Neither libertarians nor the Kochs should try to hide their relationship.

Congratulations, libertarians! August 2010 was the month when you joined an exclusive club: people accused of shilling for amoral and scary billionaires.

It really shouldn't have been a new or bracing experience for you. People have been mocking libertarians for years. This month, though, you got it from both barrels of what Andrew Breitbart likes to call the Democrat-Media Complex. On Aug. 9, President Obama spoke at a fundraiser in Texas and warned Democrats of "groups with harmless-sounding names like Americans for Prosperity" with shadowy funding sources and the power to distort elections. "You don't know if it's a foreign-controlled corporation," said Obama. "You don't know if it's a big oil company, or a big bank." Just two weeks later, The New Yorker published a 10,000 word profile of David and Charles Koch, the billionaires who have poured profits from their oil, chemical, and manufacturing companies into a network of libertarian think tanks and activist groups—such as, for example, Americans for Prosperity.

Again, nothing truly new there. But the reaction was angrier than a John Galt speech. AFP President Tim Phillips accused the president of "making shrill, desperate attacks on Americans for Prosperity and our 1,200,000 AFP grassroots activists across the nation." Reason magazine, where I worked from 2006 to 2008 (and for which I am still a contributing editor), responded with multiple blog posts attacking the New Yorker profile. "The story is a masterpiece not of the tightly researched and argued journalism for which The New Yorker is revered," writes Reason.com and Reason.tv Editor-in-Chief Nick Gillespie, "but of sly innuendo and revelations as lame as they are breathless."

Gillespie does a fine job of picking apart the New Yorker article. It also includes this disclosure: "David Koch has been on the board of trustees of Reason Foundation, the publisher of this website, for decades, and his name appears in the masthead of Reason magazine; I have also taught at various programs for the Institute for Humane Studies, which the Kochs fund, and will speak at an Americans for Prosperity event later this week." That's exactly what the enemies of Koch want to hear—proof that the brothers are members of the illuminati, cackling as their influence spreads across the political landscape.

Libertarians had better get used to this. The Kochs are now in the pantheon of Evil Rich Benefactors, exposed for everything they fund and accused of funding everything their opponents don't like. (FreedomWorks, which exists because it wanted to break away from Koch and AFP, is constantly and wrongly accused of taking Koch money.) And that means that the response so far—lots of shock and denial and dismissal and some griping about personal attacks—won't really work. The Kochs' defenders should look at other cases in which well-meaning billionaires became Emmanuel Goldsteins and adjust their strategies accordingly.

Exhibit A: Richard Mellon Scaife. In the early 1970s, the Pittsburgh tycoon and conservative activist realized that his aid to the Republican Party didn't mean much if liberals controlled academia, the media, and Washington think tanks. He was merely the wealthiest of many donors who started pouring serious money into organizations like the Heritage Foundation. It wasn't until 1986 that journalists fully realized the power of what Scaife was doing, and it wasn't until the 1990s that Scaife himself was really demonized. The reason? He was putting millions of dollars into the American Spectator and other media outlets that obsessed over the sexual life of Bill Clinton.

The Democrats went to war, much more aggressively than Obama has so far against the Kochs, starting with an (in)famous document, brandished by then First Lady Hillary Clinton on The TodayShow in 1998, detailing the "vast right wing conspiracy." Scaife didn't handle it especially well. His media strategy was simple: say nothing. Reporters thus filled in the blanks around him. Neither he nor his beneficiaries liked what those blanks were filled with, and "Scaife money" became a byword for "part of a conservative conspiracy."