Podesta Nonprofit Poised for Influence After Years in CAP’s Shadow

Washington Center for Equitable Growth tailored to Dems’ renewed economic focus

John Podesta
John Podesta / AP
December 15, 2016

As Democrats seek to hone a new kitchen-table message, one political operative stands to continue his longstanding influence atop Washington's left-wing political infrastructure: former Hillary Clinton campaign chairman John Podesta.

Podesta founded and has steered a D.C.-based policy group called the Washington Center for Equitable Growth. With Democrats looking to refocus their message on jobs and economics, the small think tank could help lay the academic and policy groundwork for a Democratic agenda in the Trump era.

Internal documentation on WCEG's formation and operations—obtained by hackers believed to be acting in concert with the Russian government and released by the group Wikileaks—provides an extensive look at the group's roots, mission, and financial backing.

Those documents provide a previously unreported history of an advocacy group that has mostly flown under the radar despite its impressive roster of operatives and academics, including Clinton campaign adviser Alan Blinder and Emmanuel Saez, a Berkeley economist best known for his collaboration with French economist Thomas Piketty.

The documents also reveal details of an organization that has struggled to define itself independently of Podesta’s vast political network, and been racked by internal strife in his absence, as his Clinton campaign duties left management responsibilities to an embattled executive director.

Neither WCEG nor Podesta responded to requests for comment on this story.

President-elect Donald Trump's surprising victory and the resulting introspection among his opponents have led to a national elevation of fundamental economic issues such as employment, economic dislocation, and income inequality.

On the Democratic side of the aisle, that means a greater emphasis on issues more commonly associated with the party's populist, labor-focused roots than the culture wars and identity politics seized on by the Democratic base and media in recent years.

That shift could play into the precise mission of groups like WCEG, which seeks to imbue policymaking with a focus on populist economics: raising the minimum wage, preserving and expanding welfare programs, redistributing income, and creating new government-funded programs aimed at the financially distressed.

WCEG emphasizes collaboration between left-wing academics and policymakers. It convenes liberal scholars, connects them with elected officials and their staff, and tries to lay the groundwork for a leftward shift in economic policy that counters common conceptions about the financial costs of redistributive policies and stringent regulation.

The group would have preferred a Clinton victory in November, but internally it planned to promote its policy goals regardless of the outcome. It began crafting a document called the Blueprint in 2014 that would lay out its proposed economic agenda for the new president.

The Blueprint "translates our policy narrative into nuts-and-bolts information that the new Administration can use, regardless of whether the new president is a Democrat or a Republican," according to an internal memo.

The Blueprint was explicitly modeled on a 2007 report from the Center for American Progress (CAP) called Progressive Growth. That report, authored under Podesta's auspices, was designed to shift the tone of the Democratic presidential primary contest and provide ready-made policy ideas for the new administration.

WCEG's use of CAP as a model was not incidental: not only did Podesta found both groups, WCEG was incubated by CAP and housed in its offices until late 2015. Donors routed their contributions to WCEG through CAP, which took a 15 percent fee off the top and provided the group with office space and administrative assistance—and signed its grant checks, a practice that would later imperil some of WCEG's ostensibly nonpartisan work.

WCEG’s political connections got its academics in the door with some of the Democratic Party’s foremost administrators and elected officials.

The group hosted an off-the-record briefing in May 2014 "at a neutral location near Capitol Hill" to promote the work of two of its economists among top economic policymakers. In attendance were representatives for the Treasury Department, the Federal Reserve, the Congressional Budget Office, the Joint Economic Committee, and Sen. Sherrod Brown (D., Ohio).

Additional "outreach" events involved pressing WCEG policies in meetings with Treasury, the JEC, Sens. Elizabeth Warren (D., Mass.), Patty Murray (D., Wash.), Angus King (I., Maine), Rep. Rosa DeLauro (D., Conn.), and the Senate Banking and Finance Committees.

Though WCEG spends minimal sums directly on lobbying, its advocacy work is explicitly geared toward policy changes.

In internal documents, the group lays out specific benchmarks for affecting policy. In one memo, staff said they planned to ensure that "our research (in-house, commissioned, and grant-driven) is circulated in at least three ‘Dear Colleague’ letters, quoted in at least five congressional floor statements, and we are sought out as witnesses and advisors for at least two Congressional hearings."

The group hoped that by December 2015 it would be in talks to shape the economic policy agendas of at least two presidential candidates.

"The major players in national politics—elected and appointed officials, candidates, press, and key interest groups—will adopt or cover our core message and cite our work," WCEG predicted.

However, clashes between WCEG leadership and staffers quickly consumed the group. Podesta had left for a White House post in January 2014, and WCEG was beset with internal squabbling under the leadership of executive director Heather Boushey, a Clinton campaign adviser who was in line to be her transition team’s chief economist.

By mid-2015, five WCEG staffers had resigned, citing clashes with Boushey or her managerial style more generally.

Podesta privately acknowledged that she could be a tough supervisor. "She's a bit of a wrecking ball boss," he wrote in one email. "Gets along great with some smashes in to others."

Some WCEG staffers were more blunt. Carter Price, who resigned as the group’s chief mathematician in April 2015, was quoted in an internal memo as calling her a "phenomenally incompetent as a manager" and the "worst manager ever."

"She cannot prioritize," Price told CAP human resource staffers, according to the memo. Boushey "has constructed artificial bureaucratic hurdles that make it impossible for researchers to function."

One WCEG staffer, former program coordinator Enjoli Timmons, even relayed second-hand accounts of racial discrimination by Boushey, though an internal review did not substantiate the charges. Boushey was "good at putting you in your place," Timmons said, but "she herself had not received or experienced any discriminatory actions or behavior," internal documents noted.

Price declined to speak on the record about his time at WCEG. Timmons did not respond to questions. Boushey also did not respond to a request for comment.

Boushey also appears to have clashed with some of WCEG’s funders, who, documents indicate, provided significant guidance on the group’s operations. A top aide to Herb Sandler, the banking magnate donor to CAP and WCEG, privately complained to Podesta that Boushey was pushing the group more towards an academic than an advocacy model.

Sandler Foundation executive vice president Steve Daetz said he had "overarching questions about Heather's ability to envision, and lead, a bigger initiative that includes many elements outside of her comfort zone."

Her vision for the organization lacked "clarity and focus," he wrote. "We run the risk of reacting to wish lists of academic economists, who are not the best arbiters of how to get things done."

Daetz relayed some of those concerns directly to Boushey.

"The research functions are important … but as we've discussed those research functions are ultimately ‘in service of’ the more strategic communications and outreach efforts (e.g. translating, disseminating, bridging, targeting key policymakers, educating, etc...) that will ultimately determine the success of our endeavor," he wrote.

Despite his concerns, Daetz told Boushey in the same email that he would "send a tranche of funds over through CAP in the next week or two."

The routing of funds through CAP makes it difficult to determine from public records who was supporting WCEG financially during its early years, but internal documents reveal that it received or planned to receive funding from the Sandler, MacArthur, Kellogg, Hewlett, Marisla, Ford, Wyss, and Rockefeller Foundations.

Internal emails show it also considered soliciting a handful of wealthy liberals, including Tom Steyer, Steve Silberstein, David Desjardins, and Pierre Omiydar.

As checks to WCEG came through CAP, so too did checks from the group. Its official association with the think tank meant that WCEG grants to academics, often based at universities and ethically bound to be nonpartisan, would show up publicly as grants from CAP, which, WCEG staff admitted, was perceived as partisan and not particularly academically rigorous.

One WCEG grantee even went so far as to decline a $15,000 grant due to the stigma of an official financial association with CAP. The grant was slated to support University of California economist Danny Yagan’s research into attempts by the wealthy to shield income from tax collectors.

Yagan "was reticent to personally accept money from a partisan organization," a WCEG staffer wrote. "He asked if we could route the funding through UC Berkeley, so as to alter the optics. He is more comfortable if 'CAP' is supporting UC Berkeley, rather than him directly."

It is not clear whether that funding was ever re-routed. WCEG reported five grants to the University of California in 2015 ranging from $14,000 to $45,000.

The group’s dependence on CAP was becoming a problem, and by early 2015 it was eyeing a way out from under the group’s umbrella. That required some massaging by Podesta. "We need to do our separation politics carefully, so let's not start gossiping about that till I do a little work on the 10th floor," he told Boushey.

Sandler was apparently involved in the process of that separation; his foundation and Podesta worked to lay the logistical groundwork for WCEG independence, and Boushey regularly briefed Daetz on their progress.

"While we believe there is much to be gained from our affiliation with CAP, we also believe that for us to be successful—and to do the most to support the work of CAP and other progressive organizations—requires that CAP’s support ‘leaves no fingerprint,’" Boushey wrote in one memo to Daetz. "Please burn this email after you read it!" she joked.

WCEG officially separated from CAP after receiving its tax-exempt status on Nov. 30, 2015. By January 2016, it was looking for ways to boost its policy advocacy activities. An internal memo discussed the creation of a new, secretive body called the Policy Advisory Group.

The board’s goal would be to secure "access to elite Washington insiders" to develop strategies for advancing its policy agenda. "We do not anticipate making the composition of this group, nor the agenda or minutes of these meetings public," the memo noted.

WCEG has also taken to directly whipping supportive academics into pressing for direct policy advocacy that aligns with its mission. When Congress considered legislation in 2015 that reduced funding for the Census Bureau and the National Science Foundation and restricted public access to federal education data, Boushey blasted out an email encouraging supportive academics to contact their members of Congress and "weigh in on the debate."

"We plan to do more like this as the need arises," she told Podesta, who praised the move.

It is not clear how involved Podesta will remain in WCEG’s day-to-day operations as the Trump administration begins its work. But as Democrats look to revamp their message along more populist economic lines, the small think tank he helped spawn provides a potential in for a political operative denied a role in crafting policy directly.

It also remains to be seen whether WCEG can effectively rebrand itself as a nonpartisan group given its history with CAP and its roster of liberal wonks and operatives.

As the group moved towards independence, its staff pondered that dilemma. In crafting a board of directors for its stand-alone 501(c)(3) organization, one staffer asked in an internal memo, "Are we signaling to the outside world with our governing board that we are non-partisan, independent, and question-driven? Or are we signaling that we are an extension of the progressive infrastructure?"

For the time being, the staffer wrote, WCEG might have to accept its role as a left-wing organization. But "we should consider expanding the board in the near future to include non-traditional allies."