Forum Post: Koch brothers vs. Cato: Nothing good happens at Dulles
Posted 12 years ago on March 7, 2012, 8:02 a.m. EST by GirlFriday
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As the Koch brothers move forward with their attempt to gain control over the Cato Institute, details are emerging that show the rift among the founders has been building over the course of several years.
But what moved this from a hostile conversation to what Cato president Ed Crane has called a hostile takeover seems to center on making sure that President Barack Obama loses the 2012 election. http://www.washingtonpost.com/blogs/think-tanked/post/koch-brothers-vs-cato-nothing-good-happens-at-dulles/2012/03/06/gIQAzq2DvR_blog.html
The surprise is that a nonprofit group, particularly an organization with the public influence of the Cato Institute, can have private shareholders.
“You don’t see 501(c)(3)s with shareholders very often,” said Jeffrey S. Tenenbaum, chairman of the nonprofit practice at Venable LLP. (Tenenbaum, like other legal experts interviewed for this story, spoke about nonprofit law generally, rather than about the specifics of the Cato case.) http://www.forbes.com/sites/lauriebennett/2012/03/02/who-knew-that-cato-had-shareholders/
This is an interesting article. http://www.counterpunch.org/2012/03/05/koch-brothers-worth-50-billion-sue-widow-over-16-00-of-nonprofits-stock/
A quote: "The original Cato Five, who signed a “Shareholders Agreement” on January 26, 1977 were: Charles Koch, George Pearson, Roger MacBride, Murray Rothbard, and Edward Crane.
Pearson became an employee of Koch Industries; MacBride was the Presidential nominee of the Libertarian Party in 1976; Rothbard became a libertarian icon. A 1981 issue of The Libertarian Forum, a newsletter edited by Rothbard, charged Crane and Charles Koch with illegally grabbing his shares of Cato and barring him from attending future Board meetings in order to consolidate their control. The details of Cato having owners and the extent of their control over the nonprofit has not found its way into mainstream media until now." ...."According to the current lawsuit, a revised version of the 1977 agreement was consummated in 1985 and “…the four persons owning the shares of Cato were Plaintiff Charles Koch, defendant Crane, William A. Niskanen, and George Pearson. Each owned 16 shares of Cato’s capital stock that he had purchased for $1.00 per share. Plaintiff David Koch became a shareholder of Cato in 1991 when Cato issued 16 shares of its capital stock to him…In 2008, George Pearson ceased to be a shareholder of Cato when he tendered his 16 shares of capital stock to the Corporation and the Corporation purchased the stock for the $16.00 that Pearson had originally paid for it. After Cato’s purchase of Pearson’s shares of stock, four shareholders of Cato remained: Plaintiffs Charles Koch and David Koch, Defendant Crane, and William Niskanen…” each constituting “a 25% voting interest in the Corporation.” "
Has Cato ever operated as a nonprofit in the public interest?? They haven't for almost 40 years..
I don't think they ever did.
This is great (great article btw): Nancy Pfotenhauer has served Charles Koch in a dizzying array of incarnations. Pfotenhauer was previously a lobbyist for Koch Industries in their Washington, D.C. office. In 2009 her media firm, Media Speaks Strategies, was paid $175,000 by the Koch funded Americans for Prosperity Foundation. KochFacts.com, a web site set up by the Kochs, carries an interview with Pfotenhauer in April 2011 in which she is identified as the “Koch family spokesperson.” She is or was on the Koch payroll.
Unfortunately because they fund both Reason and Cato the Koch brothers have a lot of say in the media presentation of libertarianism in the U.S. ( effectively excluding left-libertarians and moderate libertarians from the dialogue). Reason.com hasn't even bothered to cover the libertarian Presidential candidates with the exception of Gary Johnson and Cato is even more conservative than Reason.