Last week Jon Cowan, president of think tank Third Way, and Jim Kessler, Third Way’s senior vice president for policy, co-authored a Wall Street Journal op-ed blasting Senator Elizabeth Warren’s progressive economic agenda as irresponsible and even reckless.
Third Way’s position should come as no surprise to those familiar with the think tank. Just a cursory glance through its LittleSis profile reveals several connections to JPMorgan, Goldman Sachs, Citigroup, and other financial institutions.
In response to the op-ed, Warren issued a letter to the CEOs of the nation’s top six financial institutions – JPMorgan Chase, Wells Fargo, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley – calling on them to disclose their contributions to influential think tanks in order to establish the independence of research and analysis provided to policy makers. From the letter:
“When you use corporate resources to support think tanks there are only two possible outcomes from public disclosure — those contributions do not influence the work of the think tanks or those contributions do influence the work of the think tanks’ research and conclusions. Either way, shareholders have a right to know how corporate resources are spent, and even more importantly, policymakers and the public should be aware of your contributions and evaluate the work of the think tanks accordingly.”
Warren acknowledged the right to donate to think tanks but compared enhanced transparency with the disclosure of campaign contributions. In short, where there is the possibility of influence, the messenger should be known.
A few well-known policy think tanks already provide some degree of disclosure. Their donor lists shed some light on how these institutions are generally funded.
The Brookings Institution, a massive operation sporting the motto “Policy. Independence. Impact.”, details its donors in annual reports and groups them in broad funding ranges. JPMorgan Chase, for instance, is listed in the $1-$2.4 million donor circle. Here are some highlights from the LittleSis database:
- Goldman Sachs has 11 connections to the Brookings Institution through past and present employees, including former Goldman president John L Thornton, who is chair of the Board of Trustees at Brookings and is a consistent seven figure donor to the institution, giving at least $2.5 million in 2011-2012 alone according to their annual report.
- Brookings and JPMorgan partnered in 2012 to create the Global Cities Initiative, a 5-year policy forum on driving regional economic growth. The initiative was established with a $10 million dollar gift from JPMorgan Chase.
- Brookings is directly connected to many other financial institutions, including Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup, through donations and board memberships. Some examples can be seen in the map below (think tank board members are often, but not always, major donors).
- The Hamilton Project, an economic policy think tank which is housed at Brookings, is overseen by an advisory board composed largely of bankers, and was co-founded by former Treasury Secretary Robert Rubin, a former top executive at both Citigroup and Goldman Sachs.
The Council on Foreign Relations (CFR), a prominent foreign policy think tank, does not provide specifics on funding but it does group corporate members in vague, hierarchical circles. JPMorgan, Citigroup, Goldman Sachs, and Bank of America are all listed in the founders circle of the corporate membership roster. The level of giving required to gain entrance into that elite circle of supporters is not disclosed. Morgan Stanley is somewhat out in the cold as a member of the President’s circle.
CFR’s co-chairs are Rubin and former US Trade Rep Carla Hills, a member of JPMorgan’s international advisory board.
The Center for American Progress (CAP), a large Democratic insider think tank, does not disclose its donors, but an investigative report by The Nation recently exposed the corporate donors behind its “business alliance.” As CAP founder John Podesta heads to the White House, CAP has agreed to release its 2013 business alliance roster to assuage any conflict of interest concerns. Bank of America tops the list. The full list is expected to be available today; the Nation’s report had previously prompted CAP to decide to disclose its donors by the end of 2013.
By comparison, Third Way is less transparent, and would likely prefer to remain so. As I mentioned above, the think tank’s connections to the financial sector through board members are easily mapped, and this offers an indication of where its funding is likely coming from. But it does not disclose its funding sources.
Warren’s letter generated some minor hyperbolic backlash, but her requests are not wildly new concepts. Some corporations already disclose their support for think tanks, and some think tanks (like Brookings and CFR) already disclose basic financial information in annual reports. Perhaps the challenge for a Third Way is that it is not as large and prestigious as a Brookings or CFR, and so cannot shill for Wall Street and pretend its positions have nothing to do with its funding sources. A little transparency would have made its op-ed a lot less respectable.
Living in the era of too-big-to-fail and tax-deductible punitive settlements, it should be clear that the big banks have many tools and mechanisms through which they can influence the policymaking process. They own think tanks, but they also own lobbyists, and politicians, and the place. While a little transparency will help, it is unlikely that the banks will suffer a great deal as a result of this kind of disclosure. On the other hand, think tanks like Third Way – grasping ever so tenuously to an aura of independence and authority – have a lot to lose.