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The Koch brothers set their sights on North Carolina state races

Last month the political action committee of Kansas-based Koch Industries donated the maximum of $5,100 to the campaign of North Carolina's incumbent Republican Gov. Pat McCrory, who's in a tough fight against his Democratic challenger, Attorney General Roy Cooper. The PAC also donated the maximum amount to the McCrory campaign during the primary. 

Koch Industries is a leading petroleum refiner, and McCrory has been a friend to the oil and gas industry while governor. Two Koch subsidiaries, one specializing in refining and chemicals and another that produces synthetic materials, have locations in North Carolina. The company is owned by Charles and David Koch, major contributors to conservative pro-business causes at the national, state and even local levels. 

But the KochPAC contributions to McCrory are just a drop in a larger flood of money the organization is pouring into North Carolina: In all, Koch Industries' PAC and two Koch-backed independent spending groups have reported spending $1 million on the state's elections so far this cycle.

That includes nearly $64,000 in contributions to several Republican state legislators, the governor and the N.C. Manufacturers Alliance PAC, which represents the chemical industry. But direct campaign contributions from the Koch operation are dwarfed by its spending on outside political groups active in the state — donations that, unlike campaign contributions, are largely unrestricted by law.

With help from Art Pope

Before becoming governor, McCrory worked for Americans for Prosperity, a 501c4 outside spending group founded and funded by the Koch brothers. He led a North Carolina bus tour sponsored by AFP and took part in its advocacy videos and robocalls.

This year, the group has reported spending $360,000 on mailers attacking his opponent. While AFP was not active in the 2014 North Carolina state elections, it spent nearly $470,000 in 2012 on mailers backing McCrory, conservative state Supreme Court candidate Paul Newby and numerous Republican legislative candidates.

In addition, Freedom Partners Action Fund, a super PAC bankrolled by Charles Koch and his allies, has reported spending nearly $575,000 on TV and digital advertising against Cooper. The North Carolina governor's race appears to be the nation's only state-level contest where FPAF has been active. Most of the more than $30 million it's spent so far this cycle has benefited Republican U.S. Senate candidates in five tight races, according to the Center for Responsive Politics.

Because FPAF is a super PAC, it is required to disclose its donors. Variety Stores, the discount retail business of North Carolina conservative mega-donor Art Pope, a close ally of the Kochs who helped them found AFP and served on its board for many years, gave $100,000 to the group in June 2015.

Weighing in on the N.C. Supreme Court

This past June, Koch Industries gave $25,000 to N.C. Chamber IE, the independent expenditure arm of the N.C. Chamber of Commerce, which represents business interests. Since 2012, the company and Koch Industries Public Sector, a subsidiary that works to influence federal policy on the company's behalf, have given a total of $125,000 to the business lobby's IE arm. 

Both N.C. Chamber IE and the Chamber itself, a trade organization that's not required to disclose its donors, have spent large sums on North Carolina politics this year. Chamber IE has reported spending over $450,000 on independent expenditures supporting five Republican state legislative candidates, while the Chamber has already disclosed over $1.7 million in elections spending, much of that on TV ads supporting incumbent Republican state Supreme Court Justice Bob Edmunds in a race that will determine the court's partisan balance.

Koch Industries has also donated at least $2 million during this election cycle to the Republican Governors Association, a national super PAC that has funneled millions of dollars into the North Carolina governor's race. The RGA has reported spending close to $1.5 million on TV ads and mailers attacking Cooper, and it has given nearly $1.7 million to its newly formed RGA Right Direction PAC, which has donated over $1.8 million since August to the N.C. Republican Party. The party in turn has given the McCrory campaign almost $2.6 million. North Carolina Democrats have raised concerns that the RGA contributions to the state GOP break a state law that forbids corporate money from going to state parties and candidates and filed a complaint with the state elections board last month.

In addition, Koch Industries has contributed nearly $400,000 this cycle to the Republican State Leadership Committee, a national super PAC that puts money into state legislative and court races around the country. So far, campaign finance reports show that the RSLC has given the following amounts to North Carolina-based political groups:

* $300,000 to Fair Judges, a super PAC that has taken in nearly $900,000 and has so far spent over $340,000 on TV ads benefiting Justice Edmunds, according to Federal Communications Commission documents.
 
* $750,000 to Truth and Prosperity, a group created to support Republican incumbent Lt. Gov. Dan Forest. It has reported spending over $1.1 million so far on advertising. Though details about the targeted candidates are not yet available in state elections board reports, the money presumably benefits Forest.

* $50,000 to Real Jobs N.C., a super PAC founded by Pope. While the group has raised funds to help McCrory, it has not yet reported any spending with the state elections board.

Koch Industries has also given over $165,000 to the Republican Attorneys General Association, which in turn has donated almost $2.2 million to a group it formed called Carolinians for Freedom. While Carolinians for Freedom has disclosed little elections spending to date, The News & Observer reports that the group has booked $3.8 million dollars in ads against the Democratic candidate for attorney general, Josh Stein.

Alex Kotch

A Chapel Hill, North Carolina, native, Alex joined the Institute team in January 2014. Now living in Brooklyn, New York, he conducts research for the Institute and contributes regularly to Facing South, focusing on money in politics, elections law, education and social justice.

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GOP mega-donors Charles (right) and David Koch (left), their petrochemical company and its PAC are pouring money into North Carolina to influence state elections for governor, legislature, Supreme Court and attorney general. (Image of Charles Koch is adapted from Gage Skidmore's photo on Flickr; David Koch image is adapted from Fortune Brainstorm TECH's Flickr photo.)