Koch Industries, Masters of Far Right-Wing Skullduggery, Target Silicon Valley

September 10th 2019

Fortune Brainstorm 2016 ( Fortune Brainstorm TECH )

Fortune Brainstorm 2016 (Fortune Brainstorm TECH)

By Bill Berkowitz

Look out Silicon Valley, here comes Team Koch! Under the leadership of Charles Koch’s son Chase, and Jason Illian, Koch Industries -- operating under the name Koch Disruptive Technologies -- is making major inroads into Silicon Valley.

“Last year at Base Camp, the sleepaway summer gathering hosted by venerated venture firm Sequoia Capital, a surprise guest greeted the assembled entrepreneurs—Charles Koch, the chief executive officer of Wichita, Kansas-based Koch Industries Inc.,” Bloomberg’s Sarah McBride recently reported.

Since the entrepreneurial titans of Silicon Valley are generally known for their liberal politics and liberal culture (with some major notable exceptions), the appearance by Charles Koch at Base Camp might seem implausible, but, as McBride wrote, Charles Koch’s appearance was “just one example of the inroads the Kochs have made into the startup ecosystem.”

In her piece titled Kochs Downplay Politics to Find Common Ground in Liberal Silicon Valley, McBride characterizes this relatively new Koch project as its “most ambitious foray yet into the world of tech, [using] the conglomerate’s corporate venture fund, Koch Disruptive Technologies,” a project that is “focused primarily on startups that can work with existing Koch companies, or help Koch Industries itself build out its tech portfolio.”

According to McBride, the managing director of Koch Disruptive Technologies is Jason Illian, “a former entrepreneur,” who is emphasizing the common threads between Koch and Silicon Valley. Illian appeared on the Bachelorette, and in 2006,  he wrote “a book of romantic advice” called Undressed: The Naked Truth About Love, Sex, and Dating, and a year later he wrote MySpace, MyKids: A Parent’s Guide to Protecting your Kids and Navigating MySpace.com

Helping to bring the project into fruition is a lesser-known name on the Koch family tree; Charles’ son Chase. He is a “rising star of the business, who is widely assumed to be heir apparent to the Koch empire,” according to McBride. Chase apparently presents a less overtly conservative brand of politics then his father or late uncle. “That nonpartisan approachability, plus his and Charles’ work stoking Valley good will, has helped Koch Industries build up enough credibility to allow the conglomerate to pour about $500 million into startups over the last two years.”

McBride reported that Chase “told Politico last year that politics is ‘not at all what I’m passionate about.’ In public appearances, the younger Koch has focused less on supporting Republicans, and more on anti-poverty programs. At the same time, the Koch-backed Americans for Prosperity has said it would seek more ‘nonpartisan solutions.’”

The Koch’s network “has quietly spent at least $10 million over the past four years to combat the backlash against new technologies and encourage digital free speech, according to a person familiar with the group’s funding, CNBC’s Ylan Mui reported earlier this summer.  “The effort has encompassed grants to academics and think tanks, support for state and local legal battles, and political ad campaigns.”

The recent death of David Koch, brought forth legions of obituaries, many of which discussed how the family has used its billions of dollars to wage an unrelenting assault upon any actions on climate change, and democracy itself. The Koch Brothers' funding of right-wing think tanks, candidates, and campaigns (big and small) across the country, have become one of the most toxic elements on America's political scene.

Over the years, the Koch Brothers have inspired a cottage industry of critics: from numerous articles about the family – I’ve written several myself  (see below for links) -- to best-selling books Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, Kochland: The Secret History of Koch Industries and Corporate Power in America and Sons of Wichita; from the KochWatch; and Koch Exposed websites to films like Koch Brothers Exposed, which dissected the family’s political influence.

The Koch boys of Kansas have been performing their dastardly deeds since, well, since way back in the day. Jane Mayer’s book, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, looked into how the brothers Koch were major players behind the development and growth of the Tea Party in 2010. As The New York Times’ Jim Dwyer wrote: “Using a network of nonprofits and other donors, they had provided essential financial support for the political voices that have held sway in Republican politics since 2011. Dark Money chronicles the vast sums of money from the Koch brothers and other wealthy conservatives that have helped shape public dialogue in opposition to Democratic positions on climate change, the Affordable Care Act and tax policy.”

As The New Yorker’s Jane Mayer pointed out, Kochland: The Secret History of Koch Industries and Corporate Power in America,” by the business reporter, Christopher Leonard, examined the development of Koch Industries and “the extraordinary behind-the-scenes influence that Charles and David Koch have exerted to cripple government action on climate change.” Mayer wrote that “The Kochs’ secret sauce, as Leonard describes it, has been a penchant for long-term planning, patience, and flexibility; a relentless pursuit of profit; and the control that comes from owning some eighty per cent of their business empire themselves, without interference from stockholders or virtually anyone else.”

Illian has said that he wants political differences not to be a deal breaker. “We’re not asking everybody to agree with us on every topic,” he said. “We just want to build relationships.” 

How will Jason Illian and Chase Koch finesse such issues as Koch Industries’ vehement opposition to President Barack Obama, its relentless campaigning against environmental regulations and any actions to mitigate climate change, support for the confirmation of Supreme Court Justice Brett Kavanaugh, its opposition to the expansion of the Affordable Care Act, and its unwavering support for candidates far to the right of Silicon Valley’s sensibilities? Can they say, as Chase has said, that they are not passionate about politics, while the Koch-run Americans for Prosperity continues to attack environmental regulations and fund climate change deniers?

"It is much more dangerous to be unaware of whom you're taking money from, and what kind of politics they support," Kellie McElhaney, a University of California, Berkeley professor, told McBride. "You sure as heck should have some core values you're not going to compromise on," she added.

When there is money of the magnitude that Koch Disruptive Technologies has at its disposal, you should probably bet on the money!

What’s next for Koch Industries? Will Chase Koch be setting up a pavilion at Burning Man?