The Apostasy of the Elites

excerpted from the book

The Paradox of American Democracy

by John B. Judis

Routledge Press, 2001, paper

p156
The Apostasy of the Elites

In the I980s there were clearly individuals, like Greenspan, Burns, Simon, former Secretary of Defense Clark Clifford, and former Secretary of State Henry Kissinger, who could, and did, claim to be part of the nation's establishment. They were appointed to presidential commissions, asked to testify before Congress as disinterested "wise men," and invited to vent their expert opinions on op-ed pages and on Sunday television news shows. But many of them-like those who had eagerly endorsed Reagan's balanced budget plan in September I980-no longer behaved, or functioned, as elites. They were interested, rather than disinterested, participants; what they said often meshed subtly or crassly with the interests of business clients or political patrons.

There were also organizations that claimed to be part of the establishment. "We are delighted to be members in good standing of the Washington Establishment," the president of the American Enterprise Institute declared. Washington and New York abounded in "foundations," "institutes," "institutions," "centers," "committees," and "councils"-the labels that once distinguished elite groups from trade associations and PR firms. But many of these organizations were really the intellectual arm of business lobbies or political factions. They had little in common with the National Civic Federation, the Brookings Institution, or other original elite institutions. A similar gulf separated the newer foundations like Olin and Smith-Richardson from the older Ford and Rockefeller foundations. Irving Kristol had said it best when he declared that the new "corporate philanthropy should not be, and cannot be, disinterested."

The older elite organizations had helped make democratic pluralism possible. They stood for defining the national interest in terms that took account of business, labor, and the other competing groups in society. But the new organizations, foundations, and think tanks were designed to undermine democratic pluralism-to further the rule of business and of its K Street lobbyists over the political process. By the end of the seventies the new organizations had carried the day-through their own self-promotion and through intimidating the other elite organizations.

The Intimidated Elites

In the early I970s, conservative intellectuals, with the support of business leaders, began attacking the older elite think tanks, policy groups, publications, and foundations. They argued that Brookings, the Ford Foundation, and the Washington Post and New York Times were not independent, objective, and impartial in their political judgments and reports, but liberal and left-wing. Wrote former Nixon speechwriter and new right leader Pat Buchanan in I970s, "The Brookings Institution, policy institute of the left, works hand-in-glove with bureaucrats and Democrats.... The national press is the silent partner of the political and social movements of liberalism." These charges put those institutions on the defensive. They tried to demonstrate their impartiality by embracing the views of their critics.

In the past, elite organizations had not merely survived attacks from business and labor, but flourished. In the Progressive Era, the National Civic Federation was denounced by both the NAM and the Socialist Party. In the sixties, the radical right and the radical left had both attacked the Ford Foundation. With powerful critics on both sides of them, the elite organizations could perform a mediating role between business and its adversaries. But beginning in the I970s, Brookings, the CED, the Ford Foundation, and the New York Times editorial board could no longer play a mediating role. Their critics were almost entirely to their right.

In addition, the elite groups remained predominately upper-class in their membership and dependent upon bankers and businessmen for much of their financial support and political legitimacy. During the Progressive Era, the I930s, and the post-World War 1I decades, there had been a sizable group of business leaders like George Perkins and Paul Hoffman who insisted that businessmen had to focus on the long-term national interest. But by the I9705 they had become an anachronism. There were some holdovers like banker Felix Rohatyn, but most of the investment bankers who meddled in government policy were like William Simon or Walter Wriston, the CEO of Citicorp and prime mover behind AEI. They were primarily interested in protecting their own.

One could draw a sharp contrast, for instance, between Robert Brookings, the initial funder of the Brookings Institution, and Richard Mellon Scaife, who supplied much of the funding for Heritage and other policy groups. Brookings, who migrated to St. Louis at age seventeen, was a self-made millionaire who sold bowls, clothespins, and other wooden products in the West. His real passion remained, however, history and music, and at thirty-five he quit his dry-goods firm to go to Berlin to study the violin. When informed by his teacher after a year's study that he would never be better than a talented amateur, he returned to St. Louis and business. Having reamassed a fortune, he retired ten years later in I 896 and devoted the rest of his life to philanthropy. He became the president of Washington College, which he made into Washington University. Much of St. Louis's intellectual and cultural life still bears Brookings's mark. He was a founding member of the Carnegie Corporation, a trustee of the Smithsonian Institution, and was active in the National Civic Federation. He served on commissions in the Taft administration and on the War Industries Board in World War I.

Scaife, by contrast, was a reclusive millionaire. Born in I933, he inherited his wealth from the Mellon fortune. He flunked out of Yale and did not seem to have any occupation until I969, when he purchased a small-town newspaper. His principal work seems to have been funding conservative policy organizations, think tanks, and publications. Over four decades, he would give $620 million (in I999 dollars) to conservative organizations. In I994 he set up a fund to investigate whether former Clinton aide Vincent Foster was murdered by someone associated with the Clinton administration, even though police reports had ruled that Foster's death was a suicide. He appears to have been a man of fevered imagination and narrow, visceral hatreds.

There was also a sharp difference between the religious and moral outlook of the older elite and that of the new funders of foundations and think tanks. The older elite had been deeply influenced by the Protestant social gospel and carried on a tradition of noblesse oblige. But many of the men who funded the AEI, Heritage, and the new policy groups were closer to the conservative wing of Protestantism that had risen in opposition to the social gospel. J. Howard Pew of Sun Oil, for instance, who was a prime contributor to Billy Graham and Christianity Today, pressured evangelicals to embrace a radical right stance on economics and foreign policy. Pew's foundation would later be one of the largest contributors to the AEI. Other wealthy conservative Christians included Richard M. DeVos, the president of Amway Corporation; Nelson Bunker Hunt of Hunt Oil; and Art DeMoss, the chairman of the National Liberty Insurance Corporation.

Few of the investment bankers and corporate CEOs who served as trustees of the foundations and think tanks and as outside directors of the great newspapers, and who helped fund policy research in the I9705, shared Robert Brookings's view of the world. They may not have been virulently partisan like Scaife or as religiously conservative as Pew, but they focused on the threat to their company's profitability from government intervention and hostile political movements. They were largely oblivious to the ethic of noblesse oblige or to older strains of the Protestant social gospel. They were the upper-class counterparts to the Marin suburbanites that McFadden satirized. Instead of making sure that the elite organizations played their mediating role, they threw their money and weight behind the new conservative-business alliance.

In the face of withering attacks, some of the older elite organizations made modifications, but they maintained their identity. Brookings, for instance, hired a conservative publicist and recruited a monetarist and an anti-Soviet hawk to buttress its claim to being nonpartisan and non-ideological. When its president Kermit Gordon, a former economic advisor in the Kennedy administration, died in I977, it appointed Bruce MacLaury, who had been in the Nixon Treasury Department before becoming president of the Minneapolis Federal Reserve Bank, as his successor. But several organizations underwent more significant upheaval in the I970s. These included the Ford Foundation, the New York Times, and the Washington Post.

Under-McGeorge Bundy the Ford Foundation had come under heavy criticism from Congress in I969 for its role in Ocean Hill-Brownsville, its funding of voter registration in Cleveland's mayoral race, and Bundy's award of resettlement grants to wealthy former aides of the late Robert Kennedy. In response, Congress had inserted new requirements in the I969 tax reform bill that prohibited foundations from seeking to influence legislation or elections with their grants. Bundy and the foundation weathered that crisis, but in the next decade they faced a new challenge from business critics outside and inside the foundation.

What brought the wrath of business leaders down on Bundy's head was the foundation's role in backing the environmental and consumer movements. Ford underwrote the growth of public interest law firms. It was the main source of funds for the Center for Law in the Public Interest, the Environmental Defense Fund, the Sierra Club Legal Defense, the Natural Resources Defense Council, the Institute for Public Interest Representation, the Center for Law and Public Policy, the Citizens Communication Center, the Public Advocates, the Education Law Center, and the Center for Law and Public Policy. These firms often sued the U.S. government to force it to make companies comply with the new environmental and consumer legislation.

Bundy and the foundation also incurred the wrath of business through its work on energy conservation. In 1971, Bundy launched what would become a three-year, g4 million study of U.S. energy use. The final report, A Time to Choose, was released in October I974, but the research was finished by the time the energy crisis hit in late I973. The project staff was called upon to testify on Capitol Hill, and its recommendations became the basis of a House bill. The report laid out three options: continued use of oil and gas at the present rate, a "technical fix" that would cut the rate of increase in half, and a "zero-growth" option that would hold energy use increase after I985 at 2 percent a year. The report recommended either the technical fix or the zero option and argued that either could be achieved without causing a recession by adopting improved automobile gas mileage, better building construction, and greater industrial efficiency. To oversee either the technical fix or the zero option, the report called for the creation of a federal "energy policy council."

In retrospect, the report's recommendations were wise, prudent, and moderate-just the kind of thing one would expect from a dispassionate, but also cautious, application of social science. Over the next decade, the nation would go considerably farther than the report called for. The report's technical fix and zero option called for U.S. energy consumption to go from 73 quadrillion BTUs in I974 to about go quadrillion BTUs in I985. In fact, consumption would go from 73 to 74! A recession would occur in I982, but it would not be caused by energy conservation. And Congress and the Carter administration would establish not just a new policy council, but an entire new cabinet department. All in all, the report succeeded, as one energy expert concluded in I984, in shifting "the orientation of public policy somewhat closer to a conservationist ethic."

Some energy and environmental experts applauded the report. Michael McCloskey of the Sierra Club said, "It is a pity that the report of the Energy Policy Project was not available a couple of years ago to help guide us through the turmoil of the energy crisis." But from the moment the Ford panel began releasing its findings, it was hounded by industry representatives. Against the wishes of the project's director, S. David Freeman, the foundation created an advisory board that included prominent industry representatives, including William P. Tavoulareas, the crusading president of Mobil Oil; John D. Harper of ALCOA, the first president of the Business Roundtable; Donald C. Burnham, the president of Westinghouse; J. Harris Ward, the director of Commonwealth Edison; and Minor S. James, the vice president of the Independent Petroleum Institute of America. When the report was issued, the industry representatives hit the roof. Tavoulareas denounced it at the National Press Club. James declared, "ln my considered judgment, this report is seriously lacking in objectivity and is not an appropriate guidance tool for evaluating or determining public policies as to energy." Ward objected to the report's wariness about the safety of nuclear reactors. "A proposal to defer nuclear development in this country is dangerous to the national security and the national welfare," he wrote.

Several think tanks issued reports and studies attacking the report. The Institute for Contemporary Studies, a conservative think tank funded by Olin and Scaife money, put out a book of essays, No Time to Confuse. Its critics, drawn from business and engineering schools, rejected the report's contention that energy conservation was economically feasible. The report's scenarios were "worthless," No Time to Confuse declared. And they warned that government intervention could work "only in the context of a police state."

The Ford Foundation panicked at the torrent of vitriol. Bundy agreed to publish a critique of the report by Tavoulareas, titled A Debate on a Time to Choose. The foundation also appointed a team to review the process, headed by John Deutch, an MIT professor and energy expert who would become Undersecretary of Energy in the Carter administration and later serve as CIA director in the Clinton administration. Instead of soberly evaluating the report, Deutch's team seconded the conclusions of the critics from industry. It called the report "extremely naive regarding the feasibility of effectively implementing many of the policy proposals" and accused it of a "pervasive anti-market, progovernment bias." It concluded ominously:

What is of legitimate concern is the general atmosphere of an adversary nature that seems to have existed between the project and the representatives of industry on the Advisory Board. As a result, an attitude of hostility to the project has spread in the business community. This hostility has limited the useful impact of the project. If the Energy Policy Project was to be influential in the long term public debate on energy policy, it was essential that the project have credibility with leaders of energy industries.

Deutch didn't understand the irony of this point: to have had credibility with leaders of the energy industry, the report would have had to abandon its support for government-sponsored energy conservation, exactly the alternative that the country would turn to, and that Deutch himself would oversee. The business leaders and their lobbyists had succeeded in intimidating not only the foundation but also prominent social scientists like Deutch.

The year after Deutch's report, the final blow fell on the foundation. Henry Ford 1I resigned in protest from the board of trustees. In his letter of resignation, Ford took direct aim at what he believed was the foundation's hostility to business:

The Foundation exists and thrives on the fruits of our economic system. The dividends of competitive enterprise make it all possible.... In effect, the Foundation is a creature of capitalism-a statement that, I'm sure, would be shocking to many professional staff people in the field of philanthropy. It is hard to discern recognition of this fact in anything the Foundation does.... Perhaps it is time for the Trustees and staff to examine the question of our obligations to our economic system and to consider how the Foundation as one of the system's most prominent offspring might act most wisely to strengthen and improve its progenitor.

Ford's resignation clearly reflected business's dissatisfaction with the foundation. It became the basis for Irving Kristol's attack on "disinterested" corporate philanthropy. Bundy had resisted this kind of criticism before, but now he took steps to accommodate it. To mollify the critics of his funding environmental public interest firms, he began funding new firms that claimed to mediate between the public interest firms and the government. He also appointed a new pro-industry panel to do a new energy report. It appeared in I979 and was ignored. Its principal argument was that conservation and the development of alternative sources of energy could best be achieved through "decontrolling" energy prices.

In I979, Bundy reached mandatory retirement age. The foundation's trustees appointed Franklin Thomas to succeed him. Thomas's appointment appeared to confirm the foundation's independence. He was the first black to become the head of a major foundation. An Ivy Leaguer, he had shunned corporate law to make his name as the head of a large Ford-funded poverty project in the Bedford-Stuyvesant area of New York. But Thomas, it turned out, represented an innocuous social liberalism that calmed the fears of the foundation's business critics. He was interested in funding poverty programs and promoting affirmative action inside and outside of the foundation. He upped Ford's commitment to ghetto redevelopment and women's rights. While other foundation officials balked at the Reagan administration's request that private foundations make up for the loss in government social programs for the poor, Thomas, in effect, complied. At the same time, Thomas abruptly abandoned the foundation's commitment to consumer, environmental, and energy programs that might have ruffled the business community.

One of Thomas's first acts was to end funding for public interest law firms. A Ford official claimed that the foundation wanted the organizations to become "self-sustaining institutions," but this was laughable. In Washington, public interest firms were already being outspent about twenty-five to one by their corporate counterparts. Ford's withdrawal of funds meant that the balance between consumers and large corporations would be tipped even farther in business's direction. With Thomas's appointment, business had won its decade-long struggle to emasculate the Ford Foundation.

At the same time, business leaders began to attack the press for being "antibusiness." Corporations began monitoring newspapers and television shows to demonstrate bias. Chevron sponsored a project on "The Influence of Reporter Bias on TV Viewer Opinion." Other surveys were funded through the AEI and the Institute for Contemporary Studies. In I976, Mobil Oil, Proctor and Gamble, and other corporations set up the Media Institute in Washington to monitor media coverage of business. Its advisory board included Bryce Harlow, Murray Weidenbaum, and Herbert Schmertz, the vice president of Mobil Oil who pioneered corporate advocacy ads. One business editor, recalling the early I9705, described "the visceral hatred and contempt that most businessmen had for the media." Much of this hatred became known to the publishers of major newspapers when they solicited advertising or when they met with their boards of directors.

The New York Times always prided itself on being immune to outside pressures, but it was among the first publications to succumb. Arthur "Punch" Sulzberger became publisher of the newspaper in I963. The editor of the editorial page was John Oakes, Sulzberger's second cousin. Oakes had been in charge since I96I and had been on the editorial board since I949. One of the nation's most distinguished editors, he was responsible for the introduction of the op-ed page in I970 (the first of its kind) and for the Times's prescient warnings about U.S. intervention in Vietnam. But his evenhanded editorials on business and labor-many of them written by A. H. Raskin (a distinguished labor reporter) or Leonard Silk (later an outstanding business columnist) and his support for consumer and environmental legislation began to provoke protests from businessmen close to Sulzberger. Whenever Sulzberger made his annual pilgrimage to Detroit to help the advertising department sell ads to the Big Three, he would return filled with complaints about the editorials questioning car safety or bemoaning auto pollution.

Sulzberger hired a Harvard management expert, Chris Argyris, to analyze the relationships among the paper's different departments. Argyris's report was subsequently published with the names of the paper and its editors changed (the New York Times was called the Daily Planet). The exchanges between Sulzberger ("P" in the book) and Oakes ("T") reveal the growing tension over business coverage:

[Oakes] then said that one of the problems of being a paper with a conscience was that such a paper served the community best by being critical: "We're helping our city by being critical of all the things that are wrong with it. I think that the best way to help the city is to be critical. Of course, this is different from the typical booster view." [Sulzberger] interrupted to ask [Oakes], "Are you anti-big business?" [Oakes] answered, "No, I'm not." "The editorial page," [Sulzberger] retorted, "could give some people the idea that we're anti-big business." "That's because businessmen don't like some of the criticisms that we made," [Oakes] replied. "I would say that we're as critical of big labor as we are of big business."

At a second session, Sulzberger, turning against Oakes for his antibusiness views,

described his feelings when, on a few occasions, several of his corporation board members, men whom he respects greatly, read the paper to find their company's actions condemned. [Oakes] said that he had never thought of that embarrassment. However, he still believed that the correct action for the paper was to condemn the companies even if their chief executive officers were on the corporate board. [Oakes] continued, "These businessmen are great human beings, but they have no feelings for the tradition of a great newspaper." [Sulzberger] replied, "Let us be clear that news and editorial matters are not discussed by these businessmen. But it is still not easy to divorce myself when I know [that we have attacked] someone who sits on our board of directors.... None of these men would even think of trying to influence our positions. But they might say, "You are certainly entitled to print anything you wish, but how on earth did you arrive at such-and-such a position?"

By the mid-1970s, Sulzberger had resolved to change the newspaper's image among businessmen. Sulzberger told biographer Joseph Goulden that he had wearied of defending the newspaper to his business friends. In October I976, to symbolize his determination to change, he fired Oakes two years before he was to retire and replaced him with Max Frankel. Within a year both Silk and Raskin were also gone. An almost identical course of events took place at the Washington Post. In 1967, Philip Geyelin had become editor of the editorial page.

Katharine Graham, who had become publisher in I963, hired Geyelin, a former Wall Street Journal diplomatic correspondent, partly because she wanted to move the paper away from its identification with Johnson's policy in Vietnam. Geyelin, like Oakes, was by no means a radical, but he backed a negotiated peace in Vietnam and was amenable to the new Washington-based environmental and consumer groups. In its earlier versions, the Post had backed Nader's plan for a federal consumer protection agency, even though its defeat had become a paramount goal of the Business Roundtable and its allies.

At the end of I977, Graham called in Geyelin and asked for his resignation. Graham wrote later that it was because he was in a "prolonged slump" after Watergate. But other Post editors believe that she, like Sulzberger at the New York Times, had come under pressure from friends in business and Post directors who thought that the newspaper's editorial policy was antibusiness. Geyelin pleaded for another chance, and Graham agreed. The next February, when the consumer protection agency bill came up for a vote, Geyelin informed Colman McCarthy, who had written the earlier editorials, that the newspaper was going to change its position and oppose the bill. He gave the job of writing the editorial to a woman who was becoming close to Graham and would later become her speechwriter.

In its editorial, the Post explained that it was changing its position because "both the legislation and conditions have changed." But the changes, it acknowledged, had been to "cut back" rather than enlarge the agency's authority. What, then, was its beef? The $I5 million cost! Argued the newspaper: "The bill's sponsors maintain that the $I5-million budget of the new agency would be more than offset by transfer or elimination of existing consumer programs in over 20 agencies. We find the net-savings claim a bit hard to swallow." The newspaper rested its case on the most implausible grounds. In fact, the price tag on the agency hadn't gone up since the Post had first endorsed the agency-if anything, it had gone down. And no one had ever suggested that a $I5 million expenditure amid $505 billion in outlays-approximately 0.003 percent of the federal budget-could threaten insolvency. The weakness of the argument revealed the newspaper's true motive: not to prevent an unwise and unwarranted expenditure that could expand the deficit, but to give a signal to business that it was on its side on an issue that had great symbolic importance to it.

Graham at this point had turned extremely hostile to the consumer movement and the Federal Trade Commission. When FTC chairman Michael Pertschuk met with Graham to try to reduce her animosity, Graham surprised him by denouncing the Washington Post's consumer reporter, Morton Mintz, a journalist who had broken the Thalidomide story in I962 and had been one of the first reporters to write about Nader and auto safety. "She delivered a diatribe against Morton Mintz saying that he doesn't realize that for the Post to survive it has to make a profit. I had the sense that the Post had to thrive and consumer reporting was inimical to that," Pertschuk recalled.

After that, the newspaper regularly opposed consumer legislation. It denounced a bill to regulate advertising on young children's television shows-a proposal violently opposed by cereal companies. "It is a preposterous intervention that would turn the agency into a great national nanny," the newspaper declared. Geyelin himself only lasted through the year. When Graham's son Donald took over as editor the next year, one of his first acts was to fire Geyelin and replace him with his deputy Meg Greenfield. Geyelin later explained his firing: "I've been told that he felt we were too liberal."

Neither the New York Times nor the Washington Post-nor, for that matter, the Ford Foundation-became mouthpieces for the Business Roundtable or the Heritage Foundation, but they showed that they were subject to intimidation from the powerful bloc of conservatives and business lobbies that dominated American politics in the late I970s.

***

p173
Doing good to do well"

Just as some older elite organizations abdicated their responsibility during the I9805, 50, too, did many of the individuals who had earned a reputation as disinterested public servants. By the mid-l980s there were over a thousand former officials in Washington working as lobbyists, including over 200 former members of Congress. They weren't working simply as lawyers who were knowledgeable in FDA or FCC policies. They were selling their reputations and even their convictions. Many of the former officials would trade on their reputation as members of the elite in the crassest manner: they would defend their clients' positions in speeches, interviews, and op-ed pieces without identifying themselves as lobbyists. Elliot Richardson was not known as a lobbyist for Japanese companies but as "Mr. Ambassador" and the man who had defied Nixon during Watergate. Henry Kissinger was not known as a highly paid consultant for companies and governments but as the distinguished former Secretary of State.

Some of the lobbyists clearly believed in what they were doing. Wisconsin Senator Gaylord Nelson, a champion of environmental causes, became the head of the Wilderness Society after he was defeated for reelection in I980. But many others were simply working for the highest bidder. Former Congressman James Corman, a leading liberal Democrat who was defeated in I980, went to work for a Washington law firm where he lobbied for Nissan and Texas Air, but not for the causes or institutions he supported as a Congressman. Corman explained, "People don't hire lawyers to work on the things I worked on when I was in Congress. When you're in public office you have the privilege of representing the public interest. When you work for a law firm, you represent your client." In fact, companies preferred to hire officials who had regulated or negotiated against them or former politicians like Corman who had opposed them. Former opponents not only had a better chance of convincing their former colleagues, but their opinion, appearing to represent a conversion, carried more weight and attracted more attention.

These officials did not become lobbyists because of the conservative counteroffensive but because of the sheer growth of K Street and of the demand for effective lobbyists and consultants. Former officials could easily earn over a million dollars a year on K Street-more than ten times what they had made as public officials. This kind of temptation had not existed in the I9305 when Harvard Law graduates flocked to Washington to take jobs in government.

The law firms themselves changed in character. Firms that had formerly prided themselves on their detachment from pecuniary concerns became "profit centers" that measured the success of their partners and associates by their "billable hours." "By the I980s," Harvard Law professor Mary Ann Glendon writes, "the billable hour had evolved from a sensible tool of office management to a frenetic way of life." And the men and women who joined these firms also changed. Once the heirs of the American tradition of public service, they became businessmen and -women. The new business culture of the law firm, Stanford Law professor Robert Gordon writes, worked to discourage the development of any values beside making money for the collective. The pressures to seek and take on new clients and to pile up billable hours wipe out most of the time and energy that lawyers might otherwise have for outside activities. Firms treat the partner engaged in politics and the associates who want to do pro bono work as parasites, free riders on the income-producing efforts of others.

The move from the White House and Capitol Hill to K Street had begun in the last years of the New Deal. One of the first officials to become a lobbyist was Thomas "the Cork" Corcoran, who was a student of Frankfurter at Harvard and had helped write the Securities and Exchange Act and the Public Utility Company Holding Act. From I936 to I939 he served as Roosevelt's closest advisor until he was supplanted by Harry Hopkins. When Roosevelt did not appoint him solicitor general in I940, Corcoran quit and set up a law practice. He turned his back on the New Deal and on the ideal of disinterested law. He became known as a "fixer" for his ability to solve problems for his corporate clients. He did little actual law; most of his work was done through phone calls to contacts in the White House, the cabinet, and Capitol Hill.

Other important officials followed a similar path, including former Undersecretary of the Interior Abe Fortas, former Truman aide Clark Clifford, and Eisenhower aide Bryce Harlow. But the trickle of recruits in the I9505 and I9605 became a raging torrent in the I970s. During the Carter administration, the practice of parlaying government service into a lucrative lobbying career became known as "doing good to do well." Former chairmen of the Federal Communications Commission went to work for television networks. Former Securities and Exchange officials represented Wall Street companies under investigation by the SEC. A host of former U.S. trade officials became lobbyists for Japanese companies.

Some of these former public officials refused to be described as lobbyists. Former State Department official Stanton Anderson, a lobbyist for numerous Japanese companies, insisted that he was a "trade-policy specialist," not a lobbyist. Former Nixon administration counsel Leonard Garment, who represented Toshiba, said, "I am not really a lobbyist, I am a trial lawyer." Former U.S. trade representative Robert Strauss, who advised Japanese companies, explained, "I don't lobby. I want to be helpful, but I don't know a fucking thing about it." Of these, only Strauss had a point, but not a very good one. According to the legal definition of lobbying, which lobbyists themselves helped to write, a lawyer did not lobby unless he or she actually buttonholed a Congressmember on behalf of a client. Strauss, Clark Clifford, and the other "superlawyers" usually didn't do this work themselves. They attracted the client to their firm, gave the company advice, spoke and wrote on the relevant issues, but then let junior members of the firm do the actual lobbying. Meanwhile, the Congressmembers or White House officials knew that the message was ultimately coming from them.

These lawyer lobbyists bore the same relationship to the older elite of Theodore Roosevelt, Stimson, Brandeis, and Frankfurter that policy groups like Heritage and the American Council for Capital Formation bore to Brookings and the CED. Just as the American Council for Capital Formation aspired to be seen as a CED, Strauss wanted to be seen as a Stimson. In the short run, this strategy of deception worked, but in the long run, it proved to be self-defeating and corrosive.

By becoming business lobbyists, the former officials deprived the country of responsible mediating voices. By making it appear that even the most distinguished Americans could be bought, they contributed to public cynicism about all political opinion, including that of elites. Like the social scientists who lent their name to supply-side economics or to outlandish estimates of regulatory harm, they undermined the tradition of dispassionate expertise on which twentieth-century American democracy had relied.

The Kissinger Precedent

The single act that contributed most to public cynicism about elite opinion was former Secretary of State Henry Kissinger's establishment of Kissinger Associates, his own global consulting firm, in 1982. Before joining the Nixon administration in 1969, Kissinger had been a professor of government at Harvard and was also on retainer to Nelson Rockefeller. But by the time he left office in 1976, he was one of the most famous and respected men in the world. His opinion on any subject from Somalia to soccer carried great weight with government officials around the world and with the general public.

Kissinger could have followed the course of two other famous public officials, George Kennan and Paul Nitze. After serving in the State Department in the Truman administration, Kennan accepted an appointment at Princeton's Institute for Advanced Study, where for the next four decades he had enormous impact on American foreign policy through his books, articles, and public statements. Nitze, after resigning from the Nixon administration in 1973, established the Committee on the Present Danger, through which he almost single-handedly transformed U.S.-Soviet relations during the 1970s. But Kissinger chose instead to cash in on his own fame and reputation by setting up the world's most prestigious consulting service.

He himself tried to keep the entire operation secret. The Park Avenue office wasn't even listed in the building's directory. But on the basis of financial forms filed by his clients and disclosure statements from former employees who joined the government, journalists were able to construct a rough picture of what went on. Kissinger initially charged American and foreign banks and businesses $200,000 a year to provide advice and consultation. He charged them up to $150,000 a month for helping with concrete problems. These were huge sums in the early 1980s.

Kissinger denied that he used the reputation and contacts he had acquired as Secretary of State to open doors for his clients, but it appears that he did so frequently. In Asia, and particularly China, any businessman who wanted to see a government official needed an intermediary or door-opener like Kissinger. Explained Roger Sullivan, the former president of the National Council for U.S.-China Trade, "The Chinese have all the traditional views toward business. It's crass, lower-class. Higher level officials don't like businessmen that much. You have to have someone else with you if you want to see them." Kissinger opened doors for American Express, American International Group, GTE, H. J. Heinz, ITT, and other companies that employed him. He was equally influential in Singapore, Malaysia, and Indonesia. And he could command audiences in Mexico, where many of his clients had interests, and in the Persian Gulf.

The architect of Nixon's China opening also maintained political ties to the Chinese government. In I987, China's ambassador asked Kissinger to set up what he called a "lobby" to create U.S. support for China. Kissinger created the American-China Society, which he ran out of Kissinger Associates and which held luncheons and dinners at which visiting Chinese officials met with American businessmen and opinion makers. Kissinger denied that it was a lobby, and legally it was not. But it was a perfect example of what political scientists call "grassroots lobbying." It didn't affect legislation or governmental action directly, but it tried to change the political environment in which decisions about U.S.-Chinese relations were made.

While he was running Kissinger Associates, setting up the American-China Society, and serving as a partner in an investment scheme in China called China Ventures, Kissinger continued to comment on world affairs. He was on retainer from ABC and also had a column that was syndicated by the Los Angeles Times. Much of what he wrote pertained directly to his business and his clients. He promoted U.S. government help for countries that couldn't pay their debts to American banks, some of which were his clients. He defended authoritarian rulers in Asia from whom he was receiving favors. Yet even though he had a very direct and immediate financial stake in what he wrote, Kissinger was merely identified as a former Secretary of State. Neither ABC nor the Los Angeles Times cited his interests as the head of Kissinger Associates. Instead, he spoke and wrote as a high-ranking member of the foreign policy establishment. That gave his opinions added cachet and credibility, and in turn enhanced his ability to attract clients and open doors.

Like Corcoran, Kissinger set an example that other members of the foreign policy elite followed. He himself hired former Undersecretary of State Lawrence Eagleburger and former national security advisor Brent Scowcroft. He inspired Alexander Haig, after he was forced to resign as Reagan's Secretary of State in July I982, to set up his own version of Kissinger Associates, called Worldwide Associates. By the I9905, one prominent former official after another was setting up a "Group" or an "Associates" in his or her own name. On K Street, such practices were seen as an effective way to make money. But they thoroughly compromised the ideal of the disinterested public servant. They confirmed the public's perception that everyone was for sale.

Paradox of American Democracy

Democracy watch

Index of Website

Home Page