Follow the Money:

Conservatives Funneled Money
Through Non-Profits to Campaigns

Special to The Progressive Populist

With Newt Gingrich's profile once again rising in the electronic media, it's been slowly disclosed in Washington, D.C., over the last few months how the Speaker retained his gavel. His continuation as Speaker is in no small part due to the last-minute arrival of secret money into key congressional races around the country in the closing days of the 1996 campaign. Staffers for the Democratic minority on the Senate Governmental Affairs Committee investigating campaign fundraising practices believe they have sniffed out this last-minute money that allowed the Republicans to hold onto a slim, 11-seat House majority after the last general election.

A report issued by committee Democrats March 10 attempted to examine the non-profit network that moved money to 1996 Republican campaigns. Citizens for the Republic Education Fund, for instance, had the sound of an innocuous public interest group, perhaps interested in educational issues. Its non-profit, tax-exempt status would also lead the casual observer to the same conclusion. The Fund was, according to the report, part of a $3-million last-minute media blitz in 26 close House races around the country that helped hold the Congress for the Republicans.

Democrats challenging first-term Republican House members in states like Pennsylvania, Oklahoma, Louisiana and California were heavily targeted as well as incumbent House Democrats with liberal voting records. Because this money was not given directly to any political campaign organization, and was used only for television "issue advocacy" -- in the form of negative attacks against Democrats -- the donors were not required by FEC regulations to disclose their identities.

Looking into the Citizens for the Republic Education Fund leads quickly to a Washington GOP-linked consulting firm, Triad Management. Investigators have discovered that Triad ran Citizens for the Republic Education Fund and channeled large conservative donors into the Fund and a second non-profit group, Citizens for Reform. The Democratic report found that "Triad exists for the sole purpose of influencing federal elections. Triad is not a consulting business: it issues no invoices," and "charges no fees."

The Democratic staff report further found that "Neither [Citizens for Reform or Citizens for the Republic] has a staff or an office, and that both are controlled by Triad." Triad Management is in reality a far-right hardball operation, dedicated to connecting big hard-right donors with political candidates.

The president of Triad is Carolyn Malenick, who has described her organization in military terms as political "quick fire." In the past she has worked as a fundraiser for Iran-Contra figure Oliver North, among others. Videos produced by Triad have been aimed at major far-right donors to coax them to give large amounts of money in very short periods of time According to published reports, Senate Republican Whip Don Nickles (R-Okla.) has made appearances on the videos. Governmental Affairs Committee Democrats had planned to hold three days of hearings on Triad but were blocked when Republicans, according to the report, "unilaterally reversed a pledge" to allow the hearings last fall.

One large chunk of the last-minute money that went through Triad to the non-profits, $1.2 million, came from something called the Economic Education Trust. Because of the timing and the states where the money was eventually spent, investigators believe that the Trust was a conduit for Wichita, Kansas-based Koch oil money. An attempt by Democrats to examine the records of the Economic Education Trust, as well as to call Triad representatives to testify was blocked by committee Republicans.

Numerous sources and stories have linked the Kochs to the Triad network. This maze of non-profits and "consultants" likely marks one of the many avenues by which the $20-billion dollar Koch oil network, run by brothers Charles and David Koch, influences the national political agenda. The Kochs have been long-time contributors to conservative think tanks and non-profits around the country through their three Wichita-based foundations.

David Koch, executive vice-president of Koch Industries, not content with exercising clout in the Republican party, was the Libertarian Party's vice-presidential nominee in 1980 and sits on the board of the right-libertarian Cato Institute in Washington, D.C. He was also founder of Citizens for a Sound Economy, a Washington, D.C., business pressure group famous for its astro-turf campaigns (that is, campaigns designed in Washington by lawyer-lobbyists to sound and act like grass-roots campaigns, but often are run out of a telemarketer's office). C. Boyden Gray, George Bush's White House legal counsel, is the current head of CSE. Koch foundations have given CSE nearly $8 million since the late 1980s.

Some of the money from Citizens for the Republic Education Fund, around $400,000, also went into a last-minute advertising blitz for Kansas Congressman Sam Brownback, a one-term House member seeking a Senate seat in 1996. Brownback was successful in first defeating pro-choice Republican Shelia Frahm, who had been appointed to fill Robert Dole's vacant seat, and then defeating Democrat Jill Docking in the fall. Members of Pat Robertson's Christian Coalition also worked extensively on Brownback's campaign at the lower and mid-levels.

The Brownback campaign clearly benefited from Triad Management's support. The $400,000 spent during the last two weeks of his campaign through the non-profit attack ads turned a neck-and-neck race into a 10-point victory for the Republican candidate. Other, six-figure sums, which apparently originated from the Economic Education Trust, went to promote the Senate campaign of U.S. Rep. Woody Jenkins (R-La.), a far-right conservative who lost a squeaker election to Democrat Mary Landrieu. Jenkins' campaign had also been a high priority of the Christian Coalition. (The Kochs have a large oil and pipeline business in Louisiana.)

There were other smaller contributors to the two Triad-affiliated non-profits, including donors from Newt Gingrich's political action committee, GOPAC. But in terms of sheer dollars it appears that the Kochs were the biggest players in this scenario. And while their direct and indirect giving to political campaigns has had a profound influence on the electoral process, it also has gained influence within the Washington beltway on the appointive process.

Through the right-libertarian think tanks they helped start and finance, such as Cato and the Washington, D.C., Institute for Justice, run by former Reagan appointee Clint Bolick, they have made their power felt. Bolick was key last year in derailing the nomination of Bill Lann Lee to head the long-vacant civil right division of the Justice Department. Senate Judiciary committee Chairman Orin Hatch (R-Utah), who had signed off on the nomination at first, changed his mind within a few days of the start of the Bolick fax campaign against Lee. (Lee was later given a recess appointment by Bill Clinton.) A representative of the Charles Koch Foundation has a seat on the five-member board of directors of Bolick's Institute for Justice.

Craig McGrath is a journalist based in Washington, D.C.

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