Hidden Agenda - How the Koch Brothers transformed Wisconsin
Updated On: Sep 26, 2018
Laborers International Union of North America workers march in Madison, WI February 2011.
The cries of “Shame! Shame! Shame!” rang throughout the marbled walls of the Wisconsin state assembly chamber. Disgusted Democratic politicians, some of whom had been up for over 60 hours by this point, punctuated their chants by throwing papers – and even drinks – at their Republican counterparts. Police officers had to be summoned to physically restrain one Democratic representative yelling “Cowards!” across the aisle.
The source of this confrontation, in the early hours of February 2011, was an unprecedented push by Wisconsin Republicans, led by the state’s newly elected Republican governor, Scott Walker, to slash the union rights held by most public workers. Walker argued that budget woes in the state necessitated the shift, and barrelled forward to eliminate the rights of virtually all public-sector workers to collectively bargain with government and to allow government employees to opt out of paying dues to their unions.
At first blush this might seem like a years-old local issue in a US state that rarely lights up the international headlines. Yet events in Wisconsin are crucial to understanding how a little-known, billionaire-funded organization, called Americans for Prosperity (AFP), has tilted American politics to the right. It is intertwined with, and rivals in size, the Republican party itself.
Where did Walker’s ultra-conservative labor agenda come from? As a candidate, Walker barely mentioned collective bargaining or union busting. And we know this plan did not come from voters. Before the legislation popped up on the agenda, Wisconsinites generally supported collective bargaining. Nationally, only about 40% of American adults favor curbs to public sector bargaining rights, and in Wisconsin, this minority level of support was about the same.
Instead, to understand what happened in Wisconsin – and what is happening in states across the country – we need to look to the underappreciated organization that is at the center of the political network created and directed by the billionaire conservative industrialists, Charles and David Koch.
We are a group of Columbia and Harvard-based researchers who for the past five years have been investigating precisely how the Koch brothers work to influence US politics and the role played by AFP. In recent years, AFP has quietly pushed behind the scenes for many of the most important conservative victories across the nation, including the anti-union bills that passed in former union strongholds such as Wisconsin, Michigan, and Ohio.
AFP’s laser-like focus on anti-union legislation is in part driven by the Kochs’ libertarian embrace of free markets and limited government. But it also reflects strategic calculations. AFP has recognized that to make lasting change in US politics, the Koch network would need to permanently weaken the organizations that support liberal candidates and causes – and above all, the labor movement. Reflecting on why conservatives failed to build power in earlier decades, AFP’s national president, Tim Phillips, explained that the Democrats “had the public employee unions … which have only gotten stronger, have only gotten better-funded, have only gotten better organized”. To succeed in electing conservative candidates and promoting right-leaning policy, then, AFP would need to hobble unions, especially those in the public-sector that were powerful state-level allies of Democrats.
The members of AFP who helped brainstorm Walker’s efforts knew that the legislation would impact union membership – and go far beyond it. Since the passage of the anti-union bill, public union membership rates in Wisconsin have plummeted by more than half, falling from around 50% in 2011 to around 19% by 2017. With fewer members and revenue, the political clout of the labor unions has fallen sharply. Campaign contributions by teachers’ unions to state and local races have fallen by nearly 70%.
The consequence: a profound and long-term decline in Democrats’ chance of securing office in the state. As one Democratic operative explained to the New York Times: “Maybe we can win high-profile races because Wisconsin still leans slightly Democratic, but at the level where Walker has produced the most profound change, it may prove very difficult to turn that around. That’s where we pay the price.”
In presidential elections, Democrats lose around three percentage points after the passage of anti-union legislation, and turnout dips by around two points. So while there are many factors that might explain Donald Trump’s surprise win in Wisconsin in 2016 by a mere 23,000 votes, a weaker labor movement less able to turn out Democratic voters might have been one important contributor to Trump’s victory.
Looking back at the transformation of Wisconsin since Walker’s election, Phillips notes proudly that AFP’s organization in the state now has more grassroots activists than the Wisconsin teachers’ union has members.
“That’s how you change a state,” Phillips bragged.
More than money
In America, wealthy people have always thrown their weight around to influence elections and policy. But what is newer and more portentous in the early 21st century, especially at the state level, is the rise of organized big donor collectives through which hundreds of billionaires and millionaires invest in organization-building to remake the very terrain on which US elections and government activities play out. Organized political mega-donors can get much more leverage through persistent organizations than from scattered, one-time contributions to particular politicians.
Wisconsin is very much a case in point, because this state has for years been in the organization-building sights of the massive Koch political network, at the core of which are regular gatherings of hundreds of conservative wealth holders who channel donations year after year to political organizations closely coordinated by Charles and David Koch and their top lieutenants.
The two brothers have vast resources to invest in politics, commanding over $50bn each from their ownership of Koch Industries. That company, which the brothers inherited from their father, has grown under their leadership to become one of the largest privately held conglomerates in the United States, with activities spread across dozens of industries, including chemical manufacturing, energy production, paper production, and ranching.
Taken together, AFP’s grassroots volunteers and staffing rival those of the Republican party itself
Although Charles and David have been committed libertarians for most of their lives, since the 1980s they have steadily ramped up their political involvement and by now have constructed a vast network of organizations that pool hundreds of millions of dollars from their own pockets and other wealthy donors each year in support of conservative idea generation, leadership training, election campaigning and policy advocacy. Yet for all the groups the Kochs have created and funded, there is just one group that sits at the center of their network: Americans for Prosperity.
Expanding across US states since 2004, AFP installs paid staff at the national, regional, and state levels, and gives them the money and resources needed to influence elections and deploy lobbyists and volunteers in major policy campaigns. Wisconsin was organized early on by Americans for Prosperity, starting in 2005, and ever since AFP-Wisconsin has pushed free-market policies, above all efforts to undercut the state’s previously formidable public-sector labor unions. By 2010 AFP’s Wisconsin organization had two staffers and at least 50,000 activists on its volunteer rolls; by now AFP-Wisconsin claims some 125,000 grassroots activists (equaling around 2% of the state’s population) orchestrated by at least three paid staffers. The organization also has established up to eight local field offices spread across the state
In constructing AFP, the Kochs have created a vehicle that is perfectly positioned to reshape American politics. AFP focuses on both elections and policy battles at all levels of government, from city councils to Congress and the White House. Although its activities are mostly centrally directed from its headquarters in Virginia, AFP has active local, state and regional offices that reflect the federated nature of US politics. And even though grassroots participants do not have much say in the direction of the group, AFP has nearly 3 million citizen activists signed up to mobilize for candidates and policy causes. Activists participate in rallies or protests and contact elected officials at the direction of more than 500 paid staffers nationwide.
Taken together, AFP’s grassroots volunteers and staffing rival those of the Republican party itself. However, AFP is not a free-standing political party – but instead is an extra-party organization that parallels and leverages Republican candidates and office-holders. By providing resources to support GOP candidates and officials, and exerting leverage on them once elected, AFP has been able to pull the Republican party to the far right on economic, tax and regulatory issues.
What happened in Wisconsin?
A close examination of AFP’s early chapter buildup in Wisconsin lets us see exactly how AFP has achieved such clout – and also helps us make sense of Scott Walker’s early and sustained attacks on public-sector labor unions. Our research has uncovered several important aspects of AFP’s roll-out and impact in Wisconsin.
First, AFP-Wisconsin (AFP-WI) successfully moved from the fringe to the center of the state GOP establishment by hiring leaders who were tied into Republican leadership. AFP-WI also built on partnerships with existing conservative groups in the state to build up its grassroots membership base. The chapter started as a small, one-man operation and the first director, Mark Block, was a controversial political consultant and former legislative assistant to a Wisconsin congressman, Bill Steiger. Block had previously been sanctioned by the state for illegal campaign tactics and was a well-known “dirty tricks” operative. Yet he enjoyed strong connections to other conservative grassroots organizations in the state, which helped AFP-WI gain early members and visibility.
When the Tea Party burst on the scene in 2009, AFP-WI was heavily involved in promoting Tea Party events and activism. AFP-WI hosted a tax day Tea Party rally in 2009, and made a point to include Tea party speakers at AFP events and sign up Tea Party participants as AFP grassroots activists. Yet it would be a mistake to think of the Tea Party as being simply an astroturf operation from the Kochs – AFP built on but did not create Wisconsin’s Tea Parties.
What we would like to see is to take the unions out at the knees, so they don’t have the resources to fight
After Block’s departure in 2010, AFP further built credibility in Wisconsin by hiring members of the state GOP establishment, especially staffers who worked for key legislative leaders and thus knew the ins and outs of the policymaking process. They give AFP leverage over the GOP, allowing party staffers to move seamlessly back and forth between powerful party posts and well-paid Koch positions.
Lastly, AFP-WI also sought to incubate promising political talent by bolstering up-and-coming conservative stars. That reflects a more general strategy on the part of AFP and the Koch network to cultivate friendly GOP politicians over the long run. One politico that AFP-WI singled out for attention and recognition early on was a very conservative local government leader: Scott Walker. Walker was given prominent roles in several of AFP-WI’s signature events, including their “Defending the American Dream” summit in 2008, and was featured in AFP’s 2006 bus tour across the state, the “Ending Earmarks Express”.
Together, these opportunities gave the otherwise relatively unknown politician statewide visibility and helped him forge contacts with a broad array of wealthy donors, conservative activists and trade associations. They also helped to solidify Walker’s eventual strategy of prioritizing the union offensive when elected to office. After years of preparation, the Koch network then backed Walker’s bid for governor in 2010, even as AFP-WI also focused on helping Republicans win majorities in both chambers of the state legislature. The stage was set for Walker, then, to carry out the anti-union priorities that he had been worked with AFP on for years at that point – with Walker knowing full well that AFP-WI would have his back. As AFP’s Phillips recounted, his group had been working furiously “behind the scenes to try to encourage a union showdown” once Walker was elected.
After the legislature introduced Act 10, AFP organized rallies and bussed in volunteers from across the state in support of the effort. And after the bill became law, AFP-WI became the legislation’s best cheerleader, loudly advertising its supposed benefits and defending legislators who supported it.
It is not just union policy where Walker and the state Republicans have worked hand-in-glove with AFP. Ongoing research we are conducting on AFP-WI indicates that much of the Wisconsin Republican party’s agenda reflects AFP priorities. Take welfare reform: Walker developed and signed into law a plan that hewed closely to AFP priorities, like instituting work requirements for food support and public housing benefits and creating health savings accounts for Medicaid recipients. A similar story unfolded with a measure long-championed by AFP to limit the ability of state agencies to pass new regulations; Wisconsin implemented a version of the bill that AFP developed for the federal government.
Shifting the political terrain
The transformation of Wisconsin from the birthplace of public-sector unionization to a conservative stronghold with a battered labor movement is remarkable on its own terms. But even more remarkable is how the same story is playing out across dozens of other states. To be sure, AFP has not enjoyed the same success in every state as in Wisconsin and has endured some high-profile losses, too – most notably the re-election of Barack Obama to the White House in 2012.
But all told the Koch network has racked up important victories across many policy areas, like stymieing the implementation of the Affordable Care Act (and especially the expansion of Medicaid to poor uninsured adults) in states like Missouri and Tennessee, rolling back state efforts to address climate change (for instance, in Kansas and West Virginia), and passing massive tax cuts for wealthy individuals and companies (as in Kansas and Oklahoma).
Undoubtedly, however, AFP’s biggest accomplishment has been the passage of new anti-labor bills, like Act 10, that will permanently weaken unions and the left’s political power. “We fight these battles on taxes and regulations, but really what we would like to see is to take the unions out at the knees, so they don’t have the resources to fight these battles,” one top AFP staffer has explained about his group’s thinking.
With key anti-labor victories in states like Wisconsin, it makes sense why the Kochs are able to look past their squabbles with a unruly Trump presidency. Regardless of what happens in Washington, AFP and the Koch network has already succeeded in shifting the political terrain of Wisconsin – and the nation from the states on up.
• Alexander Hertel-Fernandez is an assistant professor of public affairs at
Columbia University and the author of Politics at Work (2018, Oxford
University Press). Caroline Tervo is the coordinator of the research project on the shifting US political terrain at Harvard University. Theda Skocpol is the Victor S Thomas professor of government and sociology at Harvard University and the co-author most recently of The Tea Party and the Remaking of Republican Conservatism, with Vanessa Williamson (2011, Oxford University Press).