Monday, May 16, 2016

Dark Money's Poison

What has occurred to me this morning as I contemplate what to write about Dark Money is that “ignorance truly is bliss.” In some ways, that is, I would be more comfortable and relaxed if I didn’t know about the swinish billionaire class whose devilish machinations are the subject of Jane Mayer’s recent book, Dark Money (Doubleday, 2016). But I do, and now I’m compelled to try to write about it and them. You probably already know who they are: the Koch Brothers, Richard Mellon Scaife, John Olin and his tribe, the DeVos family (Amway) and countless others most of us have never heard of. And what the book describes is the underhanded methods these oligarchs have used in the last forty or so years to change the political landscape to such an extent that they now control the debate over policy, over what can even be discussed, and consequently over the fate of billions of people on this planet. A quote from an unnamed environmental lawyer puts it well: 

“You take corporate money and give it to a neutral-sounding think tank,” which “hires people with pedigrees and academic degrees who put out credible-seeming studies. But they all coincide perfectly with the economic interests of their funders.” (Mayer, p. 153).

The question is, how can these rich bastards keep succeeding with their subterfuge? Aren’t there laws that control what a think tank can be, how profits in family trusts can be used? Well yes. But the rich have always had ways to shelter and/or hide their money, and “donating” it to foundations and think tanks is only one of the ploys they use to get tax exemptions while at the same time getting to control what passes for “research,” and hence the rules of the game.
            The story actually begins with John D. Rockefeller. The grand old man of American oligarchy started what was probably the first private or nonprofit foundation in 1909. And its purpose, like all the ones that followed, was simple: give the appearance of “donating” part of his wealth to a foundation ostensibly devoted to promoting the general welfare, while at the same time providing the donor with tax deductions and subsidies, i.e. lower income tax. Still, the first foundations—like Rockefeller’s and Ford’s—actually did take their charitable role semi-seriously, supporting the arts, museums, media, schools, and other ostensibly “public-interest” causes. But in the 1970s, and even before, the more recent oligarchs discovered the idea that not only could their foundations save them tax money, they could promote their favorite anti-regulatory and anti-government policies as well.
            The poster boys for this type of “philanthropy” are the Koch brothers, starting with the father, engineer Fred Koch, who built the original fortune. As I’ve noted elsewhere, Fred was a right-winger with a vengeance, a founding member of the John Birch Society who saw Communists under every carpet, especially those in the White House. In his 1960 pamphlet distributed to over 2 million sympathizers, Fred Koch referred to “the colored man who looms large in the Communist plan to take over America” and actually predicted a “vicious race war” in America, all while characterizing income taxes as nothing less than “socialism.” Taxes were his obsession, and in order to escape having to pay estate taxes on his fortune—earned, not incidentally, by helping sweet guys like Stalin and Hitler set up refineries in their home countries—he established a “charitable lead trust” whereby he could pass on his estate without taxes as long as his heirs (he had four sons, Charles and David plus Bill and Fred) for twenty years donated the interest on the principle to charity. As Jane Mayer puts it, “tax avoidance was thus the original impetus for the Koch brothers’ extraordinary philanthropy.” As to that philanthropy, it might be useful to point out that not everyone was happy with this new ability of the rich to protect their fortunes via pretend charity. As Teddy Roosevelt said at the time in response to the Rockefeller ploy: “No amount of charity in spending such fortunes can compensate in any way for the misconduct in acquiring them” (Mayer, p. 70). Amen to that. It might also be added that whereas paying taxes cedes control over the spending of it to the government (which can distribute funds to those who need it), stashing money in a private foundation means that the owner can distribute funds where he or she wants to—and get thanked for the ‘generosity.’ Perhaps that is why private foundations have multiplied like rabbits since the early days: in 1930, according to Mayer, there were only 200 private foundations; by 1950, there were 2,000; by 1985, 30,000; and in 2013 their number had swelled to 100,000, with combined assets of over $800 billion. As to the Kochs—and second son Charles is really the leader of this dog pack—they have established foundations at every opportunity. Charles was early attracted to the faux-anarchy of ‘libertarianism,’ by which he really meant freedom from government interference, especially regulations of any kind, in his business dealings. One of his early forays was the establishment of something called the Freedom School, devoted to his brand of libertarianism (he later funded and pretty much controlled the Cato Institute). As one writer said of him, “He was driven by some deeper urge to smash the one thing left in the world that could discipline him: the government” (p. 54). In the process, he often smashed people too: as in the case of Donald Carlson, a longtime tank-cleaner at the Kochs’ Pine Bend Refinery in Minnesota, who was finally dismissed in 1994 with six months pay (his accumulated sick pay, but no workmen’s compensation) because he could no longer work due to benzene poisoning (his compulsory blood tests had shown the poisoning since at least 1990, but he was never notified). Koch Industries fought his claims to the bitter end—Carlson died of leukemia, a predictable outcome of his work with benzene, in 1997—and only under court threat agreed to give his widow some money conditioned on a confidentiality agreement. After it expired, Doreen Carlson spoke out: “And they want less regulations? Can you imagine? What they want is things that benefit them. They never cut into their profits.”
            Other oligarchs Mayer focuses on were following similar patterns. In 1973, taking their cue from the famous Powell memo of 1971 urging the wealthy to go to war with the anti-capitalist forces then thought to be opposed to business, Richard Mellon Scaife (heir to the vast Andrew Mellon banking fortune) and Joseph Coors (the beer magnate) financed the launching of the Heritage Foundation. Unlike previous think tanks like Brookings that were careful to maintain at least a veneer of scholarly objectivity, the Heritage Foundation was devoted to waging a battle of ideas, of selling “a predetermined ideology to politicians and the public [rather] than undertaking scholarly research” (p. 78). The problem, of course, is that most people and the media do not make such distinctions; thus, the “scholars” from Heritage and other right-wing foundations like the American Enterprise Institute are regularly invited to appear on talk and news shows as if they are objective investigators of fact. The overall project would come to be known as “movement philanthropy,” where great fortunes could be spent promoting a kind of free-market fundamentalism, especially including anti-regulatory, anti-tax and anti-government warfare.
            A variant to this movement was started by another of the ‘philanthropists’ Mayer profiles, the industrialist John M. Olin. An industrial giant that made most of its money peddling explosives and other armaments in both WWI and WWII (Winchester rifles, hydrazine rocket fuel, etc.), the Olin corporation, with its newly acquired subsidiaries (Mathieson Chemical, Squibb) turned out to be one of the first targets of the new EPA in 1973 (founded under Richard Nixon). Olin not only produced DDT in Alabama, it was also involved in multiple mercury-pollution capers, one in fouling the Niagara River in upstate New York, and another decimating an impoverished company town called Saltville in Virginia. An Appalachian hamlet in southwestern Virginia, Saltville was owned lock, stock and barrel by its Olin overlords: 2,199 residents rented their houses, shopped at the company store and got their water from the company. Everyone worked at the chlorine plant that used mercury in its production process—a process that leaked something like 100 pounds of toxic mercury into the public waterway (the north fork of the Holston River) every day for about 20 years, resulting in mercury in fish, not to mention the poor humans who lived there. In addition, the company also dumped 53,000 pounds of mercury into an open sediment pond. One local said: “We all played with the mercury as children. Daddy brought it home from the chemical plant.” And though the company issued gas masks to workers, their use was never enforced. After the publicity about mercury poisoning in Japan’s Minamata Bay, Virginia passed strict pollution standards, but Olin said it couldn’t meet them and so the company announced it would cease operations in Saltville in 1972 (leaving Saltville as one of the first  “superfund” sites). Life Magazine’s article about the “end of a company town” implied that it was environmental activists who had destroyed a way of life. But lives had already been destroyed. As one native said: 

“The Olin Company was dirty and treated the people bad, not like people. Most of the workers were poorly educated, and they led them around like sheep. A lot of people got sick, and there were more birth defects in Saltville than in other parts of the state” (p. 99).

            Of course Olin denied it was in any way at fault and also denied that its foundation money had any connection to its long history of pollution, but the record suggests otherwise. Here is what John Olin said about his foundation campaign:

“My greatest ambition now is to see free enterprise re-established in this country. Business and the public must be awakened to the creeping stranglehold that socialism has gained here since WWII” (100).

Clearly, re-establishing “free enterprise” meant giving business free rein to use any and all environmental poisons without some pesky government agency infringing on its 'freedom.' And this was before Olin got going with his enduring contribution: taking aim at the “liberal establishment” (liberalism and socialism were synonymous to Olin) dominating colleges and universities in order to establish a kind of “counter-intelligentsia” devoted to conservative thought. To effect this sea change, he hired William Simon (energy czar and Treasury Secretary under both Nixon and Ford) to be head of his Olin Foundation in 1977. Simon had always nursed a deep hatred for the liberal elite, claiming that a secret system of academics, media types, and bureaucrats ran the nation to such an extent that “Our freedom is in dire peril.” With Simon in the lead, the Olin Foundation began its campaign to establish “beachheads” (the military language is not accidental; this was seen as a war) not just in small colleges but at the most elite institutions like Harvard, Yale and Princeton. Amazingly, they were able to prevail, with institutional coups like the “James Madison Program in American Ideals and Institutions” at Princeton; the “Program on Constitutional Government” at Harvard (run by Harvey Mansfield); and the “John M. Olin Institute for Strategic Studies” also at Harvard (and run by hawk Samuel Huntington). Ostensibly neutral (note the language), these were all as ideological as the real coup de grace, their impact in law schools with something they called “Law and Economics Theory.” Nursed by Olin contributions of over $68 million to law schools at Harvard, Chicago, and elsewhere, Olin fellows from the likes of Harvard’s “John M. Olin Center for Law, Economics and Business” then branched out to teach at Cornell, Dartmouth, Georgetown, MIT and beyond. Among these legal ‘fellows’ was John Yoo (of the infamous “torture memo”), and another supposed intellectual, John R. Lott Jr., who went on to write a book called More Guns, Less Crime. In it, Lott argued that more guns actually reduce crime and promised that legalizing concealed weapons would make people safer. On inspection (by Adam Winkler of the book Gunfight), Lott’s study turned out to be based on no data whatever. When pressed to produce his data, that is, Lott claimed it had been lost in a computer crash. In addition to such fake scholarship, one of the major contributions of the Law and Economics caper were its infamous “seminars” for judges, initiated by the ideologue Henry Manne, by then dean of the George Mason University School of Law (a haven for right-wing ideologues). These “seminars” were two-week all-expenses-paid junkets for indoctrination in law and economics in places like the Ocean Reef Club in Key Largo, Florida. Something like 660 judges were treated to these pleasure-cum-indoctrination vacations, including future Supreme Court Justice Clarence Thomas. As one of Olin’s accolytes himself put it, “Economic analysis tends to have conservatizing effects…it seems neutral, but it isn’t in fact” (108). A case in 1997, where the EPA had moved to reduce surface ozone as air pollution caused by refinery emissions, demonstrates the point. An economist at the Koch-funded Mercatus Center, Susan Dudley, challenged the EPA ruling, arguing that the federal agency had not considered that, by blocking the sun, smog cut down on cases of skin cancer: If pollution were controlled, she said, it would cause up to 11,000 additional skin cancer cases each year. Incredibly, the Circuit Court for the District of Columbia (whose majority judges had all tasted the seminar cool-aid) embraced Dudley’s argument, finding that the EPA had “explicitly disregarded the possible health benefits of ozone” (154)! Fortunately, the Supreme Court eventually overruled the circuit court, saying that the Clean Air Act’s standards cannot be subject to cost-benefit analysis.
            Enough said. What Jane Mayer’s book demonstrates—and I have only been able to provide a tiny taste of its voluminous contents—is that big money from a determined oligarchy can profoundly affect, shape, and ultimately destroy democracy and much else besides. It can defy reason to the point that President Obama’s attempts to pass even the minimal cap-and-trade legislation to begin to reduce global warming were defeated even before they had a chance for a public hearing. The same has happened with the non-stop attempts to defeat his health-care-for-all bill, which continues to be attacked and distorted to the present day (a Circuit Court has recently ruled against its provision to provide government aid to those who can’t afford their premiums). And all is done under the guise of philanthropy, all disguised with market-tested language and emotional appeals that convince the masses (see the Tea Party) that it is in their interest to side with the richest, most immoral, and, at times, criminal class in the nation. And what it demonstrates is that democracy—if there is any democracy left at this stage in the republic—must be defended just as vigorously as the attacks by the dogs who would pervert, undermine and destroy it. And even then. Even then, I say, especially when contemplating the power that great gobs of money have to corrupt, or reflecting on the apparently bottomless lust of those with it to want always more even if they have to sacrifice the entire planet to get it—even then, it may be necessary to bring back the guillotine. 

Lawrence DiStasi

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