Big Ideas; U.S. Think Tanks Often Reflect The Agendas Of Their Deep-Pocketed Supporters

THE LAUNCH of the Heritage Foundation in the 1970s started the boom in think tanks as a way for business interests in particular to influence policy - and get a tax deduction. Many notions the institutions brainstormed have changed the way ordinary people live their lives.

WASHINGTON - Stuart Butler, a wiry Englishman with an infectious smile, is so skinny his suspenders slip off his shoulders when he gestures to make a point. But don't be fooled by his size.

Butler is a man of big ideas.

From a sixth-floor office with a view of the Capitol, the 52-year-old registered Democrat runs the domestic-operations division of the Heritage Foundation, a conservative organization dedicated to altering the ways of government. It is one of more than 100 think tanks in Washington that together form a kind of "fifth estate" of government.

Funded by big business and major foundations, think tanks are pragmatic advocates whose work promotes the agendas of their backers. They conceive and promote policies that shape the lives of everyday Americans: welfare reform, Social Security privatization, medical savings accounts, to name a few.

Think tanks such as Heritage were once considered "diplomatic graveyards," where old senators and diplomats went to think and write in retirement. Now they are "setting the tenor for the major debates in Washington and around the country," says Geoffrey Underwood, founder and president of Think Tanks Network, which publishes a weekly report on their work.

Think tanks conduct research, hold seminars, issue news releases and publish books and reports aimed at influencing policy. Their experts testify on Capitol Hill, provide ideas for White House aspirants, write articles for the op-ed pages of newspapers and appear as commentators on TV.

Like Heritage, many of the institutions got their start in the late 1970s. Corporations and other special interests began providing start-up money for new think tanks, most of them with a pro-business, conservative orientation, as a more efficient way to change the climate of opinion on issues.

Today, more than 300 independent think tanks operate in the United States, not including 625 university-affiliated research organizations and 250 others with close ties to organizations or causes. Most are nonprofit, tax-exempt, political-idea factories where donations can be as big as a donor's checkbook and are seldom publicized.

Money flows

So much money now flows in that three leading conservative think tanks in Washington - Heritage, the American Enterprise Institute and the Cato Institute - took in more contributions combined during the 1997-98 congressional cycle than all the so-called "soft money" contributions to Republican national committees.

Liberal think tanks are outnumbered 2-to-1 by conservative think tanks and amass less funding.

Sam Husseini, communications director for the Institute for Public Accuracy, a liberal watchdog group that monitors think tanks, says the proliferation of corporate-funded think tanks has given wealthy business interests a back door to get attention for their positions.

"It's much more effective for a corporation to fund a think tank that says things that are conducive to their point of view, rather than having their own spokesperson say it, because it comes off as the opinion of an impartial third party," says Husseini.

Husseini cites Cato's campaign for privatizing Social Security as an example. The libertarian think tank aggressively promotes reducing the government's rules and regulations. Cato has concentrated on Social Security privatization, Husseini says, "because that's where their money comes from - the financial houses that stand to reap untold wealth if that happens."

Cato's 1998 annual report shows it received donations from the Securities Industry Association and a number of Wall Street firms, including Fidelity Investments, American Express Financial Advisors, Charles Schwab & Co., Quick & Reilly Group, State Street Bank & Trust and ETrade Securities. The amounts are not specified.

Julia Williams, a Cato spokeswoman, says the think tank neither solicits nor receives contributions from Wall Street earmarked for research on Social Security privatization. She says Social Security is an important issue for Cato because it represents one-fourth of the federal budget and therefore is a target for reduction.

"We published our first book on Social Security - our first book, in fact - in 1980, long before we ever got a contribution from Wall Street," she says.

Because Cato believes that the least government is the best government, it is "pleased when a critique of ours persuades members of Congress not to pass a law," says David Boaz, Cato's executive vice president. Boaz cites Cato's opposition to the Clinton health-care plan in 1994 and its successful effort to scuttle what he says was a "bad immigration bill" in 1996.

Influence on politicians

Rep. Thomas Tancredo, R-Calif., says think tanks' influence is pervasive, starting with seminars for new representatives put on by Heritage and the Brookings Institution. Tancredo, once president of the Independent Institute, a Colorado think tank, says he relied during his own campaign on a Heritage Foundation book, "Issues '98: The Candidate's Briefing Book," written by the think tank's experts as a resource for conservative candidates. Topics ranged from "how to get federal spending under control" to "understanding the limits of globalism."

"I plagiarized the hell out of it," Tancredo says, laughing.

Since he took office, his staff has stayed in close contact with staff from Heritage and Cato. Heritage sponsors a weekly luncheon meeting for 40 Republican representatives who call themselves the Conservative Action Team, Tancredo says.

Heritage gave guidance to Ronald Reagan during his successful 1980 campaign and presented the new administration with a guide for governing titled "Mandate for Leadership," containing 2,000 recommendations. By the end of Reagan's first year in office, Heritage counted 1,270, or 60 percent, of those recommendations as either implemented or initiated.

The idea of empowerment zones, a federal financial-incentive program aimed at rebuilding inner cities, came from a think-tank proposal - Butler's.

He joined the newly founded Heritage in 1979. In his first paper there, Butler proposed adapting the British concept of "little Hong Kongs" - where government regulations, taxes and other obstacles are eased - to spur investment in the deteriorating neighborhoods of U.S. cities.

Jack Kemp, a Republican congressman from New York who later became secretary of Housing and Urban Development, adopted the concept after reading Butler's paper. Kemp and Rep. Robert Garcia, D-N.Y., sponsored legislation and President Reagan included enterprise zones in his first budget in 1981. Finally, in 1994, 15 years after Butler first put the idea on the table, Congress passed and President Clinton signed legislation creating urban- and rural-empowerment zones - an extension of the enterprise-zone concept.

Clinton's election in 1992 generally closed the White House doors to Heritage, but its influence surged when Republicans took control of the House of Representatives in 1994, ending 40 years of Democratic control.

Like Butler's idea for enterprise zones, many notions brainstormed by think tanks have changed the way ordinary people live their lives.

Brookings played a part in creating the federal government's civil-service system and Social Security program. Its research persuaded President Nixon to impose wage and price controls during the Vietnam War.

RAND, an acronym for research and development, prides itself on political and ideological neutrality. It was set up after World War II to conduct defense-oriented research under government contracts. Although it still relies heavily on government contracts, RAND has broadened its scope to research on social policy. South Dakota's middle and high schools use a drug-prevention program developed at RAND.

The New York-based Manhattan Institute promoted scholar George Kelling's work on the "fixing broken windows theory," which led to police reforms in New York, Philadelphia, New Orleans and other cities. The theory holds that small infractions, such as graffiti, lead to widespread public disorder if left unattended.

The launch of the Heritage Foundation in the 1970s started the boom in think tanks as a way for business interests in particular to gain influence on policy - and get a tax deduction in the bargain.

Edwin Feulner Jr., a founder and president of Heritage, recalls that the inspiration came from a report issued by the established American Enterprise Institute. In 1970, AEI published a report on the supersonic transport and delivered it to members of Congress - on the day after they voted.

Feulner called the AEI president to inquire about the timing. "His answer: `They didn't want to influence the vote.' "

Driving debate, defining outcomes

What conservatives needed, Feulner decided, was an institution that drove debates and defined outcomes. Feulner and conservative activist Paul Weyrich persuaded beer baron Joseph Coors, an archconservative, to invest $250,000 in the Analysis and Research Association Inc., which was to become Heritage.

Spurred by the Reagan years, then by the Republican takeover of Congress, Heritage has grown in money and influence. It celebrated its 25th anniversary with a fund-raising drive that has garnered more than $101 million so far, with checks still coming in.

Heritage starts each year with a list of priorities agreed on by its top officers. Working mainly within those priorities, Heritage scholars conduct research and release their findings timed to have maximum impact on government policy.

Butler said the "eureka moments" at Heritage come only after extensive brainstorming and polishing of ideas. Significant policy change is a process that consumes years from the inception of an idea to the signing of a law, he says.

"At Heritage, we're not a group of independent scholars," Butler says. "We have regular meetings involving people from different departments to talk about issues, and a lot of creative juices flow from that. I take an inkling of an idea and share it with somebody else. Then a paper is done and I edit it. It comes out in that person's name, but there are a lot of people's ideas in it."

Jeffrey Eisenach, president of the Progress and Freedom Foundation, sees today's think tanks as engines of change, just as Brookings was a prime mover at the dawn of an earlier industrial age.

"If the world never changed and if thinking about public policy never changed, then we wouldn't need think tanks," Eisenach said. "The status quo doesn't need a think tank.