Koch Calls for End to 'Corporate Welfare' for Wall Street
Charles Koch, the billionaire leader of a conservative network that has pledged to spend hundreds of millions of dollars influencing next year's elections, called for an end to what he called "corporate welfare" for the biggest U.S. banks.
Koch singled out the financial industry as a target Saturday as he welcomed about 450 wealthy donors to a semi-annual retreat at a luxury hotel in California. The group, known as Freedom Partners, supports the free-market ideas Koch has long championed, and includes many of the country's biggest Republican contributors.
Big banks, Koch said, "are among the greatest proponents of corporate welfare," having received bailouts during the financial crisis and access to unlimited lending from the Federal Reserve. Meanwhile, the burden of financial regulations imposed in the crisis's wake fell hardest on small, community banks, many of which were forced out of business, he added. Big banks' political contributions help preserve their advantages, he said.
"The destructive cycle goes on and on," he said.
While Koch's remarks are consistent with the small-government mantra he has espoused for decades, they serve as a reminder of the threat the country's biggest banks face from the right as well as the left. Liberal Democrats such as Senator Elizabeth Warren of Massachusetts, and Bernie Sanders, a Vermont senator who is seeking the Democratic presidential nomination, have called for a breakup of the biggest U.S. lenders.
The network overseen by Koch and his brother, David, has pledged to spend $889 million on its agenda during the 2016 election cycle. That network includes Freedom Partners, the organization that hosted the conference, and Americans for Prosperity.
The Kochs have in the past kept their gatherings closed to the media. Bloomberg News and several other media organizations were allowed to observe parts of the conference in Dana Point after agreeing to certain conditions, including not to approach attendees or report their presence without permission.
For politicians, the Koch events are a chance to rub elbows with some of the most important conservative patrons. Two candidates for the Republican presidential nomination, Carly Fiorina and Scott Walker, spoke earlier Saturday, and Sunday's schedule includes planned appearances by Jeb Bush, Marco Rubio, and Ted Cruz.
The Kochs jointly own most of Koch Industries, the Wichita-based oil and chemicals company that is the second largest closely held company in the world. The Bloomberg Billionaires Index estimates their wealth at $51 billion each.
The Kochs' heavy spending on elections have made them bete noirs of the left. This summer's event is taking place behind heavy security at a luxury hotel in Dana Point, California. On the street outside the resort, a handful of protesters, some wearing Sanders T-shirts, waved hand-made signs saying "America Has a Koch Problem" and "Get Money out of Politics."
Back inside the gates, the crowd of silver-haired donors, many of them entrepreneurs and business executives, sipped white wine and watched the sun creep lower over the Pacific. Koch told them that obtrusive government policies are to blame not just for problems in the banking industry but, more broadly, economic inequality and lack of opportunity.
"Misguided policies are creating a permanent underclass, crippling our economy and corrupting the business community," he said. "Present company excepted, of course."