From the book:
An early example of Charles Koch flexing his muscles took place at the Cato Institute in 1981, when he fired one of the think tank's five original stockholders. Ironically, although Charles has criticized Robert Welch for turning the John Birch Society into a cult of personality by flaunting his ownership of the organization's stock, Charles had set up Cato in the same way, as a non-profit with stockholders who picked the Board of Directors. The arrangement was rare in the non-profit world. But as Charles had observed of the John Birch Society, it guaranteed the directors and unusual measure of continuing control.
The director that Charles fired at Cato was a major figure in libertarian circles, Murray Rothbard, a radical Upper West Side Jewish intellectual whose work Charles had subsidized in happier days. Rothbard called the putsch "iniquitous,"high-handed" and " illegal." He went on to claim that Charles had "confiscated the shares which I had naively left at Koch's Wichita office for 'safekeeping,' an act that is clearly in violation of our agreement as well contrary to every tenant of libertarians principle."
Some suspected that Rothbard, an Austrian economic school purist, was fired for criticizing Koch, whom he accused of watering down unpopular libertarian positions in order to get more votes for his brother's 1980 candidacy. The platform, for instance, had pulled back from advocating the complete abolition of all income taxes. It also called for shrinking rather than abolishing the military. The controversy set off alarms in the hothouse libertarian community marking Charles in the eyes of those who who took Rothbard's side as ruthless and rapacious, more interested in power than in principle...
Rothbard also accused Charles of using nonprofit organizations to "acquire access to, and respect from, influential people in government."