Billionaires for Big Government
By: Matthew Vadum and James Dellinger
Human Events | Wednesday, January 16, 2008
The Democracy Alliance (DA) is maturing. After several years of
internal strife, management squabbles, a few political purges and
frustrating electoral setbacks, the group whose mission is to tilt
American politics leftward has found its footing. The DA is becoming
what leftist blogger Markos Moulitsas of DailyKos fame called for in
2005: “A vast, Vast Left Wing Conspiracy to rival” the conservative
movement. It relies less on traditional Democratic Party “machine”
politics, which typically draws upon fat cats, institutions (the party
itself, labor unions) and single-issue advocacy groups (pro-abortion
rights groups, the National Education Association and other teacher
unions). Although it is officially nonpartisan, the DA has cultivated
deep and extensive ties to the Democratic Party establishment.
New
York Democratic Sen. Hillary Clinton’s good friend, Kelly Craighead,
runs the alliance’s day-to-day operations. Clinton brags that she has
helped create what she calls “a lot of the new progressive
infrastructure.” Last August, Clinton told the YearlyKos convention of
left-wing bloggers that she “helped to start and support” Media Matters and the Center for American Progress (CAP), two recipients
of DA grants. Media Matters is headed by conservative turncoat David, and CAP is headed by John Podesta, Bill Clinton’s White House chief
of staff.
The alliance’s principal architect, Democratic
operative and former Clinton Administration official Rob Stein, has
promised that the alliance will become less secretive as it starts to
fund a wider array of political programs and projects. In fact, the DA
has engineered to date more than $100 million in contributions from its
wealthy members to liberal groups sympathetic to the Democratic Party,
and it has the blessing of Democratic National Committee (DNC) Chairman
Howard Dean.
But problems remain. Democrats can’t be sure that
they are masterminding a grand reversal of Newt Gingrich’s 1994
Republican revolution. Democrats control Congress, and the prospects
for retaining Congress and capturing the White House this year look
better than ever. Still, the liberal grip on power is tenuous, and
anything can happen. They haven’t forgotten that the resurgence of
their party had seemed improbable just three years ago when the
alliance was created, a time when the Washington punditry pronounced a
national Republican realignment a done deal.
DA members have
concluded that the Democratic Party still lacks a coherent message
despite its victories in the November 2006 elections. That midterm vote
was more against the GOP than for Democrats. “What was done was to fire
some people in Washington and give other people a chance,” said Kansas
Democratic Gov. Kathleen Sebelius at a Miami meeting of the alliance
after the midterms. “But it’s not an endorsement of an agenda.” Podesta
said, “We still haven’t cracked the übermessage. We still haven’t
gotten into people’s minds a picture of what a progressive America
would look like.”
Many alliance members think the Democratic
Party’s future success requires ideological re-branding. They may
question whether the word “progressive” is a political winner, but they
know “liberal” isn’t.
“The liberal brand is tarnished,” said
alliance member Rob Glaser, who heads the online multimedia company
RealNetworks. He wants to “change the political paradigm” and treat the
word “progressive” as a thing “that’s nurtured and managed just like
any other brand.” To test his theory, Glaser teamed with CAP and spent
$600,000 on TV ads in the Midwest over a three-week period. He proudly
claims liberals in the test areas subsequently rechristened themselves
progressives. However, CAP research shows that as much as 40% of the
public has no clue what “progressive” means.
Origins of the Democracy Alliance
In
2003, Democratic Party activists and supporters began to coalesce
around an informal coalition they called the Phoenix Group, which was
later renamed the Democracy Alliance. Donors gave millions of dollars
to liberal candidates and 527 political committees, but there was no
electoral payoff in November 2004. Despondent, a small group of the
wealthiest Democrats met in San Francisco a month after the election
for sober reflection on Massachusetts Democratic Sen. John Kerry’s
failure to win the presidency. George Soros, Progressive Insurance
Chairman Peter B. Lewis and S&L tycoons Herb and Marion Sandler
felt let down, seduced by the siren song of pollsters and the
mainstream media who had assured them that Kerry would triumph over an
incumbent President in wartime. Around the same time, another group of
wealthy Democratic donors met in Washington, D.C., feeling the same
way. “The U.S. didn’t enter World War II until Japan bombed Pearl
Harbor,” political consultant Erica Payne told attendees. “We just had
our Pearl Harbor.”
In April 2005, Soros and the other major
players assembled a large group for a secret planning session. Seventy
millionaires and billionaires met in Phoenix, Ariz., to discuss how to
develop a long-term strategy. The attendees, including former Clinton
White House aides Mike McCurry and Sidney Blumenthal and PBS talking
head Bill Moyers, listened as officials from all the pro-Democratic
Party 527 groups on which they had lavished millions of dollars
explained why they failed to deliver the election to Kerry.
Three
quarters of the members at the meeting voted that the alliance should
not “retain close ties to the Democratic Party.” A survey showed most
members were from 45 to 65 years of age and that three quarters hailed
from the East or West coasts. Some 38% described themselves as
“progressive,” compared to 24% who called themselves “liberal” and 7%
who were content with the label “Democrats.” Not surprisingly, 84%
thought the conservative movement was “a fundamental threat to the
American way of life.”
Stein urged members to pay closer
attention to conservatives who had spent four decades investing in
ideas and institutions with staying power. Stein showed his PowerPoint
presentation called “The Conservative Message Machine’s Money Matrix,”
which showed a series of graphs and charts depicting an intricate
network of organizations, funders and activists that comprised what he
said was the conservative movement. “This is perhaps the most potent,
independent, institutionalized apparatus ever assembled in a democracy
to promote one belief system,” Stein said.
Stein believed the
left could not compete electorally because it was hopelessly outgunned
by the right’s political infrastructure. By his tally, the right spent
$170 million a year on think tanks, versus the left’s $85 million. The
right spent $35 million on legal advocacy organizations, while the left
anted up a mere $5 million. The right spent $8 million to train young
conservatives at Morton Blackwell’s Leadership Institute, while the
left spent almost nothing. The result, Stein reasoned, was that
conservatives not only won elections but also changed the national
political debate. By contrast to well-endowed conservatives, liberal
activist groups and think tanks were hard up for cash, competing with
each other for the same pool of funds rather than working toward shared
objectives. Stein’s curious calculus flattered conservatives and shamed
the left by finding a great imbalance in their revenues. But oddly, he
did not count academic programs and institutes, grant-making by the
great foundations or the resources of the mainstream media as adjuncts
of the political left. The great delusion of Democracy Alliance donors
is that conservatives comprise a “vast right-wing conspiracy.”
Stein
felt Democrats had grown accustomed to thinking of themselves as the
natural majority party. As a result, the party had become a top-down
organization run by professional politicians who cared little about
donors’ concerns. He was convinced that the Democratic Party’s
hierarchy had to be turned upside-down: Donors should fund an
ideological movement that would dictate policies to the politicians.
Activists, who had infused the party with new money and new energy,
were fed up with perceived Democratic dithering and were demanding more
say in party affairs. MoveOn.org Founder and Executive Director Eli
Pariser said, “Now it’s our party: we bought it, we own it, and we’re
going to take it back.”
Democratic donors aggravated by the
GOP’s electoral success latched on to Stein’s vision. “The new breed of
rich and frustrated leftists” saw themselves as oppressed both by “a
Republican conspiracy” and “by their own party and its insipid
Washington establishment,” journalist Matt Bai wrote in his new book,
The Argument: Billionaires, Bloggers and the Battle to Remake
Democratic Politics. “This, more than anything else, was what drew them
to Rob Stein’s presentation.”
Stein’s presentation won converts,
and in 2005, the Democracy Alliance was born. It was an odd name for a
loose collection of super-rich donors committed to building
organizations that would propel America to the left.
Speed Bumps on the Road to Socialism
In
its short time on the political scene, the Democracy Alliance has been
shaken by dissent and strife, much of which is detailed in Bai’s book.
DA
partners booted Erica Payne, the political consultant who invoked the
image of Pearl Harbor to rally the troops in 2004. Payne created bad
blood when she led an effort to oust Rob Stein as DA chief. Stein’s
successor was Judy Wade. But Wade was considered tactless and was fired
from her $400,000-a-year job at a post-2006 election meeting of the
Democracy Alliance board. Board members promised to streamline the
group’s Byzantine grant-making process and brought Stein back to the
group’s inner circle. Hillary Clinton’s friend, Kelly Craighead, who
was a senior aide to Clinton when she was First Lady, replaced Wade and
all but one member of a “reform” slate of candidates pushed by the
Service Employees International Union (SEIU) was elected to the board.
Meanwhile,
Bernard L. Schwartz, former CEO of Loral Space & Communications and
one of the largest donors to the Democratic National Committee in the
1990s, quit the DA because he thought it lacked direction. “They were
looking for who they should be when they grow up, and whoever had the
latest idea, they went off in that direction,” he told Bai just before
the 2006 elections.
In May 2006, Bill Clinton dropped by a DA
meeting for a friendly greeting but got into a shouting match when DA
member Guy Saperstein asked why Democrats wouldn’t apologize for
supporting the Iraq War. Clinton went on a 10-minute tirade, yelling
that if he had been in Congress, he would have voted to authorize the
war (a position Clinton subsequently contradicted in November 2007
while campaigning for his wife in Iowa).
Angry, Clinton wagged a
finger at Saperstein, telling him he was “wrong, wrong, wrong.” Clinton
urged DA members to move on: “Look, if that vote was a mistake, then
it’s a mistake I would have made, but you’re just wrong. This is not
productive! You’re asking people to flagellate themselves! What you do
tomorrow is all that matters. Only in this party do we eat our own. You
can go on misrepresenting and bashing our own people, but I am sick and
tired of it. Stop looking back and finger-pointing, and ask what we
should do now.”
Saperstein, an Oakland, Calif., attorney was
incensed. “It was an extraordinary display of anger and imperiousness,”
he said. Ari Berman of the leftist Nation magazine wrote, “Clinton’s
response was a not-so-subtle warning to partners to avoid divisive
issues, like the war, that might harm his wife in the next presidential
election.”
The DA filed its corporate registration in the
District of Columbia in January 2005. Little money passes through
alliance bank accounts because it is a middle man that puts donors
together with causes deemed worthy of support. At press time, only two
grants to the DA showed up in the FoundationSearch philanthropy
database, and both went to the Democracy Alliance “Innovation Fund,”
which Stein told a Hudson Institute panel is “a very small thing...that makes very small grants” to 501(c)(3) groups. The fund took in a
$50,000 grant in 2006 by the Enfranchisement Foundation and a $50,000
grant the year before by the Stephen M. Silberstein Foundation.
Stein
explained the group’s legal structure to the Hudson panel: “It is a
taxable nonprofit. Think of it as a corporation that does not make a
profit and doesn’t aspire to make a profit. We’re an association of
individuals. We have a board of directors—13 people elected by the
partners. And we file corporate papers regularly and comply with all
disclosure requirements.”
In other words, the DA has no interest
in asking the IRS to register it as tax-exempt or to allow
contributions to it to be tax-deductible. Were the DA to request
tax-exemption as a 501(c)(4) lobby group or as a 527 political group,
it would have to abide by a dizzying array of legal constraints. DA
members may want to impose Big Government bureaucracy and red tape on
Americans, but the friends of George Soros are too rich to be bothered.
The
DA’s board is a microcosm of the modern left. In the top rungs are a
limousine liberal, a labor activist and a peacenik from the 1960s. DA
chairman Rob McKay is also president of the McKay Family Foundation, a
director of Vanguard Public Foundation, co-chairman of Mother Jones
magazine, board member of the Ms. Foundation for Women and a blogger on
the “Huffington Post” website. He was born in conservative Orange
County, California, and his parents were Republicans. The DA vice
chairman is Anna Burger, sometimes known as the “Queen of Labor.” She
is secretary-treasurer of the militant SEIU and chairman of Change to
Win, the labor federation formed after SEIU joined other unions in
breaking away from the AFL-CIO. Gannett News Service called Burger
arguably “the most influential woman in the U.S. labor movement.”
Drummond Pike, founder of the ultra-liberal Tides Foundation, is the
DA’s treasurer. In 2003, Pike endorsed the document, “10 Reasons
Environmentalists Oppose an Attack on Iraq,” which was published by
Environmentalists Against War.
DA Finances
The
Democracy Alliance does not endorse candidates for public office. Stein
describes it as a “gathering place,” “learning environment,” “debating
society” and “investment club.” The DA is “a big tent, a convener for
the full spectrum of center-left thought and perspective.”
This
emerging vanguard of the proletariat is hardly open to the common
rabble because its members must satisfy one requirement: They must be
rich. Members, who are called “partners,” pay an initial $25,000 fee
and $30,000 in yearly dues. They also must pledge to give at least
$200,000 annually to groups that the alliance endorses. Partners meet
two times a year in committees to decide on grants, which focus on four
areas: media, ideas, leadership and civic engagement. Recommendations
are then made to the DA board, which passes them on to all DA partners.
The alliance discourages partners from discussing DA affairs with the
media, and it requires its grant recipients to sign nondisclosure
agreements.
While the alliance’s structure makes it hard to find
precise figures for its grant-making, Matt Bai wrote in a September 23
Los Angeles Times op-ed that DA members have “thus far poured more than
$100 million into building what they call a ‘progressive
infrastructure.’”
Early DA meetings were guarded by security
forces and shredding machines were on hand to dispose of documents
deemed sensitive. But at the Hudson panel discussion in late 2006,
Stein promised a new era of glasnost. Nowadays meetings, while closed
to the public, sometimes include journalists. Stein promised there will
“absolutely, positively” be “more transparency from the Democracy
Alliance.” However, he dismissed as a “canard” the idea that the DA hid
behind a veil of “super-secrecy,” noting that it had cooperated with
the Washington Post and the Nation magazine on stories about it. He
told the Hudson Institute audience that about 400 organizations in the
DA database were eligible for funding but that “roughly 380-something
of those groups” had not received any.
No grants were decided at
the DA’s April 2005 organizing meeting in Phoenix. However, DA partners
pledged $39 million, about $13 million of which came from Soros and
Lewis alone, at the October 2005 meeting at the Chateau Elan Winery
& Resort in Atlanta, Ga. Some smaller, less prominent groups were
reportedly miffed that they were not considered for grants.
The
next meeting, held in Austin, Texas, in May 2006, signaled that the
Democracy Alliance was perhaps becoming less a gathering of very rich
donors and more a meeting of the usual suspects, the interest groups.
SEIU President Andrew Stern spoke and money-hungry grant-seekers were
allowed to network with DA partners. SEIU pledged $5 million to
DA-approved groups. Stern also tried unsuccessfully to get DA partners
to fund labor’s public-relations campaign against Wal-Mart. He told
attendees that liberals needed to be flexible in their policy
prescriptions and resist the temptation to reflexively defend existing
government programs. Stern said he wanted national healthcare, child
care and better public schools but was open to dismantling some
entitlement programs, trying out school choice or revamping the tax
code. Even trade, normally a hot-button issue for the labor movement,
is on the table. “You can’t stop globalization. You can’t stop trade.
That debate is over,” he said. Following Stern’s appearance at the
Austin meeting, the rival AFL-CIO thought it wise to purchase
membership in the DA.
With an eye on the approaching November
2006 elections, the alliance decided to give another $22 million to 16
groups focused on electoral politics. These groups included the Center
for Community Change, USAction, ACORN, EMILY’s List and the Sierra Club.
The alliance reportedly met in Washington, D.C., in early November 2007, but it is unclear what business was transacted.
Selected Grant Recipients
It’s
understandable that ultra-successful business people in the alliance
have little but disdain for the Democratic Party’s high-priced
political consultants and conventional politicking: They think the
party should be run more like a business. DA partners have divided
their giving into what Rob Stein calls the “four buckets”: ideas,
media, leadership training, and civic engagement.
Partners pour
cash into those pails and then ladle it out to approved left-wing
groups. One group denied funding is the little-known Third Way:
Strategy Center for Progressives. Third Way favors free trade and
publicly sided with Hillary Clinton when she urged that more troops be
used in the fight against terrorism. Third Way’s board of trustees
includes Lewis Cullman, Herbert Miller and Bernard Schwartz. (Cullman
and Miller are members of DA, but Schwartz left the Alliance in 2006.)
A bloc of DA partners led by Guy Saperstein killed Third Way’s funding
request. “The alliance, these partners said, didn’t have room for
self-described centrists whose main goal was to appease Republicans,”
according to Bai.
There is no publicly available tally of
Democracy Alliance-approved grants, but here are some grant recipients
and amounts reported in the media:
Media Matters for America:
This group headed by former conservative journalist David Brock claims
to expose right-wing media bias. Its self-described mission involves
monitoring “conservative misinformation in the U.S. media.” Brock has
generated at least $7 million for Media Matters through the DA. While
Brock and Sen. Clinton are reportedly not the best of friends, she has
helped Media Matters and has close ties to the group. Kelly Craighead,
one of Hillary Clinton’s closest friends, was a top paid advisor to
Media Matters when it was set up and is currently the DA’s managing
director. In 2007, the group’s website credited her with “aligning more
than $60 million in Alliance Partner investments.”
Center for American Progress: Podesta’s think tank has received at least $9
million through the DA. According to Bai, the “vast majority” of the
funding came from Soros, Lewis and the Sandlers. CAP aspires to be a
counterpart to the Heritage Foundation, uniting disparate factions on
the left. Hillary Clinton takes partial credit for creating CAP and
maintains close ties to it.
Democracy: A Journal of Ideas: DA
partners have given $25,000 to the start-up publication founded by
former White House speechwriters Andrei Cherny and Kenneth Baer.
Soros’s Open Society Institute gave the Journal $50,000.
People for the American Way: In 2006 the DA approved a grant to this vocal
activist group, founded by Alliance member Norman Lear, but the amount
is unknown. Its president emeritus is Ralph Neas. Hollywood actors Alec
Baldwin and Kathleen Turner, along with socialite Bianca Jagger, sit on
its foundation’s board of directors.
New Democratic Network
(NDN): This activist group, which encompasses the NDN Political Fund,
the New Politics Institute and the Hispanic Strategy Center, is headed
by Simon Rosenberg, a former television news writer and producer and
political strategist for the Dukakis and Clinton presidential
campaigns. The DA approved a grant to this group in 2006, but the
amount is unknown.
Progressive Majority: This group, created in
2001, focuses on electing left-wingers at the state and local level and
developing a “farm team” of progressive candidates. Its founder and
president is former NARAL Political Director Gloria A. Totten. DA
grants to this group total at least $5 million.
Citizens for Responsibility and Ethics in Washington (CREW): This Soros-funded group
sees itself as a left-wing version of the conservative Judicial Watch.
CREW Executive Director Melanie Sloan is a former U.S. attorney and
Democratic counsel for the House Judiciary Committee.
Center for
Progressive Leadership: This organization wants to mirror the
conservative Leadership Institute. The center’s website describes the
group as “a national political training institute dedicated to
developing the next generation of progressive political leaders.
Through intensive training programs for youth, activists, and future
candidates, CPL provides individuals with the skills and resources
needed to become effective political leaders.” CPL President Peter
Murray acknowledged in July 2006 that donations from alliance members
boosted the group’s budget to $2.3 million, up from $1 million the year
before.
Association of Community Organizations for Reform Now (ACORN): ACORN is a radical activist group active in housing programs
and “living wage” campaigns in inner-city neighborhoods in more than 75
U.S. cities. In recent years it has been implicated in a number of
fraudulent voter-registration schemes. The DA approved a grant to this
group in 2006, but the amount is unknown.
EMILY’s List: While
the group’s political action committee boasts that it is “the nation’s
largest grassroots political network,” EMILY’s List is essentially a
fundraising vehicle for pro-abortion female political candidates. The
DA approved a grant to this group in 2006, but the amount is unknown.
America Votes: Another get-out-the-vote 527 organization, it is headed by
Maggie Fox, former deputy executive director of the Sierra Club. The
group received a $6-million funding commitment from Soros.
Air America: Described by the New York Observer as “a reliable destroyer of
the fortunes of wealthy, well-meaning liberals,” the struggling
left-wing talk radio network is said to have lost an astounding $41
million since 2004. After it reportedly received a funding commitment
of at least $8 million from the alliance, it filed for bankruptcy
protection in October 2006, listing liabilities of more than $20
million and assets of just $4 million. DA member Rob Glaser has
invested at least $10 million in the network over the years.
Sierra Club: The influential environmental organization successfully targeted
property rights champion Rep. Richard Pombo (R-Calif.), who was
defeated in 2006. The DA approved a grant to this group in 2006, but
the amount is unknown.
Center for Community Change: This
longtime group dedicated to defending welfare entitlements and leftist
anti-poverty programs was founded in 1968. Activist Deepak Bhargava is
its executive director.
USAction: This group works closely with
organized labor. It is the successor to Citizen Action, the activist
group discredited by its involvement in the money-laundering scandal to
re-elect Teamsters President Ron Carey in the late 1990s.
Catalist:
Formerly called Data Warehouse, this group was created by Clinton aide
Harold Ickes and Democratic operative Laura Quinn. Ickes is critical of
the DNC under Dean and aims to create a sophisticated get-out-the-vote
operation that rivals the Republican Party’s. Soros put $11 million at
Ickes’s disposal because he distrusts Dean, the Washington Post
reported. Albert J. Dwoskin, a DA board member and real estate
developer in Fairfax, Va., is chairman of Catalist.
Employment
Policy Institute: The chairman of this liberal think tank is Gerald W.
McEntee, president of the American Federation of State, County and
Municipal Employees. Other labor figures such as SEIU’s Stern are on
the board. Julianne Malveaux, the black economist who condemned Supreme
Court Justice Clarence Thomas as a traitor to fellow African-Americans,
is secretary-treasurer.
Center on Budget and Policy
Priorities: This left-leaning think tank is headed by Robert
Greenstein, who served in the Carter Administration and received a
MacArthur Fellowship (the so-called genius award) in the 1990s.
AmericanForeignPolicy.org:
A new startup headed by University of Connecticut law Prof. Richard
Parker claims on its website to have received funding from three DA
partners and that Parker authored “a major study” for the DA “on
investment gaps and needs in promoting a progressive national security
and foreign policy.”
We have implemented a new commenting system. To use it you must login/register with disqus. Registering is simple and can be done while posting this comment itself. Please contact gzenone [at] horowitzfreedomcenter.org if you have any difficulties.
blog comments powered by
|
|