George Soros’s Democracy Alliance: In Search Of A Permanent Democratic Majority
By James Dellinger and Matthew Vadum
Despondent after George W. Bush won re-election, a small group of billionaire Democrats met in San Francisco in December 2004 to reflect on John Kerry’s failure to capture the White House. George Soros, Progressive Insurance chairman Peter B. Lewis, and S&L tycoons Herb and Marion Sandler were angry and depressed. They felt they had been taken—seduced by the siren song of pollsters and the mainstream media who had assured them that the capture of the executive mansion was theirs. But despite giving millions of dollars to liberal candidates and 527 political committees, the donors came away with nothing. At about the same time another group of wealthy Democratic donors was meeting at a hotel in Washington, D.C. feeling the same way. “The U.S. didn’t enter World War II until Japan bombed Pearl Harbor,” political consultant Erica Payne told the meeting. “We just had our Pearl Harbor.”
Determined to bring the Democratic Party back from the political wilderness, Soros and the others decided they needed a long-term strategy to regain power. Former Clinton official Rob Stein urged them to copy conservatives who had spent four decades investing in ideas and institutions with staying power. Over the next year Stein would become well-known for a PowerPoint presentation called “The Conservative Message Machine’s Money Matrix.” He used graphs and charts to show how the conservative movement was comprised of an intricate network of organizations, funders and activists. Stein’s presentation was apparently convincing. In 2005 the Democracy Alliance was born. It was an odd name for a loose collection of superrich donors committed to building organizations that would propel America to the left.
In April 2005, Soros gathered together an even larger group. Seventy millionaires and billionaires met in Phoenix, Arizona, to firm up the details for their fledging political financing clearinghouse. The attendees heard presentations on why all the pro-Democratic Party 527 groups on which they lavished millions of dollars failed to deliver the election to Kerry. But now they had a new strategy to make a difference.
Finances
To join the Democracy Alliance, there is one requirement: You must be rich. Members, who are called “partners,” pay an initial $25,000 fee and $30,000 in yearly dues. They also must pledge to give at least $200,000 annually to groups that Democracy Alliance endorses. Partners meet two times a year in committees to decide on grants, which focus on four areas: media, ideas, leadership, and civic engagement. Recommendations are then made to the DA board, which passes them on to all DA partners. The Alliance discourages partners from discussing DA affairs with the media and it requires its grant recipients to sign nondisclosure agreements.
As a result, it is hard to learn much about the Alliance’s grant making. There were no grants voted on at the DA’s April 2005 organizing meeting in Phoenix. However, when the group met in October of that year at the Chateau Elan Winery & Resort in Atlanta, Georgia, it decided behind closed doors to dole out $28 million to nine grantees. Most of that money went to well-known groups, including the Center for American Progress and Media Matters for America.
Representatives of smaller, less prominent groups were reportedly miffed at the process. “No one knew why the nine groups had been picked. Funding progressive infrastructure was all well and good, but no one bothered defining precisely what ‘progressive’ meant,” wrote Ari Berman, a writer for the leftist Nation magazine. “There was an almost complete lack of actual substance,” Berman quoted one attendee saying.
After the negative feedback from the Phoenix meeting, DA leaders changed the process and allowed groups to apply for grants. The next meeting, held in Austin, Texas, in May
2006, was better received in left-wing circles. Progressive leaders such as Andy Stern, who is president of Service Employees International Union, spoke during panel discussions, and grant-seekers were allowed to network with DA partners. “I’ve made it a mission to hate the Democracy Alliance,” Berman quoted one attendee who heads a grant-seeking group, “and I was pleasantly surprised.”
With an eye on the approaching November elections, the Alliance decided to give another $22 million to 16 groups focused on electoral politics. These groups included the Center for Community Change, US Action, ACORN, EMILY’s List, and the Sierra Club. Former president Bill Clinton dropped by the Austin meeting for a friendly greeting, but when one DA partner asked why Democrats don’t apologize for supporting the Iraq war, Clinton went on a 10-minute tirade, yelling that if he had been in Congress, he would have voted to authorize the war. “It was an extraordinary display of anger and imperiousness,” said partner Guy Saperstein, an Oakland, California attorney. “Clinton’s response was a not-so-subtle warning to partners to avoid divisive issues, like the war, that might harm his wife in the next president election,” wrote Berman.
The DA’s third round of funding was expected to be decided at a Miami, Florida, meeting scheduled for November 2006. Details of the meeting were not available at Foundation Watch’s press time.
DA’s managing director, Judy Wade, said she hopes the Alliance will work with other funding groups and eventually give out $500 million in grants each year.
Selected Grant Recipients
We can identify a number of left-wing groups that have gone through the DA’s vetting process and received funding. Some grant amounts have been reported in the press but there is no official tally.
*Media Matters for America: Former conservative journalist David Brock’s group claims to expose right-wing news bias. The Internet-based media watchdog, launched in May 2004, describes itself as “a Web-based, not-for-profit, 501(c)(3)progressive research and information center dedicated to comprehensively monitoring, analyzing, and correcting conservative misinformation in the U.S. media.”
*Center for American Progress: Former Clinton White House chief of staff John Podesta heads the think tank that received $5 million from the DA. The organization aspires to be the Heritage Foundation of the left. Spinoffs include Campus Progress and the Center for American Progress Action Fund, a 50 1(c)(4) lobby group. The Action Fund’s “Kick the Oil Habit” campaign is led by actor-environmentalist Robert Redford.
*Citizens for Responsibility and Ethics in Washington (CREW):
This Soros-funded group sees itself as a left-wing version of Judicial Watch, the conservative legal group that filed a barrage of lawsuits against the Clinton administration in the 1990s.CREW executive director Melanie Sloan is a former U.S. Attorney and Democratic counsel for the House Judiciary Committee….
*Association of Community Organizations for Reform Now (ACORN): ACORN is a radical activist group active in housing programs and “living wage” campaigns in inner cities neighborhoods in more than 75 U.S. cities. In recent years it has been implicated in a number of fraudulent voter-registration schemes.
*EMILY’s List: While the political action committee boasts that it is “the nation’s largest grassroots political network,” it is essentially a fundraising vehicle for pro-abortion rights female political candidates. Donations to the organization are not tax-deductible. EMILY, according to the group’s website, “is an acronym for ‘Early Money Is Like Yeast’ (it helps the dough rise).” The group’s president is veteran political fundraiser Ellen Malcolm.
*America Votes: Another get-out-the-vote 527 organization, it is headed by Maggie Fox, a former deputy executive director of the Sierra Club. The group received a $6 million funding commitment from George Soros despite the billionaire’s protestations that he has turned his back on political campaigns.
*Air America: The struggling left-wing talk radio network filed for bankruptcy protection on October 13 after it reportedly had received a funding commitment of at least $8 million from the Alliance. The network touted by comedian Al Franken is said to have lost an astounding $41 million since 2004. Longtime radio executive Scott Elberg is Air America’s chief executive officer. The network’s headliners include TV sleaze merchant Jerry Springer.
*Center for Community Change: This longtime group dedicated to defending welfare entitlements and leftist anti-poverty programs was founded in 1968. Activist Deepak Bhargava is its executive director.
*US Action: This group works closely with organized labor. It is the successor to Citizen Action, the activist group discredited by its involvement in the money-laundering scandal to re-elect Teamsters president Ron Carey in the late 1990s.
*Data Warehouse: This group was created by Clinton aide Harold Ickes and Democratic operative Laura Quinn. Ickes is critical of the Democratic National Committee under chairman Howard Dean and aims to create a sophisticated get-out-the-vote operation that rivals the Republican Party’s. Ickes proposes to build detailed voter lists that will be made available to Democratic Party candidates, and also to advocacy groups. According to a report in the Washington Post, George Soros put $11 million at Ickes’s disposal because he distrusts Howard Dean.
Does It Have A Mission?
Obviously Democracy Alliance participants have the capacity to make big grants to leftist groups, but are George Soros and his friends doing anything different that will transform America? That’s what the Alliance is promising. After the Phoenix meeting, Sarah Ingersoll, a de facto spokeswoman for the Alliance, said the group was still ironing out details. “Primarily, we’re looking at making recommendations and thinking through with these donors on how they can form an alliance. This is about creating a network of individuals to share information to be effective in whatever they do going forward.”
Ingersoll said the Alliance intended to make details of its grant making publicly available. But that promise has not been fulfilled…
How dependent is the left on big donors? In his recent book, The Big Ripoff: How Big Business and Big Government Steal Your Money, (Wiley, 2006) Timothy Carney itemizes left-wing political contributions in 2004:
“The top four donors to 527s in 2004 — and the only donors to spend in the eight figures on that election — all gave exclusively to pro-Democrat groups. Of the top 25 individual donors—all billionaires or multi-millionaires— 15 of them gave to pro-Democrat groups, and 10 gave to Republican- supporting groups. From this elite group of super-rich donors, the Democratic side got $108.4 million, compared to the Republican side’s $40 million. Soros and Lewis together spent more to defeat Bush than the ten most prolific Republican fat cats combined spent supporting the President.”
Alliance Leadership
The ostensible leaders of the Democracy Alliance are an odd lot, which may explain why the organization has had a hard time making much of a dent in politics.
Rob McKay, president of the McKay Family Foundation, is the new chairman of the DA. He was elected at the group’s July 2006 meeting in Boulder, Colorado. Heir to the Taco Bell fortune, the 42 year-old McKay is also a director of Vanguard Public Foundation, co-chairman of Mother Jones magazine, a board member of the Ms. Foundation for Women, and a blogger on the Huffington Post website. He was born in conservative Orange County, California and his parents were Republicans. However, like many on the left he had an awakening. McKay succeeds Steven M. Gluckstern, a founding managing director of Azimuth Alternative Assets, an investment banking firm.
The vice chairman is Anna Burger, sometimes known as the “Queen of Labor.” Burger is secretary-treasurer of the Service Employees International Union (SEIU), the militant union that walked out of the AFL-CIO last year and started the 6-million member Change to Win Federation, an alternative labor coalition. After she was elected chairman of Change to Win in 2005, Gannett News Service hailed Burger as arguably “the most influential woman in the U.S. labor movement.”
The first managing director of the Democracy Alliance was Rob Stein, once chief of staff to the late Ron Brown, Bill Clinton’s first commerce secretary. Stein dazzled the billionaires with his PowerPoint presentation but he turned out to be a poor manager. Early in 2006, the board offered the $400,000-a-year job to Robert Dunn, a former president of Business for Social Responsibility, a group promoting the concept of corporate social responsibility. When he declined it, the board turned to Judy Wade, a management consultant at McKinsey& Company…
The designated spokesman for the DA is supposedly Mike McCurry, the former White House press secretary for Bill Clinton. But little has been heard from McCurry about the Alliance. Lately his public relations talents have been devoted to attacking “net neutrality” legislation regulating the Internet. That has led some left-wing activists to accuse him of helping the big telecommunications companies. McCurry “represents a sickening breed of operative” and is the agent of a “hostile takeover” of the Democratic Party, charges activist David Sirota, a former press aide to socialist congressman Bernie Sanders and recently a consultant to the Ned Lamont Senate campaign in Connecticut. That sort of vitriol suggests the problems billionaires face when they pass themselves off as leaders of the left…
Democracy Alliance leaders are tight-lipped about future plans. At press time, Soros had not been quoted in the media with any reaction to the Democrats’ electoral triumph. Nor had Peter B. Lewis, the 72-year-old insurance magnate, who suffered a heart attack and was hospitalized just before the November election…
The Democracy Alliance may have as many as 100 donor-members, both individuals and organizations. However, it has not made available an official list of its “partners.” Here are known members:
George Soros, the billionaire head of Soros Fund Management LLC, Soros is founder of Quantum Asset Management and the grant-making Open Society Institute. He donated $24 million of his own money to 527 committees that made “independent expenditures” to defeat George W. Bush in 2004. His son Jonathan is also a member of the DA.
Peter B. Lewis is a billionaire insurance magnate — chairman of Progressive Casualty Insurance Co., the nation’s third-largest automobile insurer. He gave $23 million to 527 groups in 2004.
Rob McKay, heir to the Taco Bell fortune, is chairman of the DA. Enamored of tedious class-warfare rhetoric, McKay wrote at the Huffington Post website last year that “the richest Americans are getting extravagantly richer and the poor are crawling far behind, choking on the exhaust of our luxury cars. It’s also obvious that Bush’s tax policies are widening the gap between the very rich and the growing poor.”
Herb and Marion Sandler are the co-founders of Golden West Financial Corp. They sold their S&L holding company to Wachovia in May for $24 billion in cash and stock. In 2004 they gave $13 million to anti-Bush 527s.
Guy Saperstein, an Oakland, California trial lawyer, made Bill Clinton angry when he asked about Hillary’s support for the Iraq war at a May 2006 DA meeting in Austin, Texas, Arianna Huffington reported on her blog.
Rob Reiner, a Hollywood actor-director, is chairman of Parents Action for Children, a 501(c)(3) advocacy group. In 2005 he promoted Proposition 82, an unsuccessful California ballot initiative that would have raised state taxes to fund preschool for all four year-olds.
Herb Miller is a prominent Washington, D.C. real estate developer and Democratic Party fundraiser who just lost a bitter battle with the Lerner family, owners of D.C.’s new baseball franchise. Miller expected the city to authorize him to develop housing and retail near the taxpayer-subsidized stadium. The Lerners, however, demand that the city build parking structures fast and cheap before the 2008 baseball season begins. Any development “comes later,” they say.
David A. Friedman, a philanthropist and self-described centrist, is treasurer of the Friedman Family Foundation of San Mateo, California.
Ann S. Bowers is the widow of Intel cofounder Robert Noyce, inventor of the integrated circuit and “mayor of Silicon Valley.” Bowers is board chairman of Noyce Foundation.
Albert C. Yates is former president of Colorado State University.
Davidi Gio is a Cupertino, California high-tech entrepreneur and founder of Vyyo Inc. who made the Mother Jones 400 list of big leftist donors. His wife, Shamaya, created the Winds of Change Foundation in 1998, and is a heavy donor to Democratic candidates.
Mark Buell, is a San Francisco businessman. His wife, Susie Tompkins Buell, co-founded the clothier Esprit with her ex-husband, Douglas Tompkins, who is president of the Foundation for Deep Ecology.
Tim Gill (shown above) is the software entrepreneur who founded Quark, the design and layout publishing program. Gill is also president of the Gill Foundation in Denver, a funder of gay rights organizations.
Fred Baron, founder of the Dallas law firm Baron& Budd, is one of America’ s wealthiest plaintiffs’ attorneys and has won settlements in major asbestos and toxic chemicals class-action suits. He was finance chairman for Senator John Edwards’s 2004 presidential campaign.
Service Employees International Union (SEIU) is an institutional member of the DA.
Alan Patric of is co-founder of private equity firm Apax Partners in New York. From 1993 to 1995, he was chairman of the White House Conference on Small Business.
Bren Simon is president of MBS Associates LLC, a property management and development firm. Her husband, Melvin, ranks 278 on the 2006 Forbes list of the world’s richest people. He is a part owner of the Indiana Pacers and runs the Simon Property Group, developer of shopping malls. (It is not known if Mr. Simon is active in the DA.)
Chris Gabrieli is a software entrepreneur and unsuccessful 2006 candidate for the Democratic nomination for governor of Massachusetts. He is also co-founder and chairman of Massachusetts 2020 Foundation, which describes itself on its website as “a non-profit foundation aimed at expanding educational and economic opportunities for children and families across Massachusetts.” Anne Bartley, the daughter of Winthrop Rockefeller, is vice chairman of Rockefeller Philanthropy Advisors and a trustee of the Jennifer Altman Foundation in San Francisco.
Simon Rosenberg is the founder and president of the New Democrat Network. He wrote the foreword to Crashing the Gate: Netroots, Grassroots, and the Rise of People-Powered Politics, a book by leftist bloggers Markos Moulitsas Zuniga (Daily Kos) and Jerome Armstrong (MyDD.com). Rosenberg ran unsuccessfully in 2005 for the chairmanship of the Democratic National Committee.
Bernard L. Schwartz is former CEO of Loral Space & Communications. In the 1990s he was often ranked as largest individual donor to the DNC. His wife Irene is the president of the Bernard and Irene Schwartz Foundation, a large donor to the Clinton Library Foundation.
Lewis B. Cullman is a New York financier and philanthropist. His web site says he has given away $223 million to date.
Rob Glaser is CEO of the online multimedia company Real Networks.
Rob Johnson is a former portfolio manager for George Soros’s Quantum Fund. According to Johnson: “It’s almost as if the market is a religious icon. I see that mirrored in the very, very high valuation of the United States stock market and the tremendous conviction that citizens have throughout the country that the United States is good, is right. The free market is great, and the stock market is where you put your money.”
Michael Kieschnick is founder of Working Assets. Every time a customer uses one of the Working Assets donation-linked services (long distance, wireless and credit card), the company donates a portion of the charges to “nonprofit groups working to build a world that is more just, humane, and environmentally sustainable,” according to the company’s website, which claims that over $50 million has been raised for progressive causes.
Gara LaMarche is vice president and director of U.S. Programs for George Soros’ s Open Society Institute.
Norman Lear is the Hollywood television producer who created “All in the Family” and “Sanford and Son.”
Drummond Pike is an antiwar activist who founded the Tides Foundation.
– James Dellinger and Matthew Vadum
James Dellinger is Executive Director of Green Watch and Education Watch at Capital Research Center. Matthew Vadum is Editor of Foundation Watch.
Editor’s Note: This article has drawn heavily upon “Big $$ for Progressive Politics,” by Ari Berman (The Nation, October 16, 2006), and “A New Alliance Of Democrats Spreads Funding,” by Jim VandeHei and Chris Cillizza (Washington Post, July 17, 2006).
So now we know a little bit more about the money behind Media Matters and much else going on in the Democrat operations.
