At the Bipartisan Policy Center, is cash the real divide?


So bipartisan! Democrat Henry Cisneros and Republicans Mel Martinez and Kit Bond. (Bipartisan Policy Center Facebook page)

The word "bipartisan" carries a special weight in Washington. If something's bipartisan, it's presumed to be fair and balanced. Just get an approximately equal number of Democrats and Republicans together to agree on something, and it should inoculate you against attacks from either side.

But what if the sheen of bipartisanship masks a deeper, more important bias? That the real divide in Washington is between those who can afford to pay for manufactured reports and white papers, and those who can't or don't want to?

That's the central allegation facing the Bipartisan Policy Center, a nonprofit founded in 2007 by former Senate majority leaders Howard Baker, Tom Daschle, Bob Dole and George Mitchell. As the self-proclaimed "only Washington, DC-based think tank that actively promotes bipartisanship," it says it "drives principled solutions through rigorous analysis, reasoned negotiation and respectful dialogue."

Over the past month, the center faced attacks for perhaps being not nearly so principled as it claims. The Nation magazine dinged the center for its role in shepherding a plan for major U.S. retailers to improve conditions at Bangladeshi garment factories, when it had received funding from Walmart and several of its affiliated scholars had worked or lobbied for some of the other companies involved. Investigative journalist Ken Silverstein, in a piece for Harvard's Safra Center for Ethics, outlined how the BPC takes money from oil and gas interests while promoting expanded drilling in a report overseen by a lobbyist who'd done work for ExxonMobil.

This week, the BPC is the subject of a scathing report from Ralph Nader's consumer advocacy group, Public Citizen. The authors charge that, soon after receiving funding from the American Banking Association and Citigroup, the center convened a project on financial regulatory reform stacked with industry advocates meant to examine what could be improved in the Dodd-Frank Wall Street Reform and Consumer Protection Act as implementation got underway.

Public Citizen's worries were bolstered by the resignation of John Coffee, a Columbia University law professor who was among the few on the task force who was not affiliated with industry.

"The Task Force has been bipartisan in terms of political parties," Coffee says. "But it was not bipartisan in terms of the critical division in Washington: The financial services party and the reform party." Coffee had been satisfied with a previous BPC project on capital markets, which had been staffed purely with academics. This one, not so much. He was assigned to a working group with Annette Nazareth, a former Securities and Exchange Commission member who now works on financial issues for the mega-law firm Davis Polk. They couldn't agree on what to do about money market mutual funds, and Coffee quit.

"I just felt that whether they were Democrat or Republican, the people I was dealing with were professionally engaged in serving the financial services industry," he says. "All they wanted to discuss was further deregulation, and I thought it was a waste of my time. There were Democrats, former SEC commissioners. But if you are a partner with Davis Polk, which is the firm most involved in lobbying on these issues, you're really not neutral or objective."

Another academic on the 15-person panel, James Cox of Duke University School of Law, also expressed some dissatisfaction with the process in a statement to Public Citizen. While not speaking in detail on the record, he said that awyers these days have a hard time contradicting their clients' interests -- such as those of the financial institutions that the lawyers on the panel represent.

"Increasingly, the legal profession's becoming more client-oriented, and less public- oriented," Cox said. "It's ceased being a profession, and it's become a business." And a more competitive business, at that, which makes it even harder for a lawyer to stay independent of what the people they work for want. "There's no longer any client loyalty to the firm, so it's a volatile situation," he says.

But a third academic participant, former University of Rochester president Thomas Jackson, said he had no problem with the process. The white paper his working group put out in May on how to resolve failed banks, which the Public Citizen report didn't mention, doesn't take sides in either direction, he says. "Essentially what the report did was endorse the direction in which the FDIC was going," he says. Like Coffee, Jackson was also paired with a Davis Polk partner, but he didn't think the lawyer's view dominated the outcome. "I never got a sense that my academic ideas about what you needed to do with this were being resisted on the grounds that 'my clients would go into an uproar about this.'"

Jason Grumet, the BPC's president, vehemently defends the group's process. The financial reform initiative was underwritten by a California-based foundation, he says; the ABA and Citigroup provide less than two percent of its funding. The center took care to make sure each working group had at least one Democrat and one Republican.

"We very actively embrace interested parties across the spectrum. We don't believe here is such a thing as purity or objectivity," Grumet says. "The hubris to suggest that their narrow viewpoint is more valuable, pure and instructive than a broader group, we think, is what's wrong with Washington."

But BPC didn't cross the whole spectrum when recruiting for the panel. It avoided people who thought Dodd-Frank was perfect as-is -- or who couldn't be seen publicly criticizing it -- and those who wanted to see it totally repealed. While declining to name those who didn't join the panel, Grumet referred to them as the "tribal warriors for the different orthodoxies."

"There was an implicit expectation that there was a polarized and unproductive debate going on, between those who were arguing for repeal, and those who were saying this massive piece of legislation is perfect," Grumet says. "The folks who said they weren't willing to move past the position of perfection or repeal didn't join up."

But are valuable voices lost when the more strident ones are ruled unfit to participate? Simon Johnson, an economist who espouses greater intervention in the banking industry, wondered why people like former FDIC chair Sheila Bair or former TARP administrator Neil Barofsky weren't on the panel. In a critical New York Times blog post titled "The Dark Side of Bipartisanship," Johnson wrote that the composition of the group suggested that its final positions would favor weakening reforms that already didn't go far enough.

And as for industry participation, Grumet says it's both unavoidable and essential, since most high-level government people also have taken turns in the private sector and have the experience to know what works and what doesn't. "How one would suggest that they could have a meaningful interaction on these issues without corporate engagement is befuddling," Grumet says. "The question is, do we have a process that inoculates our policy work from the special interests of our funders?"

Public Citizen says that it's impossible to separate policy work from the people who pay the bills. But lots of think tanks receive corporate contributions, or at least help from institutions that have discrete policy interests. Bart Naylor, who wrote the report, says that's fine as long as you're up front about it.

"Public Citizen gets money, and I bet if we attacked the people who are our funders, they might be less than thrilled," he says. "But we say we're progressive, and Cato is up front that they're anti-government. But 'bipartisan' says, hey, we have an open mind."

Grumet acknowledges that the banks who donated to the center probably hope to see that something favorable to their point of view comes out of it.

"This idea that there is such a thing as disinterested money, the notion that anybody's going to write a $100,000 check to an organization because they don't care about the issues that are being worked on, is kind of fantastic," Grumet says. That's why they try to get a diversity of funding sources, and prominently identify where everybody is coming from, in hopes that the collision of interests will result in a solution that makes some sense to everyone.

"I think that what we find is a little silly about these critiques is that there's this effort to delegitimize the question by suggesting that undisclosed connection," he says. "We proudly wear our different interests on our sleeve."

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle.
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