Free Enterprise Action Fund

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This article is part of the Center for Media & Democracy's spotlight on front groups and corporate spin.


Learn more from the Center for Media and Democracy's research on climate change.

The Free Enterprise Action Fund is a mutual fund set up by Steven Milloy and Thomas J. Borelli.[1] Milloy is a climate skeptic and has been a Fox News commentator and a paid advocate for Phillip Morris, ExxonMobil and other corporations. He is the founder of Borelli was formerly a tobacco scientist at Phillip Morrisand is a senior fellow at the National Center for Public Policy Research. The Free Enterprise Action Fund aims to counter the trend by corporations to embrace corporate social responsibility and campaigns by activist groups seeking to shift corporate social and environmental policy.

On its website it states that the group aimed "to keep businesses focused on business rather than activist-defined CSR, the Fund aims to promote more generally our system of free enterprise. The Fund will direct advocacy and education efforts at corporate managements, institutional shareholders, the media and the public."

In the 2008 International Conference on Climate Change organized by the Heartland Institute, Milloy stated that the Fund aims to "be a problem for managements and shareholders", and that he and Borelli "primarily work through shareholder proposals" to "get the shareholders and CEOs to think about what they're doing". He also stated, "We have filed numerous shareholder proposals with companies in the US Climate Action Partnership".[2]

During 2005, the Fund underperformed the S&P 500 index by more than 50%, while rewarding its managers with above-average management fees of 2%.


According to a January 26, 2006 report in the Chicago Tribune, "The fund's advocacy stance boils down to opposing many of the things supported by traditional 'social investment funds,' because issues like global warming or corporate governance distract business from its real role of operating in the best interests of shareholders." However, its performance as an investment has been less than stellar.

The Tribune called it the "Stupid Investment of the Week ... Strip away the rhetoric, and you're getting a very expensive, underperforming index fund, while Milloy and partner Thomas Borelli get a platform for raising their pet issues. ... An expense ratio capped at 2 percent--ridiculously high for a portfolio of corporate giants--makes stock market returns unrealistic. From inception on March 1 of last year through Dec. 31, Free Enterprise Action returned 2.32 percent; the S&P 500 returned 4.72 percent. That's ugly."[3]

In 2006, the Independent noted that: "The fund has about $6m (£4m) under management at the moment but claims to be growing fast" and "is supported by a network of right-wing think-tanks including the Heritage Foundation and the Cato Institute."[4]


Contact details

Free Enterprise Action Fund
P.O. Box 182490
Columbus, OH 43218-2490
Phone: 301-258-2852
Email: media AT

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Published: 10 April 2006