Once on the outside, conservative Koch network warms to Trump

[June 27, 2017]  By James Oliphant

COLORADO SPRINGS, Colo. (Reuters) - At a glitzy weekend gathering of donors to the powerful Koch brothers' network, much of the talk was about the conservative political group's criticism of the healthcare bill moving through the U.S. Senate.

That opposition suggests billionaires Charles and David Koch, powerful players in Republican politics, remain at odds at least on some key issues with President Donald Trump, whose campaign last year they refused to back.

But beyond healthcare, the Kochs and their operatives have welcomed much of the fledgling administration's actions, including efforts to roll back federal regulations, the decision to pull out of the Paris global climate accord, a Veterans Administration reform bill and the appointment of Neil Gorsuch to the Supreme Court.

Koch officials say their network has better access to the Trump administration than they expected given past frictions, partly because former Koch operatives have been hired in key administration jobs.

“Overall, we’ve made tremendous progress on the federal level that we haven’t been able to make in the last 10 years,” said James Davis, a spokesman for Freedom Partners, a Koch-backed advocacy group.

Vice President Mike Pence has played a key role, meeting privately with Charles Koch on Friday, as well as Marc Short, a former member of the Koch network who is now Trump's point man in Congress.

Charles Koch, addressing more than 400 supporters gathered at The Broadmoor luxury resort in Colorado for the event, touted the progress the organization is making, particularly since the 2016 election.

“When I look at where we are — at the size and effectiveness of this network — I’m blown away,” he said. “I’m more optimistic now than ever.”

The Koch brothers have been a force in American politics since the 1980s. Their influence has largely been powered by a fortune centered on Koch Industries, the second-largest privately held company in the United States with annual revenues of more than $115 billion from interests in energy, chemicals and other sectors.

Both Trump and the Koch network have incentives to build warmer ties.

The Kochs could end up spending hundreds of millions to preserve the Republican majority in Congress during next year’s midterm elections. Attendees to the weekend meeting had to donate at least $100,000 to be invited.

Koch-funded groups such as Freedom Partners could also help build support among conservative activists for tax reform and other Trump administration agenda items.

MUTUAL WARINESS

During the 2016 campaign, the Kochs kept their distance from Trump. Charles Koch spoke out against Trump's proposed Muslim registry, invoking a comparison to Nazi Germany.

The network did not actively work to defeat Trump during the Republican primary. But when he secured the nomination, the group did not spend money backing him or criticizing Democratic candidate Hillary Clinton. By contrast, the Koch network spent more than $120 million in the 2012 election to defeat President Barack Obama.

For his part, Trump lumped the Kochs in with other special-interest groups, boasting that he did not need their money and that they could not influence him.

But the Koch network began showing its clout in the spring when it worked with the White House to push the House of Representatives healthcare bill in a more conservative direction.

Tim Phillips, president of Americans for Prosperity, a Koch advocacy group, teamed with Pence and Short, Trump’s legislative affairs director, to help get the measure through the House.

President Donald Trump addresses a joint news conference with Indian Prime Minister Narendra Modi in the Rose Garden of the White House in Washington, U.S., June 26, 2017. REUTERS/Kevin Lamarque

Pence is viewed as a trusted friend of the Koch network, dating to his time as a congressman.

At the meeting with Charles Koch on Friday they discussed healthcare and tax reform, Phillips and other Koch aides said.

Short is a former Pence aide and Koch alumni, having run the Koch political organization that became Freedom Partners. Stephen Ford, a speechwriter for Pence, has worked for Freedom Partners.

Koch operatives were encouraged when the White House recently cooled to the idea of a tax on imports, the so-called “border adjustment tax” advocated by House Speaker Paul Ryan.

Americans for Prosperity and Freedom Partners mounted a media and public-pressure campaign against the border tax. Phillips has met with Treasury Secretary Steven Mnuchin on the issue. Mnuchin’s chief of staff, Eli Miller, served as the Ohio director of AFP.

Mnuchin has since come out against the tax in meetings with members of Congress, Representative Mark Meadows of North Carolina said at the donor retreat.

On the veterans bill, Koch group Concerned Veterans of America was able to work with one of their own. Darin Selnick, a former senior adviser to that group, is now a top aide to Trump’s Secretary of Veterans Affairs David Shulkin.

That group is working with the White House on the more than 130 federal judicial vacancies Trump must fill, partnering with conservative legal advocate Leonard Leo, who has become a trusted Trump adviser on the issue.

Leo joined Charles Koch on stage at a donor event on Saturday night. A Koch group, Concerned Veterans of America, mounted a grassroots campaign to secure Neil Gorsuch’s confirmation to the Supreme Court.

Yet some stark policy differences remain between the Kochs and the Trump administration.

The Kochs, who are proponents of criminal justice reform, are frustrated with the Department of Justice's effort to crack down on low-level drug offenders. They also disagree with Trump's hardline immigration stance.

Asked about the Koch network’s successes, a White House aide did not expressly address the network’s goals, but said Trump “has already made tremendous progress toward making our country prosperous and safe again.”

In interviews with attendees at the donor summit, opinions on Trump were mixed, but even some critics found reason to praise the administration. Several mentioned Education Secretary Betsy DeVos, an advocate of charter schools and vouchers.

Other attendees were effusive in their praise of Trump’s actions so far.

“He's walks the walk,” said Al Hartman, CEO of a property management firm in Houston. “He's doing exactly what everyone wants done.”

(Reporting By James Oliphant; Editing by Caren Bohan and Cynthia Osterman)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.