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Raising Arizona
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Raising Arizona

Co-published by Economic Hardship Reporting Project and The Baffler.

THE ARIZONA STATE CAPITOL complex in downtown Phoenix looked dark and dreary after working hours, but anyone passing by would have noticed at least one office light still on. Inside, Bruce Wheeler’s face soured when his eyes ran across some unusual line items in the proposed state budget. The year was 2016, and Arizona’s Republican majority had just finished designing the new state funding allocations. Wheeler, a gruff Democrat from Tucson, expected to find the usual machinations of shafting public education. But he saw something else in the pages spilled across his desk: something that he hadn’t seen in all his time as a state legislator serving non-consecutive tenures across four decades.

As usual, the 2016 budget included annual state appropriations to Arizona’s three public universities. But this time, the legislature had also earmarked three individual academic centers to receive millions of dollars in two line items separate from the annual university aid package. As Wheeler saw it, the Republicans were planning to slash the university budget on the whole while pumping money into these mysterious academic units. He didn’t know exactly what this meant, but he didn’t like it—especially not in Arizona, where the newly elected and self-proclaimed “education governor,” Doug Ducey, and his Koch-aligned Republican cohort had just achieved total control over every facet of state government and the courts. Wheeler began making a game plan for his staff to help him get to the bottom of it.

He sat back in his swivel chair and looked outside the large panel window in his office, out onto the Capitol mall and beyond, where lights were twinkling in the fifth-largest city in the country. The legislative complex that housed Wheeler’s office was built in 1960, one of the the last times Arizona Democrats held a majority in state government, and four years before Lyndon B. Johnson’s defeat of Arizona senator Barry Goldwater in the 1964 presidential election. Goldwater is widely considered the founder of the modern conservative movement and a major influence on the movement’s pro-market libertarian sect that seeks to limit government involvement in economic matters. The dirty stone complex serves as a concrete reminder that Republicans have largely controlled state government throughout Arizona’s modern history.

During that time, the state has proved an adept national laboratory for some of the country’s most draconian policies, such as the anti-immigrant “show me your papers law,” SB 1070, which became the law of the land when the Supreme Court upheld two of its harshest provisions in 2012. Arizona has set similar precedents in the realm of education. One of Ducey’s proudest achievements is the state’s voucher system that favors for-profit charter schools. It even caught the eye of former education secretary Betsy DeVos, who modeled the Trump Administration’s “Freedom Scholarships” after it in an attempt to give federal legs to the Arizona creation.

Programs like these have powerful allies in the state: a tightly knotted cluster of think tanks, foundations, and private donors belonging to a national donor membership roster—whose members ominously refer to themselves as “the network”—of ideological adherents of the billionaire Charles Koch, cofounder and CEO of Koch Industries. Here in Arizona, they’ve taken the Goldwater tradition to a whole new level.

***

Arizona became key to the Koch network during the Obama years, which they saw as no less than an existential crisis. Since Democrats controlled the White House and held majorities in both chambers of Congress, the network’s aims shifted away from federal government. They wanted to reshape facts on the ground at the state level: to create “model states,” as Tim Phillips, president of the Koch-founded grassroots advocacy group Americans for Prosperity, put it, to offset federal reforms like government health care programs.

To the network, Arizona looked like a house of cards that could be brought down with the flick of a finger. But while the state’s house and senate were consistently under Republican control, the governorship was a constant swing seat, often acting as a crucial Democratic doorstop that staved off complete Republican dominance. The position fell vacant in 2009, when Democrat Janet Napolitano resigned to join Obama’s cabinet, leaving then secretary of state Jan Brewer to fill the seat. In 2010, she was elected in her own right to a four-year term.

Brewer was as Republican as they come, infamously putting Arizona on the map for SB 1070 as well as a ban on high school ethnic studies. The only problem was she bit her thumb at some of the Koch network’s most passionate platforms, notably its opposition to government health care. With a son who suffered from severe mental illness, Brewer’s personal stake moved her to join with minority Democrats to expand Medicaid, leading her Republican peers to refer to her package as “Obrewercare.” As her time in office neared its end, the Koch network saw an opportunity to fill the governor’s seat with someone more ideological: someone who wouldn’t let their personal feelings get in the way of the Koch gospel.

That someone was Ducey, former president and CEO of Cold Stone Creamery. He was a corporate man through and through, having cut his teeth at Anheuser-Busch distributors and Procter & Gamble. Best of all, he was a Koch donor network member himself. Ducey was elected in 2014 with plenty of support from Koch-affiliated groups like the 60 Plus Association and American Encore, the latter of which poured nearly $1.5 million into his winning general election campaign.

Along with lifting Ducey into office, the network helped numerous Koch-aligned legislators who advocated giving public education a makeover, imbuing it with a free-market philosophy. When Bruce Wheeler’s team studied those strange allocation items in the 2016 budget, they discovered that the large aid packages were for so-called freedom schools—right-wing libertarian institutions that advocate eventually eliminating public education altogether, replacing the system with charter schools for the superrich—on the state’s two biggest university campuses: $2.5 million for the University of Arizona Center for the Philosophy of Freedom and $3 million for Arizona State University’s School of Civic and Economic Thought and Leadership. According to records provided by the Joint Legislative Budget Committee, expenditures on these centers have only increased since: an extra $500,000 was allocated in 2020 for another freedom school, the Alliance Bank Economic Policy Institute at Northern Arizona University, the third and smallest public university in the state. No institution in the state’s network of Koch centers has been rewarded more than its flagship, the Center for the Philosophy of Freedom, known by its short-hand moniker, the Freedom Center, which had received $24,474,700 in public tax dollars as of 2023.

The success of the freedom schools also owes much to Randy and Ken Kendrick, two private Koch donor network members who stood out as early Ducey supporters. An aged couple, small in stature but big in political influence, the Kendricks largely owe their fortune to co-owning the Arizona Diamondbacks professional baseball team and to the Datatel higher education software corporation, which Ken founded. According to campaign information collected from the database See the Money, the Kendricks have been major donors to a host of movers and shakers in the state legislature that champion freedom schools. Randy even cofounded the Arizona Free Enterprise Club, which lobbied for the schools, and she was also the first donor to the Freedom Center, which was officially founded at the University of Arizona in 2008, after two years of fundraising and ideological coordination between the Kendricks and the academic founder, David Schmidtz, according to documents obtained for this story.

A former attorney, Randy sits on the board of the Goldwater Institute, a far-right think tank and litigation firm founded with Goldwater’s blessing the year after he retired; its mission is to eliminate government interference and “defend and strengthen the freedom guaranteed to all Americans in the constitutions of the United States and all fifty states.” But she owes her political development to Charles Koch. In a private email sent shortly after Obama won his second term, obtained in a records request, a heavy-hearted but unbowed Randy wrote to her mentor with almost religious devotion. “Without your leadership,” she concluded, “I don’t believe any of us would have a trusted network into which to put our energies and effort. Thanks to you, we do . . . I won’t say I would feel lost without your leadership—that’s too much of a burden to place on you. But there is an element of truth to that also.”

Today, thanks in part to the efforts of the Kendricks, there are four freedom schools planted on every public university in the state; all but one cropped up under Ducey’s watch. But four isn’t nearly enough, as far as some conservatives are concerned. For them, the schools are no less than a source of holy water pushing its way to the surface to form what an astute journalist once called an “oasis” in a desert of liberalism.

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The freedom schools see their mission as more than providing a balance of perspectives on supposedly liberal college campuses. They have real-world aims to reorder society. In November 2015, William Boyes, director of ASU’s Center for the Study of Economic Liberty, delivered remarks at an event in Phoenix called “What Must Be Done” put on by the Mises Institute, an ultra-right education advocacy organization. Boyes spoke candidly about what the Koch centers were doing. “We need to move aggressively,” he told the crowd, emphasizing these first words in the cadence of military speech, “to create a free market in education.”

Boyes said that Arizona’s freedom schools would achieve optimal long-term impact if the centers could open both K-12 and university education to a “free-market approach”—in his words—and “get rid of the public education, create private education as a replacement, and have a market for education.” In this radically different vision of a future United States, most families would not be able to send their kids to school because there wouldn’t be a free public education system to receive them. But in the interim, Boyes suggested, the government did have a role to play during a transition period to “private for-profit” schools: “The state would continue to provide funds at a declining rate for a short period of time.”

When Wheeler heard these words shortly after Boyes’s speech, he felt like he’d caught the network red-handed. “If there was ever a blueprint signed and sealed by these bastards, here it is,” he said. But the earmarks he’d been investigating sailed through the Republican legislature anyway and were signed promptly by Governor Ducey, as has every such earmark since.

While the state of Arizona remains the freedom schools’ most regular patron, private funding also pours into the Koch network’s campus stronghold in Tucson: money that often comes with strings attached. A major donor of the Freedom Center, the Thomas W. Smith Foundation, allegedly exerted influence over who should lead the Political Economy and Moral Science (PEMS) department at the University of Arizona in Tucson, which was created by the Freedom Center in 2017 to provide undergraduate and graduate degree programs under the free-market libertarian banner. According to emails obtained for this article, professor David Schmidtz, the Freedom Center’s founding director, assured a representative of the TWS foundation that he planned to convene a new academic search committee after being “bogged down waiting for various constituencies to accept they have no right and no power to divert the search to some cause other than what TWS wanted to support.”

This kind of donor influence has shaped the Freedom Center since it was just an embryonic unit within the university’s Philosophy department. A 2006 financial agreement, obtained through a trove of internal leaks and public records requests by the advocacy group Kochs Off Campus! and shared with me, assured Randy Kendrick, before she cut her inaugural $1.5 million check to the Center, that the academic stipulations she made would be followed. According to the letter penned by then department head J. Christopher Maloney to Kendrick, the university agreed to teach Kendrick’s favored course on wealth creation—in accordance with the libertarian, pro-market slant she approved of—and to adorn Schmidtz with the title of “Kendrick Professor of Philosophy.”

In the very first newsletter put out by the Freedom Center in March 2010, Schmidtz described a survey given out at the beginning and end of this wealth creation course. He was disappointed in the results: in his view, too many students supported a minimum wage: “The results from the first survey indicate that there is much work left for the Freedom Center to do. . . . Our goal is to increase the proportion of students who respond correctly to these statements throughout the semester and to improve our methods to make sure we reach this goal.”

By the fall of 2019, “The Ethics and Economics of Wealth Creation” had metastasized to fill ten entire classroom and discussion sections simultaneously, molding approximately 175 young minds to achieve libertarian success in the free market. One of them was Alex Racy, a cerebral twenty-year-old who wanted to study political economy. The only major on campus that would allow him to do so—Philosophy, Politics, Economics, and Law (PPEL)—was the Freedom Center’s pet project.

Racy hadn’t even heard of the Freedom Center, but he quickly grew disgruntled by it when his entrance exam to the PPEL major required that he write a reflection paper on an academic essay titled “Defending Eugenics” by one of his future professors, a Koch devotee named Jonathan Anomaly. In the essay, Anomaly argues that while the Nazis gave eugenics a bad rap, the world would be a better place if society opted to “manipulate biology” to combat the West’s “troubling” demographic trends, whereby “people with a higher IQ, more education, and greater income reproduce at relatively low levels.” Anomaly’s colleague and Schmidtz’s former graduate assistant, Jason Brennan, argues similarly in his book Against Democracy that the democratic system is a failed experiment and must be replaced by an “epistocracy”—government ruled by the “knowledgeable.”

Racy’s education inside the academic orbit of the Freedom Center got weirder and weirder. On one fall semester day, he witnessed Mario Villarreal-Diaz, then a professor of Economics at the University of Arizona, prepare to face down his enemies on campus: historian Nancy MacLean was coming to speak about her book Democracy in Chains, which revealed the backstory of the radical right’s rise across America over the last sixty years. Villarreal-Diaz, known for wearing a tie clip emblazoned with the visage of Adam Smith, denounced the book and defiantly declared, according to Racy and several of the students present that day, “I am one of the big targets because I have raised money for Charles Koch.” (Villarreal-Diaz would later be arrested in October 2020 on charges of child pornography.) This, combined with the eugenics paper, ultimately pushed Racy into anti-Koch activism on campus. Fortunately, there was somewhere he could plug into: a group of community activists and university faculty were forging concrete ways to challenge the Kochs.

***

In 2017, when community activists Victoria Woodard and Patrick Diehl read investigative journalist Jane Mayer’s book Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, they noticed the University of Arizona listed on the inside cover among dozens of other institutions receiving Koch money. They decided to dig further. Within weeks, Woodard, Diehl, and fellow activist Jeff Holsen discovered that the Freedom Center’s outreach program in Tucson’s largest K-12 public school district, TUSD, included a required economics textbook which was co-authored and self-published by Schmidtz and two of his UA colleagues. (They had read about the textbook in an article in this magazine by David V. Johnson.) The TUSD governing board later voted to discontinue the associated course which, according to multiple board members, had not gone through the typical vetting process.

Also in 2017, the activists raised their concerns with Democratic Congress member Raúl Grijalva, who characterized the Koch outreach program into the state’s schools as “troubling” and posed a series of questions to the university president addressing its influence on the university curricula. Questions to which, several years later, Grijalva says he has yet to receive a response.

Soon, the group began unearthing the many millions the Koch network had supplied to the state’s universities. The discoveries prompted them to found Kochs Off Campus!, a nonprofit dedicated to protecting academic freedom in public education. They recruited faculty and students, like Racy, to join, in 2018. Their activities included advocating for strong university gift acceptance policies that combat improper donor influence, objective instructional materials at both K-12 and higher education institutions that do not promote hidden or unacknowledged political or economic agendas, resisting the growing influence of “big money” on campuses, and funding public education adequately to lessen social inequality.

In the time since their founding, Kochs Off Campus! has not let up its fight, focusing on the University of Arizona. Their efforts have begun to yield success. In 2022, the Faculty Senate appointed a faculty committee to investigate donor influence on campus, which was chaired by a faculty member of Kochs Off Campus. Later that year, KOC! asked the newly elected Governor Hobbs to veto funding in the state budget for the “freedom schools” at UA, ASU, and NAU. She responded by removing the line items that required the funding to be spent only on the freedom schools—leaving it up to the universities to decide whether or not to continue funding the Koch centers. In 2023, the amount of funding that the Republican-majority legislature intended for the Freedom Center was $4.3 million, but their wishes no longer had the force of law.

UA’s Faculty Committee on Donor Influence submitted their report to the Faculty Senate last September. It recommended that the Senate censure the Freedom Center for allowing donor influence on faculty hiring, teaching, and curriculum, as well as for their lack of transparency about donor influence and line-item funding outside the typical university budgeting process. A month later, the Freedom Center responded to the Faculty Committee’s report with a document of their own that included a section entitled “Defamation Per Se.” That section had a chilling effect on the Faculty Committee. Its chair resigned for fear of a lawsuit, and no one else on the committee has stepped forward (yet) to respond to the Center.

The Koch network’s potential litigiousness isn’t the only crisis the University of Arizona is now facing. Last November, Kochs Off Campus! learned that the UA administration made a $240 million mistake and is considering furloughing staff and faculty, reducing salaries, and putting a freeze on hiring. In response, KOC! launched a campaign to keep $4.3 million in UA’s general operating budget to help with the fiscal crisis, instead of giving it to the Freedom Center.

One possible outcome of UA’s fiscal crisis is that as a large, public university implements austerity measures to contract its essential services, the Koch outpost it houses continues to suck up both state and private funding—perhaps getting closer to the realization of the network’s vision to dismantle public education, however inadvertently. The other outcome, envisioned by KOC!, is one in which the Freedom Center’s millions are redistributed to support students and faculty across the university at a moment when its future is under threat. Only time will tell which outcome will prevail. Although the fight continues, things in Arizona aren’t so easy for the Kochs anymore.

This article received support from the Economic Hardship Reporting Project and the Robert B. Silvers Foundation.

 

Gabb Schivone is a writer and investigative reporter. You can follow them on Twitter and their personal website.

Save An Endangered Species: Journalists

Gabb Schivone is a writer and investigative reporter. You can view their first graphic/comic work, Into the Sun, a border/migration/climate fantasy story, in The Florida Review. Their journalism has been published in (or accepted by) Slate, Mother Jones, The New York Review of Books, The Intercept, and elsewhere. They are currently working on a nonfiction book manuscript about cops who have rebelled against the established order to support progressive social movements.

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