Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (50 page)

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.”

I
n 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 shut 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.

“In previous eras,” Lizza noted, “ideologically extreme minorities could be controlled by party leadership. What’s new about the current House of Representatives is that party discipline has broken down on the Republican side.” Party bosses no longer ruled.
Big outside money had failed to buy the 2012 presidential election, but it had nonetheless succeeded in paralyzing the U.S. government.

Meadows of course was not able to engineer the government shutdown by himself. Ted Cruz, the junior senator from Texas, whose 2012 victory had also been fueled by right-wing outside money, orchestrated much of the congressional strategy.
A galaxy of conservative nonprofit groups funded by the party’s big donors, meanwhile, promoted Meadows’s petition while also organizing a state-based campaign of massive resistance to Obamacare so fierce it was likened to the southern states’ defiance of the Supreme Court’s 1954 decision in
Brown v. Board of Education
. Like the segregationists, they refused to accept defeat.

Much of America was taken by surprise by such radical action. But conservative activists had been secretly drawing up various sabotage schemes for some time.

The raw anger behind this radicalism was evident in an address given by Michael Greve, a law professor at George Mason University, at an American Enterprise Institute conference in 2010. Greve was the chairman of the Competitive Enterprise Institute—an antiregulatory free-market think tank in Washington funded by the Bradley, Coors, Koch, and Scaife Foundations, along with a roster of giant corporations—and a fervent opponent of Obamacare. “
This bastard has to be killed as a matter of political hygiene,” he declared.

“I do not care how this is done, whether it’s dismembered, whether we drive a stake through its heart, whether we tar and feather it and drive it out of town, whether we strangle it,” he went on. “I don’t care who does it, whether it’s some court some place, or the United States Congress. Any which way, any dollar spent on that goal is worth spending, any brief filed toward that end is worth filing, any speech or panel contribution toward that end is of service to the United States.”

The radical resistance didn’t end after the Supreme Court upheld the law in the spring of 2012 and the public reelected Obama that fall. Instead the right wing regrouped. As
The New York Times
later reported, a “
loose-knit coalition of conservative activists” began gathering in secret in Washington to plot how else they could disrupt the program.
The meetings produced a “blueprint to defund Obamacare” signed by some three dozen conservative groups who called themselves the Conservative Action Project. Their leader was the former attorney general Edwin Meese III, an aging standard-bearer of the conservative movement who held the Ronald Reagan chair at the Heritage Foundation, served on the board of directors at the Mercatus Center at George Mason University, and was a frequent attendee at the Koch donor summits. One scheme was the initiative that Meadows eventually championed, to hold up congressional funds for the health-care program.

Another scheme was a massive “education” campaign to stir noncompliance with the federal law, both on the part of state officials, like those in North Carolina who refused to set up insurance exchanges, and by citizens.
Freedom Partners Chamber of Commerce, the Koch network’s “business league,” financed much of the fight. It used its youth-oriented front group, Generation Opportunity, to post online advertisements featuring a tasteless cartoon version of Uncle Sam jumping between the legs of a young woman undergoing a gynecological exam to spread fear about the government’s interference in private health-care matters. (The Kochs’ front group seemed to have no such qualms about government intrusion into reproductive health issues.) The organization also sponsored student-oriented protests at which mock Obamacare insurance cards were burned like draft cards during the Vietnam War. The disinformation campaign spread fear and confusion.
News reports reflected a widespread belief, particularly in desperately poor areas, that the government was setting up “death panels.”

In the summer and fall of 2013, as Meadows was gathering co-sponsors for his open letter, Americans for Prosperity spent an additional $5.5 million on anti-Obamacare television ads. Asked about this later, Tim Phillips stressed that his group merely wanted to repeal rather than defund the health-care law. But either way, he acknowledged that the Kochs’ political organization was not giving up. It planned to spend “tens of millions” of dollars on a “multi-front effort” against the law, he said.