US think tanks: money and influence

Washington, DC prides itself on a vibrant research community, working on nearly every issue under the sun in institutions known as think tanks. The thick web of knowledge and expertise that they form is unparalleled throughout the world. But it does not come without costs.

In September, a front-page controversy broke out over the funding of a paper co-authored by Brookings Institution Nonresident Fellow Robert Litan. Together with Hal Singer of the Progressive Policy Institute, Litan had published a study on the “fiduciary rule” recently put forward by the Department of Labor (DOL) to tighten the screws on financial brokers advising Americans on how to invest for retirement. The banking industry has vocally opposed the plan. In July, Litan testified on the findings of his research, which were also decidedly negative, before a committee of the US Senate. According to Reuters, at the time of the hearing he identified himself as affiliated with Brookings, even if he and Singer had carried out the work, and had been paid for it, as consultants for a firm called Economists, Inc. And though Litan made clear that the study had been funded in part by investment firm Capital Group, he did not reveal, until pressed by Massachusetts Senator Elizabeth Warren after the hearing, that Capital Group had also read a draft of the paper and offered feedback on it. Litan was forced to resign from Brookings.

“There is a hyper sensitivity now to try not to create the impression that think tanks are becoming overtly partisan or too closely connected to special interests,” says Donald Abelson, Professor in the Department of Political Science at the University of Western Ontario in Canada who studies American think tanks. “This may have been an overreaction by Brookings but I think it is symptomatic of a growing concern that there has to be more transparency about the kind of research that is being produced, who is funding it, and what the relationship is between think tanks and their donors.” Other experts, however, warn against the risks of a witch-hunt. “Individual scholars might have made a mistake,” says James McGann, Director of the Think Tanks and Civil Societies Program of the University of Pennsylvania. “But starting with the premise that these institutions are corrupt to the core is inaccurate and does great damage to them.”

The Litan episode is only the most recent installment of what is a rather long saga surrounding the “think tank industrial complex”. In September 2014, The New York Times made waves with an investigation that focused on the money, tens of millions of dollars over the last few years, that foreign governments channel to Washington’s research centers. The article raised the question of the donors’ motivation, what they hope to receive in exchange for their dollars, and how it might affect the independence of the work that they finance. The same concerns also extend to large corporations, which happen to be another crucial source of funding for think tanks alongside philanthropic foundations, private individuals, and, in some cases, the US government.

“More often than not, people who fund think tanks are looking to help these organizations shape both public opinion and public policy,” says Abelson. “They are investing in them not just because they believe in the kind of research that is being undertaken but more importantly because they feel these organizations, thanks to the people who work there, the ties they have to Capitol Hill, to the executive branch, and to the media, are in a position to influence the narrative around particular policy issues. They are looking for a return on their investment.”

It is no surprise then that right-of-center charities give to conservative think tanks and that left-of-center donors finance liberal think tanks, or that foreign governments pitch in for research that pertains to their national interests in the US. So, for example, Koch Industries, of billionaire brothers Charles and David Koch, has donated to Tyler Cowen’s Libertarian-oriented Mercatus Center at George Mason University; a labor union, the American Federation of State, County and Municipal Employees (AFSCME), is a large contributor to the liberal Center for American Progress; and, as reported by The New York Times, Norway, which is both an oil producer and a staunch environmentalist, has given money to the Center for Strategic and International Studies (CSIS) to study oil drilling in the Arctic and to the Center for Global Development to suggest ways to combat deforestation. At the same time, these are only a few among many entities financing such research. In the great scheme of things, the weight of their individual donations might be less than strikes the eye. “If you look at the number of donors, large institutions like Brookings have close to a thousand, and most of them don’t account for more than 2-3% of the annual budget,” says McGann. “It is ludicrous to think that an organization that has that kind of reputation to protect would undermine it for the benefit of just one donor.”

In any case, as long as big money seeks out institutions that are more ideologically aligned to it and gives them funds to support their work, one may say that there is no real problem. In fact, it is a good thing that the US has a fiscal framework that encourages charitable donations, including to think tanks. With government funding shrinking all around the world, this system allows research activity that is floundering in many countries to still thrive in the US. The issue, obviously, arises if and when donors alter, with their contributions, the direction and disposition of the scholarship that fellows carry out. Unfortunately, it is quite difficult to assess this with some precision. “Think tanks of course deny the accusation, and claim that that their research is independent, that the work they have undertaken is work they have decided on, and if people decide to support it that’s fine but that there are no strings attached,” says Abelson. “It’s highly speculative, but the optics are not good.”

According to Abelson, though inquiries into how think tanks raise funds are old news, what has changed in recent years is that these organizations have become more prominent, richer, and, gradually, more advocacy-oriented. “If think tanks were focused solely on generating research that was of a high quality, rigorous, and that could be independently evaluated, that would be one thing,” says Abelson. “But as some of the strategies they employ begin to more closely resemble those of lobbies, then we have the right to know who is driving their agenda. The more openness and transparency there is, the better, but this is a high-stakes political game.”

The degree of disclosure that think tanks embrace varies widely. Some make detailed information on the sources of their funds available to the public, others less so. The ethics standards to which the research staff must abide, and the wall of separation between scholars and people in charge of fundraising, also differ substantially from think tank to think tank. A group called Transparify, based in the Republic of Georgia, has recently begun evaluating research organizations around the world on their financial transparency. Only a handful of US-based institutions have received the highest five-star score, among them the Center for Global Development, the Pew Research Center, and the Woodrow Wilson Center. Many other top-tier ones have been given four stars, including Brookings and the New America Foundation. But Transparify, which is about to launch a second assessment round, is a think tank itself and is funded in its entirety by the Open Society of George Soros. Which begs the question of who watches the watchdogs.

All in all, says McGann, though it is fair to raise questions about transparency, much of what is presented today as evidence against research centers “is circumstantial, it’s people looking for controversy but with very little evidence to back it up.” Additionally, much of the outrage we see today is, according to him, directed toward the wrong organizations. “There are hundreds of think tanks in Washington,” he says, “and the focus is all on the bigger, more established ones, while it is the smaller, poorly funded, struggling groups that are more susceptible to these problems.” Nevertheless, McGann believes that it is “imperative” that the think tank community as a whole get ahead of this issue. To help these institutions prove that there is no outside interference in their research agenda, he is working on coding best practices for transparency and disclosure. He wants to standardize what already exists, which is currently scattershot, into a comprehensive set of policies for all research centers to use.

As think tanks grow in importance, this becomes ever more urgent work. “These are organizations that occupy a unique space on the American political landscape, because they bridge two very important words, the academic world and policy-making world,” says Abelson. “Think tanks can provide corporations and policy makers with a certain element of credibility and respectability that they might not have otherwise, so when corporations turn to think tanks, they are looking to acquire a currency that is even more valuable than money.” Be that as it may, we should at the very least ensure that the integrity of that currency remains intact.