Via Did Weigel: Hot, Fresh Koch Damage Control:
The Koch Brothers: Since the time of its founding, when the original Charles Koch Foundation changed its name to the Cato Institute, Cato has been envisioned as a committed force to advance free societies…. [A]ffirmative steps were taken to convert Cato… to a stock based corporation… intentionally… because Charles, as principal donor and founder… wanted to keep oversight of Cato in the hands of a few shareholders who could be relied on to maintain the original intent and vision…. Cato has been operating under this structure for more than 35 years….
Charles Koch and David Koch went to great lengths to avoid this dispute. Their efforts were numerous, sincere, and went literally up to the last minute. The disagreement over the shareholders’ agreement has been going on for years with Charles Koch and David Koch receiving several proposals from Cato’s officers to dissolve the agreement. Charles and David consistently declined these proposals because they feel the shareholder structure is important to preserve donor intent…. Charles Koch and David Koch… sought to resolve the issue, or… table the issue for a year or longer…. They proposed a standstill agreement… for one year or longer. They proposed third party mediation. They proposed alternative corporate structures…. All of these efforts were rejected, and Cato’s other shareholder demanded that a shareholders' meeting be held on March 1 where a new party (Ms. Washburn – Bill Niskanen’s widow) would be named a shareholder and new directors would be named. The court action, filed immediately before the shareholders’ meeting, was a last resort to ask the court for help in confirming the meaning of the governing documents and the shareholders’ agreement….
[A] key principle of libertarianism is recognizing and respecting the rule of law. The founders of the Cato Institute reached an agreement and agreed to be bound by it. And that is what Charles Koch and David Koch are seeking here…. [L]ike President [George W.] Bush, if Cato’s leaders are willing to abandon a key libertarian principle – adhering to voluntary agreements – when they feel it’s convenient, the organization has lost its way….
Charles and David believe that upholding the shareholder agreement is crucial to protecting Cato’s principled mission…