An Open Letter to Koch Program Alumni
By now, you’ve probably heard the unwelcome news: last Thursday, Charles and David Koch filed suit in Kansas court against the Cato Institute, Cato President Ed Crane, and Kathryn Washburn, the widow of longtime Cato chairman Bill Niskanen, in an attempt to assert majority control over Cato.
Current Cato chairman Bob Levy has told the Washington Post that “the Koch brothers, who have the power to appoint half of the board, ‘have been choosing Koch operatives’ for members, with an eye to push Cato toward support of the Republican Party.”
You’re probably confused. I’m confused too, because, like most of you, I admire the Cato Institute greatly, and I’m also tremendously grateful to the Koch brothers for their longstanding, generous support of the pro-liberty movement.
In fact, I don’t just admire the Cato Institute—I’ve made my career there. And I’m not just grateful to Charles G. Koch—I owe that career to him.
I was a member of the inaugural Koch Summer Fellow Program class in 1992. And last Fall, two decades after one of the best summers of my life, the Institute for Humane Studies asked me to give a toast to Charles Koch at an event marking KSFP’s 20th Anniversary.
I thanked him for creating a program that was “probably the most valuable thing I’ve ever done.” I told him that what I experienced that summer made me decide to stay here in this miserable company town and devote myself to the intellectual battle for individual liberty, free markets, and peace.
So I can understand why so many people in the small-government movement feel conflicted and disappointed about this dispute. But while I’m disappointed, I’m not conflicted.
When it comes to this lawsuit, like Jonathan Adler, “I cannot understand how [the Kochs’] actions can, in any way, advance the cause of individual liberty to which they’ve devoted substantial sums and personal efforts over the years.”
On Thursday, Charles G. Koch told the press, “We are not acting in a partisan manner, we seek no ‘takeover’ and this is not a hostile action.”
With all due respect, Mr. Koch, that is not true.
If there’s no “takeover” in the works, then why have the Kochs sought to pack Cato’s independent board of directors with people who are in the employ of, or otherwise beholden to, Koch interests?
By invoking Cato’s long-moribund Shareholders’ Agreement, the Kochs have nominated or elected 15 people to Cato’s Board of Directors, in the process removing four of our largest and longest-standing contributors from the Board.
Among the directors the Kochs nominated but were unable to elect were: the executive vice president of Koch Industries; a staff lawyer for Koch Industries; a staff lawyer for the Charles Koch Foundation; and a former Director of Federal Affairs for Koch Industries.
Koch appointees now on the Board are:
Charles and David Koch, the two largest owners of Koch Industries;
Preston Marshall, third-largest shareholder of Koch Industries;
Kevin Gentry, VP at the Charles Koch Foundation;
Nancy Pfotenhauer, authorized spokesperson for the Kochs and Koch Industries;
Ted Olson, distinguished Republican lawyer who represents and publicly speaks for Koch Industries; and
Judge Andrew Napolitano.
If this isn’t an attempted “takeover,” it’ll do until the real thing comes along.
And if there’s no “partisan” agenda afoot, then why did Charles and David Koch nominate and install a host of Republican party operatives on Cato’s board?
As my colleague Jerry Taylor details here, new Cato board member Kevin Gentry ”is a social conservative activist who’s also vice-chair of the Virginia GOP.” Nancy Pfotenhauer is “a former spokesperson for the McCain campaign who has argued on television in favor of the Iraq war and the ‘don’t ask, don’t tell’ policy pertaining to gays in the military.” Ted Olson, solicitor general for one of the least civil-liberties friendly administrations in modern memory, “is a Republican super-lawyer who’s never identified himself as a libertarian.”
True enough, the Kochs have also placed Judge Andrew Napolitano on the board. Alone among the new members, Napolitano has a record of advocacy of libertarian causes. But given the other nominees and appointees, that’s slim consolation indeed. Consider:
One of the candidates that the Kochs nominated, but were unable to elect, was Tony Woodlief, who has blogged about “the rotten heart of libertarianism,” criticized gay marriage, and complained about libertarians “toking up” at political meetings. In fact, Woodlief’s blog features an entire category of posts devoted to “Taunting Libertarians.”
Which is fine, we can take it–but it would be a little unusual to get “taunted” by our own board.
Another Koch nominee for Cato’s Board of Directors was right-wing blogger and attorney John Hinderaker, who calls himself a “neocon,” and has described George W. Bush as “a man of extraordinary vision and brilliance approaching to genius.”
In his statement Thursday, Charles Koch insisted that he and David merely “want to ensure that Cato stays true to its fundamental principles of individual liberty, free markets and peace.”
We’ve done a pretty good job staying true to those principles over the years. Were people like Woodlief and Hinderaker supposed to improve our performance?
From what I understand, late last week, Koch officials began contacting key members of the limited government movement about this dispute. I’ve heard enough about what was said to get the general drift by now, I think: this case is about the rule of law and respect for property and contract. It’s an age-old dispute between Ed Crane and Charles Koch, with zero ideological content.
Well, take a look at the relevant legal documents appended to the Kochs’ complaint and decide for yourself whether they straightforwardly grant the Kochs what they believe they’re entitled to. As this Reuters analysis suggests, their legal argument for divesting Bill Niskanen’s widow of her shares is anything but clear. And consider what the Kochs will win even if they prevail: a hollow Institute whose every pronouncement can be dismissed as propaganda from a “Koch-controlled” enterprise.
And if you’re inclined to think that it’s merely personal loyalty to Ed Crane that’s driving Cato’s opposition, then ask yourself why so many Cato employees, junior and senior staff alike, have publicly and vehemently opposed this takeover attempt—at no small risk to their careers, in a town where so many free-market organizations are funded by the Kochs. As (unpaid) Cato adjunct scholar Tim Lee points out,”The fact that so many senior Cato employees are sticking their necks out … underscores how serious the situation is—if this were just a personal fight between the Kochs and Ed Crane, longtime Catoites wouldn’t risk denouncing their possible future boss.”
As a friend put it to me last night, the Kochs’ hostile takeover attempt represents “a big leap down a pernicious path that most of Washington started down long ago. It strangles one of the last places in town that doesn’t put politics first.” That’s what’s at stake, and that’s why we fight.
When I got the chance to toast Charles G. Koch last October, I said that I owed him “an enormous debt of gratitude. And—whether he gets credit for it or not—the country owes him its thanks as well, because when we finally restore limited, constitutional government in this country,” the people in the Koch alumni network will have played a key role.
I believed that then; I believe it now. And that’s why I can’t begin to understand why Charles and David Koch have chosen a course of action that, if successful, would carelessly, pointlessly, and grievously injure the cause I thought they were fighting for.