There's one main rule at the conservative donor conclaves held twice a year by Charles and David Koch at luxury resorts: What happens there stays there.
The billionaire industrialists and their political operatives strive to ensure the anonymity of the wealthy conservatives who fund their sprawling political operation—which funneled more than $400 million into the 2012 elections—and to keep their plans private. Attendees of these summits are warned that the seminars, where the Kochs and their allies hatch strategies for electing Republicans and advancing conservative initiatives on the state and national levels, are strictly confidential; they are cautioned to keep a close eye on their meeting notes and materials. But last week, following the Kochs' first donor gathering of 2014, one attendee left behind a sensitive document at the Renaissance Esmeralda resort outside of Palm Springs, California, where the Kochs and their comrades had spent three days focused on winning the 2014 midterm elections and more. The document lists VIP donors—including John Schnatter, the founder of the Papa John's pizza chain—who were scheduled for one-on-one meetings with representatives of the political, corporate, and philanthropic wings of Kochworld. The one-page document, provided to Mother Jones by a hotel guest who discovered it, offers a fascinating glimpse into the Kochs' political machine and shows how closely intertwined it is with Koch Industries, their $115 billion conglomerate.
The more than 40 donors courted by the Kochs include hedge fund and private-equity billionaires, real estate tycoons, and executives of top corporations, including Jockey International and TRT Holdings, owner of Omni Hotels and Gold's Gym. A number of them have never been identified as members of the Koch donor network, including Schnatter, one of the more prominent names on the list. An outspoken opponent of the Affordable Care Act, he is a longtime Republican donor who hosted a fundraiser for Mitt Romney's presidential campaign. The document notes that the pizza mogul was scheduled to meet with Ryan Stowers, the director of higher education at the Charles G. Koch Foundation. (Schnatter did not respond to requests for comment.)
The document suggests a close collaboration between officials of Koch Industries, AFP, and Freedom Partners, whose staff and board are stacked with numerous current and former Koch Industries employees.
Another top conservative contributor on the list is TRT Holdings' cofounder Robert Rowling, whose net worth is estimated at $4.9 billion. During the 2012 election, Rowling directed $3.5 million to American Crossroads, the super-PAC spearheaded by Karl Rove, and he cut a $100,000 check to the pro-Romney super-PAC Restore Our Future. According to the document, Rowling was scheduled to sit down with Charles Koch at the "Koch residence"—presumably a reference to the Wichita businessman's vacation home at the Vintage Club, a short drive from the resort where the donor conference was held. Top Koch operatives were expected to participate in this session, including Kevin Gentry, the Koch brothers' fundraising guru; Daniel Garza, the director of the Libre Initiative, a Koch-funded organization dedicated to Latino outreach; and Marc Short, who runs Freedom Partners, the centerpiece of the Kochs' political network, which distributes donor funds to a large web of conservative nonprofit groups. (Rowling did not respond to requests for comment.)
Other heavy hitters slated for meetings with the Koch brothers or their representatives included Carl Berg, a Silicon Valley real estate tycoon worth $1.1 billion; Ken Griffin, who founded the hedge fund Citadel and clocks in at No. 103 on the Forbes 400 (net worth, $4.4 billion); John W. Childs, a top private-equity investor; and Fred Klipsch, the chairman of the headphone and speaker company Klipsch Group.
The meeting list illustrates the interwoven nature of the Koch brothers' corporate, political, and philanthropic activities. The donor meetings featured various senior Koch Industries executives, including the company's chief financial officer, Steve Feilmeier. He was scheduled to join Charles Koch for a sit down with Berg. Charles Koch's 36-year-old son, Chase, the president of Koch Fertilizer, was also scheduled to take part in a meeting with a donor named George Gibbs. (Koch Industries spokesman Rob Tappan would not comment on the conference document, only confirming that company employees attend the donor summits. Freedom Partners spokesman James Davis said he was "uncertain" about the document and did not respond to further questions.)
At least half of the one-on-one sessions involved representatives of Americans for Prosperity, the political advocacy group founded by the Koch brothers and their top political adviser and strategist, Richard Fink, a Koch Industries executive vice president and board member. The AFP officials called to duty for these discussions included AFP's president Tim Phillips, chief operating officer Luke Hilgemann, vice president for state operations Teresa Oelke, and vice president for development Chris Fink (Richard Fink's son). The state directors for AFP's Wisconsin, Michigan, Pennsylvania, and Florida chapters were also slated for tête-à-têtes during the Koch summit. (AFP spokesman Levi Russell declined to comment on the meeting document.)
In the past, Koch Industries has distanced itself from AFP and its political activities. The company has said the group is just one of "hundreds of organizations" that receive funding from the Kochs and that it operates "independently" of Koch Industries. But the document suggests a close collaboration between officials of Koch Industries, AFP, and Freedom Partners, whose staff and board are stacked with numerous current and former Koch Industries employees. Michael Lanzara and Jeff Noble, who transitioned over to Freedom Partners from Koch Companies Public Sector—the company's legal, lobbying, and public affairs branch—were scheduled to meet with donors alongside AFP staffers. The Koch brothers and Richard Fink were also listed as taking part in some of these sessions. (Fink, a man of many hats within the Koch firmament, is also an AFP board member; David Koch chairs the board of the Americans for Prosperity Foundation.)
Heading into the midterm elections, AFP has emerged as one of the right's most active and well-financed political outfits. In recent months, it has spent more than $20 million on ads clobbering congressional Democrats for supporting Obamacare. And the group is merely one piece of the Kochs' massive political operation, which in size, scope, and fundraising prowess has come to resemble a political party in its own right. During the 2012 election cycle, in fact, the Koch network managed to raise as much as the Republican National Committee itself.
After the brothers and their allies failed to win the Senate or unseat Obama in 2012, David Koch told Forbes that this setback would do little to deter them: "We're going to fight the battle as long as we breathe." At the Palm Springs conference, as the left-behind-list of VIP meetings shows, the Kochs are lining up serious financial firepower for the political fights of 2014 and beyond.
Read the meeting list, along with a guide to the participants in them, below.
Carl Berg: Ranking No. 308 on the Forbes 400, Berg is a Silicon Valley real estate titan with an estimated fortune of $1.1 billion.
Ronnie Cameron: He runs agribusiness giant Mountaire Corporation. During a meeting of the Kochs' donor network in 2011, Charles Koch recognized Cameron (and other donors) for donating at least $1 million to their cause.
Charles Chandler: Based in the Kochs' hometown of Wichita, Kansas, Chandler is the CEO of Intrust Bank.
John Childs: He runs the Boston-based private equity firm J.W. Childs & Associates.
Jamie Coulter: Haling from Wichita, Coulter is the former CEO of the Lone Star Steakhouse and Saloon restaurant chain.
Bob and Steve Fettig: The Fettigs run the metal fabrication company Tankcraft, based in Darien, Wisconsin. Steve is the company's CFO; Bob is CEO.
Richard and Leslie Gilliam: Richard founded Virginia-based coal mining company Cumberland Resources Corporation, which he sold to Massey Energy for nearly a billion dollars in 2010.
Ken Griffin: A major conservative donor, the Chicago-based businessman founded the hedge fund Citadel and is worth an estimated $4.4 billion.
John Griffin: He's the founder of Blue Ridge Capital, a New York hedge fund.
Dick Haworth: He's the chairman emeritus of Holland, Michigan-based office furniture company Haworth.
Richard "Ric" Kayne: He's the founder and chairman of Los Angeles-based investment firm Kayne Anderson Capital Advisors.
Dan Kirby: He's president of Sioux Falls, South Dakota-based Kirby Financial.
Frank Kozel: He's the principal of Pittsburgh-based Keystone Energy Oil & Gas Inc.
Francis "Franc" Lee: He's the president and CEO of Flowood, Mississippi-based lender First Tower, LLC.
Robert "Bob" Luddy: He's president of CaptiveAire Systems Inc. in Raleigh, North Carolina.
Hugh Maclellan: He's the executive chairman of Chattanooga, Tennessee's Maclellan Foundation, which make grants to Christian causes.
Cecil O'Brate: He's the CEO of Garden City, Kansas-based Palmer Manufacturing & Tank.
Verl Purdy: He's the chairman and CEO of Charlotte, North Carolina-based AGDATA Inc.
Tom Rastin: He's a director and vice chairman of the Mount Vernon, Ohio-based Ariel Foundation, started by his wife, Karen Buchwald Wright, the CEO of Ariel Corporation. Rastin is the company's vice president of engineering, sales, and marketing.
George Records: A member of the Hoover Institution's board of overseers, Records is the retired chairman of Oklahoma City's Midland Group.
Robert Rowling: Ranking No. 93 on the Forbes 400 with an estimated fortune of $4.9 billion, Rowling is the cofounder of TRT Holdings, which owns Gold's Gym and Omni Hotels.
John Schnatter: He's the founder and CEO of Papa John's International.
Tina and Craig Snider: They are the children of Ed Snider, a founding contributor of the Ayn Rand Institute and chairman of Comcast Spectacor, a sports and entertainment company that owns the Philadelphia Flyers.
Dian Stai: Based in Texas, Stai cofounded Owen Healthcare Inc. with her late husband. She's a top conservative donor who gave $125,000 to the pro-Mitt Romney super-PAC Restore Our Future during the 2012 election cycle.
Jim Stephenson: He's the president and CEO of Georgia-based Yancey Bros. Co., "which provides Caterpillar, AGCO, and Blue Bird Bus Co. products and services throughout the state of Georgia." Stephenson is also an Americans for Prosperity board member.
Jim Von Ehr: He's the CEO and founder of Richardson, Texas-based Zyvex Labs.
Debra Waller: Since 2001, she's been the chairman and CEO of Jockey International Inc.
Lew Ward: He's the founder of Oklahoma-based Ward Petroleum Corporation.
Dick Weiss: He's the Core Equity senior portfolio manager at Wells Capital Management.
Karen Wright: She's the founder and CEO of the Ariel Foundation, a private philanthropy group based in Mount Vernon, Ohio. She's also CEO of the Ariel Corporation, a natural gas compression company.
*Mother Jones was unable to confirm the identities of some donors on the list, including Steve Clark, Paul Foster, George Gibbs, George Jenkins, Jerry Hayden, Kent McCarthy, Andrew Miller, Ted Saunders, Tom Smith, Jaime Snider, and Dean Williams.
Charles Koch: He's the chairman and CEO of Koch Industries.
David Koch: He's Koch Industries' executive vice president and a board member.
Michael Lanzara: A former director for special projects at Koch Companies Public Sector, Lanzara now works for Freedom Partners.
Steve Feilmeier: He's chief financial officer and executive vice president of Koch Industries.
Kevin Gentry: A vice president at Koch Companies Public Sector, Gentry is the Koch brothers' top fundraiser. He also serves on the board of Freedom Partners.
Daniel Garza: He's the executive director of the Libre Initiative, a Koch-funded nonprofit focused on Hispanic outreach.
Chase Koch: He's Charles' son and the president of Koch Fertilizer.
Richard Fink: He's the chairman and CEO of Koch Companies Public Sector and a board member of Koch Industries. A founder of the Mercatus Center and Americans for Prosperity, Fink is the Koch' top strategist and political adviser.
Ryan Stowers: He's the director for higher education at the Charles G. Koch Foundation.
Michael Palmer: He is the president of i360, which bills itself as the "leading data and technology resource for the pro-free-market political and advocacy community." Palmer's firm has worked closely with the Kochs' voter microtargeting operation, Themis.
Derek Johnson: He's a program officer for higher education at the Charles G. Koch Foundation.
Nathan Nascimento: He's an employee of Freedom Partners.
The New York Timesreported Friday that Jamie Dimon, the silver-haired CEO of JPMorgan Chase, the nation's largest bank by assets, is getting a raise. Dimon is poised to add a few million to the $11.5 million compensation package he took home in 2013.
If you so much as glanced at the news last year, this bit of news may puzzle you. JPMorgan, in many ways, had a miserable 2013. JPMorgan paid $1 billion in fines in the wake of the "London Whale" scandal, in which the bank lost $6 billion on a market-rattling blunder by a trader named Bruno Iksil. The bank also paid $13 billion to settle charges that it'd peddled risky mortgage-backed securities. And it forked over another $2 billion to settle charges for failing to spot Bernie Madoff's ponzi scheme, which Madoff perpetrated largely using JPMorgan accounts. All told, the bank paid out roughly $20 billion in penalties to federal regulators over a slew of screw-ups and failures.
2013 was a rough year for JPMorgan. So why is Dimon getting a raise? The answer, in part, will make your blood boil. Here's the money quote in the Times:
Mr. Dimon's defenders point to his active role in negotiating a string of government settlements that helped JPMorgan move beyond some of its biggest legal problems. He has also solidified his support among board members, according to the people briefed on the matter, by acting as a chief negotiator as JPMorgan worked out a string of banner government settlements this year.
Mr. Dimon's star has risen more recently as he took on a critical role in negotiating both the bank’s $13 billion settlement with government authorities over its sale of mortgage-backed securities in the years before the financial crisis and the $2 billion settlement over accusations that the bank turned a blind eye to signs of fraud surrounding Bernard L. Madoff.
Just hours before the Justice Department was planning to announce civil charges against JPMorgan over its sales of shaky mortgage investments in September, Mr. Dimon personally reached out to Attorney General Eric H. Holder Jr.—a move that averted a lawsuit and ultimately resulted in the brokered deal. Just a few months later, Mr. Dimon acted as an emissary again, this time, meeting with Preet Bharara, the United States attorney in Manhattan leading the investigation into the Madoff Ponzi scheme.
In other words, as big as those multibillion-dollar settlements were, JPMorgan board members believe the bank's legal problems could've been worse. Blast-a-hole-in-our-balance-sheet worse. And so Dimon's pay bump is a reward for locking horns with bank regulators and federal authorities and hashing out settlement deals that were favorable to the bank. He's getting a raise because he beat the regulators, played them so well, JPMorgan board members seem to be saying, that he deserves to be rewarded for the deals he helped engineer.
There are other factors, too. Despite its legal headaches, JPMorgan's stock price climbed 22 percent over the past year, and the bank recorded profits of $17.9 billion in 2013. But to read that Dimon's savvy negotiating has won him a raise—and don't forget that no top bank executives have gone to jail for actions related to the 2008 financial meltdown—brings to mind the old Dick Durbin quote about banks and Washington: "They frankly own the place."
This week, the FBI and Department of Justice busted a Washington, DC-based political consultant and an ex-detective turned private security contractor in a money-in-politics scandal seemingly ripped from the pages of All the President's Men.
According to a criminal complaint filed in the US district court in southern California, a wealthy Mexican national allegedly funneled more than $500,000 into local and federal campaigns in the San Diego area. That, of course, is illegal. Federal law bars foreign nationals from making contributions to political candidates. So the Mexican businessman—who is unnamed in the complaint—allegedly used retired San Diego detective Ernesto Encinas, political consultant Ravneet Singh, and an unnamed straw donor to inject his money into several California-based elections.
The Mexican businessman and his co-conspirators are accused of making illegal campaign expenditures in support of four different candidates. To support a San Diego mayoral candidate, the Mexican and the ex-detective set up a super-PAC and guided $100,000 in foreign money through a shell corporation into the super-PAC. In another case, the Mexican businessman gave $380,000 to a straw donor (who was identified as an American citizen in the complaint), and the straw donor then cut checks to assorted campaigns and political committees in the San Diego area.
None of the candidates who received the Mexican businessman's support are named in the complaint, but two of them are believed to be San Diego District Attorney Bonnie Dumanis and former mayor Bob Filner. Dumanis and Filner faced each other in the city's 2012 mayoral primary. In December, Filner was sentenced to 90 days in home confinement, three years' probation, and fines totaling nearly $1,500 for assaulting three women while serving as San Diego mayor.
Then there's Ravneet Singh, the DC consultant who founded the company ElectionMall, which provides digital media services for political campaigns. Around February 2012, the Mexican businessman paid Singh and ElectionMall about $100,000 for Internet ads and key word placements to help elect a San Diego mayoral candidate. The money was transferred into ElectionMall's account by a Mexican company, and the online ad spending never appeared on expenditure records as it should have under state and federal campaign laws.
Later that year, in October, Singh and Encinas, the ex-detective, approached a general election candidate in San Diego's mayoral race candidate offering social media services to the candidate's campaign. When asked how much those services would cost, the complaint says, Singh and Encinas responded that it was "taken care of." Soon after, ElectionMall received another $190,000 from the Mexican-based company. Because the candidate's campaign was never billed, the complaint alleges that Singh, ElectionMall, and Encinas "facilitated illegal in-kind contributions" in violation of campaign law.
You can read the full Justice Department complaint against Singh, ElectionMall, and Encinas below. And you can wonder who will play the Mexican businessman, the ex-detective, and the consultant in the movie.
Members of the DeVos family rank among the most generous benefactors of the conservative movement and the Christian right, up there with the Bradleys, the Coorses, and the Kochs. Not only has billionaire Amway cofounder Richard DeVos Sr. cut checks to anti-union and anti-tax efforts, but these days he's also a fixture at the Koch brothers' invite-only donor summits. Name an organization—Jerry Falwell's Moral Majority, David Koch's Americans for Prosperity, the arch-conservative Heritage Foundation—and odds are a DeVos family member has donated to it.
How extensive is the DeVos family's largesse? Below, we trace the family's many millions as they flow out of family foundations into the biggest-name think tanks and advocacy groups in American politics today. And for good measure, we've included Erik Prince, the founder of the private-security company Blackwater, who is the brother of Dick DeVos' wife, Betsy. What a small world.