The Kochtopus is a group of minarchist organizations founded by Charles G. Koch. They include the Cato Institute (which plays a central role in the Kochtopus), Reason Foundation, Property and Environment Research Center, Students for a Libertarian Society, The Libertarian Review, Institute for Humane Studies, Council for a Competitive Economy, Heritage Foundation, Federalist Society, and the Mercatus Center at George Mason University. The power structure of the Kocktopus changed over the years, from being simply Charles Koch and his aide George Pearson, to a setup in which Libertarian Party national chairman Ed Crane was equal in power to Pearson. In addition
to rumblings about the "Crane Machine" and the "Kochtopus," there was a deep suspicion that Crane was selling out the party's principles. Circa 1984, Richie Fink set up a lobbying outfit called Citizens for a Sound Economy as a means of furthering Koch's goal of bringing in outside funding through a membership organization; this heralded the beginning of the Finktopus. The term "Kochtopus" was coined in February 1978 by Samuel Edward Konkin, III, who accused Koch of attempting "to buy the major Libertarian institutions - not just the Party - and run the movement as other plutocrats run all the other political parties in capitalist states."
The Kochtopus is allied against the anarcho-capitalist Ludwig von Mises Institute. Murray Rothbard warned of the dangers of putting too much power in the hands of one donor, and accused the Kochtopus of causing a "Kochcycle" by pouring millions into the libertarian movement from 1977-1980, and then imploding the movement by a sudden contraction of funding. Specifically, the Kochtopus took control of the Libertarian Party at the 1979 Libertarian National Convention in Los Angeles, at which David H. Koch, Charles' brother, openly bought the vice presidential nomination for $500,000; campaign finance laws allowed him to spend unlimited amounts for his own candidacy. Murray Rothbard broke with the Kochtopus soon after the '79 LP Convention and most of his close allies were purged, including Williamson Evers of Inquiry. The Center for Libertarian Studies was cut off from Koch funding. Rothbard's The Libertarian Forum began attacking Koch, and Rothbard and young Justin Raimondo set up a new Libertarian Radical Caucus.
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