Ari Rabin-Havt and Media Matters for America Lies, Incorporated Ari Rabin-Havt is host of The Agenda, a national radio show airing Monday through Friday on SiriusXM. His writing has been featured in USA Today, The New Republic, The Nation, The New York Observer, Salon, and The American Prospect, and he has appeared on MSNBC, CNBC, Al Jazeera, and HuffPost Live. Along with David Brock, he coauthored The Fox Effect: How Roger Ailes Turned a Network into a Propaganda Machine and The Benghazi Hoax. He previously served as executive vice president of Media Matters for America and as an adviser to Senate Democratic Leader Harry Reid and former vice president Al Gore. Media Matters for America is a Web-based, not-for-profit, progressive research and information center dedicated to comprehensively monitoring, analyzing, and correcting conservative misinformation in the U.S. media. ALSO AVAILABLE FROM ANCHOR BOOKS Free Ride: John McCain and the Media by David Brock and Paul Waldman The Fox Effect: How Roger Ailes Turned a Network into a Propaganda Machine by David Brock, Ari Rabin-Havt, and Media Matters for America AN ANCHOR BOOKS ORIGINAL, APRIL 2016 Copyright © 2016 by Ari Rabin-Havt and Media Matters for America All rights reserved. Published in the United States by Anchor Books, a division of Penguin Random House LLC, New York, and distributed in Canada by Random House of Canada, a division of Penguin Random House Canada Limited, Toronto. Anchor Books and colophon are registered trademarks of Penguin Random House LLC. Reinhart-Rogoff chart on this page created by Jared Bernstein for jaredbernsteinblog.com. Reprinted by permission of Jared Bernstein. The Cataloging-in-Publication Data is on file at the Library of Congress. Anchor Paperback ISBN 9780307279590 eBook ISBN 9781101972274 Cover design by Mark Abrams Cover images: (gun) © Anthonycz/Shutterstock; money, barrel and factory © Iconfinder www.anchorbooks.com v4.1 ep Contents Cover Ari Rabin-Havt and Media Matters for America Also Available from Anchor Books Title Page Copyright Epigraph Preface: Liar Introduction: Lies, Incorporated Chapter 1: The Birth of Lies, Incorporated: Tobacco Chapter 2: Tobacco’s Sequel: Climate Change Chapter 3: Lie Panel: Health Care Chapter 4: Growth in a Time of Lies: Debt Chapter 5: On the Border of Truth: Immigration Reform Chapter 6: Two Dangerous Weapons: Guns and Lies Chapter 7: One Lie, One Vote: Voter I.D. Laws Chapter 8: Shut That Whole Lie Down: Abortion Chapter 9: A Lie’s Last Gasp: Gay Marriage Chapter 10: Defeating Lies, Incorporated Notes Acknowledgments Lie \´lī\ 1: to make an untrue statement with intent to deceive 2: to create a false or misleading impression Merriam-Webster’s Dictionary Politicians lie. This behavior is not the monopoly of any political party or ideology. They lie about their personal lives, their aberrant behavior, and their records. This book is not about those lies. The types of lies this book is concerned with are the ones many politicians fully believe to be true—ones that have been passed to them by a staffer, a constituent, or a lobbyist. Those lies, sometimes repeated without intent, are designed to distort the policy-making process. Dig deep enough and you find an industry dedicated to the creation of lies and a group of people who profit from them. They are Lies, Incorporated. Preface: Liar Richard Berman is a liar. He is a man who manipulates the truth on behalf of corporate clients and earns his living profiting from the invention and trafficking of lies. The fast-food industry, tobacco companies, and high-fructose corn syrup producers have all called upon him to do what few others would: shamelessly spread falsehoods, smear the reputations of well-regarded nonprofit groups, and purchase phony research. For decades, when industries decided their last resort was the nastiest of PR campaigns, they have summoned him. Berman, who relishes the title of “Dr. Evil,”1 is not just an operator for sale to the highest bidder. He is the purest representation of a growing force in American politics that creates and disseminates lies designed to disrupt the public policy process for monetary and ideological gain. With a shield of anonymity provided by the tax code, Berman’s donors use him to engage in a form of asymmetric public policy warfare.2 For example, when agricultural interests sought to retaliate against the Humane Society for their advocacy work against factory farms, Berman launched a series of attacks against the organization. The companies funding this effort would never want their names associated with such a campaign. Attacking a popular organization like the Humane Society would damage their brands. Instead, Berman created a tax-exempt organization, HumaneWatch.org, to which they could anonymously donate and from which he would be paid a fee to manage. In addition to running its website, which promotes daily smears of the Humane Society and spreads false information about their work, Berman has produced ads targeting the group. One particularly misleading commercial aired during the 2013 Academy Awards compared the Humane Society to the notorious Ponzi scheme operated by Bernie Madoff. The ad charged “HSUS gives less than one percent of its massive donations to local pet shelters but has socked away $17 million in its own pension fund.”3 This attack was misleading at best. Every year the organization cares for hundreds of thousands of animals through a variety of its programs4; in 2014, programmatic expenses made up 80 percent of the year’s overall revenue and support.5 Berman is something of a caricature of the unprincipled lobbyist, the apotheosis of all that is wrong with Washington. It’s a notoriety he enjoys. Whether appearing as a guest on The Colbert Report or defending his exploits on The Rachel Maddow Show, Berman oddly seems to relish being berated for making outrageous claims on behalf of his undisclosed clients,6 7 such as pregnant women should not worry about mercury levels in fish. When Richard Berman appeared with Fox Business’s host Stuart Varney in July 2013 to discuss low-wage worker strikes taking place in cities across the country and their potential for negatively impacting workers, he was identified as being from the innocuous-sounding EPI—Employment Policies Institute. “At fifteen dollars an hour, many, I won’t say a majority, but many fast-food restaurants are out of business,” he told Varney.8 EPI’s funding from the fast- food industry or its connections to Berman’s consulting business was never disclosed. The New York Times called Berman’s work on behalf of the fast-food industry “a critical element in the lobbying campaign against the increase in the minimum wage,” noting that industry insiders “often cite the [EPI’s] reports, creating the Washington echo chamber effect that is so coveted by industry lobbyists.”9 This is a form of media manipulation mastered by Berman: a 2013 IRS filing from the Employment Policies Institute reports the organization’s “media outreach” resulted in “over 830” stories on radio, TV, in print, and online in that year alone.10 The brilliance of Berman’s strategy of creating front organizations is that reporters are often duped into quoting him (or his staff) not as an industry- funded lobbyist, but as the conservative, yet financially disinterested, head of a nonprofit. When The Wall Street Journal covered an EPI-funded study on the impact of increasing the minimum wage, it referred to the organization as a “right-leaning” think tank and quoted the study’s author as saying, “There’s never a good time to raise the minimum wage.”11 Yet the paper did not disclose that the Employment Policies Institute receives its funding from the fast-food industry, nor did it justify the vast overstatement of calling the group a “think tank.” For one, the Employment Policies Institute has zero full-time employees. On its 2013 IRS Form 990, the group reported that $1.044 million of its $2.131 million budget was paid directly to Richard Berman’s firm for management, advertising, research, and accounting. Meanwhile, the organization’s lack of staff was evidenced by the fact that their total payroll for the year was $46,417, all of which save $3,500 was listed as a fund-raising expense. Furthermore, $20,175 of this total was paid to Richard Berman personally.12 Meanwhile, EPI’s staff list on the same form includes just eight positions: six people each holding the title of “Director,” all paid $500 for less than fifteen minutes of work per week; one “Secretary/Treasurer,” who was paid $500 for less than twenty minutes of work per week; and Richard Berman, the “President / Executive Director,” who, as previously mentioned, was paid $20,175 for less than nine hours of work per week. Of the total $46,417 in payroll expenses, just $3,500 was spent on management and general expenses (the amount paid to the Directors and Secretary/Treasurer).13 The Employment Policies Institute exists as nothing more than a vessel to funnel money to Berman’s firm, revealing his greatest achievement: the way he so effectively blurs the lines between political operatives, corporate lobbyists, and the think tank world, sowing confusion on behalf of his clients. Richard Berman keeps his clients and their goals well hidden.14 He has front groups layered upon front groups layered upon front groups—many, if not all, sharing the same office space. Berman heads up the larger organizations, which then develop smaller projects, which then create more small projects. The only way to truly get to the bottom of who leads and funds these organizations is to sift through hundreds of pages of IRS filings, and even then the information is murky at best.