But right now, in 2003-04, Soros's primary focus was on the United States, whose government he considered to be at least as dangerous and oppressive as those of the aforementioned communist and authoritarian regimes. “I believe deeply in the values of an open society,” Soros said. “For the past 15 years I have focused my energies on fighting for these values abroad. Now I am doing it in the United States.”223 Asserting that he could “do a lot more about the issues I care about by changing the government than by pushing the issues,”224 Soros set out to “puncture the bubble of American supremacy.”225 To accomplish this, he would create a political apparatus of extraordinary influence.
Soros had quietly laid the groundwork for this apparatus during the preceding eight years. Between 1994 and 2002, the billionaire had spent millions of dollars promoting the passage of the Bipartisan Campaign Reform Act—better known as the McCain-Feingold Act226—which was signed into law in November 2002 by President Bush. Soros began working on this issue shortly after the 1994 midterm elections, when for the first time in nearly half a century, Republicans won strong majorities in both houses of Congress. Political analysts at the time attributed the huge Republican gains in large part to the effectiveness of television advertising—most notably the “Harry and Louise” series (which cost $14 million to produce and air) where a fictional suburban couple exposed the many hidden, and distasteful, details of Hillary Clinton's proposals for a more socialized national health-care system. Indeed the 1994 election became, to a considerable degree, a referendum on this attempted government takeover of one-sixth of the U.S. economy—and on the Democratic President who had tacitly endorsed it. George Soros was angry that such advertisements were capable of overriding the influence of the major print and broadcast news media, which, because they were overwhelmingly sympathetic to Democrat agendas, had given Hillary's plan a great deal of free, positive publicity for months. Three weeks after the 1994 elections, Soros announced that he intended to “do something” about “the distortion of our electoral process by the excessive use of TV advertising.”227 That “something” would be campaign-finance reform.
Starting in 1994, Soros's Open Society Institute and a few other leftist foundations began bankrolling front groups and so-called “experts” whose aim was to persuade Congress to swallow the fiction that millions of Americans were clamoring for “campaign-finance reform.” This deceptive strategy was the brainchild of Sean Treglia, a former program officer with the Pew Charitable Trusts.228 Between 1994 and 2004, some $140 million of foundation cash was used to promote campaign-finance reform. Nearly 90 percent of this amount derived from just eight foundations, one of which was the Open Society Institute, which contributed $12.6 million to the cause.229 Among the major recipients of these OSI funds were such pro-reform organizations as Common Cause ($625,000); Public Campaign ($1.3 million);Democracy 21 ($300,000); the Alliance For Better Campaigns ($650,000); the Center For Public Integrity ($1.7 million); the Center For Responsive Politics ($75,000); Public Citizen ($275,000); and the Brennan Center for Justice(more than $3.3 million).230
The "research" which these groups produced in order to make a case on behalf of campaign-finance reform was largely bogus and contrived. For instance, Brennan Center political scientist Jonathan Krasno had clearly admitted in his February 19, 1999 grant proposal to the Pew Charitable Trusts that the purpose of the proposed study was political, not scholarly, and that the project would be axed if it failed to yield the desired results:
"The purpose of our acquiring the data set is not simply to advance knowledge for its own sake, but to fuel a continuous multi-faceted campaign to propel campaign reform forward. Whether we proceed to phase two will depend on the judgment of whether the data provide a sufficiently powerful boost to the reform movement."The stated purpose of McCain-Feingold was to purge politics of corruption by: (a) putting restrictions on paid advertising during the weeks just prior to political elections, and (b) tightly regulating the amount of money that political parties and candidates could accept from donors. Vis à vis the former of those two provisions, the new legislation barred private organizations—including unions, corporations, and citizen activist groups—from advertising for or against any candidate for federal office on television or radio during the 60 days preceding an election, and during the 30 days preceding a primary. During these blackout periods, only official political parties would be permitted to engage in “express advocacy” advertising—i.e., political ads that expressly urged voters to “vote for” or “vote against” a specified candidate. Equally important, major media networks were exempted from McCain-Feingold's constraints; thus they were free to speak about candidates in any manner they wished during their regular programming and news broadcasts. This would inevitably be a positive development for Democrats, who enjoyed the near-universal support of America's leading media outlets.231
In addition to its limits on pre-election political advertising, McCain-Feingold also placed onerous new restrictions on the types of donations which candidates, parties, and political action committees (PACs) could now accept. Previously, they had been permitted to take two types of contributions. One of these was “hard money,” which referred to funds earmarked for the purpose of express advocacy. Federal Election Commission (FEC) regulations stipulated that in a single calendar year, no hard-money donor could give more than $1,000 to any particular candidate, no more than $5,000 to a PAC, and no more than $20,000 to any political party.232
The other category of pre-McCain-Feingold donations was “soft-money,” which donors were permitted to give directly to a political party in amounts unlimited by law. But to qualify for designation as “soft money,” a donation could not be used to fund “express advocacy” ads on behalf of any particular candidate. Rather, it had to be used to pay for such things as “voter-education” ads or “issue-oriented” ads—political messages that carefully refrained from making explicit calls to “vote for” or “vote against” any specific candidate. So long as an ad steered clear of uttering such forbidden instructions, there was no limit as to how much soft money could be spent on its production and dissemination.
McCain-Feingold raised the per-donor maximum for certain hard-money donations: A donor could now give up to $2,000 to a candidate, $5,000 to a PAC, and $25,000 to a political party.233 But the new law banned soft-money contributions to political parties altogether.
Historically, Republicans had enjoyed a 2-1 advantage over Democrats in raising hard money from individual donors. Democrats had relied much more heavily on soft money from large institutions such as labor unions.234 Thus it seems counter-intuitive that Soros, who clearly favored Democrats over Republicans, would seek to push legislation whose net effect—the removal of soft money—would be unfavorable to Democratic Party fundraising efforts.
But Soros's motive becomes clear when we look at the types of organizations whose fundraising activities were left unaffected by McCain-Feingold. These were “527 committees”—nonprofits named after Section 527 of the IRS code—which, unlike ordinary PACS, were not required to register with the FEC. Run mostly by special-interest groups, these 527s were technically supposed to be independent of, and unaffiliated with, any party or candidate. As such, they were permitted to raise soft money—in amounts unbound by any legal limits—for all manner of political activities other than express advocacy. That is, so long as a 527's soft money was not being used to pay for ads explicitly urging people to cast their ballots either for or against any particular candidate, the letter of the McCain-Feingold law technically was being followed. Practically speaking, of course, such things as “issue-oriented ads” and “voter-education” ads can easily be tailored to favor one party or candidate over another, while carefully steering clear of “express advocacy.”
Once McCain-Feingold was in place, Soros and his political allies collaborated to set up a network of “527 committees” ready to receive the soft money that individual donors and big labor unions normally would have given directly to the Democratic Party. These 527s could then use that money to fund issue-oriented ads, voter-education initiatives, get-out-the-vote drives, and other “party-building” activities—not only to help elect Democratic candidates in 2004, but more broadly to guide the Democratic Party ever-further leftward and to reject the “closed” society that Bush and the Republicans presumably favored. By helping to push McCain-Feingold through Congress, Soros had effectively cut off the Democrats' soft-money supply and diverted it to the coffers of an alternative network of beneficiaries—which he personally controlled.235 As Byron York observed, “[T]he new campaign finance rules had actually increased the influence of big money in politics. By giving directly to 'independent' groups rather than to the party itself, big-ticket donors could influence campaign strategy and tactics more directly than they ever had previously.... And the power was concentrated in very few hands”—most notably Soros's.236
SOROS'S "SHADOW PARTY" TAKES SHAPE
While Soros's 527s were clearly devoted to Democratic Party agendas and values, they publicly professed to be independent of any party affiliations. Their partisanship was somewhat shrouded in proverbial shadows. Gradually, a number of journalists began to make reference to the emergence of certain pro-Democrat “shadow organizations” that seemed geared toward circumventing McCain-Feingold's soft-money ban. In time, the term “Shadow Party” came into use.237
George Soros set in motion the wheels of this Shadow Party when he gathered a team of political strategists, activists, and Democrat donors at his Long Island beach house on July 17, 2003, to discuss how President Bush could be defeated in the 2004 election. Attendees included such luminaries as OSI director Morton Halperin; former Clinton chief of staff John Podesta; former Clinton speechwriters Jeremy Rosner and Robert Boorstin; Sierra Club executive director Carl Pope; labor leader and former Clinton advisor Steve Rosenthal; EMILY's List founder and abortion-rights activist Ellen Malcolm; and major Democrat donors such as Lewis and Dorothy Cullman, Robert McKay, Robert Glaser, and Peter Lewis.238
The consensus was that voter turnout—particularly in 17 “swing” or “battleground” states239—would be the key to unseating President Bush. Steve Rosenthal and Ellen Malcolm—CEO and president, respectively, of a newly formed butpoorly funded voter-registration group called America Coming Together (ACT)240—suggested that voters in those swing states should be recruited and mobilized as soon as possible. Agreeing, Soros told the pair that he personally would give ACT $10 million to help maximize its effectiveness. A few other attendees also pledged to give the fledgling group large sums of money: Soros's billionaire friend Peter Lewis, chairman of the Progressive Corporation, promised to give $10 million; Robert Glaser, founder and CEO of RealNetworks, promised $2 million; Rob McKay, president of the McKay Family Foundation, committed $1 million; and benefactors Lewis and Dorothy Cullman pledged $500,000.241
By early 2004, the administrative core of George Soros's Shadow Party was in place. It consisted of seven ostensibly “independent” nonprofit groups—all but one of which were headquartered in Washington, DC. In a number of cases, these groups shared one another's finances, directors, and corporate officers; occasionally they even shared office space.242 The seven groups were:
1) America Coming Together (ACT): Jump-started by Soros's $10 million grant, ACT in 2004 ran what it called “the largest voter-contact program in history,” with more than 1,400 full-time paid canvassers contacting potential voters door-to-door and by phone.243
2) Center For American Progress (CAP): This entity was established to serve as a think tank promoting leftist ideas and policy initiatives. Soros, enthusiastic about the Center's potential, pledged in July 2003 to donate up to $3 million to help get the project off the ground.244 From the outset, CAP's leadership featured a host of former high-ranking officials from the Clinton administration.245 Hillary Clinton predicted that the organization would provide “some new intellectual capital” with which to “build the 21st-century policies that reflect the Democrat Party's values.”246 George Soros andMorton Halperin together selected former Clinton chief of staff John Podesta to serve as president of CAP. Podesta said his goal was to develop CAP as a “think tank on steroids,” featuring “a message-oriented war room” that “will send out a daily briefing to refute the positions and arguments of the right.”247
3) America Votes: This national coalition coordinated the efforts of many get-out-the-vote organizations and their thousands of contributing activists.248 Soros's support for America Votes would continue well past 2004. Indeed he would donate $2.15 million to this coalition in the 2006 election cycle,249 another $1.25 million in advance of the 2008 elections,250 and yet another $1.25 million in 2010.251
4) Media Fund: Describing itself as “the largest media-buying organization supporting a progressive message” in the United States, this group produced and strategically placed political ads in the print, broadcast, and electronic media.252
5) Joint Victory Campaign 2004 (JVC): This fundraising entity focused on collecting contributions and then disbursing them chiefly to America Coming Together and the Media Fund. In 2004 alone, JVC channeled $19.4 million to the former, and $38.4 million to the latter.253 Soros personally gave JVC more than $12 million that year.254
6) Thunder Road Group (TRG): This political consultancy coordinated strategy for the Media Fund, America Coming Together, and America Votes. Its duties included strategic planning, polling, opposition research, covert operations, and public relations.255
7) MoveOn.org: This California-based entity was the only one of the Shadow Party's core groups that was not a new startup operation. Launched in September 1998, MoveOn is a Web-based political network that organizes online activists around specific issues, raises money for Democratic candidates, generates political ads, and is very effective at recruiting young people to support Democrats.256 In November 2003, Soros pledged to give MoveOn $5 million to help its cause.257
According to Ellen Malcolm of America Coming Together (ACT), the financial commitment which Soros made to these Shadow Party groups in 2003 “was a signal to potential donors that he had looked at what was going on and that this was pretty exciting, and that he was going to stand behind it, and it was the real deal.”258 As Byron York observed, “After Soros signed on, contributions started pouring in.” ACT and the Media Fund alone took in some $200 million—including $20 million from Soros alone. This type of money was unprecedented in American politics.259
Harold Ickes, who served as White House deputy chief of staff in the Clinton White House, had a hand in creating every Shadow Party core group except MoveOn. He was also entrusted with the vital task of making these organizations function as a cohesive entity. In 2004, Democratic strategist Harold Wolfson suggested that outside of the official campaign of presidential candidate John Kerry, Ickes “is the most important person in the Democratic Party today.”260
In addition to its seven core members, the Shadow Party also came to include at least another 30 well-established leftwing activist groups and labor unions that participated in the America Votes coalition. Among the better-known of these were ACORN; the AFL-CIO; the AFSCME; the American Federation of Teachers; the Association of Trial Lawyers of America; the Defenders of Wildlife Action Fund; EMILY's List; the Human Rights Campaign; the League of Conservation Voters; the NAACP; NARAL Pro-Choice America; the National Education Association; People for the American Way; Planned Parenthood; the Service Employees International Union; and the Sierra Club.261
New Mexico's then-governor, Democrat Bill Richardson, observed that “these groups” were “crucial” to the anti-Bush effort. “Now that campaign-finance reform is law,” he said, “organizations like these have become the replacement for the national Democratic Party.”262 And no donor was more heavily invested in these organizations—or in defeating President Bush—than George Soros, who contributed $27,080,105 to pro-Democrat 527s during the 2004 election cycle. The second leading donor was the billionaire insurance entrepreneur Peter Lewis ($23,997,220), followed by Hollywood producer Stephen Bing ($13,952,682) and Golden West Financial Corporation founders Herbert and Marion Sandler ($13,007,959).263
FAILURE AND RESILIENCY: BIRTH OF THE DEMOCRACY ALLIANCE
When President Bush won re-election in 2004, George Soros was devastated; his massive financial investments and herculean organizing efforts had all gone for naught. Adding insult to injury, the hated Republicans had retained control of both houses of Congress. As Soros contemplated what course of action he ought to pursue next, the answer came to him—somewhat unexpectedly—in the form of Democrat political operative Rob Stein, former chief of staff to Commerce Secretary Ron Brown during the Clinton administration. For the preceding two years, Stein had been busy devising a strategy by which Democrats might reclaim supremacy in the executive and legislative branches of government. He began working on this strategy shortly after the Republicans had gained eight House seats and two Senate seats in the 2002 midterm elections. Lamenting that he was “living in a one-party [Republican] country,”264Stein at that point resolved to study the conservative movement and determine why it was winning the political battle. After a year of analysis, he concluded that a few influential, wealthy family foundations—most notably Scaife, Bradley, Olin, and Coors—had spearheaded the creation of a $300 million network of politically influential organizations. Stein featured these facts in a comprehensive PowerPoint presentation—titled “The Conservative Message Machine Money Matrix”—which mapped out, in painstaking detail, the conservative movement's networking strategies and funding sources.265
Next, Stein set out to show his presentation—mostly in private meetings—to political leaders, activists, and prospective big-money donors of the left. He hoped to inspire them to join his crusade to build a new organization—a financial clearinghouse to be called the Democracy Alliance (DA)—dedicated to offsetting the efforts of conservative funders and injecting new life into the progressive movement. At each presentation, Stein asked the viewer to pledge that he or she would keep confidential the substance of the proceedings, so as to give the project a chance to coalesce and gain some momentum without excessive public scrutiny.266
Stein officially filed DA's corporate registration in the District of Columbia in January 2005.267 By that point, he had shown his PowerPoint presentation to several hundred people.268 Stein recalls that during those sessions, he consistently observed “an unbelievable frustration” by big Democrat donors who felt hopelessly unconnected to one another even as they longed to be part of a strategic coalition that could work collaboratively and cohesively.269 This was particularly true of George Soros, thus it was most significant that Soros quickly and enthusiastically embraced Stein's concept. In April 2005, Soros brought together 70 likeminded, carefully vetted, fellow millionaires and billionaires in Phoenix, Arizona, to discuss Stein's ideas and expeditiously implement a plan of action.270 Most of those in attendance agreed that the conservative movement represented “a fundamental threat to the American way of life.”271And, like Soros, a considerable number of them looked favorably on Stein's analysis and concept. Thus was born the Democracy Alliance.
DA members, called “partners,” include individuals and organizations alike. Partnership in the Alliance is by invitation-only.272 These partners pay an initial $25,000 fee, and $30,000 in yearly dues thereafter. They also must give at least $200,000 annually to groups which the Alliance endorses. Donors metaphorically “pour” these requisite donations into one or more of what Rob Stein refers to as DA's “four buckets” of fundraising: ideas, media, leadership training, and civic engagement. The money is then apportioned to approved left-wing groups from each respective category.273
The Democracy Alliance is known to consist of at least 100 donor-partners but historically has been quite secretive regarding their identities. Nevertheless, the Capital Research Center has managed to compile the names of some of the more significant current and former DA partners (in addition to George Soros and Rob Stein).274 A large percentage of them have significant ties to Soros that extend well beyond their shared membership in the Democracy Alliance. Among these partners are the following:
- AFL-CIO: This institutional DA partner is the largest labor federation in America and was a member of Soros's Shadow Party in 2004.
- Bauman Foundation co-director Patricia Bauman serves as a board member of the Soros-funded Natural Resources Defense Council.
- Property-development CEO Albert Dwoskin is the chairman of Catalist, a Soros-funded political consultancy.275
- Manhattan-based child psychologist Gail Furman belongs to the Council on Foreign Relations and is a board member of Human Rights First and the Brennan Center for Justice—all organizations that receive funding from George Soros and OSI.276
- Software entrepreneur Tim Gill is a major funder of gay-rights groups such as the Gay, Lesbian, and Straight Education Network, which is also supported by Soros.277
- Technology entrepreneur Davidi Gilo has given at least $17,600 to J Street, an organization that is consistently critical of Israel and has close ties to Soros.278
- Media-software mogul Rob Glaser was an early backer of the Soros-funded America Coming Together.279
- “Racial justice organizer” Connie Cagampang Heller works closely with the Soros-funded Tides Foundation.280
- Hyatt Hotel luminary Rachel Pritzker Hunter has served as treasurer of the Soros-funded Media Matters For America.281
- Economist and former banking executive Rob Johnson once served as a portfolio manager for George Soros’s Quantum Fund.282
- Michael Kieschnick founded Working Assets, a long-distance telephone/credit card company that donates a percentage of its profits to leftist groups and causes.283 He is also a board member of the Soros-funded evangelical group Sojourners.284
- Longtime technology executive John Luongo is a former board member of Planned Parenthood and Citizens for Responsibility and Ethics in Washington—both Soros-funded enterprises.285
- Atlantic Philanthropies president and CEO Gara LaMarche was formerly vice president of Soros's Open Society Institute. He also served a stint as associate director of Human Rights Watch and held a variety of positions with the ACLU—both organizations that are heavily funded by Soros.286
- Television producer Norman Lear created the Soros-backed group, People for the American Way.
- Progressive Insurance Company chairman Peter Lewis has many close ties to Soros and was a major funder of the Shadow Party during the 2004 election cycle.287
- Taco Bell heir Robert McKay has been a founding board member of America Coming Together, a board member of the Ms. Foundation for Women, and a director of the Fund for America288—all of which are beneficiaries of Soros money.
- Tides Foundation founder and longtime CEO Drummond Pike has close ties to Soros, who is a major funder of Tides.
- Democrat activist Simon Rosenberg founded the New Policy Institute, a project of the Tides Foundation. He also sits on the board of the Soros-funded publication Democracy: A Journal of Ideas. And in 1996 he created theNew Democrat Network, a Soros-financed organization committed to pushing the Democratic Party further leftward.289
- Golden West Financial Corporation founders Herb and Marion Sandler are philanthropic allies of George Soros and were heavy funders of Shadow Party organizations in 2004—giving some $13 million to anti-Bush “527 committees.”290
- Trial lawyer Guy Saperstein formerly served as president of the Soros-funded Sierra Club.291
- Service Employees International Union: The longtime former president of this union, Andrew Stern, sat on the executive committee of the Soros-funded America Coming Together.292
- George Soros's son Jonathan is president and co-deputy chairman of Soros Fund Management.
- DA board member Michael Vachon is the director of communications at Soros Fund Management and the overseer of Soros’s political contributions.293
- ACORN: DA founder Rob Stein has called this pro-socialist, notoriously corrupt “community organization” a “tough-minded” and “very responsible” group.300
- Air America Radio: When this left-leaning radio station was on the verge of bankruptcy in early 2006, it received a funding commitment of $8 million from DA.301
- America Votes: This voter-mobilization coalition has received at least $6 million in DA-approved funding commitments from George Soros.
- Center for American Progress: By January 2008, DA grants to this leftist think tank totaled at least $9 million—most of which came from George Soros, Peter Lewis, and the Sandlers.
- Citizens for Responsibility and Ethics in Washington: This Soros-funded group brings ethics charges against (mostly conservative) “government officials who … betray the public trust.”302
- Election Administration Fund: Housed at the Tides Foundation in San Francisco, this entity has received at least $2.5 million in DA money for its voter-registration and get-out-the-vote efforts—plus some $1 million from Soros's Open Society Institute.
- EMILY’s List: This group raises money for Democratic, pro-choice, female candidates.303
- Media Matters For America: By January 2008, DA-approve grants to Media Matters totaled at least $7 million.
- Mi Familia Vota: This group seeks to naturalize new citizens and register them to vote.304
- New Organizing Fund: This group, which “train[s] prospective progressive campaign workers in online campaign and organizing techniques,” has accepted donations directly from DA members George Soros and Deborah Rappaport.305
- Progressive Majority: Working to help “promising progressive candidates” get elected to state and political offices, this group has received at least $5 million in DA grants.306
- United States Student Association: This group is “dedicated to training, organizing, and developing a base of student leaders” who will become “social justice” activists.307
- USAction: This group favors increased government spending on social-welfare programs and public education.308
Since approximately 2006, Democracy Alliance members and staff have been working to establish subchapters of their organization in all 50 states. Their most successful effort to date has been in Colorado, where the local DA has fundedsuch varied enterprises as liberal think tanks, media “watchdog” groups, ethics groups that bring forth so-called public-interest litigation, voter-mobilization groups, media outlets that attack conservatives, and liberal leadership-training centers. The results have been striking: Whereas in 1998 Colorado had a Republican governor, two Republican U.S. senators, and four Republican House members (out of six), by 2009 the state had a Democratic governor, two Democratic U.S. Senators, and five Democratic House members (out of seven).310
Continued in Part 5
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