|JPRI Critique, Vol. X, No. 2 (February 2003)
The Corruption of Think Tanks
by Steven C. Clemons
Lobbying may not rank as the worlds oldest profession, but it comes close. Wherever and whenever political authority contemplates policies that produce winners and losers, those in favor or those opposed generally organize to pursue what is in their best interests. This jousting among interest groups and political opponents occurs in most political systems, democracies or not, at all levels of government, as much on the local level as at the national.
The greatest arena in the world todayand perhaps in historyof those attempting to determine the course of great policy decisions is Washington, D.C. The framers of the U. S. Constitution did not provide for lobbyists in their theories of government, but lobbyists have been part of the lifeblood of Americas government from the beginning. Lobbying broadly defined can refer to anyone or any group attempting to influence policy. Over time, the term lobbyist has come to mean a paid agent of influence, an advocacy agent, often a lawyer, public relations representative, or former government official, whose knowledge of the people and back corridors of government can give some private interest an edge in influencing a political decision. Lobbying has become so important that some of the nations leading publications, including the Washington Post, the National Journal, and Roll Call have sections in their paper entirely dedicated to the industry.
Over time, financial relationships between public officials and lobbyists have come to be tightly regulatedmeals purchased, trips sponsored, or gifts provided by special interests through lobbyists for government officials have either been banned or regulated by a number of ethics-monitoring centers in the Congress and executive branch of the US government.
The Consequences of Regulation
Without going into minute detail regarding the rules that now govern lobbyists vs. Congressional and administration contacts, what has occurred is the development of an underground, or second, economy of political influence. Instead of relying on exclusive and direct contacts with government, lobbyists are increasingly using public education forums and think tanks to woo and court staffers and members of Congress. The ethics rules allow staffers to attend and enjoy the food and other benefits of widely attended meetings, defined in practice as assemblies of more than just ten people. The rules allow staffers and members to travel domestically and abroad, at the expense of others, if the purpose is in line with the public officials duties and if sponsored by a non-profit entity that has been screened.
One of the most attractive strategies that corporate and other interests have employed is to use think tanks as advocates for their policy proposals. Most think tanks are organized under American corporate law on the same terms as charities and educational organizationswhat are called 501(c)3 organizations. As 501(c)3 public policy organizations, think tanks are by law permitted to devote no more than a trivial 5% of their total resources to lobbying and political advocacy. Nonetheless, if DaimlerChrysler wanted to educate a group of Congressional staffers or members about the ways in which Korea was failing to live up to the terms of the bilateral Korea-United States auto agreement or if the Biotechnology Industry Association wanted to lay out the reasons why Europes precautionary principle regarding genetically modified foods and products was a violation against science, free trade, and modernity itself, then these interests might try to secure an organization like the New America Foundation, or the Heritage Foundation, the Brookings Institution, the Center for Strategic and International Studies, the Cato Institute, the Carnegie Endowment for International Peace, or the American Enterprise Institute to host a luncheon or a conference to provide education for public officials about these issues. These special interests could also ask a non-profit entity to organize a trip to study biotech issues in Sydney, Australia or to go to Seoul or Brussels to compare European and Korean auto trade parameters.
The Corruption of Think Tanks
In a tradition fashioned in Europe, wealthy individuals and institutions often established charities to support the needs and affairs of those less well off. In America, the richest individuals from Andrew Carnegie to Bill Gates have fulfilled their noblesse oblige responsibilities by establishing personal foundations. Henry Fords Ford Foundation has been one of the major institutions engaged in global affairs, social justice, and the strengthening of civil society. Social liberals such as Norman Lear and political conservatives such as John Olin established foundations and trusts to help endow projects and people who would pursue their respective political agendas. Firms have done the same. DaimlerChrysler, AT&T, Federal Express, Phillip Morris, Toyota, AIG, Citigroupfirms all around the world give money both from their corporate coffers and from corporate foundations to focus on issues of concern to the firm, which can mean supporting everything from a philharmonic orchestra, to sponsoring an inaugural ball after a presidential election, to sponsoring policy-related trips and programs for public officials.
One of the reasons such public policy organizations are so attractive to individuals, firms, unions, and others that make contributions to them is that the contributions are tax-deductible. In other words, a group of wealthy individuals worried about the negative impact on their businesses of trade with China could either give money to members of Congress or to political partieswhich is not tax deductibleor they could make major, unlimited contributions to various think tanks to host Congressional staff for dinners, conferences, and trips and otherwise support the public policy work of a think tank designed to make an advocacy impact.
This practice is increasingly referred to as deep lobbying, and one of the greatest practitioners of it over the years has been Roger Milliken, the textile magnate from the south who has quietly fought NAFTA, the Caribbean Basin Initiative, Trade Promotion Authority, and other legislation designed to carve away at textile protections in America. While Millikens efforts have often been in vain, his money has nonetheless bought him time, and he is a formidable player behind the scenes. His support of Ross Perot in 1992 and then again in 1996 probably cost former President Bush and Senator Robert Dole the presidency.
How It Works
The think tank sector, a very crowded field in Washington, is for the most part thriving thanks to billions of dollars being pumped into it. Despite the appearance of drama in many policy battles, however, think tanks are less and less committed to genuine inquiry designed to stimulate enlightened policy decisions and more and more oriented to deepening the well-worn grooves of a paralyzed debate, frozen in place by the contending power of potential winners and losers with armies of lobbyists at their heels. Part of the reason why think tanks of all sizes are increasingly vulnerable to the whims and policy targets of lobbying interests is that as an industry think tanks are proliferating at such a pace the total dollars going into the policy sector are being divided among an increasing number of players. To grow as an institution means struggling to some degree with a Faustian bargaintaking money from donors and, while maintaining the guise of policy objectivity and seriousness, doing the bidding of the lobbyist. The lack of IRS resources to investigate the non-profit sector in any serious way, combined with the inherent fuzziness in differentiating between public education and lobbying also contributes to the corruption of think tanks.
The most important kind of public policy advocacy that lobbyists have secured think tanks to pursue is on a far grander and more sophisticated scale than invitations to black tie dinners or trips to Bali or Singapore. Think tanks are in the business of policy analysis, but they also market that analysis and attempt to sell their views to the public and to the government. For example, senior fellows at Brookings maintain a reputation for being more academic than most policy wonks in Washington and broadcast their work through books more frequently than other researchers. By contrast, fellows at the Heritage Foundation operate more frequently through faxed policy briefs or op-eds in the Washington Times and other newspapers and magazines. In the last decade, the same phenomenon that has occurred in scientific research and development funding has happened in the public policy analysis business. Rather than funding basic research in science, funders are increasingly interested in applied research. Similarly with think tanks, funders increasingly expect policy achievements that contribute to their bottom line. Examples abound.
One of the most interesting recent cases concerns the current Director of the American Institute in Taiwan, which is nominally a U.S. non-profit organization, but which actually performs most of the functions of an embassy in Taiwan now that the U.S. no longer recognizes the sovereign status of Taiwan as a nation. AIT Director Douglas Paal was President George H.W. Bushs National Security Advisor for East Asia. When he left that office, Paal founded his own think tank, the Asia Pacific Policy Center. According to a major exposé by Joshua Micah Marshall in The New Republic (March 4, 2002), the majority of Doug Paals own staff thought that the APPC was a consulting/lobbying enterprise. The APPC prepared a newsletter, the annual subscription to which cost thousands of dollars, and which went primarily to important Asian governmental organizations that might have been interested in the newsletter but were perhaps more interested in propping up the career of someone very close to former President Bush.
The APPC did not organize policy programs for the public, nor did it make widely available any of its policy materials through the Internet or otherwise. Several of its reported board members, including former National Security Adviser Brent Scowcroft, former Congressman Dave McCurdy, and former Pentagon chief Frank Carlucci expressed astonishment when they learned that they were listed as members of the APPC board in the IRS 990 forms filed by Paals organization. In the last year for which papers were filed, the four largest funders of this non-profit think tank were the Government of Singapore, JETRO (an arm of Japans Ministry of Economy Trade and Industry), Itochu (a Japanese trading company), and Mitsui Marine & Fire Insurance (a Japanese insurance firm). The Asia Pacific Policy Center also organized and hosted numerous high-level trips to Malaysia for members of Congress, particularly the Senate. Some allege that the funds for this largesse came from then Malaysia Deputy Prime Minister Anwar Ibrahim, who was at the time heir apparent to succeed Prime Minister Mahathir. Joshua Marshalls discoveries, which ran in the New Republics article, did not keep Doug Paal from receiving his appointment to Taipei, although the article probably delayed his departure by several months.
In 1997, I helped draft legislation passed in the Senate that would have forced non-profit public affairs organizations to disclose publicly if they accepted more than $10,000 directly or indirectly from foreign government sources. When this provision was being debated, the American Civil Liberties Union objected on the grounds that the Boy Scouts and other such organizations would have to register under this plan if they accepted foreign government money, and this was thought to be terrible because it would make those entities appear to be foreign agents. Thus, the legislation failed to pass from the conference committee. No action was taken to address the real problem that Congress had identified: an increasing number of non-profit, 501(c)3 organizations with dubious funding which were lobbying Congress on such issues as permanent normal trade relations for China while pretending that it was public education. Transparency is the solution, but few have found a satisfactory method to achieve reasonable transparency on the funding and intentions of non-profit institutions, many of which have been created by or are controlled by lobbying interests.
Unfortunately, I believe that corruption in the think tank arena is systemic and not easily remedied. The troubling pattern of deep lobbying and influence peddling via research institutions needs to be broadly and seriously investigated. The Internal Revenue Service needs to engage in more enforcement actions against non-profit firms that fail to deliver credible services to the public and that tend to act more as tax-sheltered income machines for key principals in the organization. Furthermore, there should be greater transparency regarding major gifts to non-profits so that deeds done by institutions can be measured by money received from donors, or clients as the case may be. I think my own institution, the New America Foundation, does an admirable job of balancing the funders that would otherwise like to direct its activities in one direction or another. But we are not immune to attempts by firms and foundations to use our machinery in policy advocacy efforts.
STEVEN C. CLEMONS has been associated with several think tanks, including the Nixon Center, the Economic Strategy Institute, the New America Foundation, and the Japan Policy Research Institute. A much longer version of this paper was presented at a conference, Lobbying and Foreign Policy, organized in Paris November 14-16, 2002, and jointly sponsored by the French Institute for International Relations (IFRI) and the German Marshall Fund.