The Kochs vs. Cato
The arch-conservative billionaire Koch Brothers have sued the Cato Institute, a libertarian think tank in Washington—often mistakenly seen as merely a tentacle, if not mouthpiece, for the Kochtopus—for control of Cato. Slate’s Jacob Weisberg wryly tweeted: “Brothers sue to regain ownership of CATO. Like the Iran-Iraq War, but better.”
The lawsuit, filed in Kansas, certainly adds a new layer of rancor, and, if it goes forward, promises a glimpse inside the secretive machinations of the Kochs. But the friction between Charles Koch and the Cato Institute isn’t new—there’s a long backstory here. In fact, Charles Koch, whom many regard as the brains behind the Kochs’ powerful political and industrial empires, first broke with Cato some two decades ago, while still retaining a stake in the think tank, for reasons that have never been made public.
Cato was co-founded by Edward Crane and Charles Koch, in the nineteen-seventies, with Koch’s money; the lawsuit notes that the original corporate name was the Charles Koch Foundation, Inc. Crane once recounted to me, “Charles said what would it take to keep me in the libertarian movement. He was very impressed. I said, My bank account is empty. He said, How much do you need? I’d been impressed with Brookings and A.E.I., and told him it would be good to have a libertarian think tank. Charles said, I’ll give it to you.” Koch steered millions to the think tank. But it was not a match for the ages. On January 13, 1992, the Washington Times reported,
Word is dribbling out of the CATO Institute that Charles Koch, the oil billionaire whose bucks have helped keep CATO’s thinkers in the tank, has dropped off the board of directors. The situation was announced to staffers last Tuesday by Ed Crane. He told the troops that funding would not be curtailed. Through various pipelines, Mr. Koch is said to control about 60 percent of CATO’s budget. Mr. Crane did apparently conclude his briefing on a less than upbeat note, explaining that he really didn’t know what Mr. Koch’s resignation meant and that it could indicate some hard times ahead.
As I wrote in my New Yorker piece about the Kochs, “Though David remains on the board at Cato, Charles Koch has fallen out with Crane. Associates suggested to me that Crane had been insufficiently respectful of Charles’s management philosophy, which he distilled into a book called “The Science of Success,’ and trademarked under the name Market-Based Management, or M.B.M…. A top Cato Institute official told me that Charles ‘thinks he’s a genius. He’s the emperor, and he’s convinced he’s wearing clothes.’ “
Brian Doherty, in his 2007 history of the libertarian movement, “Radicals for Capitalism,” writes, “As for what happened between Cato’s Ed Crane and his longtime biggest supporter, Crane himself insists ‘I don’t know what happened. I’ll go to my grave not understanding what happened.’ “