That's how much Charles and David Koch's political network hopes to spend on the presidential race, House and Senate contests, and other elections and policy fights in 2016. That figure is not far off from how much President Barack Obama's and Mitt Romney's presidential efforts each spent in 2012. It is well over what John Kerry and George W. Bush together spent during the 2004 campaign. This fundraising target was announced Monday morning at the Koch brothers' winter retreat for members of their elite donor network.
And there's a good chance that much of the money the Kochs and their allies plan to unleash will be spent in the dark—that is, with little disclosure of the true source of those millions. (Key parts of the Koch network are nonprofit advocacy groups that engage in political work without revealing their donors.)
If the Koch network—which included 450 or so attendees at this weekend's donor confab—meets it $889-million goal for 2016, it would more than double its outlay from the last presidential election season. During the 2012 campaign, the Kochs' collection of nonprofit groups spent over $400 million, with a sizable chunk of that aimed at defeating President Obama.
The Kochs and their donor-allies are now essentially their own political party. As the New York Times' Nick Confessore points out, the Koch network's $889 million exceeds the spending power of the Republican Party:
By comparison, the GOP's national campaign committees spent $657 million during the 2012 election cycle.
Here's some context from the Washington Post about how that money—it's unclear how much of it will come from the Koch family itself—could be spent:
The $889 million goal reflects the budget goals of all the allied groups that the network funds. Those resources will go into field operations, new technology and policy work, among other projects.
The group—which is supported by hundreds of wealthy donors on the right, along with the Kochs—is still debating whether it will spend some of that money in the GOP primaries. Such a move could have a major impact in winnowing the field of contenders but could also undercut the network’s standing if it engaged in intraparty politics and was not successful.
Marc Short, the president of Freedom Partners, which hosts the Kochs' donor enclaves, told the Post that "2014 was nice, but there’s a long way to go." He said that putting free-market ideals at the center of American life is the goal of the Kochs and their allies, adding, "Politics is a necessary means to that end, but not the only one."
Cruz was referring, of course, to Mitt Romney's infamous remarks, secretly caught on tape during a private campaign fundraiser, in which he dismissed 47 percent of Americans ("who will vote for this president no matter what") as freeloaders "who are dependent on government" and who refuse to take responsibility for their lives.
According to Cruz, who was one of four presidential aspirants to appear before some 300 well-heeled donors at this weekend's Koch retreat (Wisconsin Gov. Scott Walker was the fourth, though he did not join Sunday's panel), the GOP's 47-percent problem is bigger than Romney's comments. It's a party-wide problem. But Cruz noted that he had a fix in time for the 2016 election.
Here's what Cruz told panel moderator Jonathan Karl of ABC News:
Of course we have a problem [with income inequality]. And I have to say I chuckle every time I hear Barack Obama or Hillary Clinton talk about income inequality. Because it's increased dramatically under their policies.
Now, if you look at the last election, I think in 2012 the reason Republicans lost can be summed up in two words: 47 percent. And I don't just mean Mitt Romney's comment that was caught on tape—that the 47 percent of Americans who are not currently paying taxes, who are in some ways dependent on government, we don't have to worry about them. I don't just mean that comment. I think Mitt is a good and decent and honorable man; I think he ran a very hard campaign.
But the central narrative of the last election, what the voters heard, was we don't have to worry about the 47 percent. And I think Republicans are and should be the party of the 47 percent.
That is, the GOP should be the party of the bottom half.
Cruz did not go into great detail about how the Republicans could assist and appeal to the 47 percent. But he did accuse Obama administration officials of using their clout to get "fat and happy," slamming Washington as rife with crony capitalism and claiming its denizens are fixated on self-enrichment at the expense of everyone else. "I think we need to move back to a dynamic where you have Schumpeter's creative destruction, where you have small businesses that are creating opportunities," he said. Cruz's reference to Joseph Schumpeter, the Austrian economist beloved by libertarians and conservatives, was sure to delight at least one audience member: Charles Koch, a longtime fan of Schumpeter's. Cruz added, "We should be fighting for the little guy who has dreams and hopes and desires."
This weekend, a select group of Republican presidential hopefuls will arrive in southern California to attend one of Charles and David Koch's biannual donor retreats, a coveted invite for GOP politicians seeking the backing of the billionaire brothers and their elite club of conservative and libertarian mega-donors. Featured guests at the conclave will include Sens. Marco Rubio (R-Fla.), Rand Paul (R-Ky.), and Ted Cruz (R-Texas) and Wisconsin Gov. Scott Walker. Former Florida Gov. Jeb Bush was also invited to the confab but is unlikely to attend.
Romney recently barged his way back into the political fray, suggesting he might launch a third presidential bid. He told a group of donors earlier this month, "Everybody in here can go tell your friends that I'm considering a run." In a presentation over the weekend at a resort near Palm Springs, California—as it happens, the same venue that has played host to previous Koch seminars—Romney delivered what sounded an awful lot like a presidential stump speech, talking about poverty ("I believe that the principles of conservatism are the best to help people get out of poverty"), education ("We have great teachers. I'd pay them more"), and even climate change.
The 2016 Iowa caucuses remain more than a year distant, but conservatives are already using former Republican Florida Gov. Jeb Bush's potential presidential candidacy to raise cash—not to support a Bush bid, but to thwart one. Over the weekend, an outfit called the Constitutional Rights PAC blasted out an email promoting the website EndJeb2016.com and soliciting donations. Federal filings show that the PAC is connected to a Beltway lawyer who led one of the most significant money-in-politics Supreme Court cases of the past five years, and to a media firm that's helped to stoke the Benghazi scandal, the Obamacare repeal campaign, and an effort to rename Washington, DC's football team the "Washington Tea Party."
The recent EndJeb2016.com email excoriated Bush, the eldest son of George H.W. Bush and brother of George W. Bush, as "a died-in-the-wool establishment Republican and an advocate of big government." The email asked supporters to sign an online petition calling Bush "anything but a 'conservative'" and to give between $25 and $5,000 to the PAC. Larry Ward, the PAC's founder who signed the End Jeb 2016 email solicitation and registered the EndJeb2016.com site, says the group will distribute its petition to members of Congress, the Republican National Committee, and news outlets once it hits 10,000 signatures. (The initial End Jeb blast brought in about 1,500, he says.)
Update: Friday, December 12, 2014: On Thursday night, the House passed the so-called Cromnibus government spending bill with the soft money provision intact. The bill moves to the Senate where it's expected to pass.
Soft money—limitless donations pouring into the Democratic and Republican parties from labor unions, big corporations, and Hollywood moguls—was once all the rage in Washington. When the trickle of soft money began in the late 1980s, it was intended to fund building additions, TV studios, and other infrastructure for Team Blue and Team Red. But by the mid-'90s, soft money had exploded—the DNC and RNC raised $263 million of it during the '96 election cycle, up from $45 million in 1988. And by the time of Bill Clinton's reelection, soft money wasn't just funding brick-and-mortar projects—it was supporting campaign activities to elect candidates to office. And the parties went to great lengths to pocket more. Remember those infamous sleepovers in the Clinton White House for donors and fundraisers? All in the name of raising soft money. Soft money was at the core of the campaign finance scandal triggered by Clinton's '96 campaign, the brouhaha that spurred the 2002 McCain-Feingold law banning soft money.
Now, soft money is making a comeback of sorts. A provision added to the $1 trillion spending bill cobbled together by Congress this week to avert a government shutdown would increase by tenfold the amount of money wealthy donors could give to the national political parties. Those dollars would go to fund presidential conventions, physical building activities, and legal work by the parties—an echo of the old soft-money days.
Here's how the new math breaks down. Right now, donations to the DNC, the RNC, and their campaign affiliates (the Democratic Congressional Campaign Committee, the National Republican Congressional Committee, and so on) are limited to $32,400 per person per committee each year. If the provision becomes law, donors could give $324,000 a year—a tenfold increase—to the DNC or RNC, while also donating $453,600 a year to the other party committees. All told, that means a wealthy donor could give $777,600 a year to all these outfits, or more than $1.5 million across an entire election cycle. "This is a law for millionaires and billionaires, period," says Fred Wertheimer, president of Democracy 21, a good-government group that backs limits on money in politics.
As the Washington Post notes, this move could nudge the center of gravity in the political-money world back toward the national parties, which have found themselves strapped for cash while independent super-PACs rake in seven-figure checks:
While there would be some restrictions on how parties could use those donations, the creation of new, wider lanes for money to travel into the parties would be a major boon, campaign finance experts said. The expanded avenues for giving would dramatically undercut some of the last remaining provisions of the landmark McCain-Feingold Act, which curtailed the ability of parties to raise huge, unregulated sums.
"It's always hard to predict how much more money will actually be raised when contribution limits are modified like this," said Michael Toner, a Republican election law attorney and former Federal Election Commission member. "But the opportunity is there for the national political parties to raise significantly more money. I think this could be a real shot in the arm for the national parties and it would be a further chipping away of the McCain-Feingold law."
"Money is fungible in American politics," Toner added. "Any change in the campaign finance law that allows additional funds to be raised by parties for specified purposes necessarily frees up funds to be spent electing candidates."
The ability of parties to raise huge sums could help them retake power back from super PACs and politically active nonprofits, which have emerged as major players in national politics in the wake of the Supreme Court's Citizens United decision in 2010.
Critics of the provision say it will transport national politics back to the scandal-ridden '90s when soft money flowed freely. "This provision would open a door to a new avenue of corruption, and is one more indication that selling American democracy is a bipartisan affair," says Josh Orton, political director of Progressives United, the advocacy group founded by former Sen. Russ Feingold (D-Wis.).
It's unclear who inserted the provision into the spending bill. The office of Senate Minority Leader Mitch McConnell (R-Ky.), an avid foe of campaign finance regulations, denied involvement. But the provision appears to stand a good chance of surviving. Despite vowing to block an earlier attempt by McConnell to cut down campaign money limits, Senate Majority Leader Harry Reid (D-Nev.) told Politico that he will not block the current provision. "If President Obama signs this law into effect, assuming it passes, he will be joining with Sen. Reid in owning this legislation and the national scandals that are bound to follow," Wertheimer says.