Private foundations and non-profits
The best way to buy a democracy
Video transcript with sources
Conservatives are more organized than you might think. Way more. This is the second video in a playlist about the right. Let me know what else you want to see?
A recap: Social justice movements were racking up wins in the 60s and 70s. The environmental, consumer, labor, and civil rights movements were strong.
Rachel Carson published Silent Spring. Richard Nixon, of all people, made the EPA and OSHA, and the 1970s had the most equal income distribution in the country's history.
All of this terrified corporate leaders, because of course. So, Lewis Powell, Supreme Court Justice and former lawyer for big tobacco wrote his 1971 memo that became the blueprint for the conservative movement. That was the first video I posted last week, check it out.
And, credit to Jane Mayer. We’re going to follow the path in her excellent 2016 book Dark Money. Most sources are from there.
So, super-rich people sprang into action after the Powell Memo. One of the first and biggest movers was Richard Mellon Scaife. AKA busted Lindsey Graham.
Like most of these people, he inherited a fortune AND radical ideas from his parents. Same for the Koch brothers whose father … did business with pre-WW2 Germany… and left them the fortune from that.
Scaife’s parents pulled strings to get him into Yale where he flunked out a couple of times before going to the University of Pittsburgh where his dad was on the board. Surprise!
His inheritance came from the Mellon banking, oil, and aluminum fortune and added up to around $250 million in 1984.
And this is important. Scaife evaded inheritance taxes on this fortune in a way that set the standard for funding today’s conservative movement.
His family, like the Kochs, designed their trusts so that the total amount would pass to their kids tax-free if the net income from the inheritance was donated to non-profits for twenty years.
And non-profits are the kicker here. Because in response to the Powell memo, a slew of vague foundations and non-profits were set up by conservatives to push their agenda AND allow huge inheritances that funded them to pass to the heirs tax-free.
As Scaife wrote of the setup, “Isn’t it grand how tax law gets written?”
But Scaife and his peers took political non-profits to the next level. They founded The Heritage Foundation and Cato Institute which were much more aggressive and shadier by design.
They accused everyone else of liberal bias which caused everyone to take a hard right turn to avoid the accusation at the same time it justified creating their own political non-profits.
It’s the main tactic in use today. See Fox News or, the most recent right-wing editorial in the New York Times.
After Powell and Scaife, conservative non-profits exploded. There were 200 in 1930, 2,000 in 1950, 30,000 in 1985, and over 100,000 in 2013 with assets near 1 trillion dollars. All pushing a hard-right agenda, all passing on inheritances tax-free.
How do you feel about this? What do you want to see next?