Josh Marshall caught this item about TownHall.com.
The subject interests me a lot — for several reasons. I wrote a piece a while back called “Thought Control” which was paired with a TomPaine.com/Florence Fund Op-Ad in the New York Times titled “Think Tanks for Sale.”
Here is an excerpt from my piece which focuses on the political battles and events that led to the creation of the Heritage Foundation. In the first line I am referring to John Judis and his excellent book, The Paradox of American Democracy:
Judis includes a story about the earlier days at the American Enterprise Institute (AEI) that provides a refreshing glimpse of a time when think tanks used to be less for sale.
He notes how, in the early 1970s, AEI’s leadership worried about attracting IRS wrath if its policy reports appeared to influence Congressional votes. So they did what they could to make it seem as if they were staying away from legislative arm-twisting. For instance, then-AEI President William Baroody delayed the release of a study supporting a Nixon administration supersonic transport aircraft program until two days after the Senate had voted on it. Some of AEI’s friends, though, thought their fear of creating an advocacy impact was foolish, a kind of self-inflicted irrelevance.
That’s, in part, what gave Paul Weyrich and Edward Feulner the impetus to launch the Heritage Foundation, which they said would have more “quick response capability.” Such capability was very attractive to all kinds of funders who wanted their money to create action, not academic conversation. Today, Heritage is the most influential think tank in the country.
And there are many Heritage wannabes scattered all over the political spectrum. They thrive to the degree that they connect big financial support with work that leads to measurable legislative and policy results.
Thus, for TownHall.com to feel constrained by the IRS requirements governing the Heritage Foundation, one gets a sense of how political their objectives are. I applaud them for taking this step because I believe that the norms governing non-profit public affairs organizations should be strengthened.
There are more than 1,500 think tanks in Washington — and most are small boutiques run by a single person with volunteer interns. They are probably the least known and least understood part of civil society in America, particularly inside the beltway, but these organizations play an important role in influencing policy and legislation. But lobbying money and various task-oriented consulting funds are pumping through 501c3 and 501c4 organizations with little attention being paid to this growing trend.
If there existed a Hall of Fame for Conservatives with a Conscience, Barry Goldwater would be among the first champions inducted, but as David Brooks so pungently wrote in his piece on conservative sleaze the other day in the New York Times, the recent racket among big-time Republicans is that they have “embraced the conservative part while discarding the conscience part.”
But one family name that should also be included in that “Conscience of a Conservative Hall of Fame” — particularly with regard to think tanks is the Baroody name. William Baroody who helped found and build the American Enterprise Institute clearly worried about crossing inappropriate and potentially illegal lines in directing the work and activities of his think tank.
Interestingly, his son Michael Baroody who is currently Executive Vice President of the National Association of Manufacturers, stood up and did the ‘right thing’ in the National Policy Forum, of which Baroody was recruited by Haley Barbour to be the first President.
John Bolton later became the National Policy Forum’s president — but more on that later.
I will paste a rather long segment of a Congressional Report from the ‘Investiagion of Illegal or Improper Activities in Connecting with 1996 Federal Election Campaigns — Final Report of the Committee on Governmental Affairs, SENATE Rept. 105-167 – 105th Congress 2d Session – March 10, 1998’. This report is one filed by the Minority, including Senators John Glenn, Carl Levin, Joseph Lieberman, Daniel Akaka, Richard Durbin, Robert Toricelli, and Max Cleland.
Note Michael Baroody’s principled stand on the question of how think tanks, in this case the National Policy Forum, should be run. Something good clearly runs in the Baroody family:
Origin of the National Policy Forum
In 1993, Barbour, working with Donald Fierce, his friend, business partner, and RNC chief strategist, created the National Policy Forum as a “think tank” for the exchange of Republican ideas. The organization applied to the Internal Revenue Service for tax-exempt 501(c)(4) status, which would have prohibited it from engaging in partisan or primarily political activity. According to the testimony of several witnesses, Barbour touted the creation of NPF as a plank in his platform when he ran for the chairmanship of the RNC, stating
that he believed that the Republican Party had failed to generate new ideas that could be integrated into a Republican ideology.(9)
In June 1993, Barbour announced that Michael Baroody, a prominent Republican, would be NPF’s first president. Barbour himself was the chairman of NPF as well as the RNC, and he arranged for the RNC to provide NPF with several hundred thousand dollars in start-up
money.(10)
Baroody was apparently committed to creating a genuine think tank. He set about implementing what he believed to be Barbour’s vision of holding participatory conferences around the country on a variety of public policy issues (“the Forum”). He hired a large staff and began identifying conference sites and participants. However, it appears that, almost immediately, Baroody and Barbour began to clash over the operations of NPF. Baroody was interested in making the conferences open — even bipartisan — events where there would be a legitimate exchange of ideas.
Barbour, on the other hand, appears to have wanted to use NPF to strengthen the Republican Party’s base and to give the party’s supporters an opportunity to participate in formulating a national Republican policy platform. On at least one occasion, when Baroody suggested that a Democratic office holder participate in one of the
conferences, Barbour objected.(11)
Nevertheless, Barbour has characterized NPF as “the most participatory public policy institution ever,” and he claimed 10,000 people attended forums held in more than 30 states.(12)
The Barbour-Baroody Split
An even more contentious issue between Baroody and Barbour developed over the question of how to fund the Forum. Baroody felt that the Forum should embody American values and American issues and therefore believed foreign fundraising would be inappropriate. From the outset, however, Barbour wanted to explore foreign sources of fundraising. In an extraordinary memorandum, Scott Reed, the executive director of the Republican National Committee, listed “foreign” under the
heading of “fundraising” as an issue to be discussed with
Barbour in a meeting on June 2, 1993.(13)
From the inception of NPF, its creators were contemplating raising foreign money. This memorandum, written only weeks before the announcement of the creation of the National Policy Forum, is extraordinary for another reason: The RNC executive director was making recommendations on the structure, goals, and personnel for a supposedly independent, nonpartisan organization.
According to both Barbour and Baroody, they only discussed the issue of raising money from foreign sources on one occasion. That discussion nevertheless apparently led Baroody, who resigned one year later, to characterize Barbour as having a “fascination” with foreign money.(14)
Baroody testified that he never viewed a foreign contribution to the NPF as illegal, but later he recalled telling Barbour: “We could get the money; that would be easy. But it would be wrong.” (15) As he explained in more detail during his testimony, he felt such a contribution would be “[i]nappropriate, unseemly, and imprudent.” (16)
As the rift between Barbour and Baroody deepened, Barbour brought in a trusted ally, Daniel Denning, as NPF executive vice president in early 1994. Denning had held numerous positions in the Republican Party and the federal government and was working for General Electric before joining NPF. With Denning in place, Barbour began an aggressive fundraising campaign. W. Lyons Brown, a wealthy Kentucky businessman and Republican contributor, was tapped to be fundraising chairman.
Denning, with Barbour’s knowledge and presumed approval, continued to explore foreign sources of funding. Denning raised the issue of foreign fundraising with Baroody but was rebuffed, as Barbour had been before him. (17)
Unbeknownst to Baroody, Denning then approached Fred Volcansek, a former Commerce Department official under President Bush, international businessman, and GOP fundraiser, to be a fundraising consultant for NPF. According to Volcansek, Denning “was consumed with the need to raise money.” (18)
Volcansek testified that he, Denning, and Fierce met at Fierce’s northern Virginia home in the spring of 1994 to discuss foreign fundraising options. Baroody was kept out of the loop, even though, technically, Denning was his subordinate. (19)
Later in this extraordinary report, reasons for Michael Baroody’s resignation from NPF are outlined:
Baroody Resigns
On June 28, 1994, Michael Baroody submitted his resignation as president of NPF to Haley Barbour.
Baroody submitted both a resignation letter and a confidential explanatory memorandum.(24) While the letter only relayed Baroody’s intent to resign, the memorandum, which the Committee obtained from sources other than the National Policy Forum, outlined in some detail Baroody’s reasons for leaving. It is an extraordinary document. First and foremost, Baroody objected to Barbour’s “fascination” with foreign money.
Secondly, Baroody stated his belief that Barbour had allowed the ties between the NPF and the RNC to erase the necessary barriers between the two ostensibly independent entities. Baroody wrote: “I believe that what has happened over many months has undermined my efforts, distorted our purpose, blurred the separation of the RNC and the NPF in such a way as to conceivably jeopardize our 501(c)(4) application, and has occasioned the inexcusable, heavy-handed treatment of volunteers with the NPF.” Baroody continued:
I had understood at the outset that this would be an organization separate from the RNC. Though both would be chaired by you, they would operate distinctly. I had this understanding not only because you and others told me so, but because the deliberate decision had been made to organize the NPF under section 501(c)(4) of the Federal Tax Code. That provision requires separate operation. Especially in recent months, it has become increasingly difficult to maintain the fiction of separation. (25)
In his testimony before the Committee, Baroody repeated some of the examples that he had provided in his letter: the overlap of staff, the partisan nature of the conferences, the NPF’s increasing indebtedness to the RNC, and the general lack of autonomy that he felt. (26)
I don’t know Michael Baroody very well though we have met several times at National Association of Manufacturers meetings and various cocktail gigs in town. I did speak to him this morning just to confirm that the Baroody who managed AEI responsibly in the 1970s and the Baroody who showed such principled leadership during the National Policy Forum fiasco above were in fact in the same family. As noted, they are father and son.
One question that now must be asked given what we know of Haley Barbour’s National Policy Forum is:
Why was John Bolton comfortable taking a position in the National Policy Forum engaged in activities that felt corrupt and if that is too strong a word, “inappropriate, unseemly, and imprudent” to Michael Baroody?
I’ll have more on the National Policy Forum and questions for Mr. Bolton soon, but I thought that this TownHall.com news needed some attention because it gets right at the point of what is appropriate and inappropriate work and activity for non-profit, public affairs organizations.
Not too long ago, MeetUp.com‘s Founding CEO Scott Heiferman and Senior Political Advisor Don Means met a room full of policy wonks, think tank senior staff, and some public policy oriented journal chiefs to educate us about how MeetUp.com might be used to mobilize and activate interest around the nation in our policy work and activity. One one hand, this was all a very innocent meeting — but on the other, a bit naieve.
I asked Scott Heiferman and Don Means if they had thought through for those of us in the room the question of how the IRS might respond if we so explicitly engaged in mobilization efforts of people around the country — when in fact — a strict reading of the IRS code would seem to prohibit a good deal of that activity, particularly when it came to lobbying Congress. They just had not thought it through and had no response — but they said that they were just showing us what technology could allow us to do — and leave the legal issues to us.
Then they showed us how TownHall.com/Heritage Foundation had become one of their major clients and was paying MeetUp.com a fee to help them build their national outreach/mobilization/fundraising machine. I was somewhat startled as I saw at least the outlines of a decent IRS investigation in what was casually tossed out at the meeting.
Thus, I’m not surprised at all that the Board of the Heritage Foundation took steps to cut ties with TownHall.com. It is the right move given how our laws are written.
But doing the right thing when technology makes it so easy to reach people and motivate them — or when foreign money is so “easy to raise” as apparently was alleged in the National Policy Forum/Republican National Committee case — is hard to do in this climate.
Baroody did the right thing. I think Heritage is probably making the right judgment call.
Why didn’t John Bolton take the same principled stand?
— Steve Clemons
