Toxic Trade News / October 2002
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Rethinking the Think Tanks
How industry-funded "experts" twist the environmental debate.
by Curtis Moore, Sierra Magazine
October 2002 – "You know us better than you think," boast the ads of Koch Industries, a conglomerate owned by reclusive billionaire brothers Charles and David Koch. And it’s true: Most of us have unknowingly wolfed a burger ground from Koch beef, ridden on tires made from Koch’s Trevira polyester, or escaped the rain beneath a roof covered with Koch asphalt.

But there’s a darker side to the boast. Turn on National Public Radio most any afternoon, leaf through a newspaper or news magazine, watch a congressional hearing, or surf the Internet, and you will likely encounter the thoughts of Charles and David Koch (pronounced "coke"). The views will seem to be coming from an independent think tank–the Cato Institute or Citizens for a Sound Economy, for example. Yet behind these groups stands the brothers’ vast fortune: Koch Industries is the nation’s second-largest privately owned company and the largest privately owned oil company, with annual revenues of more than $30 billion. Charles cofounded Cato in 1977; in 1986 David helped launch CSE. The brothers are following in dad’s footsteps: Fred Koch was a charter member of the ultraconservative John Birch Society in 1958.

Today, Koch money–and cash infusions from corporate allies such as Exxon, Philip Morris, General Motors, and General Electric–funds industry-friendly messages that fill our airwaves and editorial pages, and influence outcomes in the halls of Congress and courtrooms across the country.

Consider, for example, Citizens for a Sound Economy, the Washington, D.C.—based organization bolstered by periodic bursts of funding from both cofounder David Koch and brother Charles. CSE is often described as a "consumer group," but according to internal documents leaked to the Washington Post, 85 percent of CSE’s 1998 revenues of $16.2 million came not from its 250,000 members, but from contributions of $250,000 and up from Koch Industries as well as other corporations, including U.S. West and Philip Morris.

What kind of exposure can such money buy? In 1995, for instance, CSE’s $17 million budget (made possible that year with grants from the Kochs, Archer Daniels Midland, DaimlerChrysler, and General Electric, among others) was spent producing more than 130 policy papers, delivering them to every single congressional office, sending out thousands of pieces of mail, and getting coverage of its viewpoints in more than 4,000 news articles around the nation. CSE’s representatives have appeared on hundreds of radio and television shows and published 235 op-ed articles. What do they tell us? Among other things, that "environmental conservation requires a commonsense approach that limits the scope of government," acid rain is a "so-called threat [that] is largely nonexistent," and global warming is "a verdict in search of evidence."

These opinions were echoed on MSNBC, C-SPAN, PBS’s NewsHour With Jim Lehrer, and elsewhere by representatives from the libertarian Cato Institute. Cato "experts" are working hard to pound home a variety of anti-environmental points. They have argued that the global ban on chlorofluoro-carbons–the chemicals that destroy stratospheric ozone–is a case of science being "distorted, even subverted." They’ve suggested that concerns over lead paint, asbestos, radon, and similar in-home poisons amount to "hysteria." And they’ve maintained that federally funded research at Harvard and other universities–used, for example, in the regulation of air pollution–"has frequently been tainted by poor methodology . . . and even borderline cases of fraud."

Fashioning themselves after the very university research centers they deplore (or old-style "think tanks" that are only a step removed from universities), these groups have neither the neutrality nor the expertise of their academic counterparts. They are simply self-described as "libertarian" or "market liberals," as if this explains why their conclusions differ so sharply from those of academic or government researchers. No mention is made of the corporate money that is lavished on them–or the corporate agenda, which is, at heart, their raison d’être.

Indeed, if the voices denying the existence of global warming or decrying tighter fuel-economy standards were obviously those of the oil, coal, auto, and similar industries, the messages would be seen for what they are–half-truths at best, and outright lies at worst–and ignored. But when the voices appear to be those of disinterested, public-spirited organizations advocating "economic freedom" or "sound science," the messages are often accepted uncritically by journalists–and then by the public at large.

John Stossel, an ABC correspondent, has become notorious for blurring the line between industry spin and science. On June 29, 2001, in a one-hour special called "Tampering With Nature," Stossel interviewed a scientist identified as "Pat Michaels of the University of Virginia" who not only discounted the dangers of global warming, but said, "Maybe a little warming is better." It is true that Michaels is a professor at the University of Virginia–but he is also a senior fellow at the Cato Institute and has been on a personal retainer from the Western Fuels Association, a group of coal-owning, coal-burning electricity generators located in the West and upper Midwest.

Doubtless at least a few of ABC’s 9 million viewers that evening believed Michaels’s assertion that "maybe a little warming is better"–but would they have believed it had they known that they were hearing the voice of the coal industry, speaking through a scientist on its dole?

Stossel is by no means alone in failing to adequately identify his sources. Michael Dolny, a senior research associate at the Center for Criminal Justice Research at California State University, San Bernardino, has used the LexisNexis database to study article citations in major newspapers as well as transcripts from major radio and television outlets. Dolny found that none of the four most-cited think tanks–the Brookings Institution, Heritage Foundation, American Enterprise Institute, and Cato Institute–was described as "corporate-backed" or anything similar, even though big-business money supplied a third of their support. The business-backed centers not only outspent their "liberal" counterparts such as the Economic Policy Institute, the Urban Institute, and the Freedom Forum four to one, but were also quoted more often.

Cato and CSE are only 2 of roughly 300 industry-funded groups that are helping businesses and the wealthy convert their vast economic and market power into political might. Their messages are invariably the same: Government regulation–most especially environmental protection–is bad, and any science that justifies it is "junk." Usually these messages are reinforced by money deployed to campaign coffers.

Take the Clinton administration’s ill-fated 1993 proposal for an energy tax. Designed to curb the nation’s appetite for imported oil and gasoline, the legislation was defeated with the help of a massive press and public-relations campaign mounted by CSE. It targeted Senator David Boren (D-Okla.), the swing vote on two key committees. After being hammered on radio and television as well as in print, Boren, who now heads the University of Oklahoma, agreed to oppose the Clinton tax, thus effectively killing it.

Within days of his decision, Boren was being supported by the same Koch interests that were funding CSE. In the three-month period from April 22 to July 8, 1993, in fact, Boren received at least $22,500 from the oil industry.

Corporate think-tank influence extends even into the branch of government designed to be immune to it: the judiciary. Some of that influence is exerted by intervention in lawsuits to make arguments that favor industry. In 1999, for example, the Citizens for a Sound Economy Foundation, the funding arm of CSE, paid for "friend of the court" briefs that sought to declare the Clean Air Act unconstitutional. Where might a nonprofit charity like CSEF come up on short notice with the money required to pay lawyers who can charge $5,000 an hour? Answer: the Claude Lambe Foundation, also controlled by the Kochs, which gave CSEF $600,000 for "general operating support"; the DaimlerChrysler Corporation Fund, which kicked in another $250,000; and General Electric, which matched the DaimlerChrysler Fund’s donation. There’s no way of knowing whether that $1.1 million paid for the legal briefs, but that amount buys a lot of lawyers, even at Washington prices.

Influence is also exercised less directly. For example, the same Lambe Foundation that gave to CSEF also donated $150,000 to the Foundation for Research on Economics and the Environment (FREE), based in Bozeman, Montana. FREE conducts seminars for federal judges–including those at the D.C. Circuit Court of Appeals, where CSEF’s briefs were filed. FREE is in ideological lockstep with organizations like CSEF: While the foundation works the legal angle, FREE "educates" the judges who will hear the cases. Indeed, the two judges, Douglas Ginsburg and Stephen Williams, who held the Clean Air Act unconstitutional (a ruling that was later overturned by the Supreme Court), based their decision largely on the arguments advanced by CSEF. And both judges had enjoyed the all-expenses-paid FREE seminars. (Ginsburg attended them each year from 1993 to ’98; Williams went in 1993 and 1998.)

The Montana seminars feature horseback riding and hiking at FREE’s dude ranch near Big Sky. In each of two years, 1999 and 2000, 6 percent of the federal judiciary took in these junkets. A typical day includes morning presentations, free time in the afternoon, an evening cocktail hour, and then dinner with a speech by, say, Alfred DeCrane Jr., retired head of Texaco, called "The Environment–A CEO’s Perspective."

FREE says its seminars focus on "economic implications of science, risk, and environmental issues." Sounds innocent enough, until you peruse some of the reading material. One seminar handout discusses the "bureaucratic pathologies of . . . agencies like the EPA" and the "irresponsible efforts [of] . . . environmentalists hostile toward industrial civilization." FREE defends its seminars and its reliance on quasi-corporate funding on the grounds that "federal judges are smart, mature, sophisticated men and women . . . disposed by training to be discerning, critical, and alert to shoddy arguments."

It appears that FREE seminars have been successful at winning over these discerning judges. According to the Community Rights Counsel, a public-interest law firm based in Washington, D.C., that has gathered and analyzed an immense amount of data on FREE, in one case, "the judge ruled in favor of a litigant that [was] funded by the same special interests that helped fund his seminar." That judge, Stephen Williams (the same one who ruled the Clean Air Act unconstitutional), reversed himself in a highly publicized suit brought by the timber industry to gut the Endangered Species Act. At issue in Sweet Home v. Babbitt was the power of the government to protect endangered species by regulating habitat. In a two-to-one opinion issued on July 23, 1993, Williams and another judge upheld that power. Two weeks later, Williams attended his first FREE seminar. When he returned to Washington, he granted a rehearing to the timber industry, switched his vote, then wrote an opinion (later overturned by the Supreme Court) striking down the habitat regulations.

Central to the functioning of American democracy is a judicial system that dispenses justice with an even hand. Yet CSEF, FREE, and other like-minded groups seem intent on reshaping the judiciary in their own image. Chief among these groups is the shadowy but powerful Federalist Society. Another regular recipient of Koch largesse, the Federalist Society is described by the Washington Monthly as "the best-organized, best-funded, and most effective legal network operating in this country." (See "Lay of the Land," March/April 2002.) Lawyers who belong to or are active in the society include at least two Supreme Court justices–Antonin Scalia and Clarence Thomas–as well as dozens of other federal judges, Attorney General John Ashcroft, Solicitor General Ted Olson, and Secretary of Energy Spencer Abraham. The society boasts a total membership of "20,000 legal professionals [and] active chapters in 60 cities." Yet, according to its 1998 federal tax return (which was provided to me when researching this story and which mistakenly included its list of donors), the Federalist Society’s income that year included $4,934,325 in grants from the Kochs’ and other such foundations but zero–yes, zero–in membership dues.

The full extent of industry funding for these myriad front groups is impossible to determine with certainty. Although information on donors is provided to the Internal Revenue Service, this is not (for the most part) available to the public. However, bits and pieces gleaned from searching a variety of databases–the Foundation Directory Online, for example–can be stitched together to provide a rough idea of the scope of special-interest spending. According to one such tally, the Kochs gave more than $21 million to the Cato Institute alone between 1977 and 1994. And in 1999, at least $1.4 million came to CSEF from just two of the several foundations controlled by the Kochs. For Koch Industries, the amounts of money it can save by sabotaging environmental rules make the sums diverted to the think tanks that do the dirty work pale in comparison. The year 2000 was particularly rough for the Kochs.

In January, Koch Industries agreed to pay about $35 million for violations of the Clean Water Act related to 310 oil spills in six states. Two months later, Koch admitted to environmental violations at its oil refinery in Rosemount, Minnesota, and was forced to cough up another $8 million in penalties. Then in July, it agreed not only to spend about $80 million to cut emissions from its Rosemount facility and from two other refineries in Texas, but also to pay a $1 million fine for air-pollution violations.

The Koch brothers’ fortune is generated a dollar at a time from its complex web of industries. Like drops of water falling from a swollen cloud, the profit stream forms trickles, rivulets, then rivers, finally flowing to industrial impoundments, where a small fraction is released in controlled, coordinated flows. Some of that money goes to pay fines and operate machinery. But a nice pool of it is directed toward Cato, Citizens for a Sound Economy, and CSEF and other foundations. All so you can know them better.

Curtis Moore is a lawyer, consultant, and investigative journalist based in Virginia. He was counsel to the U.S. Senate Committee on Environment and Public Works from 1978 to 1989.

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