Why the Koch Brothers Failed To Take Over Cato

Who's winning, who's losing, and why.
June 25 2012 7:37 PM

Cato at Peace

Ed Crane steps down to end the Koch brothers’ attempted coup at Cato, and libertarians cheer.

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Levy and Crane were effectively done talking about this. On Feb. 24, 2012, David and Charles Koch sent an email to Cato board members acknowledging some backbiting and suggesting that “this dispute be tabled until 2013”—and that, by the way, they were right. Levy hit reply-all on a point-by-point demolition of their arguments. “One way of avoiding so-called disparaging remarks,” wrote Levy, “is to stop doing damaging things such as attempting to pack the Cato board with Koch-affiliated directors.”

Five days later, the Kochs filed suit in Kansas, asking for control of the Niskanen shares.

The next four months were spent on slow-motion press leaks, lengthy emails, and public negotiation about what would be best for libertarians. You could sum up the Cato case with two bullet points. One: The Kochs wanted to hollow out a think tank and turn it into a political hack shop. Two: Nobody in the media would take the Koch-ified Cato seriously ever again. “Who the hell is going to take a think tank seriously that's controlled by billionaire oil guys?” asked Crane.

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Pro-Koch libertarians looked at this and saw a sell-out, pandering to the worst kinds of vindictive liberals. The Kochs’ organizations put out their own spin at the optimistically named ForABetterCato.com, but the high-grade anti-Crane oppo appeared at Breitbart.com. In March and April, the site published a three-part investigation titled “The Crane Chronicles,” a greatest hits of libertarian gossip. Who did conservatives really want to side with? The Kochs, captains of industry, or the guy who’d become a source for Jane Mayer? The Tea Party funders who were under attack by Rachel Maddow, or the guy who screamed and raved at the Koch’s board appointees? The series ended with anonymous (and unspecific) allegations about Crane’s “dismissive and degrading attitude toward women,” a perennial happy hour topic for D.C. libertarians, not something the community wanted to air out in public.

But the chatter stopped in May. That was when Allison et al started crafting their compromise. The Kochs had a strong case about those shares, and they could afford the legal bills. If they lost—and the Cato-ites I talked to certainly think that’s the case—it had a lot to do with their new infamy as the people pooling donations for the defeat of Barack Obama. Maybe it was better for them to keep up ties to helpful libertarian organizations but not dominate them—not paint targets on them for future Jane Mayers to jab their pencils into.

There’s a passage in Charles Koch’s management book, The Science of Success, that might explain the apparent cave. “Each vindictive triumph,” wrote Koch, “adds to feelings of grandeur and the compulsion to destroy anyone who challenges this warped self-image. The elation does not last, so the quest for revenge is renewed and carried out with utter disregard for truth and the person’s own best interests.”

Ed Crane had read The Science of Success at least once. “In my mind,” he told me in March, “it's one of the worst books ever written.”

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