Submitted by Elaine Magliaro, Guest Blogger
In November, I wrote a post titled State Policy Network (SPN)—The “PR Firm” for ALEC and a Right-Wing Agenda. According to the Center for Media and Democracy, SPN “is funded largely by global corporations and by groups and foundations associated with conservative billionaires David and Charles Koch.” Journalist Jane Mayer provided a good description of SPN in her article Is IKEA the New Model for the Conservative Movement?—which appeared in The New Yorker this past November.
In every state in the country, there is at least one ostensibly independent “free-market” think tank that is part of something called the State Policy Network— there are sixty-four in all, ranging from the Pelican Institute, in Louisiana, to the Freedom Foundation, in Washington State. According to a new investigative report by the Center for Media and Democracy, a liberal watchdog group, however, the think tanks are less free actors than a coördinated collection of corporate front groups—branch stores, so to speak—funded and steered by cash from undisclosed conservative and corporate players. Although the think tanks have largely operated under the radar, the cumulative enterprise is impressively large, according to the report. In 2011, the network funnelled seventy-nine million dollars into promoting conservative policies at the state level.
The Guardian newspaper has dug up more information about the workings of SPN…and its plans for 2014. The paper published an article on the subject entitled State conservative groups plan US-wide assault on education, health and tax just last week. According to Ed Pilkington and Suzanne Goldenberg, the authors of the article, SPN and its affiliated conservative groups/”think tanks” are planning “a co-ordinated assault against public sector rights and services in the key areas of education, healthcare, income tax, workers’ compensation and the environment…”
Pilkington and Goldenberg:
The strategy for the state-level organisations, which describe themselves as “free-market thinktanks”, includes proposals from six different states for cuts in public sector pensions, campaigns to reduce the wages of government workers and eliminate income taxes, school voucher schemes to counter public education, opposition to Medicaid, and a campaign against regional efforts to combat greenhouse gas emissions that cause climate change.
According to Pilkington and Goldenberg, documents obtained by The Guardian “contain 40 funding proposals” from groups affiliated with SPN in 34 states that provide “a blueprint for the conservative agenda in 2014.” They said their paper partnered with the Texas Observer and the Portland Press Herald in Maine to publish the summary of SPN’s proposals for the coming year in order “to give readers and news outlets full and fair access to state-by-state conservative plans that could have significant impact throughout the US, and to allow the public to reach its own conclusions about whether these activities comply with the spirit of non-profit tax-exempt charities.”
Most of the conservative “think tanks” working in collaboration with SPN “are constituted as 501(c)(3) charities that are exempt from tax by the Internal Revenue Service.” Such groups are “subject to strict restrictions on the amount of lobbying they are allowed to perform.” It was reported, however, that some of “the grant bids contained in the Guardian documents propose the launch of ‘media campaigns’ aimed at changing state laws and policies, or refer to ‘advancing model legislation’ and ‘candidate briefings’, in ways that arguably cross the line into lobbying.”
SPN gathered the grant proposals—monetary requests ranging in size from $25,000 to $65,000—from the 34 states in late July. The requests were then “submitted for funding to the Searle Freedom Trust…” Pilkington and Goldenberg said that the documents show that SPN’s link to Searle was Stephen Moore. (Moore happens to be an editorial writer for the Wall Street Journal.) They added that Moore, “who advises Searle on its grant-giving activities, was asked by SPN to rank the proposals in two halves – a ‘top 20’ and ‘bottom 20’.”
Moore claims that he serves as an “unpaid adviser” to the Searle Foundation…and that he has been a lifetime friend of Dan Searle. He also said that “the grant decisions were made by Searle’s sons and grandsons based upon the late businessman’s ‘commitment to the advancement of free enterprise and individual rights’.”
(Link to a document provided by The Guardian–State Policy Network: Searle Tax and Budget Grant Proposals)
Pilkington and Goldenberg claim, however, that the “proposals in the grant bids contained in the Guardian documents go beyond a commitment to free enterprise…” They provided examples of the submitted proposals:
• “reforms” to public employee pensions raised by SPN thinktanks in Arizona, Colorado, Minnesota, Missouri, New Jersey and Pennsylvania;
• tax elimination or reduction schemes in Alabama, Arkansas, Georgia, Maryland, Nebraska and New York;
• an education voucher system to promote private and home schooling in Florida;
• campaigns against worker and union rights in Delaware and Nevada;
• opposition to Medicaid in Georgia, North Carolina and Utah.
Kenneth Quinnell (AFL-CIO) wrote, that depending upon which 20 proposals Searle chooses to fund, there were “12 ways that SPN could assault the rights of working families in 2014.” Here are some of the examples Quinnell provided:
1. Alabama Policy Institute: Requested $25,725 to fund the “spark plug” for eliminating the state income tax. Such a plan would lead to the cutting of services for working families. (Also requested for tax cuts or elimination: Advance Arkansas Institute, $35,000; Georgia Public Policy Foundation, $40,000; Nebraska’s Platte Institute for Economic Research, $25,000; New Mexico’s Rio Grande Foundation, $30,000; Ohio’s Buckeye Institute for Public Policy Solutions, $40,000; and Opportunity Ohio, $35,000).
2. Delaware’s Caesar Rodney Institute: Requested $36,000 to fund strategies to repeal the state’s prevailing wage law, which would lower wages for working families.
3. Florida’s James Madison Institute: Requested $40,000 to fund efforts to promote vouchers (which they call Education Savings Accounts), which would reduce funding for public schools. Lower public education funding would lead to worsening student performance and teacher layoffs. (Also requested on this topic: Oregon’s Cascade Policy Institute, $40,000.)
4. Georgia Center for Opportunity: Requested $65,000 to fund opposition to Medicaid expansion, which would mean fewer residents have health care. (Also requested on this same topic: North Carolina’s J.W. Pope Civitas Institute, $46,500; Texas Public Policy Foundation, $40,000; Utah’s Sutherland Institute, $50,000.)
5. Illinois Policy Institute: Requested $40,000 to fight to change Chicago’s public employee pension system to a defined-contribution plan, which would mean less retirement security for working families. (Also requested on cutting public employee pensions: Arizona’s Goldwater Institute for Public Policy, $40,000; Minnesota’s Center of the American Experiment, $40,000; Missouri’s Show-Me Institute, $25,000; Pennsylvania’s Commonwealth Foundation, $35,500.)
6. Maryland Public Policy Institute: Requested $40,000 to push for cuts in corporate tax rates, which would lead to the cutting of services for working families.
Lisa Graves is the executive director of the Center for Media & Democracy, an organization that “has tracked the work of the State Policy Network”—as well as the workings of the American Legislative Exchange Council (ALEC). When speaking to The Guardian, Graves said that “such groups are betraying the communities they claim to represent by introducing ‘model legislation’ that undoubtedly are designed to serve the interests of large corporations and the wealthy.” She continued, “They appear to be advocating purely local interests but what they are promoting is part of a larger national template to radically remake our government in a way that undermines public institutions and the rights of workers.”
The difference between 501(c)(3) and 501(c)(4) organizations (From New Jersey On-Line)
According to the Internal Revenue Service Code, 501(c)(3) and 501(c)(4) organizations are nonprofit organizations that are exempt from paying federal income tax. 501(c)(3) organizations are either a public charity, private foundation or private operating foundation with open membership whereas 501(c)(4) organizations are civic leagues or associations operated exclusively for the promotion of social welfare or local associations of employees with limited membership.
When it comes to lobbying and political activity, 501(c)(3) organizations can appeal directly to legislative bodies and representatives and may support issue-based legislation. However, they must notify the IRS of their intent to lobby by filing form 5768, which formally informs the federal government that one has elected to use the expenditure test to have the organization’s lobbying activity measured. Under this test, lobbying capacity is typically limited to spending less than 5 to 20% of the organizational budget on lobbying activities, depending on the size of your organization.
Have you reached a conclusion yet regarding whether or not the activities of the organizations/think tanks written about in this post comply with the spirit of non-profit tax-exempt charities?
SOURCES & FURTHER READING
State Policy Network—The “PR Firm” for ALEC and a Right-Wing Agenda (Jonathan Turley)
Free-market research group’s climate proposal denounced by host university: Suffolk University says Beacon Hill Institute had not followed rules and that research plans did not match university’s mission (The Guardian)
New Rules Would Rein In Nonprofits’ Political Role (New York Times)
Guardian Documents Expose State Policy Network Groups’ Intent to Lobby (Center for Media and Democracy)
State Policy Network: The Stealth Network Dramatically Influencing State Law (Center for Media and Democracy)
Is IKEA the New Model for the Conservative Movement? (The New Yorker)
Here’s ALEC’s Plan To Bring Right Wing Policies To States Near You (Crooks and Liars)
Washington County residents have mixed reactions to plan to eliminate taxes (Portland Press Herald/Maine Sunday Telegram)
Army of Rightwing Groups Plan Assault on State Laws in 2014: Internal documents show how state-level affiliates serve national interests of corporations and wealthy, conservative ideologues (Common Dreams)
The difference between 501(c)(3) and 501(c)(4) organizations (New Jersey On-Line)
Treasury, IRS Will Issue Proposed Guidance For Tax-Exempt Social Welfare Organizations (U.S. Department of the Treasury