Kochtopus Cato Institute Power Grab: A Historical Perspective

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A new chapter is being added to the ongoing Kochtopus saga.ย On March 1 theย Washington Post,ย in aย storyย sure to fill the airwaves for the weeks and months to come, revealed the Kochtopus is suing the Cato Institute for control of the recently deceased and former Cato Chairmanย William Niskanen‘sย ownership share in theย think-tank.

The Koch Empire was recentlyย outed by DeSmogBlogย as a key seed funder of the climate change denier think-tank, the Heartland Institute. Heartland’s internal documents were recently leaked to DeSmogBlog (see โ€œHeartland Exposedโ€).ย 

Billionaire oil baron Charles Koch is now waging war against another entity that was created with Koch seed money decades ago:ย the Cato Institute.

Theย Postย explainedย succinctly:

At the heart of the dispute is the fate of the shares owned by Niskanen, who died in October at age 78 of complications from a stroke. The Koch brothers believe that they have the option to buy Niskanenโ€™s shares, while Cato officials believe that the shares belong to Niskanenโ€™s widow, Kathryn Washburn, according to theย complaint.

Cato’s Pat Michaelsย is a key player in the world of climate change denial, โ€œsowing the seeds of doubtโ€ on human-caused climateย change.

That said, Cato has also stood up for key libertarian principles in the past that do not fit a partisan framework. Among them: protection of civil liberties, opposition to imperialism, opposition to the war on drugs, opposition to the militarization of domestic law enforcement agencies, and support forย gay rights, to nameย several.

A brief overview of the key movers and shakers behind Cato’s ascendancy is important to understand the rise of the Koch Empire and the split between the faux-libertarians and the trueย libertarians.

Murray Rothbard, the Kochs, the Austrian School and the Rise of Catoย ย 

It all began nearly 40 years ago in Wichita, Kansas, corporate headquarters of Koch Industries, now and then the centerpiece of the potent Kochtopus machine.ย The Cato Institute wasย founded in 1974 and originally fundedย by Charles Koch, of Koch Industriesย fameย andย fortune.

The name โ€œCato Instituteโ€ came from โ€œCato’s Letters,โ€ which Wikipedia explains were โ€œessays condemning tyranny and advancing principles of freedom of conscience and freedom of speech, [and] were a main vehicle for spreading the concepts that had been developed by [political theorist] John Locke.โ€ย 

Often left out of the Cato historical discussion, though, is another key libertarian economist, political theorist, historian and former good friend of Charles Koch:ย Murray Rothbard.

Rothbard was a key thinker and writer advocating for the Austrian School of Economics, a school of thought current Republican Party Presidential candidate, Rep.ย Ron Paulย (TX), also embraces.ย 

Rothbardย was also one of the co-founders of the Cato Institute, as explained in a 2008 article writtenย by David Gordon of the Ludwig Von Misesย Institute.

The Austrian School’s ideology is best represented today by a think-tank that gets little to no play in the mainstream media, the Ludwig Von Mises Institute, currently chaired by former Paulย congressional chief of staff from 1978 to 1982, Lew Rockwell, and named after Austrian School economistย Ludwig Von Mises, who was Rothbard’s professor.

The Von Mises Institute, it turns out, ended up filling the void left behind when Rothbard was strong-armed out of the Cato Institute by Charles Koch in the earlyย 1980’s.

Gordon explained Rothbard’s departure,ย writing,

He thought that Cato’s primary mission should be scholarship rather than political campaigns and attempts to secure audiences with the high and mighty in Washington. His antagonists emphaticallyย disagreed

โ€ฆKoch could not tolerate what they deemed blatant disloyalty. Even though Rothbard was the leading theorist of libertarianism and the Cato Institute had been established to promote his views, they expected him to obey the orders sent down from onย high.

(Snip)

After Rothbard departed from Cato, he joined forces with the Mises Institute, established in 1982 by Lew Rockwell. The new group was a standing reproach to Kochโ€ฆsince its consistent defense, encouragement, and development of a Rothbardian program were exactly the program that the Cato Institute had betrayed. The Koch forces endeavored to strangle the new group in itsย cradle.

The main difference between the Rothbardian crowd and the Koch crowd boils down to support for a pure free market vs. what the Rothbardian crowd calls a โ€œcorporatistโ€ย market.

In a 1983 essay, not long after the Cato falling out, Rothbard penned a short essayย titled, โ€œThe Business-Government Alliance,โ€ in which heย wrote,

The push for the new corporate state was generated by an alliance between corporatist big-business groups and technocratic intellectuals, eager to help run and to apologize for the new system, which promised them a far plusher niche than did a freely competitiveย economy.

Perhaps it is no surprise after writing articles with passages like these that Rothbard and the Austrians were exiled from the Kochtopusย network.

The term โ€œKochtopusโ€ was coined by a Rothbard-inspired libertarian, Samuel Edward Konkin III, author of the New Libertarian Manifesto, published inย 1975.ย ย 

10 Years Later, Charles Koch Departsย Cato

Rothbard’s early 1980’s exile from Cato meant that the Koch Brothers were running the show there, alongside Edward Crane, the current President and CEO.

When 1991 rolled around, though, Charles Koch jumped ship from Cato and started investing his money elsewhere. Journalist Dave Weigel explained,

โ€ฆ[I]n 1991โ€ฆCharles Koch walkedย away.ย 

โ€œI have strong ideas,โ€ Kochโ€ฆ[said in an interview]. โ€œI want to see things go in a certain direction, and Crane has strong ideas. I concluded, why argue with Ed? Rather than try to modify his strategy, just go do my own thing, and wish himย well.โ€

That was what happened. Koch took his money to other foundations. Crane kept building Cato. Contact was severed; in a 2010 interview, Crane told me that he never quite understood why Kochย bolted.

Twenty years later, Charles Koch and his brother David are resurfacing in the Cato world, but the conflict ragesย on.ย 

The Kochtopus Sues Cato in a โ€œPowerย Grabโ€

In recent years, the Kochtopus is most famous for its funding of theย astroturf Tea Party machine Americans for Prosperityย (AFP), a tour de force in the world of climate change denial, union-busting, and in the sphere of electoral politics.

The common theme to its AFP front group efforts: sheer corporatism, with a well-lubed GOP machine through which to push its corporate agenda at both the federal- andย state-level.

Having funded and turned AFP into a powerful national political animal, the Kochtopus Cato power grab was a logicalย progression.ย 

โ€œMr. Koch’s actions in Kansas court yesterday represent an effort by him to transform Cato from an independent, nonpartisan research organization into a political entity that might better support his partisan agenda,โ€ said Crane of theย lawsuit.

Crane went further this week, telling the New York Times:

โ€œThis is an effort by the Kochs to turn the Cato Institute into some sort of auxiliary for the G.O.P.,โ€ said Edward H. Crane, who is president of Cato and co-founded it with Charles Koch. โ€œWhat he is doing now is detrimental to Cato, itโ€™s detrimental to Koch Industries, itโ€™s detrimental to the libertarianย movement.โ€

There is some irony in the fact that Rothbard left Cato because he felt Crane and Koch had abandoned true Austrian School of Economics libertarian principles, and now Koch is taking it to a new extreme, desiring to transform Cato into a mere tentacle of the AFP politicalย machine.

Equally ironic: AFP, a key piece of the Tea Party โ€œmovement,โ€ skyrocketed in popularity after it skillfully co-opted the originalย Ron Paul-led grassroots Tea Party movement.

Coming full circle, it could be said that Rothbard has been vindicated afterย all.

Cato Employees Peeved and Ready toย Fight

Cato will not go down without its guns blazing. Many high-ranking employees other than Crane have come out with strong statements against the Koch maneuver. A โ€œSave Catoโ€ Facebook and Twitter account have also beenย created.

Robert A. Levy, chairman of Catoโ€™s board, said in an interview with the New York Times:

โ€œWe canโ€™t be perceived as a mouthpiece of special interests. The Cato Institute as we know it would beย destroyed.โ€

โ€œWe already have major contributors who will say we are not contributing another dollar until we are sure that the Kochs are not calling the shots,โ€ Mr. Levy said. โ€œIt is a fund-raisingย nightmare.โ€

Gene Healy, a Cato Vice President, stated in an open letter,

โ€œโ€ฆI canโ€™t begin to understand why Charles and David Koch have chosen a course of action that, if successful, would carelessly, pointlessly, and grievously injure the cause I thought they were fightingย for.โ€

Jonathan Blanks, a Cato Research Assistant, wrote on his blog,

โ€œโ€ฆthe Kochs’ actions here have demonstrated they have no interest in maintaining it. Cato as a name will be irreparably damagedโ€ฆand they’ll have to start poaching Right-wing shops to fill the vacancies left by the resignations of people who refuse to associate themselves with this naked powerย grab.โ€

Julian Sanchez, a Cato Research Fellow, went so far as to write a โ€œPreresignation Letterโ€ on his website, saying that if the Kochtopus wins the lawsuit, it’s โ€œgame overโ€ for him at Cato. He stated,

โ€œI hereby tender my pre-resignation from Cato, effective if and when the Kochs take command. Iโ€™ll be sad to go, if it comes to that, but sadder to see a proud institution lose itsย autonomy.โ€

Stay tuned as the battle ragesย on.

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Steve Horn is the owner of the consultancy Horn Communications & Research Services, which provides public relations, content writing, and investigative research work products to a wide range of nonprofit and for-profit clients across the world. He is an investigative reporter on the climate beat for over a decade and former Research Fellow for DeSmog.

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