Trump’s Koch Network Feud Risks Splintering GOP Before Elections

(Bloomberg) -- President Donald Trump's fight with the powerful public policy and political network led by billionaire Charles Koch risks splintering the Republican Party just as it reaches the critical homestretch of its campaign to keep its congressional majorities in November elections.

In what amounts to struggle over the future of the party, the Republican National Committee joined Trump's attack on the Koch network in a letter to donors released late Thursday that could act to exacerbate a fight with some of the nation's most influential conservatives.

"This week, the Koch Network announced they will no longer support only Republicans running for office, and that moving forward they will support candidates that fit their agenda -- even if they are Democrats," RNC Chairwoman Ronna Romney McDaniel wrote. "Some groups who claim to support conservatives forgo their commitment when they decide their business interests are more important than those of the country or party. This is unacceptable."

The RNC letter drew disbelief from some Republicans. "The RNC distancing itself from the Kochs represents the Republican Party's repudiation of free-market economics and its embrace of its new-founded identity as a political cult," said Rick Tyler, a Republican strategist who worked on Senator Ted Cruz's 2016 presidential campaign.

The letter followed an announcement the network made on Monday not to endorse -- at least for now -- a Republican U.S. Senate candidate in North Dakota, Representative Kevin Cramer, because of disagreements over policy positions.

GOP Warning

The decision not to support Cramer was cast as a warning to other Republicans who might be tempted to stray from the free-market, fiscally restrained approach backed by Koch and his followers. Cramer is challenging Senator Heidi Heitkamp, one of 10 Senate Democrats who face re-election in states Trump won in 2016.

At a weekend donor summit in Colorado, the network also criticized Trump's restrictive trade policies and combative leadership style, while also putting forward a more bipartisanship tone and saying it might be willing to work with some Democrats.

The RNC is also planning to emphasize to donors that money given to the network could end up supporting a Democrat and put GOP congressional majorities at risk, according to a party official who wasn't authorized to speak on the record about donor messaging.

The network has funneled millions to conservative candidates and causes and keeping its supporters happy has traditionally been important to Republicans, especially in election years. It plans to spend about $400 million on state and federal policy and politics during the two-year cycle that culminates with November's balloting, a 60 percent increase over 2015-16. Besides trying to influence electoral politics, the organization also works on education, criminal justice, workforce and poverty issues.

Grassroots Army

The bulk of the money the network budgeted for November elections likely has been spent. In January, officials said they planned to complete most of their television advertising -- the most costly part of the campaign -- by the end of July, before activating their grassroots army in 36 states to try to get conservative voters to the polls.

Republican Representative Ryan Costello of Pennsylvania said Friday that the Koch network has been “very important” to Republican candidates across the country.

“I don't want to speak ill of the RNC chair, but I don't understand why you would escalate any sort of confrontation or speak ill of an outside organization that does spend tens, probably hundreds of millions of dollars helping to elect Republicans,” he said on Bloomberg Television.

The RNC's letter was released the same day that Trump attacked Charles Koch on Twitter, for the second time this week. In his Thursday tweets, the president appeared to be referencing pro-free trade comments Koch made to reporters Sunday in Colorado.

James Davis, a network spokesman, responded to the RNC letter with the same statement he'd issued after Trump's tweets on Thursday.

"We will work together with the president, elected officials and others where we agree," he said. "And, where we disagree, we will do so in a civil way. This is what it will take to make progress on the issues and ultimately create a society of mutual benefit, where people succeed by helping others."

A GOP congressman, who spoke on condition of anonymity, said he hopes the rift is quickly resolved so everyone in conservative policymaking and donor circles can stay focused on keeping control of government.

Data System

The RNC also criticized an expansive voter data system called i360 that the Koch network built that competes with the party's own growing data operation. "They have sold this data platform to some Republican campaigns, but that data is often not shared with our data eco-system and therefore does not benefit other Republican candidates including the president," the letter said.

Michael Palmer, the president of i360, defended his data operation without responding directly to the RNC's criticisms.

“i360 has been the data partner of choice for candidates across the country for eight plus years because we have provided superior data, technology and analytics," he said in a statement. "We will continue to drive innovation to create superior value for our customers now and in the future.”

Koch also told reporters that he worries Trump's trade policies could trigger a recession, if they became restrictive enough. The billionaire industrialist was measured in his criticisms, but his top deputies had sharply condemned the president's leadership style a day earlier.

Koch, 82, is the chairman and chief executive officer of Koch Industries, the second-largest closely held company in the U.S. He and his brother, David Koch, didn't support Trump in 2016.

The two sides have clashed over Trump's opposition to long-held conservative beliefs on government spending and free trade, as well as a more welcoming stance held by the network on immigration. Still, Trump has demonstrated a tight hold over GOP voters that has made Republican politicians wary of crossing him.

--With assistance from Anna Edgerton.

To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Justin Blum

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