Corporate Funding of Think Tanks Raises Question of Credibility / Critics call them 'mercenaries' for big business

Derailing a multibillion-dollar federal plan to restore the Florida Everglades is just the kind of cause that suits Citizens for a Sound Economy, a conservative think tank that fights for smaller government.
But soon after the group took on the Everglades project in 1998, the Washington-based nonprofit got an incentive that went beyond the purely philosophical. It received $700,000 in contributions from Florida's three biggest sugar enterprises, which stand to lose thousands of acres of cane-growing I8160 Galaxy Ace 2 land to reclamation if the Army Corps of Engineers plan goes into effect.
The sugar contributions were never disclosed publicly but were outlined in internal CSE documents that detail how various corporate interests donated millions to the group to bankroll its efforts on issues of direct interest to them, from global warming to Florida tort reform.
Along with those earmarked contributions, from companies such as Exxon Corp. and Hertz Corp., the organization received more than $1 million from Philip Morris Cos. at a time when CSE was opposing cigarette taxes. Phone company US West Inc. gave $1 million as CSE pushed deregulation that would let US West offer long-distance service.
The documents, obtained by the Custom holster Washington Post, provide a rare look at think tanks' often hidden role as a weapon in the modern corporate political arsenal. The groups provide analyses, TV advertising, polling and academic studies that add an air of authority to corporate arguments -- in many cases while maintaining the corporate donors' anonymity.
"Corporations have discovered that funding of research, publications, media campaigns and other forms of advocacy on policy issues can serve as an adjunct to traditional corporate lobbying and political contributions," said James Allen Smith, author of a book about think tanks.
Others use harsher terms. "It's part of a rent-a-mouthpiece phenomenon," said Gary Ruskin of the Congressional Accountability Project. "There are mercenary groups that function as surrogates when industry feels it's not advantageous for it to speak directly."
CSE officials will not discuss specific donations, saying that disclosure could expose contributors to harassment by labor unions or other groups. CSE President Paul Beckner strongly denies picking issues with an eye to their potential for luring corporate funds -- or tailoring the groups' views to mesh with those of contributors.
"We aren't a group for hire," he said. "There's a bright line that defines our independence. There is only one position we can take on most issues: the one that means less government and lower taxes. We choose the issues we work on, and we decide how that money is expended."
While corporations are prohibited from contributing directly to political candidates, there are no restrictions on their giving to nonprofit organizations such as CSE whose advocacy may help their interests. And though lobbyists representing corporations must register publicly, nonprofit groups are not required to identify the corporations financing their lobbying work.
In recent weeks, CSE has thrown itself into the political campaigns in Iowa and New Hampshire, sending out grassroots activists -- clad in signature red jackets emblazoned with the organization's Web address on the back -- to obtain candidate endorsements of its position against Internet taxation.
Such outright activism is not for every think tank. Some, such as the Heritage Foundation, will not accept money for specific projects for fear of appearing beholden to the interest that funded it. Others, such as the Cato Institute, take earmarked money but go beyond the legal requirements and identify major donors.
For example, the largest supporter of Cato's study of Social Security privatization is the U.S. insurance company AIG, which manages privatized retirement systems abroad and stands to benefit if -- as Cato is recommending -- such an option is put in place here.
But other groups, including CSE, use donations for specific projects without making public the names of their donors -- raising questions even among some of their fellow think tanks. "A nonprofit which is doing work for a very clear interest ought to reveal that," said Urban Institute President William Gorham.
On the other end of the political spectrum, some left-leaning think tanks take money from similarly interested parties. For example, unions provided the seed money to start the Economic Policy Institute, which produces research on trade, wage and work-related issues.
CSE, founded in 1984, has become a particularly vocal and political group under the chairmanship of C. Boyden Gray, a Washington lawyer who served as President George Bush's White House counsel. Modeling itself on grassroots groups such as the Christian Coalition and Ralph Nader's activist organizations, CSE has inserted itself into a number of fights with the Clinton administration and become an active force in state politics on issues from tort reform to labor.
The group has a foundation that can take tax-deductible contributions -- used, for example, to finance its "education" effort in support of a California initiative requiring unions to get annual permission from members to Phone Cover use dues for political purposes. It has a nonprofit arm that can engage in even more extensive lobbying. This year, CSE is branching into explicitly electoral politics; its board recently voted to set up a political action committee with a goal of raising at least $1 million for favored candidates in 2000.
Critics -- and even some business lobbyists -- have previously said that CSE's "grassroots" activism has sometimes been, as National Journal wrote in 1996, "a fig leaf for corporate lobbying efforts." But the newly obtained internal CSE spreadsheet -- whose information was verified independently with a number of corporations -- offers the most precise illustration yet of the close fit between CSE funding and corporate interests.
It shows that Exxon Corp.'s $175,000 for "global climate" issues arrived after Beckner dismissed the notion of global warming as "junk science." Huizenga Holdings' gift of $75,000 went toward the battle for Florida tort reform legislation, which limited car rental companies' liability. The holding company manages the investments of Florida businessman Wayne Huizenga in, among other things, auto rental companies.