For the Koch brothers, electing the right candidate can mean a financial windfall

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Why there’s no Democratic version of the Koch brothers organization
By Reid Wilson, February 7, 2014

The political network of conservative donors built by the libertarian magnates Charles and David Koch infuriates Democrats. Some get mad because of the money the Koch brothers funnel into television advertising. Some go crazy over the fact that most Koch money won’t ever be disclosed (except when someone accidentally leaves their notes in a hotel room).

But for the Democratic professionals who actually run campaigns, the thing that frustrates them most about the Koch brothers network is that there’s no real equivalent on their side.

There are, to be sure, groups of Democratic donors who raise big bucks just like Republicans — the Majority PAC, the House Majority PAC, EMILY’s List, the Democracy Alliance. There are just as many individual Democratic donors who cut seven-figure checks, and who become boogeymen for Republicans, from Tim Gill to Tom Steyer to George Soros. But the coordination between big donors that the Koch network so ably facilitates just doesn’t exist on the Democratic side.

That’s because big Democratic donors and big Republican donors are motivated by different types of issues, and therefore give differently, according to Democratic strategists who deal frequently with high-dollar donors.

For the Koch brothers, electing the right candidate can mean a financial windfall. Republican candidates the Koch brothers back tend to favor fewer regulations on businesses and more fracking and right-to-work laws, to name a few. All of those issues benefit, to different extents, the bottom lines of the companies or stock prices or hedge funds associated with the mega-donors from whom the Koch brothers solicit big checks.

Social issues? Not so much. Organizations that spend the Koch brothers’ money may align themselves with conservative hardliners on abortion or gay marriage, but the brothers themselves — and most of their donors — are less concerned with social conservatism than they are with fiscal and regulatory policy. To them, political giving is an investment.

On the Democratic side, the opposite is the case. Heavyweights in the Democratic donor community pay the same tax rates as their Republican counterparts, and cuts to the capital gains tax or the higher brackets of the income tax benefit them financially, too. If fiscal issues were the only things driving their giving habits, Democratic donors would support the same politicians that Republican donors do.

But the motivations of Democratic donors revolve more around social issues. Democrats are more likely to be single-issue givers: Gill, who made his money in software development, is passionate about gay rights; he has donated heavily to pro-gay marriage initiatives and candidates. Steyer, the California-based financier and environmentalist, has made climate change a priority.

Abortion rights motivate many of the big-dollar donors who have given to Texas state Sen. Wendy Davis (D), who collected two contributions of $1 million each in her bid for governor. Davis, who rocketed to Democratic stardom after she mounted a filibuster against a bill that restricted abortion rights, has become a cause célèbre among Democratic donors, even though she faces such an uphill battle in a still-conservative state.

Gill, Steyer and others aren’t going to realize a profit if their chosen candidates win. They see their donations more in the spirit of philanthropy than investment (Please don’t send us hate-mail, we’re just making an analogy).

And donors like being recognized for their philanthropic gestures; that’s why so many Democratic donors openly claim credit for their political spending. Steyer, for example, cooperated with the New Yorker when it wrote a profile of him last year. The Koch brothers didn’t cooperate when the magazine took a look at their political activities.

There’s a message aspect to publicizing one’s political giving, too: Steyer wants candidates to know that if they talk about climate change, someone with money will be there to back them up. No one needs to send the message that the better-known Koch brothers are there for Republican candidates.

Several party operatives said, too, that their donors have a distaste for the kinds of big money that dominates modern politics. Democrats, after all, are the ones pushing to reform campaign finance laws to tighten restrictions on super PACs and outside groups funded by those big checks. It’s hard to reconcile pushing to ban million-dollar contributions on one hand while asking for million-dollar contributions on the other.

In the past, Democrats have hamstrung their own fundraising ability by adhering to rules that don’t actually exist. Back in 1998, then-Wisconsin Sen. Russ Feingold voluntarily limited the amount of money he would spend to $1 for every citizen of his state, while his opponent, Republican Mark Neumann, followed the campaign finance rules on the books. Feingold held onto his seat — but only barely. Democratic super PACs in 2012 would only take checks up to a certain size.

(That altruism may make donors feel good, but it doesn’t necessarily translate into action. After all, the Democratic president who promised action on campaign finance reform became the first candidate since campaign finance reform first passed in the early 1970s to opt out of public financing, while he raised more money than any candidate in history, spent more on negative ads than any in history and endorsed the super PAC he once railed against in the process.)

When it comes to campaign finance and the big-dollar donors who fund super PACs and the outside groups governed under Section 501 of the Internal Revenue Code, Republicans tend to follow the rules as written. Democrats tend to follow the rules as they would like those rules to be written.
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