July 15 (Bloomberg) -- Gordon Colby, who manages 5,000 acres of Maine blueberries, says he’d never heard of any billionaire brothers being involved when he decided to join a group lobbying for less government regulation.
“I don’t even know who the hell David and Charles Koch are,” Colby, 63, said in an interview. “I don’t know about the Kochs, don’t know who is funding Americans for Prosperity. But I like what they are doing on the local level.”
Maine residents like Colby may not know it, but the Koch brothers have arrived in their state and in most others, moving well beyond their publicized involvement in Wisconsin and Ohio. Under the auspices of Americans for Prosperity, the Kochs have become one of the fastest-growing lobbying forces in U.S. politics, spreading the gospel of low taxes, no unions and small government one state at a time.
“The Koch brothers’ money puts them in a position where they can change a lot of players on the ground,” Ron Schmidt, head of the political science department at the University of Southern Maine in Portland, said in an interview.
David and Charles Koch and Koch Industries Inc., the family controlled energy and chemicals company, helped found Americans for Prosperity in 2004 with three state chapters.
The group’s website now lists 32 chapters, which is an increase from 23 in April 2009, according to the Center for American Progress, a policy group in Washington aligned with Democrats that has criticized the Kochs’ political influence.
Donations to Americans for Prosperity jumped to $16.6 million in 2009 from $3.5 million in 2007, Internal Revenue Service filings show. Koch Industries’ spending to lobby on federal issues surged 40-fold to $8.1 million last year from $200,000 in 1998, according to the Center for Responsive Politics, a Washington-based research group.
At the state level, Koch Industries and its employees spent $1.2 million on races in last year’s elections, up from $518,509 in 2008, according to the National Institute on Money in State Politics in Helena, Montana. In both years, more than 80 percent of the money went to Republicans.
“The spending can make a powerful impact,” Ross Baker, a political science professor at Rutgers University in New Brunswick, New Jersey, said in an interview. “There is a bottom-up effect. You only have to see what is happening in Ohio and Wisconsin.”
The group’s support for Wisconsin Governor Scott Walker and Ohio Governor John Kasich helped the two Republicans win legislation restricting public employee unions. In Wisconsin, Americans for Prosperity organized rallies, set up a pro-Walker website and announced an ad campaign costing more than $300,000 to support him. Walker’s moves triggered weeks of protests that saw thousands of workers surround and crowd into the capitol in Madison.
“They were one of the larger contributors to Walker’s campaign and were supporting the shocking legislation where he was able to go after public employees,” Bob Edgar, president and chief executive officer of Common Cause, a Washington-based advocacy group that opposed Walker’s measures said in an interview.
Less visibly, the Koch-backed organization has been at work in other states as well, taking advantage of, and promoting the election of, candidates who embrace its ideals.
“We have had more success on the state level this year than we had in the past because of the change in sentiment and change in elective bodies,” Alan Cobb, vice president for state operations at Americans for Prosperity, said in an interview from the group’s office in Topeka, Kansas. “We’re now in a position where we can push through more policy.”
‘We’ve Been Vilified’
The Kochs’ contributions to Americans for Prosperity aren’t public because as a nonprofit group it isn’t required to disclose donors or most of the spending it devotes to state efforts.
Melissa Cohlmia, a spokeswoman for Koch Industries, didn’t comment, recommending a March 1 commentary by Charles Koch in the Wall Street Journal. Koch wrote he was concerned about the growing national debt and government that is “allowed to pick winners and losers.” Smaller government is needed for prosperity, he said.
“Because of our activism, we’ve been vilified by various groups,” Koch said. “Despite this criticism, we’re determined to keep contributing and standing up for those politicians, like Wisconsin Governor Scott Walker, who are taking these challenges seriously.”
The Koch brothers tied for fifth on Forbes magazine’s ranking of richest Americans last year, with $21.5 billion each in net worth, reflecting their holdings in Koch Industries. The company, founded by their father, Fred C. Koch, is the second-largest closely held U.S. company after Cargill Inc., with estimated annual revenue of $100 billion, according to Forbes. Charles, 75, is chairman and chief executive officer, and David, 71, is an executive vice president.
Spending in the states has advantages because “it’s largely out of the limelight” and “it’s where the next generation of political leaders will come from,” Stephen Schneck, a politics professor and director of the Institute for Policy Research & Catholic Studies at the Catholic University of America in Washington, said in an e-mail.
Americans for Prosperity opened an office in Montana in January, hiring Scott Sales, the state’s former Republican speaker of the House, as state director. Sales criticized the budget crafted by Democratic Governor Brian Schweitzer, writing on the group’s website that “before Government can give to one citizen it must take it from another thus gaining control of both.”
The group expanded last year to Washington state, where its supporters helped block the extension of taxes to fund a convention center expansion and arts activities in King County. The group also helped promote more than a dozen Tea Party rallies scheduled around April 15, tax day.
In Augusta, Maine’s capital, Americans for Prosperity is trying to benefit from the election last year of Republican Governor Paul LePage and Republican majorities in both chambers for the first since the 1973-1974 session.
In the legislative period that ended on June 29, the group lobbied successfully to have the estate tax exemption doubled to $2 million from $1 million, though it fell short in efforts to eliminate the tax completely. The organization also helped win changes to health care that will let Maine businesses buy insurance from companies outside the state, over Democratic objections that the law will make coverage unaffordable for rural and middle-aged residents.
Americans for Prosperity also is lobbying for Maine to quit the Regional Greenhouse Gas Initiative, a program to cut carbon-dioxide emissions in the Northeast.
“They have been waiting in the wings for the right moment,” said Representative Emily Ann Cain, 31, the Democratic leader in the state House. The group’s agenda is “too extreme for the people of Maine,” she said in an interview.
Colby, the blueberry farmer, doesn’t think so. He is among more than 4,500 volunteers in Maine trained as activists by Americans for Prosperity, according to Carol Weston, a former state senator who became the organization’s director and its first registered lobbyist in February. Colby says he has 200 names on his own contact list that he can call.
“I’m a farmer and I just want to farm,” said Colby, who lives in Waldoboro and started a Tea Party group in his area last year. He said government regulations interfere with his farming, without providing specifics.
Weston, adapting civics lessons she gave visiting schoolchildren as a state lawmaker, trains about 40 possible Americans for Prosperity volunteers at a time in four-hour sessions. She highlights skills for testifying at hearings, obtaining research and learning how to “maximize your time when engaging your elected officials,” according to the group’s website.
“It’s the only way you see change,” Weston, 61, said in an interview at a coffee shop near her office, across from an Applebee’s restaurant about a mile from the statehouse. “They stay very involved all the time.”
She also brought in guest speakers who urged support of Republican-backed legislation, including Secretary of State Charles Summers, who championed a successful measure to cut off voter registration on election day,
“They are actively supporting voter suppression,” Diane Russell, a Democratic House member, said after the chamber’s vote on that bill.
David R. Burns, a Republican representative, said that while he generally agrees with Americans for Prosperity, the group’s e-mail blitzes aimed at lawmakers may backfire in Maine, where politics has traditionally been lower-key.
It can lead “to overkill and diminishing returns,” he said.
Weston, who took her lobbying job after term limits ended her Senate career, said she operates largely with autonomy from Americans for Prosperity’s headquarters.
“Americans for Prosperity is clear about their priorities: less taxes, less government,” Weston said. “It’s easy for the state director. We agree on those principles.”