Wednesday, January 17, 2007

Another Ohio legislator wants "alternative investments" for Ohio's public employees?

From John Curry, January 17, 2007
Subject: Another Ohio legislator wants "alternative investments" for Ohio's public employees?
Once again, CORE member Bob Jones relates the possibility that another Ohio legislator is contemplating an "alternative investment" scheme for Ohio's public employees' retirement monies to be diverted into a defined contribution pension plan at the expense and detriment of all Ohio's public educators and other public employees. Check out the article below (from definedbenefits.org) which addresses one organization's attempt to drain public retirement systems' monies so that some, in private business, could enrich themselves off the backs of public employees' retirement contribution monies.
Please read below what happened to the public employees of Iowa and Florida when the Defined Contribution pension plans were enacted in their states. The remainder of the article follows the quote immediately below. John

"The Cornhusker State has more than 30 years of experience with public sector DC plans. Since the 1960s, all state and most county employees have had only individual accounts - with no defined benefits - but the results have left much to be desired and the state legislature decided in 2002 to abandon the DC plans in favor of a more DB-like system. The shift follows a study in 2000 that found that workers in the DC plans, on average, were receiving retirement benefits that were both inadequate and below those provided to the state's teachers, judges and highway patrol through those workers' DB plans. In addition, state officials determined that state and county employees tended not to be sufficiently sophisticated - or even active - in the management of their portfolios. Most of the investment decisions were made essentially by default - which put workers in conservative funds - and, as a result, returns for the DC accounts lagged well behind those produced by the DB plans' professional investors. State and county employees hired after the end of 2002 will be put in a cash balance plan, a sort of DB/DC hybrid in which workers have individual accounts, but the plan administrator makes the investment decisions and guarantees participants a certain level of return.

"This experiment, if you want to call it that, 30 years later, has not worked," Nebraska Public Employees Retirement Systems Director Anna Sullivan said of the DC plans.14

ATR's support for DC plans has less to do with pragmatic arguments about their alleged superiority over DB plans than with ideology, however, as Ferrara explained in a paper on the group's Web site.

"A large government investment pool creates the risk for taxpayers of greater government control of the private economy," Ferrara wrote. "Through such a pool, the government may end up owning large shares of private companies. The government would also hold a large share of investment capital that it could use to impose mandates on the private sector. Even where there has been a good record of avoiding such abuse in the past, the danger is always present."15

While consultants prepared the report in 2000 that led to the demise of Nebraska's DC plans, the DC movement achieved its most significant victory in Florida when the state legislature adopted a DC option for its 600,000 state and local public employees. ATR celebrated the event by awarding the sponsor of the legislation - Republican state Rep. Ken Pruitt - its "Hero of the Taxpayer" award and nominating him for the Legislator of the Year award from the American Legislative Exchange Council. (ALEC had drafted model legislation on which an early - failed - version of Florida's DC bill was based.) Pruitt, according to Norquist, was "boldly paving the way for similar reforms across the country."16

Florida's $95 billion public pension fund, the largest in the country to undergo a DC conversion, is enacting the changes mandated by the bill this year. Defections from the DB plan are lower than had been expected, though, public employees apparently having been scared off by the declining stock market. Whereas a 2000 survey indicated that nearly half of the state's public employees might be expected to transfer to the DC plan, only about 8 percent of the 14,000 that had made their decisions by the summer of 2000 were giving up their defined benefits17 (though the time for teachers to decide is upcoming and the state teachers' union was one of the biggest backers of the DC option).

Many observers say that Florida's experience with DC plans could have national effects, with other states possibly following the Sunshine State's lead if it is successful (and federal officials possibly being influenced as they consider partially privatizing Social Security). Norquist, for example, in addition to praising Pruitt as a trailblazer, has predicted that half of the states in the union could adopt DC plans during the next decade, if all goes well. "If you guys do it right," Norquist said, "other states will look to Florida."18

While Florida is not trying to replace its DB plan with DC accounts, but is instead giving employees the DC option (as Ferrara, in the paper reference above, recommended), some observers have predicted that this is just the first step and participation in the DC plan eventually will become mandatory. Republican state Rep. Mike Fasano, one of the vigorous backers of the DC legislation said that, "I imagine, yes, it will [eventually] be mandatory for all new participants. It's a numbers game. ... You have to start putting everybody on the same playing field."19

http://www.definedbenefits.org

Grover Norquist and Americans for Tax Reform:
A Look at One of the Country's Most Influential Conservatives and His Plans for Public Defined Benefit Pensions

Executive Summary

Grover Norquist, in his own words, wants to "destroy" public sector defined benefit pension plans.

The trillions of dollars in investments controlled by state and local government pension plans represent a huge - and hugely inappropriate - government influence on private enterprise, he argues. In order to preserve the sanctity of the free market, governments must divest themselves of these investments, Norquist says, and replace their employees' defined benefit pension plans with defined contribution accounts.

This, though, is just one of Norquist's goals. Ultimately, he wants to reduce the cost of all government - federal, state and local - by half within 25 years and his position as president of Americans for Tax Reform and coordinator of a broad right-wing coalition puts him in a position where that might not be an unrealistic objective. He is respected for his vision and organizational skills by both allies and enemies and has already achieved some success - particularly on tax issues - in defining terms of debate to his side's advantage.

Norquist's ascent to the leadership ranks of the conservative movement has not been without controversy. Congress investigated the 1996 donation of millions of dollars by the Republican National Committee to Americans for Tax Reform and several critics have charged that Norquist's various roles of lobbyist, head of a non-profit group and conservative activist inevitably lead to conflicts of interest.

Norquist, though, remains one of the most significant and influential figures in politics. When he says he plans to destroy public defined benefit pension plans and halve the cost of government, few people dismiss him.

Grover Norquist and Americans for Tax Reform

Grover Norquist has been called the heart of the vast right-wing conspiracy. The most influential Washingtonian most people have never heard of. And the Grand Central Station of conservatism.

"All the trains run through his office," John Fund, a friend and Wall Street Journal editorial writer, explained.1

He has many ambitious goals for the conservative movement ranging from his flagship issue - as president of Americans for Tax Reform - of cutting taxes to privatizing Social Security to getting at least one "notable public landmark" named for Ronald Reagan in each of the 3,067 counties in the United States. A timeline he carries with him lists the goal year for each major campaign to be completed through 2040.

It is not just the federal government on which Norquist has his sights set, though. In 2001, he was asked which of his projects to shrink the role of government in the United States would be his "next battleground."

He turned to the subject of state and local governments' defined benefit pension plans.

"Just 115 people control $1 trillion in these funds," Norquist said. "We want to take that power and destroy it."2

History

Norquist was born in 1956 in Sharon, Penn., and grew up in a Republican household in Weston, Mass. He became a conservative, as he tells interviewers, when the Weston public library decided to discard several conservative Cold War texts, including Witness by anti-communist and Alger Hiss-accuser Whittaker Chambers. An 11-year-old Norquist bought them at a used book sale. "The bolsheviks who ran the library made a mistake - 'We're going to get rid of all this anti-communist [expletive],'" Norquist recalled to The Boston Globe. "We'll sell it off for a nickel to where it won't do any damage.' To me!"3

Those books, Norquist says, made him a foreign policy conservative, which led to him becoming an economic conservative, and "Just being an American makes you be in favor of freedom and against too much government."4

Norquist graduated from Harvard in 1978 with a degree in economics and earned an MBA from the university in 1981. He credits his years in the school's left-wing atmosphere with sharpening his conservative thinking and motivating him to join the political wars.

"It toughened you up," he said. "It made you think. It also convinced me that it all mattered: Those guys at Harvard were going to go out and run the country. We [conservatives] were cooked if some of us didn't get active ... too."5

In the 1980s, that activist spirit led to his involvement with the U.S. Chamber of Commerce, the National Taxpayers Union, the College Republican National Committee and other conservative groups.

In 1985, Grover Norquist, at President Reagan's request, created a group called Americans for Tax Reform (ATR) to help push through what would become the Tax Reform Act of 1986, legislation that cut marginal tax rates and equalized the taxation of capital gains, earned income and unearned income. After ATR's success in 1986, Norquist, instead of disbanding the group, broadened its mission to include opposition to taxes at all levels and support for reducing the role of government.

In the late 1980s, he would travel the world in support of anti-communist insurgents and, in the early 1990s, he would work with former House Speaker Newt Gingrich of Georgia to help craft the Republican Revolution of 1994. It is at the helm of ATR, though, that Norquist would attain his greatest influence.

Americans for Tax Reform

In 17 years, ATR, under Norquist's leadership, has grown from an ad hoc group focused on a single piece of legislation to one of the most influential organizations in the conservative movement.

Its trademark Taxpayer Protection Pledge - which commits political candidates to oppose tax increases if elected - has been signed by 212 congressmen, 37 senators and President Bush, as well as 1,275 state legislators, eight governors and 11 statewide officials.6

In addition to its eponymous causes, though, ATR has expanded its scope to include other conservative projects, such as privatizing Social Security, expanding "school choice," enacting "paycheck protection" laws - which prohibit unions from using an individual member's dues for political causes without the consent of that member - and decreasing government regulations.

Norquist's - and ATR's - importance to the right is seen at his "Wednesday meetings." Since 1993, he has hosted these gatherings of conservatives - representatives of groups such as the National Rifle Association, Christian Coalition and American Legislative Exchange Council (ALEC), an organization of conservative state lawmakers, attend the by-invitation-only meetings - where a "weekly checklist" of issues is discussed. Though the attendees may have different areas of primary interest, they are united by a desire to reduce the impact of government on their lives. Norquist calls it the "Leave Us Alone Coalition." Attendance at the meetings has grown from about a dozen people at the beginning to more than 100 now, and the latter number regularly includes staff members from the Bush White House.7

Ideology

In addition to the areas listed above, there are many others in which Norquist wants the government to leave Americans alone.

He has bashed the United States Postal Service, which ATR materials refer to as a "financial sinkhole," for inefficiency.

In 1997, he testified before a congressional subcommittee in support of computer encryption laws that do not give the government an easy ability to eavesdrop on electronic communications.

In 2001, he joined a coalition formed to oppose some of the increased law enforcement powers that were being sought by Attorney General John Ashcroft and the Bush administration Justice Department after Sept. 11, an effort that allied him with Ralph Nader, People for the American Way and other liberal activists.

He is a member of several groups and a backer of myriad causes that, in his judgment, "will cause the economy to grow and make the relative size of the state shrink while freedom is expanded."8 He works at both the federal and state level, saying that, "on almost everything we do, there's a two-track process, there's federal legislation and there's state legislation."9 In short, he is not just a Republican activist, but a conservative - even libertarian - true believer. As such, the idea of governments controlling trillions of dollars of stock in private companies is anathema.

Targeting Public Sector Pension Plans

One of Norquist's oft-stated goals is to reduce the cost of all government - federal, state and local - by half within 25 years. He measures this using four criteria: government spending as a percentage of gross national product (GNP); regulatory costs as a percentage of GNP; number of people employed by the government; and "assets controlled by the state, generally pension money and land."10

State and local public defined benefit (DB) pensions hold about $1.6 trillion in nongovernmental securities - such as stocks and corporate bonds11 - a pool of money that, if taken out of the government's hands, would move Norquist a significant way toward his goal.

The tack Norquist has taken in attempting to get rid of public sector DB plans is to push defined contribution (DC) plans - such as 401(k)s - as their replacement. DB plans provide workers with guaranteed benefits upon retirement, with the level determined by a formula based on salary and years of service. The burden of investing wisely enough to fund the benefits thus falls upon the administrators of the plans - governments in the case of public plans - and they are bound to provide the promised benefits even if their investment returns are inadequate.

In contrast, DC plans require individual participants to make investment decisions and offer no guarantees to workers beyond an employer's promise to provide a fixed amount of money for them to invest. The ups and downs of the market thus must be weathered by employees and their retirement income is determined by their investment decisions.

As part of this effort, Norquist has formed the American Shareholders Association, an ATR project "dedicated to analyzing public tax policy from a market perspective" that endorses tax policies favorable to DC plans and that addresses other shareholder issues.12

More directly, though, ATR promotes "pension reform" on its Web site with several papers that analyze states that have adopted DC accounts for public employees, as well as a chart that breaks down the number of public workers in DB plans and DC plans in the states. The papers stress what Norquist and others say are the advantages of DC accounts for employees - greater portability than DB plans and, they assert, a higher retirement income. An April 2002 paper by former George Mason University law professor Peter Ferrara titled "Public Sector Pension Reform: Creating Portable Pensions for Government Employees," concluded that all states should offer DC accounts as a supplement to DB plans and should provide employees with the option of replacing their DB plans with the private accounts.

"These reforms would make full-scale pension liberation a reality," Ferrara wrote.13

DC accounts do tend to be more portable than DB plans but the argument that DC accounts produce greater retirement benefits is contested by many people, especially retirement officials in Nebraska.

The Cornhusker State has more than 30 years of experience with public sector DC plans. Since the 1960s, all state and most county employees have had only individual accounts - with no defined benefits - but the results have left much to be desired and the state legislature decided in 2002 to abandon the DC plans in favor of a more DB-like system. The shift follows a study in 2000 that found that workers in the DC plans, on average, were receiving retirement benefits that were both inadequate and below those provided to the state's teachers, judges and highway patrol through those workers' DB plans. In addition, state officials determined that state and county employees tended not to be sufficiently sophisticated - or even active - in the management of their portfolios. Most of the investment decisions were made essentially by default - which put workers in conservative funds - and, as a result, returns for the DC accounts lagged well behind those produced by the DB plans' professional investors. State and county employees hired after the end of 2002 will be put in a cash balance plan, a sort of DB/DC hybrid in which workers have individual accounts, but the plan administrator makes the investment decisions and guarantees participants a certain level of return.

"This experiment, if you want to call it that, 30 years later, has not worked," Nebraska Public Employees Retirement Systems Director Anna Sullivan said of the DC plans.14

ATR's support for DC plans has less to do with pragmatic arguments about their alleged superiority over DB plans than with ideology, however, as Ferrara explained in a paper on the group's Web site.

"A large government investment pool creates the risk for taxpayers of greater government control of the private economy," Ferrara wrote. "Through such a pool, the government may end up owning large shares of private companies. The government would also hold a large share of investment capital that it could use to impose mandates on the private sector. Even where there has been a good record of avoiding such abuse in the past, the danger is always present."15

While consultants prepared the report in 2000 that led to the demise of Nebraska's DC plans, the DC movement achieved its most significant victory in Florida when the state legislature adopted a DC option for its 600,000 state and local public employees. ATR celebrated the event by awarding the sponsor of the legislation - Republican state Rep. Ken Pruitt - its "Hero of the Taxpayer" award and nominating him for the Legislator of the Year award from the American Legislative Exchange Council. (ALEC had drafted model legislation on which an early - failed - version of Florida's DC bill was based.) Pruitt, according to Norquist, was "boldly paving the way for similar reforms across the country."16

Florida's $95 billion public pension fund, the largest in the country to undergo a DC conversion, is enacting the changes mandated by the bill this year. Defections from the DB plan are lower than had been expected, though, public employees apparently having been scared off by the declining stock market. Whereas a 2000 survey indicated that nearly half of the state's public employees might be expected to transfer to the DC plan, only about 8 percent of the 14,000 that had made their decisions by the summer of 2000 were giving up their defined benefits17 (though the time for teachers to decide is upcoming and the state teachers' union was one of the biggest backers of the DC option).

Many observers say that Florida's experience with DC plans could have national effects, with other states possibly following the Sunshine State's lead if it is successful (and federal officials possibly being influenced as they consider partially privatizing Social Security). Norquist, for example, in addition to praising Pruitt as a trailblazer, has predicted that half of the states in the union could adopt DC plans during the next decade, if all goes well. "If you guys do it right," Norquist said, "other states will look to Florida."18

While Florida is not trying to replace its DB plan with DC accounts, but is instead giving employees the DC option (as Ferrara, in the paper reference above, recommended), some observers have predicted that this is just the first step and participation in the DC plan eventually will become mandatory. Republican state Rep. Mike Fasano, one of the vigorous backers of the DC legislation said that, "I imagine, yes, it will [eventually] be mandatory for all new participants. It's a numbers game. ... You have to start putting everybody on the same playing field."19

Republican Support and Controversy

As ATR's influence has swelled, so have its coffers. In 1990, the group's gross receipts - as listed on the disclosure form it is required to file with the Internal Revenue Service as a 501(c)(4) non-profit organization - totaled $29,051. By 2001, that number had risen to more than $4.9 million.20 (The group also has an affiliated 501(c)(3) non-profit group called Americans for Tax Reform Foundation that in 2000 received contributions of about $937,000.21)

ATR is not legally required to publicly reveal where the millions of dollars that flow through the organization come from, and Norquist has no interest in doing so voluntarily. In February, 2002, for example, Newsweek reported on ATR's membership in an ad hoc group called the 21st Century Energy Project. Formed by Republican lobbyist Ed Gillespie in 2001, the group aimed to promote President Bush's energy plan through TV, radio and print ads. Funding for the group, Newsweek reported, came from Gillespie's corporate clients, including Enron, which reportedly funneled more than $50,000 to the group through ATR. Asked to comment, Norquist's reply was brief: "We don't disclose our donors."22

He responded similarly to disclosure pressures during the 2000 Republican presidential primary campaign in New Hampshire. ATR bashed Arizona Sen. John McCain in $100,000 worth of TV ads for his support for tighter campaign finance laws, and McCain said that the group had "an obligation to say who is paying" for the ads. Even George W. Bush said that third-party groups that buy political ads should reveal their donors. When asked if he would reveal his contributors, though, Norquist said, "So what? So the AFL-CIO could go beat up on them? Of course not."23

ATR is so protective of its records, in fact, that in 1997 it refused document and witness subpoenas from the Senate Governmental Affairs Committee, which was conducting a special investigation into alleged campaign finance law violations during the 1996 election season. (Several other groups, including the AFL-CIO, also resisted subpoenas and time constraints on the committee, which was required to complete its work by the end of 1997, prevented it from enforcing the subpoenas by citing resisters with contempt of Congress. The final report on the investigation noted that even threats of contempt charges "lacked credibility ... because the nonprofit groups understood that the Committee could not obtain a contempt of Congress citation from a federal district court before the expiration of the December 31, 1997 deadline."24)

Nonetheless, it was revealed that, in October 1996, the Republican National Committee (RNC) gave ATR several donations totaling $4.6 million. The congressional panel's Republican majority and Democratic minority differed wildly in their interpretations of this donation, the largest transfer of money from a national political party to a tax-exempt organization in American history.

Democrats charged in their report on the investigation that ATR, in coordination with the RNC, used the money for election activities, mainly the funding of direct mail and phone bank campaigns defending Republicans against Democratic charges that the GOP was out to cut Medicare. This, according to the minority report, amounted to Republicans "laundering" the money through ATR, which enabled the party to get around disclosure rules and the requirement that it fund no more than 35 percent of its issue advocacy with "soft" dollars. (The RNC, Democrats asserted, was short of "hard" money at the time.)25

Both the RNC and ATR said they did not coordinate the spending of the money and the committee's final report (which was, of course, drafted by the Republican majority) concludes that, "Despite evidence of substantial contributions to nonprofit groups by or through the RNC, the Committee has found no evidence that the RNC directed or controlled the expenditure of those funds."26 Democrats, however, point out that the RNC donations tended to arrive just days before ATR had a bill due for its direct mail and phone bank campaigns and were often in amounts close to what was owed by the group.27

Democrats went even further in their criticism of ATR, though, charging that many of its regular programs were coordinated with the RNC to such an extent that the group was essentially an "alter ego" of the GOP. The Taxpayer Protection Pledge, as well as other ATR projects such as the Enemy of the Taxpayer award, Democrats said, were used by the group to promote the election of Republicans, while the Wednesday meetings, "often served as [GOP] strategy sessions for the 1996 elections" (a claim made in Elizabeth Drew's book Whatever It Takes that Democrats cited in their report on the investigation). In addition, Democrats charged that the RNC encouraged contributors to donate money to ATR - and other tax-exempt groups - through the RNC, which then forwarded the money to the organizations, possibly, Democrats insinuated, with instructions on how to use it. Democrats cited one example in their report: Cincinnati billionaire Carl Lindner donated $100,000 to ATR at the RNC's request. The report raises but leaves unanswered the questions of how many other similar donations there were and how much control Republicans had over the expenditure of the money.28

All of this, Democrats said, was not allowable under ATR's status as a 501(c)(4) non-profit group since such an organization, according to the Internal Revenue Service (IRS), "must be operated exclusively for the promotion of social welfare." While political activity is allowed, "The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office.29 Also, Democrats charged that some of the RNC money was funneled through the ATR Foundation, a 501(c)(3) group that, the IRS says, "may not participate at all in campaign activity for or against political candidates."30

ATR denied all accusations of wrongdoing, with one of its attorneys stating in a letter to the investigating committee that, "ATR has never engaged in electioneering of any sort. It has never advocated the election or defeat of any candidate for any office at any time; it has never run political advertising on any subject."31 The Republican majority on the committee also dismissed the charges against ATR, saying in the final report that, "the Committee possesses no evidence of illegalities by the organizations that received these contributions [from the RNC and people solicited by the RNC], such as ATR." (While it was critical of all the groups that resisted committee subpoenas, the majority report did not specifically chide ATR. Instead, it singled out the AFL-CIO for reprobation, saying that the union's resistance caused "contagious noncompliance.")32

Donations and Alleged Conflicts

Despite its strict secrecy, some information about ATR's donors has leaked out. The Nationreported last year that corporations are responsible for a large percentage of the group's income and that, in 1999, one-third of its $7 million budget came from just 40 corporate supporters, including Microsoft, Pfizer, AOL Time Warner and United Parcel Service. The group's biggest contributor that year, according The Nation, which cited the group's tax return - which is not a public record - was tobacco company Philip Morris, which gave it $685,000. R.J. Reynolds and U.S. Tobacco also reportedly provided ATR with "significant money," while the Mississippi Band of Choctaw Indians gave the organization $366,000 as support for Norquist's work on behalf of the gambling industry. The liquor industry also donated heavily, according to The Nation, with the Distilled Spirits Council, United Distillers & Vintners and Seagram Companies all contributing to ATR.33 (The Democratic report on the campaign finance investigation noted that in 1996, just $12,470, or 0.2 percent of ATR's bank deposits, came from donations of $1,000 or less.34)

Norquist is a lobbyist by trade and several of the businesses identified as contributors to ATR were once his clients. (He says that he no longer represents commercial clients.) From 1997-1999, for example, Microsoft paid him a total of $280,000 to lobby on its behalf and, in both 1999 and 2000, Seagram retained his firm, Janus-Merritt Strategies, for an annual fee of $120,000. The Distilled Spirits Council, meanwhile, retained Janus-Merritt for $40,000 in 1999.35

Some of Norquist's lobbying ties have stirred controversy, even accusations of conflicts of interest. For example, critics of his opposition to Internet taxation - he served on the bipartisan Advisory Commission on Electronic Commerce that studied the issue for the federal government - have charged that his position has something to do with the money he has received from Microsoft. Also, Dan Stein, executive director of the Federation for American Immigration Reform, a group that supports increased restrictions on immigration, has made similar charges regarding Norquist's pro-immigration stand. Norquist, who identifies "Moscow on the Hudson" as his favorite movie because it is "a celebration of immigration ... the most patriotic movie ever made,"36 has, according to Stein, been "paid by Microsoft and others to take a positivist legislative agenda to Congress (including the importation of more foreign labor). It seems Mr. Norquist has a habit of donning more corporate hats than Dr. Seuss' Bartholomew Cubbins and neglecting to mention conflicts of interest."37 It has also been noted that ATR Foundation pushes for lower taxes on alcohol (among other consumer items), which meshes nicely with Norquist's work on behalf of Seagram and the Distilled Spirits Council.

"You can wear too many hats and he does," Charles Lewis, executive director of the Center for Public Integrity, charged in 1997, before Norquist moved away from corporate lobbying. "He's a whole hat store. And that's the conflict of interest: He's head of a non-profit. He's a corporate lobbyist. He's a foreign lobbyist [who once worked on behalf of the small Indian Ocean country of Seychelles]. This gives non-profits, which are supposed to be doing research, a bad name."38

One of Norquist's associations led to an article in The New Republic that charged that he had ties to fundamentalist Moslems who are sympathetic to terrorists. Norquist has worked for years to bring Moslems into the Republican Party and in 1998 he co-founded the Islamic Institute to advocate conservative causes to Moslems out of ATR headquarters. The magazine charged that Norquist's quest to convince Moslems to support Republicans led him to overlook some of his associates' ties to terrorists and that he arranged for several Moslems to attend a White House event on Sept. 26, 2001, who had not renounced the Sept. 11 attacks. Also, Abdurahman Alamoudi, an official with the American Muslim Council, a group that had presented Norquist with an award for his outreach to the Islamic community, has reportedly declared himself a supporter of Hamas and Hezbollah.39 Alamoudi retained Janus-Merritt for $20,000 in 2000.40

Norquist, in a letter to the editor responding the article, defended his work to recruit Moslems and disputed several facets of the story. He said, for example, that he did not recommend to the White House people who should attend the Sept. 26 event, and that, in any case, if they truly had questionable backgrounds, it is unlikely they would have made it past the Secret Service background checks.41

While Norquist has given up some of the lobbying jobs which were the causes of much criticism, he continues to stir controversy in the field. One of ATR's current efforts - the K Street Project - aims to identify the party affiliation of members of lobbying firms in Washington, D.C., "with the object of letting people know how many Rs and Ds are being hired by trade associations or companies," Norquist said.42

"How will people use the information? Use your imagination," Norquist said. "My interest is in reminding K Street that you no longer have to hire liberal Democrats who don't like you."43

Democrats, though, charge that the list smacks of McCarthyism and is an inappropriate attempt to deny them jobs and political access.

"This is how [the GOP] does business," Democratic Party Chairman Terry McAuliffe said. "I call it extortion."44

Summary

Grover Norquist, according to former Republican House Speaker Newt Gingrich, is "essentially the most creative and most effective conservative activist in the country ... [and] a remarkable implementer of effective communications and grassroots political strategies."45 While such praise might be expected from such a close ally, Norquist is as respected by his enemies as he is by his friends.

"He is a very good coalition builder," Ralph Neas, president of People for the American Way, a liberal group that keeps tabs on ATR and other right-wing organizations, said. "Grover has been one of the most effective leaders of the radical right on tax issues, and a host of others."46

Norquist is a long-range thinker who is both driven to change the world - not just the nation; in addition to his anti-communist globe-trotting, he recently went to Japan to urge Prime Minister Junichiro Koizumi to cut taxes to spur the economy47 - and patient. He charts his plans not in weeks, months or even years, but in decades.

He has both corporate ties and political connections, which is to say, money and influence.

He is, in short, one of the leading conservative intellectuals and one of the movement's most effective activists. As ambitious as his goals are, his supporters are confident enough to take him seriously and his opponents are wary enough to know that they cannot afford not to.

Endnotes

1: The Washington Post, Sept. 4, 1995, "Right in the Middle Of the Revolution." (Return)
2: The Nation, May 14, 2001, "Grover Norquist: 'Field Marshal' of the Bush Tax Plan." (Return)
3: The Boston Globe, April 17, 2002, "Right where he belongs: From Weston to Washington, Grover Norquist has become the quiet mastermind of conservatism." (Return)
4: Insight on the News, Jan. 26, 1998, "Grover Norquist takes on the tyranny of federal taxation." (Return)
5: The Boston Globe, April 17, 2002, "Right where he belongs: From Weston to Washington, Grover Norquist has become the quiet mastermind of conservatism." (Return)
6: Americans for Tax Reform. (Return)
7: The Nation, May 14, 2001, "Grover Norquist: 'Field Marshal' of the Bush Tax Plan." (Return)
8: Grover Norquist, March 20, 1997, testimony before the House Judiciary Subcommittee on Courts and Intellectual Property. (Return)
9: Insight on the News, Jan. 26, 1998, "Grover Norquist takes on the tyranny of federal taxation." (Return)
10: Ibid. (Return)
11: United States Census Bureau. (Return)
12: American Shareholders Association mission statement. (Return)
13: Peter Ferrara, "Public Sector Pension Reform: Creating Portable Pensions for Government Employees." (Return)
14: Interview with Anna Sullivan. (Return)
15: Peter Ferrara, "Pension Liberation." (Return)
16: Americans for Tax Reform press release. (Return)
17: Florida State Board of Administration. (Return)
18: The Miami Herald, Feb. 27, 2001, "State gives workers say over pensions: White House plans to keep watch on Florida's progress." (Return)
19: Interview with Mike Fasano. (Return)
20: National Center for Charitable Statistics Data Web. (Return)
21: Internal Revenue Service Form 990 filed by Americans for Tax Reform Foundation (obtained from GuideStar). (Return)
22: Newsweek, Feb. 25, 2002, "Winks, Nods & Corporate Cash." (Return)
23: Associated Press, Jan. 6, 2000, "McCain campaign spars with anti-tax group." (Return)
24: U.S. Senate Governmental Affairs Committee, "Final Report of the 1997 Campaign Finance Special Investigation." (Return)
25: U.S. Senate Governmental Affairs Committee, "Minority Report of the 1997 Campaign Finance Special Investigation." (Return)
26: U.S. Senate Governmental Affairs Committee, "Final Report of the 1997 Campaign Finance Special Investigation." (Return)
27: U.S. Senate Governmental Affairs Committee, "Minority Report of the 1997 Campaign Finance Special Investigation." (Return)
28: Ibid. (Return)
29: Internal Revenue Service. (Return)
30: Internal Revenue Service. (Return)
31: U.S. Senate Governmental Affairs Committee, "Minority Report of the 1997 Campaign Finance Special Investigation." (Return)
32: U.S. Senate Governmental Affairs Committee, "Final Report of the 1997 Campaign Finance Special Investigation." (Return)
33: The Nation, May 14, 2001, "Grover Norquist: 'Field Marshal' of the Bush Tax Plan." (Return)
34: U.S. Senate Governmental Affairs Committee, "Minority Report of the 1997 Campaign Finance Special Investigation." (Return)
35: Center for Responsive Politics. (Return)
36: Insight on the News, Jan. 26, 1998, "Grover Norquist takes on the tyranny of federal taxation." (Return)
37: The Washington Times, Aug. 17, 2000, "The great visa scam; Conservatives do the bidding of big business." (Return)
38: The New York Times, July 8, 1997, "Conservative Advocate and His G.O.P. Ties Come Into Focus." (Return)
39: The New Republic, Nov. 12, 2001, "Fevered Pitch." (Return)
40: Center for Responsive Politics. (Return)
41: The New Republic, Nov. 19, 2001, "Wild Pitch?" (Return)
42: The New York Times, June 10, 2002, "Republicans Track Politics Of Lobbyists." (Return)
43: The Hill, June 26, 2002, "List or Blacklist: Democrats take aim at conservative 'K Street Project.'" (Return)
44: Ibid. (Return)
45: The Nation, May 14, 2001, "Grover Norquist: 'Field Marshal' of the Bush Tax Plan." (Return)
46: Ibid. (Return)
47: Wall Street Journal, Aug. 28, 2002, "Another Tokyo Setback." (Return)

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