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1.

The New Leviathan

This book is about a political force of unprecedented magnitude in American life. The “New Leviathan” is a network of billion-dollar tax-exempt foundations and advocacy think tanks that work in concert with government unions and grassroots radical groups to make up the organizational core of the political left. The New Leviathan is not only a political force in the narrow sense of directly influencing electoral outcomes through the support of candidates and parties. Because its power derives from institutions whose mandates are educational and philanthropic, its influence extends into every aspect of the nation’s life. This influence is exerted through a tax-exempt universe of policy think tanks, grassroots campaign organizations, and public-interest groups, created and supported by its donations. The components of the New Leviathan operate within the framework of a “progressive” ideology that promotes an ever-expanding state, along with policies that undermine America’s sovereignty and weaken her defenses. The New Leviathan’s ever-growing power has already tipped the scales of the national political debate and, as we will show in this volume, transformed its very nature.

Conventional wisdom would dismiss the very possibility of such dominance in the political arena by a money machine of the Left. In the conventional view, it is Republicans and the political right with their corporate sponsors and big-money donors who make up the “party of the rich,” while progressives speak for the powerless and the poor. In this perspective, conservatives are agents of an economic “ruling class,” organized to defend its social privileges. In the exercise of financial power in politics, conservatives are assumed to enjoy an overweening advantage, utilizing unrivaled resources to orchestrate “vast right-wing conspiracies,” which are designed to thwart progressive efforts in behalf of equality and “social justice.”

While casting conservatives as mouthpieces for the rich, the same perspective portrays Democrats as the party of “working Americans and their families,” providing a voice for the voiceless and a shield for the disadvantaged. Accepting the Democratic Party’s presidential nomination in 2000, Al Gore summed up this outlook in a slogan: “They’re for the powerful; we’re for the people!” 1

The political melodrama in which Democrats and progressives posture as paladins of enlightenment has a long and unpretty history. It was forged during the moderately populist and immoderately corrupt presidency of Andrew Jackson, spokesman for the “common man,” who entered the White House as a self-proposed champion of the people battling the “moneyed elite.” Both the image and the aura were transparent manipulations to seduce a willing public. Despite humble beginnings, Jackson was a man of means who basked in the privileges of an aristocratic life. The same comfortable circumstances did not discourage him from plundering the property of his political rivals, or justifying his avarice as a “sharing” of the wealth, or from exploiting the morality play he had created to expand his personal power. Nor did Jackson’s “everyman” enthusiasms keep him from owning and selling slaves throughout his life or from presiding over the forced removal of American Indian tribes from their native lands on the “Trail of Tears.”

Politics being a market in which fictions are currency, the Jacksonian myth established the enduring template of the two-party system. As a Republican newspaper in Tennessee complained, “The rank and file of the democratic party honestly believes . . . the democratic party is the poor man’s party, that the republican party is the party of boodle and corruption and that they obtain and maintain their supremacy in all the states by the undue use of money.”2

Franklin Roosevelt entered the White House a hundred years after Jackson, and despite being a born aristocrat, a “son of privilege who never depended on a pay check,” he was also able to frame his presidential tenure as “the Era of the Common Man.”3 In the 1970s, Jimmy Carter took up the folksy mantle, touting himself as a simple peanut farmer from Georgia and promising to be the “people’s president.” Yet Carter was the son of a wealthy plantation owner, inherited his own business, and spurned a lucrative job in the private sector in order to sow the seeds of a political career with a tale of humble beginnings.4 Carter’s claim to be a progressive was particularly dubious since he won his 1970 gubernatorial campaign by courting the support of southern segregationists and projecting what one biographer has called a “not-so-subtle racism” away from public view.5

In the election of 2000, Al Gore, another scion of an elite segregationist family, took up the populist theme with the campaign slogan, “The People vs. the Powerful.” As part of a White House that set records fund-raising from “special interests,” Gore’s claim was hardly credible, although a politically sympathetic media helped to make it seem so. After losing the presidency, Gore launched a new career posing himself as the people’s champion against global polluters, even winning an Academy Award and a Nobel Prize from fellow progressives for these efforts while trampling on the environment and making himself a wealthy man in the process. Today, Gore travels the world on private carbon-gorging jets and spends an estimated $30,000 a year to heat just one of his luxury mansions, which include a recently purchased $9 million villa in Montecito, California, with six bedrooms, nine bathrooms, a large pool house, and six fireplaces.6 His stake in a “green” energy company that profits from lucrative environmentally correct government contracts has positioned him to become the world’s first “carbon billionaire.”7

Populist hypocrisy was on display again and in a particularly sordid fashion during the next national election when Democratic vice-presidential candidate John Edwards cast America as a benighted home of the oppressed. According to Edwards, there were “two Americas”--on the one hand, the rich Republican America with its boot heel on the necks of the hapless and helpless; on the other, the Democrat America of the poor and voiceless (if not for noble crusaders like Edwards). Back on earth this selfless servant of the workingman had accumulated a personal net worth of $188 million, while his running mate, John Kerry, had married into two fortunes three times the size of Edwards’s own, making him the richest lawmaker in the country.8 Kerry’s opulence was not untypical of the balance between the parties: among the twelve richest lawmakers, Democrats outnumber Republicans three to one.9

The ability to see itself as a perennial underdog in a class war it regards as integral to capitalism is an abiding strength of the political left. But the image is unsupported by the facts. Far from being the party of the people, Democrats and their progressive core represent America’s social and cultural elites and constitute the richest, the most organized, and most economically powerful political force in American history. As Christopher Caldwell observed in a New York Times essay, “the Democratic Party is the party to which elites belong. It is the party of Harvard (and most of the Ivy League), of Microsoft and Apple (and most of Silicon Valley), of Hollywood and Manhattan (and most of the media) and, although there is some evidence that numbers are evening out in this election cycle, of Goldman Sachs (and most of the investment banking profession). . . . The Democrats have the support of more, and more active, billionaires [than the Republicans]. Of the twenty richest ZIP codes in America, according to the Center for Responsive Politics, 19 gave the bulk of their money to the Democrats in the last election, in most cases the vast bulk--86 percent in 10024 on the Upper West Side.” 10

Wall Street--the very symbol of capitalist excess and wealth--was a key player in Barack Obama’s successful presidential election run in 2008. Counterintuitive at first, this fact becomes immediately intelligible once one realizes that big government works for Wall Street bankers who float all the bonds that underwrite government spending programs and take their percentage on every dollar of big government debt. Award-winning business reporter Charles Gasparino observes: “. . . the assumption made by most Americans, . . . [is] that because investment bankers are rich they must favor Republicans because, by definition, Republicans favor lower taxes on the wealthy and on big business. And while, of course, no one likes high taxes, what’s more important than the tax rate is how much income you make in the first place: paying 30 percent of your money in taxes if you make a million dollars is better than paying a 20 percent tax rate on an income of only half a million.” 11

In light of these facts it is hardly surprising that the top financial backers of Barack Obama’s presidential campaign included Wall Street leaders Jamie Dimon (CEO, JPMorgan Chase), Lloyd Blankfein (CEO, Goldman Sachs), Dick Fuld (CEO, Lehman Brothers), Warren Spector (CEO, Bear Stearns), Larry Fink (CEO, BlackRock--the world’s largest money management firm), Greg Fleming (number two at Merrill Lynch), and Mark Gallogly (number two at the private equity firm Blackstone). Collectively, these Wall Street titans raised more than $100 million for the Obama campaign.12

It is a reflection on human vanity that the Left actually believes it is the people’s David to the Right’s Goliath. A recent display of this misplaced self-esteem was the now-famous PowerPoint presentation that former White House official Rob Stein screened for George Soros, Clinton political operatives, and Democratic funders as the 2004 election approached. The PowerPoint was called “The Conservative Message Machine’s Money Matrix,” and Stein’s goal was to persuade Democratic funders that they had to match the unfairly oversized conservative war chest in order to help the little people out.

Stein’s presentation began with the false premise that conservatives enjoyed an overwhelming advantage in the resources they were able to funnel into American politics. In Stein’s view, this advantage enabled conservatives not only to influence politics but to move the boundaries of the entire national debate to the right. Using charts and graphs, Stein purported to show that with just $300 million from two hundred “anchor donors” the conservative “message machine” was nonetheless able to fundamentally reshape the country’s politics.13 “This is perhaps the most potent, independent, institutionalized apparatus ever assembled in a democracy to promote one belief system,” Stein told New York Times journalist Matt Bai, who didn’t bother to check.14

In fact, Stein’s figure was a modest sum in an age when one gubernatorial campaign can cost $170 million. But his portrait of an overweening and unanswered conservative message machine proved decisive in recruiting the left-wing billionaires in the room to underwrite a network of newly minted progressive organizations. The most prominent example was the Democracy Alliance, which was established in 2005 by Soros and a coalition of eighty leftist donors, each of whom contributed $1 million toward its creation.

The immediate goal of the Democracy Alliance was to lead the resurgence of the Left in the 2006 midterm elections. Almost half the groups the alliance funded hadn’t existed only a few years before.15 In its inaugural year of operations, the Democracy Alliance distributed $50 million to assorted left-wing, tax-exempt think tanks and quasi political associations, a sum that increased to $80 million the following year. The alliance quickly became the most visible presence of the Left’s immense and unappreciated financial power in shaping the political landscape.16

Long before Stein’s presentation, the claim that the Right was massively funded compared to the Left was a standard piece of progressive folklore, supported by a bookshelf of left-wing tracts and pseudoscientific studies. In Moving a Public Policy Agenda: The Strategic Philanthropy of Conservative Foundations (1997), author Sally Covington charged that the conservative movement had relied on “a substantial and interconnected institutional apparatus” unrivaled by the Left in order to win the war of ideas and push the country rightward. Like Stein, Covington singled out a core of conservative foundations--Scaife, Bradley, Koch, and Olin--as the financial engine driving this ostensibly dramatic shift in the national ideology to the right. Yet, the Olin Foundation was so dedicated to this concerted effort that in 2005 it deliberately went out of business in accord with the wishes of its founder.17

A 1999 report by a progressive advocacy group, the National Committee for Responsive Philanthropy, made essentially the same argument. The report claimed that conservative foundations had contributed approximately $1 billion in the ten years between 1990 and 2000 to twenty leading conservative think tanks and were thereby able to produce a “rightward shift in American politics.” 18 So powerful were these foundations, according to the report, that they could prevail despite opposition to their political agenda from the majority of the country. In short, conservative money trumped the democratic will of the people. The identical thesis with nearly identical supporting evidence was argued in No Mercy: How Conservative Think Tanks and Foundations Changed America’s Social Agenda. Its left-wing authors, academics Richard Delgado and Jean Stefancic, claimed that by relying on the financial wealth of conservative funders like Bradley, Scaife, and Olin, the Right had been able to get federal policies enacted that the American people did not support.

The twin premises of all these narratives, including Stein’s PowerPoint, was that conservatives could draw on far superior and unrivaled tax-exempt resources to change the nation’s political discourse and move it to the right. Both premises were demonstrably false. As of 2009, the financial assets of the 115 major tax-exempt foundations of the Left identified by our researchers added up to $104.56 billion. Not only is this total not less than the financial assets of the 75 foundations of the Right, it was more than ten times greater.19

Of the “Big Three” conservative foundations that every one of the left-wing analyses cited (Bradley, Olin, Scaife), not one has (or had) assets exceeding a billion dollars. By way of contrast, fourteen progressive foundations do, including Gates, Ford, Robert Wood Johnson, Hewlett, Kellogg, Packard, MacArthur, Mellon, Rockefeller, Casey, Carnegie, Simons, Heinz, and the Open Society Institute.20 As already noted, the John M. Olin Foundation, which figures in each of the left-wing foundation narratives and has so alarmed the Left over the years as one of the conservative “Big Three,” actually terminated itself in 2005 and has been defunct ever since. No comparable progressive foundation has so far voluntarily put itself out of business.



1. http://academic.csuohio.edu/kneuendorf/content/cpuca/gorespch.htm.

2. Edward L. Ayers, The Promise of the New South: Life After Reconstruction (Oxford University Press, 2007), p. 38.

3. Jean Edward Smith, FDR (Random House, 2008), p. x.

4. Kenneth Morris, Jimmy Carter, American Moralist (University of Georgia Press, 1997), pp. 114–15.

5. Ibid., p. 187.

6. http://www.huffingtonpost.com/2010/05/17/photos-al-goree-new-8875_n_579286.html.

7. http://www.telegraph.co.uk/earth/energy/6491195/Al-Gore-could-become-worlds-first-carbon-billionaire.html.

8. http://washingtonexaminer.com/blogs/beltway-confidential/democrats-party-rich.

9. Ibid.

10. Christopher Caldwell, “The Ideological Divide,” New York Times Book Review, October 24, 2010.

11. Charles Gasparino, Bought and Paid For: The Unholy Alliance Between Barack Obama and Wall Street (Sentinel HC, 2010), pp. 30–31.

12. Ibid., p. 40.

13. Matt Bai, The Argument: Billionaires, Bloggers and the Battle to Remake Democratic Politics (Penguin Press, 2007), p. 26.

14. Ibid., p. 25.

15. David Callahan, Fortunes of Change: The Ruse of the Liberal Rich and the Remaking of America (John Wiley and Sons, 2010).

16. http://www.washingtonpost.com/wp-dyn/content/article/2005/08/06/AR2005080600848_pf.html.

17. http://www.nytimes.com/2005/11/28/opinion/28miller.html.

18. http://www.commonwealinstitute.org/archive/1-billion-for-ideas-conservative-think-tanks-in-the-1990s.

19. The report identifies 82 conservative foundations, but 7 of the foundations named had zero or negative assets in 2009. For up-to-date charts of both conservative and progressive foundations, see Appendices I to III of this volume. The original NCRP report listed 79 conservative foundations but by 2009, 4 of these had zero or negative assets.

20. See Appendix II.