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Secret Summit: 24 Hours With The Koch Brothers

Evening Edition

Aired 6/17/14 on KPBS Midday Edition.

Secret Summit: 24 Hours With The Koch Brothers

GUESTS:

Joanne Faryon, inewsource reporter

Brad Racino, inewsource reporter

Transcript

Audio

Aired 6/16/14

An event so secret it had a code name on the schedule: “T&R Sales Meeting.” Hotel guests who weren’t part of the conference — including two inewsource reporters who stayed the night Friday — were escorted out of the hotel by security on Saturday afternoon.

Over the weekend and into Monday, the billionaire Koch brothers and supporters converged on the St. Regis Monarch Beach Resort in Dana Point. This columned, luxury compound, a little more than an hour north of San Diego, has 400 rooms, a spa, a golf course, a private beach and six restaurants. Staff confirmed the entire hotel — including food and beverage service — had been bought out for a special event.

An event so secret it had a code name on the schedule: “T&R Sales Meeting.” Hotel guests who weren’t part of the conference — including two inewsource reporters who stayed the night Friday — were escorted out of the hotel by security on Saturday afternoon.

But over 24 hours at the St. Regis, they got a glimpse of what lay ahead at the conference entitled "American Courage, Our Commitment to a Free Society."

“Arriving,” 3:39 p.m.

This was the first text between two reporters and an editor during what would become a 24-hour attempt to learn about the semi-annual political summit hosted by the sixth-richest men in the world: David and Charles Koch.

The retreats drum up hundreds of millions of dollars for conservative political candidates and set policy for the Kochs’ network of political organizations, which all share the same goal — moving the country to the right.

Most of the cash is funneled through “dark money” groups that are not legally required to disclose their donors.

According to Forbes magazine, the brothers are worth $41.3 billion.

These are the most elite and most conservative political events in the country, and for the past few years reporters and political bloggers have attempted to gain access. Two inewsource reporters booked rooms at the St. Regis, a five-star resort, to find out who would attend and what was on the agenda.

“It’s about freedom,” a 20-something man said when asked what the conference was about.

For many of the wealthy conservatives who attend these summits, it’s also about being able to influence the political process without being publicly identified, said author and Politico’s chief investigative reporter Kenneth Vogel.

“This big money is having an increasing impact on the political process on elections, on governing, and it’s become harder and harder to find who is doing the spending,” said Vogel, who twice infiltrated a Koch summit and whose book, “Big Money,” examines the issue.

Big money also buys big secrecy.

It can buy an entire luxury hotel for three days and a security force to ensure no one without an invitation gets in.

Hotel staff confirmed the resort was bought from Saturday to Tuesday for a private event. Some said it was a wedding, others speculated it was a celebrity, “extreme VIP” or someone political.

With tax, the least expensive room costs $609 a night.

It was the biggest show of security one longtime employee had ever seen — and the employee has met movie stars and royalty at the hotel.

“American Courage, Our Commitment to a Free Society” was the theme — as evidenced by the oversized posters lining the hall into the meeting rooms, but the chatter indicated what else was on attendee’s minds: the new national education standards of Common Core, lost emails in the Internal Revenue Service investigation into unfair scrutiny of the tea party and other conservative groups, and political correctness.

As Friday night guests checked out Saturday morning, a picture of who would attend the summit emerged: mostly male, mostly white middle-aged and older, some with their families or wives.

Represented at the summit were groups such as Americans for Prosperity, Mercatus Center, the Libre Initiative and more — all part of the well-funded network able to contribute massive amounts of cash into political causes anonymously.

MORE: See full list of groups represented at the summit.

James Davis, former communications director and chief spokesman for the 2012 Republican National Convention, checked in under Freedom Partners, where he now serves as vice president of strategic communications. Freedom Partners is a “nonprofit, nonpartisan … chamber of commerce that promotes the benefits of free markets and a free society,” according to its website. It’s one of the key conservative groups the Koch brothers use to fund their political candidates and causes, according to the Washington Post.

Carl Anderson, former chairman and CEO of Arrow International Inc. and current board member and independent director at Carpenter Technology Corp., checked in shortly after. This was Anderson’s third conference, and he was clearly a familiar face.

A huge security force of young men wearing blue sport coats and tan pants began to fan out inside the hotel’s maze of corridors and seating areas.

At 5:35 p.m., David Koch, the younger of the two brothers, walked quickly into the hotel, surrounded by an entourage.

At 6 feet 5 inches tall and with all the confidence of one of the wealthiest people in the country, Koch made a striking entrance.

He was once a college basketball player, according to a 2010 profile in New York Magazine, “when you could be white and be good.” He’s a libertarian whose father, Fred Koch, helped found the John Birch Society, an anti-communist, and what some consider, radical right, political group.

Koch quickly disappeared into the luxurious ether of the hotel, not to be seen in public again until later that night, when he emerged from the private dining room of the hotel’s premier restaurant, Stonehill Tavern, flanked by security.

Down the hall from the restaurant were two rows of at least eight black and white oversized prints affixed to silver-framed mirrors leaning against the walls. The prints depicted a family of three: a woman with a kerchief on her head, a man in a suit and cap, and a boy with his arm pointing to the Statue of Liberty in the distance, evoking a nostalgic coming-to-America picture of immigration.

“American Courage” was printed in bold across the top. “Our commitment to a free society” was written underneath.

A black and white oversized print on display at the Koch brothers' secret political summit held at the St. Regis Monarch Beach Resort in Dana Point, June 14-16, 2014.

At the end of the hallway, the grand staircase led to a ballroom and a series of meeting rooms. A worker swept the walls with what looked like a metal detector. He joked he was “cleaning the walls.”

Audio visual equipment was everywhere. A group of men walked into the ballroom. They’d been there for days working on preparations for the conference but gave no hint about what the conference was about.

It’s the secrecy of these meetings that has fueled so much of the criticism. Secrecy combined with money.

Charles Lewis, founder of the Washington, D.C.-based Center for Public Integrity and an expert on campaign finance, said the Koch brothers would likely say their personal safety dictates secrecy, but Lewis said that’s a red herring.

“I think they just don’t want the notoriety of being not only in the one percent but in the tiny, tiny fraction of the one percent of the richest human beings on planet earth — who by the way are also trying to influence politics so they can get even richer,” Lewis said.

Politico’s Vogel said small numbers of wealthy donors are having almost as much impact on the process as the political parties themselves.

“It’s incumbent upon us, as journalists, members of the media, to try and pull back the curtain as far as we can to try and give voters the ability to make informed decisions about who is influencing the debate, who is trying to get which candidate elected,” Vogel said.

The Koch brothers only recently became a household name. The U.S. Supreme Court’s ruling in 2010, Citizens United v. Federal Election Commission, allowing corporations and labor unions to spend unrestricted amounts of money to support or denounce candidates and causes, thrust the issue of political spending into the spotlight. And last month, Senate Majority Leader Harry Reid, a Nevada Democrat, accused the Koch brothers of being “one of the main causes” of climate change, referring to their energy and chemical conglomerate.

The Koch brothers and their supporters plan to raise nearly $300 million to spend on the 2014 election and fund a new energy initiative “with a deregulatory, pro-consumer spin,” according to a story published by the Daily Beast on Friday. The story said energy was expected to be a big part of this conference — but there was no evidence of that from anything in public view.

The emphasis was vaguely on freedom, with one attendee joking about the lack of it at the hotel.

“There’s no freedom around here — you’ve got to follow directions,” he said.

These secret summits are attended by big name politicians. Past attendees have included New Jersey and Texas Govs. Chris Christie and Rick Perry, according to Politico.

The Daily Beast reported Sen. Marco Rubio, a Republican from Florida and potential GOP presidential candidate in 2016, was expected to attend the St. Regis event.

No politicians were spotted Friday night, just groups of mostly men hanging out in the hotel bar and around the patio fire pit, talking politics.

“Academic institutions are factories for corruption,” one said to another.

They talked about political prospects, and one man remarked that he liked “Herrera,” possibly a reference to Jaime Herrera Beutler, a Republican who represents Washington state’s 3rd Congressional District.

“You’re into Latinos, eh?” the other replied.

The man who said he liked Herrera talked about working on former U.S. Sen. Rick Santorum’s campaign, and how it was the “Tylenol quote” that killed Santorum’s chances in the 2012 Republican primary. Foster Friess, one of Santorum’s most prominent backers, told MSNBC’s Andrea Mitchell “back in my days, they used Bayer aspirin for contraceptives. The gals put it between their knees, and it wasn’t that costly,” he said.

They talked about how things said in private would sound terrible in public.

“My wife is a spic, I call her a wetback sometimes,” one man said, laughing.

Around midnight, details of the upcoming schedule trickled out.

Saturday was loaded with golf. The event’s opening reception was Saturday afternoon. Seminar registration was to begin Sunday.

The heading on the schedule read, “T&R Sales Meeting.”

By 2 a.m. Saturday, the open areas of the hotel were almost deserted.

A janitor polished the handrails leading down the large spiral staircase to the Pacific Ballroom, at the far end of the hallway lined with American Courage mirrors.

Saturday

By 8 a.m. Saturday, staffers at the hotel’s Malta room handed out black folios to new arrivals, as a security guard stood outside the closed doors. The folios never left their hands.

A man conspicuous in his dark glasses — and what appeared to be a Google glass piece of hardware over his right lens — staked out a busy corridor.

“What a shady looking guy,” a man said to a woman as they walked by.

“He’s our intelligence guy,” the woman replied.

By mid-morning, sound checks were conducted in a ballroom, with another security guard standing in front of the entrance.

By 1 p.m., most of the hotel restaurants had shut down to the public, with just a few guests from Friday night left on the grounds.

At the Pool Bar & Grill a few conference attendees had lunch.

A gray-haired man in a blue suit greeted a husband and wife at a nearby table.

“Could things get any worse?” he asked.

“I suppose they could get a lot worse — that’s why we’re here, isn’t it?” the other replied. Both shared a laugh.

By 2 p.m., one man who was not with the conference was surrounded by four security guards. He was told he had to leave the premises because it was being occupied by a private function.

“What does that have to do with me?” he asked.

“You have to leave,” one of them responded.

Meanwhile, Charles Koch was making his way to the hotel gym for a 30-minute workout.

Koch, 78, the second oldest of the four brothers, is the chairman and CEO of Koch Industries. Just two months ago, he wrote a column for the Wall Street Journal, describing his vision of a free society:

“In a truly free society, any business that disrespects its customers will fail, and deserves to do so,” he wrote. “The same should be true of any government that disrespects its citizens. The central belief and fatal conceit of the current administration is that you are incapable of running your own life, but those in power are capable of running it for you.”

Koch wore gray Nike sneakers with neon green trim and socks hiked up halfway to his knees. He pulled out a mat at the far end of the gym and lay down. He stretched his legs, as one of his body guards watched through a glass wall from the adjoining atrium.

Koch paused in between sets to watch TV. The World Cup was on. He pulled a few smaller weights from the rack — five or 10 pounders — and sat at an incline bench closest to the glass wall.

Outside, two women and a man were swimming laps in the small pool. An older white man, with white hair and a hat, lay on a chaise lounge in a hotel robe. He carried with him an America³ bag. America³ was a racing yacht and syndicate operated by Bill Koch and Harry Melges in the 1992 America’s Cup.

By late afternoon, once the hotel was cleared of outsiders, including two inewsource reporters, the conference began in earnest.

Vogel said we’re in a new political reality, in which the super wealthy are able to exert influence into the process without their names attached. And it happens on both sides of the aisle.

In a story earlier this year, Vogel cited the Democracy Alliance, which he called “a secretive group of wealthy liberals that’s the closest thing the left has to the vaunted Koch brothers’ political network.” The DA, as it’s known, also has big, closed-door meetings for well-heeled donors.

“They’re very much in competition in this new political world in which we live,” Vogel said.

It’s important for people to pay attention to the big money phenomenon, Lewis said.

“Most Americans don’t give to political campaigns,” Lewis said. “Most people that give a check of $1,000 or more, it’s basically one or two percent of the American population at most, and that’s at most. It’s a fraction of one percent, I believe, at that level. …That’s why we should care."

Editor's note: Charles Lewis, found of the Center for Public Integrity and a campaign finance expert, is a member of the inewsource board of directors.

This story was edited by Lorie Hearn, editor and executive director of inewsource, a KPBS media partner.

Comments

Avatar for user 'philosopher3000'

philosopher3000 | June 16, 2014 at 7 a.m. ― 3 months ago

So glad that iNewsSource has decided to try real investigative journalism about subjects that actually effect our national political environment, rather than sexual hearsay and innuendo gossip scandals, this year.

Mayday, Mayday, Mayday!
https://mayday.us

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Avatar for user 'Missionaccomplished'

Missionaccomplished | June 16, 2014 at 11:57 a.m. ― 3 months ago

Did they serve alcohol and was John Markkk present?

( | suggest removal )

Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | June 16, 2014 at 1:59 p.m. ― 3 months ago

Good work, inewsource!!

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Avatar for user 'JeanMarc'

JeanMarc | June 16, 2014 at 3:06 p.m. ― 3 months ago

missionaccomplished I wish I had been present, that would mean two things: I was a billionaire, and free cocktails.

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Avatar for user 'BernieLatham'

BernieLatham | June 17, 2014 at 5:38 a.m. ― 3 months ago

Nobody has mentioned the rather extraordinary image that the authors included in their piece (I would very much love to hear their thoughts on it).

The iconography is really in stark contrast to both the resort itself and to the lives and ideology of those in attendance. Indeed, the blunt hit-you-over-the-head symbolism and graphics are reminiscent of the posters out of socialist PR operations of the 30s. This could be a union-organizing poster.

So what the hell is this image doing at a Koch conflab?! That family illustrated would be, if they arrived at this even, be hustled out by private security in a flash. And what about those upper class feet and shoes sticking out the bottom?

I have a thesis: We've been witnessing over the last short while a rather amazing surge in the use of the term "populism" to describe libertarianism (and actually the broader GOP/right as well, but particularly the sort of conservatism being promoted by the Koch machine). I suspect that what we're seeing here is a sophisiticated PR move to rebrand away from the Tea Party (which has polled in the crapper for several years now) to something seemingly less weird and more traditional. It is as bogus as to imagine this family of immigrants portrayed would be welcomed by the modern right but as a marketing move, it isn't a big shift from the pretending "grassroots" positioning people like Dick Armey beat you over the head with re the Tea Party.

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Avatar for user 'davidyale'

davidyale | June 17, 2014 at 11:08 a.m. ― 3 months ago

KO2CH = Potassium Formate. May cause irritation of respiratory tract. May cause allergic skin reaction. Avoid contact with eyes. Harmful if swallowed, especially hook, line, and sinker. If allowed to dump in waterways, will cause H2 woes. http://www.BestPuns.Com

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Avatar for user 'Missionaccomplished'

Missionaccomplished | June 17, 2014 at 11:31 a.m. ― 3 months ago

@John Markkk, LOL

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Avatar for user 'Peking_Duck_SD'

Peking_Duck_SD | June 17, 2014 at 3:13 p.m. ― 3 months ago

Groups like this need to do their formulations for government takeover in secret.

Convincing huge blocks of poor, middle class, and upper-middle class voters to vote against their own best interests and for an increasingly plutocratic society that favors the super-rich is not easy to do, but with incessant propaganda over decades it is obviously working.

It started under Reagan with the tag line "trickle down" economics.

Just give the wealthiest minority of people free reign, tax breaks, and governmental special treatment that nobody else is afforded and their wealth will ‘make its way down’ to the rest.

Well it doesn't make its way down.

It makes its way to off-shore bank accounts where even more tax freebies can be had, it makes its way to huge "golden parachutes" that ensure even failing CEOs can continue their lavish lifestyles, and it makes its way to lobbyists in Washington who are paid very well to ensure even more pro-1% laws get passed.

THAT is where the wealth of these people is being spent, not on the people they employ!!

How is it a "free market" capitalist society when average workers stand to lose everything if the company they are working for fails, but the wealthy wall street types and CEOs just get bail-outs and paid off so they have no consequences.

What is happening in America today is so NOT free market.

Nor is it "small government".

People like the Cocks claim they are for smaller government and the stupid believe them, but anyone with an ounce of intelligence can see they want CONTROL of government and obtain this control through the false guise of wanting to "minimize" it.

How is paying lobbyists millions and millions of dollars to secure you paid-off politicians and special favors in Washington small government!?

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