Koch brothers' influence in Minnesota reaches beyond just campaigns

A series of college appearances by a Minneapolis improv theater company. Opposition to a ban on flavored tobacco sales at Duluth convenience stores. Funding for St. Cloud State University's Economics Reading Group. A reinterpretation of the federal law governing mining leases near the Boundary Waters Canoe Area Wilderness. State legislation making it easier to hold protest organizers liable for damage.

What do they have in common? All these initiatives are linked to the network of policy and political groups affiliated with Charles and David Koch, the billionaires who own Koch Industries and the Pine Bend Oil Refinery in Rosemount.

The Koch brothers' brand of free-market conservatism helps shape the state's — and the nation's — political, legislative, business and academic systems. The vast, well-funded web of influence provokes both admiration and alarm and is unrivaled by any single organization on the opposite end of the political spectrum.

"There's really nothing in the United States that quite matches the scope, the intensity, the durability and the financial resources" of the Koch network, said Dave Levinthal of the Center for Public Integrity, a nonpartisan, nonprofit investigative organization based in Washington. "The Kochs have been in a way a party unto themselves."

The extent of the Kochs' political activity and the secrecy that characterizes some of their enterprises have prompted depictions of them as leaders of a shadowy cabal.

Tim Phillips, president of Americans for Prosperity, a Koch political advocacy group, disputes that notion. "We're not stealth. We're not hiding. We're there in plain sight," he said in an interview. "We openly talk about the issues that we're engaging on."

Duke University history professor Nancy MacLean disagrees. "They are using their fortunes to slowly and carefully redesign the governing rules of our society without being honest with the American people about what they're doing," she said. Her 2017 book, "Democracy in Chains," explores the origins of the Kochs' beliefs.

Minnesota's Stanley Hubbard, the billionaire CEO of Hubbard Broadcasting who has given money to Koch groups, said the brothers' motives are purely patriotic. "I know them well enough to know that they love America and they're not pushing issues to help their business," he said. "They're really decent people."

Charles Koch, 82, and his brother David, 78, forged the network's core values. Charles Koch has run Wichita-based Koch Industries since 1967. David Koch shares majority control. Forbes says each has a net worth of $52 billion.

The brothers' companies employ almost 63,000 people in the U.S., including 1,429 in Minnesota. Subsidiaries include Flint Hills Resources — which operates Pine Bend — and businesses that produce paper, minerals, fertilizers and glass. A Koch company owns and operates 4,000 miles of pipeline, including a line that brings jet fuel to Minneapolis-St. Paul International Airport.

The network includes political operations that donate mostly to Republican, think tanks that promote the Kochs' beliefs, foundations and nonprofit organizations.

The network plans to spend up to $400 million on campaigns and policy priorities in 2017-2018. Four Minnesota Republican congressional candidates and one Democrat have received contributions this year from Koch-related donors. Phillips said involvement in the state's U.S. Senate races hasn't been ruled out.

Koch groups are airing TV ads in Wisconsin against Democratic U.S. Sen. Tammy Baldwin and have long supported Republican Gov. Scott Walker. "Walker, in some fundamental way, doesn't run Wisconsin," said Matt Rothschild of the Wisconsin Democracy Campaign, a nonprofit that promotes openness in government. "Wisconsin is run by the Koch brothers."

Americans for Prosperity, a tax-exempt nonprofit with chapters in 36 states, is the highest-profile Koch political entity in Minnesota. Since AFP began operations here in 2011, it has become "clearly a new force in Minnesota," said Chris Conry of TakeAction Minnesota, a progressive group. "It's a sophisticated effort."

With three full-time employees and a cadre of volunteers, AFP has penetrated every corner of the state. It uses weekly phone banks, door-knocking campaigns — year-round, not just in election season — a radio show, direct mail and social media outreach to connect with hundreds of thousands of Minnesota residents annually, said state director Jason Flohrs.

AFP uses its organizational muscle to mobilize supporters and influence opinions.

"It's all designed to get to people and educate them and get them to take action," Flohrs said. "Politicians come and go," he said, so AFP "made a conscious choice to operate in the sphere of ideas and the sphere of long-term societal change."

Phillips said the Koch network doesn't "ever want to be an appendage for any political party or any individual politician." Its goal, he said, is to "move the culture in a direction that we think helps people improve their lives."

During this year's legislative session in St. Paul, AFP's stances adhered to the Kochs' ideology of lower taxes and less government spending and regulations. It objected to fees on opioid manufacturers, a spending bill's effect on state debt and DFL Gov. Mark Dayton's veto of a tax relief bill.

AFP's national operation raised eyebrows last month when it launched ads targeting 10 Republicans — and seven Democrats — for backing a $1.3 trillion federal spending bill. Breaking with GOP orthodoxy, it funds a rehabilitation program for prisoners and wants Congress to find a solution for immigrant "Dreamers."

AFP also ventures into local issues. In May, it helped defeat a Nashville referendum that would have raised sales taxes to pay for transit projects.

But it doesn't always win. Before a Duluth City Council vote on a ban on the sale of flavored tobacco in convenience stores, AFP opposed it in mailings to residents, e-mails to officials and public testimony.

The AFP campaign was "very focused and targeted," said Councilor Zack Filipovich, a cosponsor of the measure. "They had their messaging down." The Council passed the ban Feb. 13 on a 7-2 vote.

AFP is not the only instrument of Koch clout here.

The Koch brothers are among donors to the American Legislative Exchange Council, a nonprofit group that drafts model state legislation on issues such as "stand your ground," voter ID and Medicaid work requirements.

State Rep. Pat Garofalo, R-Farmington, is listed on the ALEC website as a state chair. He called it "a research bank" like a nonpartisan forum run by the National Conference of State Legislatures and said ALEC model legislation is rarely used here. "Most of the ideas that we see at the Legislature are driven by people in Minnesota because we're a unique state," he said.

ALEC provides model legislation for two bills that were considered in St. Paul this year. One would allow felony charges against anyone training or recruiting protesters who damage critical infrastructure. Dayton vetoed it May 30. Another bill that would have limited political advocacy by public employees was not enacted.

"It's a well-orchestrated national effort, so you'll see these same bills popping up in state after state that are almost identical," said Rep. Frank Hornstein, DFL-Minneapolis. ALEC's influence also has been felt on health care, education, renewable energy and local control issues, he said.

The Charles Koch Charitable Foundation has given grants to three Minnesota schools. Gustavus Adolphus College received about $12,000 over three years, said Tom Young, vice president for institutional advancement. The money went to speakers for a workshop in philosophy, politics and economics.

St. Cloud State has been awarded $45,200 since 2009, said Bob Beumer, executive director of development. It was used to provide books and sponsor meetings of the Economics Reading Group.

The University of Minnesota, Duluth got less than $5,000 in 2015 and grants in the range of $10,000 to $25,000 in 2016. The U data center did not explain how it was spent.

The Kochs' role on campuses created a ruckus at Virginia's George Mason University. President Angel Cabrera on April 30 ordered an inquiry after the release of documents showing the Charles Koch Foundation had a voice in hiring and firing professors.

Funding for the Minneapolis improv group came from the nonprofit Charles Koch Institute. Tane Danger of The Theater of Public Policy said a $98,000 grant enabled it to conduct forums on 10 campuses this spring that focused on issues such as the #MeToo movement and race.

"We're very cognizant of the fact that people are going to have lots of preconceived notions of what it means to have the Koch name attached to anything," Danger said, but his group and the schools chose all the topics.

"This is not some sort of partisan Trojan horse," he said. Negotiations for a larger grant to fund more campus appearances next year are underway.

The Koch brothers did not support Donald Trump's 2016 campaign, but their associates have key roles in the White House and federal policies.

White House legislative affairs director Marc Short once served as president of the Koch-funded nonprofit Freedom Partners.

In April, U.S. senators led by Sheldon Whitehouse, D-R.I., wrote to the White House and eight federal departments or agencies requesting information about Koch-related activities and individuals.

"Americans have a right to know if special interests are unduly influencing public policy decisions," the letters said. The one sent to the Interior Department included Daniel Jorjani on a list of individuals for whom the senators sought financial disclosure forms and lists of issues they work on.

Jorjani, the Interior Department's principal deputy solicitor, is a former employee of the Charles Koch Foundation, Charles Koch Institute and Freedom Partners. He wrote the Dec. 22, 2017, legal opinion that reversed the Obama administration's 2016 decision to block development of Twin Metals' copper and nickel mine on the BWCA's border.

Judy Keen • 612-673-4234