The Koch model of political activism means that parties no longer control the process

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Big-Money Donors Demand Larger Say in Party Strategy
By Nicholas Confessore, March 1, 2014

The Republican donors who have financed the party’s vast outside-spending machine are turning against the consultants and political strategists they once lavished with hundreds of millions of dollars.

In recent months, they have begun holding back checks from Republican “super PACs” like American Crossroads, unsatisfied with the groups’ explanations for their failure to unseat President Obama or win back the Senate. Others, less willing than in the past to defer to the party elders and former congressional staff members who control the biggest groups, are demanding a bigger voice in creating strategy in exchange for their continued support.

Donors like Paul Singer, the billionaire Republican investor, have expanded their in-house political shops, building teams of loyal advisers and researchers to guide and coordinate their giving. And some of the biggest contributors to Republican outside groups in 2012 are now gravitating toward the more donor-centric political and philanthropic network overseen by Charles and David Koch, who have wooed them in part by promising more accountability over how money is spent.

“People are really drawn to the Koch model,” said Anthony Scaramucci, a New York hedge fund investor and Republican fund-raiser, who attended the Kochs’ annual donor conference near Palm Springs, Calif., in January. “It’s adaptive, data-driven, and they are the most propitious capital allocators in political activism.”

The quiet revolt signals a broader shift in the world of big money. Clubs of elite donors in both parties are taking a more central role in shaping policy and campaigns, displacing party leaders and the outside-spending organizations they helped create after the Supreme Court’s Citizens United decision in 2010. And the sheer scale of their spending is almost certain to rewrite the playbook for political campaigns this year, as candidates reckon with the strongly held views of some of the world’s wealthiest people.

The phenomenon is not limited to the right. Super PACs blessed by Democratic congressional leaders have posted strong fund-raising over the last year, bolstered by victories in 2012. But those organizations are now being overshadowed by donors like Tom Steyer, the billionaire who is raising a $100 million political fund with other wealthy environmentalists to battle politicians deemed hostile to climate regulation.

Parties have “lost the ability to control the process,” said Jim Nicholson, a former chairman of the Republican National Committee, partly because of legislation that cut the flow of money to party committees. “The party can’t coordinate with these super PACs and neither can the campaigns, so there’s a lot more chaos and disequilibrium in the campaigns. And the party structure clearly has a diminished role because they don’t have the resources they used to have.”

Rob Stein, a founder of the Democracy Alliance, one of the largest clubs of donors on the left, agreed.

“The devolution of the two-party system has begun,” Mr. Stein said. “Money is leaving the parties and going to independent expenditure groups. These now are fracturing the ‘big tents’ of our old two-party system into independent, narrow and well-funded wings.”

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