by Jane Mayer
The John Locke Foundation also sponsored the North Carolina History Project, which aimed to reorient the state’s teaching of its history by providing online lesson plans for high school teachers that downplayed the roles of social movements and government while celebrating what it called the “personal creation of wealth.” In a similar vein, Republicans in the state senate passed a bill requiring North Carolina’s high school students to study conservative principles as part of American history in order to graduate in 2015. The bill stressed the “constitutional limitations on government power to tax and spend.” “It’s all part of Pope’s plan to build up more institutional support for his philosophy,” said Chris Fitzsimon, director of NC Policy Watch, a liberal watchdog group.
But Pope became a lightning rod as his profile grew. The NAACP began holding weekly “Moral Monday” protests in the state capital against North Carolina’s turn to the right and eventually began picketing the chain stores owned by Pope’s company, Variety Wholesalers.
Even some Republicans in the state accused Pope of going too far. Jim Goodmon, the president and CEO of Capitol Broadcasting Company, which owned the CBS and Fox television affiliates in Raleigh, said, “I was a Republican, but I’m embarrassed to be one in North Carolina, because of Art Pope.” Goodmon had deep ties to the state’s conservative establishment. His grandfather A. J. Fletcher was among Jesse Helms’s biggest backers. But Goodmon described the Pope forces as “anti-community,” adding, “The way they’ve come to power is to say that government is bad. Their only answer is cut taxes.” He concluded, “It’s never about making things better. It’s all about tearing the other side down.”
—
Interviewed in a spare office overlooking a suburban parking lot that served as Variety Wholesalers headquarters in Raleigh, Pope dismissed those who were trying to paint him as extreme as misinformed. “If the left wing wants a whipping boy, a bogeyman, they throw out my name,” he protested. “Some things I hear about this guy Art Pope—you know I don’t like this guy Art Pope that they’re talking about. I don’t know him. If what they say were true, I wouldn’t like a lot of things about me. But they’re just not true.”
In a nearly four-hour-long, lawyerly rebuttal, he argued that conservatives like himself were the underdogs in North Carolina and that his expenditures merely represented an effort to balance the score. He said that he was driven not by “narrow corporate interest” but by abstract idealism. He described himself as “politically a conservative” and a “classical liberal, philosophically.” He acknowledged that the nonprofit groups he supported took many positions advantageous to his business, such as opposition to minimum wage laws. In fact, critics, like Dean Debnam, a liberal North Carolina businessman, accused Pope of exhibiting “a plantation mentality” by keeping “people working part time…He preys on the poorest of the poor, and uses it to advance the agenda of the richest of the rich,” he charged. But Pope said he didn’t take positions to enhance his bottom line. In the tradition of John Locke, he said, he just believed that society functioned best when citizens were rewarded with the wealth that their hard work produced.
Pope, who credited a summer program run by the Cato Institute for first exposing him to free-market theories, argued that the country’s growing economic inequality was not a worry because “wealth creation and wealth destruction is constantly happening.” All Americans, he said, had a fair chance at success. Citing Michael Jordan and Mick Jagger as examples, he asked, “Why should they be deprived of that money—why is that unfair?” He noted, “I’m not envious of the wealth that Bill Gates has,” and added, “America does not have an aristocracy or a plutocracy.”
The poor, he argued, were largely victims of their own bad choices. “Really, when you look at the lowest income, most of that is just simply a factor of age and marriage. If you’re young and single—and God forbid if you’re young and a single parent, and don’t have a high school education—then your earnings will be low, and you’ll be in the bottom twenty percent.”
The constellation of nonprofit groups supported by Pope’s fortune echoed this tough-luck message. For instance, a researcher at the Civitas Institute asserted that the poor in America lived better than “the picture most liberals like to paint.” The researcher Bob Luebke cited a Heritage Foundation study showing that the poor often had shelter, a refrigerator, and cable television. “The media obsession with pervasive homelessness also appears a myth,” he declared. John Hood, a bright protégé of Pope’s who moved from the John Locke Foundation to become head of the John William Pope Foundation in 2015, stressed that “the true extent of poverty in North Carolina and around the country is woefully overestimated.” Where poverty did exist, he asserted, it largely resulted from “self-destructive behavior.”
Gene Nichol, the director of the Center on Poverty, Work, and Opportunity at the University of North Carolina School of Law, pointed out that one-third of the state’s children of color lived in poverty, meaning they started at the bottom, long before they were old enough to make choices of their own. But Pope’s network successfully pressured the university to eliminate the Center on Poverty in 2015 after Nichol criticized Republican policies.
Pope’s own experience of poverty was limited. He grew up in a wealthy household, attended a private boarding school before the University of North Carolina and the Duke School of Law, and joined his family’s discount store business, which was started by his grandfather and expanded by his father. But Pope often stressed, “I am not an heir.” He explained that his father had demanded that he and his siblings buy stakes in the family-owned business. Like Charles Koch, and many others in their donor network, Pope believed that he had advanced to the helm of the company on his own merits. Those who knew Pope confirmed that he worked extremely hard and was obsessively frugal. But he also received many advantages from his parents, including hundreds of thousands of dollars in campaign contributions.
Scott Place, who served as campaign manager during Pope’s one bid for statewide office, his unsuccessful 1992 run for lieutenant governor, recalled one transaction vividly, when Pope’s father made a donation to his campaign. “He had his checkbook, and he was stroking the check. He said, ‘How much?’ Art says, ‘Well, I guess $60,000.’ The dad bitched. I was standing, thunderstruck. I said, ‘That’s a HUGE check!’ The father responded, ‘Well, it’s Art’s inheritance. I guess he can do whatever the hell he wants to with it.’ It wasn’t like, ‘Go get ’em, son,’ ” Place recalled. “It was more like, ‘Take the money and get out!’ ”
Before the campaign ended with Pope’s defeat, records show that Pope’s parents made uncollected “loans” to him of approximately $330,000, which, adjusted for inflation, would be more than half a million dollars today.
Place said of Pope, “He thinks that if you’re poor, you’re just not working hard enough. It’s all about free enterprise. He probably did grow his daddy’s business, and he is smart and politically shrewd. But he wasn’t just born on third base. He started out within an inch of home plate.” Place suggested, “Anybody can be politically effective if they have got almost a blank check.”
David Parker, the chair of the North Carolina Democratic Party, accused Pope of glossing over the fact that he was born privileged. “All this talk of Protestant work ethic,” he said, “but he made his money the old-fashioned way: his mother bore a son.” He added, “We’re all prisoners of Art Pope’s fantasy world.”
—
The ideological machine that Pope bankrolled in North Carolina was unusually powerful, but just one part of the multimillion-dollar system of interlocking nonprofit organizations conservatives had built in almost every state by the time Obama was reelected president. Because they were partial to federalism and suspicious of centralized power, the emphasis was natural. From the Civil War on through the civil rights movement, states’ rights had been a conservative rallying cry, particularly in the South. Historically, it had often been bound up in racial anim
osities, with local jurisdictions resisting federal interference. Then, during the Reagan years, the movement took on a pro-corporate cast. While conservative business leaders such as Lewis Powell and William Simon organized corporate interests to counter the liberal public interest movement nationally, conservative allies set up similar organizations at the state and local levels. As one leader of this effort, Thomas A. Roe, an anti-union construction magnate from Greenville, South Carolina, reportedly declared to a fellow trustee at the Heritage Foundation during the 1980s, “You capture the Soviet Union—I’m going to capture the states.”
Roe went on to found the State Policy Network in 1992, a national coalition of conservative state-based think tanks. By 2012, the network had sixty-four separate think tanks turning out cookie-cutter-like policy papers, including at least one hub in every state. In North Carolina, for instance, both of the think tanks founded by the Pope fortune were members. The organization’s president, Tracie Sharp, described each as “fiercely independent.” But behind closed doors, she likened the group’s model to the global discount chain store Ikea. She told eight hundred members gathered for an annual meeting in 2013 that the national organization would provide them with a “catalogue” of “raw materials” and “services” so that local chapters could assemble the ideological products at home. “Pick what you need,” she said, “and customize it for what works best for you.”
In 2011, the State Policy Network’s budget reached a sizable $83.2 million. Coordinating with the think tanks were over a hundred “associate” members that included conservative nonprofit groups like Americans for Prosperity, the Cato Institute, the Heritage Foundation, and Grover Norquist’s Americans for Tax Reform, which the Kochs also helped to fund.
Adding clout to the Right’s reach at the state level was the American Legislative Exchange Council. Weyrich’s brainchild had grown impressively since the 1970s, when Richard Mellon Scaife had provided most of its start-up funding. Critics called it a conservative corporate “bill mill.” Thousands of businesses and trade groups paid expensive dues to attend closed-door conferences with local officials during which they drafted model legislation that state legislators subsequently introduced as their own. On average, ALEC produced about a thousand new bills a year, some two hundred of which became state law. The State Policy Network’s think tanks, some twenty-nine of which were members of ALEC, provided legislative research.
ALEC was in many ways indistinguishable from a corporate lobbying operation, but it defined itself as a tax-exempt 501(c)(3) “educational” organization. But to its allies, ALEC touted its transactional achievements. As one member-only newsletter boasted, ALEC made a “good investment” for companies. “Nowhere else can you get a return that high,” it said. To avoid appearing bought off, lawmakers made sure not to mention the corporate origins of the model bills. But as the former Wisconsin state legislator (and later governor) Tommy Thompson admitted, “Myself, I always loved going to these [ALEC] meetings because I always found new ideas. Then I’d take them back to Wisconsin, disguise them a little bit, and declare that ‘It’s mine.’ ”
The Kochs were early financial angels of this state-focused activism. Koch Industries had a representative on ALEC’s corporate board for nearly two decades, and during this time ALEC produced numerous bills promoting the interests of fossil fuel companies such as Koch Industries. In 2013 alone, it produced some seventy bills aimed at impeding government support for alternative, renewable energy programs.
Later the Kochs presented themselves as champions of criminal justice reform, but while they were active in ALEC, it was instrumental in pushing for the kinds of draconian prison sentences that helped spawn America’s mass incarceration crisis. For years among ALEC’s most active members was the for-profit prison industry. In 1995, for instance, ALEC began promoting mandatory-minimum sentences for drug offenses. Two years later, Charles Koch bailed ALEC out financially with a $430,000 loan.
In 2009, the conservative movement in the states gained another dimension. The State Policy Network added its own “investigative news” service, partnering with a new organization called the Franklin Center for Government and Public Integrity and sprouting news bureaus in some forty states. The reporters filed stories for their own national wire service and Web sites. Many of the reports drew on research from the State Policy Network and promoted the legislative priorities of ALEC. Frequently, the reports attacked government programs, particularly those initiated by Obama. The news organization claimed to be a neutral public watchdog, but much of its coverage reflected the conservative bent of those behind it.
Professional journalists soon took issue with the Franklin Center’s labeling of its content as “news.” Dave Zweifel, editor emeritus of The Capital Times of Madison, Wisconsin, called the group’s Web site in the state “a wolf in disguise” and “another dangerous blow to the traditions of objective reporting.” The Pew Research Center’s Project for Excellence in Journalism ranked Franklin’s reports as “highly ideological.” But Franklin’s founder, Jason Stverak, was undeterred. He told a conservative conference that his organization, whose financing he refused to disclose, planned to fill the vacuum created by the economic death spiral in which many of the “legacy media” found themselves at the state level all over the country.
Cumulatively, these three groups created what appeared to be a conservative revolution bubbling up from the bottom to nullify Obama’s policies in the states. But the funding was largely top-down. Much of it came from giant, multinational corporations, including Koch Industries, the Reynolds American and Altria tobacco companies, Microsoft, Comcast, AT&T, Verizon, GlaxoSmithKline, and Kraft Foods. A small knot of hugely rich individual donors and their private foundations funded the effort, too.
Much of the money went through DonorsTrust, the Beltway-based fund that erased donors’ fingerprints. Fewer than two hundred extraordinarily rich individuals and private foundations accounted for the $750 million pooled by DonorsTrust and its sister arm, Donors Capital Fund, since 1999. Many were the same billionaires and multimillionaires who formed the Koch network.
This relatively small group of contributors to DonorsTrust provided 95 percent of the Franklin Center’s revenues in 2011. The big backers behind DonorsTrust and Donors Capital Fund also put $50 million in the State Policy Network’s think tanks from 2008 to 2011—a sum that goes far at that level. Whitney Ball, who ran DonorsTrust, and who was also a director on the State Policy Network’s board, explained that during the Obama years, conservative donors saw “a better opportunity to make a difference in the states.”
—
In the autumn of 2013, fallout from the conservative makeover of North Carolina reached far beyond state boundaries. An obscure Republican freshman congressman from one of the newly gerrymandered districts helped set in motion the process that led to the shutdown of the federal government. The episode became an object lesson in the way that the radicalized donor base in the Republican Party was polarizing politics to an extent that would have been almost unthinkable just a few years earlier.
Until his election in 2012, Mark Meadows had been a restaurant owner and Sunday-school Bible teacher in North Carolina’s westernmost corner. Previously, the rural, mountainous Eleventh Congressional District had been represented by a former NFL quarterback and conservative Democrat named Heath Shuler. But gerrymandering had removed so many Democrats from the district that Shuler retired rather than wasting time and money on what was clearly a hopeless race, all but handing over the seat to Meadows.
After only eight months in office, Meadows made national headlines by sending an open letter to the Republican leaders of the House demanding they use the “power of the purse” to kill the Affordable Care Act. By then, the law had been upheld by the Supreme Court and affirmed when voters reelected Obama in 2012. But Meadows argued that Republicans should sabotage it by refusing to appropriate any funds for its implementation. And, if they didn’t get their way, they would sh
ut down the government. By fall, Meadows had succeeded in getting more than seventy-nine Republican congressmen to sign on to this plan, forcing Speaker of the House John Boehner, who had opposed the radical measure, to accede to their demands.
Meadows later blamed the media for exaggerating his role, but he was hailed by his local Tea Party group as “our poster boy” and by CNN as the “architect” of the 2013 shutdown. The fanfare grew less positive when the radicals in Congress refused to back down, bringing virtually the entire federal government to a halt for sixteen days in October, leaving the country struggling to function without all but the most vital federal services. In Meadows’s district, day-care centers that were reliant on federal aid reportedly turned distraught families away, and nearby national parks were closed, bringing the tourist trade to a sputtering standstill. National polls showed public opinion was overwhelmingly against the shutdown. Even the Washington Post columnist Charles Krauthammer, a conservative, called the renegades “the Suicide Caucus.”
But the gerrymandering of 2010 had created what Ryan Lizza of The New Yorker called a “historical oddity.” Political extremists now had no incentive to compromise, even with their own party’s leadership. To the contrary, the only threats faced by Republican members from the new, ultraconservative districts were primary challenges from even more conservative candidates.
Statistics showed that the eighty members of the so-called Suicide Caucus were a strikingly unrepresentative minority. They represented only 18 percent of the country’s population and just a third of the overall Republican caucus in the House. Gerrymandering had made their districts far less ethnically diverse and further to the right than the country as a whole. They were anomalies, yet because of radicalization of the party’s donor base they wielded disproportionate power.