We Berate, You Deride – A look at Steven J. Milloy's current affiliates and backers

Posted on November 28, 2007


money burning earthOn Monday we looked at the “first ever” survey of IPCC scientists and concluded that not only was it useless as statistics and science, but that it only served as anti-global heating propaganda. Yesterday we looked at the people and organizations around Steven J. Milloy of DemandDebate.com and JunkScience.com and we concluded that the work of both Mr. Milloy and his associates are draped under a pall of suspicion and doubt. Today, in the final part of this series, I look at the individuals and organizations who financially support Mr. Milloy’s work and make him such an effective conservative soldier in the culture wars.

When I started looking into DemandDebate.com’s financial sponsors, I was unable to determine who they really are. There’s no board of directors, no staff listed, not even a phone number and address. Not even a “WhoIs” query finds DemandDebate.com’s patrons because Mr. Milloy anonymized his registration. Initially, I didn’t even realize that Mr. Milloy was associated with DemandDebate.com. It’s only when you look at the site’s publications (like the discredited IPCC survey) that you discover that Steven J. Milloy is the executive director of DemandDebate.com. However, in the process of hunting for, and failing to discover, who exactly is funding DemandDebate.com, I did discover an amazing web of patronage that weaves back and forth through Mr. Milloy’s past and present in fascinating ways.

Mr. Milloy’s JunkScience.com website is a black hole when it comes to who supports it. Officially it’s sponsored by Mr. Milloy’s Citizens for the Integrity of Science (CFIS), a group that a) doesn’t officially make enough money (<$25,000) to require it to reveal its backers and b) isn’t a non-profit that has to file public IRS Form 990s. This effectively keeps JunkScience.com’s monetary benefactors off the public radar. Since at least one Free Enterprise Education Institute (FEEI) document is actually housed on the JunkScience.com website, it is possible that the FEEI is the source of CFIS’ money, but there’s no way to know with the information available. However, we do know that Dr. Michael Gough of the Cato Institute is listed as the executive director of the CFIS. Dr. Gough was a Director of The Advancement of Sound Science Coalition (TASSC), the discredited and defunct organization that Mr. Milloy ran out of his house for years and that I discussed in detail yesterday. Dr. Gough is still associated with the Cato Institute as an adjunct scholar and worked with Mr. Milloy while Milloy was himself an adjunct scholar of the Cato Institute.

While there’s a strong likelihood that JunkScience.com and DemandDebate.com are funded by some other individual(s) or organization(s), there’s always a chance that Mr. Milloy himself is the direct backer of both websites. Based on his various connections to foundations and securities, he certainly makes enough money to back both sites himself.

Mr. Milloy is one of the directors of the Free Enterprise Education Institute, along with Thomas J. Borelli and Deneen Moore Borelli. The FEEI sponsors the website CSRWatch/SRIWatch, a site devoted to opposing the corporate social responsibility movement as being too economically costly, and the Free Enterpriser online publication. According to the FEEI’s 2005 IRS Form 990, their total operating expenses over several years equaled approximately $477,000, of which $355,000 was paid to “Steven J. Milloy” of Potomac, Maryland for consulting services. The next highest expense for FEEI was for “website expenses,” presumably for CSRWatch/SRIWatch. In addition, Mr. and Mrs. Borelli are both associated with National Center for Public Policy Research, Mr. Borelli as a senior fellow for the Center in general and Mrs. Borelli as a senior fellow for the Center’s Project 21. Mr. Borelli used to work as Philip Morris’ director of scientific affairs and Mrs. Borelli used to be his secretary at Philip Morris. In addition, Mr. Borelli was involved with TASSC while he worked at Philip Morris. While at Philip Morris, Mr. Borelli received and acted upon letters like this one from the Competitive Enterprise Institute (CEI):

This dichotomy [between public panic over toxins and chemicals vs. public acceptance of food risks] suggests a strategy for using our general acceptance of foods as a means of deflating fears of chemicals. At the same time, it might be used to deflate public trust of government risk assessment….

Bottles of CEI’s “Vino Veritas-Freedom of Speech Wine” were prepared and distributed, carrying on their labels a statement that, despite its validity, is illegal under [Bureau of Alcohol, Tobacco, and Firearms, BATF] regulations: “There is significant evidence that moderate consumption of alcoholic beverages may reduce the risk of heart disease.”

CEI’s position is that BATF policy prevents consumers from receiving truthful, useful information. BATF’s policy is illogical from the standpoint of public health, and illegal from the standpoint of the First Amendment.

Mr. Milloy is presently an adjunct scholar for the CEI.

While all of the FEEI’s financial backers are not available from the IRS Form 990, we know that the FEEI received $71,000 in 2005 – of which between $45,000 and $70,000 came from ExxonMobil, according to ExxonSecrets.org research into ExxonMobil’s Form 990. And we know that the Claude R. Lambe Foundation gave $30,000 to FEEI in 2004. The Claude R. Lambe Foundation is one of the three Koch family charitable foundations that also fund the Cato Institute and Freedomworks among others (including, not coincidentally, many of the other organizations we’ll be discussing here). The Claude R. Lambe Foundation also generously funds the Reason Foundation (mentioned both yesterday and below), the Competitive Enterprise Institute, the Property and Environment Research Center (discussed in more detail below), and the National Center for Public Policy Research, where Mr. and Mrs. Borelli are both senior fellows. Another donor to the National Center for Public Policy Research is the Carthage Foundation, part of the Scaife family foundations (some of the grants of the Sarah Scaife Foundation are covered below), and it granted $50,000 in 2006.

Mr. Milloy and Mr. Borelli (and Mrs. Borelli too, via her husband) have worked together and in parallel since at least 1993, manipulating science to serve their ideological and political ends. During that time they’ve been funded by Philip Morris, Exxon Mobile, and some of the largest conservative foundations in the United States.

But while they may not have worked alongside each other for much of that period, they do now: Mr. Milloy and Mr. Borelli are not only co-directors of the FEEI, but they’re both advisers for their politically conservative mutual fund, the Free Enterprise Action Fund (FEAFund).

As advisers to the FEAFund, Mr. Milloy and Mr. Borelli split a 1.25% commission. According to the FEAFund’s annual report for 2006, the commission was just over $75,000. While this is a significant amount of money, it’s in addition to the $355,000 Mr. Milloy earned via FEEI and to the estimated $130,000 earned annually by the law and business consulting firm “Steven J. Milloy Inc.” (data available from Manta.com). When combined, Mr. Milloy’s approximately $500,000 income would be more than sufficient for him to “self-fund” both JunkScience.com, DemandDebate.com, and all his other web projects out of his own personal wealth. Whether he actually does so is an open question.

As mentioned above, Mr. Milloy earned a hefty “consulting fee” from CFIS that was largely paid by ExxonMobil. Unfortunately, I haven’t been able to dig deeper into “Steven J. Milloy Inc.” to find out whom Mr. Milloy’s legal and consulting clients are. At least, not yet. But because it’s federal law that the identities of a mutual fund’s principle investors are public information, and because I hadn’t ever seen these investors detailed during my research, I chose totrack down the main sponsors of Mr. Milloy’s FEAFund. Their backing is what enables Mr. Milloy to earn an advisory commission on the FEAFund’s assets, and as such they qualify as indirect backers of Mr. Milloy’s efforts via JunkScience.com and DemandDebate.com.

As of April 1, 2007, SEC documents show that there were eight investors who held more than 5% of the Free Enterprise Action Fund, of which seven held 9% or greater. These seven are William Dunn (19%), Arthur Dantchik (10%), Thomas L. Phillips (10%), Robert A. Levy (10%), the Claws Foundation (9%), The Randolph Foundation (9%), and Donors Capitol Fund (9%). These seven investors control a combined total of 76% of the total assets of the fund.

The largest shareholder, William Dunn of Stuart, Florida, is the director of Dunn Capitol Management and the founder of Dunn’s Foundation for the Advancement of Right Thinking. William A. Dunn of Stuart, Florida is also a director of the Competitive Enterprise Institute. In addition, he is a Director and a member of the Board of Trustees for the Reason Foundation and a Director of the Property and Environment Research Center (PERC). If you’ll recall from yesterday’s post, Mr. Milloy’s associate Kenneth P. Green (currently of the American Enterprise Institute) used to work for the Reason Foundation and Mr. Milloy himself works with the Competitive Enterprise Institute.

Dunn’s Foundation for the Advancement of Right Thinking gave away over $3 million in grants in 2004 alone, with much of that money going to organizations associated in some way with Mr. Milloy or people he knows: $445,000 to the CEI, $370,000 to the Institute for Justice (see Arthur Dantchik below), $370,000 to PERC, $308,000 to the Reason Foundation, $185,000 to the Cato Institute, and $25,000 to the AEI. Some of the other backers for both the CEI, PERC, and Reason Foundation have been the Charles G. Koch and the David H. Koch Charitable Foundations. The Charles G. Koch foundation funds the CEI and PERC to the tune of almost $60,000 and $15,000 respectively. The David H. Koch foundation granted $315,000 to the CEI between 1995 and 2001 and over $1.5 million to the Reason Foundation between 1986 and 2001.

The next largest shareholder in the FEAFund is Arthur Dantchik of Bela Cynwyd, Pennsylvania. Mr. Dantchik is one of the founders of the Susquehanna Investment Group and is a Director for the Institute for Justice. He works with fellow FEAFund shareholder and Cato Institute director/senior fellow Robert A. Levy (see below) at the aforementioned Institute for Justice. In addition, he is on the board of directors for another FEAFund shareholder, the Claws Foundation. According to Claws Foundation’s 2006 IRS Form 990-PF, one of Mr. Dantchik’s fellow Claws Foundation directors is a co-founder of the Susquehanna Investment Group and director of the Cato Institute, Jeffrey Yass. The other director of the Claws Foundation is Alan P. Dye, a director of Freedom House and legal counsel to the Ron Paul for President campaign. The Claws Foundation itself is not a political organization – it exists largely to fund medical research.

Since 1999, Mr. Dantchik has given over $263,000 to conservative causes, including approximately $22,000 to 2004 congressional candidates outside of his own state of Pennsylvania. Mr. Dantchik’s Institute for Justice has received a total of $265,000 in donations from the Charles G. Koch Charitable Foundation from 1986 through 2005, another $1.35 million from the David H. Koch Charitable Foundation between 1995 and 2001, and over $1.1 million from the Sarah Scaife Foundation between 1992 and 2005. The Institute for Justice also received over $2 million from The Lynde and Harry Bradley Foundation between 1992 and 2005, a massive conservative foundation that has also given extensively to the AIE (over $17 million between 1987 and 2005), the National Center for Policy Analysis (nearly $1.5 million), the Reason Foundation (nearly $1 million), the Cato Institute (about $860,000), the CEI (about $770,000), PERC (about $600,000), and the Thomas L. Phillips’ Philips Foundation (about $560,000), all between the mid 1980s and 2005.

Thomas L. Phillips, creator of the Thomas L. Phillips Revocable Trust of McLean, Virginia, is another principle investor. Mr. Phillips has donated some money to local McLean, VA political races and is the CEO of Phillips International, the parent company to the Phillips Foundation, Eagle Publishing, and Healthy Directions LLC (formerly Phillips Health). The Phillips Foundation is a non-profit foundation that offers journalism fellowships for journalists “who share the Foundation’s mission to advance constitutional principles, a democratic society and a vibrant free enterprise system,” with special fellowships for writing on the environment from a free-market perspective. Most of the Phillips Foundation trustees are associated with Phillips International in some way. Thomas Phillips is obvious, but the president of conservative uber-publisher Regnery Publishing, Alfred S Regnery, is another trustee, as is Eagle Publishing director Thomas A. Fuentes. Eagle Publishing is the parent company for Regnery Publishing, the publisher of the “Politically Incorrect Guides” and books like Unfit for Command and Men in Black. Eagle Publishing also publishes the Evans-Novak Political Report, conservative “news” source Human Events (which counts Ann Coulter as the legal affairs editor and Ms. Coulter, Newt Gingrich, Pat Buchanan, Robert Novak, Sen. James Imhoffe, Rush Limbaugh, Phyllis Schlafly, Michelle Malkin, Bill O’Reilly, and other conservative luminaries as commentators), and runs the Conservative Book Club. In addition, Mr. Phillips has given significant support to the National Conservative Campaign Fund (NCCF), a group whose directors and advisory board are composed of Phillips and most of the rest of the leaders of the Phillips Foundation. Mr. Phillips’ connections at the NCCF are good enough to have had Vice President Dick Cheney to come over for an NCCF reception at the Phillips’ home.

Mr. Phillips has donated over $124,000 in support of conservative causes and elections since 1996, and his National Conservative Campaign Fund has given approximately $532,000 to Republican candidates since the 2000 election cycle (Source: Opensecrets.org). In 2006, the Phillips Foundation raised $68,000 from Phillips International, $10,000 from Foundation trustee Robert Novak, and $5,000 from the Randolph Foundation, another significant investor in the Mr. Milloy’s FEAFund, and it has also received over $107,000 from the Charles G. Koch Charitable Foundation from 2002 to 2005.

As I mentioned above, the Randolph Foundation is another significant investor in Mr. Milloy’s FEAFund. Randolph Foundation trustee James Q. Wilson is also Chairman of the AEI’s Council of Academic Advisers. The Randolph Foundation is a relatively new conservative foundation, so there’s not a lot of information on them available, but the 2005 Form 990 shows that the Foundation is a significant donor to the AEI ($50,000) and the CEI ($18,000) and, as mentioned above, a minor donor to the Phillips Foundation.

And while we’re on the topic of the AEI, we should probably point out that another major conservative fund, the Sarah Scaife Foundation, gave the AEI $575,000 in 2006, along with $60,000 for the Cato Institute, $350,000 for the CEI, $125,000 for the National Center for Policy Analysis (where Mr. Milloy’s associate and AEI “briber” Ken Green is an environment expert), and another $125,000 to the Reason Foundation.

The second to last of the major investors is Robert A. Levy LLC, a business founded of Silver Spring Maryland. Robert A. Levy, formerly of Silver Spring and presently residing in Florida, is the Senior Fellow in Constitutional Studies and a member of the Board of Directors at the Cato Institute. Mr. Levy gave Congressional testimony regarding the global tobacco settlement, specifically suggesting that the settlement was “a shameful document, extorted by public officials who have perverted the rule of law to tap the deep pockets of a feckless and friendless industry.” Given that Mr. Levy still works for the Cato Institute with Dr. Michael Gough, and Dr. Gough is associated with Mr. Milloy through CFIS, it’s not unreasonable that Mr. Levy would be in a position to become a major shareholder in the FEAFund.

The last major investor is Donors Capital Fund (DCFund), a large fund associated with Donors Trust, a group that professes to be “the sole donor-advised plan dedicated to promoting a free society and serving donors who serve that purpose.” Several of the directors of DCFund have connections to groups that are related to Mr. Milloy directly or through other avenues. For example, two of the directors are associated with the American Enterprise Institute, namely AEI’s President, Christopher DeMuth, and Steven F. Hayward, the F.K Weyerhaeuser Fellow in Law and Economics. DCFund co-founder and Executive Director Whitney L. Ball once served as the Director of Development for the Cato Institute, is presently associated with The Philanthropy Roundtable and, via that association is also connected to Philanthropy Roundtable Vice-Chairman and Randolph Foundation director Heather R. Higgins. Director Walter H. Mellor is the co-founder and President of the Institute for Justice, the same organization that fellow FEAFund principle investor Arthur Dantchik is a director of. The President of Donors Trust, Kimberly O. Dennis, is also the Executive Director of the Searle Freedom Trust, is Secretary for the Philanthropy Roundtable, and is a Director of PERC alongside fellow FEAFund principle investor William Dunn.

In addition to all the personal connections between the various investors and the DCFund, the DCFund has also granted a total of $23,000 to the AEI, $44,000 to the Cato Institute, $36,000 to the Reason Foundation, and $12,000 each to the CEI and Institute for Justice in 2006 alone (from the 2006 Form 990).

These connections are what I could find via the various foundations’ websites and public FEC, SEC, and IRS documents. However, over the years there have been many more connections between Mr. Milloy and various corporations, conservative individuals, and conservative foundations. Given Mr. Milloy’s history of working for businesses who want to discredit profit-suppressing scientific data and his connections throughout the entire conservative money machine, it’s probably reasonable to guess that his financial backers for any particular project are the groups or individuals with the most to lose – ExxonMobil and Shell Oil vs. global heating, Philip Morris vs. second-hand tobacco smoke, Monsanto et al vs. Horizon Organic, etc.

Mr. Milloy’s connections to the tobacco lawsuits in the 1990s as an official supplier of deceit and “junk science” casts a long shadow over his credibility, but he could have escaped that shadow by now if he had ever chosen to do so. Instead, Mr. Milloy continues to associate with purveyors of scientific propaganda and disinformation such as Kenneth Green of the AEI, Thomas and Deneen Borelli of the National Center for Public Policy Research, Michael Gough of the Cato Institute, and both the Competitive Enterprise Institute and Fox News in toto. In addition, via what little we’ve been able to glean about who funds Mr. Milloy’s various websites and institutes, it’s obvious that he’s continued a pattern of working for corporations (and their direct representatives) who have a vested interest in manipulating and distorting science to their particular ends. As such, even if DemandDebate.com’s survey of the IPCC “scientific consensus” were scientific, Mr. Milloy’s history and associations make him a dubious source for anything resembling real science, his publication of the ironically-titled JunkScience.com notwithstanding.

It’s important to understand that Mr. Milloy’s connections with the AEI, CEI, Cato Institute, Reason Foundation, and through them to the Randolph Foundation, Philanthropy Roundtable, Donors Capital Fund and Trust, the Phillips Foundation, PERC, et al doesn’t mean that Mr. Milloy is the guiding force behind these connections. He is a single thread, albeit an important one, in an intricate tapestry of denial and misrepresentation of science in the service of conservative ideology. Through the deep pockets of his various corporate and conservative supporters over the years, he’s become a very effective conservative soldier in the war for the minds, and votes, of the people.

Mr. Milloy’s connections and access to money fostered over years make him a very effective conservative soldier in the culture wars. And he’s not alone – the very same people who back Mr. Milloy also back Ken Green, Tom and Deneen Borelli, Michael Gough, John Yoo, C. Boyden Gray, to name just a few. Backed by money from corporations and wealthy conservative foundations, Mr. Milloy and his ilk attempt to use propaganda to further their own ideological ends, in this case by fostering a false sense of scientific uncertainty over global heating when in fact there is a great deal of certainty about the science of global heating. And they won’t go away just because President Bush leaves office in January 2009 – they have too much to lose, ideologically and financially, to just roll over and go away when their favorite President has finished his second term.

Next time you read about something from JunkScience.com, DemandDebate.com, StopLabelingLies.com, the Competitive Enterprise Institute, or watch Steve Milloy on Fox News, remember who the source is.

Monday: DemandDebate.com’s survey on the scientific consensus surrounding global heating
Yesterday: A closer look at the background of Steven J. Milloy, executive director of DemandDebate.com

Many of the sources below were created specifically to enable citizens and patriots like all of us to track the influence of money on politics at all levels. They are relatively simple to use and enable anyone who is concerned about the corrupting influence of money on politics to hold their various political representatives’ feet to the proverbial fire. I used each of them repeatedly and regularly in the process of researching this series.

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