What the Koch Brothers Want with Cato

Tuesday, March 13, 2012

Recap from It's a Free Country.

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, David Boaz, executive vice president of the Cato Institute, talked about the organization's relationship with the Koch brothers, Charles and David Koch, who have filed a lawsuit for control of the libertarian establishment.

Not-so-hostile takeover

Last month Charles and David Koch filed a lawsuit for control of the libertarian-leaning Cato Institute, a think tank that the deep-pocketed conservative donors have played a major role founding, funding, and guiding since the late 1970s.

Until recently, the Koch brothers held only two of four shares in the Cato Institute, Charles being a co-founder and David having been brought on as a donor and eventually a board member. The two remaining shares were held by Ed Crane, another co-founder and president of Cato, and Bill Niskanen, longtime chairman of the organization.

David Boaz said that due to unfortunate circumstances, the balance of power had shifted since last fall.

When Bill died in October, the Kochs assumed that gave them a two-to-one majority of the shareholder arrangement, and therefore, by definition, if you own two of the three shares of a corporation, you own it.

Boaz hopes Cato can prove otherwise.

They moved to tell us, 'Well, we're now in charge.' We believe that's an incorrect interpretation of the shareholder arrangement, that in fact Bill's shares didn't disappear like pixie dust—they still exist and are under control of his executor, who is his widow.

Packing Cato with Koch people

Koch detractors have already made a lot of hay over the brothers' association with the Cato Institute—about four percent of Cato's funds have come from Kochs over the past decade—but taking control of the organization would be new territory for them.

Boaz said that neither of them had ever had any role in the direction or management of Cato other than what any single board member does. Yet over the past few years, the Kochs had stopped giving money to Cato and started installing people of their choosing to Cato's board of directors, which the brothers claimed was within their rights under the initial shareholder agreement.

But David Boaz said that the brothers weren't picking people because their ideology aligned with Cato's: the Kochs' selections were mostly business.

Six of the seven people they've managed to place on our board are financially dependent on Koch Industries. That's not so much packing the board with conservatives, but with people not independent of Koch interests—officers, directors, and employees of Koch Industries.

Joining a partisan machine?

What's the endgame for the Kochs here? What do they have planned for Cato, and why are they trying to wrest control of it now?

David Boaz said he isn't entirely sure. However, he has noticed that Charles and David Koch have seemed increasingly interested in partisan politics, and in using Cato as a reservoir of studies and speakers that can be tapped by allied advocacy, policy, and political organizations with a unified objective: getting Democrats out of power.

That's not what Boaz sees as an appropriate role for an independent think tank.

There's both an ideological aspect—we don't want our libertarianism rounded off until it consists of nothing more than taxes and regulation—and we don't want other groups and groups with partisan interests or any single board member telling us what to do.


David Boaz

Comments [16]

Henry from Katonah

Cato vs the Koch Bros? I don't have a dog in this fight! I guess if the Cato think-tankers don't get paid by the Kochs, they will have to live in garrets.

Mar. 13 2012 02:42 PM

@hjs 11211 --

"People worry too much about money in politics... voters are responsible for the course the nation takes not the 1%"

Voters elect candidates. Corporate/monied interests set the policies, not the electorate nor those elected.

Don't think so? Who has gotten the lion's share of tax cuts? Whose's fortunes have improved over the last 30 years? How's the value of your home stood up over the last four years? You or any of your neighbors, kids, wife, brothers, sisters, family members unemployed?

My apologies for insulting you. I am sorry for that. However, I think your statements are incredibly heedless.

Mar. 13 2012 11:01 AM
amalgam from NYC by day, NJ by night

@ Chuzzlewit - Please enumerate the "social engineering" policies that the Obama admin. has undertaken. Thanks.

@ Hugh Sansom - You're right; American society needs smart, robust debate and CATO and all other groups, regardless of ideology, operating in good _intellectual_ faith are necessary for that to exist.

Mar. 13 2012 10:49 AM
John A

"People can make better decisions than other people can for them."
Ha-Ha. That statement sounds like saying 1=1 to me. Of course in a properly constructed gvt we would hope and work to maintain that some may indeed judge the other.

Mar. 13 2012 10:49 AM
Ashley March

"...they won’t be voting for our self-righteous, self-satisfied, sanctimonious, social engineer President in November." But they will be voting for one of the three self-righteous, self-satisfied, sanctimonious, social engineer Republican candidates?? Speak for yourself.

Mar. 13 2012 10:47 AM
rai from NY, NY

I've long regarded the term "conservative think tank" as an oxymoron.

Mar. 13 2012 10:44 AM

Brookings has gone far more conservative in the past 20 years, and it most definitely has tailored its alignment to please one of its largest donors — Haim Saban, unalloyed supporter of Israeli occupation. Brookings, with its Saban Center, is very clearly pro-Israel in a way it was not 20 or 25 years ago. It is also loudly pro-American wars.

Mar. 13 2012 10:44 AM

and by the way the person with the most money doesn't always win

Mar. 13 2012 10:42 AM

so the people / the voters are blameless

childlike...ignorance, really? are u responsible for any of this mess?
Wow im more offended by this than anything Chuzzlewit/jgarbuz has ever said

Mar. 13 2012 10:38 AM
Jacob from Brooklyn

So the "free market" fundamentalists don't like people using their private wealth to buy speech and tell them what to do in the workplace?

Mar. 13 2012 10:37 AM

Cato is the kind of conservative institution that progressives like myself _want_ around. Compare the American Enterprise Institute of 30 years ago with AEI today -- huge change and decline. Cato has remained a different cat -- genuinely conservative in an older sense (the sense that William Safire used to emphasize) and libertarian (also in the sense that Safire embraced).

Mar. 13 2012 10:37 AM
John A

Somebody say something to help me differentiate this organization from the Ayn Rand line of thought.

Mar. 13 2012 10:36 AM

@Chuzzlewit --

1) Quit impinging on how a political group your imagine should feel. I don't tell you to stop writing.

2) Nice pivot. Your comment doesn't address the salient point of this story: this is yet another power grab for public influence/policy by the Koch brothers.

@hjs11211 --

Your childlike faith in the electoral process ignores today's political reality and is appalling in its ignorance.

Mar. 13 2012 10:17 AM

People worry too much about money in politics
At the end of the day We the people are free to vote for who we want to.
Information is on the web and practically free.
voters are responsible for the course our nation takes not the 1%

Mar. 13 2012 08:55 AM
Martin Chuzzlewit from Manhattan

OOPS, I meant "should get too smug."

Mar. 13 2012 08:28 AM
Martin Chuzzlewit from Manhattan

This legal action does not, however, mean that those on the Left should not get too smug.
Yes, CATO should remain "non-partisan".....but (having gone to many CATO events and having read much from the CATO "reading list") the frightening reality of Obama's vision for what our society "should be" (mandated and imposed equality of all outcomes by the bogus justification of "fairness") is an anathema to all that CATO stands for .... economic freedom, minimal government, free trade, free market capitalism, private property and minimal taxation.

Libertarians are by no means Republicans, but I haven't met anyone at CATO conferences in the past 2 years who doesn't think that Obama is a disaster as a threat to individual liberty and personal freedoms. They may not be Republicans .... but they won’t be voting for our self-righteous, self-satisfied, sanctimonious, social engineer President in November.

“We are all Republicans this year” is the operative phrase

Mar. 13 2012 08:23 AM

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