The Kochs Sue to Control the Cato Institute

Since 1977, the Cato Institute has been America’s chief libertarian think tank. Cato had four shareholder-founders: Ed Crane, Charles Koch, George Pearson, and William Niskanen. Following Niskanen’s death last fall, there’s been an ongoing, behind-the-scenes controversy about what would happen to Niskanen’s shares in the organization.

Would the shares go to his widow, or does billionaire Charles Koch have a right to purchase them (if Cato does not or cannot)? Charles Koch has been at odds with Crane’s non-partisan philosophy for Cato, so the ownership of the shares is consequential.

If the Kochs had more shares, they would control Cato, and could take it in any direction they wanted. Cato would likely look more like Charles & David Koch’s Americans for Prosperity, an avowedly partisan and conservative organization.

In the fall, just about everyone in the libertarian movement knew that the Kochs would try to use Niskanen’s death to wrest control of Cato from Crane. This conflict been a long-time coming. Talk of behind-the-scenes (now failed) discussions on Cato’s future has been widespread.

The Kochs are now suing to determine who has the right to Niskanen’s shares.

Here’s Crane’s statement on the Kochs’ lawsuit:

Charles G. Koch has filed a lawsuit as part of an effort to gain control of the Cato Institute, which he co-founded with me in 1977. While Mr. Koch and entities controlled by him have supported the Cato Institute financially since that time, Mr. Koch and his affiliates have exercised no significant influence over the direction or management of the Cato Institute, or the work done here.

Mr. Koch’s actions in Kansas court yesterday represent an effort by him to transform Cato from an independent, nonpartisan research organization into a political entity that might better support his partisan agenda. We view Mr. Koch’s actions as an attempt at a hostile takeover, and intend to fight it vehemently in order to continue as an independent research organization, advocating for Individual liberty, limited government, free markets and peace.

For more about the Kochs’ lawsuit, see the Washington Post and the court documents in the case.

Writing at Slate, David Weigel describes what’s at stake:

And so, with libertarianism at its modern apex, the Kochs are trying to wrestle the movement’s leading think tank away from the guy [Ed Crane] who built it up. (Literally. They just completed a renovation.)

More to come.

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