The Koch brothers’ main political arm intends to spend more than $125 million this year on an aggressive ground, air and data operation benefiting conservatives, according to a memo distributed to major donors and sources familiar with the group.
The projected budget for Americans for Prosperity would be unprecedented for a private political group in a midterm, and would likely rival even the spending of the Republican and Democratic parties’ congressional campaign arms.
The group has already spent more than $35 million on ads attacking vulnerable Democrats in key Senate and House races, according to sources, including Sens. Kay Hagan of North Carolina, Mary Landrieu of Louisiana and Mark Pryor of Arkansas. The $125 million projection comes from a memo obtained by POLITICO labeled as a “Confidential Investor Update” provided to major donors in March, but a source familiar with AFP called the figure a “very conservative estimate. We’re on track for more than that.”
An AFP spokesman declined to comment on its 2014 budget, but did not dispute the authenticity of the memo. It details the group’s efforts to beef up its field operation in key counties, and to deploy a new “closed-loop data system in which volunteer and membership information is automatically updated” for access by phone bankers and canvassers roaming neighborhoods with tablets.
The plans — combined with those of other groups in the sprawling political operation affiliated with the billionaire industrialists Charles and David Koch — more closely resemble the traditional functions of a national political party than a network of private nonprofit groups.
The goal of the network is a long-term movement to expand the political playing field for conservatives — both into new states and into non-traditional demographics including millennial, Hispanic and low-income voters.
AFP’s $125-million projected 2014 budget alone would also exceed the total 2012 fundraising hauls of the Democratic Congressional Campaign Committee, National Republican Congressional Committee, Democratic Senatorial Campaign Committee or the National Republican Senatorial Committee.
As the Koch network prepares to gather its operatives and donors next month for an annual summer fundraising seminar, it’s implementing a series of adjustments based on lessons learned from 2012. In the run-up to that election, the network spent more than $400 million only to watch President Barack Obama win reelection and his Democratic allies retain the Senate.
Some megadonors wondered what their cash bought, and privately suggested they might look to spend their money elsewhere. The Koch operation undertook a forensic analysis of what went wrong designed partly to prove to donors that it could be trusted with their political donations going forward.
AFP identified “three key areas where the Left outperformed our efforts in the field,” according to the memo, which conceded they were “tough and painful lessons — but it’s important to remember that AFP is run like a business”:
• “Our data system was insufficient” and failed to quickly process information fed into it by thousands of canvassers and phone bankers contacting voters, causing “delays in updates, leading to some data inaccuracies during a critical phase of our organizing efforts.”
• “We were outmanned” by the left generally and Obama’s campaign, specifically, which, the memo notes “had 770 field staff on the ground” in Florida alone. By contrast, the memo notes that AFP and “other network partners” had about only 300 total field staff nationwide.
• “The Left had a superior messaging strategy and implementation that effectively identified their demographic targets, determined which issues resonated best with which groups, and delivered specific messages over TV, radio and online ads for those audiences.”
To remedy the messaging disadvantage, AFP developed “a sophisticated new media message-testing strategy to target specific demographics in specific locations we need to move on our issues,” according to the memo.
The resulting advertisements increasingly have used personal stories, often told by regular folks looking directly into the camera, to critique Democratic policies like Obamacare, and the politicians who support them. They’re part of a broader effort to project a kinder, gentler tone in espousing libertarian-infused government-slashing policies that sometimes risk coming across as coldhearted.
“If the presidential election told us anything, it’s that Americans place a great importance on taking care of those in need and avoiding harm to the weak,” reads the AFP memo.
Echoing Charles Koch’s opposition to the minimum wage, it asserts that free market, low-regulation policies “create the greatest levels of prosperity and opportunity for all Americans, especially for society’s poorest and most vulnerable.” Yet, the memo says, “we consistently see that Americans in general are concerned that free-market policy — and its advocates — benefit the rich and powerful more than the most vulnerable of society. …We must correct this misconception.”
The major contributors to the Koch network groups tend to skew much whiter and older than the population the groups are trying to reach. And while the emcee of the Koch donor seminars, Kevin Gentry, in April emailed a group of fundraisers for allied organizations that “we want our donors to be younger,” he added that “just doesn’t track with reality. So if we try to ‘force’ our donors to become younger – i.e., focusing our donor acquisition more at youth cohorts, we will likely have less efficient and less economically profitable fundraising.”
The Kochs’ major donors have shaken off any misgivings and returned in force, according to an operative who works with various groups in the Koch network. “They have been big with the early money and it’s obviously still flowing,” said the operative. “They’re up in all these states and their map keeps expanding.”
A Koch-backed nonprofit called the LIBRE Initiative — which is focused on educating “Hispanic communities about economic freedom principles and values such as free enterprise, limited government, and personal responsibility” — is hiring field directors in Colorado and Texas, as well as a coalitions coordinator and a “West Coast youth projects manager.”
Likewise, the Koch-backed youth advocacy group Generation Opportunity is looking to hire a slew of employees across the country — including state directors, events directors, digital staffers and volunteer coordinators — partly to “engag(e) the millennial generation to advance free market principles by growing grassroots networks that will supply advocates and local community volunteers.”
Plus, recruiting for data developers, engineers and analysts is brisk at both Themis, a nonprofit that supports the back-end data operations of Koch network groups, and i360, a for-profit company linked to Themis that provides similar services to Republican campaigns and party committees.
Perhaps the most significant organizational shift in Koch World is the increasing footprint of Freedom Partners, a nonprofit that served as a hub for other network groups in 2012, when it doled out $236 million to an array of conservative nonprofits. It’s now expanding its own operations, airing $2 million worth of ads last month targeting Democratic senators on Obamacare — a total expected to rise as the general election approaches. In the past eight months, Freedom Partners, which is technically a business league that receives dues of at least $100,000 from members, has doubled its staff. It now counts more than 100 employees and is on the market for a vice president of strategic communications to handle rapid response and a strategist to assist with its health care campaign.
“We’re really looking long term — beyond any given election cycle,” said Freedom Partners spokesman James Davis. “We’re focused on building out our capabilities to educate Americans on the benefits of a free society.”
Conservatives operatives are loath to publicly challenge the Koch network, because of its ability to steer huge amounts of funding. But some have complained privately that groups like Freedom Partners, AFP and others in the network aren’t having as much impact as their resources should allow because of their unwillingness in ads and other communications to explicitly urge the election of Republicans or the defeat of Democrats.
Instead, the groups, which cast themselves as nonpartisan, focus their ads on issue critiques, though they can sometimes seem just as hard hitting as the most aggressive negative ads.
An exception came in 2012, when AFP expressly opposed Obama. That year, the two nonprofits that constitute AFP, neither of which discloses its donors, spent $149 million — AFP’s biggest spending year since it was created with funding from the Kochs in 2004. But the source familiar with AFP suggested the $125 million 2014 budget included only the arm of AFP registered under section 501(c)4 of the Tax Code, meaning the group’s spending total could be far higher if the spending of the 501(c)3 Americans for Prosperity Foundation is taken into account.
According to tax filings, the two arms of AFP combined to spend a comparatively paltry $39 million in 2010 when the outfits were credited with helping Republicans harness the tea party protests to recapture the House of Representatives.
Mostly, though, the AFP donor memo touts the group’s role in recent conservative policy victories in five “model states” — Arkansas, Indiana, Kansas, North Carolina and Wisconsin — including enacting tax cuts, fighting Obamacare and restricting union power. This year, AFP is working to expand its program into eight new “pathway states,” including Arizona, Georgia, Michigan, Nebraska, Oklahoma, South Carolina, Tennessee and Texas, according to the memo.
Last year, AFP added new full-time chapters in South Carolina, Tennessee, Alaska, Louisiana and West Virginia — the latter three of which are home to competitive 2014 Senate races — and the memo boasts “we’re growing our full-time field presence in key counties and deploying a refined part-time staff infrastructure to optimize efficiency, reduce costs, and grow AFP’s volunteer base.”
But it makes clear, “AFP’s most significant near-term opportunity to advance policy is on the ground in the states, particularly those where the citizens, Legislatures and Governors are more supportive of free market issues.” The state battles, it concludes, have “a ‘ripple effect,’ influencing broader national policy.”