Koch Group Has Ambitions in Small Races

Iowa — Election seasons in this small eastern Iowa town are usually
cordial affairs. But this year, a group backed by the billionaire
Koch brothers has changed that.
The group, Americans for Prosperity, has jumped into the race to elect
Coralville’s next mayor and City Council with an aggressive
campaign, mailing fliers, advertising in newspapers, calling voters
and knocking on their doors. Its latest leaflet hit mailboxes last
week, denouncing the town’s growing debt and comparing it to the
financial woes of Detroit. “Coralville is fast becoming Iowa’s
version of Detroit,” it read. Tuesday’s race here is not the only one that has drawn the interest of Americans for Prosperity, which was founded by Charles and David Koch. Local
chapters have been involved in property tax fights in Kansas, Ohio
and Texas, the group says. In January, the group successfully fought an increase in a food and beverage tax in Fremont, Neb. And last spring, it opposed a tax increase in
Gahanna, in central Ohio. Voters rejected the tax measure in May,
but the City Council has put it back on Tuesday’s ballot.
Tim Phillips, the national president of Americans for Prosperity, said the organization could have a real effect on local races, where it does not have to deal with all the Washington special

The main reason “we fight local issue battles is because they result in good policy
outcomes, generally promoting economic freedom via less taxes, less
government spending,” he said.

But here, in this town of fewer than 20,000 residents, the group has not been so
welcome, and the nonpartisan campaign has become an informal
referendum on the involvement of outsiders. Even residents who agree with Americans
for Prosperity’s core argument — that the city’s debt is out of
control — question the group’s motives for wading into the race.
That has forced the candidates who share the group’s beliefs to
keep the organization at a distance.

Chris Turner, a first-time candidate
for the City Council who has spoken out against the debt, said that
although he disagreed with Americans for Prosperity on most issues,
he could not seem to catch a break because his campaign platform
aligns with the organization. 

“Every time I
go to a debate or anything, I’ve tried talking about the budget,
and then they just go, ‘Koch brothers, Koch brothers, Koch
brothers,’ ” he said of his critics, adding that he wished
Americans for Prosperity “would just go

The organization’s Iowa chapter, one of
35 affiliates across the country, is running the campaign in
Coralville. Mark J. Lucas, the president of the Iowa chapter, lives
in Iowa City, a college town that neighbors Coralville. He said he
took an interest in the Coralville race because the city’s debt and
its economic development strategy affect taxpayers across the state
who have to make up Coralville’s shortfalls.

Americans for Prosperity is not openly
promoting specific candidates, and Mr. Lucas would not say how much
money it is spending. 

“For me as a
state director, I’m the one who picks the strategy,” said Mr.
Lucas, a native Iowan. “It’s not, like some people think, the Koch
brothers are telling us, ‘You need to play in the Coralville City
Council race.’ That’s absolutely not

But David Jacoby, a Democratic state
representative from Coralville, questions the motives for Americans
for Prosperity’s involvement in a local race in which eight people
are running for three council seats and four people for

“I think right now, too, that they’re
doing whatever groundwork they can for the 2014 elections — so any
inroads they can make anywhere,” Mr. Jacoby

Americans for Prosperity seems to be
winning few adherents here, or at least anyone willing to admit so
publicly. After all, eastern Iowa was a Democratic stronghold in
2008 and 2012, when the state went for President Obama. Thumbing
through a survey at Kathyl Jogerst’s door on a rainy afternoon last
week, John Sevier, a 22-year-old volunteer with Americans for
Prosperity, started a question to her by saying the City Council
had moved $5 million out of the school district

Ms. Jogerst, 61, cut him

“No, they didn’t,” she said with a
skeptical chuckle. 

“Are you sure?”
Mr. Sevier said. 

“Yeah, yeah,”
she said, quickly explaining her position without allowing him to
get a word in. “I know the agenda with your

One of the central players in the race,
a coalition of business leaders called Citizens for
Responsible Growth and Taxation
, has a large disclaimer
on its website that says it is unaffiliated with Americans for

The citizens group, which has given
money and advice to candidates it supports, has been criticized
because it is unclear who some members are. While most of them are
said to own businesses in Coralville, many do not live in the town.
The group also has the backing of General Growth Properties, a
developer based in Chicago with 123 malls nationwide, including
Coral Ridge Mall in Coralville. That is the type of corporate,
big-money affiliation that people here say they are uncomfortable
seeing in their elections. 

General Growth
has not contributed money to any candidates in the race, but a
spokesman, David Keating, said in a statement that the company “is
like many other local businesses and homeowners in Coralville —
very concerned about the astronomical levels of debt incurred by
the city and the huge property tax hikes that have

A central issue in Coralville’s
elections is the city’s decision to borrow tens of millions of
dollars to turn a once-blighted stretch of riverfront into a
development called the Iowa River Landing. The city retained
ownership of some of the buildings, including a Marriott hotel and
convention center and a brewery. City officials also lured a Von
Maur department store to the development with as much as $16
million in incentives.  

“I don’t think
government should operate private enterprise,” said Mark Winkler, a
City Council candidate the citizens group has backed. “Government
should own libraries, police

Critics complain that the debt has
prevented the city from lowering property tax rates. They also
complain that the complex rules of tax-increment financing siphon
property tax money away from the schools, leading the state to pay
$2.5 million toward Coralville schools each

But city officials argue that their
investments have helped the economy boom — $757 million in retail
sales last year, a more than fourfold increase since 1997 — and
that the debt will be paid. They blame General Growth for stirring
much of the criticism, saying the developer was upset that Von Maur
went to the Iowa River Landing and not the

“I am very proud of what we’ve done
here,” said Bill Hoeft, a city councilman who is running for a
second term.  

Laurie Goodrich said that when she
decided to run for the City Council, she planned to campaign on
issues like painting the water tower, keeping the parks clean and
maybe upgrading residential yard waste

“We have not discussed any of that,”
she said. “The sad part is, is that that’s really what concerns
people who live here.”