Watch Out, Dems: Sheldon Adelson And The Koch Brothers Are Closer Than Ever

06/14/2015 10:16 pm ET | Updated Sep 08, 2015

sheldon adelson and david koch
Casino mogul Sheldon Adelson (left) and billionaire industrialist David Koch (right) are both deeply committed to making sure a Republican wins the White House in 2016. (Adelson: Star Max/IPx Koch:AP)

In late April, some 700 conservative luminaries, including presidential contenders, donors, fundraisers and former President George W. Bush, gathered at the Venetian casino and resort in Las Vegas for the Republican Jewish Coalition’s spring meeting, where Sheldon Adelson, the billionaire casino mogul and GOP megadonor, was holding court.

Among the assembled allies, well-wishers and supplicants who put in appearances was Tim Phillips, the head of Americans for Prosperity, the political centerpiece of the sprawling fundraising and advocacy network spearheaded by the billionaire brothers Charles and David Koch.

It was the second consecutive year, according to an RJC donor, that Phillips dropped by for at least part of the conference, which doubles as the site of the so-called Adelson primary -- the increasingly high-stakes battle between GOP presidential candidates vying to win the billionaire’s favor by expressing their full-throated support for Israel. Phillips’ foray into RJC turf was emblematic of a growing and successful effort by the Koch network to tap into Adelson’s $28 billion net worth and forge new links with the casino owner and the RJC, of which Adelson has long been the lead bankroller.

The Koch brothers’ donor network budgeted some $300 million in the 2014 election cycle and played a sizable part in helping the GOP recapture the Senate by improving the right's field and voter data operations. The Huffington Post has learned that in 2014, Adelson’s donations to Phillips’ outfit and other Koch-funded organizations accounted for a significant portion -- nearly $30 million -- of this haul, according to two conservatives familiar with the network. Early this year, the brothers’ network unveiled plans to spend an astonishing $900 million on its political and advocacy drives in the 2016 election cycle. Members of the network hope that Adelson will donate as much as he did in 2014, and possibly more, according to the two sources. “I think Adelson writes one of the biggest checks to the Koch network,” one source said.

In an email, Andy Abboud, the casino mogul’s top political aide, said that Adelson did not give $30 million to AFP in 2014, adding that "we will not release a figure." But when asked a few times to clarify whether Adelson’s 2014 donations to AFP and associated Koch network organizations reached that figure, Abboud declined to respond.

The previously unreported scale of Adelson’s commitment to the Koch network only underscores one of the most important -- and largely unnoticed -- trends reshaping Republican big-money politics.

Historically, the Koch network and Adelson have had different top-line priorities. Kochworld has focused largely on domestic matters, with a particular emphasis on shrinking the federal government and minimizing regulatory and tax burdens on businesses. Adelson’s primary interests, meanwhile, have long been Israel, expanding defense spending and hawkish foreign policy in general. But the megadonors, conservatives say, share a number of political and ideological concerns. They have certain aims in common, from curbing union power and killing estate taxes to developing better voter-data operations and mobilizing veterans to vote. And Adelson and the Koch network also share a strong commitment to do, and spend, what it takes to win the White House in 2016 -- a year that now looks like it will feature an expanded conservative focus on national security, terrorism and Middle Eastern policies.

In recent years, and partly spurred on by President Barack Obama’s re-election in 2012, the Koch network and Adelson -- who in 2012 ranked as the country's single largest donor to super PACs and dark money groups -- have, for the time being at least, begun working more closely together in areas where their strategic and ideological priorities overlap. Adelson and Kochworld have also forged closer ties between key staff members and appear to share a willingness to lay out cash for the best and most sophisticated voter data operations and for grass-roots mobilization. That increased coordination could have big implications for the 2016 congressional elections -- and could have bearing on who will occupy the Oval Office come January 2017.

Adelson’s ties to the Koch network are relatively new. It was only in early 2012 that Adelson made his first appearance at the Koch’s annual fundraising and policy retreat near Palm Springs, California. That event also drew then-House Majority Leader Eric Cantor (R-Va.), the only Jewish Republican congressman and arguably the casino owner’s closest ally in Congress, who was a favorite of some Koch donors. Later in 2012, Adelson wound up chipping in at least $15 million to AFP coffers, according to two sources -- about 10 percent of the nearly $150 million he and his wife Miriam donated that year to a mix of super PACs, which have to disclose their donors, and “dark money” nonprofit groups like AFP and the Karl Rove-linked Crossroads GPS, which don’t.

The Adelsons spent about $100 million on political causes during the 2014 cycle, according to multiple sources. Although that was a lower total than 2012, a greater share of it -- some 30 percent -- went to Koch network groups. Last year, the Adelsons also sent a mix of seven- and eight-figure checks to several other dark money groups, including Crossroads GPS, the American Action Network, the U.S. Chamber of Commerce, RJC and others, say sources.

In 2014, the battle for the biggest Adelson checks became heated, pitting Koch network groups, including AFP, against Rove’s Crossroads GPS. Rove has been close to Adelson since the 2008 elections, when he provided informal advice to him, and their relationship seemed to grow tighter in 2012. But in 2014, Rove at times badmouthed the Koch groups and others as he sought to rope in more funds for his own operation, say GOP sources. “The infighting became intolerable,” Abboud told The New York Times last fall. “We told them ‘you either all stop competing’ or we’re not doing anything.”

As Adelson’s Koch network donations have become a larger part of his political spending, other ties -- which the casino owner likes to foster among the groups he backs, in order to maximize the political returns -- have developed. One example: Phillips’ Vegas visits came after Freedom Partners, which serves as a central financing hub for about two dozen Koch-supported groups, gave $700,000 to the Adelson-backed RJC, according to IRS reports. Marc Short, the president of Freedom Partners, was also in Las Vegas at the time of the RJC bash, according to a conservative source, as was Adam Stryker, a former Nevada-based lobbyist for Adelson’s Las Vegas Sands Corp. who in just a few years has risen fast in the AFP hierarchy.

Some Koch donors see ample reason for top Koch operatives to woo the RJC’s wealthy donor base, a community that includes several hedge fund and real estate CEOs. “I think AFP sees the value of reaching out to conservative Jews given Obama’s attitude towards Israel and Netanyahu,” said one Koch donor, referring to conservative Israeli Prime Minister Benjamin Netanyahu, a close political ally and personal friend of Adelson.

Furthermore, Abboud, Adelson’s top political aide, is close to the Koch operation and last year had at least one high-profile role at a Koch event, according to two network donors. At the Kochs' January 2014 donor retreat in California, Abboud helped lead a panel discussion focused on grass-roots mobilization strategies and data operations, according to two attendees. “Andy is very involved with AFP,” one attendee said.

Stryker, the ex-lobbyist for Adelson’s Las Vegas Sands who worked under Abboud, moved to AFP a few years back. Initially, Stryker led AFP’s Nevada affiliate, but in 2013 he assumed a bigger post nationally as AFP’s first chief technology officer, according to his bio on AFP’s site.

As of last year, Stryker seems to have gained a still bigger role: He now runs “strategic initiatives” for AFP, a job that involves some dealings with the Koch network’s sophisticated and expensive i360 voter data company and related grass-roots activities, according to a source familiar with the new post. According to the same AFP bio, Stryker also has served on the group’s National Advisory Council, an elite committee “which leads the way in revamping technology and data components across the country” -- a high priority for AFP, and for the entire Koch network.

On the policy front, Adelson’s political agenda has long been dominated by his ardor for Israel and his hawkish views on defense and national security -- subjects that are less important to many of the Koch network’s libertarian-leaning donors, who have often pushed for fewer foreign entanglements and tighter defense budgets. But other domestic ideological and bottom-line concerns, as well as political exigencies, seem to have brought the multibillionaires’ agendas closer together.

Adelson, the Koch brothers and a number of the network’s wealthy donors, for instance, are said to be strong foes of estate taxes, which in the last year have increasingly become a target of AFP and some other Koch-backed groups. Likewise, both the casino mogul and the Koch brothers have poured big bucks over the years into efforts to curb union clout, in part by backing the various campaigns of Gov. Scott Walker (R-Wis.) as he has fought to limit public sector unions’ bargaining power.

A few Koch network groups, including AFP and 60 Plus, have in the past year expanded lobbying drives at the federal and state levels to pressure lawmakers to kill estate taxes. This spring, the House passed a bill calling for an end to death taxes after a lobbying blitz by a coalition that included a few Koch-backed advocacy groups and other powerhouses like Americans for Tax Reform and the American Conservative Union. A similar bill is pending in the Senate, but Democrats may filibuster it and the White House is firmly opposed.

Another area of overlapping political interest is the Koch network’s multimillion-dollar funding for Concerned Veterans for America, an advocacy group launched in 2012 that focuses heavily on health care reform for veterans and the need for tougher national security policies. The group’s founder, Pete Hegseth, previously ran another outfit, Vets for Freedom, which received $1.4 million from the Adelson-backed group Freedom’s Watch and spent close to $5 million during the 2008 election season, according to public records.

The newer Concerned Veterans group has been expanding its field operations to more states, partly with an eye toward mounting an ambitious get-out-the-vote effort in 2016, according to sources and the group's own website. Its “get out the veterans” effort is focused on states with large populations of veterans and active military personnel, and it plans to use direct mail and digital ads to mobilize voters.

To do all that, the Vets group has been fundraising aggressively: Hegseth has teamed up with AFP’s Phillips this year at several intimate donor meetings held in Florida and other states, according to conservatives familiar with the gatherings. Hegseth also gave a talk explaining his group's goals to donors and operatives at the network retreat this January. Donors and conservatives point out that the group’s national security mission is relatively new to Kochworld. “They never talked about national security in the past,” one Koch donor noted.

The Koch network retreat this past January seemed to offer other evidence of a growing consensus between Adelson and the Koch camp that national security issues will warrant greater attention as the 2016 election season opens. In a novel move, the retreat included a live-streamed panel discussion, featuring Sens. Marco Rubio of Florida, Rand Paul of Kentucky and Ted Cruz of Texas, that focused on foreign issues and national security matters, areas that the network has historically given short shrift.

There are still some high-stakes issues where the interests of the respective superdonors seem at odds. One notable case involves an Adelson-financed lobbying crusade to kill Internet gambling -- a cause that Adelson has portrayed largely in moral terms, but that also has very real bottom-line ramifications for his gambling empire, since the spread of Internet gambling would most likely eat into his revenues. The expensive Adelson lobbying blitz is the kind of targeted campaign that many conservatives castigate as “crony capitalism,” and in fact it’s been labeled just that by Ron Paul, the libertarian champion and father of Sen. Paul.

The Koch network has harshly criticized various types of government intervention and tax breaks that benefit specific companies or industries as examples of “crony capitalism.” But it has been silent on Adelson’s lobbying blitz to snuff out Internet gambling.

“Adelson’s financial support for the Koch network will trump their philosophy as it normally does,” predicts one conservative familiar with the Internet gambling battle.

As they map out their spending plans for 2016, the Koch brothers and Adelson may end up adopting variations on the same strategy.

Last month, David Koch said in a radio interview that he and his brother Charles might well help a few candidates in the primaries. “We’re thinking of supporting several Republicans if we’re happy with the policies these individuals are supporting,” he told Larry Kudlow, the conservative economist and radio host.

Rubio and Walker -- the latter of whom David Koch reportedly suggested earlier this year was his favorite Republican presidential candidate -- each drew high marks at the Kochs’ January donor retreat, sources say. Rubio and Walker are among the five GOP hopefuls, along with Sens. Paul and Cruz and former Florida Gov. Jeb Bush, invited to the upcoming summer retreat as well. AFP and other outfits in the Koch network have indicated they won’t get behind a particular candidate in the primaries.

Adelson, who is known for his mercurial tendencies, has played his cards more closely. Abboud said in an email that Adelson would only back one candidate in the primaries and that he hadn’t picked his choice yet. Previously, Abboud had said a decision could come after the second GOP debates this year, or early next year.

The casino mogul has indicated to allies that he wants to avoid repeating 2012, when he and his wife initially poured $15 million into a super PAC backing former House Speaker Newt Gingrich, a longtime favorite. Adelson, like many observers, now believes those donations extended the primary and hurt eventual nominee Mitt Romney, sources said. The Adelsons wound up giving $30 million to a Romney super PAC.

A few confidantes and GOP operatives, however, say the casino owner now seems to be thinking about spreading some of his largesse around in a different way. In 2012, Adelson cut eight-figure checks to Gingrich and Romney. This time, he could end up giving considerably smaller amounts to super PACs backing a few of his favorites in the unusually crowded field, perhaps this year or early next year, before settling on a top choice who'd then receive support on the scale that Gingrich and Romney received. “Sheldon’s got a few people who are very strong on Israel and he might give them seed money to compete,” said one operative close to the campaign of an Adelson ally.

One hint of this strategy: on Jan. 19, shortly before Rubio announced his formal run, Adelson and his wife each chipped in $10,200 to Rubio’s Victory Fund, a leadership PAC.

Like the Koch brothers, Adelson now seems keenest on Rubio, who has demonstrated strong support for Israel and tough national security policies, and on Walker, who's shown his willingness to fight union power and is generally good on Israeli issues, according to sources. Adelson has had a few meetings since early 2014 with both candidates -- though he's also met with others, including Cruz, whose hard-line foreign policy views mesh with Adelson’s -- and last month the casino magnate dined with Rubio at the Capital Grille in D.C., according to two people familiar with the get-together.

One long-shot candidate who sources say is expecting some Adelson seed money and is very high on the casino order's political radar is Sen. Lindsey Graham of South Carolina, a national security hawk and one of Congress’ biggest boosters of Israel. Adelson co-chaired a D.C. fundraiser for Graham in March, when Netanyahu controversially addressed Congress. And Adelson and the senator talk fairly often, say conservative sources.

Graham, who attended the RJC bash in April in Las Vegas and drew a big and enthusiastic crowd at a private meeting according to two attendees, also won Adelson’s heart for sponsoring the Senate bill in 2014 to ban Internet gambling. Graham has pledged to introduce the measure again. Adelson’s brother Lenny recently joined Graham’s national finance committee, as did two former Adelson business partners in Boston, Ted Cutler and Irwin Chafetz.

Adelson "will be contributing to more than one candidate,” predicts a fellow RJC board member with ties to the megadonor. “He’ll be strategic.”

This story has been updated to add Abboud’s statement that the Adelsons will not release a figure for their 2014 giving to Koch network organizations.

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