A national network of conservative think tanks funded by companies and businessmen including the Kochs of Koch Industries, the Waltons of Wal-Mart, and Art Pope of Variety Wholesalers is driving a corporate agenda in state legislatures that includes privatized education, blocked health care reform, weakened environmental protections, and tax policies that benefit corporations and their owners.
So why aren't they reporting their lobbying activities as required by law?
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That's a question raised by a new investigation by the Center for Media and Democracy (CMD) on the State Policy Network. Based in Arlington, Va., the SPN is an alliance of 63 state-based think tanks that, according to SPN's website, "pride themselves on their independence." But CMD questions that claim, pointing to how SPN members work together to promote their anti-regulatory agenda, often using cookie-cutter research and reports.
"The 'experts' of State Policy Network groups get quoted on TV, in the papers, or in the legislature as if they were nonpartisan, objective scholars on issues of public policy," says CMD Executive Director Lisa Graves. "But in reality, SPN is a front for corporate interests with an extreme national policy agenda tied to some of the most retrograde special interests in the country, including the billionaire Koch brothers, the Waltons, the Bradley Foundation, the Roe Foundation, and the Coors family."
In 2011, the combined revenue of SPN and its member groups was $83.2 million, and SPN itself experienced a $3 million jump in revenue from 2011 to 2012. In the past, little was known about SPN's financing, but CMD uncovered a public document listing the group's 2010 funders. Among its top contributors were Donors Capital Fund and its sister group, Donors Trust, which Mother Jones dubbed the "dark money ATM of the conservative movement"; tobacco giants RAI, Altria, Philip Morris, and Reynolds American; and other corporate behemoths including Microsoft, AT&T, GlaxoSmithKline, Verizon, Comcast, and Time Warner Cable.
SPN has also received money directly from the Claude R. Lambe Charitable Foundation, a family fund of the Kochs, who also support SPN member groups. For example, an inadvertently disclosed tax form revealed that the Texas Public Policy Foundation received contributions directly from Koch Industries and well as a Koch family fund. Other SPN member funders include the Walton Family Foundation, the Castle Rock Foundation affiliated with the Coors Brewing family, and the Pope Family Foundation affiliated with Pope, a GOP mega-donor who heads the Variety Wholesalers discount retail chain and serves as North Carolina's state budget director.
"The funding behind SPN closely resembles a client-based relationship," the report says. "When the Koch brothers want to see lower corporate taxes and fewer pollution regulations so Koch Industries can see higher profits, contributing to right-wing think tanks that aggressively call for lowering -- or eliminating -- corporate taxes and removing environmental regulations serves as an investment that aids their corporation as well as their personal agenda."
SPN member groups are officially registered as 501(c)(3) charitable nonprofits, which are prohibited by law from lobbying and other political activity. However, at least some SPN members appear to orchestrate lobbying and political operations to promote their legislative agenda to state lawmakers in a way that effectively amounts to lobbying, and they are not reporting that activity as required by law.
For example, many SPN think tanks hold what they variously bill as "legislative forums," "seminars," or "policy previews" at the start of new legislative sessions where they present state legislators with bills they consider policy priorities -- though they are careful to avoid use of words like "convince," "persuade," or "lobby." Among the many SPN groups that have held such sessions are the Texas Public Policy Foundation, the Mississippi Center for Public Policy, and the Pope-funded Civitas Institute in North Carolina.
The CMD report also notes that SPN and many of its affiliates are some of the most active members and biggest sponsors of the American Legislative Exchange Council, a controversial group that brings together corporations and state politicians behind closed doors to craft model bills that are then introduced by ALEC-member legislators. Last year the campaign-finance watchdog group Common Cause filed a complaint with the IRS charging ALEC with misusing charity laws and massively underreporting lobbying activity -- charges similar to those being made about SPN.
All of SPN's member think tanks push parts of ALEC's agenda in their states, according to CMD, and at least 34 SPN members have direct ties to ALEC. In North Carolina, for example, the John Locke Foundation -- a think tank founded and largely funded by Art Pope -- sits on various ALEC task forces, including those addressing tax policy, education, the environment, and elections.
Some of the SPN think tanks appear to have crossed a bright legal line by contributing to partisan political accounts, all belonging to Republican candidates or political committees, CMD reports. In Florida, for example, reports show that the James Madison Institute contributed $591 to the Florida Republican Party on June 20, 2006. SPN members made similar contributions to Republican accounts in Colorado, Illinois, Michigan, Utah, Washington, and Wisconsin, according to CMD.
In South Carolina, even Republican politicians began raising concerns about whether the groups may be breaking the law after the South Carolina Policy Council held meetings at which it called for replacing GOP legislators with more conservative alternatives. "I don't know if they can maintain their tax-exempt status," state Sen. Paul Campbell told The Post & Courier in 2010. "I think they are big time overstepping their bounds. I think it's wrong."
In addition to releasing the report about SPN, CMD joined with ProgressNow -- a 501(c)(4) advocacy group that connects progressive think tanks in the states -- to launch a website at StinkTanks.org that offers more information about SPN, its member groups, and their activities.
In response to the CMD report, Nonprofit Quarterly opined that it might be time to require that all corporate charitable donations -- whether through corporate foundations or directly through corporate officers -- be publicly disclosed. But in a press conference unveiling the report, CMD's Graves said she has a more modest goal of greater transparency through voluntary self-disclosure.
"We are shocked that some groups appear to be so involved in legislative lobbying yet report no lobbying expenditures," she said.