Dark Money: How a Secretive Group of Billionaires is Trying to Buy Political Control in the US, by Jane Mayer, Scribe, 464 pp, £9.99, ISBN: 978-1925228847
It is often claimed that statisticians lost the US presidential election of 2016 because their public opinion polling was faulty. But recent analysis shows that the opposite is true: statisticians helped win the election for Trump, but only the ones who abandoned a demographic approach (dividing up the electorate into ostensibly homogenous groups) in favour of using a psychometric model to fine-tune persuasion at a granular level. Since everything we do online leaves digital traces, the internet provides huge banks of personal information, especially big data gleaned from Facebook. Data analytics opens the way to micro-marketing in the political arena, tailoring political messages to voters’ personal characteristics and targeting those messages with astounding accuracy.
Trump regularly spewed out anti-science sentiments in his campaign but the irony is that his team was able to apply a highly scientific approach to the gentle art of persuasion. The data-mining company Cambridge Analytica, after some success in the Brexit campaign, ramped up its approach to “weaponising” personal data for Trump, ultimately outperforming the Democrats’ demographics research. As the struggle with Clinton peaked, Trump’s team was blasting out 175,000 variations of his core arguments, mostly via Facebook, tweaking each message with tiny changes as needed to fit the end user’s profile. These micro-targeting techniques were used not only to get out the vote for Trump but also for vote suppression, discouraging wavering Clinton supporters by using so-called Facebook “dark posts”.
Jane Mayer’s exploration of “dark money” in politics ends before Trump won the election but she sheds further light on the use of data-mining by a major libertarian movement to win the mid-term elections of 2014. The evolution of this libertarian movement (which by 2015 had not yet mended fences with Trump) forms the core of this brilliant and chilling book. “Libertarianism” has to be understood here in the peculiarly American sense of unbridled capitalism, having nothing in common with the European tradition of libertarian socialism or anarchism except for a deep suspicion of state structures. Charles and David Koch, owners of a conglomerate that sells hundreds of products including gasoline, jet fuel and coal, realised that the internet had transformed the business of winning elections into a high-tech competition for access to relevant big data. Detailed portraits of 190 million active voters were quickly assembled, backed by enormous computer power. The 2014 effort was deemed a phenomenal success, producing Republican control of both houses of Congress and thus hobbling Obama’s policy ambitions. Republicans also won the elections at state level, gaining all the power needed locally to implement voter suppression tactics, including redrawing electoral boundaries. The new technology of data analytics allowed the Koch movement in effect to hollow out the Republican Party, undermine its traditional conservative values with a far-right agenda and build a new party in all but name. The mid-term elections were a trial run for the next item on the brothers’ shopping list: the White House in 2016.
The secretive influence the Koch brothers exert over American politics began when they became ideologically aligned with the John Birch Society in the 1960s, with its heady brew of anti-communism and the conviction that America needed a range of radical “government-slashing” measures. Jane Mayer began researching the little-known Koch phenomenon for The New Yorker ten years ago and developed her research since then into a splendid book of 450 pages, a tenth of which is footnotes. In fascinating ways, it deepens our understanding of how power is maintained by a few in a country generally seen as a paragon of electoral integrity. At the end of this investigative masterpiece, Mayer leaves the reader alone to judge whether unbridled capitalism and democracy can coexist, especially after the Supreme Court unleashed the might of extreme wealth on enfeebled democratic structures. She highlights a quote from Louis Brandeis: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few. But we can’t have both.”
Mayer delves into the whole power ecology in which elections exist and the struggle to reshape its dominant ideology. At the centre of her narrative is the tenacious ambition of a small group of extremely wealthy families to radically transform American politics in their favour, oligarchs with views once derided by William F Buckley as “anarcho-totalitarian”. Their efforts amount to a Gramscian-style ideological project built on an integrated network inspired by Friedrich Hayek: funded “beachheads” in leading universities, think tanks, advocacy and lobbying groups, and synthetic grassroots organisations to give the movement momentum on the ground (cynically referred to by those in the know as “astroturf”). The Kochs amplified their reach by joining forces with a small group of like-minded families controlling huge fortunes to nourish a strain of ultra-conservative politics that is now becoming the new normal in Washington. As Charles Koch put it in 1976, the movement’s goal was no less than “to destroy the prevalent statist paradigm”. From about 1980, the Kochs began to pour hundreds of millions of dollars into an effort to move their political agenda by stealth from the extreme edge of the right wing of American politics to its centre. The whole project seemed to be having little impact, however, until the Obama presidency began.
Obama’s victory in 2008 was seen at first as a complete rout of the Koch movement, with Democrats not only capturing the White House but also building majorities in both houses of Congress and holding the golden trophy of nomination to the Supreme Court. Fearing that a new progressive era had begun with Obama’s win, libertarian advocates of the infallibility of free, unregulated markets saw their entire ideological movement in peril. The week of Obama’s inauguration, Charles Koch sent an impassioned letter to the 75,000 employees of Koch Industries to warn them that America faced “the greatest loss of liberty and prosperity since the 1930s”. But he wasn’t giving up. At his January 2009 summit for donors (these donor meetings had been taking place in secret since 2003), he issued one more call to his fellow billionaires to take back, and if possible take over, American politics. “If not us, who?” he asked. “If not now, when?”
Top of the Koch agenda was an insistence that any government action on climate change, which would damage Koch Industries’ fossil fuel profits, must be repulsed. Security and confidentiality were crucial to these bi-annual donor seminars, to avoid public scrutiny. At the 2009 event, for instance, white-noise-emitting loudspeakers were placed around the perimeter fence, aimed outward towards any uninvited press or public. The glue binding these publicity-shy billionaire donors (described by Forbes magazine as “the invisible rich”) together was antipathy towards government regulation and taxation that impinged on their family wealth.
This steady flow of money into political philanthropy (ironically, fully supported by tax breaks) was happening against the background of an increasingly obvious widening of the income gap between the majority in America and the top one per cent of the population. As billionaire investor Warren Buffett put it bluntly, “there’s class warfare all right, but it’s my class, the rich class, that’s making war, and we’re winning”. Paul Krugman warned that the country was being transformed into a plutocracy like Russia, where a handful of extraordinarily powerful businessmen bend the government into catering to them at the expense of everyone else. Political scientist Jeffrey Winters of Northwestern University argued that America was now a “civil oligarchy” in which an extremely wealthy minority was able to use its vastly superior economic position to produce political results that favoured its interests. Thomas Piketty warned that the inequality gap was leading to “patrimonial capitalism”, where the fortunes of those with great wealth and their inheritors would increase at a faster rate of return than the rate at which wages would grow, an inevitable dynamic that would mimic the aristocracies of old Europe.
Jane Mayer is admirably thorough on the history of the Koch brothers’ fortune (including a classic story of bitter lifelong sibling rivalry) and their early ideological formation. Both were rooted in their father’s willingness to work for both the Soviets and the Nazis. Fred Koch got involved in oil refining after World War I, first helping the Soviet Union to build the foundations of the Russian oil industry, and then assisting Hitler’s Third Reich. Koch oversaw the construction of a massive oil refinery in Hamburg, which was to prove crucial in manufacturing high-octane gasoline for fighter planes, critical to Hitler’s growing military ambitions. Not only was Fred Koch’s refinery a key part of the Nazi war machine (finally bombed out of existence by American B-17s in 1944) but he was an ardent proselytiser for the fascist work ethic he saw in Europe and Japan, contrasted with Roosevelt’s welfare state which “encouraged idleness, feeding at the public trough and dependence on government”.
One of the founding members of the John Birch Society, an arch-conservative group obsessed with uncovering secret communist plots to subvert America, Fred declared that “the coloured man looms large in the communist plan to take over America”. He believed welfare was based on a secret plot to attract rural blacks to cities where they would foment “a vicious race war”, and communists would “infiltrate the highest offices of government in the US until the President is a communist, unknown to the rest of us” (a claim that prefigures conspiracy theories circulated forty-five years later about Obama). His son Charles switched his enthusiasm to the offshoot Freedom School, which was more focused on shrinking government. The school taught a revisionist version of history, in which the South should have been allowed to secede from the Union and retain slavery as a lesser evil than the military conscription of the Civil War; the robber barons were heroes not villains; Roosevelt’s New Deal and Johnson’s War on Poverty were shameful swings towards socialism. The weak and the poor should be cared for by private charity, not government. Taxes were a form of theft and the Bill of Rights should be reduced to a single one: the right to own property.
The key influence on the movement Koch built with his brother David was the Austrian laissez-faire economist Friedrich Hayek (whose work was popularised in Readers Digest and would later become a major influence on Reagan and Thatcher). Hayek provided an intellectual foundation for the primacy of the market in human affairs, using the language of freedom and revolutionary change. The free market alone would enable people to realise their true liberty. Scholarly institutes (think tanks) should be the primary movers in a struggle with establishment intellectuals and help forge libertarian ideas into persuasive policies.
As one family researcher put it, “Charles was not going to be satisfied with being the Engels or even the Marx of the libertarian revolution. He wanted to be the Lenin.” Ultra-conservative ideas were aired on the fringes of politics in the 1970s that would become entirely mainstream among Trump supporters in 2017: the abolition of government controls on energy; no limits on campaign donations and the abolition of the Federal Elections Commission; an end to prosecution of tax evaders; no minimum wage, child labour laws or compulsory education of children; the abolition of all government healthcare programmes and all forms of welfare for the poor. Even the idea of disaffected citizens being organised into “a very big tea party” was mooted as early as 1980. Key to the movement was the range of philanthropic foundations the Kochs controlled: the Cato Institute, the Heritage Foundation, Americans for Prosperity, the Hoover Institution and several others. These cranked out research papers, press releases, op-ed columns in elite newspapers, background material for journalists and copy to be delivered on-air by right-wing celebrity presenters, thus shaping the agenda of public discourse and the framing of major issues.
The first academic beachhead to be established was in George Mason University, making it a libertarian mecca. Several new centres were described by academic critics as lobbying groups disguised as disinterested academic programmes. The economics department served as an incubator for policies of deregulation and tax cuts for the rich. To the dismay of some faculty members, students were tested at the beginning and end of each week for ideological improvement and student essays had to be run through a computer to count mentions of free-market icons Ayn Rand and Milton Friedman. By 2015, Koch was subsidising anti-tax and anti-regulation programmes in over three hundred colleges.
The ideological production line of universities and think tanks was augmented at “astroturf” level to simulate the appearance of popular outrage and impress legislators. The Tea Party seemed to spring into life spontaneously, unsullied by vested interests, a remarkable awakening of anti-government rage that spread across the country just after Obama’s inauguration. Jane Mayer has done important investigative work here too on the grassroots aspect of the libertarian onslaught that would make Obama a lame duck president a long time before his eight years were completed. Never a real mass movement, the Tea Party managed to loom large in the media when constantly framed as a mass rebellion by celebrity broadcasters Glenn Beck and Rush Limbaugh.
This was the final weapon in the arsenal of the oligarchs who found Obama threatening because he believed in using government to solve problems. Within two months of taking office, Obama was continually confronted by white protesters shouting racist slogans and waving angry placards: “Impeach Now!” and “Obama Bin Lyin’”. Members of Congress found themselves ambushed by angry, screaming citizens, some believing specious rumours about government plans for “death panels” to euthanise senior citizens. There were echoes of Fred Koch’s 1950s fear of “communist negroes”. His sons also pursued the quiet path of financing legal challenges to Obama’s healthcare legislation right up to the Supreme Court, and buying media influence. In the first two years of Obamacare, $235 million was spent on TV ads demonising the law; only $69 million on ads supporting it.
Healthcare activated the Tea Party but Obama’s environmental and energy policies were the real target of the Koch circle. If the government interfered with the free market in order to protect the planet, the potential losses for energy companies would be catastrophic. There was only one moral compass behind the plan to channel public outrage against climate change science and it was pointing towards the corporate bottom line. Thus was born the global warming denial movement, making lack of scientific certainty a central issue and framing environmental regulation as an attack on American independence. The public denunciations of climate scientist Michael Mann are well-documented, including the accusation of falsifying data. Pressure was put on Penn State University to fire him and death threats were directed at his family. The fear among environmentalists was that a chilling effect would take hold, preventing younger climate scientists from participating in public debate.
Central to this vast ideological movement was what Mayer calls “a raging river of cash” capable of carrying the whole Republican Party further to the right. The drive to end all restrictions on campaign funding was on. The Supreme Court eventually obliged in 2010, capping a string of legal manoeuvrings in lower courts funded by Betsy DeVos, now Trump’s Secretary for Education. This decision lifted any remaining political stigma attaching to the idea of wealthy families investing in politics and sent a message to them that they could now act with impunity, unshackling and spending really big money. At a Koch donor summit in 2009, $13 million was pledged. At the next summit, after the Supreme Court decision, it was $900 million. In the 2010 mid-term elections, Democrats lost control of the House of Representatives and in 2014 they lost control of the Senate. Obama managed to get re-elected but with diminishing hopes that he would be able to prevail with his core agenda: health care, gay rights, abortion, voting rights, immigration reform, gun control, labour law and the environment. In 2016 his nomination for the Supreme Court was ignored and died in the Congressional doldrums.
By early 2017, a Koch-backed “Roadmap to Repeal” had been presented to Trump and was getting the green light: a list of Obama environmental regulations the energy industry had waged a futile fight against for eight years, donating millions of dollars to politicians who vowed to block them, filing lawsuits to overturn them and hiring experts to generate reports that questioned the need for them. The emerging three-way alliance between Trump, Congress and the energy industry was the clearest sign to date of a radical shift of power in government now under one-party rule.
This book is essential reading for understanding the context of Trump’s arrival centre-stage and especially for commentators who insist that the will of the people prevails in American politics. Louis Brandeis was right. The idealistic assumption behind the myth of American exceptionalism and the health of its democracy needs serious scrutiny, aided by Jane Mayer’s research: the idea that there exists a robust public sphere in which citizens are fully informed about political issues and come together in full knowledge on election day to express their collective will. This book will also make a significant contribution to journalistic and academic research into the existence of a Deep State, a permanent power structure that is effectively able to govern with only limited reference to the consent of the governed. This substratum of power was first analysed in C Wright Mills’s classic study The Power Elite in the 1950s, which explored the social and economic interlocking of three overlapping domains: administrative and political insiders, corporate owners and directors, and those at the top of the military/security pyramid. Much has changed since then, especially in the concentration of wealth. We can only hope that Mayer will soon update Dark Money and complete a detailed picture of the power elite in the time of Trump.