Koch brothers try to navigate differences with Trump going into 2018 elections

In July 2016, billionaire GOP kingmaker Charles Koch compared choosing between Donald Trump and Hillary Clinton to voting for cancer or a heart attack. He and his brother, David Koch, sat out the 2016 presidential election, along with their vast network of businesses and political advocacy groups.

Now, one year into Donald Trump's presidency, the Koch brothers and their allies are learning to work with the roller-coaster realities of the Trump era, aided by ties like former Koch official Marc Short, the White House's current director of legislative affairs, and Vice President Mike Pence, who has long been on friendly terms with the network.

As the 2018 midterm elections — elections top Koch officials acknowledge will be the most challenging they have ever faced — rapidly approach, the network is keeping a tight political focus on holding Republican majorities from state legislatures to the U.S. Senate, and a policy focus on the areas where they believe they can make the most common-ground progress. At the Koch-backed Seminar Network's retreat in the Southern California desert last week, public criticism of the president or his administration was carefully avoided, as speakers focused on political strategy for the midterms, sweeping social policy and philanthropic endeavors, and protecting 2017 policy accomplishments like tax overhaul and regulatory reduction.

"This progress is endangered, we know that. But we're going to keep pushing straight through what we know is going to be a tough 2018," Tim Phillips, president of the Koch political advocacy arm Americans for Prosperity, told a ballroom packed with donors last week during a strategy session as he announced a $400 million investment in politics and policy for the 2018 election cycle.

But the very theme of the Kochs' winter seminar, "Breaking Barriers," was difficult to miss. Inescapable philosophical divides with the administration persist in key policy areas like the future of immigration and managing the criminal justice system, not to mention the jarringly different tones the Kochs' network and the Trump administration strike to tackle those issues. Navigating those differences — not only with the Trump administration but from within the ranks of Kochs' thousands of donors with various interests — will likely be key for the Koch network in the 2018 midterms and beyond.

One of the starkest contrasts lies in immigration, as Congress debates sweeping reforms in the days ahead. For years, the Koch network and their Latino outreach arm, the LIBRE Initiative, have taken an approach to immigration that is rare in the center-right world. LIBRE, for example, has also worked to help immigrants — including those who entered the country illegally — acquire driver's licenses.

The network flat-out opposed an idea Mr. Trump floated during his campaign: denying birthright citizenship to children born to illegal immigrants. And when Mr. Trump then proposed a Muslim registry, Charles Koch called the proposal "reminiscent of Nazi Germany."

After Mr. Trump recently proposed a legislative framework on immigration that would protect up to 1.8 million young immigrants, but potentially restrict future migration by ending the diversity visa lottery program and restricting extended-family migration, the network came out in favor of the fix for immigrants brought to the U.S. illegally by their parents. Reaching a legislative fix for the Deferred Action for Childhood Arrivals (DACA) program is something LIBRE has been working on for months. LIBRE President Daniel Garza said his organization has had more than 100 meetings on Capitol Hill to find common ground on the topic.

"It's a top priority to deal with that first," James Davis, president of Koch public relations arm In Pursuit Of, said of DACA in an interview.

But beyond DACA and a general support for border security, common ground on the president's proposal seems to fade.

Garza and other leaders in Koch world said they can't support future "arbitrary" cuts to legal immigration levels. Mr. Trump's plan would dramatically slow legal immigration. Familial relationships may not always be the best way to determine who should come into the country, but that's something that needs a full-fledged discussion, Davis argued.

"The one concern we have is the reduction -- and something we cannot support -- is the arbitrary reduction, in the number of future immigrants," Davis said, expressing his concerns over the "chain migration" debate. 

"I think our goal is to make sure we're a welcoming country," Phillips said, asked about the apparent tension between the Trump administration's approach and the Kochs' mission. "And that folks here who come here have an opportunity to live the American dream, which has animated people from around the world for generations. This country has been a beacon of hope for people struggling from the very beginning."

But Koch leadership appears to be treading carefully on immigration when it comes to the 2018 election cycle.

Pressed on whether the network has limits on backing a candidate who differs with them on immigration — say, if a candidate didn't support protections for DACA recipients — Davis declined to draw any line in the sand. The network intends to stay out of primary races entirely, as it usually does, focusing instead on supporting Republicans in November.

"It's hard to say that there's a red line here or there," Davis said, adding that if someone isn't a "champion" of their priorities, "it's going to be hard to support you."

Perhaps just as stark of a contrast between the Koch network and the Trump administration lies in their approaches to the criminal justice system.

Attorney General Jeff Sessions' "tough on crime" approach often seems at odds with the Koch network's relentless focus on rehabilitation, hiring people internally despite criminal records and re-examining how the country criminalizes drugs. Sessions has restored a robust version of civil asset forfeiture -- a program that allows police to seize citizens' possessions even when they have not been indicted -- saying he "love[s] that program." Mark Holden, senior vice president and general counsel at Koch Industries who focuses on criminal justice issues, calls asset forfeiture, "unconstitutional." Sessions has directed federal prosecutors to push for the toughest sentences available under the law, stepping up efforts to enforce drug offenses as was done in the war-on-drugs era of the 1980s and 1990s when he cut his teeth as a federal prosecutor. In Holden's opinion, that's the "wrong approach," and it won't work.

"It's something that we tried, and failed," Holden said of the war-on-drugs era. "We had a war on drugs, and drugs won."

"They're good-intentioned laws," Holden continued. "And I understand, Attorney General Sessions is basically saying, these are laws on the books. And if we want to change them, there's a way to change them. It shouldn't necessarily be through fiat issued by the next attorney general or this attorney general. I agree with him on that. That's why I think we need to reform I think the sentencing rules, particularly with regard to non-violent drug offenders. And I think what we should do is stop being stuck in the 80s and the 90s and move on to the 2000s."

But Holden admitted sentencing reform — implementing shorter or different punishments for low-level offenders, particularly drug offenders — doesn't look likely with the administration's current approach.

"I do think there is an appetite for it in Congress," Holden said. "Now at the executive level, the White House level and the AG, there isn't now, it seems. So what we always talk about at Koch is meeting people where they are."

But even in Congress, sentencing reform could be a challenge in the current political climate. A bill from Sen. Grassley, R-Iowa, that would reduce some of the mandatory minimum sentencing requirements, will be taken up for markup in the Senate Judiciary Committee on Thursday. Sen. John Cornyn, the Republican Majority Whip from Texas, told donors at the Koch seminar he's hopeful about passing some version of prison reform in 2018, but not so much about sentencing reform.

But Holden, whose passion for criminal justice reform was sparked by working as a prison guard after high school, is trying to find common ground in Washington. He's working closely with the Trump administration on prison reform, specifically, with Trump son-in-law and senior adviser Jared Kushner, on finding ways to reduce recidivism rates. One such January meeting on prison reform, at which Mr. Trump was present, announced the administration's commitment to reducing the rate of crimes committed by people after leaving prison to save money and improve society. Notably lacking in that announcement was any mention of improving prison conditions, or reevaluating prison sentences, things often associated with criminal justice reform. 

However, the Koch network is also pursuing private endeavors in trying to address the cracks in the criminal justice system. Last month, the Koch network announced a new initiative — "Safe Streets, Second Chances" — a pilot program of sorts that aims to individualize reentry programs for prisoners in efforts to prepare them for life after prison and ultimately reduce prison populations. The network is investing $4 million at this point, and they're "willing to spend as much money as we need to" to make it work, Holden said.

Looking ahead to the 2018 midterms, on immigration and other key issues for the network, Davis said they're "not going to let the perfect be the enemy of the good."

"When we're looking at overall electoral engagement, we have to consider all the issues," Davis said. "And so, we'll be doing that as we continue to look forward, and as candidates and current elected officials make their positions known."

"We always say, we'll work with anyone to do good, no one to do harm," Davis said. 

  • Kathryn Watson

    Kathryn Watson is a politics reporter for CBS News Digital.