Goldwater Institute

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Learn more about how the State Policy Network aids ALEC and spins disinformation in the states.

Learn more about corporations VOTING to rewrite our laws.

The Goldwater Institute is a right-wing advocacy group based in Arizona. It has ties to the Koch brothers (see below for more) and is a member of the State Policy Network (SPN), a web of state pressure groups that denote themselves as "think tanks" and drive a right-wing agenda in statehouses nationwide. It is also an affiliate of the Franklin Center for Government and Public Integrity.[1]

A 2013 report published by Arizona Working Families and the Center for Media and Democracy called the Goldwater Institute "a special interest group in Arizona that also influences law outside the Grand Canyon State."[2]

Koch Wiki

The Koch brothers -- David and Charles -- are the right-wing billionaire co-owners of Koch Industries. As two of the richest people in the world, they are key funders of the right-wing infrastructure, including the American Legislative Exchange Council (ALEC) and the State Policy Network (SPN). In SourceWatch, key articles on the Kochs include: Koch Brothers, Koch Industries, Americans for Prosperity, American Encore, and Freedom Partners.

See Ties to the Koch Brothers below for more.

Lobbying and Influence

Pushing ALEC's Agenda in Arizona

According to a 2013 report by the Center for Media and Democracy (CMD) and Arizona Working Families, "Through ALEC, the Goldwater Institute sits behind closed doors with state legislators where lawmakers and private sector lobbyists and representatives have an equal vote on templates to change the law."[2] Goldwater has urged the adoption of key parts of the American Legislative Exchange Council (ALEC) agenda in the areas of education, health care, anti-worker and austerity policies, land use and pollution, and international trade. For more information on specific bills, see Ties to ALEC below, SPN Ties to ALEC and "A Reporter's Guide to the Goldwater Institute."

Goldwater's Lobbying Operations

The Goldwater Institute advances the ALEC agenda and other legislation through maintaining regular contact with Arizona legislators. As of 2013, Goldwater had two registered lobbyists in Arizona: its Executive Vice President Starlee Rhoades and Communications' Director Lucy Caldwell, as well as the Phoenix-based Gallagher & Kennedy Public Affairs firm, which has held an active lobbyist status to represent Goldwater in Arizona since at least January 2013. Nick Dranias is not registered as a lobbyist to represent Goldwater, but he does "advise" legislators. While some of these communications would strike a lay person as lobbying, Arizona law has loopholes for providing 'technical' advice about legislation, which is not considered lobbying.[2]

Goldwater "grades" Arizona legislators based on how they voted on certain bills. Included in this list for 2013 were bills that closely resemble ALEC model legislation, such as HB 2494, which is very similar to ALEC's "Charter Schools Act" and "Next Generation Charter Schools Act." Additionally, Goldwater's list of "good" bills includes a resolution supporting a balanced budget amendment (HCM 2005) and several bills supporting tuition/scholarship tax credits, both of which are part of the ALEC agenda.

Other positions Goldwater took in opposition to Arizona families included:[2]

  • Opposition to the state providing health insurance to a spouse of a deceased law enforcement officer (HB 2204)
  • Opposition to a ban on electric cigarettes for minors (SB 1209). (At least as late as 2012, Goldwater was receiving funding from Altria (formerly Philip Morris global tobacco)).
  • Opposition to a bill providing overtime pay for law enforcement officers (HB 2303)
  • Opposition to a bill giving tax credits to companies to hire veterans (HB 2484)
  • Opposition to a bill requiring CPR to be taught in public schools (SB 1337)

Ties to the Koch Brothers

Goldwater has received significant amounts of funding from sources with ties to the Koch brothers, including the Charles G. Koch Foundation and the Koch-linked DonorsTrust and Donors Capital Fund (see Out-of-State Donors below for more).

Goldwater is also involved with a number of organizations and networks with close Koch ties, including ALEC, the State Policy Network, and the Franklin Center for Government and Public Integrity.

Goldwater senior fellow Vernon L. Smith is affiliated with a number of Koch-funded think tanks, including the Cato Institute and the Mercatus Center.

Ties to the American Legislative Exchange Council

The Goldwater Institute is a prominent and active member of ALEC, especially in the areas detailed below.

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.

Worker and Consumer Rights

Byron Schlomach represents Goldwater on the Commerce, Insurance and Economic Development Task Force. He introduced the "Prohibition on Paid Union Activity (Release Time) by Public Employees Act" and the "Public Employee Paycheck Protection Act" at ALEC's 2012 Spring Task Force Summit in Charlotte.[3] Together with Dranias, Scholmach sponsored the “Insurance Compact Enabling Act” at the task force meeting during the 2010 States and Nation Policy Summit.[4]

Privatizing Schools and Undermining Public Schools and Teachers

According to a 2013 report, Goldwater Institute staff have been "the primary author of ALEC’s annual state-by-state education report card," which ranks states according to how well they follow ALEC's policy agenda, not for how well their students perform.[2]

Jonathan Butcher, the Goldwater Institute's Education Director, represents the organization as the private sector co-chair of ALEC's Education Task Force as of September 2013.[5] Butcher sponsored "model" legislation (the "District and School Freedom Act") at the 2012 ALEC Spring Task Force Summit. The model bill was adopted and sent to the board for approval.[6] Butcher also sponsored the "Resolution Opposing the Implementation of the Common Core State Standards Initiative" during the K–12 Education Reform Subcommittee Meeting of the task force during ALEC's 38th annual meeting.[7]

In 2010, Matt Ladner represented Goldwater on the Education Task Force. He sponsored the "A-Plus Literacy Act" during the education meeting of the 2010 States and Nation Policy Summit.[8] The bill was passed by the public and private sectors unanimously.[9]

Selling School Policies with Misleading Rhetoric

A report by People for the American Way Foundation found that advocates for ALEC-Goldwater Institute education policies sometimes used misleading rhetoric to promote proposals that disproportionately benefit wealthier families.[2] When Goldwater's Executive Director Darcy Olsen was "confronted with data showing that low-income families in Arizona were receiving little, if any, benefit from her state's law" on tuition tax credits, she "was surprisingly candid. 'Has it only helped [poor families] more than moderate and wealthy families?' asked Goldwater's Darcy Olsen. 'Probably not. If it was sold that way, it's only an angle.'"[10]

Federal Power and State Relations

Nick Dranias, the Goldwater Institute's Clarence J. and Katherine P. Duncan Chair for Constitutional Government and Director of the Joseph and Dorothy Donnelly Moller Center for Constitutional Government, partook in the International Relations Task Force meeting at the 2011 ALEC Annual Meeting (which includes the Federal Relations Working Group), discussing "his three step plan to restore state sovereignty." This consisted of three pieces of model legislation, which he introduced: the "Constitutional Defense Council Legislation," the "Model State Sovereignty Civil Rights Law" and the "Sovereign State Interstate Compact."[11]

Health, Pharmaceuticals, and Safety Net Programs

Opposition to Arizona Medicaid Expansion

The Goldwater Institute opposed the expansion of Arizona's Medicaid program under the Affordable Care Act. The Medicaid expansion passed the Arizona legislature with bipartisan support and was signed into law by Republican Governor Jan Brewer in June 2013. In September, Goldwater filed a lawsuit against the state to block implementation of the law on the grounds that it was a tax increase, and therefore required a two-thirds majority.[2] The lawsuit was dismissed in February 2014.[12]

Involvement with ALEC HHS Task Force

Nick Dranias has also been active in ALEC's Health and Human Services Task Force. He sponsored a piece model legislation at ALEC's 2011 Spring Task Force Summit called the "Health Freedom Compact Act," whose purpose is to create a type of "treaty" among states to make a "legal argument that it is a federal crime for anyone, including federal officials, to interfere with a state’s health care freedom laws, such as a law modeled on ALEC’s Health Care Freedom Act."[13] He presented to the task force at the ALEC 2011 Annual Meeting as well.[14] Another Goldwater staff member, Dr. Byron Schlomach, Director of Goldwater's Center for Economic Prosperity, has also been active in the Health task force. In 2010, Dr. Schlomach gave a presentation entitled "The Evolution of Third-Party Payment in Health Care" at the 37th Annual Meeting.[15] Dr. Schlomach also sponsored the "Insurance Compact Enabling Act" at ALEC’s 2010 States and Nation Policy Summit.[16] This bill was referred both to the Health and Human Services Task Force and the Commerce, Insurance and Economic Development Task Force, of which Schlomach is also a member.[17]

Prior to coming to the Goldwater Institute, Dranias worked as an attorney for the Institute for Justice. ALEC, the Goldwater Institute, and the Institute for Justice are all members of the State Policy Network (SPN).[18][19][20]

Taxes and Budgets

The Goldwater Institute is also a member of ALEC's Tax and Fiscal Policy Task Force. Steve Slivinski, Senior Economist, introduced model legislation, the "Subsidy Truce Compact," at the Tax and Fiscal Policy Task Force Meeting at the 2011 ALEC Annual Meeting.[21] Byron Schlomach previously represented Goldwater on this task force. At the 2010 annual meeting, Sclomach sponsored two pieces of model legislation, "The Balanced Budget Certification Act" and "The Spending Evaluation Act."[22] At the 2010 States and Nation Policy Summit, Schlomach presented on "A Constitutional Amendment Requiring State Approval for Increases in Federal Debt."[23]

Environment and Energy

Nick Dranias has also represented the Goldwater Institute as a member of ALEC's Energy, Environment and Agriculture Task Force. He sponsored two pieces of model legislation at the 2010 annual meeting: "Decentralized Land Use Regulation for Rural Counties" and the "State Sovereignty through Local Coordination Act."[24] The latter would allow local government to force the state or federal government to align its regulation with local regulations, preventing the imposition of more restrictive regulations in areas such as environmental protection.[2]

Like ALEC, Goldwater has opposed efforts to regulate greenhouse gas emissions. One of its senior fellows, Robert Balling, authored a 2010 article, "Some Like It Hot," in which he suggested that ecosystems could adapt to global warming.[2]

Please see SPN Ties to ALEC for more.

Ties to the Franklin Center for Government and Public Integrity

The Goldwater Institute has hosted writers from the ALEC-connected Franklin Center for Government and Public Integrity, which screens potential reporters on their “free market” views as part of the job application process.[25] The Franklin Center funds reporters in over 40 states.[26] Despite their non-partisan description, many of the websites funded by the Franklin Center have received criticism for their conservative bias.[27][28] On its website, the Franklin Center claims it "provides 10 percent of all daily reporting from state capitals nationwide."[29]

Franklin Center Funding

Franklin Center Director of Communications Michael Moroney told the Center for Public Integrity (CPI) in 2013 that the source of the Franklin Center's funding "is 100 percent anonymous." But 95 percent of its 2011 funding came from DonorsTrust, a spin-off of the Philanthropy Roundtable that functions as a large "donor-advised fund," cloaking the identity of donors to right-wing causes across the country (CPI did a review of Franklin's Internal Revenue Service records).[30] Mother Jones called DonorsTrust "the dark-money ATM of the conservative movement" in a February 2013 article.[31] Franklin received DonorTrust's second-largest donation in 2011.[30]

The Franklin Center also receives funding from the Wisconsin-based Lynde and Harry Bradley Foundation,[32] a conservative grant-making organization.[33]

The Franklin Center was launched by the Chicago-based Sam Adams Alliance (SAM),[34] a 501(c)(3) devoted to pushing free-market ideals. SAM gets funding from the State Policy Network,[35] which is partially funded by The Claude R. Lambe Foundation.[36] Charles Koch, one of the billionaire brothers who co-own Koch Industries, sits on the board of this foundation.[37] SAM also receives funding from the Rodney Fund.

Areas of Work

In 2014, the organization listed the following as its main issue areas:[38]

  • Education Reform
  • Healthcare Reform
  • Tax Reform
  • Campaign Finance & Election
  • Government Spending
  • Constitutional Rights
  • Property Rights
  • State Powers
  • City & Local Reform
  • Free Speech
  • Business & Job Creation
  • Government Accountability
  • Workplace Freedom

Funding

Arizona Taxpayers Fund Goldwater

According to a 2013 report by Arizona Working Families and the Center for Media and Democracy, even though "the Goldwater Institute has attacked government spending, the institute has taken in over a million in Arizona taxpayer dollars for its 'public interest' lawsuits, and amassed what it has described as 'excess cash.'"[2]

Out-of-State Donors

From 2008 to 2012, the Koch-connected Donors Capital Fund gave $1,822,462 to the Goldwater Institute, a substantial portion of revenue. In 2010, it gave $562,000 to the Goldwater Institute, which constituted more than 17 percent of revenues that year. In 2009, the Donors Capital Fund gift of $665,462 constituted 26 percent of the Institute’s revenues. In 2008, it donated $360,000, or 12 percent of the Goldwater Institute's revenues that year.[2]

According to the former director of the IRS Exempt Organizations Division Marcus Owens, such funds act as a pass-through: “it obscures the source of the money.”[2]

The Goldwater Institute has many other big donors from outside of Arizona, including[2]:

In 2006, a few of the organization's over 170 contributors included:[39]

Finances

Employee Compensation

Goldwater's top executive compensation rises, while Arizona income falls. (Source: "A Reporter's Guide to the Goldwater Institue")

Despite attacking Arizona employees, claiming state workers are paid too much, the Goldwater Institute pays its top employees sizable salaries. From 2007 to 2012, Goldwater's employee compensation increased by ten times more than its revenues did, despite budget losses. The tax-exempt organization has given its top two executives raises in compensation of 185 percent since 2007, but the charity’s revenue did not increase by anywhere near that percentage in the same period, growing by only 18 percent in those five years.[2]

The compensation of Goldwater's executive director, Darcy Olsen, jumped from $180,000 in 2007 to $268,182 for 2011 (the most recent year in which Goldwater’s tax forms are available), while compensation of the Goldwater Institute’s director of litigation, Clint Bolick, jumped even higher in this five-year period, from $126,875 to $300,624. At the same time, the real median wages of Arizona households dropped from $54,116 to $46,709.[2]

The Goldwater Institutes's compensation to top employees also includes large bonuses. In 2011, Olsen received $20,000 and Bolick received a bonus of $35,000. Goldwater gave its Director of Policy Development, Nick Dranias a $50,000 bonus in 2011, bringing his total compensation for that year to $176,228, more than three times the earnings of the average Arizona household.[2] In 2012, even without those bonuses, Goldwater's executives received generous compensation: at $130,426, Dranias' 2014 salary was "about two and three-quarter times the real median wage of Arizona households, which was $47,826 in 2012."[2]

Core Financials

2012[40]

  • Total Revenue: $3,830,266
  • Total Expenses: $3,463,958
  • Net Assets: $5,231,958

2011[41]

  • Total Revenue: $4,190,522
  • Total Expenses: $3,764,908
  • Net Assets: $4,795,651

2010 [42]:

  • Total Revenue: $3,299,424.00
  • Total Expenses: $3,506,634.00
  • Net Assets: $4,380,969.00

2009[43]:

  • Total Revenue: $2,540,977.00
  • Total Expenses: $2,681,328.00
  • Net Assets: $4,557,541.00

Background

According to a previous version of its website, the Goldwater Institute "was established in 1988 as an independent, nonpartisan research and educational organization dedicated to the study of public policy in Arizona. Through research papers, commentaries, policy briefings and events, Goldwater scholars advance public policies based on the principles championed by the late Senator Barry Goldwater during his years of public service -- limited government, economic freedom and individual responsibility. Consistent with a belief in limited government, the Goldwater Institute neither seeks nor accepts government funds and relies on voluntary contributions to fund its work."

"The Goldwater Institute is heir to the legacy of the late Barry Goldwater. Transcending party lines, the term 'Goldwater Conservative' came to be synonymous with the principles that made the United States a beacon of liberty -- individual rights, economic freedom, and a government of strictly limited powers.
"The Goldwater Institute board and staff share a belief in those principles, and work to develop solutions to public policy problems in accordance with them. Some call this philosophy conservative for its commitment to rule of law; others call it libertarian for its commitment to free markets and limited government; and, still others call it liberal for its commitment to individual rights. We believe our philosophy, regardless of the names by which it is known, builds a firm foundation for the free society to which we are dedicated."

Despite its affirmations of advancing Senator Goldwater's values of limited government, economic freedom, and individual responsibility, according to a 2013 report about the Institute, the late Senator himself disliked parts of what the Institute had grown to represent. Specifically, Senator Goldwater didn’t like seeing his namesake institute turn into a special-interest, big-business lobbying group. Unfortunately, he died of a stroke before he could implement a system of “checks and balances” within the institute to protect his name.[2]

Personnel

Board of Directors

As of June 2014:[44]

Staff

As of June 2014:[45]:

Former staff include:

  • Barbara Small, Executive Assistant
  • Byron Schlomach, Director, Center for Economic Prosperity
  • Christina Corieri, Health Care Policy Analyst
  • Joshua Turner, Litigation Manager
  • Michael Pfeifer, Production Manager
  • Starlee Rhoades, Executive Vice President
  • Taylor Earl, Staff Attorney[46]
  • Jennifer Alvarez, Paralegal
  • Robert Kramer, Communications Associate
  • Christian Palmer, Investigative Reporter[47]

Senior Fellows

  • Alan Charles Kors, Professor of History, University of Pennsylvania
  • Benjamin Barr, Constitutional Policy Analyst
  • Bradley Smith, Professor of Law, Capital University
  • Carrie Lukas, Director of Policy, Independent Women's Forum
  • Dan Lips, Policy Advisor & Investigator, U.S. Senate Homeland Security & Governmental Affairs Committee
  • David Schmidtz, Professor of Philosophy & Economics, University of Arizona
  • Fred E. Foldvary, Professor of Economics, Santa Clara University
  • Fred Kelly Grant, Constitutional Law Expert
  • George Reisman, Professor Emeritus of Economics, Pepperdine University
  • Gordon Tullock, Professor of Law & Economics, George Mason University
  • Ilya Somin, Associate Professor of Law, George Mason University
  • James D. Gwartney, Economics Chair & Center Director, Florida State University
  • Jay P. Greene, Endowed Chair & Head of the Department of Education Reform, University of Arkansas
  • Jeffrey Parker, Professor of Law, George Mason University
  • John Shadegg, Former U.S. Representative, Arizona's 3rd Congressional District
  • Lee Ann Elliott, Former Commissioner, Federal Election Commission
  • Matthew Ladner, Director of Policy & Research, Foundation for Excellence in Education
  • Michael J. New, Assistant Professor, University of Alabama
  • Patrick Chovanec, Associate Professor of Economics, Tsinghua University (Beijing)
  • Randy Barnett, Professor of Law, Boston University
  • Robert Balling, Professor of Geography, Arizona State University
  • Robert G. Natelson, Retired Professor of Law, University of Montana
  • Stephen Moore, Editorial Page Writer, Wall Street Journal
  • Steve Pejovich, Professor Emeritus, Texas A&M University
  • Steven M. Greenhut, Investigative Journalism Director, Pacific Research Institute
  • Todd Zywicki, Professor of Law, George Mason University
  • Vernon L. Smith, Nobel Prize winner in Economics, 2002
  • Veronique de Rugy, Senior Research Fellow, Mercatus Center

Contact Details

Goldwater Institute
500 E. Coronado Road
Phoenix, AZ 85004
Phone: 602.462.5000
Fax: 602.256.7045
Web: http://www.goldwaterinstitute.org

Articles and Resources

Related SourceWatch Articles

Related PRWatch Articles

External Articles

References

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  12. Associated Press, "Challenge to Jan Brewer's Arizona Medicaid Expansion Is Dismissed," Wall Street Journal, February 8, 2014, accessed May 29, 2014.
  13. American Legislative Exchange Council, Health and Human Services Task Force meeting agenda and materials, March 31, 2011, on file with CMD.
  14. American Legislative Exchange Council, Health and Human Services Task Force meeting agenda and materials, August 4, 2011, on file with CMD.
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  33. The Bradley Foundation. The Bradley Foundation. Organizational website. Accessed August 19, 2011.
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  38. Goldwater Institute, Issues and Cases, organizational website, accessed June 23, 2014.
  39. Goldwater Institute, Annual Report 2006, accessed July 2007, p. 24.
  40. Goldwater Institute, 2012 IRS Form 990, organizational annual financial filing, October 2013.
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