Revealed: The Corporations and Billionaires that Fund the Texas Public Policy Foundation

The Texas Public Policy Foundation—an influential right-wing think tank based in Austin with ties to Rick Perry, Ted Cruz and many other powerful politicians—bills itself as a “non-partisan research institute” and brags that it “does not accept government funds or contributions to influence the outcomes of its research.”

It’s easy for the organization to make that claim; as a 501(c)(3) non-profit TPPF doesn’t have to disclose its funding sources. But a list of TPPF’s donors was inadvertently posted on Guidestar.org.

According to the tax filings, TPPF gets a majority of its funding from a relatively small group of major corporations, conservative foundations and wealthy individuals with a financial interest in the type of policies that TPPF promotes. Altogether, the list of donors includes 129 individuals, corporations and foundations and totals $4.7 million in donations.

“Most think tanks work for their funders and TPPF’s donors are a Who’s Who of Texas polluters, giant utilities and big insurance companies,” said Craig McDonald, director of Texans for Public Justice. “TPPF is thinking the way its donors want it to think.”

That was the charge leveled by a former TPPF executive that Abby Rapoport and I spoke with for a story last year.

Melinda Hasting—who served as the foundation’s vice president from 1996 to 1998 but has since broken with the conservative movement—says one fundraising tactic involved approaching corporations, wealthy businessmen, and corporate-funded foundations with a pitch. Hasting (formerly Melinda Wheatley) describes it: “We think this is beneficial to your industry and would you consider providing us with a non-profit contribution. … Here’s the timeline for the completion of the research; the parameters of the research are this; we expect it will result in some savings or outsourcing.”

TPPF’s response at the time was that the organization no longer, if it ever, operated that way. (The foundation didn’t respond to a request for comment by press time. I will update the post if and when I hear back.) Regardless, there is remarkable confluence between its donors and the positions it stakes out.

Take Energy Future Holdings, for example.

When it became apparent this summer that Texas’ power grid could go dark because of a lack of investment in new power generation, regulators found few tools at their disposal to deal with the problem. Texas, after all, has one of the most deregulated power markets in the world. Big utilities urged the Public Utility Commission to raise the cap on wholesale prices, a measure that would pad their bottom lines but almost certainly cost consumers. In June, the PUC voted 2-0 to raise the cap from $3,000 per megawatt-hour to $4,500. The decision was as much about laissez-faire ideology as practical management of the grid.

Over the last decade of Texas’ electricity deregulation experiment, no organization has proved a bigger apologist for dereg’s failures as TPPF. In a July op-ed in the Houston Chronicle, the organization’s Bill Peacock went so far as to call for the complete elimination of the cap. This was par for the course. In 2007, when TXU (now the nearly-bankrupt Energy Future Holdings) was accused of market abuse and electricity prices were skyrocketing, Peacock rallied to the company’s defense, arguing that “prices are not too high because of problems with the market or TXU.” He’s still on this kick, blasting the PUC for “spurious claims of market power abuse” and calling for the agency to be handcuffed in its ability to punish wrongdoers.

TPPF has also rallied to the defense of coal, in particular Luminant’s fleet of coal- and lignite-fired power plants, which are struggling due to competition from natural gas and stricter EPA limits on mercury, smog and carbon pollution. (Luminant is a unit of Energy Future Holdings.) Luminant and TPPF singled out the EPA’s Cross-State Air Pollution Rule for sustained legal and rhetorical attack. But TPPF was the most strident, saying it would “eliminate jobs, threaten the reliability of our electricity grid, drive up the cost of electricity, and lower economic growth.” Kathleen Hartnett White, a TPPF energy analyst and former chairwoman of the Texas Commission on Environmental Quality, has gone so far as to claim that “There is no environmental crisis. In fact there’s almost no major environmental problems.” Luminant couldn’t get better support if it was paying for it. And maybe it was.

According to the donor list, Luminant and its two sister companies—TXU Energy and Oncor—donated $110,000 to TPPF in 2010. The American Coalition for Clean Coal chipped in $10,000.  Other big utility interests were generous too: the Associated Electric Companies of Texas kicked in $43,000; NRG Energy offered $10,000; AEP Texas and AEP SWEPCO contributed $10,000 each; and Direct Energy ponied up $20,000.

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Close observers of how powerful interests control policy in Texas will perhaps not be surprised by the TPPF’s funding sources.

The foundation’s major corporate donors include:

• The Koch Brothers: Koch Industries Inc. ($159,834) & the Claude R. Lambe Charitable Foundation ($69,788.61)
• Verizon ($47,450)
• State Farm Insurance ($25,000)
• Texans for Lawsuit Reform ($30,000)
• ExxonMobil ($10,000)
• Altria ($20,000)
• GEO Group, a private prison company ($15,000)
• TimeWarner Cable ($10,000)
• RJ Reynolds Tobacco ($5,000)
• Texas Association of Manufacturers ($5,000)
• ConocoPhillips ($5,000)
• Farmers Insurance Group ($5,000)
• Chevron ($5,000)
• Boeing ($5,000)
• Blue Cross Blue Shield of Texas ($5,000)
• Devon Energy ($5,000)
• AND MANY MORE!

Notably, most of the brand-name corporations donating to TPPF aren’t particularly “political” or ideological. But they do have something in common: They are all subject to oversight by state government and mostly benefit from the pro-deregulation, pro-privatization, “free market” policies favored by TPPF.

“We support TPPF’s mission to promote free enterprise, as this is the best way to expand customer choices and improve customer service,” said Patti Kelly, a spokeswoman for State Farm.

Another major funding source: wealthy businessmen (and they are mostly men). Oil and gas interests, especially independent producers based out of Midland, have an outsized presence:

• Jim Leininger, the founder of TPPF and the so-called Daddy Warbucks of the conservative movement in Texas ($50,000)
• Don Sparks, Discovery Operating Inc., Midland ($48,500)
• Tim Dunn, Crownquest Oil & Gas Inc., major funder also of Empower Texans ($43,000)
• Chaz Neely, San Antonio Steel Co. ($25,000)
• Beaman Floyd, lobbyist for insurance interests and director of Texas Coalition for Affordable Insurance Solutions ($15,000)
• Robert McNair, owner of the Houston Texans ($10,000)
• Red McCombs ($5,000)
• Jim Hornfischer, publisher of Fed Up!, Rick Perry’s anti-government book, the proceeds of which went to TPPF ($94,000)
• George Seay, finance chair for Perry’s disastrous presidential run who ran into campaign-finance trouble ($15,000)
• Harold Simmons, Dallas billionaire and one of the nation’s biggest donors to conservative superPACs ($11,000)
• AND MANY MORE!

Perry-appointed regents for Texas A&M and the University of Texas, a highly-desirable appointment often encouraged with the ample application of dollars into campaign coffers, also are big boosters of TPPF. The regents for both schools have worked closely with TPPF on unpopular schemes to impose market discipline on the systems’ flagship schools:

• Wallace Hall, UT regent ($31,692)
• Phil Adams, insurance company owner, Texas A&M regent ($15,000)
• Brenda Pejovich, UT regent and TPPF board member ($10,487)

• Jeff Sandefer, UT regent and TPPF board member who’s been instrumental in pushing controversial reforms at UT and A&M ($200,495)

Foundations constituted a large share of TPPF’s funding in 2010:

• Entities associated with the State Policy Network, which Mother Jones described as “a little-known umbrella group with deep ties to the national conservative movement.” ($544,306.90)
• The ED Foundation, the family charity of controversial UT System regent & TPPF board member Jeff Sandefer ($200,495)
• The Fickling Family Foundation ($100,000)
• Jacquelin Hume Foundation ($40,000)
• DonorsTrust  ($65,300)
• The Amon G. Carter Foundation, a Ft. Worth-based charity that mostly funds the arts ($20,000)
• AND MANY MORE!

Notably, TPPF’s top donors are middle-of-the road foundations. However, the following foundations all earmarked their money specifically for the organization’s criminal justice reform project, which has made common cause with progressives:

• Pew Charitable Trusts ($354,420)
• Chicago Community Foundation ($203,760)
• Public Welfare Foundation ($175,000)

TPPF explicitly advertises access to its board members and executive director on its donation page. Those who give $5,000 to $24,999 receive “priority communications with the President and the Chairman of the Board.” So-called “Liberty Leaders”—those who give $100,000 to $249,999— are invited to “join President or Executive Director at personal one-on-one meeting to discuss Foundation’s focus and strategy”; meanwhile Freedom Stewards ($250,000 or more) are allowed to attend board meetings to “give feedback” and “make suggestions.”

Update at 5PM with correction: Jeff Sandefer is not a UT System regent. He has, however, been instrumental in pushing reforms at UT and A&M. The story has been corrected to reflect that.