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BROKEN CITY
Washington’s robust market for attacks, half-truths
http://www.bostonglobe.com/news/politics/2013/05/18/corporations-anonymously-fund-attacks-and-influence-washington-policy-through-nonprofit-groups/qyaJIFcv7yYOsQvya6ykAK/comments.htmlA look inside an industry of distortion, where unnamed corporations pay richly to bend the debate their way
By Michael Kranish
GLOBE STAFF
MAY 19, 2013
Seventh in a series.
WASHINGTON — Even by the contemporary standards of bare-fisted attack ads, the unlikely assault on the president of the Humane Society of the United States seems particularly brazen.
“Is Wayne Pacelle the Bernie Madoff of the Charity World?” the ad says, comparing the leader of the nation’s largest animal welfare group to the swindler serving a 150-year sentence for losses of $65 billion in the world’s most notorious Ponzi scheme. As a narrator speaks, an image of Pacelle is shown morphing into Madoff.
Then the attack widens. The Humane Society, the narrator says, “gives less than 1 percent of its massive donations to local pet shelters but has socked away $17 million in its own pension fund.” Dollar bills are shown floating in front of Pacelle’s smiling face as the narrator says donors should only continue to contribute to the Humane Society “if you want your money to support Wayne and his pension.”
This one-minute ad — viewed 1.7 million times on YouTube and created by a nonprofit organization called the Center for Consumer Freedom — provides a case study of what critics say is an industry of distortion in Washington. Increasingly, groups are seeking to influence public policy not by the traditional methods of lobbying or campaign contributions, but, as in this case, by hurling accusations, true or not, that are intended to destroy an influential target’s credibility.
On one level, the charges can be easily refuted, according to the ad’s target, Pacelle. The Humane Society president said his organization shelters more animals than any other group, mostly using its own facilities instead of contributing to others, and he said that the $17 million pension fund covers hundreds of employees, not just himself.
The ad “is comparing me to America’s most notorious white collar criminal and I have a spotless record on financial matters and we also do exactly what we say,” Pacelle said, decrying what he called the ad’s “lies and fabrications and misrepresentations.”
But on a broader level, it is the story behind the ad that is most revealing — a story that provides a window into a world of questionable claims, powered by donations from unnamed corporations, and a Washington agenda with many millions of dollars at stake.
The group behind the ad, the Center for Consumer Freedom, is headed by a Washington-based corporate communications consultant named Richard Berman, the head of Berman and Company, a public relations and government affairs firm.
The center’s funding includes large donations from corporations whose identity it does not disclose. But Berman and his associates have said in depositions and interviews that backers include food and farming corporations.
Some of those companies have been at odds with the Humane Society, which backs legislation in Congress and state legislatures to improve conditions for farm animals. An ad defending the cramped size of animal pens is, needless to say, hardly as attention-getting as one comparing the Humane Society president to Madoff.
Sarah Longwell, the vice president of Berman and Company, declined to take questions from the Globe, writing via e-mail that “no one here will be participating in your story.” Berman did not respond to repeated requests for comment.
Washington, of course, is a city with many operatives who act for corporations seeking to shape public opinion about issues before Congress without leaving fingerprints and without having to directly associate their name and brand with the attacks made on their behalf.
Indeed, from the upper reaches of the Washington power structure on down, questionable or outright false statements have become a way of doing business.
Hyperbole and distortion are common, a carryover from the rhetorical free-for-all of political campaigns; the result is that there is much public confusion about the issues, about what is fact and what is merely an interested parties claim.
Gun control opponents say the government plans to take away guns. Obamacare opponents say the government wants to take over health care. So-called “birthers” went after President Obama by suggesting he was not born in America despite indisputable evidence he was born in Hawaii. Senate Majority Leader Harry Reid last year said Republican presidential nominee Mitt Romney didn’t pay federal taxes for 10 years, even though Romney provided a letter from his accountant that he said refuted the charge.
Misinformation has become so widespread that a counter-industry of fact checkers has emerged at various media outlets; The Washington Post rates misleading statements on the number of “Pinocchios,” while the Pulitzer-winning website PolitiFact gives the biggest whoppers a grade of “Pants on Fire.”
In a political campaign, a candidate making questionable claims can be held accountable by voters at the ballot box. But accountability is harder to come by in the shadowy world where Berman and like operatives do their work. There, corporate backers are anonymous, funding groups that have vague but high-sounding names, such as the Center for Consumer Freedom. The work of such groups receives far less scrutiny from media fact-checking operations than that of political candidates.
In this realm of opinion molding, Berman is a pioneer. He maintains one of the longest-running and most influential enterprises in the field. His attacks typically are carefully worded so that each sentence can be defended as narrowly accurate. But his critics say many are constructed in a way that distorts the overall picture, as in the case of the ad comparing Pacelle to Madoff.
Berman boasts on his website of his influence, saying that his groups’ research is cited on the floors of the House and Senate, shaping countless pieces of legislation. His op-eds run in newspapers across the country, sometimes without making clear the sources of his corporate backing. He was quoted in a 2003 book about US politics as saying companies “can pay us to represent them and retain their anonymity,” while he vows on his website that he will stick with an issue “as long as it takes to win.”
While Berman’s work has been in and out of the news over the years, his profile recently has been raised due to a confluence of events that has focused new light on his activities.
Charity Navigator, an independent group that analyzes nonprofits, recently gave five of Berman’s groups its lowest rating, known as a “donor advisory,” saying the nonprofits used most of their funds to pay Berman’s for-profit company for management services and other costs.
Charity Navigator president Ken Berger said in an interview that such transfers were “very rare” and “raise a lot of questions.” (In response, Berman’s group recently posted a note on its website saying that Charity Navigator’s finding is “misleading” and that there is nothing unusual about the way Berman’s nonprofit groups pay into Berman’s for-profit firm.)
The Humane Society, also citing transfers among Berman entities, has filed a complaint against him with the IRS, alleging that Berman’s groups have engaged in “systemic abuse of their tax-exempt status.” An IRS official said the agency could not comment on whether a complaint is being investigated. A Berman website says that the IRS investigated earlier complaints and “did not change the non-profit status of any of the groups they reviewed — nor was any organization sanctioned.”
Melanie Sloan, the head of Citizens for Responsibility and Ethics in Washington, which filed an unsuccessful complaint with the IRS against Berman’s groups in 2004, said Berman’s activities have only grown since then. Corporate backers are “using Berman to say outrageous things that they themselves would never say because of the risk of alienating some of their customers,” she said. Berman, in turn, has attacked Sloan’s group as a “left-wing attack dog.”
Berman has said he has to resort to such tactics because his adversaries — some of which also don’t disclose most donors — make unsubstantiated claims and haven’t been properly scrutinized. “It is a strategy,” he testified before a US House committee in 2002, “to reposition people who have a pristine image which is undeserved . . . . If that’s shooting the messenger, then I’m guilty of it.”
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One of Berman’s top vehicles for “shooting the messenger” is his Center for Consumer Freedom, which is described on a Berman website as being “supported by restaurants, food companies and thousands of individual consumers.” The depth of support from consumers is unclear, but certainly the center is aggressive in going after groups that have been at odds with the food and restaurant business, including the Humane Society and organized labor.
Berman and other representatives of the center have, for example, regularly made media appearances to press the case of his corporate backers. Berman appeared on Fox News in April to castigate calls for increasing the minimum wage. A Berman employee, J. Justin Wilson, the author of a book published by the Center called “An Epidemic of Obesity Myths,” appeared in February on NPR’s popular “Diane Rehm Show,’’ presented as a counter-point to experts who warned of the danger of addiction to high-sugar foods.
Berman and his employees have written more than 100 op-eds and letters to the editor in newspapers this year, including a piece by Berman posted to an online forum of The Boston Globe, in which he was identified as the center’s director and wrote that a proposed state law called the Prevention of Farm Animal Cruelty Act “is less about helping animals and more about a fringe agenda to bankrupt farmers.”
Much of Berman’s work is done through websites, one of which, “Humane Watch,” has been publicized in Times Square billboards and a Super Bowl commercial. Many are designed to counter the findings of federal health studies.
The Center for Consumer Freedom, for example, runs a highly trafficked website called “Obesity Myths,” which says that it is “myth” that “obesity will shorten life expectancy.” The website noted — correctly — that federal officials had lowered an estimate of premature deaths from obesity. But that revised report still said that many such deaths would occur, according to federal officials.
Dr. William Dietz, who until last June was director of the CDC’s division of nutrition, physical activity and obesity, said that the Berman group’s claims are “ridiculous.” The evidence that obesity can shorten life is abundant, he said, even as the estimate of premature deaths has gone down. He expressed frustration that the government’s reports are sometimes presented in the media on equal footing with those sponsored by groups like Berman’s whose clients have a vested interest.
“Part of the problem with public debate these days is that everyone seems to have an equal voice and belief seems to have displaced science,” Dietz said. “Anytime someone wants to dismiss the science they will go after the people who publish it.”
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Berman began his career working in senior executive positions for a series of corporations, including Bethlehem Steel and Pillsbury, and he served as director of labor law at the US Chamber of Commerce. Then he created Berman and Company, focusing on government activity that affects corporations. He got his start with funds from tobacco giant Philip Morris, which paid at least $600,000 to fight smoking-related legislation, and millions of dollars from alcohol-related businesses.
By the mid-1990s, Berman was at the center of a fight against legislation designed to limit drunken driving fatalities. On one side was Mothers Against Drunk Driving, a group that few in Washington were anxious to take on. Berman jumped at the chance.
It was a time when many state legislatures were considering legislation to lower the blood alcohol limit from 0.10 to 0.08. In order to reach the 0.08 level, a 160-pound man must consume four drinks in an hour, while a 120-pound woman must down three drinks in two hours, according to the Food and Drug Administration. That level of intoxication makes it difficult for drivers to process information and control speed, the FDA has said. Proponents said lowering the legal level to 0.08 would let people drink in moderation, while saving thousands of lives.
Berman saw it differently.
“It’s feel-good, meaningless legislation that doesn’t have any impact,” Berman testified at a 1997 hearing. He suggested focusing instead on “the 0.14-and-above drivers [who] are at the heart of the drunk-driving problem.”
US Senator Frank Lautenberg, a New Jersey Democrat who attended the hearing, rose from his chair to declare that “what I heard Mr. Berman say I found almost shocking,” recalling how he had met with a family in which a young girl was killed by a driver whose blood alcohol content was 0.08.
Berman’s efforts may have delayed efforts to lower the alcohol limit, but his argument was, in the end, unsuccessful. Spurred by federal incentives, the number of states with a 0.08 limit went from 19 in 2000 to all 50 by 2004. As a result of that and other measures, including setting the drinking age at 21, alcohol-related fatalities have dropped from 13,472 in 2002 to 9,878 in 2011, according to the National Highway Traffic Safety Administration.
But Berman, in his role as president of a trade group called the American Beverage Institute, continues to battle Mothers Against Drunk Driving. The institute says on its website that its mission is to “expose and vigorously counter the campaigns of modern-day prohibitionists.”
In January, Berman associate Sarah Longwell, the managing director of the Institute, authored an op-ed in the Milwaukee Journal Sentinel in which she took on MADD, saying the group wants the federal government to require monitoring devices to be placed in cars of those convicted for drunken driving. Such devices prevent a car from starting until the driver has passed an in-car breathalyzer test. That’s unfair, she wrote, because a person whose blood alcohol limit is at the state limit is no more impaired than someone who is “driving while talking on a hands-free cellphone.”
At the same time, the American Beverage Institute runs a website called “The New Prohibition,” which alleges that a network of “anti-alcohol activists,” including the American Medical Association and Mothers Against Drunk Driving, “seek to return the United States to the 1920s,” when alcohol use was banned. The website said that if anti-alcohol activists have their way today, some people won’t be able to have “a beer at a ballgame.”
While MADD has advocated in-car breathalyzers for convicted drunk drivers, it supports the current 0.08 blood-alcohol limit, according to senior vice president J.T. Griffin.
“The ‘new Prohibition’ is an absolute lie,” Griffin said. “They are trying to paint us as an extreme organization. It is shameful coming from an organization that doesn’t reveal who their sponsors are.”
While it is impossible to say how much impact the “new Prohibition” campaign is having, MADD officials say they are monitoring the Berman effort closely, particularly as state legislatures review their decisions to lower the drinking age and consider requiring in-car breath test machines.
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The Center for Consumer Freedom, as well as Berman and Company and several affiliated groups, share the address of a downtown Washington office building. The publicly available portion of the Center’s 2011 tax filing shows that it is mostly funded by a handful of generous, anonymous donors. An individual identified only as “Donor No. 1” gave $300,000. “Donor No. 6” gave $520,000. All told, the nonprofit Center received $1.4 million in 2011 in contributions and grants. It spent $2.1 million, of which $1.3 million was paid to the for-profit Berman and Company for management, research, advertising and accounting fees, according to its IRS filing.
While tax rules allow the identity of donors to nonprofits to be anonymous, the Center says on its website that its contributors must remain secret because “they are reasonably apprehensive about privacy and safety in light of the violence and other forms of aggression some activists have adopted as a ‘game plan’ to impose their views.”
Eight blocks from the headquarters of the Center for Consumer Freedom, Wayne Pacelle sits in his office at the Humane Society and fumes over the Center’s attacks on him and his group. The ad comparing Pacelle to Madoff, released on April 5, is only the latest. For months, Berman’s group has suggested that the Humane Society is bilking donors because it gives less than 1 percent of its money to pet shelters.
Pacelle said it is a classic Berman strategy of “false framing” of an issue. The society, he said, doesn’t say it will give large amounts to independent pet shelters. Instead, Pacelle said that the Humane Society takes care of more than 100,000 animals at its own facilities, including a 1,300-animal care center near Dallas and a 1,200-acre wildlife rehabilitation center ranch near Fort Lauderdale.
Berman “doesn’t give us credit for any of the animals we care for,” Pacelle said. “The only metric he uses is if we give a grant to a pet shelter.”
Pacelle said he has alerted Berman to “misrepresentations” many times without a response.
So why is Berman’s group attacking the Humane Society and Pacelle? Pacelle believes Berman has been hired by corporate interests such as agri-business and restaurant chains that don’t like the way the Humane Society has influenced food- and agricultural-related legislation in Congress and state legislatures. For example, the Humane Society has been fighting for years, and with some success, to force big farms to get rid of pens that prevent pigs from turning around, urging that such structures be replaced with facilities that let the animals roam a bit.
The tactics are a sign of change in Washington, Pacelle said. It used to be that a company would hire a Washington representative to oppose a particular piece of legislation. What is new, he said, is that Berman is trying to destroy the “brand” of the Humane Society, not just a pending bill.
It is hard to quantify Berman’s success rate. Unlike a lobbyist who files a report declaring which legislation he is trying to influence, Berman works on behalf of unnamed backers and tries to shape public perceptions about his targets. As a result, Berman can claim success in delaying legislation or undermining an opponent. For example, in an e-mail to one of his backers — a copy of which was provided to The Globe — Berman wrote that the campaign against the Humane Society was “far more successful than I anticipated” in creating a negative image, asserting that he was “chilling the donation stream.”
Pacelle said donations have more than doubled during the time that Berman has attacked him but added there was no way to know if more money would have come in without the assault.
Berman’s group also has gone after People for the Ethical Treatment of Animals, which has angered some farm and food groups by conducting investigations into the treatment of farm animals. Berman’s Center for Consumer Freedom created a website called “PETA kills animals,” which says PETA killed 1,647 cats and dogs in 2012.
The strategy was a classic effort for Berman: the headline-grabbing fact is correct, and PETA says the number of killed animals is accurate. But PETA said the broader implication is misleading. PETA says it “euthanizes” only the most “broken” animals brought to its “shelter of last resort.” PETA senior vice president Jeff Kerr said Berman’s charges are “like complaining that a hospice has a high mortality rate. It’s entirely misleading.” Kerr said that the real aim of the attack is to undermine PETA because the group’s promotion of a vegan diet cuts into the profits of Berman’s backers.
While some groups prefer to ignore Berman’s tactics, the Humane Society has filed a complaint with the IRS that alleges the Center for Consumer Freedom and other entities created by Berman have violated tax laws and may owe more than $23 million to the IRS.
“We have been the first major organization to punch back and try to expose his attacks on many of America’s most respected charities,” Pacelle said. “He doesn’t like that and he knows that so much of it stems from my passion not to let this guy get away with his scam and I will continue to go after Rick Berman until he is completely exposed.” But such steps seem to have only increased the animosity.
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It was last summer when Berman launched another hardball effort to undermine the Humane Society — an effort he may have believed would not become publicly known. He wanted one of the nation’s leading charity-rating organizations — the Wise Giving Alliance of the Better Business Bureau — to drop its accreditation of the Humane Society. If that happened, donations to the Humane Society might significantly decrease, and Berman could claim another victory.
Berman’s tool was an unsubtle warning. He threatened to publicize what he called a “pay-to-play” system, in which charities that are rated by the Wise Giving Alliance have the option of paying to display the group’s endorsement.
“You can protect [the Humane Society’s] brand at the BBB’s expense,’’ Berman wrote in a June 27, 2012 letter to the Alliance, “or you can protect the BBB’s brand.”
The BBB’s Wise Giving Alliance strongly denied that it engages in “pay to play,” stressing that groups are not required to purchase the right to display the accreditation.
Berman then traveled in August for a meeting at the headquarters of the Wise Giving Alliance, whose officers said they received permission from him to record the conversation. The Humane Society is “as duplicitous an organization as I have ever seen,” Berman said at the meeting, according to a transcript provided by the Alliance.
Berman said he was speaking for his financial supporters, calling them “big companies” who were tired of being attacked by the Society. “They are very upset with the Humane Society,” Berman said, according to the transcript. “We are several million dollars into going after them.”
And if the Alliance wouldn’t act — revoking the Humane Society’s accreditation — Berman repeated his written warning that he and his backers might go after them, too. “As I try to get to the goal line, worst case scenario is, in regard to the Better Business Bureau, if you’ll excuse the expression, become collateral damage,” Berman said, according to the transcript.
H. Art Taylor, the chief executive of the Wise Giving Alliance, investigated Berman’s allegation that the Humane Society was running a “scam.” He said in an interview that he found his claim baseless and thus the Society has kept its accreditation.
Taylor provided the correspondence and transcript to the Globe because he said he wanted the public to understand Berman’s methods. “People ought to know why we are pushing back,” he said.
* * *
Berman gave one of his most revealing talks about his strategy in a locale far from his Washington office. Meeting with a group of Nebraska farmers in 2010, he told them it was more effective to “hit people in their heart rather than their head,” according to a report on the talk by Nebraska Farm Bureau News. “Emotional understanding is very different — it stays with you. Intellectual understanding is a fact and facts trump other facts. When I understand something in my gut, you’ve got me in a very different way.”
Berman then explained why he believes such attacks work. “People remember negative stuff,” Berman said. “They don’t like hearing it, but they remember it . . . . We can use fear and anger — it stays with people longer than love and sympathy.”
