Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (11 page)

T
he looming question, though, was how all this money could best be spent. Scaife, who was an early admirer of William F. Buckley Jr.’s, came into his full inheritance just as intellectuals on the right were incubating the idea that they needed to build their own establishment to counter that of the liberals. A leading voice of this cause was a member of Scaife’s League to Save Carthage—Lewis Powell, the future Supreme Court justice who was then an eminent corporate lawyer from Richmond, Virginia. And at just that moment, Powell was in search of deep-pocketed donors to bankroll the project.

Powell was the author of a brilliant battle plan detailing how conservative business interests could reclaim American politics. In the spirit of Hannibal, it called for a devastating surprise attack on the bloated and self-satisfied establishment, which regarded itself as nonpartisan but which the conservatives regarded as liberal.
Carrying out this attack would be an alternative opinion elite that would look like the existing one, except that it would be privately funded by avowedly partisan donors intent on implementing a pro-business—and, critics would say, self-serving—political agenda.

Powell’s ties to corporate conservatives were manifold. In addition to a thriving corporate law practice, he held seats on the boards of over a dozen of the largest companies in the country, including the cigarette maker Philip Morris. So in the spring of 1971, Powell, who was then sixty-three, had watched with growing agitation as student radicals, antiwar demonstrators, black power militants, and much of the liberal intellectual elite turned against what they saw as the depravity of corporate America. Powell believed American capitalism was facing a crisis. All summer long, he clipped magazine and newspaper articles documenting the political threat. He was particularly preoccupied with Ralph Nader, the young Harvard Law School graduate whom Daniel Patrick Moynihan, then assistant secretary of labor, had hired to investigate auto safety hazards. Nader’s 1965 exposé on General Motors,
Unsafe at Any Speed
, accused the auto industry of putting profits ahead of safety, triggering the American consumer movement and undermining Americans’ faith in business. Powell was a personal friend of General Motors’ corporate counsel and regarded this and other anticorporate developments with almost apocalyptic alarm.

That summer, two months before Powell was nominated by Richard Nixon to the Supreme Court, his neighbor Eugene Sydnor Jr., a close friend and director of the U.S. Chamber of Commerce, who shared Powell’s political upset, commissioned Powell to write a special memorandum for the business league. In August, Powell delivered a seething memo that was nothing less than a counterrevolutionary call to arms for corporate America, warning the business community that its very survival was at stake if it didn’t get politically organized and fight back. The five-thousand-word memo was marked “confidential” and titled “
Attack on American Free Enterprise System.” A virtual anti–
Communist Manifesto
, it laid out a blueprint for a conservative takeover. As Kim Phillips-Fein describes it in her history,
Invisible Hands
, Powell’s memo transformed corporate America into a “vanguard.”

Also heeding the battle cry were the heirs to some of America’s greatest corporate fortunes, including Scaife, who were poised to enlist their private foundations as the conservative movement’s banks. Foundations had several advantages for both the donors and the recipients of this largesse. Unlike most businesses, few people controlled them, so they could move quickly on controversial projects. And they provided the donors with tax breaks while conferring the aura of a high-minded cause. Reflecting on this period, James Piereson, a scholar at the Manhattan Institute who became a crucial figure in several conservative foundations, said, “
We didn’t have anything when we started in the late 1970s. We had no institutions at all in the mainstream of American political life.” He debunked what he called the liberal misconception that corporations directly funded most of the far-right movement, arguing, “What we did was way too controversial for corporations.” Instead, he said, in the beginning “there were only a small number of foundations,” including the Earhart Foundation, based on an oil fortune, the Smith Richardson Foundation, derived from the cough and cold medicine dynasty, and, most importantly, the various Scaife family foundations.

The late 1960s and the early 1970s were in fact a daunting time for corporate America and for those living off great corporate fortunes. The business community was reeling from the birth of the environmental and consumer movements, which spawned a host of tough new government regulations. Following the 1962 publication of Rachel Carson’s
Silent Spring
, exposing the devastating environmental fallout from irresponsible chemical practices, Congress passed the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, and other laws creating the modern regulatory state. In 1970, with strong bipartisan support, President Nixon signed legislation creating both the Environmental Protection Agency and the Occupational Safety and Health Administration, giving the government new powers with which to police business. The standards decreed by the Clean Air Act were notably tough. In developing regulations, the EPA was directed to weigh only one concern—public health. Costs to industry were explicitly deemed irrelevant. Meanwhile, as opposition grew to the Vietnam War, protesters turned angrily against companies they accused of fueling the conflict, such as Dow Chemical, the producer of napalm, which became the target of more than two hundred demonstrations in the 1970s. New Left leaders, like Staughton Lynd, urged the antiwar movement not to waste time on Washington but instead, as he wrote in 1969, to “
lay siege to corporations.” Polls showed that Americans’ respect for business was plummeting.

As scientists linked smoking to cancer, the tobacco industry was under particularly pointed attack, which might have heightened Powell’s alarmism. As a director at Philip Morris from 1964 until he joined the Supreme Court, Powell was an unabashed defender of tobacco, signing off on a series of annual reports lashing out at critics. The company’s 1967 annual report, for instance, declared, “We deplore the lack of objectivity in so important a controversy…Unfortunately the positive benefits of smoking which are so widely acknowledged are largely ignored by many reports linking cigarettes and health, and little attention is paid to the scientific reports which are favorable to smoking.” Powell took umbrage at the refusal by the Federal Communications Commission to grant the tobacco companies “equal time” to respond to their critics on television and argued that the companies’ First Amendment rights were being infringed. Powell’s legal argument failed in the courts, increasing his sense of corporate embattlement. Jeffrey Clements, in
Corporations Are Not People
, suggests
Powell’s defense of the tobacco companies was a harbinger of the corporate rights movement and a big part of what led him to push in his memo for conservatives to empower more pro-business courts.

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.

D
uring 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.

I
n 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.