by Nomad
In this the final part of my investigation into the Gramms, I’d like to deal with Wendy’s relationship with Rick Perry and another influential power broker.
As if Wendy Gramm’s role in the Enron scandal wasn’t enough to qualify her as one of the notable villians in a saga filled with some pretty odious characters, she’d really only just begun. After her jaunt through the world of academia and through the infested jungle of the private sector, Wendy now found herself stepping back into academia (or something very much like it).
If Phil Gramm represents one side of corruption, then some might claim his wife to be an example of a newer but far more insidious indirect kind.
Koch Industries- along with other corporations have developed a long term strategy to use think-tanks, paired with prestigious universities, to give support - with studies and surveys and expert opinions- to their agenda. In exchange, the universities benefit from large-dollar corporate support.
The Mercatus Center of George Mason University, where Wendy Gramm is a director of the “regulatory studies program”, is a case in point.
Mercatus is an increasingly influential anti-regulatory voice-machine created and subsidized by Koch Industries. Over the years, the university and its associated institutes and centers has received more funding from the Koch Family Charitable Foundations than any other organization—a total of $29,604,354. Of that sum, The Mercatus Center has received $1,442,000.
Mercatus is an increasingly influential anti-regulatory voice-machine created and subsidized by Koch Industries. Over the years, the university and its associated institutes and centers has received more funding from the Koch Family Charitable Foundations than any other organization—a total of $29,604,354. Of that sum, The Mercatus Center has received $1,442,000.
Previously known as the Center for the Study of Free Market Processes, the Mercatus Center was founded by Richard Fink (an apt name if ever there was one)—with a grant from Charles Koch. Koch currently serves on the center’s Board of Directors—as does Fink, who is also an executive vice president and a member of the board of directors of Koch Industries, Inc.
Wendy Gramm’s ties to the Koch brothers go way back. Koch has had a cozy relationship with Wendy ever since she played a key role in deregulating oil speculation. As Lee Fang reported in Think Progress:
Like many oil companies, Koch uses legitimate hedging products to create price stability. However, the documents reveal that Koch is also participating in the unregulated derivatives markets as a financial player, buying and selling speculative products that are increasingly contributing to the skyrocketing price of oil. Excessive energy speculation today is at its highest levels ever, and even Goldman Sachs now admits that at least $27 of the price of crude oil is a result from reckless speculation rather than market fundamentals of supply and demand. Many experts interviewed by ThinkProgress argue that the figure is far higher, and out of control speculation has doubled the current price of crude oil.
(The next time you fill up your gas tank and your wallet feels lighter, you can thank Wendy Gramm.)
Mercatus, however serves a different function in the Koch machine.
A Koch Industries paper mill is violating the Clean Water Act by pumping out massive amounts of pollution into an Arkansas waterway, according to an EPA enforcement complaint to be filed tomorrow by Public Employees for Environmental Responsibility (PEER) and the Ouachita Riverkeeper.The complaint alleges that a Georgia-Pacific paper mill on the Coffee Creek in Arkansas - owned by the billionaire Koch Brothers -emits 45 million gallons of paper mill waste including hazardous materials like ammonia, chloride, and mercury each dayCoffee Creek then flows into Louisiana's Ouachita River where the pollutants have left the formerly pristine water speckled with odorous foam, slime and black pockets of water, said Jerry Johnson, who has been visiting the Ouachita River for 35 years."People used to swim in it," said Johnson, who now lives along the river. "In the summertime, it was the place to go."
And this is by no means an isolated incident. Another report from 2000 in the New York Times,
A federal grand jury returned a 97-count indictment against Koch Industries today, charging the company, a subsidiary and four employees with environmental crimes at a Texas oil refinery.The defendants were charged with violating federal air pollution and hazardous waste laws at the Koch Petroleum Group's West Plant refinery near Corpus Christi, Tex., conspiracy and making false statements to state environmental officials, the Justice Department said.
And, one more example, which is more important perhaps -given the links to the controversial ties to Koch and Governor Walker, Wisconsin.
Koch Industries operates twelve industrial facilities in Wisconsin: Georgia-Pacific and its wholly-owned subsidiaries in Green Bay (4 plants), Oshkosh, Phillips, and Sheboygan; and Flint Hills Resources in Green Bay, Junction City, McFarland, Milwaukee, Stevens Point and Waupun... (T)he data reveal that over the course of those three years, Koch Industries' facilities emitted over 5.4 million pounds (PDF) of toxic discharges into Wisconsin's air and water. Of these discharges, nearly 100,000 pounds (PDF) were of substances known or suspected to cause cancer.
The pattern is clear. But what’s this got to do with Wendy and Mercatus? Joining forces with other Koch-supported organizations, Mercatus has been a leader in the roll back of environmental regulations. Greenpeace has cited Mercatus as a chief source for climate change denying efforts. Moreover, Mercatus has specifically targeted the Environmental Protection Agency (EPA) in its de-regulatory drive. Jane Mayer from a revealing New Yorker article on the Koch brothers examines the role this group plays:
Thomas McGarity, a law professor at the University of Texas, who specializes in environmental issues, told me that “Koch has been constantly in trouble with the E.P.A., and Mercatus has constantly hammered on the agency.” An environmental lawyer who has clashed with the Mercatus Center called it “a means of laundering economic aims.” The lawyer explained the strategy: “You take corporate money and give it to a neutral-sounding think tank,” which “hires people with pedigrees and academic degrees who put out credible-seeming studies. But they all coincide perfectly with the economic interests of their funders.”
As a Businessweek headline proclaimed:
"Much corporate environmentalism boils down to misleading statistics and hype."
Wendy Gramm’s pedigree- if you don’t look too closely- adds weight to her opinions to all of the Mercatus calls for de-regulation. That, coincidentally, ties in quite nicely with what the top donors to Mercatus expect.
It is important that you realize who funds the Mercatus Center. Since 1985, the Mercatus Center has received 513 grants totaling $45,347,884. Their top donors have been as follows:
- Koch Family (Includes Claude Lambe Foundation): $24,258,797
- Olin Foundation: $7,530,824
- Scaife Family (includes Carthage Foundation): $5,031,000
- Bradley Foundation: $2,5544,050
- Barre Seid: $2,212,000
- Earhart Foundation: $996,348
- McKenna: $265,000
- Jacquelin Hume Foundation: $260,000
- Smith Richardson: $254,315
- The Walton Family (Wal-Mart): $120,000
- JM Foundation: $85,000
- Castle Rock Foundation (Coors Family): $75,000
Evidently unsatisfied with the work she has done unfettering markets, scrubbing regulations and ignoring the ethical codes and laws, all of which in one or another has lead to the meltdown, Wendy Gramm is now looking forward, on behalf of the corporations, to destroying the environment as well.
The Texas Public Policy Foundation (TPPF) “501(c) non-profit, non-partisan research institute” is run by a man Texas Monthly called “the most influential Republican in Texas” and probably a person most people have never heard of.
Austin Democratic political consultant George Shipley once called the shy and unassuming Dr. James Leninger, “ the sugar daddy and godfather of the Republican right wing in Texas.”
Besides the many groups with a local political interest, Leininger has funded national social conservative organizations, including the American Family Association (considered a hate group by the Southern Poverty Law Center) , Christian Pro-Life Foundation, Family Research Council, and Focus on the Family.
Leninger tends to give his PACs and foundations innocuous names — Texans for Justice, the Texas Public Policy Foundation, the Texas Justice Foundation, Children’s Economic Opportunity Foundation, Texans for Governmental Integrity, the A PAC for Parental School Choice, etc. According to the Current (a weekly alternative paper), Leininger is also a major donor to, or plays a leading role in, at least a dozen major right-wing groups. Politically, he has given not only to Christian-right school board candidates and right-wing legislative candidates but also to Sens. Kay Bailey Hutchison and Phil Gramm, and he was Rick Perry’s largest campaign contributor ($500,000) in Perry’s race for lieutenant governor.
The mission of TPPF, founded by Leninger in 1989, is to “promote and defend liberty, personal responsibility, and free enterprise in Texas and the nation by educating and affecting policymakers and the Texas public policy debate with academically sound research and outreach.”
A conservative and devoutly religious Republican businessman, Leininger made his personal fortune through Kinetic Concepts, based in San Antonio, which makes and rents therapeutic beds for patients who are paralyzed or suffer from serious illnesses. As humble as that might sound, take note, KCI Revenue for 2008 was $1.88 billion, increasing to $1.99 billion in 2009 and in 2010 increased to $2.02 billion.
Incidentally, Rick Perry, before he ran for lieutenant governor developed a lucrative relationship with Leininger. According to a Houston Chronicle piece dated September 21, 1997:
On Jan. 13, 1995, Perry bought $38,875 worth of stock in Kinetic Concepts, a company owned by Jim Leininger, a San Antonio physician, conservative activist and major Perry campaign donor. Perry invested an additional $35,167 in the company on Jan. 24, 1996 — the same day he spoke at a luncheon that Leininger attended. Later that day, an investment firm bought 2.2 million shares of Kinetic Concepts stock, driving up its price. Perry sold his Kinetic Concepts holdings a month later for a $38,382 profit. Leininger and Perry acknowledged they spoke at the luncheon but denied discussing the stock.
Just a terribly fortunate coincidence? Back in 1997, Wendy Gramm also (coincidentally) had ties to Leininger’s company. Gramm earned a miniscule $25,000 a year as a member of the Kinetic Concepts board of directors. She also held stock options in the company when Kinetic Concepts Inc. agreed to sell most of the company to two San Francisco investor firms in a deal worth $850 million to $875 million.
It is no exaggeration to say that Rick Perry owes a lot to Leninger. There is the new report issued by Texans for Public Justice, a money-and-politics watchdog group.
Perry might never have been governor — nor now be a presidential candidate — but for James Leininger. In a game-changing 1998 race then-Texas Agriculture Commissioner Perry was elected Lieutenant Governor. That victory secured Perry’s automatic promotion to governor two years later when President-Elect Bush abandoned the Governor’s Mansion. Perry narrowly won his fateful 1998 race against Democrat John Sharp, capturing just 50.04 percent of the vote.
This squeaker victory was secured by an eleventh-hour media blitz that Perry paid for with a last-minute, $1.1 million loan. Leininger and two other Texas tycoons guaranteed the loan, which supplied more than 10 percent of the $10.3 million that Perry raised for that election. Leininger’s family and company PAC contributed $62,500 to that Perry campaign. Leininger also was the No. 1 contributor at the time to the Texas Republican Party (then chaired by former Leininger employee Susan Weddington), which sank $82,760 into that Perry campaign. “I congratulate Leininger,” Perry opponent John Sharp said at the time. “He wanted to buy the reins of state government. And by God, he got them.”
Through the TPPF, Leininger has used his wealth to promote his own conservative-religious agenda in a variety of ways. Karen Olsson writes in Texas Monthly, Leininger was the driving force back in 2002 to influence the Texas Board of Education to re-write school textbooks.
... TPPF aimed to influence policy by publishing research reports on state issues; its early preoccupations mirrored several of Leininger's own: tort reform, vouchers, and reduced government. Working in tandem with the new SBOE [State Board of Education] members, the TPPF began objecting to textbook material deemed liberally slanted or morally suspect. The Legislature retaliated in 1995, forbidding the SBOE to question any aspect of textbook content other than "factual errors." Despite the restriction, the TPPF continued to analyze proposed books, hiring researchers to ferret out errors both of fact and of insufficient patriotism. Last winter the group helped bat down an environmental-science textbook (in large part because of a poorly written sentence linking democracy to pollution); this summer it criticized proposed social science and history textbooks for failing to disavow socialism.
While the TPPF’s involvement in Texas textbooks may seem like a very narrow agenda, its policy interests, in fact, are wide-ranging, covering many conservative causes. Teddy Wilson, progressive political activist and blogger notes:
The TPPF supports the predictable conservative line on a whole host of issues. The TPPF disputes the scientific evidence of climate changes and claims that the “scientific consensus has never been as broad as proclaimed,” and the compromised emails of climate scientists showed “data manipulation and fundamental errors now discredit a once broadly accepted body of science.” The “private sector can bring innovation and competition to the criminal justice system” is how the TPPF frames its advocacy of the private prison industry, despite that there has been no evidence to support that the privatization of the prison industry has provided any public savings. The TPPF even has an entire center dedicate to “Tenth Amendment Studies,” which is a favorite Constitutional Amendment among the Tea Party faithful.
If any of this sounds depressingly familiar, then there’s a good good reason. Two long time supporters of TPPF are foundations associated with Koch Industries (Charles G. Koch Charitable Foundation and Claude R. Lambe Charitable Foundation) which contributed contributing $383,125 in 2005-2009 and nearly a half million dollars between 1997 and 2009.
Rick Perry’s Wrong Approach
In Perry’s campaign book, Fed Up! the governor says that he knows of no other organization that is better positioned than Texas Public Policy Foundation to help “foster a national conversation” about “the proper role of government in our lives."
However, last May, TPPF might have pushed its agenda a bit too hard. Its attempts to influence educational policy created quite a controversy. Seven breakthrough solutions to problems with the Texas’ high educational system were drafted by TPPF in its think-tank capacity, and promoted by Governor Perry.
It did not go over as well as expected. In response, five A&M faculty members from various disciplines drafted a letter to Richard Box, the chairman of the Texas A&M University System Board of Regents, laying out their concern regarding the lack of transparency in the board's apparent intention to implement seven proposed "breakthrough solutions" promoted by the TPPF. The seven recommendations advocated “a business-style, market-driven approach under which colleges and universities would treat students as customers, de-emphasize research that isn't immediately lucrative, and evaluate individual faculty by the tuition revenue they generate.”
Within a few days of the letter being posted online, more than 530 faculty members had added their names. The A&M Chancellor Mike McKinney eventually resigned.
All this is rather ironic of course since Wendy Gramm served on the board of Regents from 2001 to 2007, (as mentioned in Part 1) and serves as chairman in TPPF. Coincidence can quickly be discounted.
Put simply, this is the wrong approach... the classroom is not a marketplace. The proposals reviewed here will not promote effective learning or the responsible use of resources inside a laboratory, library or seminar room. The University of Texas at Austin's bottom line is to provide a first-class education while spending our resources responsibly and efficiently. Separating those two goals is like separating research from teaching: it serves the wrong bottom line. Similarly, treating students as customers, offering them a "product" designed to win positive reviews and then rewarding the most popular instructors will neither challenge students in meaningful ways nor foster the deep learning and skills they will need throughout life.
Many feel the Perry’s close association with TPPF has damaged the university. This is turn has damaged the governor’s image. He would have Wendy Gramm, its chairman, to thank for that.
Texas A&M University has the support of its former students that is the envy of many universities. Aggies love their alma mater and it shows inmany ways. One Aggie, however, should love his school less and, in fact, should stay out of its business. Gov. Rick Perry's obsession and interference in A&M has caused great harm, damage some observers feel could take a generation to undo. From his appointment of regents with greater fealty to him than to the university system they are supposed to represent to his constant meddling in the day-to-day operations of the flagship university to his infatuation with the Texas Public Policy Foundation -- an ultraconservative think tank that seeks to insinuate itself into every corner of state government -- Perry has proven not to be a friend of A&M, but rather a hindrance.Never before has a governor of Texas had such deadly influence on a major state university, and Perry's meddling blocks the way of A&M's oft-stated efforts to achieve greatness.The Texas Public Policy Foundation seems harmless on the surface, with its stated goals of limited government, individual liberties, free markets, personal responsibility and private property rights. Most Texans probably would subscribe to those goals. Dig below the surface, however, and you see just how radical its efforts are.Founded by arch-conservative physician James Leininger, the foundation board is chaired by Wendy Gramm, former Texas A&M regent and wife of former Sen. Phil Gramm. Current Regent Phil Adams of Bryan is a board member, a clear conflict of interest to his responsibilities to A&M.The foundations website says, "The public is demanding a different direction for their government, and the Texas Public Policy Foundation is providing the ideas that enable policymakers to chart that new course."Unfortunately, thanks to Perry's influence, those ideas become mandates, without discussion and input from the people of this great state....Perry has been in thrall to the Texas Public Policy Foundation and its backers since he began accepting generous contributions from them in his first statewide race. Texas cannot, however, be run by contribution and those most able to spend big bucks to help buy elections, no matter which side of the political spectrum they are on.A&M is well on its way to achieving greatness. It would be a shame to let Rick Perry and his cohorts derail that with their interference.Rick Perry can love Texas A&M more by meddling less -- preferably not at all. Beyond appointing the best regents he can find -- no matter who they contributed to in the last gubernatorial election -- and attending football games at Kyle Field, Perry should leave A&M alone.
Epilogue
In researching and writing this post, I was astonished at how much harm two people can do to the country. One would think that our system would be stronger than that.
That our long established system of checks and balances would prevent people like the Gramms from ever inflicting too great a harm to the nation. But then the underlying purpose of all the de-regulation that the Republicans have called for (and have achieved) is really just a means to an end, a method of abolishing the safety checks that had, for the most part, protected our institutions. Once those have been removed, anything is possible.
That our long established system of checks and balances would prevent people like the Gramms from ever inflicting too great a harm to the nation. But then the underlying purpose of all the de-regulation that the Republicans have called for (and have achieved) is really just a means to an end, a method of abolishing the safety checks that had, for the most part, protected our institutions. Once those have been removed, anything is possible.
Even this list of all of the misdeeds of Mr. and Mrs. Gramm, as comprehensive as it might seem, is partial. Still I should think this is enough information about Perry and the friends of Rick for most intelligent voters to help them decide who the governor of Texas owes his allegiance to.
I began this investigation with a quote from the first president of the United States and I shall end it with two quotes by its fourth, James Madison.
“All men having power ought to be distrusted to a certain degree”
And this is especially true when those that wield the power are partially hidden behind masks and puppets. When it comes to peoples like the Gramms- whose working relationship with a presidential candidate is not only acknowledged but applauded- it is simply not possible to be as vigilant as necessary. Since justice has apparently failed- not once but repeatedly in this case, the only option is to make sure than any candidate connected with such people is not elected to high office. We literally cannot afford it. Now is the time to make sure that Perry doesn't come any closer to the White House than he is at this minute.
When reflecting on the various attempts by Phil and Wendy Gramm to by-pass, ignore or remove the regulatory powers of our government to protect its citizens, it is helpful to recall this other quote by Madison:
“If men were angels no government would be necessary”
And when you are dealing with a pair like the Gramms (along with so many other less-than- angelic types), it's all the more reason that we need more regulations in place, not less. Ironically, despite having waved the flags of deregulation at every opportunity, Mr. and Mrs. Gramm themselves provide the best proof of the necessity, the vital importance of having tight regulations and the power to punish those that violate them.
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