Koch network to spend up to $400 million on 2018 midterm elections

INDIAN WELLS, Calif., Jan 28 (Reuters) - The conservative Koch network spent its annual donor conference celebrating policy victories under President Donald Trump such as the tax overhaul, but the elation was tinged with anxiety over November’s congressional elections that could pose a risk to its agenda.

To that end, the network plans to spend what would be unprecedented sums for the Kochs to maintain Republican majorities in the U.S. Senate and House of Representatives, while trying to sell voters on the benefits of the newly passed tax package, according to network officials who briefed reporters on their strategy during the conference this weekend in Indian Wells, California.

Historically, the party in power loses seats in congressional elections after a new president's election. This year, Republican angst is compounded by Trump, whose tumultuous presidency helped galvanize Democratic and independent voters to go to the polls in special and state elections last year.

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Rising political stars to watch in 2018

Randy Bryce (D)

Bryce made waves earlier this year when he announced he would run against House Speaker Paul Ryan in the 2018 midterm elections. Bryce, a Democrat, is a U.S. Army veteran, cancer survivor and union ironworker.

Rep. Scott Taylor, (R-VA)

A former Navy SEAL, Taylor has represented Virginia's 2nd District since he was elected in 2016. He has branded himself as a Republican lawmaker who is unafraid to speak out against President Trump and members of his own party -- recently calling out Roy Moore for allegations of sexual misconduct.

Rep. Seth Moulton, (D-MA)

39-year-old Seth Moulton has increasingly emerged as a prominent House member and one to watch within the Democratic party. He served four tours of duty in Iraq and notably serves as the. Recently, he has advocated for "a new generation" of Democratic leadership.

Rep. Chris Collins, (R-NY)

Collins was elected to represent New York's 27th district on Capitol Hill in 2012, and has since positioned himself as a vocal right-wing defender within the Republican party. He also came out as one of President Trump's most vocal supporters leading up to an after the 2016 election.

Rep. Raja Krishnamoorthi (D-Ill.)

Krishnamoorthi was elected in 2016 -- making him one of the more freshman lawmakers on Capitol Hill. Still, the former lawyer with a past of aiding the Obama administration has played an integral role this year in congressional investigations into the Trump campaign's potential ties to Russia. As a member of the House Committee on Oversight and Government Reform, he has taken many opportunities to speak critically of the clearance aides like Jared Kushner have -- and has firmly positioned himself as a staunch opponent of GOP efforts to repeal and replace Obamacare.

Sen. Lisa Murkowski, (R-AK)

As one of 21 women currently serving in the U.S. Senate, Murkowski has positioned herself as a more moderate leader within the Republican party. Murkowski refused to toe the party line on an attempted Obamacare repeal earlier this year, and has since raised skepticism over specific elements of the GOP tax bill and Republican Senate candidate Roy Moore.

Rep. Charlie Crist, (D-Fla.)

Crist is one of the more interesting players currently positioned in the political landscape. Once a Republican, Crist served as both attorney general and governor of Florida -- but then switched to a member of the Independent and eventually Democratic party. In his current House role representing Florida's 13th congressional district, Crist has emerged as a Democrat unafraid to take a middle-ground approach in his policy stances.

Sen. Tom Cotton, (R-AR)

As the youngest U.S. senator, Cotton's political future currently looks very bright. As one of the few Capitol Hill lawmakers that has yet to have a public feud -- on Twitter or otherwise -- with President Trump, Cotton was recently on the shortlist to replace Mike Pompeo as CIA director if Pompeo replaced Rex Tillerson as secretary of state.

Sen. Catherine Cortez Masto, (D-NV)

Catherine Cortez Masto is the first Latina ever elected to the U.S. Senate.

Governor-elect Ralph Northam (D-VA)

Northam was elected governor of Virginia in the series of "anti-Trump" Election Day victories Democrats celebrated in Nov. 2017. Northam's victory over Ed Gillespie signaled a potential shift in the oft-fraught over Virginia battleground state -- and Northam's gubernatorial tenure will be one to eye in the context of midterms and the 2020 presidential election.

Sen. Kirsten Gillibrand (D, NY)

Many who watch politics closely have noted Gillibrand as one to watch since she was appointed to Hillary Clinton's former Senate seat in 2009, and then elected in 2012. Early in her Senate career, Gillibrand used her position as a member of the Committee on Armed Services to chalk up a major legislative win by championing the repeal of "Don't Ask, Don't Tell." Gillibrand has also recently spoken out against sexual harassment allegations stemming from both Democratic and Republican offices -- calling on both Sen. Al Franken and President Trump to resign.

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“It’s going to be a very challenging environment,” said Tim Phillips, president of Americans for Prosperity, a grassroots political group that is part of the Koch network. “The left is energized. There’s no question about that.”

The network is prepared to spend up to $400 million on the congressional races - a 60 percent increase from its investment in the 2016 election, officials said.

Energy magnates Charles and David Koch have long been outsized players in Republican politics, but they never warmed to Trump during the 2016 campaign.

With Trump in the White House, however, they have seen several policy goals realized, including the tax legislation and cutting federal regulations.

But the Koch network still diverges from the Republican president on issues such as immigration and trade. The Kochs strongly support legislation that would protect “Dreamers” - people brought illegally to the United States as children - from deportation.

Two Koch operatives, Daniel Garza and Jorge Lima, were at the White House on Friday to try to help broker a deal with Congress over the Dreamers. The network issued a statement on Friday disagreeing with a proposal in Trump's immigration blueprint that would set new limits on legal immigration.

On trade, Phillips and other Koch operatives are deeply concerned about the administration’s moves to impose tariffs on some imports and ardently support the North American Free Trade Agreement with Canada and Mexico, which is being renegotiated and that Trump has threatened to abandon.

'GET OUT AND DEFINE YOURSELF'

Senator John Cornyn, the No. 2 Republican in the Senate, was an attendee at the Koch event, a measure of the network’s deep ties to conservatives in Congress and an example of the leverage it would lose should Democrats take control next year.

Of the $400 million the network is looking to spend, $20 million will go toward promoting the tax law, which passed Congress in December and included big cuts in corporate tax rates along with tax reductions for many individuals.

SEE ALSO: Ivanka Trump reportedly leading charge to replace John Kelly

Polls at the time of passage showed Americans divided about the bill's merits, but Phillips said he believed that would change as voters see increased paychecks. Democrats condemned the tax measure as favoring corporations and the rich.

Americans for Prosperity is positioned to be a ground-level force in the congressional elections. Its largest presence is in Florida, where Democratic Senator Bill Nelson may face a fight from Republican Governor Rick Scott. The group also has offices in Arizona, Nevada, and Wisconsin, among other states, all of which are expected to see highly competitive Senate races.

Phillips said his group would likely stay out of Republican primaries.

One variable hanging over the Kochs’ effort is Trump. Republican losses in a special U.S. Senate election in Alabama last month and a governor’s race in Virginia in November were attributed in part to discontent with the president.

In 2010, Republicans seized on voter worries about Democratic President Barack Obama's signature healthcare law, known as Obamacare, to capture the House and thwart Obama’s policy goals.

For the Koch network, the challenge will be to avoid having every local race become a referendum on the president, which could propel a Democratic wave.

RELATED: A look at David Koch

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Businessman David Koch arrives at the Metropolitan Museum of Art Costume Institute Gala Benefit celebrating the opening of "Charles James: Beyond Fashion" in Upper Manhattan, New York May 5, 2014. REUTERS/Carlo Allegri (UNITED STATES - Tags: ENTERTAINMENT FASHION BUSINESS HEADSHOT)
Businessman David Koch arrives at the Metropolitan Museum of Art Costume Institute Gala Benefit celebrating the opening of "Charles James: Beyond Fashion" in Upper Manhattan, New York May 5, 2014. REUTERS/Carlo Allegri (UNITED STATES - Tags: ENTERTAINMENT FASHION BUSINESS HEADSHOT)
Businessman David Koch arrives at the Metropolitan Museum of Art Costume Institute Gala Benefit celebrating the opening of "Charles James: Beyond Fashion" in Upper Manhattan, New York May 5, 2014. REUTERS/Carlo Allegri (UNITED STATES - Tags: ENTERTAINMENT FASHION BUSINESS)
EXCLUSIVE. Julia and David Koch, and their son host a party taking place at their home for the Charles Evans PCF Pro-AM TOUR 2012 Hamptons Tournament, benefiting the Prostate Cancer Foundation, in Southhampton, NY on August 18, 2012. The reclusive David Koch has a net worth of $25 billion. He is thought to have bankrolled the tea party, a connection however which he is evasive about. Strongly anti-Obama, he and his brother Charles have poured an estimated $400,000 million into the 2012 campaign. Photo by Art Seitz / ABACAUSA.COM
Businessman David Koch arrives at the Metropolitan Museum of Art Costume Institute Gala Benefit celebrating the opening of "Charles James: Beyond Fashion" in Upper Manhattan, New York May 5, 2014. REUTERS/Carlo Allegri (UNITED STATES - Tags: ENTERTAINMENT FASHION BUSINESS HEADSHOT)
U.S. businessman and philanthropist David H. Koch is seen with an unidentifed guest as he arrives for the Metropolitan Museum of Art Costume Institute Gala 2015 celebrating the opening of "China: Through the Looking Glass," in Manhattan, New York May 4, 2015. REUTERS/Andrew Kelly
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James Davis, vice president of Freedom Partners, another Koch-backed policy group, said strong candidates should be able to differentiate themselves from Trump.

“Get out there and define yourself and where you stand on the issues,” Davis said.

During one event, a donor from Nebraska, Gail Werner-Robertson, stood up and addressed Charles Koch directly, urging attendees to contribute more to the midterm effort.

“We can’t lose the progress you all have fought so hard for,” she said.

(Reporting by James Oliphant; Editing by Caren Bohan and Peter Cooney)

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