by Jane Mayer
Exacerbating corporate America’s woes, the economy was buckling from “stagflation,” the unusual combination of high inflation and high unemployment. There were oil shocks and gas lines as well. And after generations of redistributive progressive income and inheritance taxes, the economic elite was losing its lead. Income in America during the mid-1970s was as equally distributed as at any time in the country’s history.
“No thoughtful person can question that the American economic system is under broad attack,” Powell declared in his memo. What distinguished his jeremiad from many other conservative screeds was his argument that the greatest threat was posed not by a few “extremists of the left,” but rather by “perfectly respectable elements of society.” The real enemies, he suggested, were “the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences,” and “politicians.”
Powell called on corporate America to fight back. He urged America’s capitalists to wage “guerilla warfare” against those seeking to “insidiously” undermine them. Conservatives must capture public opinion, he argued, by exerting influence over the institutions that shape it, which he identified as academia, the media, the churches, and the courts. He argued that conservatives should control the political debate at its source by demanding “balance” in textbooks, television shows, and news coverage. Donors, he argued, should demand a say in university hiring and curriculum and “press vigorously in all political arenas.” The key to victory, he predicted, was “careful long-range planning and implementation,” backed by a “scale of financing available only through joint effort.”
Powell was not alone. A number of activists on the right issued similar calls to arms, including Irving Kristol, the godfather of neo-conservatism. A former Trotskyite, Kristol had become a columnist on the conservative editorial page of The Wall Street Journal, where he counseled business leaders to be more wily about public relations, arguing that they needed to downplay their “single-minded pursuit of self-interest” and instead tout moral values like family and faith. The Nixon White House aide Patrick Buchanan similarly argued in 1973 that in order to become a permanent political majority, conservatives needed to persuade corporate America and pro-Republican foundations to fund a think tank that would act as a “tax-exempt refuge,” a “talent bank,” and a “communications center.” But it was Powell’s memo that electrified the Right, prompting a new breed of wealthy ultraconservatives to weaponize their philanthropic giving in order to fight a multifront war of influence over American political thought.
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During this period, Scaife, like many conservatives, was growing disillusioned with more conventional political spending. Goldwater’s defeat was a huge personal disappointment. Afterward, Scaife got involved in one more campaign in a big way, donating almost $1 million in $3,000 checks to 330 different front groups associated with Nixon’s 1972 reelection campaign. The small increments of cash were designed to evade federal contribution limits.
But when Nixon was implicated in the Watergate scandal, Scaife turned against him and against the idea of funding candidates. Scaife, who by then had bought a local newspaper, the Tribune-Review, in Greensburg, outside Pittsburgh, published a scalding editorial demanding Nixon’s impeachment in 1974. Soon after, he refused to even take the president’s phone calls. “He was never a big candidate person since,” says Christopher Ruddy.
Frustrated by the electoral process, Scaife, like Charles and David Koch, sought to finance political victory through more indirect means. Though he continued to donate money to political campaigns and action committees, he began to invest far more in conservative institutions and ideas. His private foundations emerged as a leading source of funds for political and policy entrepreneurship. Think tanks, in particular, became what Piereson called “the artillery” in the conservative movement’s war of ideas. In his memoir, Scaife estimates that he helped bankroll at least 133 of the conservative movement’s 300 most important institutions.
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In 1975, the Scaife Family Charitable Trust donated $195,000 to a new conservative think tank in Washington, the Heritage Foundation. For the next ten years, Scaife became its largest backer, donating $10 million more. By 1998, these donations had reached a total of some $23 million, which meant that Scaife accounted for a vastly disproportionate share of the think tank’s overall funding. Previously, Scaife had been the largest donor to the American Enterprise Institute (AEI), the older, rival conservative think tank in Washington, but Heritage had a new model that won him over. In contrast to the research centers of the past, it was purposefully political, priding itself on creating, selling, and injecting deeply conservative ideas into the American mainstream.
In fact, the Heritage Foundation was born out of two congressional aides’ frustration with the more conventional think tank model. One of them, Edwin Feulner Jr., was a Wharton School graduate and Hayek acolyte, with a flair for fund-raising. The other, Paul Weyrich, was a brilliant and fiercely conservative working-class Catholic press aide from Wisconsin, who described himself openly as a “radical” who was “working to overturn the present power structure.” The duo had become exasperated by AEI’s refusal to weigh in on legislative fights until after they were settled, a cautious approach reflecting the older think tank’s fear of losing its nonprofit status. Instead, they wanted to create a new sort of action-oriented think tank that would actively lobby members of Congress before decisions were made, take sides in fights, and in every way not just “think” but “do.”
Lewis Powell’s memo awoke the financial angels their project needed. The first of these was Joseph Coors, a scion of the archconservative Colorado-based Coors brewery family. After reading Powell’s memo, he was so “stirred” up he sent a letter to his senator the Colorado Republican Gordon Allott, offering “to invest in conservative causes.” Weyrich, who worked for Allott, saw Coors’s letter and pounced. He urged the magnate, who seemed to be offering unlimited funds with no strings attached, to come to Washington immediately. “I do believe I’ve never met a man as politically naive as Joe Coors,” he reportedly said with a chuckle afterward. But Coors was enthralled. Weyrich had talked of being “engaged in a war to preserve the freedom this country was built on. Think of what we need as combat intelligence,” he told Coors.
Coors immediately enlisted. Like the Kochs and Scaife, he and his brothers had inherited a lucrative private family business along with their parents’ reactionary views. A supporter of the John Birch Society, Joe Coors regarded organized labor, the civil rights movement, federal social programs, and the counterculture of the 1960s as existential threats to the way of life that had enabled him and his forebears to succeed. The Coors Brewing Company, founded in 1873 by Adolph Coors, a Prussian immigrant, was famously hostile to unions and had repeated run-ins with the Colorado Civil Rights Commission, which accused the company of discriminating against minority employees. Convinced that radical leftists had overrun the country, Joe Coors, the youngest grandson of the founder, became the center of controversy when as a regent at the University of Colorado he had tried to bar left-wing speakers, faculty, and students on campus. His attempt to require faculty to take a pro-American loyalty oath was defeated by the other regents. Enraged that his own son had become a hippie at the school, he railed during a commencement address against “pleasure-minded parasites…living off the state dole.” By the time he connected with Weyrich, he already believed that the Right needed new and more militant national institutions of the kind Weyrich described.
Before long, Coors became the first donor to the fledgling conservative think tank that Weyrich and Feulner were launching, the forerunner of the Heritage Foundation, then called the Analysis and Research Association. On top of his initial contribution of $250,000, Coors promised $300,000 more for a headquarters building. Soon he was reveling in his new status as a national figure and jetting back and forth from Golden, Colorado, to Washington. Backed by the first of many
multimillionaire political ideologues, the Heritage Foundation opened for business in 1973.
Scaife’s money soon followed, on an even bigger scale. A popular saying at the time was “Coors gives six-packs; Scaife gives cases.”
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Independent research institutes had existed since at least the turn of the century in the United States, but as John Judis writes in The Paradox of American Democracy, the earlier think tanks strove to promote the general public interest, not narrow private or partisan ones. In the tradition of the Progressive movement, they professed to be driven by social science, not ideology. Among the best known was the Brookings Institution, founded in 1916 by the St. Louis businessman Robert Brookings, who defined its mission as “free from any political or pecuniary interest.” To assure an ethic of “disinterestedness,” Brookings, who was himself a Republican, mandated that scholars of many viewpoints populate its board.
The same ideals animated the Rockefeller, Ford, and Russell Sage Foundations, as well as most of academia and the elite news organizations of the era, like The New York Times, which strove to deliver the facts free from partisan bias. Because the self-perception of these institutions was that they were engaged in a modern, even scientific pursuit of the truth, they did not regard themselves as liberal, although frequently the answers they brought to social problems involved government solutions.
In the 1970s, with funding from a handful of hugely wealthy donors like Scaife, as well as some major corporate support, a whole new form of “think tank” emerged that was more engaged in selling predetermined ideology to politicians and the public than undertaking scholarly research. Eric Wanner, the former president of the Russell Sage Foundation, summed it up, saying, “The AEIs and the Heritages of the world represent the inversion of the progressive faith that social science should shape social policy.”
According to one account, it was Hayek who spawned the idea of the think tank as disguised political weapon. As Adam Curtis, a documentary filmmaker with the BBC, tells the story, around 1950, after reading the Reader’s Digest version of Hayek’s Road to Serfdom, an eccentric British libertarian named Antony Fisher, an Eton and Cambridge graduate who believed socialism and Communism were overtaking the democratic West, sought Hayek’s advice about what could be done. Should he run for office? Hayek, who was then teaching at the London School of Economics, told him that for people of their beliefs getting into politics was futile. Politicians were prisoners of conventional wisdom, in Hayek’s view. They would have to change how politicians thought if they wanted to implement what were then considered outlandish free-market ideas. To do that would require an ambitious and somewhat disingenuous public relations campaign. The best way to do this, Hayek told Fisher, who took notes, was to start “a scholarly institute” that would wage a “battle of ideas.” If Fisher succeeded, Hayek told him, he would change the course of history.
To succeed, however, required some deception about the think tank’s true aims. Fisher’s partner in the venture, Oliver Smedley, wrote to Fisher saying that they needed to be “cagey” and disguise their organization as neutral and nonpartisan. Choosing a suitably anodyne name, they founded the grandfather of libertarian think tanks in London, calling it the Institute of Economic Affairs. Smedley wrote that it was “imperative that we should give no indication in our literature that we are working to educate the public along certain lines which might be interpreted as having a political bias. In other words, if we said openly that we were re-teaching the economics of the free market, it might enable our enemies to question the charitableness of our motives.”
Fisher would go on to found another 150 or so free-market think tanks around the world, including the Manhattan Institute in New York, to which both Scaife and other conservative philanthropists would become major contributors. The Sarah Scaife Foundation in fact for many years was the Manhattan Institute’s single largest contributor. The donations paid off, from Scaife’s viewpoint, when they helped launch the careers of the conservative social critic Murray and the supply-side economics guru George Gilder, whose arguments against welfare programs and taxes had huge impacts on ordinary Americans.
Fisher’s early collaborator in founding the Manhattan Institute was William Casey, the Wall Street financier and future director of the CIA. The early think tank was not a spy operation, but it was funded by wealthy men who had no objections to using pretexts and disinformation in the service of what they regarded as a noble cause. In fact, Scaife during this period was simultaneously funding a CIA front group. In his memoir, he acknowledges that in the early 1970s he owned a London-based news organization called Forum World Features that was in reality a CIA-run propaganda operation. He had taken it over from Jock Whitney, the publisher of the New York Herald Tribune, who was a friend of his father’s in the OSS.
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An element of subterfuge was also discernible in Weyrich’s early planning. His papers include correspondence that make his political organizations sound like clandestine corporate front groups. One associate writes, “As you well know, business people have been notoriously apathetic in the political field. This is primarily, I feel, due to the businessman’s fear of his involvement with respect to his business and possible repercussions from the federal government. The organization we propose would screen him and provide him a vehicle which would in effect do his political work for him at a price.”
Earlier attempts by American tycoons to hide behind nonprofit front groups had proven both legally and politically toxic. In the 1930s, Democrats gleefully unmasked the Du Pont family’s funding for the American Liberty League, an ostensibly independent organization that opposed FDR’s New Deal, ridiculing it as the “American Cellophane League” because “it’s a DuPont product and you can see right through it.” In 1950, Congress investigated the group that became AEI, denouncing it as a “ ‘big business’ pressure organization” that should register as a lobbying shop and get barred from offering its donors tax deductions. In 1965, top AEI personnel took leaves of absence to form the brain trust for Goldwater’s 1964 presidential campaign. The Internal Revenue Service nonetheless threatened the think tank’s tax-exempt status. It was this searing experience that prompted AEI and other conservative groups of this period to avoid the appearance of being too partisan or of acting as corporate shills.
But in the 1970s, such concerns became outmoded. Powell and others in the newly aggressive corporate vanguard inverted from a negative into a positive the accusation that conservative organizations were slanted by successfully redefining existing establishment organizations like Brookings and The New York Times as equally biased but on the liberal side. They argued that a “market” of ideas was necessary that would give equal balance to all views. In effect, they reduced the older organizations that prided themselves on their above-the-fray public-service-oriented neutrality to mere combatants in a polarized war.
Disoriented, Brookings and the Times rushed to add conservatives to their ranks in hopes of demonstrating their nonpartisanship. Brookings hurriedly made a Republican its president, while the Times in 1973 added Nixon’s former speechwriter Bill Safire to its op-ed page as a columnist. In 1976, after the Scaife-funded Institute for Contemporary Studies issued a report accusing the media of liberal bias, the Times forced out the editorial page editor John Oakes for having an antibusiness tone. The Ford Foundation, meanwhile, which had funded much of the early bipartisan environmental movement, as well as the public interest law movement, donated the first installment of $300,000 in grants to AEI in 1972 in an attempt to fight criticism that it was liberal. “That was quite the heist you pulled on the Ford Foundation, congratulations!” a friend exclaimed in a note to a top AEI official.
The upshot was that by the end of the 1970s conservative nonprofits had achieved power that was almost unthinkable when the League to Save Carthage first formed. Enormously wealthy right-wing donors had transformed themselves from the ridiculed, self-serving “economic royalists” of FD
R’s day into the respected “other side” of a two-sided debate.
The new, hyper-partisan think tanks had impact far beyond Washington. They introduced doubt into areas of settled academic and scientific scholarship, undermined genuinely unbiased experts, and gave politicians a menu of conflicting statistics and arguments from which to choose. The benefit was a far more pluralistic intellectual climate, beyond liberal orthodoxy. The hazard, however, was that partisan shills would create “balance” based on fraudulent research and deceive the public about pressing issues in which their sponsors had financial interests.
Some insiders, like Steve Clemons, a political analyst who worked for the Nixon Center among other think tanks, described the new think tanks as “a Faustian bargain.” He worried that the money corrupted the research. “Funders increasingly expect policy achievements that contribute to their bottom line,” he admitted in a confessional essay. “We’ve become money launderers for monies that have real specific policy agendas behind them. No one is willing to say anything about it; it’s one of the big taboo subjects.”