You have to give points to WaPoists over the Beltarians in reporting on the Koch-Cato power opera.
Koch-controlled, beltarian magazine Reason manages to report on Koch-Cato, giving background on the founding of Cato, without mentioning Murray Rothbard, who was an original founder and came up with the name for the institute. Neat trick.
Slate, owned by the Washington Post, correctly discusses the Koch-Cato power battle and significantly mentions Rothbard in the first paragraph of their story.
It's not hard to understand why the Kochs want Murray Rothbard buried in a memory hole, given the fact that Rothbard was heaved out of the Cato institute because of Murray's principled libertarian stand versus the opportunistic desires of the billionaires and that a feud is again now arising that does two things, raise the question of the Kochs as opportunists over principle, once again and once again brings to the surface Rothbard's original ownership in the institute, this time with documentation that the Kochs originally kept away from Rothbard. An ownership that now traces to Lew Rockwell, founder of the Mises Institute, an Institute the Kochs failed to shut down though they tried, an institute that remains steadfast in principle and has been free from the power operas that have flared around the Kochs in the 20th century and now the 21st century.
Bob, your post on the WaPo and Reason divergence was great, and the significance of Murray will be a big fight. More and more Cato-enemies will see the fight with the estate of Rothbard as a juicy angle, and "if it bleeds it ledes" (more appropriate, if it clicks it sticks) and lead more people to read about the grand Dr Rothbard.
ReplyDeleteR Dale Fitzgerald
It's funny that the only states a real conservative can win are blue-leaning states. Shows how uninformed Americans are.
ReplyDeleteBob - Follow the lineage of the original Cato shares. They create MANY unresolved questions.
ReplyDelete1977 Original Shareholders Agreement:
Charles Koch - 12 shares
George Pearson - 12 shares
Roger MacBride - 12 shares
Murray Rothbard - 12 shares
Ed Crane - 12 shares
TOTAL SHARES ACCOUNTED FOR: 60
1985 Shareholders Agreement:
Charles Koch - 16 shares
George Pearson - 16 shares
Bill Niskanen - 16 shares
Ed Crane - 16 shares
TOTAL SHARES ACCOUNTED FOR: 64
OUTSTANDING SHARES UNACCOUNTED FOR: 24
1991 Shareholder's Agreement:
Charles Koch - 16 shares
George Pearson - 16 shares
Bill Niskanen - 16 shares
Ed Crane - 16 shares
David Koch - 16 shares
TOTAL SHARES ACCOUNTED FOR: 80
OUTSTANDING SHARES UNACCOUNTED FOR: 24
2008 - George Pearson relinquishes his stake in Cato by selling his shares to Cato.
Charles Koch - 16 shares
Bill Niskanen - 16 shares
Ed Crane - 16 shares
David Koch - 16 shares
TOTAL SHARES ACCOUNTED FOR: 64
SHARES RETURNED TO CATO: 16
OUTSTANDING SHARES UNACCOUNTED FOR: 24
2011 - Bill Niskanen dies
Charles Koch - 16 shares
Niskanen Estate - 16 shares (disputed)
Ed Crane - 16 shares
David Koch - 16 shares
TOTAL SHARES ACCOUNTED FOR: 48
SHARES RETURNED TO CATO: 16
SHARES IN DISPUTE: 16
OUTSTANDING SHARES UNACCOUNTED FOR: 24
Questions that need to be answered:
1. How did Charles Koch, Pearson, and Crane each acquire 4 more shares of stock between 1981 and 1985, and when/how were they issued?
2. What happened to MacBride's shares between 1981 and 1984?
3. What happened to Rothbard's shares after the 1981 board meeting?
4. Why did Pearson (who I believe was closer to Koch than to Crane) voluntarily leave in 2008 when his shares alone could have given the Kochs the majority they seek today?
Also this is only speculative, but could the issuance of 4 new shares apiece to Koch, Pearson, and Crane in 1985 (plus the 16 to Niskanen) have been a tacit admission that the Rothbard and MacBride shares still existed?
ReplyDeleteThe only logical purpose of going from 12 to 16 seems to be to dilute the voting strength of the other outstanding shares (Rothbard and MacBride) relative to those who got 4 more added to their stockpiles. It guaranteed that Koch & Crane would still have a voting majority if, for whatever reason, Rothbard and/or MacBride were able to exercise their shares at some future point.
If I were the judge, I'd be asking the following questions: What constitutes ownership of a donor supported "privately-owned" non-profit? Where donors to Cato advised that they were contributing to a non-public, "privately-owned" non-profit, which could be taken over at some future date by a couple of oil barons? Does any failure to disclose leave Cato or the Kochs open to a class action suit? Who is responsible for that lack of disclosure? Wouldn't that be the "owners" the Kochs? If there is legal exposure, how does that affect Cato's valuation? How does the fact that the organization has never been resident in Kansas effect the question of ownership? Which resources do the Kochs own and which resources do they not own? For instance, do they own the name The Charles G. Koch Foundation or do they own the name The Cato Institute, which was contributed by Murray Rothbard and for which he was never compensated? How does the fact that Rothbard was never compensated for his shares, let alone willingly depart with them affect the case? How does the fact the MacBride's shares never became an issue affect the case? Who owns MacBride's shares? Why did the Kochs not sue to reclaim MacBrides shares? Does any of this history imply a pattern of improper, non-contractually complicit behavior? Wouldn't it be amusing if the Kochs sued for ownership only to end up with a corporation with massive legal exposure and few assets? Perhaps the best approach would be to just let them have it.
ReplyDeleteIf you look at Rothbard's essay in the May 1981 issue of Libertarian Forum, which lay out the seizure of his Cato shares, I think the questions about the "unaccounted" shares are answered.
ReplyDeletehttp://mises.org/journals/lf/1981/1981_01-04.pdf
Rothbard notes that MacBride was already no longer a shareholder as of 1981. At the time Rothbard was sacked, the remaining shareholders were him, Crane, C. Koch, and "another person, who works in the Koch offices in Wichita." (Pearson)
So, if MacBride's 12 shares were redistributed among the remaining four, they would then each have 16 shares.
While Rothbard makes clear that he believes his shares were seized inappropriately, he also notes that what Crane told him in the 1981 shareholder meeting was that his shares had been "canceled."
If that's true, there would no mystery. The total number of outstanding shares as of May 1981 would thus be 48 (Crane, Koch and Pearson with 16 each) and it would stay at that figure until 16 new shares were issued to Niskanen with the new agreement in 1985. Another 16 were issued to D. Koch in 1991.
I'll support the position made above. If I've made a donation above, under the belief that Cato is a regular not-for-profit organization like any other, one that will continue to advocate for its stated libertarian cause, and I then find out that it is merely an owned toy of a billionaire conservative -- I'll consider myself to have been defrauded of my donation. Someone should be held accountable. I'm not sure if that is a Cato employee, Cato's board, or the "owners," which presently consists of the Koch brothers and Ed Crane.
ReplyDelete