Koch donors embrace Trump policies, starting with tax cut, if not his persona

Fredreka Schouten | USA TODAY

INDIAN WELLS, Calif. — The wealthy donors in the conservative network founded by the billionaire Koch brothers may not be fans of President Trump’s Twitter feed, but they are embracing many of the policies enacted during his first year in office.

And they are preparing to spend heavily this year to preserve the Republican Party’s hold on Congress amid worries that Trump’s unpredictable behavior will distract from the GOP’s achievements.

“If I had gone into a coma two years ago and woke up today and just read what had been accomplished, I would have been shocked and thrilled,” said Tom Sheperd, a Cincinnati businessman who was among the 550 donors who gathered at the Kochs’ private retreat in the California desert.

But Sheperd said Trump “isn’t helping get many Republicans elected.”

“I think he’s doing more harm than good,” he said, “because he’s distracting people from the good work that is happening either because of him or in spite of him.”

During the weekend gathering, Koch aides reiterated plans to spend a record $400 million on politics and policy to shape November’s midterm election, including $20 million to sell the $1.5 trillion Republican tax overhaul in the face of voter skepticism.

Koch operatives and donors alike acknowledged that Republicans face a difficult path in November.

Democrats need to nab at least 24 seats from the Republicans to seize control of the House. And Republicans face the headwinds of history: The party of a first-term president typically loses ground in midterm congressional elections.

Republican strategists also have sounded alarms about Trump’s low approval ratings and a string of Democratic successes, including the party capturing a Wisconsin state Senate seat this month in a rural district that Trump won by 17 percentage points in 2016.

On Monday, Tim Phillips, president of the network’s main political group Americans for Prosperity, warned that 80 House seats could be in play in November as GOP copes with a wave retirements in competitive districts. He and the group’s CEO Emily Seidel implored donors to give early to help pummel vulnerable House and Senate incumbents on the airwaves in the months ahead and to boost Republican gubernatorial candidates in key states, such as Nevada.

In the Senate, Koch groups already have spent $3 million on advertising to target first-term Democratic Sen. Tammy Baldwin of Wisconsin. Other early Senate targets: Missouri Sen. Claire McCaskill, Indiana Sen. Joe Donnelly and Florida Sen. Bill Nelson.

“We’ve never faced a challenge like this year brings,” Seidel told a ballroom of the elite political financiers assembled at a luxury resort here to plot strategy. “Folks, let’s fight and let’s fight now.”

The network is the biggest outside force in Republican politics and counts 700 donors who contribute at least $100,000 annually to groups in the network. Many contribute millions more to the Kochs’ political operations.

Tough election

“It is going to be a tough election,” acknowledgedArt Pope, a North Carolina retail magnate and longtime Koch donor who helped orchestrate Republican majorities in his state’s legislative chambers during the Tea Party wave of 2010.

But Pope, who did not back Trump’s candidacy, suggested that voters might view individual Republican candidates differently than their party’s unorthodox leader. “He’s obviously a very unique historic president,” Pope said of Trump, but “he’s not the Republican Party. He definitely has his own brand, and the Republicans have their own brand.”

Pope and other Koch donors who did not back Trump the candidate nonetheless heaped praise on his policy moves as president.

John DeBlasio, who runs a private-equity firm in Chicago and backed Ohio Gov. John Kasich’s candidacy in the 2016 election, singled out the tax plan and Trump’s efforts to roll back federal regulations as signature achievements.

“If you just tuned out Trump and his voice and his persona, which is hard to do … the policies and the achievements have been excellent,” DeBlasio said.

Charles Koch and David Koch, the billionaire industrialists who oversee the influential donor network, declined to support Trump in the 2016 election. At one point, Charles Koch compared a suggestion that Trump would require Muslims to register to the policies of Nazi Germany.

But a year into his presidency, the Kochs have arrived at uneasy alliance with the administration. During the weekend conclave, Koch operatives repeatedly praised the tax overhaul, which grants a 40% permanent tax cut to businesses.

Phillips called its passage a “transformative event.” On Sunday night, Koch operatives circulated a statement from Ronnie Cameron, a poultry industry executive and Koch donor, announcing that the 5,700 hourly employees at his Arkansas-based Mountaire Corp. would receive one-time bonuses ranging from $500 to $1,000 in February as a result of the tax law.

But Koch officials have disagreed — politely — with other aspects of Trump’s policies, or lowered their ambitions in the hopes of finding common ground with the president. For instance, Koch operatives spent years at the federal level pushing for a broad range of legislative changes to the criminal-justice system, including reducing sentences for non-violent offenders. Now, network officials are focused on a more narrow range of changes with the White House centered on helping prisoners reenter society and reducing the rates of recidivism. (Network groups still are working broadly on criminal justice issues through philanthropic efforts and with state policymakers.)

Mark Holden, a top Koch lieutenant, recently joined a group of governors and activists who met with President Trump and his law-and-order Attorney General Jeff Sessions, to discuss the prison reentry proposals.

Sessions is “fully on board with prison reform,” Holden told reporters over the weekend. “We are going to meet people where they are.”

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