No Kock brothers for you...

How Rand Paul bombed at Kock brothers gathering

His laid-back style turns off big money donors.

By Kenneth P. Vogel and Tarini Parti

Some of the most influential players in big-money conservative politics gathered late last month to discuss government’s role in society, but their focus kept shifting to a less weighty topic: Rand Paul’s outfit.

The Kentucky senator and prospective GOP presidential candidate — whose libertarian politics mesh with those of the billionaire megadonor brothers Charles and David Kock — appeared at the annual winter meeting of the Koch donor network wearing a boxy blue blazer, faded jeans and cowboy boots.

Some attendees commented that Paul’s appearance was “cavalier,” said Frayda Levin, a Paul supporter and major donor who attended the conference at the Ritz-Carlton in Rancho Mirage, California. It was organized by Freedom Partners Chamber of Commerce, the nonprofit hub that oversees the Koch network. “This is an older crowd and much more establishment crowd. They are used to a Romney. They are used to a Jeb Bush,” Levin said.

“Jeans might work for a younger audience,” said another attendee, “but these are old bulls who put on a tie every day to go to the office.”

The sartorial criticisms hint at a potentially more serious challenge for Paul — securing the backing of enough big-money donors to be competitive in a crowded Republican primary that could include prolific fundraisers such as Jeb Bush and Chris Christie.

During a Sunday afternoon speech at the Kock forum , Paul drew skepticism among some donors by touting tax breaks as a means of spurring economic growth in blighted inner cities. That stance is anathema to the brand of small-government conservatism espoused by the industrialist brothers and many of their network’s donors, who object to marketplace interference. Even Levin admitted she was “a bit surprised. But he’s just exploring ideas right now. People didn’t quite understand where he was coming from.”

Donors were further put off by Paul’s performance later that evening in a forum for prospective GOP presidential candidates that also featured Sens. Marco Rubio of Florida and Ted Cruz of Texas. At times slouching in a cushy arm chair, Paul, with his legs crossed, gave rambling answers that contrasted sharply with other participants.

At one point, he opposed eliminating tax benefits to the oil and gas industry — from which Kock Industries, the brothers’ multi-national conglomerate, benefits but which the brothers philosophically oppose. Paul seemed less prepared than Rubio, who gave detailed answers and was by far the most sharply turned out of the trio (pressed Navy blue suit, crisp white shirt, red tie and American flag lapel pin). Cruz, tieless in a light blue shirt and tan sports coat, laced his remarks with one-liners.

The next day, when 100 donors participated in an informal straw poll conducted by veteran consultant Frank Luntz, Paul finished dead last. Rubio came in first, followed by Wisconsin Gov. Scott Walker, who stopped by the conference, but could not make it for the panel.

Paul’s spokesman Sergio Gor noted the event was mostly off the record (though the forum was streamed live online) and said his office wouldn’t comment on specifics. But, he added “we can assure you Sen. Rand Paul made great inroads with countless individuals who attended the event. His individual meetings with attendees proved very, very fruitful and he was well-received by the hosts. Finally, since the event was closed to the press, it is impossible for any reporter to accurately reflect the opinion of 300 attendees.”

Still, several attendees characterized Paul’s performance as a missed opportunity for him to significantly broaden his base of megadonor support headed into a presidential election in which the two major party nominees and their allies are expected to spend upward of $1.7 billion apiece.

Big-money support is seen as a key weakness for Paul, much as it was for the presidential campaigns of his father, former Texas Rep. Ron Paul. While there are key differences between father and son in both style and substance, major donors still look skeptically upon both Pauls’ brands of libertarian-infused conservatism — particularly their noninterventionist foreign policies.

Supporters argue that Rand Paul, who has opened offices in Silicon Valley and Austin, can overcome that by looking outside the traditional GOP megadonor community

“Mainstream donors were never his primary target. He is bringing in guys from Silicon Valley, from the tech world, who were never comfortable with the Republican Party,” Levin said, describing Paul’s donor base as “transpolitical.”

Indeed, Paul has met with a number of tech tycoons who defy party labels, such as Peter Thiel, the PayPal co-founder and early investor in Facebook and LinkedIn, who gave more than $2.7 million to super PACs supporting Ron Paul’s 2012 presidential campaign; Facebook’s Mark Zuckerberg; PayPal board member Scott Banister; Joe Lonsdale, founder of Palantir who is considered a Thiel protégé. Napster co-founder Sean Parker, who has waded increasingly into national politics in recent months, donated $5,000 to Paul’s leadership PAC in November, according to the latest campaign finance reports.

Paul might not raise the most, but he will have necessary donor support, said Aleix Jarvis, one of the few Paul backers among the K-Street lobbying world of Washington. “Money is not going to be a problem for him,” said Jarvis, a lobbyist at Fierce Government Relations. “It won’t match what Jeb does, but I think that’s an advantage in Rand’s mind.”

Yet with mixed results, Paul has continued to try to court allies among the traditional megadonor community.

During a 2013 major donor summit organized by the Karl Rove-conceived American Crossroads super PAC, Paul was aggressively challenged on whether he would support a military strike on Iran if it became apparent that the regime had enough uranium to build a bomb.

The Freedom Partners conference seemed like fertile turf for Paul, given that Paul’s libertarian sensibilities align closely with the Koch brothers and some of their key donors.

In fact, Charles Kock is thought to favor Paul most among all the prospective 2016 candidates. And Paul has traveled to Koch’s home turf of Wichita to court him, playing at least one round of golf with the 79-year-old billionaire. (Paul’s PAC late last year paid $406 to Koch Industries for a “golf expense” according to a recent campaign finance filing).

Some have viewed Charles Kock as a bridge to other network donors. The Kock network intends to spend $889 million in the run-up to the 2016 election on a combination of political organizing and advertising, as well as academic research and advocacy on free-enterprise issues. While the brothers and their network have not said whether they will try to influence the GOP presidential primary, the political world is closely watching its every interaction with prospective candidates.

Some conference attendees say Paul was well-received in a small group break-out session on one of Koch’s key issues — criminal justice reform.

But when Paul defended his noninterventionist positions in response to a question on Cuba at the candidate forum, sources say he got mixed results from the Koch donor network, which has become increasingly diverse and now includes several donors who are more aligned with the hawkish GOP orthodoxy on foreign policy.

Asked about his support for President Barack Obama’s move to normalize relations with the communist island nation, Paul said “We’ve tried an embargo for 50 years. It hasn’t worked. The reason I call it a form of isolationism is if you apply the embargo … if you do that for China, for Vietnam, for Laos, for any of the other countries that have human rights abuses, that would be a policy of isolationism.”

Levin conceded that Paul’s foreign policy isn’t for everyone. “That’s what differentiates him. I don’t think he came across as extreme libertarian. Rand Paul just thinks we can’t patrol the world,” she said. As for the Rancho Mirage, she said “I don’t think it was a missed opportunity. He tried to court them, but there are some issues — some key issues — that he’s not going to back down on.”