Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (49 page)

Besides the $60 million that Pope and his family foundation put into this ideological infrastructure, they gave more than $500,000 to state candidates and party committees in 2010 and 2012. In addition, Pope’s company, Variety Wholesalers, gave nearly $1 million more to outside groups running independent campaigns during that period. In the state of North Carolina, Pope was, as one of his former political advisers, Scott Place, put it, “
the Koch brothers lite.”

The agenda this money was behind became apparent once the Republicans won control of North Carolina’s general assembly. In a matter of months, they enacted conservative policies that private think tanks had been incubating for years. The legislature slashed taxes on corporations and the wealthy while cutting benefits and services for the middle class and the poor. It also gutted environmental programs, sharply limited women’s access to abortion, backed a constitutional ban on gay marriage, and legalized concealed guns in bars and on playgrounds and school campuses. It also erected cumbersome new bureaucratic barriers to voting. Like the poll taxes and literacy tests of the segregated past, the new hurdles, critics said, were designed to discourage poor and minority voters, who leaned Democratic. The election law expert Richard Hasen declared, “
I’ve never seen a package of what I would call suppressive voting measures like this.” The historian Dan T. Carter, who specialized in southern history at the University of South Carolina, noted that when friends around the country asked if things in North Carolina were as bad as they looked from the outside, he was forced to answer, “
No, it’s worse—a lot worse.”

Republicans claimed their new policies allowed residents to “keep more of their hard-earned money.” But according to a fact-checking analysis by the Associated Press, the working poor were in line to pay more while the wealthiest gained the most. The North Carolina Budget and Tax Center scored the changes and found that 75 percent of the savings would go to the top 5 percent of taxpayers. The legislature eliminated the earned-income tax credit for low-income workers. It also repealed North Carolina’s estate tax, a move that was projected to cost the state $300 million in its first five years. Yet the benefits of this tax break were so skewed to the wealthiest few that only twenty-three estates would have been big enough to qualify as of 2011, because the existing law already exempted the first $5.25 million of inheritance from taxation. (The Pope-funded Civitas Institute had first proposed many of these top-weighted tax cuts, with the assistance of its special adviser, Arthur Laffer, the controversial inventor of supply-side economics.)

At the same time, the legislature cut unemployment benefits so drastically that the state was no longer eligible to receive $780 million in emergency federal unemployment aid for which it would otherwise have qualified. As a result, North Carolina, which had the country’s fifth-highest unemployment rate, soon offered the most meager unemployment benefits in the country.

The state also spurned the expanded Medicaid coverage for the needy that it was eligible for at no cost under the Affordable Care Act. This show of defiance denied free health care to 500,000 uninsured low-income residents. A study by health experts at Harvard and the City University of New York projected that the legislature’s obstruction of these benefits would cost residents between 455 and 1,145 lives
a year
.

Art Pope was fond of the libertarian saying “There is no such thing as a free lunch,” and in North Carolina his budget proved him right. To make up for the projected billion-dollar-a-year shortfall created by the many new tax cuts he helped to deliver, something had to give.
So for savings, the legislators turned to the one institution that had distinguished North Carolina from many other southern states—its celebrated public education system.

The assault was systematic. They authorized vouchers for private schools while putting the public school budget in a vise and squeezing. They eliminated teachers’ assistants and reduced teacher pay from the twenty-first highest in the country to the forty-sixth. They abolished incentives for teachers to earn higher degrees and reduced funding for a successful program for at-risk preschoolers. Voters had overwhelmingly preferred to avoid these cuts by extending a temporary one-penny sales tax to sustain educational funding, but the legislators, many of whom had signed a no-tax pledge promoted by Americans for Prosperity, made the cuts anyway.

North Carolina’s esteemed state university system also took a hit. Ideological warfare infused the fight. Pope’s network had waged a long campaign to slash spending, with employees of the John William Pope Center for Higher Education Policy, another Pope-created nonprofit, accusing the university system of becoming a “niche for radicals,” describing the public funding as “a boondoggle,” and demanding that the legislature “starve the beast.” The center dug up professors’ voting records in an effort to prove political bias. Once the Republican majority took over the legislature, it quickly imposed severe cuts that were projected to cause tuition hikes, faculty layoffs, and fewer scholarships, even though the state’s constitution required that higher education be made “as free as practical” to all residents.

Bill Friday, a revered former president of the University of North Carolina, confided not long before he died in 2012 that he was afraid the changes would put higher education out of reach for many poor and middle-income families. “
What are you doing, closing the door to them?” he asked. “That’s the war that’s on. It’s against the role that government can play. I think it’s really tragic. That’s what’s made North Carolina different.”

At the same time that Pope’s network fought to cut university budgets, he offered to privately fund academic programs in subjects he favored, like Western civilization and free-market economics. A $500,000 gift that Pope made to North Carolina State University, for instance, funded lectures by conservatives. “
I’m pretty sure we would not invite Paul Krugman,” a professor who picked the speakers and was affiliated with the John Locke Foundation, acknowledged. Some faculty saw Pope’s donations as a bid to buy academic control. “
It’s sad and blatant,” said Cat Warren, an English professor at North Carolina State. Pope, she said, “succeeds in getting higher education defunded, and then uses those cutbacks as a way to increase leverage and influence over course content.”

The John Locke Foundation also sponsored the North Carolina History Project, which aimed to reorient the state’s teaching of its history by providing online lesson plans for high school teachers that downplayed the roles of social movements and government while celebrating what it called the “personal creation of wealth.” In a similar vein, Republicans in the state senate passed a bill requiring North Carolina’s high school students to study conservative principles as part of American history in order to graduate in 2015. The bill stressed the “
constitutional limitations on government power to tax and spend.” “It’s all part of Pope’s plan to build up more institutional support for his philosophy,” said Chris Fitzsimon, director of NC Policy Watch, a liberal watchdog group.

But Pope became a lightning rod as his profile grew. The NAACP began holding weekly “Moral Monday” protests in the state capital against North Carolina’s turn to the right and eventually began picketing the chain stores owned by Pope’s company, Variety Wholesalers.

Even some Republicans in the state accused Pope of going too far. Jim Goodmon, the president and CEO of Capitol Broadcasting Company, which owned the CBS and Fox television affiliates in Raleigh, said, “
I was a Republican, but I’m embarrassed to be one in North Carolina, because of Art Pope.” Goodmon had deep ties to the state’s conservative establishment. His grandfather A. J. Fletcher was among Jesse Helms’s biggest backers. But Goodmon described the Pope forces as “anti-community,” adding, “The way they’ve come to power is to say that government is bad. Their only answer is cut taxes.” He concluded, “It’s never about making things better. It’s all about tearing the other side down.”

I
nterviewed in a spare office overlooking a suburban parking lot that served as Variety Wholesalers headquarters in Raleigh, Pope dismissed those who were trying to paint him as extreme as misinformed. “If the left wing wants a whipping boy, a bogeyman, they throw out my name,” he protested. “Some things I hear about this guy Art Pope—you know I don’t like this guy Art Pope that they’re talking about. I don’t know him. If what they say were true, I wouldn’t like a lot of things about me. But they’re just not true.”

In a nearly four-hour-long, lawyerly rebuttal, he argued that conservatives like himself were the underdogs in North Carolina and that his expenditures merely represented an effort to balance the score. He said that he was driven not by “narrow corporate interest” but by abstract idealism. He described himself as “politically a conservative” and a “classical liberal, philosophically.” He acknowledged that the nonprofit groups he supported took many positions advantageous to his business, such as
opposition to minimum wage laws. In fact, critics, like Dean Debnam, a liberal North Carolina businessman, accused Pope of exhibiting “
a plantation mentality” by keeping “people working part time…He preys on the poorest of the poor, and uses it to advance the agenda of the richest of the rich,” he charged. But Pope said he didn’t take positions to enhance his bottom line. In the tradition of John Locke, he said, he just believed that society functioned best when citizens were rewarded with the wealth that their hard work produced.

Pope, who credited a summer program run by the Cato Institute for first exposing him to free-market theories, argued that the country’s growing economic inequality was not a worry because “
wealth creation and wealth destruction is constantly happening.” All Americans, he said, had a fair chance at success. Citing Michael Jordan and Mick Jagger as examples, he asked, “Why should they be deprived of that money—why is that unfair?” He noted, “I’m not envious of the wealth that Bill Gates has,” and added, “America does not have an aristocracy or a plutocracy.”

The poor, he argued, were largely victims of their own bad choices. “Really, when you look at the lowest income, most of that is just simply a factor of age and marriage. If you’re young and single—and God forbid if you’re young and a single parent, and don’t have a high school education—then your earnings will be low, and you’ll be in the bottom twenty percent.”

The constellation of nonprofit groups supported by Pope’s fortune echoed this tough-luck message. For instance, a researcher at the Civitas Institute asserted that the poor in America lived better than “the picture most liberals like to paint.” The researcher Bob Luebke cited a Heritage Foundation study showing that the poor often had shelter, a refrigerator, and cable television. “The media obsession with pervasive homelessness also appears a myth,” he declared. John Hood, a bright protégé of Pope’s who moved from the John Locke Foundation to become head of the John William Pope Foundation in 2015, stressed that “the true extent of poverty in North Carolina and around the country is woefully overestimated.” Where poverty did exist, he asserted, it largely resulted from “self-destructive behavior.”

Gene Nichol, the director of the Center on Poverty, Work, and Opportunity at the University of North Carolina School of Law, pointed out that one-third of the state’s children of color lived in poverty, meaning they started at the bottom, long before they were old enough to make choices of their own. But Pope’s network successfully pressured the university to eliminate the Center on Poverty in 2015 after Nichol criticized Republican policies.

Pope’s own experience of poverty was limited. He grew up in a wealthy household, attended a private boarding school before the University of North Carolina and the Duke School of Law, and joined his family’s discount store business, which was started by his grandfather and expanded by his father. But Pope often stressed, “I am not an heir.” He explained that his father had demanded that he and his siblings buy stakes in the family-owned business. Like Charles Koch, and many others in their donor network, Pope believed that he had advanced to the helm of the company on his own merits. Those who knew Pope confirmed that he worked extremely hard and was obsessively frugal. But he also received many advantages from his parents, including hundreds of thousands of dollars in campaign contributions.

Scott Place, who served as campaign manager during Pope’s one bid for statewide office, his unsuccessful 1992 run for lieutenant governor, recalled one transaction vividly, when Pope’s father made a donation to his campaign. “
He had his checkbook, and he was stroking the check. He said, ‘How much?’ Art says, ‘Well, I guess $60,000.’ The dad bitched. I was standing, thunderstruck. I said, ‘That’s a HUGE check!’ The father responded, ‘Well, it’s Art’s inheritance. I guess he can do whatever the hell he wants to with it.’ It wasn’t like, ‘Go get ’em, son,’ ” Place recalled. “It was more like, ‘Take the money and get out!’ ”

Before the campaign ended with Pope’s defeat, records show that Pope’s parents made uncollected “loans” to him of approximately $330,000, which, adjusted for inflation, would be more than half a million dollars today.

Place said of Pope, “He thinks that if you’re poor, you’re just not working hard enough. It’s all about free enterprise. He probably did grow his daddy’s business, and he is smart and politically shrewd. But he wasn’t just born on third base. He started out within an inch of home plate.” Place suggested, “Anybody can be politically effective if they have got almost a blank check.”

David Parker, the chair of the North Carolina Democratic Party, accused Pope of glossing over the fact that he was born privileged. “All this talk of Protestant work ethic,” he said, “but he made his money the old-fashioned way: his mother bore a son.” He added, “We’re all prisoners of Art Pope’s fantasy world.”

T
he ideological machine that Pope bankrolled in North Carolina was unusually powerful, but just one part of the multimillion-dollar system of interlocking nonprofit organizations conservatives had built in almost every state by the time Obama was reelected president. Because they were partial to federalism and suspicious of centralized power, the emphasis was natural. From the Civil War on through the civil rights movement, states’ rights had been a conservative rallying cry, particularly in the South. Historically, it had often been bound up in racial animosities, with local jurisdictions resisting federal interference. Then, during the Reagan years, the movement took on a pro-corporate cast. While conservative business leaders such as Lewis Powell and William Simon organized corporate interests to counter the liberal public interest movement nationally, conservative allies set up similar organizations at the state and local levels. As one leader of this effort, Thomas A. Roe, an anti-union construction magnate from Greenville, South Carolina, reportedly declared to a fellow trustee at the Heritage Foundation during the 1980s, “
You capture the Soviet Union—I’m going to capture the states.”