The Gigantic Kochtopus.

In a series of 5-4 rulings, with conservatives in the majority, the US Supreme Court has opened the floodgates of political spending by corporations and billionaires. In Valeo v. Buckley, the Court essentially ruled that political spending is the equivalent of free speech.  In Citizens United v. Federal Elections Commission, the Court ruled that corporations are people and therefore enjoy the right to contribute to political candidates. And in McCutcheon v. Federal Elections Commission, the Court ruled that there can be no aggregate campaign limits. In other words, individuals and corporations can contribute up to $32,400 to a national political party, up to $10,000 to a state, district and local party committee and a maximum of $2,600 to each and every candidate.

That means a single individual can contribute as much as $1,131,000 to buy votes in the House and $260,000 to buy votes in the Senate. In addition, the wealthy are now free to buy votes in state legislatures, in county boards and city councils.  If you have the money, you can buy enough free speech to shout down ordinary citizens.

Even better for the billionaires, contributions to so-called “issue” advertising is unlimited.

No one understands that more than the anti-government billionaire brothers, Charles and David Koch.  Owners of the world’s second-largest privately-held corporation, Koch Industries, they spent more than $383 million on the 2012 election alone. And in 2012 they were just getting organized. Since that time, they have expanded their complex network of nonprofit “social welfare” groups and trade associations to allow them to spend even more money to influence elections. Due to loopholes in nonprofit tax reporting, the groups don’t have to name their donors. And since most of the Koch groups have been set up as trusts, it’s even harder to track how they spend their money.

The latest move by the Koch brothers is the use of “disregarded entities.” These are Limited Liability Corporations (LLCs) that are “owned” by nonprofit organizations and considered part of them for tax purposes.  This adds yet another set of veils with which the Koch brothers can hide the names of donors and how their groups spend money.  On the IRS website, disregarded entities cannot be searched by name because their tax returns are filed by the parent group. And because all of these LLCs are set up in Delaware, they are not required to disclose who runs them.

Why all the cloak and daggar?

Quite simply, it’s an attempt by the Kochs to disguise their anti-government, anti-American political spending. For example, it’s well known that one of the largest recipients of Koch money is the group Americans for Prosperity which supports the Tea Party and runs millions of dollars of ads attacking Democratic and even moderate Republican candidates. What’s less known is PRDIST, a disregarded entity “owned” by the Koch brothers with an income of $48,365,000.

Other Koch “social welfare”groups include Center for Shared Services, Center to Protect Patient Rights, Concerned Veterans for America, EvangChr4 Trust, Freedom Partners Chamber of Commerce, Generation Opportunity, Public Engagement Group Trust, Public Notice, TC4 Trust, The LIBRE Initiative Trust and Themis Trust. Their disregarded entities are mostly letters jumbled together such as RION, TOHE, ORRA, TRGN, SLAH, POFN, RGSN, TDNA, DAS MGR, and STN. You’ll find a more extensive list of Koch-funded organizations and an interactive chart at the following link.

Although all of these organizations are prohibited from engaging in politics in order to receive non-profit status, politics are clearly their primary focus.  The LIBRE Iniative Trust is currently spending hundreds of thousands on advertising attacking “Obamacare” and incumbent Democratic representatives who have supported it. Conservative political issues and advertising seem to be at the core of all of the other Koch non-profits as well.

To be fair, Democrats have their own billionaire funders, such as George Soros. But no one has gone to such extremes to influence elections and hide their involvement as the Koch brothers. Given that, it shouldn’t have come as a surprise to anyone when it was discovered last year that the Internal Revenue Service was giving extra attention to non-profits founded by conservative organizations.

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