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Lee Fang | The Nation

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Lee Fang

Lee Fang

Investigating the intersection of politics, lobbying and public policy at RepublicReport.org.

Alberta Government Quietly Funded Researchers Behind ‘Independent’ Report Boosting Keystone XL

Alberta Tar Sands

An aerial view of crude oil production in Alberta, Canada. (Flickr, Howl Arts Collective)

Before the State Department released its controversial Environmental Impact Study last week, a consulting firm called IHS CERA primed the news media by releasing its own study last year claiming that the Keystone XL wouldn’t make a substantial difference in emissions. The report was released as an “independent” study. TheNation.com filed a Freedom of Information and Protection of Privacy Act request to the Alberta government, and found that taxpayers in Canada paid IHS CERA hundreds of thousands of dollars.

The heavily redacted contract, a version of which can be found here, provides $325,000 from the government of Alberta to IHS CERA. In addition, public budget documents from Alberta reveal that taxpayers in Canada have provided IHS with more than $545,426 in payments over the last year for energy-related work.

The Alberta government has been one of the most aggressive proponents of the pipeline. Last year, Alberta retained two DC lobbying firms with strong ties to Secretary of State John Kerry, Mehlman Vogel Castagnetti and Rasky Baerlein Strategic Communications, to push for speedy approval of the Keystone XL.

Logo_IHS_CERA_190809

Echoing the State Department EIS released last week, the IHS CERA claimed that even without the Keystone XL, Canadian oil sands would be developed by other means. “Even if the Keystone XL pipeline does not move forward, we do not expect a material change to oil sands production growth,” claims the authors.

However, assessments of the market by Toronto-Dominion Bank, Royal Bank of Canada, Deloitte, Goldman Sachs and other leading financial analysts have found that the Keystone XL is critical for the development of the high-carbon oil sands market.

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Notably, even Jackie Forrest, one of the co-authors of the 2013 IHS CERA report, claimed previously that without the Keystone XL, oil sands development “could stall for lack of new demand.” Contradicting her most recent report, Forrest told the Oil & Gas Journal that, “based on our view of growth in Canadian oil sands and tight oil production, over the next five years North America will need both the Keystone XL and the Enbridge projects in order to create enough takeaway capacity to prevent bottlenecks.”

As critics have noted, the State Department’s EIS was also marred by a serious conflict of interest. The private firm tapped to conduct the study, ERM, misled the State Department by obscuring its financial ties to TransCanada, the largest beneficiary of the Keystone XL pipeline.

 

Read Next: Keystone XL and Tar Sands: Voices From the Front Lines.

IRS Dark Money Reforms Would Curb Voter Registration, Leave Lobbying Groups Untouched

The exterior of the Internal Revenue Service building. (AP Photo)

President Obama could take immediate steps to begin to clean up the dark money problem in American politics. He could, for instance, issue an executive order requiring all government contractors to disclose their contributions to 501(c) advocacy groups, a decision that would impact hundreds of major firms.

Instead, the administration’s response to the flood of dark money in recent elections is a set of new IRS regulations aimed only at addressing some activity taken by 501(c)(4) “issue advocacy” groups. The new rules restrict “participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.” The rules also restrict C4 organizations from engaging in so-called “candidate-related” communications.

Though put forth with purportedly good intentions, this proposed rule would do little to deter powerful individuals or large companies from engaging in limitless dark money electioneering. The $400 million in undisclosed campaign money spent by the Koch network in 2012, revealed recently by Robert Maguire of the Center for Responsive Politics and Matea Gold of The Washington Post, showed that deep-pocketed donors have been quick to set up 501(c)(6) trade associations, which would not even be impacted by the rules as they stand now. Like 501(c)(4) issue advocacy organizations, 501(c)(6) trade groups may take unlimited donations and engage in unrestricted partisan or election activity. Trade groups are often formed by industry associations or coalitions of like-minded businesses. One of the largest of the new Koch groups, called Freedom Partners, is a 501(c)(6) trade association.

As a result of the Citizens United Supreme Court decision, 501(c)(6) trade associations have been front and center in coordinating corporate-funded, fully undisclosed, partisan advocacy. Organizations such as the US Chamber of Commerce and the American Petroleum Institute have taken advantage of the new election landscape to provide corporations with a veil of secrecy in influencing American elections. And the proposed regulations on 501(c)(4) organizations would do nothing to change that.

Let’s say, for the sake of argument, that a candidate who feels strongly about regulating the fossil fuel industry and addressing climate change ran for US Senate. In response, oil company X sought to prevent this candidate from being elected, but did not want the negative publicity associated with dumping millions of dollars into an election. Oil company X could simply route the money through a 501(c)(6) trade group, like the US Chamber of Commerce or the National Federation of Independent Businesses, which could then air the negative campaign advertisement independently or through another third party. The voter would have no idea where the money was coming from.

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While certain organizations have been created or expanded in the last two election cycles to exploit the current system for 501(c)(4) nonprofits, namely groups like Americans for Prosperity, Crossroads GPS and, on the Democratic side, Priorities USA, most 501(c)(4) nonprofits are community groups that have little resources and exist to promote genuine nonpartisan advocacy.

Under the administration’s new rule, the small 501(c)(4) groups would probably be hurt the most, and at least in the short term, civic engagement will take a hit. The “candidate-related” communications banned in the new rules include nonpartisan voter registration and “get-out-the-vote” drives.

To critics, the rule will reduce the role of activists (like the League of Women Voters) while allowing the wealthy to simply change tax status and continue operating in the dark. “The big players,” Alliance for Justice president Nan Aron wrote, “will hire lawyers and accountants to help them avoid the rules.” Moving to better police the activities of political nonprofits is desperately needed. But any change should aim to level the playing field and promote transparency for all.

Read Next: Lee Fang on who is leading the movement to privatize education.

Ted Cruz: Block Immigration Reform to Help Republicans in 2014

Senator Ted Cruz (R-TX) has railed against immigration reform all year, becoming one of the most vocal opponents of the legislation that passed the Senate in June. In arguing against the bill, Cruz charges regularly that proponents of reform are merely playing politics. “It is designed for it to sail through the Senate and then crash in the House to let the president go and campaign in 2014 on this issue,” he said.

In an interview that aired earlier this month, Cruz admitted that he is the one using the livelihood of millions of undocumented immigrants for partisan gain.

Speaking with Houston-based radio host Michael Berry, Cruz said he hopes that Speaker John Boehner will not take on immigration reform next year. Doing so, Cruz argued, would diminish the “incredible opportunity to retake the Senate in 2014.” Cruz emphasized that he is focused on winning the Senate majority from Democrats, and said passing immigration reform legislation would be the “number one thing Republicans could do to mess that up.”

Cruz also said comprehensive immigration would amount to “kicking millions of Americans in the teeth.” During the chat, the freshman senator did not offer any concrete policy solutions, noting only that those seeking to pass legislation “refuse to stand for principle.” The Senate version of the bill includes a pathway to citizenship of over 13 years, with many barriers and fines, along with over $50 billion of increased border security.

Transcript below:

MICHAEL BERRY: Amnesty, illegal immigration, an immigration reform plan. We’re hearing that Boehner has punted that until after the Republican primary to save the squish Republicans from Tea Party challenges. True?

TED CRUZ: You know, I don’t know. I certainly hope the reports that you and I are both reading are not true. You know I think we’ve got an incredible opportunity to retake the Senate in 2014, to retire Harry Reid as Majority Leader. And the number one thing Republicans could do to mess that up is to refuse to stand for principle. And if the House turns around and passes a giant amnesty deal that doesn’t secure the border and grants amnesty, they might as well go and put “Harry Reid for Majority Leader” bumper stickers on the backs of their cars because it would be kicking conservatives, kicking the Tea Party, kicking millions of Americans in the teeth to make that same mistake again, so I sure hope they don’t do it.

BERRY: I think you’re right.

Ted Mitchell, Education Dept. Nominee, Has Strong Ties to Pearson, Privatization Movement

Ted Mitchell, then president and CEO of the NewSchools Venture Fund attends the New York Times “Schools for Tomorrow” conference panel. (AP Photo)

Ted Mitchell, the chief executive of the NewSchools Venture Fund, was nominated in October by President Obama to become the Under Secretary of the Department of Education.

As the administration continues to reshuffle its team, and confront new regulatory challenges, some view Mitchell’s nomination as a move towards greater privatization. In the coming months, the Department of Education will release “gainful employment” rules to rein in for-profit colleges, an experiment in proprietary education that many see as an unmitigated disaster.

As head of the NewSchools Venture Fund, Mitchell oversees investments in education technology start-ups. In July, Zynga, the creators of FarmVille, provided $1 million to Mitchell’s group to boost education gaming companies. Mitchell’s NewSchool Venture Fund also reportedly partners with Pearson, the education mega-corporation that owns a number of testing and textbook companies, along with one prominent for-profit virtual charter school, Connections Academy.

Jeff Bryant, a senior fellow with the Campaign for America’s Future, says it seems likely that Mitichell will “advocate for more federal promotion of online learning, ‘blended’ models of instruction, ‘adaptive learning’ systems, and public-private partnerships involving education technology.”

Mitchell did not respond to TheNation.com’s  request for comment*.

His ethics disclosure form shows that he was paid $735,300 for his role at NewSchools, which is organized as a non-profit. In recent years, he has served or is currently serving as a director to New Leaders, Khan Academy, California Education Partners, Teach Channel, ConnectED, Hameetman Foundation, the Alliance for College-Ready Public Schools, Silicon Schools, Children Now, Bellwether Partners, Pivot Learning Partners, EnCorps Teacher Training Program, the National Alliance for Public Charter Schools, and the Green DOT Public Schools.

In addition, Mitchell serves as an adviser to Salmon River Capital, a venture capital firm that specializes in education companies. Mitchell sits on the board of Parchment, an academic transcript start-up that is among Salmon River Capital’s portfolio.

Salmon River Capital helped create one of the biggest names in for-profit secondary education, Capella University. “As a foundational investor and director, [Salmon River Capital’s] Josh Lewis made invaluable contributions to Capella’s success. From leading our landmark financing in 2000, when Capella was a $10 million business operating in a difficult environment, through a successful 2006 IPO and beyond, he proved a great partner who kept every commitment he made,” reads a statement from Steve Shank, founder of Capella.

The Minnesota-based Capella heavily recruits veterans and has received $53.1 million from the GI Bill in the past four years. The Minnesota attorney general is currently investigating several unnamed for-profit colleges in her state. 

Numerous investigations have shown that for-profit colleges have targeted veterans with deceptive recruiting tactics. “Some for-profits have cleaned out students’ military benefits while also signing them up for thousands of dollars in loans without their knowledge. A vet who enrolled at the largely online Ashford University after being told the GI Bill would cover his tuition ended up owing the school $11,000,” reported Mother Jones.

But the companies are not without some winners: Bloomberg News reported in 2010 that executives at for-profit colleges have raked in $2 billion in compensation.

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How the Department of Education moves forward in 2014 with its own set of regulations on for-profit colleges—an industry criticized for burdening a generation with a lifetime of debt—is yet to be determined. Currently, lobbyists for the largest for-profit colleges, including Apollo (University of Phoenix), Education Management Corporation (The Art Institutes), Kaplan, ITT Tech, Career Education Corporation and Corinthian Colleges, are lobbying aggressively to make sure that the rules will not curb the $38 billion in taxpayer money now enjoyed by the industry. The campaign extends to think tanks, politicians and other sources of influence in Washington.

In a presentation posted online by WhiteBoard Advisors, a DC consulting firm that is owned by Grayling, a lobbying corporation that represents for-profit colleges, posed a number of questions to education experts about what Mitchell’s nomination means for gainful employment regulations.

One slide is titled, “Insider Insights: What, if anything, does Mitchell’s selection mean for the gainful employment regulation process?” Many responses are ambiguous, even dismissive if Mitchell can play a role. “Nothing, that’s controlled by James Kvaal, period. That Ted doesn’t think for‐profit providers should be summarily executed means he’s not going to be included in conversations,” reads one anonymous insider’s view.

Others are more optimistic that he will weaken regulations on the for-profit college industry: “Hopefully he will moderate it and be more supportive of private providers.” Some education privatization supporters have been even more candid. Rick Hess, an outspoken supporter of privatization at the American Enterprise Institute, tweeted: “Ted Mitchell appt as ED Under Sec is bad news for gainful employment fanatics.”

Update: After publication of this blog post, Mitchell e-mailed a statement noting that he could not comment on gainful employmen regulations because he is in the "midst of a confirmation process." He added that he is on "an informal advisory Board for Salmon" and that Pearson sponsored a summit for his organization in May. 
Read next: George Zornick on congressional scrooges

Two House Democrats Lead Effort to Protect For-Profit Colleges, Betraying Students and Vets

Rob Andrews and Alcee Hastings.

Democratic Reps. Rob Andrews of New Jersey and Alcee Hastings of Florida are trying to protect the for-profit career college industry. (Photographs courtesy of the US House of Representatives)

Students and veterans helped deliver big campaign victories for the Democratic Party in recent elections. Now, some Democratic lawmakers are thanking them by trying to ensure that predatory businesses can rip them off and saddle them with a lifetime of debt.

TheNation.com has learned that a small group of House Democrats, led by Representatives Rob Andrews of New Jersey and Alcee Hastings of Florida, are organizing an effort within the caucus to protect the for-profit career college industry from any meaningful regulation. The two congressmen are among the largest recipients of campaign cash from the industry. Campaign finance data compiled by TheNation.com show Hastings has received $54,500, and Andrews $78,547, from for-profit college executives and political committees.

Unlike non-profit private or public universities, proprietary career colleges exist to make money; lot's of it. For-profit colleges take in some $33 billion in taxpayer money annually, funds designed to help veterans and students afford college. For many critics, the entire industry is built upon fraud. Multiple investigations show systematic deception in the industry -- recruiters lying to students about job placement rates, students graduating with incredibly high debt with few employment prospects, and marketing campaigns that obscure what is often a low-quality education.

Students that have gone to for-profit colleges are not only more likely graduate with high levels of debt -- for-profit students hold $31,190 dollars in debt on average, compared to $17,040 at private, nonprofit institutions and $7,960 at public colleges -- they are also three times as likely to default on their loans.

As Adam Weinstein reported for Mother Jones, for-profit colleges have also targeted returning soldiers to take advantage of their GI benefits. “Some for-profits have cleaned out students' military benefits while also signing them up for thousands of dollars in loans without their knowledge. A vet who enrolled at the largely online Ashford University after being told the GI Bill would cover his tuition ended up owing the school $11,000,” Weinstein noted.

In 2010, the Department of Education proposed modest rules to mandate that taxpayer money would only go to for-profit schools that could demonstrate that a reasonable number of their students were able to gain jobs after graduation. An intense lobbying effort followed. Career colleges, including the University of Phoenix, Kaplan Higher Education, Devry Inc., The Art Institute (owned by Education Management Corporation), Corinthian Colleges, Grand Canyon University, among others, pushed back through a sophisticated influence campaign. Think tanks and other NGOs were co-opted by industry, dozens of lobbyists were hired, and for-profit colleges pumped campaign contributions into the accounts of lawmakers opposed to the rule. The industry also flooded the department with astroturfed letters. The Obama Administration finally issued a much-watered down version of the rule. Then, the for-profit colleges sued and persuaded a judge to strike it down.

This year, the Obama Administration has promised to re-propose the regulation, and today will reconvene a meeting with stakeholders to move forward with a new version of the “gainful employment&rdquot; rule. During debate over the last version of the rule, virtually every House Republican, joined by a number of Democrats, worked to defeat the regulation. The process seems to be repeating itself this year, with Andrews and Hastings circulating a “Dear Colleague” letter asking other House Democrats to sign a document asking the administration to back down. The letter, obtained in draft form by by TheNation.com, asks lawmakers to contact David Opong-Wadee, a staffer to Hastings, if they would like to join the anti-gainful employment regulation group.

Notably, the Association for Private Sector Colleges and Universities, a trade association for the industry, has given only to two House Democrats in the last three months: Hastings and Andrews.

 

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Third Way: ‘Majority of Our Financial Support’ From Wall Street, Business Executives

If Third Way’s attacks on Senator Elizabeth Warren make the group sound like a stalking horse for Wall Street executives, there might be a reason for that.

At a demonstration today outside the think tank’s downtown DC office, Third Way senior vice president Matt Bennett conceded to Progressive Change Campaign Committee (PCCC) co-founder Adam Green that “the majority” of Third Way’s donor support comes from the group’s board of trustees, most of whom are from the finance sector.

As TheNation.com and others have pointed out, the majority of Third Way’s trustees are finance industry executives, many of whom might have a vested interest in using a surrogate to attack Warren. Warren, whom Time magazine calls the “new sheriff of Wall Street,” has demanded greater regulation of the industry. Many of the trustees listed on the Third Way website hail from an assortment of private equity firms and other investment businesses. Others work indirectly, like Third Way trustee Thurgood Marshall Jr., whose professional website at the public affairs firm Bingham Consulting lists his work as “government relations” on issues concerning, among others, “banking regulations.”

Bennett explained to Green that the majority of donors to his group “write us personal checks,” so much of the Wall Street money to Third Way comes from individuals, not institutions. To be sure, Third Way also counts on other corporate donors. As we’ve reported, many companies maintain ties to Third Way, which was formed as a bulwark against economic progressivism within the Democratic Party, to advance their interests in Washington. For instance, both Qualcomm and Humana list their donations to Third Way as part of each company’s lobbying budget.

Third Way sparked the demonstration by authoring an opinion piece in the Wall Street Journal last week titled “Economic Populism is a Dead End of Democrats.” Third Way’s Jon Cowan and Jim Kessler explicitly called out Warren’s proposals for expanding Social Security through taxes on higher income individuals. Though polls show rampant support for these policies, many critics believe there were ulterior motives for the opinion column. Expanding Social Security would not only end up expanding benefits for seniors, but would also force Third Way’s trustees to pay slightly more in taxes.

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A transcript of the exchange is below:

GREEN: If you included the financial industry sector people, as individuals on your board, what percent would be Wall Street money?

BENNETT: Here’s the thing about defining Wall Street money. As we’ve said, our major donors are on our website. Many of them are in the finance sector, they write us personal checks. This is not from their institutions, many of them are retired or have left their institutions, in fact most of them. That is the majority of our financial support, coming from trustees.

GREEN: Is there a ball park? A percentage?

BENNETT: I’m not going to get into that.

 

Read Next: Greg Mitchell talks about Jon Stewart and Mandela.

ALEC Opposed Divestment From South Africa’s Apartheid Regime

ALEC

(Photo by Lee Fang)

There’s a lot of news this week on the American Legislative Exchange Council and the related network of state-based think tanks, the State Policy Network.

Almost a year ago, when I was at a small upstart blog called Republic Report, we first sent a letter to corporations involved with ALEC, asking them to leave the organization, given its role in crafting the Stand Your Ground law in Florida. The Guardian unveiled a trove of documents revealing that ALEC has suffered tremendously from the negative press around those efforts, which involved a group of left-of-center organizations, including the Center for Media and Democracy and Color of Change. Many businesses actually did leave ALEC.

While ALEC seems down, they’re not out. According to the documents obtained by The Guardian, ALEC and its allied organization, SPN, have redoubled their efforts to expand and find new funding streams. The documents suggest fundraising off of gambling efforts, efforts to push worker retirement accounts into dubious 401(k)-style plans, and other corporate giveaways that ALEC and SPN can spin into legislative templates and advocacy. Specific corporations and lobbying organizations are listed as prospective donors. The money just never stops.

This is the inherent difference between right-leaning organizations and their counterparts on the left. Large corporations view their right-wing giving as a strong return on investment. For almost every major conservative issue campaign, at least on economic policy, the wealthy and powerful ultimately benefit, meaning their donations to groups like ALEC and their cohorts are well-served. If corporate donors give to the left, as they sometimes do, they risk higher taxes, more empowered workers and less influence over elections. So it should be no surprise the the vast majority of corporate wealth in politics flows to the right and far right.

This pattern has repeated itself for many decades, though it has accelerated in recent years. During the course of my research on how the conservative movement rebuilt itself in the aftermath of the 2008 elections, I found myself digging through many historical files that show this dynamic repeating itself like an endless feedback loop.

On the occasion of Nelson Mandela’s passing this week, it is worth remembering that many American conservative organizations opposed his struggle by fighting against sanctions and divestment from the apartheid regime that oppressed him.

For ALEC, that meant partnering with corporations that faced calls for South African divestment and creating template legislation to block the pro-Mandela movement.

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Below is a camera phone picture of one Legislative Update from ALEC describing its campaign in the 1980s to block South African divestment. During this period, ALEC’s corporate membership included a number of businesses with interests in South Africa, including IBM:

For more on how the recent history of the conservative movement, including the role of ALEC and SPN, my book The Machine: A Field Guide the Resurgent Right delves much deeper. Also, The Nation has a thorough investigation of SPN/ALEC in the April 15 edition, which you can find here.

Allison Kilkenny takes a closer look at the effects of Chicago school closures.

Third Way Shares Consultant With Group Spending Big to Defeat Third Way Co-Chairs

Sen. Elizabeth Warren.

Senator Elizabeth Warren is among political leaders Third Way attacked in a recent editorial. (AP Photo/Harry Hamburg)

If Third Way is truly concerned about electing Democrats, they chose a strange fundraising firm to partner with.

When Third Way’s president and senior vice president of policy published a Wall Street Journal opinion piece this week decrying the economic positions of Bill de Blasio and Elizabeth Warren, namely, taxing the rich and expanding entitlement programs, their arguments rested on (weak) grounds that such ideas are bad for Democratic Party electoral prospects.

Earlier this week, TheNation.com obtained the latest disclosure forms for Third Way and reported that the think tank relies on a corporate lobbying firm called Peck, Madigan & Jones—a company featured by The Hill as among the “Top Lobbyists” of 2013—to raise more than half a million dollars a year. What makes Peck, Madigan & Jones such a top player on K Street?

Peck, Madigan & Jones’s largest client is the US Chamber of Commerce, a corporate trade group that represents large corporations like AIG, Bank of America and Dow Chemical. The Chamber, through its financial policy and legal affiliates, has paid Peck, Madigan & Jones $570,000 this year alone.

While the Third Way op-ed made a point of claiming that progressive economic policies wouldn’t play well with voters in Colorado, in 2008, their fundraisers’ client ran nasty attack ads against a Third Way leader in the state. When Third Way co-chair Senator Mark Udall (D-CO) first ran for the Senate, the US Chamber sponsored an advertisement against him on energy policy, declaring, “Every time he’s blocked American energy production, he’s made the tyrants and sheiks happy. But we’ve paid the price.”

Last year, Third Way co-chair Senator Claire McCaskill (D-MO) faced a barrage of attacks from the Chamber. One ad during the election last year instructed viewers, “Call Claire McCaskill. Tell her Missouri doesn’t need government-run health care. Support the repeal. We need jobs!” Watch it:

As The Huffington Post’s Luke Johnson reported, other Third Way co-chairs have commented on the growing controversy over the Wall Street Journal column. Representatives Joseph Crowley (D-NY), Allyson Schwartz (D-PA) and Ron Kind (D-WI)—all Third Way co-chairs—have distanced themselves from the arguments laid out in the piece.

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We noted earlier this week that several Third Way trustees gave campaign money to Mitt Romney. But it might be even more problematic for the group that it has ties to the US Chamber, an organization that is dedicated to unseating Third Way leaders.

Peter Rothberg lists the top ten songs about Nelson Mandela.

Fox News Invites Financial Analyst to Trash Minimum Wage Increase

Jonathan Hoenig on Fox News.

Fox Business, an affiliate of Fox News, has responded to the rise of worker protests across the country by inviting on a finance industry trader to trash them.

The network aired several segments this week designed to criticize efforts to raise the minimum wage. In one, guest Jonathan Hoenig made a range of strange and misinformed comments, including a declaration that “every prominent economist over many, many decades has agreed [that] the minimum wage is discrimination.”

In reality, more than 100 economists have called for raising the minimum wage to benefit workers. Nobel laureate Joseph Stiglitz signed onto a letter last year arguing that “a minimum wage increase would provide a much-needed boost to the earnings of low-wage workers.”

Hoenig then argued, “Only about 4 percent of people making the minimum wage are actually supporting a family full-time.” The Economic Policy Institute notes that over a quarter of those who would be affected by increasing the minimum wage are parents, and a third are married. Also, one in every five children in the United States has a parent who would benefit from a federal minimum wage increase.

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Finally, Hoenig said his opposition to increasing the minimum wage stems from his belief that doing so would prevent workers from becoming the CEO of McDonald’s and other fast-food chains. One has to wonder if Hoenig, a financial investment advisor based in Chicago, has ever bothered to meet with the McDonald’s workers in his city who are gainfully employed, yet, homeless.

Gabriel Thompson goes on NPR to discuss how Walmart is exploiting its warehouse workers.

GOP Donors and K Street Fuel Third Way’s Advice for the Democratic Party

Third Way criticized New York Mayor-elect Bill de Blasio.

Third Way criticized New York Mayor-elect Bill de Blasio's universal pre-K education policy today. (AP Photo / Seth Wenig)

Third Way, a centrist think tank that portrays itself as a Democratic group, has some advice for the party: avoid economic populism at all costs. In a column for The Wall Street Journal today, the group argues that the party should steer clear of creating a strong safety net, and criticizes Mayor-elect Bill de Blasio’s call for universal pre-K funded through an upper-income tax increase as a foolhardy idea for national Democrats.

As many have noted today, in reaction to the column, Third Way’s attacks on Social Security and Medicare fail on the merits. It’s bad policy, and it’s equally bad politics.

But for Third Way, a group founded in 2005 that is highly active on Capitol Hill, the think tank is merely defending the special interest groups that allow it to exist.

Buried inside the annual report for Third Way is a revelation that the group relies on a peculiar DC consulting firm to raise half a million a year: Peck, Madigan, Jones & Stewart. Peck Madigan is no ordinary nonprofit buckraiser. The group is, in fact, a corporate lobbying firm that represents Deutsche Bank, Intel, the Business Roundtable, Amgen, AT&T, the International Swaps & Derivatives Association, MasterCard, New York Life Insurance, PhRMA and the US Chamber of Commerce, among others.

The two organizations complement each other well. Peck Madigan signs as a lobbyist for the government of New Zealand on the Trans-Pacific Partnership free trade deal; Third Way aggressively promotes the deal. Peck Madigan clients push for entitlement cuts, and so does Third Way.

Notice that Humana, a major health insurance company, lists its $50,000 donation to Third Way not as a donation to a think tank but as part of its yearly budget spent on lobbying activity, up there with the Florida Chamber and other trade associations. The company views financial gifts to Third Way as part of its strategy for increasing its profit-making political influence.

What’s more, Third Way’s leadership has tenuous connections to the Democratic Party it hopes to shape. Daniel Loeb, a hedge fund manager listed as a trustee on Third Way’s 2012 annual disclosure, bundled $556,031 for Mitt Romney last year. Third Way board member Derek Kaufman, another hedge fund executive, also gave to Romney.

There is a long and storied tradition of corporate, right-wing interests seeking to shape the economic policies of the Democratic Party. The DLC, another Third Way–style group that folded in 2011, was funded by none other than Koch Industries. Richard Fink, a strategist to the Koch brothers who helped found what is now known as Americans for Prosperity, was on the DLC’s board.

Washington’s Big Business–friendly press has greeted the Third Way column as a “game changer.” But these arguments aren’t new, and neither are the strategies. Large corporations have many ways of finding useful surrogates, and Third Way is a prime example.

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UPDATE: Daily Kos’s Hunter has a nice post noting how Third Way’s hatred of Senator Elizabeth Warren may relate to the fact that Third Way’s board is made up almost entirely of investment bankers and other Wall Street executives. Also worth considering, the anti-privatization drive of those “economic populism” types might rub some Third Way board leaders the wrong way—especially the one who sits on Correction Corporation of America’s board.

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