Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (17 page)

A variety of major corporations eagerly joined Olin and other conservative foundations in footing the bills.
A study by the nonpartisan Center for Public Integrity found that between 2008 and 2012 close to 185 federal judges attended judicial seminars sponsored by conservative interests, several of which had cases before the courts. The lead underwriters were the Charles Koch Foundation, the Searle Freedom Trust, ExxonMobil, Shell Oil, the pharmaceutical giant Pfizer, and State Farm, the insurance company. Topics ranged from “The Moral Foundations of Capitalism” to “Terrorism, Climate, and Central Planning: Challenges to Liberty and the Rule of Law.”

Simultaneously, the Olin Foundation provided crucial start-up funds for the
Federalist Society, a powerful organization for conservative law students founded in 1982. With $5.5 million from the Olin Foundation, as well as large donations from foundations tied to Scaife, the Kochs, and other conservative legacies, the Federalist Society grew from a pipe dream shared by three ragtag law students into a powerful professional network of forty-two thousand right-leaning lawyers, with 150 law school campus chapters and about seventy-five lawyers’ groups nationally.
All of the conservative justices on the Supreme Court are members, as are the former vice president Dick Cheney, the former attorneys general Edwin Meese and John Ashcroft, and numerous members of the federal bench. Its executive director, Eugene B. Meyer, son of a founding editor of
National Review
, acknowledged that without Olin funding “
it possibly wouldn’t exist at all.” Looking back, the Olin Foundation’s staff described it as “
one of the best investments” the foundation ever made.

J
ohn M. Olin died in 1982 at the age of eighty-nine, but after his death his foundation became even more robust. He left it about $50 million in his estate and another $50 million in a trust for his widow, which came to the foundation in 1993 after she died. The funds were well invested, growing to some $370 million in all before the foundation spent it down and closed its doors in 2005. Olin had directed his foundation to shut down during the lifetime of the trustees for fear that it would fall into the hands of liberals, as he believed the Ford Foundation had tragically done.

William Simon remained the head of the Olin Foundation until his own death in 2000. He also continued to amass a stupendous fortune of his own during the 1980s, using controversial financial maneuvers. By the late 1980s,
Forbes
estimated Simon’s wealth at $300 million.

Around the same time, the Olin Foundation made
a key $25,000 investment of its own in an unknown writer named Charles Murray, funding a grant at the Manhattan Institute that would support a book he was writing that attacked liberal welfare policies. The backstory to
Losing Ground
, Murray’s book, was a primer on the growing and interlocking influence of conservative nonprofits. At thirty-nine, Murray was an unknown academic, toiling thanklessly at a Washington Beltway firm evaluating U.S. government social programs. Frustrated and just scraping by, he was about to try writing a thriller novel in order to make ends meet when his application for a job at the Heritage Foundation caught the eye of the conservative philanthropy world. Soon, he was the beneficiary of its growing network. Heritage placed an antiwelfare piece by Murray on the op-ed page of
The Wall Street Journal
. This sparked a grant from the Olin Foundation that enabled him to work full-time on what became his pathbreaking 1984 book,
Losing Ground
, even though he hadn’t previously considered turning his research into a book. “
It was a classic case of philanthropic entrepreneurship,” Murray says. The hidden force behind Murray was Joyce, the Olin Foundation’s enfant terrible. “Mike Joyce was one of the most influential obscure people of the last century,” says Murray.

Losing Ground
, which was written in a tone of sorrow rather than anger, blamed government programs for creating a culture of dependence among the poor.
Critics said it overlooked macroeconomic issues over which the poor had no control, and academics and journalists were split, with several challenging Murray’s scholarship. Nonetheless, with ample funding from Olin and other conservative foundations, Murray succeeded in shifting the debate over America’s poor from society’s shortcomings to their own.

Despite Reagan’s professed antipathy toward big government, his administration steered cautiously away from Murray’s controversial libertarianism, preferring to criticize welfare cheaters rather than the whole idea of government-run antipoverty programs. But to the dismay of liberals, Bill Clinton, a “New Democrat,” later embraced his ideas, calling Murray’s analysis “essentially right” and incorporating many of his prescriptions, including work requirements and the end to aid as an entitlement, in his 1996 welfare reform bill. “
It took ten years,” Murray has said, “for
Losing Ground
to go from being controversial to conventional wisdom.”

The Olin Foundation also backed what came to be known as the Collegiate Network, privately financing a string of right-wing newspapers on America’s college campuses.
Among them was
The Dartmouth Review
, which infamously published an editorial in Ebonics proclaiming, “Now we be comin’ to Dartmut’ and be up over our ’fros in studies, but we still be not graduatin’ Phi Beta Kappa.” The paper hosted a feast of lobster and champagne to mock a student fast against global hunger, sledgehammered shantytowns erected by students protesting apartheid in South Africa, and published a transcript of a secretly taped meeting of students belonging to Dartmouth’s gay student association.
The Dartmouth Review
became an incubator for right-wing media figures like D’Souza and the future conservative radio host Laura Ingraham. Its counterpart at Vassar, meanwhile, gave starts in journalism to the
ABC correspondent Jonathan Karl and Marc Thiessen, an online columnist at
The Washington Post
best known for his defense of the Bush administration’s use of torture.

A
s the Olin Foundation spent itself out of existence, Michael Joyce jumped to a new and far more powerful private foundation, started by another conservative family. In 1985, a corporate merger in Milwaukee created a spectacular windfall, boosting a previously sleepy local charity, the Lynde and Harry Bradley Foundation, overnight into a nonprofit juggernaut. Its assets rocketed from $14 million to over $290 million, making it one of the twenty largest foundations in the country. Swimming in cash, the foundation’s small, unpaid staff, which had mostly focused on conventional local do-gooding until then, sought out Joyce, telling him, “
We’ve got money, and we want to do what you did at Olin. We want to become Olin West.” Almost on the spot, Joyce moved to Milwaukee to run the Bradley Foundation himself. He left Piereson behind to cope with Simon’s famously short temper and the twenty-year plan to spend the Olin Foundation out of business.

At the Bradley Foundation, Joyce had a freer hand. “He basically invented the field of modern conservative philanthropy,” according to Piereson.
During the next fifteen years, the Bradley Foundation would give away $280 million to his favorite conservative causes. It was small in comparison with older research foundations like the Ford Foundation, but unlike Ford, under Joyce’s direction Bradley regarded itself as a righteous combatant in an ideological war, giving it a single-minded focus.
At least two-thirds of its grants, according to one analysis, financed conservative intellectual activity. It paid for some six hundred graduate and postgraduate fellowships, right-wing think tanks, conservative journals, activists fighting Communism abroad, and its own publishing house, Encounter Books.
Continuing the strategic emphasis on prestigious schools, the foundation gave both Harvard and Yale $5.5 million during its first decade under Joyce’s management. It was an activist force on the secondary-school level, too. The Bradley Foundation virtually drove the early national “school choice” movement, waging an all-out assault on teachers’ unions and traditional public schools. In an effort to “wean” Americans from government, the foundation militated for parents to be able to use public funds to send their children to private and parochial schools.

When Joyce took over the Bradley Foundation, he continued to fund many of the same academic organizations he had at Olin, including half of the same colleges and universities. “
Typically, it was not just the same university but the same department, and in some cases, the same scholar,” Bruce Murphy wrote in
Milwaukee Magazine
, charging that this led to a kind of “intellectual cronyism.” The anointed scholars were good ideological warriors but “rarely great scholars,” he wrote. For instance, Joyce stuck with Murray in the face of growing controversy over his 1994 book,
The Bell Curve
, which correlated race and low IQ scores to argue that blacks were less likely than whites to join the “cognitive elite,” and was loudly and convincingly discredited. The Manhattan Institute fired Murray over the controversial project. “They didn’t want the grief,” says Murray. But Joyce reportedly kept an estimated $1 million in grants flowing to Murray, who decamped to the American Enterprise Institute. “I knew from Mike Joyce my fellowship was portable,” Murray says. But the controversy stirred by the book clouded the Bradley Foundation’s reputation. Joyce, who was accused of racism, said he received death threats. He felt so threatened he demanded enhanced security. The book, he acknowledged, left “an indelible imprint on us.”

Joyce stepped down from Bradley in 2001 amid rumors of alcoholism and erratic and self-destructive behavior. “Demons were rumored,” recalls a friend. According to one well-informed source, Joyce’s drinking, which had escalated from three-beer lunches to complete benders, reached a crisis when he presided as the master of ceremonies at a formal Washington event in a state of scandalous, public inebriation. Afterward, the Bradley Foundation’s board gave Joyce the choice of going into a rehab program or resigning. Realizing he had lost the board’s respect, he resigned. After that, the few remaining years of his life were a lonely, powerless downward spiral.

Nonetheless, Joyce’s achievements transcended his personal problems. When he retired, Joyce was showered with accolades from the Right.
National Review
described him as “
the chief operating officer of the conservative movement.” It added, “Wherever you looked in the battle of ideas, a light dusting would have turned up his fingerprints.” The tribute concluded, “Over the period of his Bradley service, it’s difficult to recall a single, serious thrust against incumbent liberalism that did not begin or end with Mike Joyce.”

What received no attention, however, was that the small-government conservatism that the Bradley Foundation promoted was fueled by federal funds. The Bradley Foundation very deliberately cast itself as a foe of big government. In 1999, Joyce wrote a confidential memo to the foundation’s board arguing that to win, conservatives needed to “
package for public consumption…dramatic stories” depicting citizens as “plucky Davids fighting gallantly against the massive, statist, bureaucratic Goliath.” But the foundation owed much of its existence to that Goliath—in the form of taxpayer-funded defense spending.

The event that multiplied the Bradley Foundation’s assets by a factor of twenty almost overnight, transforming it into a major political force, was the 1985 business takeover in which Rockwell International, then America’s largest defense contractor, bought the Allen-Bradley company, a Milwaukee electronics manufacturer, for $1.65 billion in cash.
The deal created an instant windfall for the Bradley family’s private foundation, which held a stake in the company. Its assets leaped from $14 million to some $290 million.

When it bought the Allen-Bradley company, two-thirds of Rockwell’s revenues, and half of its profits, came from U.S. government contracts. Rockwell had become, in fact, a poster child for wasteful government spending. The
Los Angeles Times
called it a “
symbol of a military industrial complex gone berserk.” Rockwell’s coffers were bulging with cash, but its reputation had taken a hit from its role as the main contractor producing the B-1 bomber, an aircraft so maligned it earned the nickname the Flying Edsel. President Carter had canceled the program as a waste of money, but after
Rockwell waged a strenuous lobbying campaign, President Reagan had brought it back to life. As part of his administration’s huge defense buildup, Reagan also authorized the manufacture of the MX missile system, another multibillion-dollar defense program that was widely criticized as unnecessary, for which Rockwell was the largest contractor. Thus, by 1984, thanks to profligate government spending, Rockwell had one of the strongest balance sheets in the business, with $1.3 billion in cash piling up on its ledgers. Business analysts warned that the company needed to diversify in order to become less reliant on federal contracts. It was this dubious set of circumstances that sent the company on the shopping spree that ended in its purchase of Allen-Bradley and the phenomenal enrichment of the Bradley Foundation.

In its early days especially, Allen-Bradley had relied heavily on government defense contracts, too, to pull it through. Founded in 1903 by two enterprising high school dropouts, brothers Lynde and Harry Bradley, along with investor Stanton Allen, it grew from making rheostats to many other kinds of industrial controls, particularly for the radio, machine tool, and auto industries. The business had “
teetered on the edge of solvency” until the United States entered World War I, according to a history by the Milwaukee historian John Gurda that was commissioned and published by the Bradley Foundation. But thanks to government defense contracts, which accounted for 70 percent of the company’s business, orders increased tenfold over six years, and the company was, according to Gurda, “launched.” World War II proved even more of a boon. Gurda describes its impact on the company as “staggering.” By 1944, government war work accounted for nearly 80 percent of the company’s orders. Its business volume more than tripled during World War II.