> Citizens for Sound Economy: Think tank or hired gun?
>
> By DAN MORGAN
> Web-posted: 4:12 p.m. Feb. 11, 2000
> [Ft. Lauderdale Sun-Sentinel]
>
> WASHINGTON -- Derailing a multibillion-dollar federal plan to restore
> the Florida Everglades is just the kind of cause that suits Citizens for
> a Sound Economy, a conservative think tank that fights for smaller
> government.
>
> But soon after the group took on the Everglades project in 1998,
> the Washington-based nonprofit got an incentive that went beyond
> the purely philosophical. It received $700,000 in contributions from
> Florida's three biggest sugar enterprises, which stand to lose
> thousands of acres of cane-growing land to reclamation if the Army
> Corps of Engineers plan goes into effect.
>
> The sugar contributions were never disclosed publicly but were
> outlined in internal CSE documents that detail how various corporate
> interests donated millions to the group to bankroll its efforts on
> issues of direct interest to them, from global warming to Florida tort
> reform.
>
> Along with those earmarked contributions, from companies such as
> Exxon and Hertz, the organization received more than $1 million
> from Philip Morris at a time when CSE was opposing cigarette taxes.
> Phone company US West gave $1 million as CSE pushed deregulation
> that would let US West offer long-distance service.
>
> The documents provide a rare look at think tanks' often hidden
> role as a weapon in the modern corporate political arsenal. The
> groups provide analyses, TV advertising, polling and academic
> studies that add an air of authority to corporate arguments -- in
> many cases while maintaining the corporate donors' anonymity.
>
> "Corporations have discovered that funding of research,
> publications, media campaigns and other forms of advocacy on policy
> issues can serve as an adjunct to traditional corporate lobbying and
> political contributions," said James Allen Smith, author of a book
> about think tanks.
>
> Others use harsher terms. "It's part of a rent-a-mouthpiece
> phenomenon," said Gary Ruskin of the Congressional Accountability
> Project. "There are mercenary groups that function as surrogates
> when industry feels it's not advantageous for it to speak directly."
>
> CSE officials will not discuss specific donations, saying that
> disclosure could expose contributors to harassment by labor unions
> or other groups. CSE President Paul N. Beckner strongly denies
> picking issues with an eye to their potential for luring corporate funds
> -- or tailoring the groups' views to mesh with those of contributors.
>
> "We aren't a group for hire," he said. "There's a bright line that
> defines our independence. There is only one position we can take on
> most issues: the one that means less government and lower taxes.
> We choose the issues we work on, and we decide how that money is
> expended."
>
> While corporations are prohibited from contributing directly to
> political candidates, there are no restrictions on their giving to
> nonprofit organizations such as CSE whose advocacy may help their
> interests. And though lobbyists representing corporations must
> register publicly, nonprofit groups are not required to identify the
> corporations financing their lobbying work.
>
> In recent weeks, CSE has thrown itself into the political campaigns
> in Iowa and New Hampshire, sending out grass-roots activists -- clad
> in signature red jackets emblazoned with the organization's Web
> address on the back -- to obtain candidate endorsements of its
> position against Internet taxation.
>
> Such outright activism is not for every think tank. Some, such as
> the Heritage Foundation, will not accept money for specific projects for
> fear of appearing beholden to the interest that funded it. Others,
> such as the Cato Institute, take earmarked money but go beyond
> the legal requirements and identify major donors.
>
> For example, the largest supporter of Cato's study of Social
> Security privatization is the U.S. insurance company AIG, which
> manages privatized retirement systems abroad and stands to benefit
> if -- as Cato is recommending -- such an option is put in place here.
>
> But other groups, including CSE, use donations for specific projects
> without making public the names of their donors -- raising questions
> even among some of their fellow think tanks. "A nonprofit which is
> doing work for a very clear interest ought to reveal that," said Urban
> Institute President William Gorham.
>
> On the other end of the political spectrum, some left-leaning think
> tanks take money from similarly interested parties. For example,
> unions provided the seed money to start the Economic Policy
> Institute, which produces research on trade, wage and work-related
> issues.
>
> CSE, founded in 1984, has become a particularly vocal and political
> group under the chairmanship of C. Boyden Gray, a Washington
> lawyer who served as President Bush's White House counsel.
> Modeling itself on grass-roots groups such as the Christian Coalition
> and Ralph Nader's activist organizations, CSE has inserted itself into
> a number of fights with the Clinton administration and become an
> active force in state politics on issues from tort reform to labor.
>
> The group has a foundation that can take tax-deductible
> contributions -- used, for example, to finance its "education" effort in
> support of a California initiative requiring unions to get annual
> permission from members to use dues for political purposes. It has a
> nonprofit arm that can engage in even more extensive lobbying. This
> year, CSE is branching into explicitly electoral politics; its board
> recently voted to set up a political action committee with a goal of
> raising at least $1 million for favored candidates in 2000.
>
> Critics -- and even some business lobbyists -- have previously
> said that CSE's "grass roots" activism has sometimes been, as
> National Journal wrote in 1996, "a fig leaf for corporate lobbying
> efforts." But the newly obtained internal CSE spreadsheet -- whose
> information was verified independently with a number of corporations
> -- offers the most precise illustration yet of the close fit between CSE
> funding and corporate interests.
>
> It shows that Exxon's $175,000 for "global climate" issues arrived
> after Beckner dismissed the notion of global warming as "junk
> science." Huizenga Holdings' gift of $75,000 went toward the battle
> for Florida tort reform legislation, which limited car rental companies'
> liability. The holding company manages the investments of Fort
> Lauderdale businessman Wayne Huizenga in, among other things,
> auto rental companies.
>
> A CSE project on the New Jersey auto insurance market brought in
> funds from three insurance companies and two trade associations.
> The Association of American Railroads chipped in for a study of
> legislation that could force railroad companies to let other shippers
> use their tracks.
>
> Several months after Microsoft committed $380,000 to CSE's
> tax-exempt foundation last May, CSE officials lobbied in Congress to
> limit the Justice Department's budget for antitrust enforcement. CSE
> officials say their opposition to Justice's antitrust suit against
> Microsoft long predated the company's contribution.
>
> CSE was founded by two free-spirited Midwestern oil and gas
> tycooons, the brothers David H. and Charles G. Koch, principal owners
> of Koch Industries of Wichita. Foundations they controlled helped
> found Cato, CSE and other less-known think tanks committed to the
> Kochs' libertarian beliefs.
>
> But although the Kochs and a stable of wealthy individuals and
> foundations have continued to provide a base of support, corporate
> contributions now constitute the bulk of CSE's income, which has
> grown from $4 million in 1991 to $15.5 million in 1998. According to
> the documents, General Electric and Publix Super Markets gave
> $500,000 in 1998, and Emerson Electric Co., AlliedSignal Inc., and
> Johnson & Johnson provided $200,000 each.
>
> "Our goal is to build an army of grass-roots activists who believe in
> limited government and lower taxes," Beckner said.