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Defund the left

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Defund the left is a term used in America to describe efforts by conservative activists to eliminate government financial support for non-profit groups deemed to be 'liberal'.

While initially coined in response to Reagan government proposals to curtail funding of non-profits, it has subsequently been more loosely used to describe a range of other administrative measures aimed at silencing advocacy groups.

Conservative concern grows

The rise of public interest groups campaigning on a broad range of issues in the 1960's antagonized conservative groups. While little could be done to restrict informal action groups, the larger non-profit groups relied on the benefits of their tax-exempt status to attract tax-deductible donations from individuals and foundations. In some cases, they also gained grants directly from government.

The funding of voter registration drives as part of the civil rights movement by some foundations in the 1960's so enraged conservatives that in 1969 they convened congressional hearings in an attempt to regulate the activities of non-profit groups and foundations. These hearings resulted in the 1969 Tax Reform Act, which created the architecture of the current regulatory framework. In 1976 the legislation was further refined to allow non-profit groups with 501 c 3 tax-deductible status to engage in some lobbying as long as it didn't exceed 20 percent of an organization's budget.

Through the 1970s traditional foundations, supplemented by new foundations, broadened the scope of what they were willing to fund to include more 'liberal' projects.

The Reagan administration moves to muzzle non-profits

In 1981, the Heritage Foundation, the dominant conservative think-tank at the time, published Mandate for Leadership, a comprehensive conservative agenda with over two thousand policy recommendations for the incoming Reagan administration.

One challenge, as Heritage saw it, was to counter the rise of its ideological opponents by whittling away their status as 'public interest' organisations and eliminating federal financial support for 'liberal' groups. "Unless conservatives can break the moral monopoly still enjoyed by persons indifferent to the well-being of the American private sector and by proponents of expanded government power, any effort to reform federal domestic policies is likely to be reduced to the level of tinkering," they wrote.

According to OMB Watch, a non-profit group that has tracked attempts to constrain non-profit groups, the Heritage Foundation's 1981 proposals comprised three key changes. (OMB is the acronym for the Office of Management and Budget). Firstly they wanted to "impose some sort of lobbying and advocacy restrictions on any organization receiving federal funds", even if any lobbying was funded by funds raised independently by the organisation itself. Secondly was to "specify the type of such 'informational' activity that can be done with federal grants". Thirdly Heritage sought to "limit the circumstances under which grants and contracts can go to groups organized primarily for lobbying and advocacy."[1]

The Heritage Foundation's proposal was quickly translated into a proposed Presidential Executive Order, named A-122 Cost Principles for Non-Profit Organizations, by the Office of Management and Budget general counsel, Michael Horowitz. The draft order defined the freshly minted term "political advocacy" as comprising any action "attempting to influence a government decision." Any organization engaging in political advocacy would not be eligible for federal grants irrespective of whether the advocacy was paid for by other sources of fundraising revenue or federal funds.

The proposals prompted a massive backlash with a three year campaign, led by the National A-122 Coalition comprising non-profit, religious, and other charitable organizations, defeating the proposals. Horowitz recounted over a decade later being rebuked by Reagan's Chief of Staff James A. Baker III. "The leader of the free world has come to me and said that all he has been hearing is this business about A-122," he said. (After working for the Reagan administration Horowitz went on to become a senior fellow at the Washington office of the conservative think tank, the Hudson Institute).

While the A-122 proposals were defeated, they still had the effect of chilling both non-profits and some foundations. Nor had the conservative movement given up on the notion of 'defunding the left'.

In 1984, the Capital Research Center (CRC) was founded by former Heritage Foundation senior Vice-President and Reagan administration staffer Willa Johnson. CRC was established with seed funding from Richard Mellon Scaife, Adolph Coors and John Olin foundations. The role of CRC was to erode the standing of those it viewed as 'liberal' non-profit advocacy groups and foundations.

Non-profits and the Gingrich revolution

The rise of the anti-environmental Wise Use Movement also adopted the calls to 'defund the left'. 'Wise Use' leaders such as Ron Arnold - who more recently has been a regular contributor to CRC publications - routinely made eliminating financial support for environmental groups one of his key messages. "We want to destroy the environmentalists by taking away their money and their members" Arnold told the New York Times.

The tobacco industry too spotted the attraction in constraining the advocacy of public interest health groups. An internal Philip Morris strategy document prepared in late 1993 proposed to run a campaign in California to "regulate" charitable health organisations by capping advocacy spending and diverting funding into research activities. "Reporting requirements for percent of funds used for research vs salaries: cap administrative costs, salaries, lobbying expenditures; establish minimum percentage of funds for research," the strategy stated.[2]

With the success of the Republicans winning control of the House of Representatives in 1994, the targeting of non-profit groups was once more elevated on the political agenda. The Republicans success was captured in Newt Gingrich's Contract with America which aimed to slash federal funding on a range of 'liberal' programs.

Conservative activists though needed to tread carefully because what they wanted was to strip federal funding from 'liberal' organisations without affecting corporate lobbying or funding for conservative groups. By targeting only federal grants but excluding contracts, corporate contractors - such as the defense industry - would remain free to lobby and most conservative groups would be unaffected.

In 1995, the environmental watchdog CLEAR "obtained documentation that details evidence of a right-wing legislative effort to 'defund the left' being coordinated by an alliance of conservative advocacy groups and Members of Congress. Their target: federal funding of non-profit advocacy organizations."[3]

Amongst those supporting the campaign were the Christian Coalition, Grover Norquist's Americans For Tax Reform, the Competitive Enterprise Institute the Institute for Justice, the Eagle Forum and the American Conservative Union.

The documents revealed that a bill - Stop Taxpayer Funded Political Advocacy - would be introduced by Oklahoma Republican Representative, Ernest Istook, that would have prohibited any 501 (c) 4 and 501 (c) 5 organizations from receiving any federal funds.

In American Prospect, Karen Paget reported that it would have given private citizens legal standing to challenge the activity of any non-profit in court, with the burden of proof falling on the NGO to clear its name and would have prohibited any organisation that received federal funds from engaging in any "advocacy" activity. [6]

CLEAR described the strategy as being aimed as being for a quick, clean hit. "The strategists behind this bill hope it will be dropped in about two weeks and go straight to the floor with no committee hearings. They are also very concerned that they 'spin' this campaign to make it look like a 'good government' campaign rather than a 'defund our enemies list' effort."

In early 1995, Jeff Shear wrote in the National Journal and subsequently the Baltimore Sun of a Republican project - later to be dubbed the K Street project - being co-ordinated out of the office of House Majority Leader Dick Armey. Heading the project was Virginia Thomas (wife of Supreme Court Justice Clarence Thomas), which also involved Scott Hodges the Heritage Foundation's budget director. One of those involved in the project, conservative activists Grover Norquist, told Shear "we will hunt [these liberal groups] down one by one and extinguish their funding sources".

"With control over Congress and the White House, it's all over. We will go back and sue people who broke the law, who were ripping off taxpayers to do political work. If Planned Parenthood is lobbying, taxpayers need to be reimbursed," he said.

Kate O'Beirne, the Heritage Foundation's vice president for government relations, told Shear that "publicly funded political advocates rarely find themselves debating anyone who's privately funded … They are all supported by tax dollars. If their ideas are so compelling, let them go out in the marketplace, as Heritage does, and see if the public agrees with them."

The momentum was gathering on other fronts too. In 1996 the CRC launched its new monthly newsletter, Foundation Watch, to target the philanthropic activities of foundations it considered were funding groups too liberal for their tastes.

The Istook bill too provoked an uproar. Once more a coalition of non-profit groups, Let America Speak - co-chaired by the Alliance for Justice, Independent Sector, and OMB Watch - was created to counter the proposals. The Istook amendments were eventually defeated in 1997. However, according to OMB Watch, around the same time "the Senate worked out an agreement to restrict eligibility of 501(c)(4) (social welfare) organizations that lobby from receiving federal grants."

'Truth in Testimony'

After the two major full frontal attacks by conservative groups to constrain non-profit groups were rebuffed, the focus switched to procedural changes. In 1997 the House of Representatives passed a rule called "Truth in Testimony" that required all non-governmental groups testifying to disclose how much money in grants and contracts they have received from the government during the previous three years. The St. Louis Post-Dispatch described the rule as a "naked attempt to intimidate mainly nonprofit, liberal advocacy groups from testifying".

A spokesman for the Free Congress Foundation, Bradley Keena, welcomed the rule as "a first step toward levelling the playing field" and "part of a much larger plan to defund the left." Heritage foundation director of Congressional affairs, Marshall Whitmann, described the rule as an opportunity to highlight federal funding of non-profit groups. "For 40 years, we saw the growth of a spending complex that involved nonprofit organizations and governmental organizations that worked in tandem to grow Government. This rule is an opportunity to shed some light on this phenomenon and educate the taxpayer," he told the New Work Times.

More recent skirmishes

In February 2001, the annual Conservative Political Action Conference featured a "Defunding the left" panel of speakers with Terrence Scanlon from the Capital Research Center, Stefan Gleason from the National Right to Work Foundation, Paul Beckner from the Citizens for a Sound Economy and Morton Blackwell from the The Leadership Institute.[4]

Conservative News Service reported that Scanlon complained of 'liberal' groups opposing the nomination of John Ashcroft to Attorney General and told the conference that left-wing non-profits could be stopped.

"For the first time since 1952, we have a Republican Congress, House and Senate, we have a Republican President, so the agency heads will be hopefully mostly conservatives. So for the very first time we have an opportunity to go after these groups and take away their federal money. Let's do it," Scanlon said.[5]

In March 2003, a bill from Republican Representative, Michael Castle, to reauthorize the Individuals with Disabilities Education Act, revived elements of both the Istook amendments and the Reagan era A-122 proposals. Once more a storm of protest erupted. The following month the proposed restrictions were dropped.

However, OMB Watch notes that with omnibus proposals repeatedly defeated, the conservative emphasis has switched to piecemeal changes that add up over time.

In July 2003 OMB Watch, released a report, An Attack on Nonprofit Speech: Death By a Thousand Cuts - chronicling a myriad of minor attacks on the ability of NGO groups to speak out. The report authors noted that “when there were attacks on non-profit advocacy in 1983 and 1995, the sector organized galvanizing responses to fend them off. Unfortunately, it appears that such attacks are again surfacing, but in ways that are broader yet much harder to fight back.” [6]

Using 'eco-terrorism' smears to mask funding attacks

The environmental movement in particular has been singled out for attention by think tanks and PR companies to be marginalised by being portrayed as 'ecoterrorists'. In 2002, the Competitive Enterprise Institute co-sponsored a conference with the aggressive anti-green PR company Nichols-Dezenhall. (The company has since been renamed Dezenhall Resources after Nick Nichols, who spoke at the conference, retired). The conference was titled "Stopping Eco-Extremism: A Conference On Legislative, Legal And Communications Strategies To Protect Free Enterprise". When CLEAR, the watchdog organisation on the anti-environmental movement, tried to gain access to the conference it was denied.[7]

The week before the conference an article had appeared on TechCentralStation, written by Nick Nichols. Nichols argued 'eco-terrorism' was being funded by legitimate non-profit groups. "Like many foreign-based terrorist groups, many eco- and animal rights terrorist groups receive encouragement, support and funding from groups that are perceived to be legitimate charities. In the United States, charitable organizations classified as 501 (c)(3) groups under the tax code benefit from taxpayer subsidies, government grants and foundation philanthropy. This classification can bring enormous financial benefit to extremist groups," he wrote.[8]

According to a report of the meeting by David Case, the executive editor of TomPaine.com: ."Nichols painted with the broadest of brushes, deftly segueing among references to September 11th, eco-terrorists and the mainstream environmental movement. One minute, he (rightly) condemns the $43 million-plus in property damage caused by ELF since 1996. Next, he reproaches the green crisis, a powerful "$22 billion per year" global conspiracy."

The firm's strategy, said the article "depends on routine, if hard-hitting, PR warfare: attacking a group's tax exempt status, its credibility and its funders. To eco-terrorists, these tactics are irrelevant. To media-dependent mainstream groups that that have rent and salaries to pay, they could be lethal".[9]

While the term 'defund the left' is American, the strategy of seeking to curtail the voice of non-profit groups has spread beyond, largely through the fusion of aggrieved corporations working with conservative think tanks.

Attacks on IRS Non-Profit Status

On June 18, 2001, Frontiers of Freedom, sent a letter to the IRS asking it to revoke Rainforest Action Network's 501(c) 3 nonprofit tax status. A Frontiers of Freedom press release was headed "Test Case Could Slash Donations to Radical Environmental Groups test case". If successful, the press release noted, the strategy could be applied against other "radical environmental groups that are skirting our nation's tax laws". "It's really pretty simple," Frontiers of Freedom spokesman Jason Wright said. "If you take taxpayer dollars, you ought not to get involved in controversial issues".

The protest actions that FoF listed mostly involved the hanging of banners, which according to the think tank, does not fall under the legal definition of "charitable" or "educational" activities. On this basis, Frontiers of Freedom argued RAN's IRS tax-exempt status should be withdrawn.

A tax lawyer specialising in non-profits at the legal firm Shaw Pittman in Washington told the Wall Street Journal that even if the complaint was dismissed it was a tactic that would have an effect. "Reporting political enemies to the IRS is an attractive tactic because it forces the enemy to spend resources and sleepless nights ... Adverse publicity is an added bonus, particularly if it scares away donors," he said.

Rather than retreating, RAN opted to defends its actions and accuse Frontiers of Freedom of attempting to curtail their rights to free speech. The President of the Tides Foundation, Drummond Pike, spoke out as a foundation funder that wasn't going to be deterred. "If it were up to these folks, they would have taken away Martin Luther King's church's status," he said in a RAN media release.[10]

Jim Wheaton, founder and senior counsel for First Amendment Project, which is provided legal support to RAN: "No one should think for a moment that this is anything other than an attempt to put RAN out of business".[11]

Resources

References

  1. [1]
  2. "Core Objectives," Philip Morris strategy document, 1994
  3. [2]
  4. [3]
  5. Collective Intelligence: Posts 3224-3352
  6. [4]
  7. "CLEAR ALERT: CLEAR denied access to 'eco-terrorism' conference," March 4, 2002
  8. [http://www.techcentralstation.com/022802C.html
  9. [5]
  10. "Industry-backed, Anti-Environmental Groups and Logging Giant Boise Cascade Attack Rainforest Action Network," Environment News, May 2000
  11. "Massive Attack: Logging allies launch coordinated effort to cripple Rainforest Action Network"

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