Magazine | April 11, 2016, Issue

Benefactors with Great Wealth

Dark Money: The Hidden History of the Billionaires behind the Rise of the Radical Right, by Jane Mayer (Doubleday, 464 pp., $29.95)

When John D. Rockefeller gave $100,000 to the American Board of Foreign Missions in 1905 to support Congregational ministries overseas, his critics seized on a piece the Congregational Church’s moderator, the Reverend Washington Gladden, had written a decade before, in which he had denounced giving by the rich as “tainted money.” These fortunes, Gladden had charged, were acquired “by methods as heartless, as cynically iniquitous as any that were employed by the Roman plunderers or robber barons of the Dark Ages.” “Is this clean money?” he asked. “Can any man, can any institution, knowing its origins, touch it without being defiled?”

Liberals waged war against Rockefeller, Andrew Carnegie, and other great philanthropists. The critics’ greatest triumphs came when they persuaded these donors to create perpetual foundations with no restrictions on how the fortunes could be used; when the founders died, the liberals seized outright control of these foundations.

In the 1970s, conservative donors began to be smarter and exercised tighter control of their foundations. Some, most notably John M. Olin, created foundations with term limits, ensuring that their foundations would not be captured and used by the Left after their deaths. As conservative donors changed their tactics, liberals responded by attacking the legitimacy of their donations. The latest to do so is New Yorker staff writer Jane Mayer, who has been writing pieces for most of this decade critical of such conservative donors as Charles and David Koch and North Carolina’s Art Pope. Dark Money expands on her previously published work with additional material about wealthy conservatives’ donations to philanthropic causes and to political campaigns.

The subtitle of her book contains two errors in 13 words. The history she describes is not hidden and the people she writes about are not radicals.

Mayer believes that the entire conservative movement is politically illegitimate. She refers to conservatives as “ultraconservatives” and libertarians as “extreme libertarians.” Her definition of “extremist” includes all writers for and editors of this magazine. Here is how she describes the Bradley Foundation in the 1990s: “a righteous combatant in an ideological war.” The foundation was “an activist force on the secondary-school level, too,” she says. “The Bradley Foundation virtually drove the early national ‘school-choice’ movement, waging an all-out assault on teachers’ unions and traditional public schools. In an effort to ‘wean’ Americans from government, the foundation militated for parents to be able to use public funds to send their children to private and parochial schools.”

But what did the Bradley Foundation actually do? It funded early research on school choice, including John Chubb and Terry Moe’s influential 1990 book Politics, Markets, and America’s Schools. It awarded substantial grants in Milwaukee to pay part of the tuition of students in private schools, and other grants that allowed these schools to expand and to admit even more students with vouchers. The result, according to the Philanthropy Roundtable, was that, as of 2015, 30,000 students in Milwaukee used vouchers to attend private schools (there were smaller voucher programs in Racine and statewide).

Note how Mayer salts her description of Bradley’s activities with military metaphors (“all-out assault,” “an activist force”), as if the organization were an occupying army instead of a medium-sized charitable foundation. She does this as an attempt at misdirection: She is unable to provide any examples in which program officers of any conservative foundation forced grantees to take positions they would not have taken if they hadn’t gotten foundation money.

Since she can’t show that the Koch, Bradley, and Scaife foundations control the conservative movement, she quotes several sources (such as conservative-turned-liberal David Brock) about how terrible these foundations are. These sources provide no evidence of oppressive foundation control. Her highest-ranking source is Ed Crane, who served as president of the Cato Institute between 1977 and 2012, when he lost a vicious power struggle and was forced to retire. According to Mayer, Crane said that Charles Koch, Cato’s most generous donor, “thinks he’s a genius. He thinks he’s the emperor, and he thinks he’s wearing clothes.” But Crane offered no evidence that Koch forced Cato fellows or authors to come up with conclusions dictated by the donor.

Mayer also loves quoting anonymous sources for rumors that are too good to check. She claims, based on the account of an unnamed “family acquaintance” of the Kochs, that Fred Koch, Charles and David Koch’s father, was so in love with Germany that he brought back a German governess to watch over his two oldest children, Frederick and Charles. The terrifying Teuton, she says, enforced “a rigid toilet-training campaign” and delighted in reading the Koch children scary German fairy tales. Mayer claims that this woman stayed with the Koch family until 1940, when she returned to Germany in ecstasy over the Nazi occupation of France. Her legacy, according to Mayer, was inspiring in Charles Koch (born in 1935) a “lifetime occupation” of “crusading against authoritarianism.” It should be noted that Mayer does not know the purported governess’s name.

Mayer’s prejudices cause her to focus on shallow questions rather than deep ones. For example, she is opposed to all conservative foundations’ funding of colleges and universities. But she completely ignores the funding of professorships of free enterprise, because these chairs are funded by legions of smaller donors, and the existence of these donors disproves the idea that it is only a few mandarins who fund the Right. And yet: Free-enterprise professorships raise legitimate concerns about whether their existence abridges academic freedom, since donors want them to go to supporters of the free-enterprise system. It is because donors dictate what free-enterprise professors may teach that Milton Friedman was able to say (in a conversation with me for a Wall Street Journal piece I wrote in 1990), “I am opposed to chairs of free enterprise, as I am to chairs of Marxism or socialism.”

As for her book’s being a “hidden history” of foundations, Mayer relies for the most part on four readily accessible secondary sources, supplemented by articles in periodicals. Her history of the Bradley Foundation is based primarily on John Gurda’s authorized history, published in 1992. Her chapters on the Olin Foundation are based on John J. Miller’s authorized history A Gift of Freedom (2005). Her major source on Richard Mellon Scaife is a multi-part series published by the Washington Post in 1999. Much of her knowledge of libertarianism and some of her material on Charles and David Koch comes from Brian Doherty’s Radicals for Capitalism (2007).

Her original material, besides interviews that provide much in the way of indignant rhetoric but little evidence, includes one minor and one major source. Late in his life, Richard Mellon Scaife wrote an autobiography, which was privately printed and never made publicly available. Mayer obtained a copy, but judging from the quotations she provides, the book offers limited insights into Scaife’s intentions.

Her major discovery comes as a result of lawsuits between members of the Koch family. Fred Koch, who founded the company that became Koch Industries, had four children, who inherited the privately held company when their father died in 1967. In 1983, Charles and David Koch bought out their brothers, Frederick and Bill Koch, for $800 million. Bill Koch, thinking he had been cheated, launched lawsuit after lawsuit alleging that Koch Industries had committed environmental crimes. He also hired opposition researchers to investigate his brothers. In 2001, the Koch brothers agreed not to disparage one another, and Bill Koch had to settle for being a billionaire instead of a mega-billionaire. But all of the material Bill Koch obtained prior to 2001 ended up in Mayer’s hands, and she eagerly uses it to disparage Charles and David Koch.

But the Bill Koch material includes little that concerns the Koch brothers’ charitable giving. The major — and accurate — charge based on that material is that in 1933 Winkler-Koch, the company that became Koch Industries, built an oil refinery that became Nazi Germany’s third-largest. Koch Industries’ response is to note that many American companies were doing business in Germany at the time. Mayer also notes that, during World War II, Winkler-Koch developed improved forms of aviation fuel that helped B-17 bombers smash German industry. Mayer does show that Koch Industries was fined several times for pollution violations.

In short, Dark Money does little to prove its case about the nefarious influence of charitable giving. It is a failure because it has too much prejudice against conservatives and the conservative movement, and provides very little evidence of wrongdoing. That does not mean conservative foundations should escape scrutiny. Foundations get far too little attention from the press. But journalists should look at what charities are doing, and whether their policies help or hurt our country, and not just search for hidden manipulators.

Above all, journalists should realize that conservative foundations and their liberal counterparts are quite similar, except that liberal foundations are far larger than conservative ones. The Bradley Foundation has assets of almost $902 million. According to the Foundation Center, a nonprofit that compiles authoritative statistics on foundations, that makes it the 96th-largest foundation in the U.S. By contrast, the ten largest foundations, including such liberal stalwarts as the Ford, Robert Wood Johnson, Hewlett, Kellogg, Packard, and MacArthur foundations, each have assets of over $6 billion.

In some regards, liberals would do better to emulate the Right than to try to annihilate it. Mayer quotes Yale University Press director Steve Wasserman, who explained that he tried to get left-wing donors to fund serious books but couldn’t do it because they were too busy trying to get noticed in Hollywood. “On the right, they understand that books matter,” Wasserman said — but the Democrats he talked to weren’t interested in funding scholarship because they were “hostage to star personalities and electoral politics.”

Ideas have consequences, and that conservatives are willing to invest in the development of ideas is a credit to them and something for which public-spirited citizens should be grateful.

Mr. Wooster is the senior fellow at the Capital Research Center. The Bradley Foundation funded his book Great Philanthropic Mistakes, and he has written for the Pope Center.

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