks. "We intend to continue to play a productive role . . . to find a solution to the dreamers." 

Frank Baxter, a Koch donor who was George W. Bush's ambassador to Uruguay and who did not support Trump for president, said he is "pleasantly surprised at some of the outcomes" under the Trump presidency so far and hopes for a "rational" immigration policy that takes care of dreamers. 

"I was certainly opposed to the way he talked about immigration and the way he talked about trade," said Baxter, a founding board member of a charter school in Los Angeles. "But what I'm beginning to see is him stumbling toward a good immigration policy - something I care very much about, because so many of our students are immigrants." 

Several other donors said in interviews that they were happy with the moves by national GOP leaders. "In general, we're pleased with the Senate because of the tax reform bill. It wasn't perfect, but it was a great compromise to get it through," said Doug Deason, a Dallas businessman who supported Trump's bid in 2016. "In it, of course, they repealed the individual mandate in the Affordable Care Act, which was great. That essentially shot a hole in the boat of ACA. We're very pleased with that." 

This weekend's gathering is the largest donor meeting since Charles Koch began hosting the twice-a-year gatherings in 2003. There are roughly 700 "investors" who contribute a minimum of $100,000 annually to the network, and about 550 came to California for the confab, which continues through Monday night, officials said. There are 160 first-time attendees. 

The once closely guarded meetings were opened to reporters in recent years, on the condition that donors in attendance are not identified without their consent. 

Among the GOP officials who made appearances this weekend were Sen. John Cornyn of Texas, Sen. Todd Young of Indiana, Sen. Thom Tillis of North Carolina, Arizona Gov. Doug Ducey, Kentucky Gov. Matt Bevin, Rep. Marsha Blackburn of Tennessee and Rep. Mark Meadows of North Carolina. 

As the Koch network looks to have a voice on policy, it already has influential allies inside the Trump administration. Most prominent among them is Marc Short, who previously oversaw political operations for the Kochs and is now the White House liaison to Capitol Hill. Lesser-known alumni of the network work inside agencies that are rolling back protections for federal lands and environmental regulations. 

A top priority for the coming year is a Trump's expected infrastructure proposal, an issue that network officials have already been discussing with the administration, they said. James Davis, who runs communications for the network, said their goal is to make sure that there is no increase in the gas tax. "We'll have to see whatever plan comes forward before we can say whether we'd support it," said Davis. "One thing we won't support is just throwing money toward projects that are a waste."


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