TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

You might not know their names, but brothers Charles and David Koch have quietly given more than $100 million to right-wing causes, underwriting a huge network of foundations, think-tanks and political groups.

Jane Mayer reports on the Koch brothers in the current edition of The New Yorker, in an article titled "Covert Operations: The Billionaire Brothers Who are Waging a War Against Obama."

She says the Koch brothers have become the primary underwriters of hard-line libertarian politics in America, and their views dovetail with their corporate interests. Charles, who is 74, and David, who is 70, own virtually all of Koch Industries, a conglomerate whose annual revenues are estimated to be $100 billion.

The Kochs operate oil refineries in several states and control some 4,000 miles of pipelines. Koch Industries owns Brawny paper towels, Dixie cups, Georgia-Pacific lumber, Stainmaster carpet and Lycra and is ranked by Forbes as the second-largest private company in the country, after Cargill.

Just to clarify, Koch is spelled K-O-C-H.

Jane Mayer is a staff writer for the New Yorker. She writes about politics and the war on terror.

Jane Mayer, welcome back to FRESH AIR. Now, you say that by giving money to fund political groups like Tea Party protestors, they've helped turn their private agenda into a mass movement. So before we get to who they've given money to, what do you consider to be the Koch brothers' private agenda?

Ms. JANE MAYER (Staff Writer, The New Yorker): Well, they are long-time, very hard-line libertarians. So their private agenda is really the eradication of the federal government in almost all of its forms, other than the parts of it that protect personal rights.

They have been working to fight the federal government really since the 1970s. And their father was doing it before they were. So they're trying to get rid of federal regulations, particularly on energy companies like their own. They particularly have been at war with environmental regulations, and they have a history of serious and even criminal pollution problems. And they're very anti-tax in almost every form.

GROSS: Now, you describe the Koch brothers as waging a war against President Obama. What are some of the things that they've funded in opposition to the Obama administration?

Ms. MAYER: Well, they have funded various kinds of front groups and organizations that have come at Obama from many directions at once, which is kind of what got me interested in the story because if you kind of pick up the rocks and take a look at what's under them, so often you find roots, financial roots that go back to the Koch brothers.

And I'm talking about, and particularly, opposition to Obama's health care policy, opposition to Obama's environmental policies, energy policies, tax policies, the stimulus program. You name it, they are against it. And you can pretty much find money coming through their family foundations to I counted just recently 34 different organizations that have been involved in policy and politics, mostly in opposition to Obama.

GROSS: Now, you give an example in your New Yorker article of a July 4th summit, a Tea Party summit that was funded by Americans for Prosperity in Texas. It was called Texas Defending the American Dream. You say an ad cast the event as a populist uprising against vested corporate power. And it said: Today, the voices of average Americans are being drowned out by lobbyists and special interests, but you can do something about it.

And there was no mention anywhere of the special interest, huge corporate power that was helping to fund this Tea Party summit. Why does Americans for Prosperity not mention anywheres that you could find that, you know, David Koch, who is a billionaire and owns all these corporate interests, is behind it, even though they're saying it's an anti-corporate group?

Ms. MAYER: Well, it is an irony. And the thing is that youd really have to ask them why they want to obscure their hand in this. And I did try to ask them.

But one of their characteristics is that they are really press shy and underground, particularly when it comes to describing their political activities. So they wouldn't answer any questions about it.

GROSS: What other aspects of the Tea Party movement have the Koch brothers funded?

Ms. MAYER: It's interesting. They were involved almost from the start of the Tea Party movement, and they put up websites that helped organize rallies. They helped pay for buses that got people to the rallies. They've provided various kinds of sort of political infrastructure that has made the movement possible, kind of fanned the insurrection in various ways.

But the other thing that's interesting to me is that they've tried to channel the very legitimate and genuine anger that's out there in the country about economic problems and push it in towards their own agenda.

It's not that they were the very creators of this anger. It's more that they've tried to take the anger and model it. And I've got a quote in the story from someone named Bruce Bartlett, who is a Republican and conservative historian and economist who actually worked for one of the Koch organizations.

And he explains that for years, they've been trying to turn their politics of kind of libertarianism into a mass movement. And the Tea Party is what provided the sort of the troops out on the street for them to do that.

GROSS: So how does the Tea Party meet the Koch brothers' agenda?

Ms. MAYER: Well, it provides bodies on the street. It provides ideological, you know, voice to an agenda that they've got. Basically, if you take the example of the Texas branch of Americans for Prosperity, because I went down to Austin to see it, what they are doing is training angry people in issues that they care about.

They are trying to get people to fight regulations, fight energy reform, fight environmental reform. And they also provide education about who those angry people should target in the way of candidates and politicians and how they should do it.

They even provide scripts. They've got - they've handed out talking points for the Tea Party.

GROSS: Do you think that most of the people who see themselves as members of the Tea Party don't know about the corporate money behind it, don't know, for instance, that the Koch brothers are supporting a lot of the Tea Party activities?

Ms. MAYER: You know, I just don't know...

GROSS: By supporting, I mean funding, yeah.

Ms. MAYER: It's hard to tell. I mean, when I was down in the Austin convention talking to Tea Party people, there were a lot of people who had conspiracy theories about money flowing into American politics.

But, you know, ironically, none of those - the people that I interviewed, seemed to be focused on the Koch brothers. They were kind of obsessed with the possible role played by George Soros in particular.

So I didn't find anyone who seemed focused on the Kochs' role.

GROSS: You actually talked to one of Soros' spokespeople and asked them for their take on this because, you know, Soros is seen as, like, the great funder of liberal causes. And you quote his spokesperson as saying that Soros' funding is transparent. He doesn't secretly, you know, covertly fund things, and also, none of his contributions are in the service of his own economic interests.

Ms. MAYER: That was Michael Vachon who said that. And I can see out there on the Internet blogs that this is it had become kind of a war between red America and blue America about which billionaire, you know, creates more trouble in American politics.

And, you know, in some ways, I sort of think of it as choose your poison. The point is not to say that, you know, not to defend George Soros. It's to question, really, the role of these huge fortunes in flooding money into American politics.

And I actually wrote a very tough piece about George Soros for the New Yorker magazine also. So it's not that we're championing one over the other, necessarily.

But I can tell you one thing, which is when I did write about George Soros and the fortune - questioning the amount of money he was putting into politics, there was a big difference between writing about Soros and writing about the Koch brothers.

George Soros spent days talking to me and let me watch his operation pretty closely. And he puts out a lot of information about where his money is going.

By contrast, the Koch family refused to answer even the most fundamental question about their activities. They are, as I quote somebody saying who worked for them, they are not just under the radar, they are underground. And you cannot get this information out of them. So they prefer to be a much more closeted political force.

GROSS: Thus your article is headlined "Covert Operations." Any idea why they're so covert?

Ms. MAYER: Well, I think that, you know, again, I'm going on the interviews that I did with people who worked with them to get some insight. And one of them told me something I thought was interesting, which was that they prize their privacy and remember again, this is a privately owned company partly because they want to avoid the scrutiny of possible congressional investigations into their activities.

They don't want controversy to be associated with the brands they sell. It might get in the way of their business. And so they don't want people to think when they're picking up Brawny paper towels that, hey, this money is going into attacking Obama because, you know, they don't want that kind of controversy.

They'd rather hide behind groups that do their work for them. I have a quote from someone who says they use rednecks to do their dirty work for them. And that was someone who worked for them who said that.

GROSS: My guest is Jane Mayer. Her article about the Koch brothers is in the current edition of The New Yorker. We'll talk more after a break. This is FRESH AIR.

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GROSS: My guest is Jane Mayer. Her article in the current edition of The New Yorker is about two billionaire brothers, Charles and David Koch, who own virtually all of the conglomerate Koch Industries and have quietly helped finance right-wing causes.

So getting back to the seemingly grassroots groups that the Koch brothers have funded and gotten off the ground, these groups are sometimes called Astroturf because it's fake grassroots, how did that become part of their strategy?

Ms. MAYER: Well, it goes way back. And in fact, I think one of the things that really caught my interest about them was that their story is such a big piece of American political history. They've been working at this project really since before 1980, when David Koch became vice president for the Libertarian presidential ticket.

It was a miserable failure in 1980. They got one percent of the vote. And at that point, David Koch and his brother Charles Koch decided that if they wanted to have an impact on American politics, they were going to have to do something other than run for office.

It was clear that their ideas did not do well in the marketplace of the ballot box. And so, at that point, they kind of put their heads together with some other fellow travelers and decided that they were going to fund a complete infrastructure of organizations that were aimed at manufacturing political public opinion that mirrored their own.

And so they set about doing this, and they've been doing it ever since, just absolutely pouring money into creating public opinion in all ways that you can do that, which is they've funded think-tanks, they've funded publications, they fund academics. They give scholarships to students who will hold similar views as theirs. They fund a tremendous array of organizations. And they've actually, you know, founded a number of them themselves.

GROSS: They founded the Cato Institute, the first libertarian think-tank.

Ms. MAYER: Absolutely, the Cato Institute has become, you know, a very powerful player in the area of shaping political opinion in the country. I mean, it's quoted all the time as a kind of a nonpartisan and impartial libertarian think-tank. But it was founded by the Koch fortune, and it has been funded by it ever since.

GROSS: Other think-tanks that they've had a lot to do with in terms of funding?

Ms. MAYER: One of the more important, kind of less well-known but very important ones is called the Mercatus Center, which is at George Mason University in Northern Virginia. And it is a think-tank that is very targeted in its approach, basically aimed at gutting all kinds of federal regulations, particularly environmental regulations.

And it's been instrumental in attacking the EPA, for instance, which again, is something that dovetails really nicely with Koch Industries' interests because they're constantly at war with the EPA over their pollution problems.

GROSS: You said that the Koch brothers created these think-tanks to manufacture public opinion. What do you mean by manufacture public opinion?

Ms. MAYER: That reflects, again, reporting I've done. One of the people that I interviewed was a is a environmental lawyer who tangled with this Mercatus Center a lot. And the way that that lawyer put it was that the center was set up almost to kind of launder economics.

Businesses come and industry comes, it donates money to the Mercatus Center. The Mercatus Center then has pedigreed scholars who write papers, and the papers almost always come out promoting whatever the point of view is of the industry.

So it's kind of a way of taking industry money and turning it into what looks like impartial academic support but is actually funded by the industry.

GROSS: Now, you say that at some point, the Koch brothers realized that think-tanks weren't enough to effect the changes that they wanted, and they needed a mechanism to deliver the message to the public and rally the public around their causes.

And at that point, in 1984, they created Citizens for a Sound Economy, which became very vocal during the Clinton administration. So what was Citizens for a Sound Economy?

Ms. MAYER: Well, Citizens for a Sound Economy was a prototype, really, for the current organization they have, the Americans for Prosperity. And what you were reading was actually, this is a quote from Matt Kibbe, who was involved at the time and is a Republican political operative. He's now very involved in the Tea Party movement.

He was explaining the roots of this kind of activism. It's corporate-sponsored activism. These organizations usually have the names of citizens this or citizens that, such as, you know, Citizens for a Sound Economy. But in fact, they're underwritten by corporate interests.

And so that was what that organization did was it, again, was particularly involved in energy policy. It opposed a tax that Clinton was proposing at the time on BTU. And it actually succeeded in killing it.

The proposed tax went down to defeat after Citizens for Sound Economy, much like the current Tea Party movement, started organizing rallies in the streets and loud protests in front of Congress and pouring money in to oppose politicians who supported this new tax on energy.

GROSS: Although the Koch brothers are libertarians, and they think government should be stripped to its most minimal role, you say they've been great beneficiaries of government money. Their companies have gotten about $100 million in government contracts since 2000.

Ms. MAYER: That's right. They've got a you know, so there's a certain amount of hypocrisy in this libertarian notion, and in fact, there have been some more kind of purist libertarian thinkers who have attacked the Kochs for exactly this, for kind of disguising their corporate self-interest as a kind of a lofty libertarian philosophy.

They were also, I think, tremendous beneficiaries during the Bush years of the 2005 energy bill, which was a tremendous giveaway of subsidies and tax breaks to various energy companies.

GROSS: President Obama has mentioned Americans for Prosperity, a group that David Koch co-founded, at least once. And you quote that, and this was after the Citizens United ruling, which struck down laws prohibiting direct corporate spending on campaigns, on political campaigns.

President Obama warned that this had made it easier for big companies to hide behind, quote, groups with harmless-sounding names like Americans for Prosperity. They don't have to say who exactly Americans for Prosperity are. You don't know if it's a foreign-controlled corporation or a big oil company, unquote.

As we speak, the Americans for Prosperity website has a headline: President Obama insults Americans for Prosperity's 1.2 million activists. Has President Obama talked about Americans for Prosperity and its major corporate funding outside of this and the paradox behind, you know, big corporate powers funding seemingly grassroots movements?

Ms. MAYER: Well, I think he also gave a radio address where he mentioned them. So I think maybe he's mentioned them now twice. And I managed for the story to get an interview with David Axelrod, his senior advisor, who I expressed a certain amount of frustration, which is I think maybe why the White House is beginning to sort of pipe up on this subject a little bit.

I mean, their feeling is that a lot of the media has taken the sort of Tea Party rebellion at face value, as just kind of an outpouring naturally into the streets and without looking far enough into the corporate interests underlying some of it.

And so what David Axelrod told me was, you know, what they don't tell you is that it's a, you know, a grassroots uprising that's funded by a couple oil billionaires. And they are hoping, it seems, that people will pay more attention to the huge and powerful interests that are really underlying a lot of the opposition to Obama.

GROSS: Now, I want to mention that the Koch brothers also support a lot of arts and medical institutions. They've done great philanthropic work with the American Ballet Theater, Lincoln Center, the Museum of Natural History, Sloan-Kettering Cancer Center. So I think it's important that we mention that.

Ms. MAYER: Yeah, David Koch is really one of the primary philanthropists in New York City at this point. He gave $100 million to renovate the State Theater in Lincoln Center, and he's on the board of the most prestigious cultural organizations in the city, including the Metropolitan Museum of Art and the Natural History Museum.

And so it's interesting. I mean, and particularly as a writer for the New Yorker, it was interesting for me to sort of connect the dots between that philanthropic role that he plays and this really sort of brass-knuckles political role. It's almost as if there are kind of two David Kochs, and it's interesting to kind of put the pieces together.

GROSS: Did you find a connection?

Ms. MAYER: Well, at a certain point in his life, I think it was around 1991, he had a near-death experience, where he nearly died in a plane crash, and then he was also coincidentally diagnosed with prostate cancer. And he began to re-examine his life to some extent. And it was at that point he started to give away really spectacular amounts of money, particularly to cancer research and particularly to prostate cancer research.

You know, I think that David Koch has, you know, you don't want to take that away from him. But at the same time, I have to say one of the things that really shocked me in doing the reporting on this family was that at the same time that David Koch has been, you know, sort of portraying himself as such a champion of the fight against cancer and actually has given a tremendous amount of money to that fight, his company produces a chemical, formaldehyde, in many, many, many products, and they produce it in huge quantities, which the U.S. government has been trying to regulate as a known carcinogen in human beings.

And the Koch Industries, through its Georgia-Pacific subsidiary, produces tons of formaldehyde and puts it into tons of products, particularly things like plywood and laminates.

And the company has been fighting the regulation of formaldehyde, trying to hold off the EPA from keeping it from flowing freely into the marketplace. And, you know, I just don't know how they can reconcile these two roles.

GROSS: Jane Mayer will be back in the second half of the show. Her article about the Koch brothers is in the current edition of the New Yorker. I'm Terry Gross, and this is FRESH AIR.

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GROSS: This is FRESH AIR. Im Terry Gross, back with Jane Mayer.

We're talking about her article in the current edition of The New Yorker titled, "Covert Operations: The Billionaire Brothers Who Are Waging War Against Obama. Its about Charles and David Koch, who have quietly underwritten a huge network of right wing foundations, think tanks and political groups. The brothers own virtually all of Koch Industries, a conglomerate which owns oil refineries, as well as Brawny paper towels, Dixie cups, Stainmaster carpet and Lycra.

The Koch brothers have an interesting family political history. Their father was an oil man in the 1930s. He spent a lot of time in the Soviet Union. You say his company trained Bolshevik engineers and helped Stalins regime set up 15 modern oil refineries but, eventually, Stalin brutally purged several of Kochs Soviet colleagues and then he became fiercely anti-communist, became an original member of the John Birch Society.

Do you think that his, like, fervent anti-communist beliefs had any effect on his sons beliefs?

Ms. MAYER: Oh, absolutely. I mean, and theyve talked about it themselves. At the dinner table they were told over and over again that strong centralized government were evil. And some ways - and I've interviewed an old family friend of theirs who basically suggests that they transferred their fathers paranoia about communism to paranoia about the federal government in the United States and all regulations.

And, I mean there was a consistent thread even within the Birch Society there, too, which was that the Birch Society was founded mostly by largely businessmen who were opposed to labor unions and, you know, minimum wage laws, and specifically opposed to Franklin Roosevelts New Deal and a larger federal government. So theres kind of a consistent line that moves from the father, whose name is Fred Koch, to these sons. And, I mean I just dont think you could make some of the details up, though.

Who would ever think that behind one of Americas most spectacular private fortunes is a father who made his first millions working for Joseph Stalin setting up the Soviet oil refineries?

GROSS: So the Koch brothers were brought up by a father who was fervently anti-communist. They grew up with anti-government, anti-big-state beliefs. How much of their work now in funding libertarian causes and anti-regulation, how much of that do you think is just like personal political philosophy and how much of it is like, this will help my corporation make profits?

Ms. MAYER: Well, I think there is no separation between the two in their thinking. They believe that prosperity will result for themselves and others, I guess, if you get rid of all kinds of state regulations and just allow the marketplace to bloom, as they would put it. They see both things as being united, really.

One of the things that I found fascinating was that they're not just your sort of ordinary Republican captains of industry; they are really self-described radicals. And Charles Koch specifically calls himself a radical and says he has a radical agenda when he talked to Brian Doherty in this book Radicals for Capitalism. Their vision is really pretty far out.

GROSS: An example of whats far out about it?

Ms. MAYER: Well, you can see their thinking I think pretty clearly in the platform of the 1980 libertarian ticket, which was when David Koch was the vice presidential candidate. And it called for eliminating Social Security, eliminating income taxes, eliminating corporate taxes, eliminating pretty much every federal agency other than those that enforce kind of basic rights, particularly property rights.

So their vision is - its extreme, you know, from pretty much any direction. Its interesting, but its not a mainstream kind of widely-held view, as evidenced by how it did during that campaign, where literally, they ran against Ronald Regan from the right and they got one percent of the vote.

GROSS: So Jane, when you look over the years since the Koch brothers have started funding think tanks and groups that are meant to look like grassroots groups, what impact do you think theyve actually had on American politics?

Ms. MAYER: Well, I think that you have to credit them with having been relatively successful in disrupting the Obama presidency, which is really what they were hoping to do. I mean, and theyve talked pretty openly about it. They organized even before Obama was elected, and Charles Koch talked about how what he saw on the horizon was the greatest threat to freedom and prosperity since the 1930s. And as Obama was being inaugurated, they were organizing groups to attack the stimulus.

And I think theyve finally reached a kind of a point in 2010 where theyve got actual people out on the streets who are fighting for their agenda. And so I think theyve, you know, after many, many years of funding all these different networks that they're having a certain amount success.

GROSS: So if the Tea Party movement is in part or maybe even largely the creation of corporate interests like the Koch brothers and their group, Americans for Prosperity, and like the group Freedom Works, which have provide a lot of money for the Tea Party movement, what does that make the people in the movement? Are you saying that they're na�ve in being used by corporate interests in an apparently anti-corporate campaign?

Ms. MAYER: You know, I guess I'm just not willing to paint them with such a broad brush. This piece is about the Kochs. Its not about all the people who are in the Tea Party movement. And I'm the kind of reporter thats got to get out there and interview people to know whats going on. And I haven't spent enough time talking to people in the Tea Party movement to really understand more. And so, I certainly wouldnt want to have just sort of dismissed them as some sort of, you know, mass wave of naivete.

I'm sure its complicated. The Tea Party movement seems to be made of many different kinds of people with many different points of view. Its sort of an amorphous movement anyway. What I'm saying is that in this piece, its clear that there are huge corporate interests who are trying to channel the angry people that are the foot soldiers of the Tea Party movement and move them in a direction that is good for their own corporate agenda.

GROSS: Jane Mayer, thank you as always for talking with us. Really appreciate it.

Ms. MAYER: Thanks, Terry. Its always great to be with you.

GROSS: Jane Mayers article about the Koch brothers is in the current edition of The New Yorker. You'll find a link to it on our website, freshair.npr.org, where you'll also find a link to a Koch Industries website, which responds to what it describes as negative attention its attracted from some people who dont support economic freedom.

Today, Americans for Prosperity, co-founded by David Koch, began its Defending the American Dream summit in Washington. The rally ends Saturday morning, after which they will provide transportation to Glenn Becks Restoring Honor rally at the Lincoln Memorial.

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