Criminal Intent?:
Hidden Money,
Secret Seminars,
and Undisclosed Lobbying:

1. Koch's Seminar Network
2. Hidden Money, Undisclosed Lobbying
3. Koch, NACDL, and George Mason University

1. Koch's Seminar Network and Criminal Intent

2010 leaked summit program shows several "overcriminalization" allies in attendance 

2010 leaked summit program shows several "overcriminalization" allies in attendance 

Koch Industries leads a highly secretive network of donors who meet twice a year for seminars on Koch's “integrated” political strategy. Although very little is known about these meetings, it can be seen that nearly all of the key figures and organizations involved in Koch’s mens rea reforms have attended Koch’s donor summits.

The sponsors of the Mens Rea Act (2015 and 2017) have all attended at least one of Koch’s secretive donor summits: Mike Lee (2017, 2016), David Perdue (2017), Rand Paul (2015, 2013), and Ted Cruz (Aug 2015, Jan 2015, 2013). All have received considerable contributions from Koch Industries and their network of donors. 

When the 2017 bill was filed, the National Association of Criminal Defense Lawyers (NACDL) made a celebratory announcement, describing their:

bipartisan approach to mens rea reform with the assistance of allies from a diverse coalition, including the Heritage Foundation, the U.S. Chamber of Commerce, the Federalist Society, Right on Crime, Koch Industries, and the American Bar Association.

Koch Industries first gained attention in October 2014 for donating to NACDL’s indigent defense program. 

This gift came one month after it was exposed that NACDL’s Executive Director Norman Reimer had attended Charles Koch’s secretive political donor summit in June 2014. Reimer told the New Yorker's Jane Mayer how:

until recently the company had funded mainly programs involving white-collar crime. Reimer told me that for years he had been asking Koch Industries to donate funds to support indigent defense, but it didn’t do so until 2014. At that point, Reimer says, the company provided a “significant six-figure” grant to train and support public defenders. (Dark Money, pg 361)

A leaked program from that same seminar shows Riemer and Koch General Counsel Mark Holden jointly leading an invitation only session (within the already secretive summit), entitled “Over-Criminalization: Removing Legal Barriers to Opportunity <<invitation only for past attendees>>.”

According to a leaked recording from Koch’s 2014 donor summit, Reimer acknowledged Koch’s involvement in NACDL’s White Collar Crime Project, specifically their collaboration with Edwin Meese and the Heritage Institute:

Thank you for the investment that Koch Industries made with us. We’ve been able to build some bridges with (inaudible). So let me give you some of the basics of how this would work out. We did a report a number of years ago that had a profound impact. It was cited widely on the failure of the Congress to have adequate intent requirements in the laws that they passed. Intent means the moral (inaudible). We seem to be punishing people that they don’t know that they did something wrong.
And this is a project I did jointly with the Heritage Foundation, an extraordinary (inaudible). And I was privileged to having as my co-author (inaudible), Former Attorney General Edwin Meese. I have to tell you that got a lot of attention. We went up to the Hill, and we presented it. And we had people that you wouldn’t believe would even be in the same room patting us on the back and thanking us for this work. (Undercurrent, Transcript)

He spoke alongside Koch's strategist Richard Fink on a panel entitled "Drive the National Conversation."

The mens rea conversation has largely been driven by NACDL's White Collar Crime Project alongside the Heritage Foundation’s Center for Legal and Judicial Studies, chaired by Edwin Meese. Meese has been active in Koch’s academic political/academic operations for decades. He served on George Mason University’s Board of Visitors alongside with Heritage president Edwin Feulner, and the of Koch's "integrated strategy" seminars, Richard Fink. A leaked program from Koch’s 2010 donor summit shows Meese in attendance.

According to tax forms and FEC filings, the Heritage Foundation’s political arm, Heritage Action for America, received at least $1,175,000 from political umbrella of Koch's donor seminars, the Freedom Partners Chamber of Commerce, between 2012 and 2014.

In 2005, Stephanie Martz left her position as senior counsel  at the U.S. Chamber of Commerce’s litigation center to head up NACDL’s White Collar Crime Project. Koch Industries’ Mark Holden has been a board member of the Chamber’s Institute for Legal Reform since 2007.

The same leaked 2010 program that shows Meese at Koch's seminar also shows two U.S. Chamber of Commerce officials leading a session on judicial elections.

According to tax forms and FEC filings, between 2012 and 2014, the U.S. Chamber of Commerce has received at least $7.5 million from Koch’s political umbrella, the Freedom Partners Chamber of Commerce.

Hidden Money and Undisclosed Lobbying

Unlike charitable donations from the Koch foundation, direct contributions from Koch Industries do not have to be publicly disclosed. Koch’s largely undisclosed funding to the NACDL can be traced back as early as 2003, when NACDL’s tax forms disclose one contribution from Koch Industries in the amount of $132,500.

Another accidental disclosure was discovered by the Texas Observer, showing funding from Koch Industries to the organization that launched Right on Crime in 2010, the Texas Public Policy Foundation:

a list of 2010 funders of TPPF that was disclosed to the IRS was inadvertently made public. The list of funders revealed is an important case study in how the Kochs' disclosed foundation spending is an under-representation of their overall political giving: Koch gave more to TPPF from its corporate Koch Industries treasury than it gave from its Koch Family Foundations. . . Koch Industries gave $159,834 directly to TPPF in 2012, versus $69,788.61 from the Claude R. Lambe Foundation, which is a Koch Family Foundation. (Sourcewatch)

Industry v.s. Dodd-Frank and the Foreign Corrupt Practices Act

Koch Industries and many members of their network are deeply involved in financial markets, specifically, deregulating and then trading in the financial markets that lead to the 2007 financial collapse (NYT, 2008).

In 2010, the NACDL and Heritage Foundation lobbied against parts of the Dodd-Frank financial reform bill, releasing a joint report entitled Without Intent. It criticized criminal provisions that did not require mens rea. The NACDL’s Tiffany Joslin also produced complementary research alongside Federalist Society’s C. Boyden Gray. The NACDL failed to disclose any of their funding from Koch Industries.

Between 2010 and 2011, the U.S. Chamber of Commerce’s Institute for Legal Reform advocated for weakening the Foreign Corrupt Practices Act. Koch’s general counsel, Mark Holden, has been a trustee of the Chamber’s Institute for Legal Reform since 2007.

In October 2011, Bloomberg reporters released a bombshell investigation finding that Koch Industries made bribes, or “improper payments to secure contracts in six countries dating back to 2002.”

The the U.S. Chamber of Commerce was eventually targeted as part of an inquiry by a House oversight committee, addressing the “apparent conflicts of interest” associated with advocating “changes that would weaken the Foreign Corrupt Practices Act” while “almost one in four [trustees] were affiliated with companies that were reportedly under investigation for violations” of that same law:

We are concerned about these apparent conflicts of interest. ILR is a not-for-profit advocacy organization affiliated with the U.S. Chamber of Commerce. In October 2010, it issued recommendations to change the Foreign Corrupt Practices Act that would significantly undermine the law. For example, ILR recommended limiting a company's liability for the actions of a company it has acquired; adding a "willfulness" requirement for corporate criminal liability; and limiting a parent company's liability for the acts of its subsidiary Yet nowhere did ILR disclose that over a dozen of the corporations represented on its board have violated or have been under investigation for violating the Foreign Corrupt Practices Act. . . One such company is Koch Industries . . .According to news accounts, Koch Industries reportedly acknowledged that it paid bribes to secure business in Algeria, Egypt, India, Morocco, Nigeria, and Saudi Arabia from 2002 to 2008 (Waxman Letter)

Four months before the Koch’s foreign bribery scandal became public, June 2011, the NACDL also lobbied for “common sense” mens rea reforms needed in the Foreign Corrupt Practices Act. Unlike the U.S. Chamber of Commerce, NACDL's relationship with Koch Industries was not public.

Koch, NACDL, and George Mason University

Koch’s largely undisclosed funding to the NACDL can be traced back as early as 2003, when NACDL’s tax forms show Koch Industries contributed $132,500. That is the year NACDL began submitting amicus briefs on white collar criminal cases.

Their first white collar brief was filed on behalf of Frank Quattrone, who was being charged with “obstructing justice and tampering with evidence” at Credit Suisse. Despite considerable evidence, Quattrone got a deferred prosecution agreement, and the charges were eventually overturned. Incidentally, Quattrone went on to found the Quattrone Center for the Fair Administration of Justice at Penn Law School, which has received $2.2. Million from the Koch foundation.

The NADCL held their first overcriminalization conference in 2004, co-sponsored by the Heritage Foundation. It featured research by George Mason University law professor John Hasnas, who served as Koch Industries assistant general counsel immediately prior to being hired at George Mason University.

George Mason University is ground zero for Koch's academic spending. The NACDL and GMU’s Law and Economics Center collaborated closely on the topic of white collar overcriminalization for years. In Norman Reimer’s opening remarks to their 2010 joint conference, he was so focused on white collar reforms that he had to remind the audience “[f]or NACDL, support for rational and humane criminal justice policies is not limited to the white collar crime arena.”

Among the few others acknowledged in developing the 2010 NACDL/Heritage joint report was George Mason University Law Professor Jeffrey Parker. Parker was part of the Heritage overcriminalization working group, and a senior fellow at the Goldwater Institute. Parker is a longtime critic of corporate criminal liability. He co-directed a 2010 conference entitled Overcriminalization 2.0 at Georgetown University, co-sponsored by the GMU Law and Economics Center and the NACDL. Todd Zwyickidirector of GMU’s Law and Economics Center is also a senior fellow at the Goldwater Institute. He directs the Mercatus Center’s Financial Markets working group, and testified on “Financial Regulatory Reform Proposals” in 2009.