Progressives for Sale

Secret corporate cash behind Obama-allied think tank, leak reveals

CAP founder John Podesta / AP
May 21, 2013

A liberal think tank with close ties to the Obama administration took money from General Motors and other businesses it did not disclose while campaigning for policies benefitting those companies, according to The Nation magazine.

Members of the "Business Alliance" of the Center for American Progress (CAP) include bailed out car company GM, unsafe Bangladeshi factory utilizer Walmart, and embattled solar energy company First Solar, according to a membership list obtained by the liberal magazine.

CAP, whose chairman is Democratic Party power player John Podesta, was a major proponent of the auto bailout, which used $50 billion of taxpayer money to spare GM a traditional bankruptcy.

The month before GM entered bankruptcy proceedings with the backing of the federal government, CAP posted an article titled, "As General Motors Goes, So Goes the Nation."

A collapse of the Big Three—GM, Ford, and Chrysler—not only affects their employees, but employees all along the supply chain. The Center for Automotive Research, or CAR, estimates that the total effect of direct, indirect, and expenditure-induced effects of a contraction in U.S. automobile manufacturing will be considerable. For example, a 50-percent reduction in operations would lead to nearly 2.5 million jobs lost and more than $125 billion lost in personal income in the first year.

Such doomsday predictions were important for the administration as it promoted the unpopular bailout, according to U.S. auto expert Ed Niedermeyer.

"That assessment was made by a think tank Center for Automotive Research funded by the Detroit 3 and the UAW," he said. "They [CAP and CAR] were crucial. … Many other justifications have been given for the auto bailout post-hoc — green cars, exports—but the key assessment was that 1 million jobs would disappear all at once."

CAP did not respond to requests for comment.

GM was not the only alliance member to receive favorable public treatment from the liberal think tank while donating money to it, according to the Nation.

CAP’s Richard Caperton praised First Solar’s "innovative projects" while testifying to the House Committee on Energy and Commerce, but failed to disclose that First Solar was a member of the alliance.

CAP does not disclose Business Alliance members to the public despite its criticism of corporate money in politics. CAP vice president Alex Demots called on Congress to "strengthen disclosure" laws in the wake of the 2010 Citizens United decision:

Though it can no longer prohibit corporate political spending, the federal government is allowed to require corporations to publicly disclose their political spending. For reporting to be effective, Congress would have to take steps to prevent corporations from circumventing reporting requirements and hiding their identities.

The post also talked of the ways that corporations can use intermediaries to donate unlimited sums to politicians and political groups. CAP has received millions of dollars from the Democracy Alliance, a collection of liberal billionaires and millionaires that funnels money into liberal groups without disclosure.

CAP created the Business Alliance in 2007, two years after it started receiving money from Democracy Alliance members. The Business Alliance was instrumental to maintaining the think tank’s growth, the Nation reports.

"After growing rapidly in its first few years, tax records show, CAP’s total assets fell in 2006 for the first time, from $23.6 million to $20.4 million," the report states. "Assets started growing again in 2007 when CAP founded the Business Alliance, a membership rewards program for corporate contributors, and then exploded when Obama was elected in 2008. According to its most recent nonprofit tax filing, CAP’s total assets now top $44 million, and its Action Fund treasury holds $6 million more."

While CAP’s lucrative war chest has made it one of the largest liberal think tanks in the country, its political connections have made it the most influential.

Its founder John Podesta served as former President Bill Clinton’s chief of staff before launching the group in 2003. He later oversaw President Obama's transition team.

Podesta stepped down as its president in 2012, allowing former Clinton and Obama staffer Neera Tanden to take over.