It's important that everyone associated with George Mason U. suffer the stigma of the Koch Bros.' Mercatus Center

At the intersection of far-right ideological wackitude and stinking right-wing corruption, why should we be surprised to find the wife of former Texas Sen. Phil Gramm, Wendy Gramm? Our Wendy, subject of an astonishing accusation concerning her tenure as CFTC chair, "is listed as a distinguished senior scholar at George Mason University's [and the Koch brothers'] Mercatus Center."

by Ken

I don't want to keep writing about the wave of right-wing cash flooding the election any more than you want to keep reading about it. In fact, I started stockpiling new and cumulatively ever more horrifying links, which I just haven't had the heart to write about. But there's one piece I don't think we can pass over. Kate Zernike's Tuesday NYT report, "Secretive Republican Donors Are Planning Ahead," attracted a fair amount of attention, but not nearly enough, I think. It lays out the gridwork of the once-ridiculed Vast Right-Wing Conspiracy. Here's just the tip of what she reported:

A secretive network of Republican donors is heading to the Palm Springs area for a long weekend in January, but it will not be to relax after a hard-fought election — it will be to plan for the next one.

Koch Industries, the longtime underwriter of libertarian causes from the Cato Institute in Washington to the ballot initiative that would suspend California’s landmark law capping greenhouse gases, is planning a confidential meeting at the Rancho Las Palmas Resort and Spa to, as an invitation says, “develop strategies to counter the most severe threats facing our free society and outline a vision of how we can foster a renewal of American free enterprise and prosperity.” . . .

Koch Industries, a Wichita-based energy and manufacturing conglomerate run by the billionaire brothers Charles and David Koch, operates a foundation that finances political advocacy groups, but tax law protects those groups from having to disclose much about what they do and who contributes. . . .

The Koch network meets twice a year to plan and expand its efforts — as the letter says, “to review strategies for combating the multitude of public policies that threaten to destroy America as we know it.” . . .

The Kochs insist on strict confidentiality surrounding the California meetings, which are entitled “Understanding and Addressing Threats to American Free Enterprise and Prosperity.” The letter advises participants that it is closed to the public, including the news media, and admonishes them not to post updates or information about the meeting on the Web, blogs, social media or traditional media, and to “be mindful of the security and confidentiality of your meeting notes and materials.” . . .

There's an increasingly serious question as to what even the best efforts of policy-making and communication (not to be confused with what the Obama administration and congressional leaders have actually done) might accomplish against a corporate oligarchy determined not just to retake control of the country, but to assert that control to an extent without parallel in the modern American era. This is roughly the ground I covered, or re-covered, in my post last night, referencing among other sources Bill Moyers's extraordinary speech at the 40th-anniversary gala of Common Cause, including his heroic evocation of Theodore Roosevelt's exhortation:

It is not a partisan issue; it is more than a political issue; it is a great moral issue. If we condone political theft, if we do not resent the kinds of wrong and injustice that injuriously affect the whole nation, not merely our democratic form of government but our civilization itself cannot endure.

I explained at the end of last night's post that what I really wanted to talk about was some of the specific ways the oligarchy is tightening its chokehold -- "this process of right-wing moguls spending huge quantities of money on ideology for profit." The specific case I had in mind was --

the billionaire Koch brothers' funding of a right-wing think tank, the Mercatus Institute, at a public university, Virginia's George Mason. I will be expressing the sincere hope that everyone connected with the once-reputable George Mason U be tarred with the brush of the Kochs' power-mongering corruption.

I think most of us have been aware in a general way that Mercatus has in a remarkably short time emerged as the most vocal and muscular of the extreme-right-wing think tanks, a role we might until fairly recently have attributed to the Cato Institute. A lot of gaps were filled in for many of us, and whole new areas of the right-wing financial network laid open to scrutiny, in Jane Mayer's still-indispensable New Yorker "reporter at large" survey, "Covert Operations: The billionaire brothers who are waging a war against Obama," of the Wichita-based Charles Koch's empire and sphere of influence. (David Koch, who's New York-based, seems to function mostly as a front man, burnishing the family name by spreading zillions of dollars to cultural and other charitable institutions.)

To appreciate not just the importance but the brilliance of Mercatus as the Koch's policy shop, we have to go back to Mayer (the boldface emphasis added):

In the mid-eighties, the Kochs provided millions of dollars to George Mason University, in Arlington, Virginia, to set up another think tank. Now known as the Mercatus Center, it promotes itself as "the world's premier university source for market-oriented ideas—bridging the gap between academic ideas and real-world problems." Financial records show that the Koch family foundations have contributed more than thirty million dollars to George Mason, much of which has gone to the Mercatus Center, a nonprofit organization. "It's ground zero for deregulation policy in Washington," Rob Stein, the Democratic strategist, said. It is an unusual arrangement. "George Mason is a public university, and receives public funds," Stein noted. "Virginia is hosting an institution that the Kochs practically control."

The founder of the Mercatus Center is Richard Fink, formerly an economist. Fink heads Koch Industries' lobbying operation in Washington. In addition, he is the president of the Charles G. Koch Charitable Foundation, the president of the Claude R. Lambe Charitable Foundation, a director of the Fred C. and Mary R. Koch Foundation, and a director and co-founder, with David Koch, of the Americans for Prosperity Foundation.

Fink, with his many titles, has become the central nervous system of the Kochtopus. He appears to have supplanted Ed Crane, the head of the Cato Institute, as the brothers' main political lieutenant. Though David remains on the board at Cato, Charles Koch has fallen out with Crane. Associates suggested to me that Crane had been insufficiently respectful of Charles's management philosophy, which he distilled into a book called "The Science of Success," and trademarked under the name Market-Based Management, or M.B.M. In the book, Charles recommends instilling a company's corporate culture with the competitiveness of the marketplace. Koch describes M.B.M. as a "holistic system" containing "five dimensions: vision, virtue and talents, knowledge processes, decision rights and incentives." A top Cato Institute official told me that Charles "thinks he's a genius. He's the emperor, and he's convinced he's wearing clothes." Fink, by contrast, has been far more embracing of Charles's ideas. (Fink, like the Kochs, declined to be interviewed.)

At a 1995 conference for philanthropists, Fink adopted the language of economics when speaking about the Mercatus Center's purpose. He said that grant-makers should use think tanks and political-action groups to convert intellectual raw materials into policy "products."

The Wall Street Journal has called the Mercatus Center "the most important think tank you've never heard of," and noted that fourteen of the twenty-three regulations that President George W. Bush placed on a "hit list" had been suggested first by Mercatus scholars. Fink told the paper that the Kochs have "other means of fighting [their] battles," and that the Mercatus Center does not actively promote the company's private interests. But Thomas McGarity, a law professor at the University of Texas, who specializes in environmental issues, told me that "Koch has been constantly in trouble with the E.P.A., and Mercatus has constantly hammered on the agency." An environmental lawyer who has clashed with the Mercatus Center called it "a means of laundering economic aims." The lawyer explained the strategy: "You take corporate money and give it to a neutral-sounding think tank," which "hires people with pedigrees and academic degrees who put out credible-seeming studies. But they all coincide perfectly with the economic interests of their funders."

Mayer goes on to describe, as an example of the way having your own think tank can work, the successful efforts of economist-turned-Mercatus-hotshot Susan Dudley in conning the courts into overturning the EPA's 1997 move to reduce surface ozone ("a form of pollution caused, in part, by emissions from oil refineries") on the ground that the agency had "explicitly disregarded" the "possible health benefits of ozone." ("The EPA," Mayer says Dudley argued, "had not taken into account that smog-free skies would result in more cases of skin cancer. She projected that if pollution were controlled it would cause up to eleven thousand additional cases of skin cancer each year.")

Now, given the heavy concentration of energy businesses in Koch Industries, it's not surprising that Charles Koch (right) assigns a high priority to preventing any more meaningful environmental regulation and dismantling as much as possible of what exists. As Mayer also pointed out, though, energy isn't the only area of environmental degradation that's big business for Koch Industries. For example, its 2005 acquisition of Georgia-Pacific made it a leading producer of formaldehyde.

Koch’s corporate and political roles, however, may pose conflicts of interest. For example, at the same time that David Koch has been casting himself as a champion in the fight against cancer, Koch Industries has been lobbying to prevent the E.P.A. from classifying formaldehyde, which the company produces in great quantities, as a “known carcinogen” in humans.

Scientists have long known that formaldehyde causes cancer in rats, and several major scientific studies have concluded that formaldehyde causes cancer in human beings—including one published last year by the National Cancer Institute, on whose advisory board Koch sits. The study tracked twenty-five thousand patients for an average of forty years; subjects exposed to higher amounts of formaldehyde had significantly higher rates of leukemia. These results helped lead an expert panel within the National Institutes of Health to conclude that formaldehyde should be categorized as a known carcinogen, and be strictly controlled by the government. Corporations have resisted regulations on formaldehyde for decades, however, and Koch Industries has been a large funder of members of Congress who have stymied the E.P.A., requiring it to defer new regulations until more studies are completed. . . .

David Koch did not recuse himself from the National Cancer Advisory Board, or divest himself of company stock, while his company was directly lobbying the government to keep formaldehyde on the market. (A board spokesperson said that the issue of formaldehyde had not come up.)

James Huff, an associate director at the National Institute for Environmental Health Sciences, a division of the N.I.H., told me that it was “disgusting” for Koch to be serving on the National Cancer Advisory Board: “It’s just not good for public health. Vested interests should not be on the board.” He went on, “Those boards are very important. They’re very influential as to whether N.C.I. goes into formaldehyde or not. Billions of dollars are involved in formaldehyde.”

Harold Varmus, the director of the National Cancer Institute, knows David Koch from Memorial Sloan-Kettering, which he used to run. He said that, at Sloan-Kettering, “a lot of people who gave to us had large business interests. The one thing we wouldn’t tolerate in our board members is tobacco.” When told of Koch Industries’ stance on formaldehyde, Varmus said that he was “surprised.” . . .

There seems no end to the nasty businesses Koch Inidustries is heavily invested in, businesses that turn out to reap huge financial rewards for the humongous amounts of money its proprietor invests in the "charitable" side of his operations. Our friend A Siegel has gathered some relevant links on his Get Energy Smart Now blog. A post called "unKnown Koch Kourage" (lots of links onsite) begins:

Koch Industries … one of the wealthiest businesses in the world, privately owned by a far-right libertarian klan who are spending furiously to undermine the very concept of representative democracy. The Koch brothers have their hands (filthy) dirty in funding global warming denial efforts (with Koch funding skewing even Smithsonian museum halls into climate skeptic deceit), attacks on science that shows Koch businesses threatening Americans’ health, Koch efforts to dupe hundreds of thousands (millions) of outraged Americans into anti-Obama/anti-Democratic mania with funding of astro-turf groups like Americans For Prosperity, and have been funding (heavily) campaign efforts to even further open the floodgates to profiting off polluting the air we breathe and water we drink.

Koch Industries is (and the Koch Brothers are) one of the major funders behind Proposition 23 in California, which would seek to kill off California’s innovative approach to tackle climate change mitigation imperatives and opportunities. The all-out attack on Californians has created a serious backlash -- with investors, newspapers, politicians, and myriads of citizens reacting with strong outrage to opposed Prop 23. (Even to the extent that the fossil-foolish funders of Proposition 26, which should also be voted down, are trying to distance themselves from Proposition 23.) . . .

Americans for Prosperity, as Jane Mayer reported, "has worked closely with the Tea Party since the movement’s inception." Although the Kochs have tried to deny that they're behind AFP, they're just kidding; the financial links have been well established, and Charles Koch doesn't give that kind of money to organizations he doesn't control. By all evidence, AFP is now the lobbying muscle of Koch's political organization -- having been created for that purpose, it appears, to take over from Citizens for a Sound Economy (which, Jane Mayer reported, "was accused of illegitimately throwing its weight behind Bush’s reëlection" in 2004) in much the way that the Mercatus Center think tank was spawned to take over the Koch-think role from the no-longer-favored Cato Institute.

Which brings us back to Mercatus, and a fairly eye-popping story that appeared in yesterday's Washington Post. David S. Hilzenrath reported that one of the two administrative law judges who presides over investor complaints at the Commodity Futures Trading Commission (CFTC), upon his recent retirement, made a request so extraordinary that, assuming it's all true (and I haven't seen any contradiction), still has my head spinning. He asked that the cases he still had pending await [sorry, I originally wrote "not await," turning the meaning upside-down!] the appointment of a new administrative judge rather than being turned over to the other current one.

In a notice recently released by the CFTC, Painter said Judge Bruce Levine, his longtime colleague, had a secret agreement with a former Republican chairwoman of the agency to stand in the way of investors filing complaints with the agency.

"On Judge Levine's first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant's favor," Painter wrote. "A review of his rulings will confirm that he fulfilled his vow," Painter wrote.

Painter continued: "Judge Levine, in the cynical guise of enforcing the rules, forces pro se complainants to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case."

The CFTC oversees trading of the nation's most important commodities, including oil, gold and cotton. The agency's administrative law judges handle cases in which investors allege that trading professionals or financial firms violated the rules.

I imagine the mention of Wendy Gramm's name got the attention of lots of DWT readers. Yes, we're talking about that Wendy Gramm, the wife of former Texas Sen. Phil Gramm -- two of the most ideologically whacked-out and corrupt people to infest the federal government. But it gets even more interesting.

Wendy Gramm is listed as a distinguished senior scholar at George Mason University's Mercatus Center, but a spokeswoman for the center, Catherine Behan, said Gramm is not active there.

Gramm was head of the CFTC just before president Bill Clinton took office. She has been criticized by Democrats for helping firms such as Goldman Sachs and Enron gain influence over the commodity markets. After leaving the CFTC, she joined Enron's board.

Ohmygosh, we even get an Enron linkage!

For the record:

[Wendy] Gramm could not be reached for comment. Her husband, former senator Phil Gramm (R-Tex.), said he would pass along a message but added, "I doubt she's going to want to get involved in this."

Sounds like an ace prediction, senator. But don't you think she's now kind of "involved in this"?

Now I have every reason to believe that there are many fine people at George Mason University doing serious work in the areas of education and all the other things a major university does. It hardly seems fair to tar them all with the brush of Kochian cooptation. Unfortunately for them, however, that's just what their university leadership did to them when it not only took the money but allowed its name -- the name of a public university, remember -- to be pasted onto a think tank whose orientation is entirely ideological and political.

Well, maybe not entirely ideological and political. As I think we've seen, where the Kochs are concerned, ideology is big business. Really big business.

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