A raucous rally outside the conference resulted in 25 arrests. The Kochs fight back

RANCHO MIRAGE, Calif. – Faced with an avalanche of bad publicity after years of funding conservative causes in relative anonymity, the billionaire industrialist Koch brothers, Charles and David, are fighting back.

They’ve hired a team of PR pros with experience working for top Republicans including Sarah Palin and Arnold Schwarzenegger to quietly engage reporters to try to shape their Koch coverage, and commissioned sophisticated polling to monitor any collateral damage to the image of their company, Koch Industries.


At the same time, through their high-priced lawyers, private security detail and influential allies in conservative politics and media, the Kochs have played hard ball with critics and suspected foes.

Young environmental activists who pranked them have been hit with a lawsuit seeking more than $100,000 in damages, and the leak of an internal document describing their political activities resulted in an investigation – complete with document analysis and interviews of suspects – that eventually identified the mole.

Both their new openness and their aggressive – and sometimes secretive – tactics were on display before and during the Kochs’ closed-door, invitation-only four-day annual winter meeting of conservative donors and leaders that concluded Tuesday with a breakfast at the pricey resort that hosted it here in the Palm Springs suburbs.

On the one hand, the Kochs asked a handful of participants to talk to POLITICO about the conference, marking the first time the company has waived the strict confidentiality rules surrounding its donor meetings, which have been taking place twice a year since 2003, but had attracted almost no attention until this year’s.

“You know why they’re being scrutinized, don’t you?” asked Herman Cain, a former pizza company CEO and long-shot 2012 GOP presidential candidate who has attended four Koch conferences, including the one that concluded today.

“Because they’re not liberal. That’s all that’s about,” said Cain.

And, in another shift, Koch’s PR representatives reached out to reporters, largely in response to a raucous rally outside the resort gates that vilified the Kochs as personifying a corrupt political system – and that resulted in the arrests of 25 proteste rs.

On the other hand, the Kochs retained a heavy private security detail, which tracked resort guests deemed “suspicious,” erected a blockade Saturday to block a documentary camera crew from filming arriving guests, and removed a POLITICO reporter from the resort café under threat of arrest.

The pushback began in earnest last summer, when the brothers, longtime supporters of libertarian think tanks, started coming under intense scrutiny for their role in helping start and fund some of the deepest-pocketed groups involved in organizing the tea party movement, and for steering cash towards efforts to target President Barack Obama, his health care overhaul, and congressional Democrats in the run-up to the 2010 election.

Democrats – led by Obama, his political adviser David Axelrod and Rep. Chris Van Hollen (D-Md.) – singled out political spending by non-profit groups funded by the Koch brothers, namely Americans for Prosperity, as a campaign issue.

In media appearances, Van Hollen even spelled out the previously little-known brothers’ last name, saying on Al Hunt’s Bloomberg News television show that “Americans for Prosperity which are the Koch Industries, k-o-c-h (are) like the third wealthiest people in the country,” while in a background conference call with reporters a senior administration official suggested Koch Industries might be avoiding corporate taxes – prompting outrage from the Kochs' allies and calls for an investigation from GOP Senators, who contended the White House may have illegally accessed the company’s tax information.

The Koch brothers, who are worth a reported $21.5 billion each, commissioned polls to test whether public opinion about their privately owned oil, chemical and consumer products company changed in the midst of the attacks.

Personally, the brothers and their executives were rattled by the scrutiny, according to a conservative source who has closely tracked the Kochs’ philanthropy and their meetings, but who contends the Kochs largely brought the heightened scrutiny on themselves.

“They somehow thought that they could runs tens of millions of dollars in ads, but fly under the radar screen and that nobody was going to find out,” said the source. “So they’re scrambling now because they weren’t nearly as prepared for the fallout as they should have been.”

The source requested anonymity to discuss the Kochs without provoking the ire of the brothers, who – some in conservative circles say – are known for retaliating against allies and former allies deemed insufficiently loyal. For instance, the source cited the company’s investigation to determine who leaked a packet of Koch literature that included a list of the attendees of the previous donor meeting, held in June in Aspen, Colo., and an invitation from Charles Koch inviting potential participants to the Rancho Mirage meeting.

The packet, posted on the White House-allied ThinkProgress blog in October, included the dates and location of the recently concluded conference, allowing critics to plan demonstrations. The environmental group Greenpeace on Friday flew a blimp over Rancho Mirage emblazoned with stylized portraits of David and Charles Koch bracketing the words “Koch Brothers; Dirty Money,” while Sunday’s rally was organized by the liberal watchdog group Common Cause, in conjunction with labor unions and the civil disobedience outfit Ruckus Society.

“I don’t want to call it a witch hunt, but it was a pretty intense inside intelligence-type operation that lasted a week,” the source said of the Kochs’ search for the leaker, explaining that Koch officials used clues in the invitation ThinkProgress obtained to “narrow it down to a few (invitees) and went and asked them.” The source said the Kochs ultimately found the source of the leak.

The Kochs also deployed a forceful response in late December against an anonymous group of pranksters who had issued a fake press release purporting to be from the company – and set up a corresponding website –implying Koch Industries had changed its skeptical stance towards climate change, and would cease funding organizations that worked to debunk climate science and oppose legislation to limit carbon emissions.

Koch Industries sued the pranksters, who called themselves Youth for Climate Truth, alleging the prank harmed Koch’s “business and reputation,” as well as its “goodwill … in the minds of the public” – and seeking $100,000 and other damages.

Deepak Gupta, a lawyer for the watchdog group Public Citizen, which is defending the climate group, called the Koch suit “a very aggressive move. It’s sort of like using a bazooka to get at a fly.” And Public Citizen’s filings suggested it may have backfired, furthering the pranksters goal of “drawing additional media attention to Koch’s political activities.”

But Koch’s top lawyer Mark Holden defended the lawsuit, telling POLITICO “intentional theft and trademark infringement may be just a prank to some people, but we take it seriously.”

The Kochs also took the Democratic attacks seriously, assembling a crisis communication team including consultants Michael Goldfarb – a former editor at the conservative Weekly Standard who worked on Arizona Sen. John McCain’s 2008 GOP presidential campaign and now works at firm where he represents McCain’s running mate Palin among other clients – and Ron Bonjean, a veteran GOP Capitol Hill press hand and occasional pundit who was a top adviser to Sens. Jon Kyl of Arizona, Trent Lott of Mississippi and former House Speaker Denny Hastert of Illinois.

A new media consultant who worked on the McCain campaign, Soren Dayton, was hired last year to handle corporate issues, while Julie Soderlund, a veteran California GOP operative who worked for Schwarzenegger and the failed California GOP Senate campaign of Carly Fiorina, was retained last week to help with an anticipated barrage of media scrutiny of the conference and the protests, which never quite materialized.

A few days before Bonjean signed his contract with the Kochs, he posted an item on POLITICO’s Arena attacking a New Yorker article linking the Kochs’ political philanthropy to their business interests as “a hit piece without balance designed as a foundation for the professional left-wing community to launch its attacks.”

Bonjean’s post, which made no mention of any affiliation or potential affiliation with the Kochs, asserted “the Koch brothers have lived the essence of the American Dream by building up its family-owned businesses that now employ thousands of hardworking Americans.”

Bonjean, Goldfarb and Soderlund traveled to Rancho Mirage, where Goldfarb and Soderlund moved mostly unnoticed through the crowd of protesters Sunday, and could be seen talking to representatives from the relatively few media outlets on the scene. Though they were not quoted in stories, much of the national coverage of the conclave counterbalanced the protesters’ charges either by quoting past meeting attendees defending the conference as an exchange of policy ideas, or by noting that major liberal donors like billionaire financier George Soros attend similar meetings to dole out funds – and that, in fact, Common Cause has received funding from Soros.

Longtime Koch hand Nancy Pfotenhauer, who also was an adviser to the McCain campaign, issued carefully worded statements to the Los Angeles Times (meeting attendees are “some of America’s greatest philanthropists and job creators … who share a common belief that the current level of government spending in our nation is simply unsustainable”), MSNBC.com (the goal is “to discuss solutions to our most pressing issues and strategies to promote policies that will help grow our economy, foster free enterprise and create American jobs”) and other outlets.

Other high-profile Koch backers went on the attack against the protesters and the media, alleging that the occasionally vituperative rhetoric among Sunday’s crowd would have drawn sweeping media condemnation had they occurred at tea party rallies, which liberals alleged were rife with widespread extremist, homophobic and racist rhetoric.

During Sunday’s demonstration, Koch and resort security discouraged curious donors from leaving the resort buildings to watch protesters from the grounds, though a photo posted on a Common Cause blog with the headline “We got their attention” appears to show David Koch watching the protest from a resort balcony. And other participants watched from a patio behind a heavily guarded gate, as protesters pressed toward baton-wielding sheriff’s deputies in riot helmets guarding the entrance, waving signs reading “Koch Kills” and “Uncloak the Kochs,” and chanting “David and Charles Koch: Your corporate greed is making us broke.”

“It’s always disappointing to see these really vitriolic personal attacks in America from the left, and you saw it out there,” Tim Phillips, president of Americans for Prosperity, and an attendee at the conference, told POLITICO in a telephone interview during a break between conference sessions Monday.

Conservative Washington Post blogger Jennifer Rubin posted a photo of one protester’s hand-made sign featuring a swastika.

And various conservative media outlets and journalists have also assailed the Kochs’ critics, including several who have received funding, honoraria or other payments from Koch-linked non-profits, or donors who attend their conferences – including Reason magazine, Wall Street Journal editorial board member Stephen Moore, and the Washington Examiner’s Tim Carney.

Carney, who spoke on Sunday at the conference, and other conservative journalists came in for criticism after the leaked memo revealed that they attended last year’s Koch meeting in Aspen – along with major GOP donor Phil Anschutz, who owns the Washington Examiner.

Afterwards, Carney voluntarily disclosed that he has received small payments from Koch-affiliated non-profits over the years for speeches, editing and mentoring. He told POLITICO Saturday that he considers it healthy for there to be scrutiny of people across the political spectrum “who spend money and get involved in politics – which is what’s going on in Palm Springs.”

But he said the way the White House and ThinkProgress have highlighted the Kochs’ activity has “has been silly and misleading and probably at times dishonest.”

Inside the resort at the beginning of the conference, “there was an atmosphere almost of paranoia,” said Gary Ferdman, a Common Cause official.

Ferdman had reservations at the resort and stayed there Thursday and Friday night. He said he was told Saturday that his lunch reservations at the resort restaurant had been canceled and was urged to check out and leave promptly by a member of Koch’s large security detail.

Security manned every doorway and stairwell near the ballrooms where Koch events were held, and threatened to jail this POLITICO reporter while he waited in line at the resort’s café, after he stopped by a Koch conference registration table.

The resort grounds were “closed for a private function,” the resort’s head of security, James Foster told POLITICO, ushering the reporter outside, where private security guards, wearing gold lapel pins bearing Koch’s “K” logo, threatened “a citizen’s arrest” and a “night in the Riverside County jail” if the reporter continued asking questions and taking photographs.