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The Right Leans In

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Consider these organizations as the spokes on a wheel. When a group of for-profit education companies sought legislation allowing online charter schools greater access to taxpayer dollars, it hired dozens of state lobbyists from coast to coast. In addition, however, the virtual-school companies tapped SPN to provide academic studies, talking heads for the local media, flip-cam-equipped journalists to quiz critics, and busloads of activists at state capitols. 

This article was reported in collaboration with the Investigative Fund at the Nation Institute, where Lee Fang is a reporting fellow. It is adapted from his new book, The Machine: A Field Guide to the Resurgent Right, which is scheduled for publication on April 24 by the New Press.

About the Author

Lee Fang
Lee Fang
Lee Fang is a reporting fellow with The Investigative Fund at The Nation Institute. He covers money in politics,...

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Lobbyists with the school companies—including K12 Inc. and Connections Academy—drafted the legislation through ALEC. The State Policy Network groups acted, in essence, as ALEC’s public relations team to promote the laws. And it worked: by the end of 2011, sixteen states had passed laws expanding virtual education. The flow of campaign dollars and closed-door influence peddling still happened, as in any traditional corporate campaign to pass major legislation. The difference in this case, however, was a well-oiled operation that could deliver the appearance of a groundswell in demand for proprietary online charter schools, when little public support existed. Worse, the lobbying by SPN-affiliated think tanks overshadowed serious questions about these charter-school businesses, which despite their soaring profit margins have been roundly criticized for abysmal test scores and high dropout rates. Together, these new state-level groups have remade the political map, providing ideological cover for extreme conservative policies once thought of as politically toxic. 

State Policy Network’s organizations have also operated as fronts for corporations seeking to cloak their business interests under an ideological veneer. The Commonwealth Foundation for Public Policy, a Pennsylvania-based affiliate of SPN that is pushing to pass right-to-work legislation, is financed in part by the Pennsylvania Manufacturers’ Association, a lobbying group that represents US Steel, Hershey Foods, Sun Oil and many smaller firms. The lobbying group even provides office space for the Commonwealth Foundation and its media outlet, Pennsylvania Independent. The foundation has surged in size, with its budget climbing from $890,000 in 2008 to $1.95 million in 2011, the last available figure. The head of the Pennsylvania Manufacturers’ Association, Frederick Anton, has pushed right-to-work legislation for years. But this time, he’s being aided by grassroots organizers from Americans for Prosperity, as well as the media work of Pennsylvania Independent. 

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The pattern seen in the online education debate has been duplicated to pass corporate tax cuts, reductions to health and education programs, a rollback in state environmental laws, and other corporate and conservative priorities. In places like Minnesota and Louisiana, the playbook has been deployed to provide telecom companies with a greater monopoly by pushing to outlaw municipal fiber-optic broadband networks, a faster, cheaper alternative for consumers. (Notably, Comcast and Time Warner Cable helped sponsor the last State Policy Network retreat.) 

When the Free State Foundation, a Maryland affiliate of SPN, testified in Congress in opposition to so-called net neutrality rules, which prevent Internet providers from setting discriminatory download and upload speeds based on content, the National Cable and Telecom Association quietly provided the small think tank with a grant of $85,000. 

In 2010, when the Texas Public Policy Foundation filed similar comments to the FCC in opposition to net neutrality, the think tank received $76,500 from AT&T and $34,950 from Verizon, according to a leaked donor list. 

Meanwhile, several family foundations financed by Koch Industries—a firm that produces chemicals and transportation infrastructure for hydraulic fracturing (better known as fracking) and horizontal drilling for oil and natural gas—have helped with State Policy Network’s expansion. In turn, SPN think tanks from New York to California have attacked bills intended to create state-level regulations over fracking. 

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State Policy Network was founded on March 24, 1992, in South Carolina by Thomas Roe, a wealthy businessman, Reagan adviser and leader of the South Carolina Policy Council, a state think tank modeled after the Heritage Foundation. Now headquartered in Arlington, Virginia, SPN began as an effort to mobilize more than twenty state think tanks. Political Research Associates, a left-leaning investigative team, reported that the group quickly became a “government-in-waiting” for the wave of Republican governors elected in 1994. As SPN affiliates proposed broad tax cuts and privatization schemes, the Republican governors frequently hired policy professionals from the think tanks to help enact those ideas. 

Though backed by some of the largest Republican donors in the country, including the Coors family and Richard Mellon Scaife, SPN also thrived in the 1990s by assisting the tobacco industry in packaging its resistance to tobacco taxes and health regulations as part of a “freedom agenda” for conservatives. 

Sharp herself gained experience working at this nexus of influence. Records stored with the University of California, San Francisco, reveal that Philip Morris not only gave generous financial donations to SPN affiliates, but was heavily involved in drafting and disseminating content for the think tanks. Before assuming her current position, Sharp served as executive director of the Cascade Institute, a State Policy Network affiliate in Oregon. The UCSF archive shows that during her tenure, the Cascade Institute corresponded with Philip Morris’s state lobbyist in Salem on promoting opposition to tobacco taxes, including one instance where Cascade published an opinion piece by a doctor. The doctor’s column, which was faxed to the Philip Morris representative, warned that high cigarette taxes could lead to “drive-by shootings and mob-style assassinations—turf wars—over the control of black market cigarette sales.”

At a 2001 meeting for SPN, Sharp invited Joshua Slavitt, Philip Morris’s director of external affairs, to give a talk. “I know that many of you have worked with Philip Morris,” Slavitt said, according to a prepared text, adding: “It won’t surprise you that we believe it is in our enlightened self-interest to be part of the policy discussions that ultimately shape the environment in which we do business.” He ended his speech with specific recommendations for SPN leaders in requesting corporate contributions. 

A look at the donors to the Texas Public Policy Foundation, the SPN affiliate in Austin, provides a rare window illustrating how these think tanks operate today. The evidence shows that the Big Tobacco–era strategy has been embraced by other large corporations. 

The Texas Public Policy Foundation, whose leaders recently stirred up controversy for surreptitiously lobbying on behalf of the government of Malaysia, received the bulk of its money from more than seventy-five business interests, including firms like ConocoPhillips, Boeing, TXU Energy, ExxonMobil, AEP Texas and Devon Energy. The largest company on the donor list, Koch Industries, gave $159,834 through its Austin lobbyist, J. William Oswald, in addition to a $69,788 donation from the Claude R. Lambe Foundation, a Koch family foundation run in part by Richard Fink, another executive with Koch’s lobbying operation. As The Texas Observer noted, the Texas Public Policy Foundation has focused much of its advocacy on issues pertaining to its corporate benefactors, including energy deregulation and opposition to Environmental Protection Agency rules to curb mercury, smog and carbon pollution. 

The Texas donor list also reveals that Sharp has played a larger role in directly financing the expansion of her affiliates than was previously known. Public disclosures indicate that SPN distributed only $19,500 to the Texas Public Policy Foundation in 2010. That modest amount, which is similar in size to grants given to other state think tanks, suggests that many of the groups do not rely on a central source of cash. But the leaked document shows Sharp as the contact for a donation of $300,000 from the “State Think Tank Fund,” as well as $195,000 from the “Government Transparency Fund” and $49,306 from SPN itself—a discrepancy of $524,806 compared with the disclosed grant. Neither the State Think Tank Fund nor the Government Transparency Fund appears on Guidestar.com or the Foundation Center, repositories for nonprofit and foundation disclosures. 

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