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George Soros’s Democracy Alliance:

George Soros’s Democracy Alliance:

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D
December 2006
CONTENTS
George Soros\u2019s
Democracy Alliance
Page 1
Philanthropy Notes
Page 8
George Soros\u2019s Democracy Alliance:
In Search Of A Permanent Democratic Majority
By James Dellinger and Matthew Vadum
Summary: George Soros is spurring a

handful of wealthy donors who have formed a loose-knit group that is funding a permanent political infrastructure of nonprofits, think tanks, media outlets, leadership schools, and activist groups\u2014 a kind of vast left-wing conspiracy to mirror groups in the conservative move- ment. It\u2019s called the Democracy Alliance (DA). The Democrats\u2019 surprise capture of both houses of Congress in November gives the new group a perfect opening. But the DA is off to a rocky start and has been surprisingly reluctant to disburse funds to sympathetic groups.

Wow! We won. Now what? From left to right, incoming Speaker Nancy Pelosi
and incoming Senate Majority Leader Harry Reid cheer the Democrats\u2019
recent electoral triumph, while billionaire leftist George Soros ponders the
future of the Democracy Alliance, a group he helped to create.

espondent after George W. Bush
won reelection, a small group of

billionaire Democrats met in San Francisco in December 2004 to reflect on John Kerry\u2019s failure to capture the White House. George Soros, Progressive Insurance chairman Peter B. Lewis, and S&L tycoons Herb and Marion Sandler were angry and depressed. They felt they had been taken\u2014 seduced by the siren song of pollsters and the mainstream media who had assured them that the capture of the executive mansion was theirs. But despite giving millions of dollars to liberal candidates and 527 political commit- tees, the donors came away with nothing. At about the same time another group of wealthy Democratic donors was meeting at a hotel in Washington, D.C. feeling the same way. \u201cThe U.S. didn\u2019t enter World War II until Japan bombed Pearl Harbor,\u201d political consultant Erica Payne told the meeting. \u201cWe just had our Pearl Harbor.\u201d

Determined to bring the Democratic Party

back from the political wilderness, Soros and the others decided they needed a long-term strategy to regain power. Former Clinton of- ficial Rob Stein urged them to copy conserva- tives who had spent four decades investing in ideas and institutions with staying power. Over the next year Stein would become well- known for a PowerPoint presentation called \u201cThe Conservative Message Machine\u2019s Money Matrix.\u201d He used graphs and charts to show how the conservative movement was comprised of an intricate network of organizations, funders and activists. Stein\u2019s presentation was apparently convincing. In 2005 the Democracy Alliance was born. It was an odd name for a loose collection of super- rich donors committed to building organiza- tions that would propel America to the left.

In April 2005, Soros gathered together an even larger group. Seventy millionaires and billionaires met in Phoenix, Arizona, to firm up

the details for their fledging political financ- ing clearinghouse. The attendees heard pre- sentations on why all the pro-Democratic Party 527 groups on which they lavished millions of dollars failed to deliver the elec- tion to Kerry. But now they had a new strat- egy to make a difference.

Finances

To join the Democracy Alliance, there is one requirement: You must be rich. Mem- bers, who are called \u201cpartners,\u201d pay an initial

FoundationWatch
2
December 2006
Editor: Matthew Vadum
Publisher: Terrence Scanlon
Foundation Watch
is published by Capital Research
Center, a non-partisan education and
research organization, classified by
the IRS as a 501(c)(3) public charity.
Address:
1513 16th Street, N.W.
Washington, DC 20036-1480
Phone: (202) 483-6900
Long-Distance: (800) 459-3950
E-mail Address:
mvadum@capitalresearch.org
Web Site:
http://www.capitalresearch.org
Reprints are available for $2.50 prepaid
to Capital Research Center.

$25,000 fee and $30,000 in yearly dues. They also must pledge to give at least $200,000 annually to groups that Democracy Alliance endorses. Partners meet two times a year in committees to decide on grants, which focus on four areas: media, ideas, leadership, and civic engagement. Recommendations are then made to the DA board, which passes them on to all DA partners. The Alliance discourages partners from discussing DA affairs with the media and it requires its grant recipients to sign nondisclosure agreements.

As a result, it is hard to learn much about the Alliance\u2019s grantmaking. There were no grants voted on at the DA\u2019s April 2005 organizing meeting in Phoenix. However, when the group met in October of that year at the Chateau Elan Winery & Resort in Atlanta, Georgia, it decided behind closed doors to dole out $28 million to nine grantees. Most of that money went to well-known groups, including the Center for American Progress and Media Matters for America.

Representatives of smaller, less prominent groups were reportedly miffed at the process. \u201cNo one knew why the nine groups had been picked. Funding progressive infrastructure was all well and good, but no one bothered defining precisely what \u2018progressive\u2019 meant,\u201d

wrote Ari Berman, a writer for the leftist Nation magazine. \u201cThere was an almost com- plete lack of actual substance,\u201d Berman quoted one attendee saying.

After the negative feedback from the Phoe- nix meeting, DA leaders changed the process and allowed groups to apply for grants. The next meeting, held in Austin, Texas, in May

2006, was better received in left-wing circles. Progressive leaders such as Andy Stern, who is president of Service Employees Inter- national Union, spoke during panel discus- sions, and grant-seekers were allowed to network with DA partners. \u201cI\u2019ve made it a mission to hate the Democracy Alliance,\u201d Berman quoted one attendee who heads a grant-seeking group, \u201cand I was pleasantly surprised.\u201d

With an eye on the approaching November elections, the Alliance decided to give an- other $22 million to 16 groups focused on electoral politics. These groups included the Center for Community Change, USAction, ACORN, EMILY\u2019s List, and the Sierra Club. Former president Bill Clinton dropped by the Austin meeting for a friendly greeting, but when one DA partner asked why Democrats don\u2019t apologize for supporting the Iraq war, Clinton went on a 10-minute tirade, yelling that if he had been in Congress, he would have voted to authorize the war. \u201cIt was an extraordinary display of anger and imperi- ousness,\u201d said partner Guy Saperstein, an Oakland, California attorney. \u201cClinton\u2019s re- sponse was a not-so-subtle warning to part- ners to avoid divisive issues, like the war, that might harm his wife in the next president election,\u201d wrote Berman.

The DA\u2019s third round of funding was ex-

pected to be decided at a Miami, Florida, meeting scheduled for November 2006. De- tails of the meeting were not available at

Foundation Watch\u2019s press time.

DA\u2019s managing director, Judy Wade, said she hopes the Alliance will work with other funding groups and eventually give out $500 million in grants each year.

Selected Grant Recipients

We can identify a number of left-wing groups that have gone through the DA\u2019s vetting process and received funding. Some grant amounts have been reported in the press but there is no official tally.

*Media Matters for America: Former con-

servative journalist David Brock\u2019s group claims to expose right-wing news bias. The Internet-based media watchdog, launched in May 2004, describes itself as \u201ca Web-based, not-for-profit, 501(c)(3) progressive research and information center dedicated to compre- hensively monitoring, analyzing, and cor- recting conservative misinformation in the U.S. media.\u201d

*Center for American Progress: Former

Clinton White House chief of staff John Podesta heads the think tank that received $5 million from the DA. The organization aspires to be the Heritage Foundation of the left. Spinoffs include Campus Progress and the Center for American Progress Action Fund, a 501(c)(4) lobby group. The Action Fund\u2019s \u201cKick the Oil Habit\u201d campaign is led by actor- environmentalist Robert Redford.

*Citizens for Responsibility and Ethics in
Washington (CREW):

This Soros-funded group sees itself as a left- wing version of Judicial Watch, the conser- vative legal group that filed a barrage of lawsuits against the Clinton administration in the 1990s. CREW executive director Melanie Sloan is a former U.S. Attorney and Demo- cratic counsel for the House Judiciary Com- mittee. However, CREW was one of the first liberal groups to blast incoming House Speaker Nancy Pelosi for endorsing the ulti- mately unsuccessful campaign of Pennsyl- vania Representative John Murtha to be majority whip in the 110th Congress. Sloan called Murtha \u201cone of the most unethical members of Congress,\u201d and noted that

DA chairman Rob McKay (left), and
managing director Judy Wade (right)
3
December 2006
FoundationWatch

For frequent updates on environmental groups,
nonprofits, foundations, and labor unions, check out the
CRC-Greenwatch Blog at

www.capitalresearch.org/blog

Pelosi\u2019s endorsement \u201cshows that she may have prioritized ethics reform merely to win votes with no real commitment to changing the culture of corruption.\u201d

*Center for Progressive Leadership: This

organization wants to mirror Morton Blackwell\u2019s Leadership Institute. The center\u2019s website describes the group as \u201ca national political training institute dedicated to devel- oping the next generation of progressive political leaders. Through intensive training programs for youth, activists, and future candidates, CPL provides individuals with the skills and resources needed to become effective political leaders.\u201d CPL President Peter Murray acknowledged in July 2006 that donations from Alliance members boosted the group\u2019s budget to $2.3 million, compared with $1 million the year before.

*Association of Community Organizations
for Reform Now (ACORN): ACORN is a

radical activist group active in housing pro- grams and \u201cliving wage\u201d campaigns in inner cities neighborhoods in more than 75 U.S. cities. In recent years it has been implicated in a number of fraudulent voter-registration schemes.

*EMILY\u2019s List: While the political action committee boasts that it is \u201cthe nation\u2019s largest grassroots political network,\u201d it is essentially a fundraising vehicle for pro-abor- tion rights female political candidates. Dona- tions to the organization are not tax-deduct- ible. EMILY, according to the group\u2019s website, \u201cis an acronym for \u2018Early Money Is Like Yeast\u2019 (it helps the dough rise).\u201d The group\u2019s president is veteran political fundraiser Ellen Malcolm.

*America Votes: Another get-out-the-vote

527 organization, it is headed by Maggie Fox, a former deputy executive director of the Sierra Club. The group received a $6 million funding commitment from George Soros de- spite the billionaire\u2019s protestations that he has turned his back on political campaigns.

*Air America: The struggling left-wing talk

radio network filed for bankruptcy protection on October 13 after it reportedly had received a funding commitment of at least $8 million from the Alliance. The network touted by comedian Al Franken is said to have lost an

astounding $41 million since 2004. Longtime radio executive Scott Elberg is Air America\u2019s chief executive officer. The network\u2019s head- liners include TV sleaze merchant Jerry Springer.

*Sierra Club: The influential environmental

organization\u2014# 7 on Greenwatch.org\u2019s \u201cGang Green\u201d list of the worst environmental activist groups\u2014has entered into a \u201cstrate- gic alliance\u201d with the United Steelworkers union (seeL a b o r W a t c h, October 2006). Led by executive director Carl Pope, the Club successfully targeted property rights cham- pion Representative Richard Pombo (R-CA), who was defeated in November.

*Center for Community Change: This long-

time group dedicated to defending welfare entitlements and leftist anti-poverty programs was founded in 1968. Activist Deepak Bhargava is its executive director.

*USAction: This group works closely with

organized labor. It is the successor to Citizen Action, the activist group discredited by its involvement in the money-laundering scan- dal to re-elect Teamsters president Ron Carey in the late 1990s.

*Data Warehouse: This group was created

by Clinton aide Harold Ickes and Democratic operative Laura Quinn. Ickes is critical of the Democratic National Committee under chair- man Howard Dean and aims to create a so- phisticated get-out-the-vote operation that rivals the Republican Party\u2019s. Ickes proposes to build detailed voter lists that will be made available to Democratic Party candidates, and also to advocacy groups. According to a report in the Washington Post, George Soros put $11 million at Ickes\u2019s disposal because he distrusts Howard Dean.

Does It Have A Mission?

Obviously Democracy Alliance participants have the capacity to make big grants to leftist groups, but are George Soros and his friends doing anything different that will transform America? That\u2019s what the Alliance is prom- ising. After the Phoenix meeting, Sarah Ingersoll, a de facto spokeswoman for the Alliance, said the group was still ironing out details. \u201cPrimarily, we\u2019re looking at making recommendations and thinking through with these donors on how they can form an alli- ance. This is about creating a network of individuals to share information to be effec- tive in whatever they do going forward.\u201d

Ingersoll said the Alliance intended to make details of its grantmaking publicly available. But that promise has not been fulfilled. In- deed, the group invites critics to charge it with sinister motives because it has revealed so little about itself. Conservatives David Horowitz and Richard Poe, co-authors ofThe

Shadow Party: How George Soros, Hillary Clinton and the Sixties Radicals Seized Control of the Democratic Party, (Nelson

Current, 2006) refer to the Democracy Alli- ance as probably one of the \u201cmost active Shadow Party groups today.\u201d

Since December 2004 the Democracy Alli- ance has given away about $50 million to left- wing organizations and activists. However, as journalist Andrew Ferguson recently ob-

Comedian-activist Al Franken of the
perpetually insolvent Air America

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