It’s Kochs vs. Mercers in the Right’s Big Tech Brawl

(Bloomberg Businessweek) -- Tucker Carlson, the Fox News commentator and Donald Trump whisperer, shocked the conservative ecosystem when he devoted a segment of his show last month to vilifying right-wing nonprofits.

Carlson said many groups have betrayed the conservative cause and “colluded with Big Tech to shield left-wing monopolies” from oversight. The U.S.’s large internet companies work in secret to impose a left-wing agenda on the country, he said, and no one in Washington is doing anything about it.

He cited a report that named the Heritage Foundation, which gave Carlson his start in Washington in the 1990s, and Americans for Prosperity, part of the political network affiliated with libertarian billionaire Charles Koch, as the villains.

Not long ago, conservative lawmakers, think tanks, and trade groups were unified in their calls for a light regulatory approach to business. More recently, they’ve been waging a bitter war over whether and how to rein in Silicon Valley’s biggest companies. The fight has split the right wing into an anti-Big Tech camp made up mostly of social conservatives and a faction composed of more traditional pro-business groups that supports the internet giants. 

The skirmishing has helped elevate the view that the internet companies are suppressing right-wing voices. Republicans including Senate Majority Leader Mitch McConnell and Texas Senator Ted Cruz believe that’s a winning political argument, judging by their campaign ads.

Such hammering could make it harder for the internet platforms under federal and state antitrust investigation to beat back legislation to break them apart or win over public opinion. It could also cause the platforms to lose a cherished legal immunity, called Section 230, that protects them from many lawsuits.

A ringleader of the side claiming tech companies have a left-wing agenda is Senator Josh Hawley, a Missouri Republican who investigated Google for antitrust and privacy violations when he was a state attorney general.

Aside from Fox News’ Carlson, this faction counts President Trump; Steve Bannon, Trump’s former chief strategist; and the family foundation of Robert Mercer, the hedge fund tycoon who backed Trump’s candidacy. And it includes a galaxy of smaller nonprofits forming around the idea that Google, Twitter, and Facebook censor conservative ideas. 

“Big Tech should be reined in and reined in fast,” says Bannon.

Defending the internet companies is a network of groups supported by libertarian billionaire Charles Koch, who’s broken with Trump and increasingly shifted his focus to Silicon Valley.

Allied with the Koch network are the pro-free-market Mercatus Center at George Mason University and mainstream conservative think tanks such as the Heritage Foundation and the Competitive Enterprise Institute. Some of these groups criticize the tech companies’ practices but believe regulators should keep their distance.

Robert Bluey, Heritage’s vice president of communications, wrote in the Daily Caller, a conservative publication that Carlson co-founded, that the Fox News segment was misleading. While Heritage has sometimes been treated unfairly by YouTube, Bluey wrote, that doesn’t mean the government should regulate the Google unit.

“It should come as no surprise that Heritage supports empowering consumers rather than government to influence the private sector,” Bluey wrote. “We are, and have always been, champions of free enterprise and critics of government intervention.”

Observers of the schism say Trump has helped convince the Republican base of the social conservatives’ view, which increasingly is comfortable with government regulation or intervention if it advances their cause. At the same time, these observers say, the pro-business wing of the party coming to the defense of Big Tech is in decline.

Tech companies “hold cultural values that are very different” from the Republican Party base, says Marshall Kosloff, a media fellow at the Hudson Institute. “If you are an up-and-coming Republican politician or a commentator like Tucker Carlson,” the tech companies aren’t aligned with you, he says.

There is little evidence that Facebook, Twitter, Google and its YouTube unit systematically discriminate against ideological viewpoints. They’ve explained how they decide to remove content that violates their rules. Twitter Inc., for example, allows only people—bots aren’t permitted—to have accounts. Followers of some accounts, including high-profile ones like Trump’s, have been deleted in an effort to remove spam and fake or abusive tweeters.

Yet some right-leaning groups persist in the view that the platforms are biased. They complain that their posts are more likely to be flagged for violating social media sites’ standards for hate speech or violence when they talk about hot-button social issues such as immigration, religion, sexual orientation, or gender, says Klon Kitchen, a Heritage technology research fellow.

In July, Trump invited right-wing media groups to the White House to hear their grievances. The president said he would direct his administration to “explore all regulatory and legislative solutions to protect free speech,” though little has come of that. But even Trump acknowledged that some right-wing content went too far. “Some of you are extraordinary,” Trump told the audience. “Can’t say everybody. The crap you think of is unbelievable.” Later, he added: “Some of you guys are out there. I mean it’s genius, but it’s bad.”

The rift was on full display in San Francisco days before Carlson’s attack, when the Lincoln Network, a right-leaning nonprofit that seeks to bridge the divide between Washington and Silicon Valley, hosted a debate on whether the U.S. should crack down on social media companies for alleged bias.

James O’Keefe, an attendee at the White House media confab and founder of Project Veritas, which uses sting operations to expose what it considers wrongdoing by liberal groups, in the debate used videos to try to show that Twitter and Alphabet Inc.’s Google are biased. In one case, a Google employee argues that breaking up the search giant won’t “prevent the next Trump situation.” Project Veritas "people lied about their true identities, filmed me without my consent, selectively edited and spliced the video to distort my words and the actions of my employer," the Google employee later wrote in a blog post.

Berin Szóka, president of the libertarian think tank TechFreedom, had earlier tweeted that claims of systematic bias amount to a conspiracy theory. “At the end of the day, the free-market position has always been clear: It’s not the government’s role to meddle in speech—period,” he said at the debate.

It’s “not a conspiracy theory when you can see the person’s lips moving,” O’Keefe said at the debate. “You attack me, and you attack my journalism.” The remark prompted Szóka to use air-quote marks as he mouthed the word journalism. “Well here’s a challenge for you,” O’Keefe said. “Name one thing about that that’s fake. And if you can’t, you better put up or shut up, my friend.”

The Koch family, which owns the industrial conglomerate, Koch Industries Inc., over the past decade has created or supported numerous libertarian organizations to advocate a hands-off approach to regulation. Federal tax forms filed by the Charles Koch Foundation and the Charles Koch Institute show they gave more than $500,000 to Szóka’s TechFreedom from 2014 to 2018, the latest data available.

The Kochs have also given millions to the Heritage Foundation; the R Street Institute, which favors limited government; universities; and other think tanks whose scholars have advocated for a laissez-faire approach to regulation.

Google likewise contributes to the Lincoln Network, TechFreedom, the R Street Institute, and other libertarian think tanks, though it won’t disclose amounts.

On the other side, the Mercer Family Foundation gave almost $8 million between 2013 and 2018 to the Government Accountability Institute, which seeks to uncover government corruption. Peter Schweizer, who heads the institute, co-wrote The Creepy Line, a 2018 documentary that argues Google and Facebook Inc. stifle conservative speech. Schweizer has been a conservative hero since his 2015 book, Clinton Cash, which investigated the finances of Bill and Hillary Clinton.

M.A. Taylor, who co-wrote and directed the film, says he got more pushback from Republicans than Democrats after its release, which he believes was in part because Google funds many conservative and libertarian groups and think tanks. He says the institute Schweizer heads wasn't involved in the project, but declines to say who funded it.

In November, Rebekah Mercer, daughter of Robert, moderated a panel discussion, which featured Schweizer and Taylor, on internet-platform bias. She said Facebook and Google should be charged with making in-kind donations to the Democrats because, as gatekeepers to knowledge, “they’re all ideologically on the same page.”

Her father, founder of hedge fund Renaissance Technologies LLC, bankrolled conservative digital site Breitbart News while Bannon led it. (The two have since had a falling out.) The elder Mercer also supported the 2016 Trump campaign and invested heavily in Cambridge Analytica, the now-defunct political consulting firm that harvested Facebook data from millions of users without its knowledge.

The Mercer Family Foundation has given almost $3.5 million to the Heartland Institute, a think tank that advocates for free markets and whose website features anti-tech opinion pieces, from 2013 to 2017. The foundation also granted almost $13 million between 2013 and 2017 to the Media Research Center, which polices what it believes is liberal bias by mainstream media. The foundation’s latest filing, for 2018, shows no money going to the Media Research Center and several other groups critical of Big Tech, a sign that the family may be rethinking its donor strategy.

Rebekah Mercer, the Mercer Family Foundation, and Sandy Schulz, senior publicist for the Government Accountability Institute, didn’t respond to requests for comment. Brent Bozell, the Media Research Center president, didn’t return calls seeking comment on the donations.

The report Carlson cited in his Fox News segment came from the Google Transparency Project, a group that often criticizes the search giant. Oracle Corp., a longtime Google antagonist, has claimed to be one of its donors.

Some groups, such as the Lincoln Network, straddle the divide. The Kochs gave it $1.6 million from 2014 to 2018. But the group also got $100,000 from the Mercer family in 2016. A Lincoln Network spokesperson pointed to a statement on its website that says the group is “careful not to allow donors to predetermine or unduly influence our work.”

Much of the schism revolves around Section 230 of the 1996 Communications Decency Act, which shields internet platforms from legal liability for content such as Facebook posts, YouTube videos, and tweets. Hawley, the Missouri senator, is sponsoring a measure that would strip tech companies of their legal immunity unless they prove to the Federal Trade Commission that they are politically neutral when policing content.

Heritage and Koch-affiliated groups argue that the Section 230 exemption has been critical to the development of a flourishing digital economy.

Conservatives are similarly split over whether the government should bring antitrust charges against the tech companies. Koch and allies say antitrust enforcers are being too zealous, and sometimes overtly political, in their pursuit of the tech companies.

If you only favor tough antitrust enforcement “when you get to be the attorney general or your preferred political party is in the White House, you are just setting up a massive weaponization of one of the most powerful tools for the government to have,” says Jesse Blumenthal, vice president for technology and innovation for Stand Together, an umbrella group that includes Americans for Prosperity, the Charles Koch Foundation, and the Charles Koch Institute.

Late last year, Americans for Prosperity began a Facebook advertising campaign criticizing the state-level investigation of Google led by Texas Attorney General Ken Paxton. But those in the social conservative camp said that view ignores the power that tech platforms have over individuals’ personal information, markets, and political speech. Investigating Big Tech “involves both the central tenets of our country’s free-market economy and the guaranteed freedom of speech,” a Paxton spokesperson said in 2018. 

“If 50 state AGs agree there is an issue here that is totally appropriate for them to look into, I don’t think that’s conservative or liberal,” says Rachel Bovard, a senior adviser for the Internet Accountability Project, a new advocacy group in the social-conservative orbit. She wouldn’t disclose its donors.

“You have this libertarian strand of the conservative movement that says private business is good because it’s private business,” she says. The tech giants are international behemoths “with more data on us than” the National Security Administration. “We are in unprecedented territory.” —With Ben Brody and Joshua Green

To contact the editor responsible for this story: Sara Forden at sforden@bloomberg.net, Paula Dwyer

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