Guest Host: Laura Knoy

For the last three days, the Koch brothers and their donors have taken over a fancy seaside hotel in Dana Point, California. The annual summer meeting usually takes place behind closed doors. This year, Charles and David Koch are going a different route: They invited reporters to cover some of the weekend’s events. It’s part of larger strategy by the Kochs to become more transparent about their activities. But, as many observers point out, how they raise and spend money is anything but transparent. Guest host Laura Knoy and her guests discuss the Koch brothers’ influence in 2016 and how candidates are financing their campaigns.

Guests

  • Norman Ornstein Resident scholar, American Enterprise Institute; co-author of "It's Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism"
  • Fredreka Schouten Reporter, campaign finance and lobbying issues, USA Today
  • Ron Elving Senior Washington editor, NPR News

Transcript

  • 10:06:54

    MS. LAURA KNOYThanks for joining us. I'm Laura Knoy of New Hampshire Public Radio sitting in for Diane Rehm. Over the past few days, a handful of Republican presidential candidates appeared at the annual Koch Brother Conference in Southern California. Their hope, to steer some of the nearly $900 million the brothers plan to spend this election cycle their way. To discuss the meeting and the latest in campaign fundraising, I'm joined in studio by Ron Elving of NPR. Ron, nice to see you. Thank you for being here.

  • 10:07:20

    MR. RON ELVINGGood to be with you.

  • 10:07:21

    KNOYAlso with us, Norm Ornstein of the American Enterprise Institute. Norm, welcome back, good to see you.

  • 10:07:25

    MR. NORMAN ORNSTEINThanks, Laura. Good to see you, too.

  • 10:07:26

    KNOYAnd joining us by phone from Southern California, Fredreka Schouten of USA Today. Fredreka, thank you for your time. We appreciate it. Fredreka Schouten, are you with us?

  • 10:07:38

    MS. FREDREKA SCHOUTENHi, I am.

  • 10:07:40

    KNOYGood morning, Fredreka. Thank you for being with us.

  • 10:07:42

    SCHOUTENHello? Can you hear me?

  • 10:07:44

    KNOYYes, we can, Fredreka. And you're out there covering the Koch Brothers Conference and I wanted to start off by asking you a couple of questions about that, Fredreka. What's it like out there, first of all?

  • 10:07:54

    SCHOUTENWell, it's very beautiful. We're perched on the -- overlooking the Pacific Ocean at a luxury St. Regis Monarch Beach Resort where folks are dining under the stars and mingling with politicians. You know, there are a lot of sitting governors here, U.S. senators and, of course, the five presidential candidates.

  • 10:08:19

    KNOYWhich five are there, Fredreka? Just remind us.

  • 10:08:22

    SCHOUTENOkay. Who have been there, actually, because a lot of them have left. So Carly Fiorina spoke, Scott Walker, former Florida Governor Jeb Bush, Senator Ted Cruz and Senator Marco Rubio.

  • 10:08:35

    KNOYOkay. So Cruz, Rubio, Bush, Walker and Fiorina. And there's been a lot of talk, Fredreka, about the fact that this is the first time the Koch brothers have let journalists in. How much access have they allowed you to have to some of the people who are there?

  • 10:08:51

    SCHOUTENWell, some. I mean, there have been restrictions, no doubt about that. What we have been able to watch are all of the presidential candidates discussing, you know, making their pitches to donors in Q&A sessions. And then, some of the open plenary sessions, for instance, Michael Lomax, the head of the United Negro College Fund, last night, addressed donors and we listened to that. And so it's been limited in some ways, but, you know, frankly, I think it's better to come in and see what's happening firsthand because they are so important.

  • 10:09:28

    SCHOUTENThey're building an operation that nearly rivals the Republican Party in terms of its funding and scope.

  • 10:09:35

    KNOYOne of the restrictions, from what I understand, Fredreka, is you can't say who the donors are. Is that right? And how come?

  • 10:09:43

    SCHOUTENRight. Well, there are donors who are wandering around the halls and one of the restrictions was that we wouldn't identify them or approach them for interviews. Although, last night, about 20 donors came and talked with reporters on the record about why they were there and who they were liking in the presidential primary. By the way, a lot of them remain undecided, even after listening to five people.

  • 10:10:04

    KNOYYeah, I was going to ask you about that, if there was any sort of clear consensus among the donor crowd, who they liked better. But no, it sounds like.

  • 10:10:11

    SCHOUTENNo, not yet. I mean, I think -- I heard some inklings from people that they, you know, that they want someone who had been a governor. I mean, there seems to be a definite sort of bias towards governors, but people also liked Marco Rubio and thought that he -- and Ted Cruz, frankly. Ted Cruz gives a great fiery speech and he was, you know, he did that yesterday.

  • 10:10:37

    KNOYWhat did he say? I am interested in, you know, if any of these candidates said anything newsworthy at the conference?

  • 10:10:43

    SCHOUTENWell, you know, Ted Cruz talked about -- really complained about what he called the Washington cartel that exists, even after these donors spent fortunes helping to elect Republicans to the Senate, he said, it's the same-old, same-old and one of the things that he cited was, you know, fighting over the Ex-Im Bank, the Export-Import Bank, and the fact that it still had a fair amount of support among establishment Republicans in Washington.

  • 10:11:17

    SCHOUTENHe also, very boldly, said when asked about global warming that the data and facts don't support it. And he got a big round of applause.

  • 10:11:27

    KNOYWell, Fredreka, hold on 'cause I want to bring our other guests into the studio -- in our conversation and then we have a lot more to talk about. Ron Elving with NPR so just step back for us, if you could, please. Many have said that this conference and allowing journalists to come in and talk about it is part of a rebranding strategy by the Koch brothers. Why do they feel they need to do that, Ron?

  • 10:11:49

    ELVINGThere are several reasons. One, they don't want to appear to the be the, you know, vultures with long fangs that they're often portrayed to be. Harry Reid, who is the Democratic leader in the United States Senate, has really focused on the Koch brothers in particular as the face of the billionaire class, as the face of people who are getting involved in politics to throw their financial weight around and this has apparently stung a bit.

  • 10:12:14

    ELVINGRight as he was introduced, in fact, this weekend, Charles Koch started talking about Harry Reid before he had even begun his regular remarks. So this seems to have gotten under their skin a little. There's another reason. They are organized, in part, many of these superPACS, they are organized under a part of the tax code, 501 (c), that governs charitable organizations, including, in many cases, public radio stations.

  • 10:12:37

    ELVINGAnd this particular part of the code allows them to raise and spend great amounts of money without disclosing the names of their donors. Now, that's not all the money we're talking about, but it's a sizable portion of all this new money that's coming into politics. And these donors don't have to tell you who they are, unless they choose to, but many of them identify themselves as limited partnership corporations, LLCs, and they don't have to tell you who they are.

  • 10:13:04

    ELVINGBut what they have to do is they have to do something -- let's put it in quotation marks -- "good for the community" with their money. It has to be civic-minded. And so there is also another reason for the Koch brothers, not just image, but also to meet at least a theoretical legal standard to be talking about all the good things they're going to do with this money that they're raising in these organizations, including things like prison reform.

  • 10:13:28

    KNOYA couple -- so a couple reasons for them to come out and be a little more transparent. Norm, what do you think? Some people have said we're seeing a kinder, gentler Koch brothers, with them getting involved in prison reform and so forth. What do you think?

  • 10:13:42

    ORNSTEINI will say that the focus on prison reform is not some studied attempt to pick and issue in a cynical fashion. They're libertarians, in some ways, although, frankly, they used to be pure libertarians. The fact is, the Koch Industries gets enormous government subsidies. They may dislike the Export-Import Bank, but they love all the regulations that benefit energy companies, oil and the like. But they still have a significant libertarian thrust to them and so prison reform is something that they and others in that area have been for for a significant period of time.

  • 10:14:15

    ORNSTEINBut as a more general matter, Ron is right. This is an attempt to soften the image. And anybody who's watched cable news or ESPN at all over the last year has seen a flood of feel-good commercials for Koch Industries, a privately-held company that has never looked for publicity before. You know, there's another part of this. David Koch is somewhat different from his brother in some ways. Charles runs the company, has been the genius behind the company.

  • 10:14:52

    ORNSTEINDavid has been a philanthropist in a lot of different ways and is also -- he deviates from conservative or Republican orthodoxy in terms of supporting same sex marriage, for example. I remember a moment in Aspen a couple of years ago when I denounced the Citizens United decision in the David Koch Auditorium of the Aspen Institute.

  • 10:15:14

    KNOYOops.

  • 10:15:14

    ORNSTEINWhich was a delicious moment, frankly, for me. But I think, you know, the circles that he runs in, he's stung by the notion that he and his brother are villains and they want to get away from that.

  • 10:15:25

    KNOYSo all those, you know, scary, grainy ads that we saw in 2014 kind of hurt them a little bit.

  • 10:15:32

    ORNSTEINYou're still going to see those ads, but the reality is that what the Koch brothers have done before and what they're going to continue to do is use the IRS code -- and there was one area where I think I would disagree a little bit with Ron. The code doesn't say that these organizations can behave this way and get away with lacking disclosure. The code actually says that they're supposed to be exclusively social welfare organizations. It's the IRS that's failed to get involved here.

  • 10:16:02

    ORNSTEINBut what they've done is to create a web of organizations, transfer money among and between and for them. So you're going to see Americans For A Better America or some such title doing these grainy ads, but you won't see fingerprints of the Koch brothers or many of the donors who are out there in Dana Point on them.

  • 10:16:19

    KNOYSo Ron, as we talk about this sort -- maybe it's not a shift, but more transparency, more conversation about who they are and what they believe in, is this support by one of the Koch brothers anyway for same sex marriage, how are Republican presidential candidates going to play with that?

  • 10:16:37

    ELVINGMost Republican candidates for president are going to want the Koch brothers money, but not necessarily the full stamp of their ideology. Scott Walker, for example, has been a big favorite of the Koch's and they have made no secret of liking him, partly because of the way he took on public employee unions in Wisconsin after he was elected governor. They were big supporters of his even before he had met them.

  • 10:16:59

    ELVINGSo he is a favorite of theirs and yet his positions on social issues are conservatives, a religious conservative, if you will, and they have moved more in that direction since he became a presidential candidate in the last couple of years. So they're going to differ on that, but they're also going to be able to find enough common ground -- and that's not just Scott Walker, but many of these other candidates, they'll be able to find enough common ground that they'll be able to say, well, I don't follow David Koch on everything.

  • 10:17:28

    ELVINGHe does not agree with Charles Koch on everything. But what we do agree on is the need for America to do "fill in the blank."

  • 10:17:34

    KNOYDid you want to jump in there, Norm, too?

  • 10:17:35

    ORNSTEINWell, I just -- there's a larger point to be made here, Laura, which is that this is not just about electing a president. What the Koch brothers are doing out at Dana Point, and I'm sure Fredreka can address this as well, they've pledged to put almost a billion dollars into politics this year. It's not all their money, although they could easily afford it. But they're trying to build a party organization that, in effect, will eclipse the Republican Party. They've got a thousand people on the ground.

  • 10:18:03

    ORNSTEINThey're building a ground game that the Republicans have never had before. So this is a level of ambition that is just striking.

  • 10:18:10

    KNOYWell, coming up, more on campaign funding and the Koch brothers in just a moment and we'll take your questions and comments as well. Stay with us.

  • 10:20:01

    KNOYWelcome back. I'm Laura Knoy of New Hampshire Public Radio sitting in for Diane Rehm. My guests for the hour, as we look at campaign fundraising and the Koch brothers, are Fredreka Schouten. She's a reporter covering campaign finance and lobbying issues for USA Today. She is at the Koch brothers' conference in Southern California. With me in studio, Ron Elving, senior Washington editor for NPR News and Norm Ornstein, resident scholar at the American Enterprise Institute. Norm is co-author of the book, "It's Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism."

  • 10:20:33

    KNOYWe will take your questions and comments throughout the hour. Call us on 800-433-8850, 800-433-8850. Send email to drshow@wamu.org. Find us on Facebook or Twitter. And all of you, let's go to our listeners now. And John is calling from Halifax, Pa. John, go ahead. You're on "The Diane Rehm Show." Thanks for joining us.

  • 10:20:57

    JOHNGood morning, Laura and guests. It always amazes me that on this show and other liberal leaning shows, they bring up the topic of the Koch brothers but rarely comment on George Soros and the liberal side of this same issue.

  • 10:21:15

    KNOYWell, John, I'm glad you called. Because that was mentioned, right, Fredreka, by I think Carly Fiorina at the conference.

  • 10:21:22

    SCHOUTENYes. Yes, she did mention that. And, you know, I do think that we do write about George Soros. He was a contributor to the Hillary Clinton super PAC in this cycle. But I'll say this, about Soros, he has not been as active in recent cycles as he was back in 2004, when he, you know, really spent heavily. I think it was about $24 million to try to make sure that George Bush wasn't reelected. The bigger player who has emerged in recent cycles is Tom Steyer, a California billionaire environmentalist who has pumped, you know, tens of millions of dollars into his own super PAC to advance his climate-change agenda. And so he has emerged as a bigger player. And I think we're writing a lot about him, too.

  • 10:22:15

    KNOYWhat do you guys think? Do you have a handle, Ron Elving, on just what will be spent on the conservative side or libertarian side, when we talk about the Koch brothers? And what might be spent on the liberal side?

  • 10:22:25

    ELVINGI'm going to take the guess that there is going to be more money on the former side than the latter. Because if you can talk about Tom Steyer, who is, yes, very active, but particularly on the issues that interest him as opposed to something more systematic. And you can talk about George Soros but, as you've already noted from Fredreka, he has backed off to a large degree in terms of his involvement. Whereas, on the other side, this is very much a waxing opportunity. This is very much something that is getting to be a dominant element of the way conservative politics is practiced.

  • 10:22:58

    ELVINGAnd I would hazard to guess that some of that is inspired not only by their shock and amazement at what Barack Obama has been able to do in two terms as president, but also by their fear, expressed in those mid-term elections of 2010 and 2014, that the Republican Party was becoming hostage to a set of issues and to a group of people whose interests do not necessarily coincide with those of this class, that is, the billionaire class, the beyond-establishment Republicans. And they, then, felt they needed to reassert their control over conservatism and their control of the Republican Party to some degree, even if it means, as Norman was saying, setting up an almost entirely alternative party to pursue those ends.

  • 10:23:41

    ELVINGThere's a great deal more money behind that. There are many more billionaires who can be organized around that principle then there are Tom Steyers in the world.

  • 10:23:49

    KNOYI love your take -- a slightly different question, Norm -- what people call the money primary. And some people say: Look it doesn't even matter that we have, you know, primaries in my home state New Hampshire, or the Iowa caucuses. What do you think about that?

  • 10:24:01

    ORNSTEINWell, certainly, one of the things that's happened this time -- and it's -- this is a real test -- it used to be that Iowa and New Hampshire were the ruthless winnowing out factors. Because if you couldn't make a dent there, the money dried up and you simply couldn't compete any longer. Now we have candidates who simply find a sugar daddy, one billionaire. Now, you know, that doesn't mean the billionaire is going to stay with a candidate all the way through if they can't perform at all. But candidates have more staying power now. And we used to see, you know, it's interesting -- Jeb Bush tried the shock strategy that worked for his brother, worked for his father -- $100 million early in this process, outstripping everybody else.

  • 10:24:45

    ORNSTEINTed Cruz, who's a very different candidate -- and it's interesting that he's there with more establishment candidates -- announces that he's going to run and he's got $35 million in super PACs right away, coming from a small number of very wealthy donors. That means he can sustain this for a very significant period of time. And that means a greater likelihood that this race will drag on longer than it otherwise would -- an unintended consequence, I think, for a lot of Republicans who supported opening up the money chase to the wild, wild West.

  • 10:25:16

    KNOYAll right. Well, again, thank you for that call. And we'll take more of your calls in just a moment. The number is 800-433-8850. Send us email at drshow@wamu. Join us on Facebook or Twitter. Here's an email from Jack Foksa (sp?) . He says, "While money is speech, the Koch brothers have a voice and I have none." Jack, by the way, is in Gainesville, Fla. He says, "While money is political power, the politicians bow to those with money and ignore the guy with no money." Jack says, "What can I do to change this? Nothing, when the money holders hold all the cards." Jack, thank you for the email. Fredreka, I'm sure you've covered, you know, regular Americans who share Jack's frustration.

  • 10:25:55

    SCHOUTENYeah. I think that is the sentiment among a lot of people. I mean, we saw it expressed in sort of a very public fashion with the postal worker from Florida who flew a gyrocopter on to the lawn of the U.S. Capitol, with letters denouncing money in politics. I think there are a lot of people who are frustrated with the status quo. I don't think that anything will change quickly. I mean, this Congress is not about to pass legislation that would require that a lot of these nonprofits that are active in politics disclose their donors. So I think we're going to see, in this election cycle, much of the big money influencing the public debate. And then we'll see whether there is a shift.

  • 10:26:41

    SCHOUTENI mean, there are a number of states out there, for instance, that have, you know, pushed resolutions saying that we need to rewrite the constitution to address Citizens United. Again, don't know how much, you know, how much traction that will have this year but we'll see in the future.

  • 10:26:59

    KNOYWell, and, Fredreka, one sometimes middle-ground that folks on this issue come to is they say, "Okay, never mind about the amounts of money. At least, let's find out who is contributing that money." What are the latest rules around disclosure? Because one of you said, early on -- I think it was Ron -- that we still don't know a lot about who's fundraising and...

  • 10:27:21

    SCHOUTENRight.

  • 10:27:21

    KNOY...who's behind these big pots of money.

  • 10:27:23

    SCHOUTENWe definitely know, in the case of super PACS, they have to disclose their donors. Although, in some cases, those donors are limited liability corporations and you can't find out very much about the people behind them. So there is that. But, you know, a lot of the spending done by the Koch brothers, for instance, is done through nonprofit groups. And a lot of those donors don't want to be disclosed. I mean, we had a handful who came and chatted with us. But I also heard from people who said, "I think that this is free speech. I have the right to put my money into politics. And that if my name is disclosed, it will chill that speech."

  • 10:28:04

    ORNSTEINYeah.

  • 10:28:04

    KNOYNorm, go ahead.

  • 10:28:05

    ORNSTEINA few points here. First is, the Supreme Court, even with Citizens United and its aftermath, has said by an eight to one margin that robust debate demands disclosure. So the argument that you should be anonymous has not been upheld by even this Supreme Court. A second point. When the court has basically said, "money is speech." What they're saying is, if I'm out there in a debate with another individual and I'm just speaking in my normal voice, and that person has a sound system the equivalent of what the Beatles had at Shea Stadium in 1964, it's not a very equal debate.

  • 10:28:42

    ORNSTEINAnd then I would make a third point, which is, many of the Tea Party people actually are uneasy about the way these rules are working. I did a forum last week with a couple of conservatives -- one of whom, John Pudner, had actually run the campaign of David Brat, who unseated Eric Cantor, an insurgent campaign. He, now, is championing a tax credit for small donations and said that many of the people around him would even consider a multiple matching fund system for small contributions -- trying to tilt the balance a little bit the other way. In the absence of a different Supreme Court, that may be the only direction in which we could go. But we're a long ways from getting anywhere there.

  • 10:29:25

    KNOYWow, that's really interesting. Ron.

  • 10:29:26

    ELVINGAnd for his part, Bernie Sanders, who is a Democratic candidate for president, has called for a system of public financing for campaigns and that idea has been out there for a long time.

  • 10:29:36

    KNOYAnd hasn't really gone anywhere.

  • 10:29:37

    ELVINGWell, it can easily be characterized by its opponents as taxpayer-funded politics or taxpayer-funded politicians. Do you want to give your money to this? And we know from the check-off experience on IRS forms, that people don't want to give even a dollar or two or three dollars to the presidential campaigns voluntarily, even if it doesn't increase their tax. So it's not been a popular idea. But the things that are happening now -- this billionaire takeover, if you want to give it that kind of label -- that's going to provoke a lot more thought and it may change people's ideas.

  • 10:30:10

    ORNSTEINYou know that Nick Confessore of The Times, and some of his colleagues, and Matea Gold of The Post, who've been really all over this story -- but Nick had a piece that said that 400 families have given more than half the money into this campaign.

  • 10:30:23

    KNOYI saw that, yeah. It's interesting.

  • 10:30:24

    ORNSTEINAnd Mike Malbin, who runs the Campaign Finance Institute, said we're not in a gilded age anymore -- a new gilded age. It's a platinum age. And that's a very worrisome thing because big money brings with it big corruption.

  • 10:30:35

    KNOYLet's go back to our listeners. Again, you're listening to "The Diane Rehm Show." You can call us, 800-433-8850. Send us your email at drshow@wamu.org. Join us on Facebook or Twitter. And Mark joins us from Allentown, Fla. Hi, Mark. Go ahead. You're on "The Diane Rehm Show." Welcome.

  • 10:30:54

    MARKOh, thank you. And, you know, Silicon Valley, Wall Street, Hollywood, Vegas: there's a reason why the president and Democrat politicians go to those please, because they are (unintelligible) on a Democrat side. And it seems to me that just a little bit of the Koch brothers is like calling the kettle black. The Koch brothers rate, what, in the teens somewhere. All the top donors, individual donors in the nation are all Democrat -- all liberal Democrats. There's the Tides Foundation, Ploughshares, it goes on and on. Democrats are highly organized with raising large amount of money, including unions. So to complain about the Koch brothers is just really kind of over the top in my opinion.

  • 10:31:41

    KNOYWell, Mark, thank you for calling in. And, Fredreka, we've covered this a little bit earlier with our other caller. But here's someone else saying, "Hey, don't just pick on the Koch brothers. There's plenty of, you know, big, deep-pocketed Democrats as well.

  • 10:31:52

    SCHOUTENWell, I mean, there's certainly money on the Democratic side. I mean, you have labor unions that have traditionally spent a lot of time and used, you know, their members going out on behalf of candidates. So you can't discount, sort of, the power of some interests on the Democratic side. I think we're fascinated by the Koch brothers because they represent a family of two brothers who control a private company and have managed to sort of find a group of like-minded people that they've brought together over a dozen years to support a number of causes -- not just politics, of course, but, you know, programs in higher education and, you know, think tanks like the Cato Institutes. They're fascinating because they are so unique.

  • 10:32:43

    KNOYThe unique because it's a private company getting so deeply involved in politics.

  • 10:32:47

    SCHOUTENA single, private company getting so deeply involved in politics, two brothers. I mean, it's a -- it's fascinating.

  • 10:32:56

    KNOYI'm Laura Knoy and you're listening to "The Diane Rehm Show." Again, if you want to join us, call 800-433-8850. Send an email to drshow@wamu. Follow us on Facebook or Twitter. Norm, go ahead.

  • 10:33:09

    ORNSTEINIt would be a mistake to think that there's only one side where politicians are seeking this kind of money. And, in fact, the opponents of campaign finance reform have included major campaign lawyers and operatives in both parties. Bob Bauer, who was the president's campaign lawyer, Joe Sandler with the Democratic National Committee: ardent opponents of most of these reforms. But, on the other hand, what Mark said, that the big money is on the Democratic side and the big donors on the Democratic side, simply doesn't match the facts. And the billion dollars that the Koch brothers are raising and all the money coming in -- the dark money through secret funds -- much more of it's on the Republican side.

  • 10:33:49

    ORNSTEINAnd if you look, even now, at the numbers, the amounts that the candidates have raised as opposed to the super PACs, which they now run -- they're supposed to be independent, but there's no independence at all -- vastly outstrip what Hillary Clinton has done. She's raised money from big donors, but far more from small donors than any of the others. So there's a difference here, even though it's not that anybody's hands are clean.

  • 10:34:12

    ELVINGThere's a news...

  • 10:34:13

    SCHOUTENWell, and the...

  • 10:34:14

    ELVINGThere's a news...

  • 10:34:14

    SCHOUTENAnd -- and...

  • 10:34:15

    ELVINGI'm sorry, Fredreka. Go ahead.

  • 10:34:16

    KNOYGo ahead, Fredreka. Yeah, and then we'll let you jump in, Ron.

  • 10:34:17

    SCHOUTENNo, no. What I was going to say is that, I think Norm -- I think Norm does make an excellent point here. Because one of the things, when you look at the lineup of the super PAC donors, is that it is -- you're seeing far more of this activity on the Republican side. Hillary Clinton raised about $45 million for her campaign account. And only about $50 million went into a super PAC supporting her. So she is getting a lot of support from people who are complying with the limits and contributing directly to her campaign. It's a flip for Jeb Bush, for instance, who received $103 million into his super PAC and only about $11 directly to his campaign. And more than two dozen people contributed a million or more each to the Jeb Bush super PAC.

  • 10:35:10

    KNOYGo ahead, Ron.

  • 10:35:11

    ELVINGThere's also a news peg here and that is that the Koch brothers are quite visibly and with intent organizing something -- where they're trying to raise a billion dollars from billionaires, largely -- in order to put a much heavier thumb down on the scale in 2016 than they did in 2012. And it was a pretty good sized thumb then. So this is an effort being made by them, in public. That's why we're talking about it today because it just happened over this weekend. If someone puts together something anything like that, or even a quarter as large or a tenth as large on the Democratic side, that will be equally newsworthy and equally covered.

  • 10:35:48

    KNOYYou know what I'm interested in hearing from you, Ron, is the issues. How will this big influx and this big organization from the Koch brothers, really thinking about 2016, how will it affect the way issues are discussed at the 2016 presidential primary -- mostly on the Republican side but on the Democratic side, too.

  • 10:36:05

    ELVINGWe'll get some kind of an indication of that later on tonight, when, at seven o'clock Eastern Time, 14 Republican candidates -- in other words, everybody but Donald Trump, Mike Huckabee, and, wait for it, Jim Gilmore -- are going to gather up in Manchester, N.H., and they're going to answer questions for two hours. That means about eight minutes per candidate. Some of them, several of them, are going to be people who are getting there from Dana Point, Calif. I hope they can get some good commercial flight connections between those two points.

  • 10:36:34

    ELVINGAnd when they get there, they're going to have to answer some questions from a panel of people in Manchester, N.H., one of which ought to be something like, "Did you change your mind on any issues over the weekend, sir?" Probably the answer would be, no. But what kind of influence is this audition that you just had before these people in California -- what kind of influence is that going to have on how you stand on positions? And they might bring up, for example, the president's proposals on climate change today.

  • 10:37:01

    ORNSTEINYou know, I wouldn't worry about the commercial flights. Most of these candidates have billionaires with airplanes who will be taking them there.

  • 10:37:06

    ELVINGOh, I am -- I am shocked to hear that.

  • 10:37:08

    ORNSTEINSo -- but, you know, to your point, Laura, another name that's been bandied about for a long time, Sheldon Adelson...

  • 10:37:16

    KNOYHe supported Newt Gingrich.

  • 10:37:17

    ORNSTEIN...the -- who kept Newt in the race for a significant period of time.

  • 10:37:21

    KNOYRight.

  • 10:37:21

    ORNSTEINWho's in Las Vegas. And we've had pilgrimages of candidates in the past go to Las Vegas. And we had an incident awhile back where one of the candidates at a forum made the mistake of talking about the occupied territories in the Middle East, which is an absolute no-no. And of course, that candidate then went back, apologized, and kissed Sheldon Adelson's ring.

  • 10:37:43

    KNOYAll right. Well, coming up, more of your calls and questions on campaign fundraising and the Koch brothers. Stay tuned.

  • 10:40:00

    KNOYWelcome back. I'm Laura Knoy, sitting in for Diane Rehm. My guests for the hour as we talk about campaign fundraising and the Koch brothers are Fredreka Schouten, a reporter covering campaign-finance and lobbying issues for USA Today. She is at the big Koch brothers' conference in Southern California. Ron Elving is in studio, senior Washington editor for NPR News, and Norman Ornstein, resident scholar at the American Enterprise Institute. You can join us, too, with your questions and comments. Find us on Facebook or Twitter. Send us an email to drshow@wamu.org. And of course you can give us a call, 800-433-8850.

  • 10:40:39

    KNOYAnd all of you, let's go right back to our listeners, and Ralph is in Battle Creek, Michigan. Hi Ralph, you're on "The Diane Rehm Show," welcome.

  • 10:40:46

    RALPHYes, hello, I just wanted to ask a question. I think we're verging toward a plutocracy rather than a democracy with these huge, powerful, well-funded interests that have unlimited spending. And there was a book by Kevin Phillips in 2004, which he said in the introduction, or -- it was called "Wealth and Democracy," and he said in the introduction he thought that the country had become a plutocracy. That was back in 2004.

  • 10:41:15

    RALPHOh, and one other thing. In Michigan, we have, like, at least four Koch-brother-funded organizations. We have -- located here. Americans for Prosperity, we have the Mackinac Center for Public Policy, we have Acton Institute. I think there's -- ALEC is funded by it. So there -- I wish George Soros would set up something in Michigan.

  • 10:41:36

    KNOYResponding to those other people who called and talked about the groups on the liberal side. You know, Ron Elving, what do you think? Are we moving toward a plutocracy with these big groups contributing so much and having such an influence?

  • 10:41:48

    ELVINGThere certainly is more direct influence in terms of subtle ways, or not subtle but not so obvious, maybe, as the efforts being made to elect a president. These things, such as taking over legislatures, setting up many, many, many think-tanks, they had a great deal of influence setting up the CATO Institute a number of years, well, they were highly influential in setting that up. And they can change the debate. They have changed the debate.

  • 10:42:14

    ELVINGALEC, the organization that they referred to, is a legislative information center, but it also essentially produces boilerplate bills that can then be passed in legislature after legislature until much of the country, if not most of the country, has adopted that particular approach to any particular issue. And this has gone from starting out, perhaps, with energy industry issues that interested the Kochs to tax issues that interested the Kochs to an absolute panoply of issues of all kinds that have to do with the distribution of political power, who gets to vote, how people are determined in terms of defining their citizenship, all kinds of different ways that the Koch brothers and their ideas have gotten out there, all of it done largely thought the leveraging of large amounts of money, and that's plutocracy.

  • 10:43:03

    KNOYWell, here's an email that came in. This person doesn't give a name but says follow the money. This person says, where does the money get spent? If it is for TV ads and the like, I think the problem is not the money but the uninformed voter. If we made voting decisions based on informed knowledge of the candidates, then TV ads/money would make little difference. What do you think, Norm?

  • 10:43:23

    ORNSTEINWell, first of all, one of the reasons that disclosure matters is an enormous amount does got into TV ads. It's now going into all others kinds of communications, as well. And as we've seen with the Koch brothers, a lot of it on the ground, get-out-the-vote drives, identifying voters and the like. But if you have a TV ad that comes with a tagline, paid for by Americans for a Better America, you have no idea who's behind it. And we know that, for example, there have been a lot of very slashing ads hitting lawmakers who have supported climate change legislation funded by groups with nice-sounding names that were actually supported by oil companies.

  • 10:44:03

    ORNSTEINIf voters know that, you put it into a different context than if you think it's coming from a group of civic-minded individuals. So disclosure is not the only remedy here, but it becomes an important part of it. And if you're not an informed voter, and you don't know who's sending these messages, you're in the dark.

  • 10:44:20

    KNOYSo sometimes it's hard to become informed because the names are so, you know, mom and apple pie.

  • 10:44:26

    ORNSTEINYes, and of course the ads now are just, you're inundated with them.

  • 10:44:30

    KNOYFredreka, returning to, again, what you've been covering there at the Koch brothers conference out in Southern California, you talked earlier about the five candidates who were there. Who wasn't there, Fredreka?

  • 10:44:41

    SCHOUTENWell, lots of others, Notably Kentucky Senator Rand Paul, who, you know, his libertarian views put him very much in line with the views of Charles Koch. And he seems to have, perhaps, fallen out of favor. He was invited, decided not to attend. There has been -- there was a lot of coverage earlier in the year about his previous appearance before donors who complained that he appeared to be cavalier, he wore blue jeans. A lot of these guys are pretty straight-laced. And so there's a little tension there, we're -- you know, we'll see how that plays out.

  • 10:45:24

    SCHOUTENLots of others not invited, including Donald Trump, who tweeted on Sunday that they were all here to beg for money from the Kochs and questioned whether they were puppets.

  • 10:45:36

    KNOYThe Trump tweet, and that was big news over the weekend. Norm, I know you want to jump in there, too.

  • 10:45:41

    ORNSTEINYeah, just, you know, one of the things that I believe this conclave is trying to do is to figure out a way to unite at a relevant point behind a candidate so that they don't end up with a circus. Their nightmare, and the dream of every political reporter, is that we have an open convention with a lot of delegates who are not going to be controlled by anybody choosing a nominee very late in the game.

  • 10:46:08

    ORNSTEINAnd it's interesting, in particular, that, you know, you've got candidates there who would be among the group of establishment Republicans, remember establishment now means very conservative, it's not moderate, in Walker and Bush and Rubio but that Ted Cruz is a part of this group, somebody who is a radical insurgent. Remember, this is a guy who last week, in an unprecedented way, went on the Senate floor and called Mitch McConnell, his leader, a liar right on the floor on the Senate, who has advocated shutting down the government and taking extreme steps, is one of those people who they're considering for that role.

  • 10:46:44

    ORNSTEINAnd we have a real question as to whether even with this group of donors, if they can, in fact, choose a candidate, unite behind somebody and shut off the debate at a particular point. That may be one of the most interesting things that we'll see, coming ahead around March or so of next year.

  • 10:46:59

    KNOYDid you want to jump in, too, Ron, on that point?

  • 10:47:00

    SCHOUTENOne thing I'd like, I wanted to jump in, it's Fredreka.

  • 10:47:01

    KNOYSure.

  • 10:47:02

    SCHOUTENOne of the things, earlier this year, I sat down with Charles Koch, and he talked about wanting to help one or more of five candidates, including Rand Paul and the others who are here. And what's striking to me in the conversations is that they do not seem at this point willing to back one or two candidates in the primary but are trying to use their base of donors and the activists to elevate, to lift up a handful of them and give them the opportunity to compete effectively against Trump.

  • 10:47:38

    KNOYGo ahead, Ron.

  • 10:47:39

    ELVINGRand Paul has a contradiction. He has a dilemma. He wants to be a man of the people. He wants to go out there, to California, to a Koch brothers audition wearing blue jeans and cowboy boots, and that got a lot of note when that happened earlier this year, as Fredreka noted. So this time, he's invited, he decides not to go at all because he doesn't want to see like he's perhaps toadying to these guys because he wants to be that man of the people. He wants to be different. He wants to be outside the old box of the Republican Party.

  • 10:48:05

    ELVINGBut at the same time, a lot of his ideas, about taxes and government, are more appealing to this group, the Koch group, than they are, perhaps, to some of the common men that he wants -- or common people that he wants to be part of.

  • 10:48:15

    ORNSTEINYou know, he's a fascinating character in a lot of ways. Earlier on, he jumped behind the criminal justice reform issue and thought that he could be the leader there, and he would be the guy, the only one who could attract African-Americans or Hispanics. And now others have jumped on, and it's sort of eclipsed him. At the same time, there is a strong isolationist strain on the Republican side, and he's the candidate who evokes that. But because there's such antipathy towards Barack Obama now, and the reaction is if he's for it, we're against it, the notion that Obama is weak, which is the drumbeat of all conservatives, means we've got to be strong.

  • 10:48:55

    ORNSTEINSo he's sort of left without a constituency at this point, and he's moved enough away from the pure Libertarian roots that those people who ardently supported his father in the past are not so much behind him. So I joked the other day that Rand Paul now rhymes with free fall, and this has not been a very good time for him. This debate becomes very important for him to try and gain some traction and figure out a voice that in fact does resonate with voters.

  • 10:49:19

    KNOYWell, let's take another call, and again, you're listening to the Diane Rehm Show. We're talking about campaign funding and the Koch brothers. You can join us, 800-433-8850. Send your email to drshow@wamu.org. And James in Indianapolis, Indiana, hi James, you're on "The Diane Rehm Show," welcome.

  • 10:49:37

    JAMESHi, yeah, thanks for taking my call.

  • 10:49:39

    KNOYSure.

  • 10:49:41

    JAMESI really appreciate it. I was saying that to me, the great model, I think, for a Republican leader, someone that I could really get behind, would be Teddy Roosevelt because in his day, he stood up to the great powers-that-be. I think he stood for the common man, and he also was very protective of public lands and of our environment. And those -- that's the two issues that really keep me from wholeheartedly embracing the Republican agenda.

  • 10:50:07

    JAMESAnd I would also like to say, regarding campaign financing, that there was a terrific book that was written a few years ago by a fellow named Lawrence Lessig called "Republic, Lost," which I would recommend reading or studying, looking at, because it really breaks down the issues of how -- exactly what (inaudible) money does to corrupt our political system.

  • 10:50:29

    KNOYOkay, James, thanks for calling in. You talked about that a little bit earlier, Norm. You mentioned money and corruption.

  • 10:50:33

    ORNSTEINYeah, and, you know, the Citizens United decision is the one that gets all the attention. I was actually more troubled by a subsequent decision, McCutcheon, in which Chief Justice Roberts basically defined corruption almost into non-existence and said, in effect, that, you know, it's the American way. You have a lot of money, you give it, you get access. The people you support do the policies that you want. That's all fine. Corruption becomes only the "American Hustle," ABSCAM variety, a direct quid-pro-quo bribe caught on videotape.

  • 10:51:04

    ORNSTEINAnd that's really bad. Larry Lessig has pointed that out. His idea, which has also come from some others, Bruce Ackerman, a law professor at Yale, patriot dollars, give everybody in the country $50 every cycle that you can give to whatever candidates you want. And then you've got something that basically makes all the billionaire money a little bit less significant.

  • 10:51:27

    ORNSTEINAnd finally I would say to James, there are no more Teddy Roosevelt Republicans. This is a very different party than we've had. Moderate Republicans, those who support campaign finance reform or conservation or environmental policy, they are not even a trace element in the party anymore. It's now conservatives against more radical forces.

  • 10:51:49

    KNOYWell, thank you for that call. And here's an email from Randy. He says, your caller tried to compare the funds given by the Koch brothers to monies given by unions. Randy says unions represent all of the employees involved. The Koch brothers are two people. Randy says no two people should have the impact on government that they have exerted. Thank you, Randy for that one.

  • 10:52:06

    KNOYHere's one from Joel in Salisbury, Maryland. He says, I hope someone on your panel will mention the fact that reporters attending the Koch event in California have access on the condition that none of the donors present be named. He says, I find it a clear example of the relationship between American media and the elites. Joel says, I wonder if anyone will cover the protests at the gates of the venue. And so Fredreka, you're there. What were the protests like at the gates of the venue, and did they get a lot of coverage?

  • 10:52:35

    SCHOUTENThey got some coverage. I will say that I saw, when I arrived, which was a little later, you know, just one protestor across the street. I would not say that there was, like, a heavy presence of protestors that I witnessed. But to be clear, I mean, there may have been some earlier. You know, and this is interesting. I mean, I talked about this at the very outset. As a reporter, I felt it was important to go there and to try to get as much information as I could about what Charles and David Koch were saying to donors, what -- and so we accepted some of these conditions but were utterly transparent about them in our coverage.

  • 10:53:19

    SCHOUTENAnd we tried to cover all aspects of this, and we decide these issues on a case-by-case basis, but, you know, I routinely talk to people who are concerned about the Koch brothers, and I try to also talk to the Koch brothers and their donors about what compels them to get involved in politics.

  • 10:53:36

    KNOYWas that odd for you, though, Fredreka, to agree to cover something under those conditions? Usually reporters expect and want, you know, free rein.

  • 10:53:45

    SCHOUTENYeah, I mean, I mean, what I did is I had long conversations with them and with my editors. Again, I felt it was far better to get in the door and to cover the event than to say I'm not going to cover it. And I had the opportunity last night to talk to some donors, and I'll talk to more people today. I'm, you know, I'm always pushing for more information, but again, it's better to be in the building than not.

  • 10:54:13

    KNOYI'm Laura Knoy, and you're listening to "The Diane Rehm Show." Again, you can join us at 800-433-8850. Send email to drshow@wamu.org. And gentlemen, I did want to return briefly to the Republican debate that one of your mentioned earlier and bring you in, too, Fredreka. This is the debate later this week, the official debate sponsored by Fox News and the party. Only 10 candidates get to appear on the stage, and Ron Elving, it's all about the polls, and I wonder if money is helping people bump their recognition up in the polls.

  • 10:54:51

    ELVINGThey certainly hope so. They're buying ads like crazy. They're trying to get a little bit more national profile. Usually they'd be buying ads in those early states, but now they have to go national insofar as they have the money to do so. They're also saying outrageous things to make sure that they get a certain amount of coverage.

  • 10:55:05

    KNOYBlowing up their cells phone on YouTube.

  • 10:55:05

    ELVINGWhat have you, and also timing some of the things that they do. John Kasich obviously timed his announcement largely around trying to get a late bump, and it seems to have worked, and he seems to have crawled just over the line, and he may very well be one of the 10 on Thursday night, whereas before he wasn't.

  • 10:55:24

    KNOYSo there's a lot of consternation about this, again, who's in, who isn't, who gets to go on that stage and who doesn't and the role that money may play in that. So there's this alternative debate that you mentioned earlier, I think, Norm, 14 candidates in Manchester, New Hampshire, tonight. Will people watch that? How's that going to be different from the official, sanctioned party debate?

  • 10:55:45

    ORNSTEINI don't think we're going to see much attention given to it, to tell you the truth. And then we have, of course, the junior debate. What Fox has done, Fox put itself in a terrible position. They're going to pick 10 based on polls. But the difference between the 10th and 11th and 12th candidates is going to be basically less than one half of one percent average in the polls with polls that have a margin of error of plus or minus five percent. So you're talking about people who will be seen as serious and those will not, and so they created this junior debate with the other candidates, which is at 5 o'clock, as opposed to later in the evening, in Cleveland, and my guess is that will get much less attention, too.

  • 10:56:25

    ORNSTEINBut the candidates there will probably say more outrageous things so that they can try and gain a little bit more traction. Then you've got the dilemma of how you stage-manage 10 candidates. You know, the ones in New Hampshire, they're going to, I think, handle them serially more than they are going to have a debate.

  • 10:56:41

    KNOYYeah, it's more of a forum than a debate.

  • 10:56:42

    ORNSTEINIt's a forum and not a debate. But if you have a debate with 10 candidates, where you're limiting the candidates to one minute and then a 30-second response, and then you can get a response if somebody else mentions your name, it's a zoo in a lot of ways. And how you can stand out, especially since almost all of them have identical views across the range of all the issues save Jeb Bush on common core and immigration, it's not likely to be very edifying, frankly, especially if it comes to learning something about their nuances on positions, if there are any nuances.

  • 10:57:19

    KNOYWell, we will all be watching all those debates, the ones at the kids' table at Thanksgiving, as we've been calling it.

  • 10:57:24

    ORNSTEINYes.

  • 10:57:24

    KNOYAnd also the big debates. Thank you all so much for being here. I really appreciate it. Ron Elving, good to see you. Thank you.

  • 10:57:28

    ELVINGThank you, Laura.

  • 10:57:29

    KNOYRon Elving, senior editor for NPR News. Norm Ornstein, thank you also for your time.

  • 10:57:32

    ORNSTEINMy pleasure.

  • 10:57:35

    KNOYNorman Ornstein, resident scholar at the American Enterprise Institute. And Fredreka, thank you also for being with us.

  • 10:57:39

    SCHOUTENThank you.

  • 10:57:40

    KNOYThat's Fredreka Schouten. Again, she's with USA Today. I'm Laura Knoy, sitting in for Diane Rehm. Thanks, all, for listening.

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