Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (15 page)

In response to the rising concerns in Saltville, in 1970 Virginia passed strict new standards that the company said it couldn’t meet. As a result, Olin said, it would cease operations in Saltville by the end of 1972. The company actually had several other reasons for shutting the plant. It was unable to compete with more efficient western salt ash manufacturers. Also, it was under pressure from the United Mine Workers union, which had succeeded after bitter battles in representing the employees. In all likelihood, the factory was doomed not just for environmental reasons.

Yet the story line blaming environmental activists for its problems proved irresistible.
Life
magazine produced an elegiac photo essay called “End of a Company Town,” and
The Wall Street Journal
lamented the crushing new regulatory burden on corporate America. The Olin Corporation, meanwhile, demolished its factory and sold most of its Saltville real estate back to local residents but found no takers for its mercury waste “muck” pond. It tried removing a foot or so of topsoil around it, and it tried building a ditch along the river to divert the toxic runoff, but these efforts were hopelessly deficient. Soon after, the EPA designated Saltville one of the country’s first “Superfund” sites.

“
It’s a ghost town. It was extremely polluted and still is,” says Shirley “Sissy” Bailey, who grew up near Saltville and still lives there. “To this day, that muck pond is still there, and you can still see clumps of mercury along the river. The drinking water is so full of lead and mercury it isn’t fit for a dog to drink.” She says she “lived” the history, ran as a kid on riverbanks so poisoned no grass grew. The air often smelled of chlorine and other chemicals. “The Olin Company was dirty and treated the people bad, not like people,” she says. “Most of the workers were poorly educated, and they led them around like sheep. A lot of people got sick, and there were more birth defects in Saltville than in other parts of the state,” she asserts, although there has been no study proving this or establishing any causal correlation.

“
Common sense should have made companies take responsibility, but until the 1970s there were no regulations on this. The EPA became a form of accountability,” says Stephen Lester, the Harvard-educated science director for the Center for Health, Environment, and Justice in Falls Church, Virginia, a nonprofit environmental group that provided technical assistance to Bailey in a later mercury contamination fight in Saltville. “Of course that imposes costs and affects the bottom line, so it wasn’t popular with the company.” The cost of cleaning up Saltville, in fact, was projected to be upward of $35 million.

Former officials at the Olin Foundation, when asked about the company’s ignominious environmental record, downplay any link to the nonprofit’s pro-corporate, antiregulatory ideology. “
It is possible that Mr. Olin was influenced to some degree by litigation and regulations against the company,” says James Piereson, the conservative scholar, who was executive director and trustee of the Olin Foundation from 1985 to 2005. “But that would be one factor among many others; and he was no longer running the company on a day to day basis by this time.” He added, “There were a lot of cross currents in the air: the Cold War, détente, Watergate, inflation, a stock market crash, war in the Middle East, Vietnam, environmentalism, feminism.” William Voegeli, who was program officer at the Olin Foundation from 1988 to 2003, says, “
The Olin family had very little to do during these years with either the John Olin Foundation or the Olin Corporation.” He added, “I never heard one word, during my years at the foundation, about how its grants might affect the Olin Company (whose stock constituted less than one percent of our endowment), or the finances of the Olin family. Whatever else can be said of our conservative agenda, it was disinterested.”

I
t was, however, against a backdrop of serious clashes with the increasingly robust regulatory state that John Olin directed his lawyer to enlist his fortune in the battle to defend corporate America. As he put it, “
My greatest ambition now is to see free enterprise reestablished in this country. Business and the public must be awakened to the creeping stranglehold that socialism has gained here since World War II.”

At first, the foundation funneled money into the same conservative think tanks that Scaife and Coors were supporting, the Heritage Foundation, the American Enterprise Institute, and the Hoover Institution, the conservative think tank located on Stanford University’s campus. But soon John Olin’s focus diverged. Perhaps because of his upset over Cornell, his foundation became uniquely centered on transforming academia. As he wrote in a private letter to the president of Cornell, he regarded the campus as overrun by scholars “
with definite left-wing attitudes and convictions.” Olin noted, “It matters little to me whether the economic development is classified as Marxism, Keynesianism, or whatnot.” He said he regarded “liberalism” and “socialism” as “synonymous.” All of these academic trends, he asserted, needed “very serious study and correction.”

To get his bearings, Olin’s labor lawyer, Frank O’Connell, contacted a handful of other private conservative foundations. He sought advice from colleagues at the Koch and Scaife Foundations, as well as a few others on the right such as the Earhart Foundation and the Smith Richardson Foundation, which was funded by the Vicks VapoRub fortune. George Pearson, who was running the Charles G. Koch Foundation at that point, guided O’Connell, assigning him a free-market reading list that included Hayek’s essay “The Intellectuals and Socialism.” Hayek’s point was emphatic: to conquer politics, one must first conquer the intellectuals. O’Connell recalled, “
It was like a home-study course.”

The fledgling right-wing foundations were also studying their establishment counterparts during this period, particularly the giant Ford Foundation.
By the late 1960s, Ford was pioneering what its head, McGeorge Bundy, a former dean at Harvard and national security adviser to the Kennedy and Johnson administrations, called “advocacy philanthropy.” Ford was, for instance, pouring money into the environmental movement, funding the Environmental Defense Fund and the Natural Resources Defense Council. By supporting public interest litigation, it showed conservatives how philanthropy could achieve large-scale change through the courts while bypassing the democratic electoral process, just as the early critics of private foundations had feared.

I
n 1977, Olin raised his foundation’s stature by choosing William Simon as its president. Simon was a social acquaintance of Olin’s from East Hampton, Long Island, where they both had beach houses, and Olin described Simon’s thinking as “
almost identical with mine.” While Olin kept a low profile, however, Simon loved the spotlight, the hotter the better. As Voegeli recalled, Simon was like Alice Longworth’s description of her father, Theodore Roosevelt. “He wanted to be the bride at every wedding, and the corpse at every funeral.”

Simon had been energy czar and later Treasury secretary under Presidents Nixon and Ford and was a famously intemperate critic of those he considered “stupid.” This large category included liberals, radicals, and moderate members of his own Republican Party. Like Olin, he was incensed by the expansion of the regulatory state. He especially detested environmentalists and other self-appointed guardians of the public interest, describing them as the “New Despots.” In his 1978 manifesto,
A Time for Truth
, he wrote, “
Since the 60’s, the vast bulk of regulatory legislation passed by congress…[has] been largely initiated by a powerful new lobby that goes by the name of the Public Interest movement.” Simon disparaged these “college-educated idealists” who claimed to be working for “the well being of ‘consumers,’ the ‘environment,’ ‘minorities,’ ” and other nonmaterial causes, accusing them of wanting to “expand the police powers of the state over American producers.” He challenged their purity. Noting that they claimed to care little for money, he accused them of being driven by another kind of self-interest. Quoting his colleague Irving Kristol, the neoconservative intellectual, he charged that these usurpers wanted “the power to shape our civilization.” That power, he argued, should belong exclusively to “the free market.”

Simon’s hatred and suspicion of the liberal elite approached Nixonian levels in his 1980 sequel manifesto,
A Time for Action
. He claimed that a “secret system” of academics, media figures, bureaucrats, and public interest advocates ran the country. Picking up where Lewis Powell had left off in his memo nine years earlier, Simon warned that unless businessmen fought back, “Our freedom is in dire peril.”

Simon’s foreboding, like that of Olin, is somewhat hard to fathom given that both men had reached pinnacles of American power and wealth. They were both millionaires many times over, with more properties, possessions, titles, honors, and accomplishments than they could easily count. Both men were born into privilege. Like Scaife, Simon was chauffeured to grade school, and his family was so wealthy he likened his parents to the carefree and careless characters in F. Scott Fitzgerald’s fiction. Nonetheless, he regarded himself proudly as self-made. His father evidently lost his mother’s fortune, motivating Simon to make his own. On Wall Street, he became a hugely successful partner at Salomon Brothers, where he was an early leader in the lucrative new craze for leveraged buyouts. But what neither Olin nor Simon had was influence over the next generation. “We are careening with frightening speed towards collectivism,” Simon warned.

Only an ideological battle could save the country, in Simon’s view. “
What we need is a counter-intelligentsia…[It] can be organized to challenge our ruling ‘new class’—opinion makers,” Simon wrote. “Ideas are weapons—indeed the only weapons with which other ideas can be fought.” He argued, “
Capitalism has no duty to subsidize its enemies.” Private and corporate foundations, he said, must cease “the mindless subsidizing of colleges and universities whose departments of politics, economics and history are hostile to capitalism.” Instead, they “must take pains to funnel desperately needed funds to scholars, social scientists and writers who understand the relationship between political and economic liberty,” as he put it. “
They must be given grants, grants, and more grants in exchange for books, books, and more books.”

Under Simon’s guidance, the Olin Foundation tried to fund the new “counter-intelligentsia.” At first, it tried supporting little-known colleges where conservative ideas—and money—were welcome. But Simon and his associates soon realized that this was a losing strategy. If the Olin Foundation wanted impact, it needed to infiltrate prestigious schools, especially the Ivy League.

The man who put his mark on the Olin Foundation more than its namesake, or even Simon, was its executive director, Michael Joyce, a fierce former liberal who had become a neoconservative acolyte of Kristol’s. A friend of Joyce’s said that he believed philanthropy was about power and that those with great fortunes needed political capos like him to tell them how to wield it. Joyce was a brawler who wanted to take on America’s liberal establishment, not just supplement it in some milquetoast way. In the words of Ralph Benko, a libertarian blogger for
Forbes
, “
Joyce was a true radical. He was inspired by Antonio Gramsci. He wanted to effect radical transformation.” In Miller’s view, Joyce was “an intellectual among activists, and an activist among intellectuals. He understood how the world of ideas influenced the real world.” Joyce was characteristically more blunt. “My style,” he said, “was the style of the toddler and the adolescent: fight, fight, fight, rest, get up, fight, fight, fight. No one ever accused me of being pleasant. I made a difference. It was acknowledged by friend and foe.”

Joining Joyce was Piereson, a thoughtful, soft-spoken neoconservative whose path to the Olin Foundation had also run through Irving Kristol. Piereson had befriended the Kristol family at the University of Pennsylvania, where he taught government and political theory alongside Irving’s son, Bill. Both had felt marginalized by their more liberal peers. Having closely observed America’s academic intelligentsia, Piereson concluded that the foundation needed to “penetrate” the most elite institutions, “
because they were emulated by other colleges and universities of lesser stature.” As Hillel Fradkin, who also worked at the Olin Foundation, put it, “
The only way you’re going to change the debate in this country is by looking to those schools. Giving money to conservative outposts won’t get much done.”

What emerged was a strategy they called the “beachhead” theory. The aim, as Piereson later described it in an essay offering advice to fellow conservative philanthropists, was to establish conservative cells, or “beachheads,” at “
the most influential schools in order to gain the greatest leverage.” The formula required subtlety, indirection, and perhaps even some misdirection.

The key, Piereson explained, was to fund the conservative intelligentsia in such a way that it would not “raise questions about academic integrity.” Instead of trying to earmark a chair or dictate a faculty appointment, both of which he noted were bound to “generate fierce controversy,” he suggested that conservative donors look for like-minded faculty members whose influence could be enlarged by outside funding. In time, such a professor could administer an expanded program. But Piereson warned that it was “essential for the integrity and reputation of the programs that they be defined not by ideological points of view.” To overtly acknowledge “pre-ordained conclusions” would doom a program. Instead of saying the program was designed to “demonstrate the falsity of Marxism” or to promote “free-enterprise,” he advised that it was better to “define programs in terms of fields of study, [like the] John M. Olin Fellowships in Military History.” He wrote, “Often a program can be given a philosophical or principled identity by giving it the name of an important historical figure, such as the James Madison Program [in] American Ideals and Institutions at Princeton University.”