The thin line between researcher and lobbyist

In chasing funds, think-tanks push corporate donors' agendas - and reap tax benefits too

WASHINGTON • As Lennar Corp, one of the largest homebuilders in the United States, pushed ahead with an US$8 billion (S$10.8 billion) plan to revitalise a barren area of San Francisco, it found a trusted voice to vouch for its work: the Brookings Institution, the most prestigious think-tank in the world.

"This can become a productive, mutually beneficial relationship," Brookings vice-president Bruce Katz wrote to Lennar in July 2010. The ultimate benefit for Brookings: US$400,000 in donations from Lennar's different divisions.

The think-tank began to aggressively promote the project, San Francisco's biggest redevelopment effort since its recovery from the 1906 earthquake, and offered to help Lennar "engage with national media to develop stories that highlight Lennar's innovative approach". Brookings even named Mr Kofi Bonner, the Lennar executive in charge of the project, as a senior fellow - an enviable credential he used to advance the firm's efforts.

Think-tanks have power in government policy debates because they are seen as researchers independent of moneyed interests. But in the chase for funds, they are pushing agendas important to corporate donors, at times blurring the line between researchers and lobbyists. And they do so while reaping the benefits of their tax-exempt status.

Thousands of pages of memos and confidential correspondence between Brookings and other donors show that financial support often came with assurances from the think-tank that it would provide "donation benefits", including setting up events featuring corporate executives with government officials, according to The New York Times and the New England Centre for Investigative Reporting.

Many other think-tanks have similar arrangements. Think-tank executives, however, reject any suggestion that they are tools of corporate influence campaigns and say they are simply teaming up with donors that have similar goals.

"We do not compromise our integrity," said Brookings' executive vice-president Martin Indyk. But he acknowledged the arrangement to appoint the Lennar executive as a senior fellow had created the "appearance of a conflict of interest".

Still, the benefits afforded to corporations looking to cloak themselves with a think-tank's authority are evident, according to a review of documents from more than a dozen institutions. The likely conclusions of some think-tank reports, documents show, are discussed with donors before the research is complete. Drafts of the studies are seen by donors whose opinions then help shape final reports.

Despite these benefits, corporations can write off the donations as charitable contributions. Some tax experts say these arrangements may amount to improper subsidies by taxpayers if think-tanks are providing specific services.

Executives at Brookings, the Centre for Strategic and International Studies and other think-tanks say they have systems to ensure their reports are based on scholars' independent conclusions. Corporate donations to Brookings are tax-exempt based on the premise that the think-tank's work benefits the public good, not a firm's bottom line.

Lawyers who specialise in non- profit law say Brookings' agreements raised questions.

"Tax deductions are subsidies that are paid for by all taxpayers," said Ms Miranda Perry Fleischer, a professor at the University of San Diego School of Law. "And the reason the subsidy is provided is that the charitable organisation is supposed to be doing something for the public good, not that specifically benefits the private individual or corporation in the form of providing them goods or services."

Mr Indyk said that opinion was "totally unfounded", noting that Brookings had retained its own lawyers to review the documents and found no problems.

NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on August 09, 2016, with the headline 'The thin line between researcher and lobbyist'. Print Edition | Subscribe