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Corruption at the Fifth Estate

Lack of disclosure on de facto lobbying at think tanks has triggered a
bipartisan reaction.

Earlier this year, one of Washington's preeminent think tanks, the
Atlantic Council, was caught in a pay-for-play scheme promoting an
authoritarian regime that happens to pay some of its bills. The incident
could reignite a burgeoning bipartisan coalition of anti-kleptocracy
lawmakers that has put foreign corruption in its crosshairs.

The president of the Council, Fred Kempe, penned a glowing op-ed
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at CNBC.com on January 14 applauding the United Arab Emirates'
appointment of Sultan Al Jaber, the Abu Dhabi National Oil Company's
CEO, to lead the U.N.'s COP28 climate summit. The article dropped in
the midst of a backlash from climate activists who oppose the selection
of an oil chief from a petrostate to head international climate talks.
What the article didn't disclose in its original version was that the
Atlantic Council has received over $1 million in donations annually from
the UAE for the past five years, along with gifts from various
state-connected entities. The Gulf State monarchy has a long list of
human rights abuses, according to the U.S. State Department, and is a
close ally of Saudi Arabia.

After the Washington Free Beacon contacted CNBC for comment
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about the conflict of interest, the website issued
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a lengthy editor's note at the top of the article copping to the
omission.

I asked Eli Clifton, a policy adviser at the Quincy Institute, about the
fallout from the op-ed. Clifton closely tracks foreign influence at U.S.
think tanks and was one of the early voices who initially brought
attention to the Atlantic Council's lack of disclosure. He told me
he'd never seen as harsh of a correction as the one put out by CNBC,
which essentially claimed the outlet had been misled by Kempe.

"That editor's note represented a direct collision between
journalistic standards and the absence of these principles whatsoever at
think tanks," said Clifton.

The editor's note was enough of a scandal that the Council
retroactively scrubbed its own website to include disclosures on several
articles, including a write-up
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on the Council's Global Energy Forum hosted in Abu Dhabi in January.

Kempe's PR tour for Middle Eastern monarchies didn't end with the
CNBC op-ed though. Just a few days after the debacle, Kempe spoke on a
panel at Davos entitled "Saudi Arabia's Transformation in a Changing
Global Context," and heaped praise on Saudi Arabia's minister of
finance, Mohammed Al-Jadaan-a "rock star," in Kempe's words. "I hope
that's an accepted thing to call someone in Saudi Arabia, but you
really are highly respected by all of your peers," said Kempe.

Needless to say, the Council's financial ties to Saudi Arabia's
closest Gulf State ally were not mentioned to the audience members.

This slippage between neutral think tank analyst and paid lobbyist is
not entirely uncommon in Washington, though it doesn't often play out
quite this brazenly. Ben Freeman is the former director of the Foreign
Influence Transparency Initiative at the Center for International Policy
and now a research fellow at the Quincy Institute. For him, what's
unnerving about the recent Kempe scandal is that the Council actually
releases more details about its funding than many other think tanks.
However, several of its largest donations remain anonymous, which has
led to speculation.

"The op-ed shows that when think tanks don't disclose information it
makes it look like they have something to hide," said Freeman. "It's
not a scarlet letter to take foreign funding but these institutions need
to disclose when they do."

Several recent flare-ups at think tanks have exposed the scope of the
conflicts of interest and caught the attention of lawmakers.

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This past summer, the head of the Brookings Institution, John Allen,
stepped
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down amidst a federal investigation into illegal lobbying he did on
behalf of Qatar. The Qatari government is a major backer of Brookings,
which consistently sits at the top of international rankings for U.S.
think tanks in terms of research output and influence. The FBI's
affidavit alleged that Allen violated foreign lobbying rules by
advocating for Doha interests to White House officials during a 2017
diplomatic dispute while advising Qatar on how to shape U.S. policy. The
DOJ recently dropped its probe into Allen without an explanation of why
it chose not to pursue charges.

The prestige of think tanks like Brookings and the Atlantic Council
derives from their coveted independence and technical expertise, which
spurs lawmakers to court their advice and philanthropic donors to pay
them handsome sums. At least, that's what we're told. Think tanks
have become so embedded in the political process, often writing
legislation for congressional offices, that they might as well be
considered a fifth estate of government.

Originally serving as boutique policy shops, the nonprofit research
sector now takes in billions of tax-exempt dollars from both
multinational corporations and, increasingly, foreign governments, much
of which remains undisclosed. In recent years, Big Tech companies have
flooded
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a smattering of think tanks with cash, especially once the firms began
to face regulatory scrutiny.

Foreign funders have increased their footprint in D.C. as well. In a
2020 study from the Foreign Influence Transparency Initiative, Freeman
found that think tanks accepted
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at least $174 million from foreign state entities, and the number is
almost certainly higher because of a lack of transparency. Many of the
top foreign spenders are OPEC+ governments-Qatar, UAE, Saudi Arabia,
and Russia-that clearly conflict with U.S. interests on key issues
like energy policy. In addition, the repressive crackdowns by these
governments would seem to contradict the stated goals of many think
tanks like Brookings, which nominally take a hard line in support of
human rights.

For large corporations, white papers from a pseudo-academic outfit offer
a certain cachet that can be more valuable than lobbying. And foreign
regimes, especially those with sullied fortunes, can bypass legal
restrictions on direct lobbying and use think tanks for reputation
laundering. In both cases, a lack of disclosure can hoodwink lawmakers
into thinking they are getting independent analysis.

The dark money flowing into think tanks creates a crisis of expertise
that further undermines trust in government and threatens the basic rule
of law. Domestic lobbyists have to register their activities, and
foreign actors are bound by an even stricter set of laws and
restrictions, under the Foreign Agents Registration Act of 1938.

The Brookings bombshell last year galvanized a group of lawmakers in
Congress to push for mandated disclosures from policy shops on foreign
funding. The outcry over the Kempe op-ed could build momentum in the new
Congress. Among the most prominent voices are Democratic Reps. Katie
Porter (D-CA) and Jared Golden (D-ME), joined by Republican Sen. Chuck
Grassley (R-IA) and Rep. Jack Bergman (R-MI). Sen. Elizabeth Warren
(D-MA) has also been a longtime critic of opaque funding at think tanks.

Both the Think Tank Transparency Act and the Fighting Foreign Influence
Act are expected to be reintroduced this Congress. They would force
nonprofits to disclose high-dollar donations from overseas to a public
registry. Other reforms would also close loopholes
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in Truth in Testimony rules, so that think tank experts called upon to
speak at congressional hearings can't sidestep the limited
transparency obligations already in place.

The legislators are part of a broader anti-kleptocracy coalition that
has emerged in Congress. They seek to impose stricter rules on an array
of American institutions, from banks to real estate to nonprofits, that
all too willingly accept illicit funds from overseas. As shown by the
Pandora Papers in 2021, onshore tax havens such as South Dakota
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and coastal real estate
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have become a vehicle for global oligarchs to evade sanctions and taxes,
and maintain financial secrecy. While oligarchs use properties for
direct money laundering, they often turn to nonprofits such as art
museums, medical schools, and think tanks to burnish their image and buy
influence in the U.S.

To be sure, Republicans have been more keen to crack down on foreign
funding at think tanks than they have been on instituting transparency
rules for U.S.-based corporations. And of course, right-wing donors have
their own think tank networks-primarily the Heritage Foundation and
American Enterprise Institute-which still wield enormous power in GOP
politics.

Still, passing even basic transparency reforms for foreign funding at
think tanks would be an important rebuttal to the libertarian wing of
the GOP, which for decades has worked to protect the financial secrecy
of corporations from the prying eye of the taxman or government
intrusion. It would be a key admission by conservatives that the
international flow of capital is not an unmitigated good and requires
some regulation.

~ LUKE GOLDSTEIN, WRITING FELLOW

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