Country ... USA
Power and Influence

Forbes ... Inside The Koch Empire: How The Brothers Plan To Reshape America

Burgess COMMENTARY
I was asked by an acquaintance how an initiative like TrueValueMetrics could succeed against the power and influence of people like the Koch Brothers. He pointed me to the Forbes article and the 'Kochtopus'. It is a good question, but power and influence does not always win when the powerless have 'right' on their side.

The example of Mahatma Gandhi comes to mind. How could this powerless person do anything against the 'might' of the British Empire in India. Nelson Mandela goes from being a prisoner to being the first President of post-apartheid South Africa.

When something is wrong, really wrong, people eventually say 'enough is enough' and good things start to win.

There is also a question about 'what is winning'. In the case of TrueValueMetrics Value Accountancy winning should be seen as getting the global accountancy profession to change direction from merely helping clients to make more money within the rules, but helping society have more success because the whole system of money flows and value flows is being optimized. Success is not making a website popular, but changing the way every accountant on the planet thinks about money profit and valuadd. Hopefully, the TrueValueMetrics initiative can start this ... can be a catalyst.
Peter Burgess

Inside The Koch Empire: How The Brothers Plan To Reshape America

This story appears in the December 24, 2012 issue of Forbes.

'We get threats from people in Congress, and this is pushed out and becomes part of the culture: That we are evil so we need to be destroyed.' - Charles Koch (Photo: Jamie Kripke for Forbes)

A man who, by FORBES’ careful measure, is one of the 50 most powerful people in the world, one of the 20 wealthiest–and one of the dozen most vilified–is perpetually in a position to reflect. But given it’s Charles Koch’s 77th birthday, the calendar demands it. Especially with the presidential election that Charles has called “the mother of all wars” less than a week away, and with Koch Industries, the firm he has built into the second-largest private company in America, considering several more big acquisitions, including an 18,000-employee automotive glassmaker, Guardian Industries.

Yet despite all these momentous events swirling around his wood-paneled Wichita office, decorated with seascapes and looking out on to the prairie to the north, the legacy he wishes to initially address comes via a piece of paper with a color photograph of his first grandson. The baby’s name: Charles. “My proudest accomplishment,” he smiles.

Given that he and his brother have been called “pigs” (by MSNBC host Chris Matthews) and protesters have unfurled “Koch Kills” banners at rallies, Charles clearly wants to use this rare interview to humanize himself, attaching some personal substance to his courtly Midwest manner. Yet this grandfatherly presence, framed by an unbuttoned collared shirt and a toothy grin, is at odds with the business and political juggernaut that he and his younger brother David have built in a systematic process befitting their MIT training.

Charles’ many critics on the left–including the President of the United States–accuse him of accumulating too much power and using it to promote his own economic interests through a network of secretive organizations they call the “Kochtopus.” Ironically, the Koch brothers believe they’re fighting against power, at least in the political realm. For the Kochs the real power is central government, which can tax entire industries into oblivion, force a citizen to buy health insurance and bring mighty corporations like Koch Industries to heel.

“Most power is power to coerce somebody,” says Charles, in a voice that sounds like Jimmy Stewart with a Kansas twang. “We don’t have the power to coerce anybody.”

The November elections–which David, in a separate interview shortly after the results were finalized, termed “bitterly disappointing”–seem to confirm Charles’ last point. Not even the Koch brothers, who spent tens of millions of dollars during this election cycle (they won’t disclose the exact amount) funding direct political contributions and issue-driven “nonprofits,” could coerce voters to back their candidates. Mitt Romney’s loss was a huge blow to them, both in terms of likely policy outcomes and personal reputation.

But those who think the brothers, older and chastened, will now fade away don’t understand the Kochs. Not a bit. Obama’s victory was just a blip on a master plan measured in decades, not election cycles. “We raised a lot of money and mobilized an awful lot of people, and we lost, plain and simple,” says David. “We’re going to study what worked, what didn’t work, and improve our efforts in the future. We’re not going to roll over and play dead.”

In Pictures: The World’s Most Powerful People

The goal has always been, Charles says, “true democracy,” where people “can run their own lives and choose what they want to buy, choose how to spend their money.” (“Now in our democracy you elect somebody every two to four years and they tell you how to run your life,” he says.) Both Kochs innately understand that–unlike the populist appeal of their fellow midwestern billionaire Warren Buffett and his tax-the-rich advocacy–their message of pure, raw capitalism is a much tougher sell, even among capitalists.

So their revolution has been an evolution, with roots going back half a century to Koch’s first contributions to libertarian causes and Republican candidates. In the mid-1970s their business of changing minds got more formal when Charles cofounded what became the Cato Institute, the first major libertarian think tank. Based in Washington, it has 120 employees devoted to promoting property rights, educational choice and economic freedom. In 1978 the brothers helped found–and still fund–George Mason University’s Mercatus Center, the go-to academy for deregulation; they have funded the Federalist Society, which shapes conservative judicial thinking; the pro-market Heritage Foundation; a California-based center skeptical of human-driven climate change; and many other institutions.

All of these organizations, unknown to 99% of the population, and their common source of support, unknown to most of the rest, have provided the grist for conservative thinking since Reagan. It’s a measure of Koch’s success that 40 years after Richard Nixon was stumping for national health insurance, Paul Ryan’s Ayn Rand-tinged economics are just a little right of center. That the Supreme Court’s conservative majority led by Chief Justice John Roberts has issued a number of pro-property rights, anti-government decisions in recent years that read like they came straight out of a Federalist Society position paper. That when George W. Bush sought a watchdog on regulation costs, he appointed a top Mercatus executive. And none of this was accidental–it just took millions of dollars over decades of time. You can see the same process at work in David’s quest to find a cure for cancer. A prostate cancer survivor like the rest of his brothers, he has given $215 million to fight the disease so far, including $100 million to fund his own research center at MIT.