Dr Evil and the Koch Fiends

It is known in the lobbying trade as ‘astroturfing’ – super-rich donors bankrolling supposedly grass-root movements that are, in fact, just an artificial creation designed to lever political influence out of their cash. In recent weeks it is libertarian billionaire brothers David and Charles Koch (rhymes with poke) who have been in the the firing line for this type of pseudo-gardening. The New Yorker picked them out as the ‘billionaire brothers who are waging a war against Obama’ and, according to their liberal accusers, they the paymasters of the Tea Party movement. So are these billionaires a threat to American democracy?

Certainly the Kochs are using at least of some of their giving to influence public debate – David started the free-market Americans for Prosperity Foundation and Charles founded the libertarian Cato Institute think tank – and are convinced opponents of President Obama on issues like health care and financial reform. However, David, at least, is harder to pigeonhole as a hardcore Tea Party fanatic since, as New York Magazine reported, he “supports stem-cell research and gay marriage.”

This is not the first time that right-wing billionaires have been outed as the puppeteers of the political process. Before the Kochs it was the John M. Olin Foundation that was seen to have sowed the seeds of the conservative revival in the 1980s. Indeed, such was the success of the right in using philanthropy to influence the political debate that in 2005 the Stanford Social Innovation Review published a seminal article by Andrew Rich about how conservative foundations were using better tactics than their leftier rivals in the battle of ideas.

Yet for many on the right, the great philanthro-conspiracy is being run by liberal billionaires – particularly George Soros, who has been branded ‘Dr Evil’ and ‘Public Enemy Number One’ by critics such as Bill O’Reilly for his support of groups including Indeed, the right has been suspicious of the liberal-leanings of the foundation sector for a long time. For instance, in the 1960s, the Ford Foundation’s support for voter registration provoked conservative ire.

That in turn was part of a far older debate about the influence of philanthropy in politics. Nearly a century ago, in the progressive era of ‘trust-busting’, the 1912 Walsh Commission recommended limits on the size of foundations for fear that they would “manipulate the economy and …influence public opinion.” At the same time, there was fierce resistance to John D. Rockefeller’s (ultimately successful) attempts to institutionalise his philanthropy by creating a foundation, for fear that this would lead to political influence. Later, in the 1950s, the Cox and Reece Commissions, reflecting the mood of the times, investigated charges that foundations were supporting ‘un-American’ causes. (For more on these debates see the bonus chapter we have written on the history of American philanthropy.)

The alternative, of course, is to clamp down on philanthropy’s role in public policy. This has an obvious appeal to those who believe that the democratic process should be left to civic groups, untainted by the donations of rich people. Yet it is worth remembering that some of the great civic movements have been successful because of the influence of the rich – as Stephen Tomkins’ new book about the campaign to end the slave trade reminds us.

The case for philanthrocapitalists meddling in politics has also been made in a recent blog post by a leading aid thinker, Duncan Green, the Head of Research at Oxfam. Reflecting on a speech he made to London hedge fund donors Absolute Return for Kids, Duncan (no relation of Michael’s) suggests that a potential sweetspot for rich donors could be influencing elites in developing countries to support fair taxation, labour rights and so on.

Many philanthrocapitalists understand this already. The Bill Gates backed ‘Malaria No More’ campaign has consciously lobbied political and economic leaders in Africa to be part of the solution to this solveable problem. Even back at home, George Soros and other billionaires have joined the campaign to keep estate duties (known to their critics as ‘death taxes’). These causes are, of course, close to the hearts of most liberals and, on death taxes at least, will make many conservatives bristle. The reverse is also true. Gates is annoying the teaching unions and many of their supporters with his campaign to reform the American schools system almost as much as the Kochs’ donations to free-market causes.

America is right to be live to the threat of plutocracy – the influence of the rich on politics. When wealthy people give to any cause, political or not, they should be transparent about it. Debate and scrutiny by the public is crucial. Philanthropists who are interested in real change will always be drawn to politics. At times this will irritate the right, at other times the left. Maybe this is the best reassurance we have that by joining the battle of ideas philanthropists can enrich rather than diminish democracy: billionaire donors actually seem to be pretty well spread across the political spectrum.