FIVE YEARS AGO, George Mair was bored with his job as editorial director of KNX, the CBS radio affiliate in Los Angeles. As Mair recalls it now, he and John E. Cox Jr., hit on an idea of starting a non-profit organization aimed primarily at improving relations between business and the media. The one thing they didn't have was money, so when they heard that Richard Larry, an administrative agent of the Scaife Family Charitable Trusts, was coming to town, they called up to see if they could talk to him.
"The only reason he agreed to have dinner with us is that he thought Jack was another man named Cox he was supposed to be meeting," Mair, now an editorial columinist for the Los Angeles Times Syndicate, says with a laugh. "But he was very polite and listened to our ideas. He came again a few months later and we had lunch. He gave use a check. When we opened it, it was far, far beyond our wildest dreams -- $100,000."
Thus was born the Foundation for American Communications, one of a large number of organizations that owe their existence to the generosity of one of the richest men in America, Richard Mellon Scaife. Scaife, a great-grandson of the founder of the Mellon empire, has made the formation of public opinion both his business and his avocation.
Over the past 12 years, Scaife, whose personal fortune is conservatively estimated at $150 million, has bought or started a variety of publications, mainly in the Pittsburgh area. But he has increasingly turned his attention from journalism to other, more ambitious efforts to shape public opinion, in the form of $100 million or so in grants from Scaife charities to conservative, particularly New Right, causes. These efforts have been dramatically successful. Indeed, Scaife could claim to have done more than any other individual in the past five or six years to influence the way in which Americans think about their country and the world.
Since 1973, Scaife kcharitable entities have given $1 million or more to each of nearly a score of organizations that re closely linked to the New Right movement. These range from the Institute for Foreign Policy Analysis, a Massachusetts think tank that examines political and military issues, to California's Pacific Legal Foundation, the oldest and largest of a dozen conservative legal groups, all Scaife beneficiaries, which function as mirror-images of the Nader-inspired public-interest law groups.
The press has generally overlooked Scaife, even when reporting on organizations that are financially dependent on him. For example, Scaife is the single largest donor to the Mountain States Legal Foundation -- $200,000 toward a $1 million budget in 1980 -- as acknowledged by Mountain States officials. Yet, earlier this year, when James Watt, then president of Mountain States, was up for Senate confirmation as interior secretary in the Reagan Cabinet, the press reported -- on the basis of available information -- that Mountain States was primarily funded by timber, utility and mining interests.
Similarly, officials of The Heritage Foundation, a conservative think tank that supplied 11 members of the Reagan transition team, acknowledge that Scaife is a far larger contributor than Joseph Coors, whose name has been the only one mentioned in most press reports on the group. Scaife, who joined with Coors to launch Heritage seven years ago, gave close to $900,000 -- three times Coors' gift -- to help meet the current $5.3 million Heritage budget.
"They're playing all sides of the street: media, politics -- the soft approach and the hard," says George Mair, referring to Scaife and his advisers. Mair left the Foundation for American Communications just over a year ago, forced out, he claims, over the issue of what he regarded as the group's increasingly conservative bias, a charge that FACS president Jack Cox denies.
Scaife himself has never publicly discussed his motivations or goals. Indeed, he has repeatedly declined requests for interviews, as he did in the case of this article. (See box on this page.) Officials of most organizations that receive money from Scaife charities say they rarely if ever see Scaife himself, but deal instead with aides like Richard Larry, who has also been unavailable for comment.
Most of the more sensitive Scaife donations are made through a family trust that is not legally required to make any public accounting of its donations, and most institutions that receive money from Scaife, like their more liberal counterparts, do not volunteer information about their contributors. The story of Scaife and his activities has to be pieced together from public records, such published reports as exist and conversations with people who for the most part decline identification -- some because of business or professional reasons, others because they fear retaliation.
Scaife's secretiveness is but one aspect of a complicated personality. A handsome man in the blond, beefy style one associates with Southwestern ranchers or oil millionaires, the 49-year-old Scaife dresses like a Wall Street executive. His astonishingly blue eyes are his most striking feature. A friend from an early age of J. Edgar Hoover and a longtime admirer of Barry Goldwater, Scaife is said by those who know him to be fascinated by military and intelliglence matters. At the same time, he is so shy and insecure about his intellectual capacities, according to one business acquaintance, that "he never speaks business without two, three, four people around him."
David Abshire, who, as chairman of the Georgetown University Center for Strategic and International Studies, a major Scaife beneficiary, has known Scaife for nearly 20 years, describes him as "likalbe, enthusiastic and a very fine, public-spirited individual." A Democratic office-holder in Pittsburgh, on the other hand, views Scaife as a "lone wolf" whose clout "is through his money and nothing else." Pittsburgh acquaintances add that Scaife is rarely seen on the social circuit, and suggest that Scaife's relations with most of the other Mellons tend to be less than cordial. Certainly that holds true within his own family: Scaife has only one sibling, Cordelia Scaife May, and he has not spoken to her for the past seven years.
One small insight into Scaife's personality is provided by Pat Minarcin, a former editor of the now-defunct Pittsburgher magazine, which Scaife financed. "We were talking one time after a meeting and I said to him, 'Is money power?'" Minarcin recalls. "He paused three or four seconds and looked at me really hard. He's just not used to people speaking to him on that level. He said, 'I didn't use to think so, but the older I get the more I do.'"
Certainly money is very much the stuff of which Mellon family history is made. By 1957, when Fortune magazine tried to rank the largest fortunes in America, four Mellons, including Scaife's mother, Sarah Mellon Scaife, were listed among the top eight.
In 1965, when his widowed mother died, Richard Scaife -- in his early 30s, married and the father of the first of two children -- had no real career. After flunking out of Yale (he later finished at the University of Pittsburgh), Scaife had followed in the footsteps of his father, a retiring man from a local industrial family, and been given a variety of titles but little real power in several Mellon enterprises.
Just looking after his personal affairs could have become a full-time job. At the time of the last public accounting, in 1978, Scaife was the second-largest stockholder (after his second cousin Paul Mellon) in the Mellon Bank, one of the top 20 banks in the country. Among Scaife's other personal sources of wealth is the income from two trust funds set up for him by his mother -- probably amounting to around $8 million a year. He has homes in Pebble Beach, Calif., and in Pittsburgh, and a large estate in Ligonier, Pa., and he flies from coast to coast in a private DC9 -- a plane so big that in commercial serivce it carries up to 100 passengers.
After his mother's death, Scaife began to take an increasingly active role in the family's philanthropic activities. Four Scaife family entities currently engaged in giving money to charity have assets of more than $250 million and current annual income of at least $12 million.
Gulf Oil company stock makes up a large part of the Scaife fortune. If one were to count in not just Richard Scaife's personal holdings in Gulf, but also those of the various Scaife charitable entities, the total would probably rank as the second largest holding (after Paul Mellon) in the company. By the same rough yardstick, Scaife and Scaife family entities account for about 6 percent of the stock of First Boston Corp., a major investment banking firm. Scaife was elected to the First Boston board last year. The Mellons and Scaifes as a whole hold about 13 percent of the First Boston stock, an investment second in size only to that of Financiere Credit Suisse.
It was newspapers, however, not the world of finance, that eventually captured Richard Scaife's interest.
He now has a collection of holdings that include the Greensburg (Pa.) Tribune-Review, the Lebanon (Pa.) Daily News and Sunday Pennsylvanian; two Pennsylvania weeklies and a new monthly business Sunday supplement called Pennsylvania Economy, which began publishing last October. Elsewhere, he owns half of two weeklies in California and half of the Sacramento Union, his largest and only nationally known acquisition. Scaife bought the half interest in late 1977 from John McGoff, a Michigan publisher who is under investigation by federal authorities in connection with alleged payments by the South African government to permit him to buy news properties.
Scaife's one foray into international publishing represents perhaps the most curious of his publishing enterprises. In 1973, he became the owner of Kern House Enterprises, a U.S.-registered company. Kern House ran Forum World Features, a London-based news agency that supplied feature material to a large number of papers around the world, including at one time about 30 in the Unite States. Scaife abruptly closed down Forum in 1975, shortly before Time Out, a British weekly, published a purported 1968 CIA memornadum, addressed to then-director Richard Helms, which described Forum as a CIA-sponsored operation providing "a significant means to counter Communist propaganda." The Forum-CIA tie, which lasted into the '70s, has been confirmed by various British and American publications over the years, and it was confirmed independently by a source in connection with this article.
Scaife's involvement with Forum began at a time when he seems to have begun to recognize that newspapering might not represent the most effective way to make his mark on the world. Perhaps it was frustration at his lack of clout as a publisher that led Scaife to cast around for other areas in which to pay a public role. This search coincided with the birth of a powerful new movement, one that was to culminate in the election of Ronald Reagan -- the New Right.
Many leaders of the New Right are, like Scaife, men in their 30s and 40s who, for one reason or another, see themselves as outside the old conservatives establishment. They share not just a traditional free-market, anti-Communist view of the world, but also a sophisticated ability to analyze the forces that shape American society. This analysis has led to the creation of myriad New Right lobbying groups and think tanks whose techniques are drawn directly from citizens' groups and New left organizations of the 1960s. ("Ten years ago the liberals kind of had a copyright on organizations outside of government," says Leon Reed, an aide on defense matters to Sen. William Proxmire. "At some point the right realized that all of the things like shareholder resolutions and testifying before Congress can be used by anyone.") This analysis also accounts for the tremendous emphasis the New Rights puts on the news media, particularly television. No longer, as in Spiro Agnew's day, are the media seen simply as the enemy; rather, they are regarded as an institution which, like any other, is capable of being influenced as well as intimidated.
Scaife, with his money, his interest in politics and the media, and his long-held conservatives views -- he gave $1 million to the 1972 Nixon reelection campaign -- quickly became a key New Right backer. Indeed, the rise of the New Right coincided with a substantial increase in Scaife's power to assist it. In 1973, he became chairman of the Sarah Scaife Foundation; with a year, a total break occurred between him and his sister. Since their mother's death, Cordelia Scaife May had tried to restrain her brother from shifting charitable donations away from Sarah Scaife's priorities -- population control and art -- and toward conservative causes. After the break, she apparently gave up.
Family entities such as the Sarah Scaife Foundation, the Carthage Foundation and the Allegheny Foundation, whose donations are a matter of public record, do give to many civic projects as well as to Richard Scaife's political charities. The Allegheny Foundation in particular has been a generous benefactor of such local causes as a major restoration now in progress in Pittsburgh. But the clearest indicator of which charities lies closest to Richard Scaife's heart is the giving pattern of the Sarah Scaife Grandchildren's Trust. Trusts, unlike foundations, do not have to give any public accounting of how they spend their income. According to information privately made available, the grandchildren's trust has virtually ceased giving to organizations other than conservative and New Right groups.
Total donations from Scaife entities to conservative causes currently run about $10 million a year. (This amount, of course, does not reflect any personal contribution Scaife may make, about which no information is publicly available.) Among better-known conservative funders, the John M. Olin Foundation gave a total of all causes of $5.2 million in 1979, while the Adolph Coors Foundation gave away $2.5 million. Among funders perceived as left of center, Stewart Mott, heir to a General Motors fortune, gives away, through a trust, an average of between $700,000 and $1.3 million a year, according to an aide, while the Haymarket Peoples Fund gave $191,400 in 1979.
Sometimes, of course, a small amount of money at the right time is of more value than nillions later on. Since 1973, Scaife entities have provided seed money to as many as two dozen New Right organizations.
The power of Scaife money is well appreciated by those who come up against it. An official of a large foundation concerned wih arms control says that whenever he and other foundation executives interested in military issues discuss possible projects, they "always inevitably think about all that Scaife money and what it's doing." The official adds that the conservative groups "have a heck of a lot more influence [in denfense] than the left-wing groups.
"A group like the National Strategy Information Center, which invites young academics to Colorado every year, can reach a lot of people very effectively," he says. "There is no analogous program on the left. And they're badly splintered. The only thing that is anything like a match for the right-wing groups is the Institute for Policy Studies." The IPS budget for 1980 was $1.6 million.
A catalogue of Scaife recipients over the past few years would contain virtually every significant conservative defense-oriented program in existence in the United States Groups devoted to free-market economics -- like the Law and Economics Center at Emory University, which has provided all-expenses-paid economics courses for 137 federal judges -- have been the second-largest beneficiary since 1973.
Because they have been able to attract big names -- people like former Navy Secretary Paul Nitze, now chairman of policy studies of the Committee on the Present Danger, and economist Milton Friedman -- many Scaife-funded defense and economics organizations command media attention. This attention has increased with the movement of a number of people from New Right groups into the Reagan administration -- among them Interior Secretary Watt, from the Mountain States Legal Foundation, and presidential counselor Edwin Meese, a founder of the Institue for Contemporary Studies. Both groups describe Scaife as their largest donor and the institute says Scaife provided its seed money of $75,000 in 1973.
Not just names but numbers count. With so many conservative groups active in defense and economic matters, vast quantities of facts are constantly being generated and large numbers of seminars and briefings are constantly under way. "You can't underestimate the effect of a simple paper avalanche," says Leon Reed, the Proxmire aide "One of the most important things groups like this can do is to give information to the people Congress who support you. Groups can also provided people to speak at press conferences, testify before committees, things like that."
One example of the kind of "paper avalanche" to which Reed refers is the number of facts and figures generated by conservatives groups at the time of the start of the 1979 congressional debate on the SALT II treaty. A quick check reveals at least eight studies on the issue, all critical, by groups that receive substantial Scaife backing. In addition, the Scaife-assisted Georgetown Center for Strategic and International Studies held a two-day briefing for 20 key European journalists on the issue, and the Heritage Foundation held an all-day session for members of the U.S. press. According to Herb Berkowitz, Heritage director of public relations, that press briefing "really kicked off the debate." The SALT treaty was not ratified.
Other examples of the potential impact of names and numbers abound.
In September 1979, Time magazine devoted two pages to a report on a Brussels conference on NATO sponsored by the Georgetown Center and chaired by Henry Kissinger, a counselor in residence at the center. The article gloomily asserted: "The North Atlantic Treaty Organization received a thorough physical and psychological checkup last week and was found to be less than robust at age 30. The general diagnosis: flabby nuclear muscle and a creeping inferiority comnplex."
On Dec. 15, 1980, The New York Times carried a full-column report, datelined San Francisco, which began: "A group of conservative black businessmen and educators, meeting here over the weekend with representatives of President-elect Ronald Reagan, advocated a reduction in the minimum wage, the elimination of rent control laws and a thorough reorganization of many social programs." The sponsor of the conference was the Institute of Contemporary Studies (to which Scaife is the largest donor).
Among a plethora of news articles last year on weakened U.S.military capabilities -- which appeared at the same time as Sacife-backed organizations were turning out at least a dozen studies on the subject -- probably the most breathless was an Oct. 27 Newsweek cover story entitled "Is America Strong Enough?" The article, which quoted few people by name, depended heavily on such sources as "defense experts" and "a respected American military analyst." It reported in apocalyptic Pentagonese that "experts say Soviet advances in missile guidance now threaten the security of Minuteman ICBMs that constitute the land-based leg of America's nuclear triad -- opening a 'window of vulnerability' that threatens to subject the United States to nuclear blackmail, if not a Soviet first strike, by as early as 1982." The only expert named in a two-page spread entitled "Sizing up the Soviets' Might," was Jeffrey Record from the Institute for Foreign Policy Analysis. Scaife provided the largest single portion of the Institute's seed money ($325,000) in 1976, and continues to be its single largest donor, providing about one-third of its current $1 million budget.
Such examples suggest how layer upon layer of seminars, studies, conferences and interviews can do much to push along, if not create, the issues which then become the national agenda of debate.
While the defense and economics groups funded by Scaife court the news media and, by the very nature of what they do, attract coverage, Scaife has also shown himself to be interested in groups that specially produce or scrutinize news or try to affect the newsgathering process itself. Contributions in this area do not approach those to the other two areas, but they are substantial, and growing.
Some insight into the thinking of Scaife's advisers regarding the media is provided by George Mair, formerly of the Foundation for American Communications. "They seemed fascinated by the media and loved to hear all the gossip," Mair recalls. "But, at the same time, they had a conspiratorial view of how the media work."
To date, FACS has recieved more than $700,000 from Scaife, including about 20 percent of its current $650,000 budget. According to FACS president Jack Cox, Scaife remains the organization's single largest donor. Besides sponsoring conferences which have been attended by close to 500 journalists, FACS runs seminars for nonprofit organizations and businesses on how to deal with the media.
Jack Scott, president of the Gannett Newspaper Foundation describes FACS as "a balanced organization" with no perceptible bias. "Cox is a conservative; there's no blinking at that," Scott says. "But he is very reluctant to project his political opinions. I don't think that as an organization they have a philosophy."
Michael rounds, a business reporter for the Rocky Mountain News who attended a FACS seminar on economics last year, says, "I felt it was very well done. Where else would I get a chance to meet Paul Samuelson?" He adds, "I saw it as business-supported -- that's why I went. The economists weren't what I would call liberals. The organizers were trying to educate a bunch of journalists like me, trying to give them and me a sense of how business works and to deal with perceived antibusiness bias."
Education of journalists is also a part of the work of another Scaife-backed media group, the Washington based Media Institute.
Frank Skrobiszewski, second in command at the Media Institute, describes its main objective as being "to improve the quality of economic reporting, particularly on network television." The institute has published, for example, a study of television news that concludes that the networks have increased the public's fear of nuclear power. It also runs lunch seminars for journalists and puts out a newsletter.
The institute's newest project is the Economic Communications Center, which began operating last October. ItsCommunications purpose, according to Skrobiszewski, is to provide journalists with quick analyses of current economic issues and easy access to experts in the field.
Scaife's funding not only makes possible a critical scrutiny of television programs; it also helps to create programs. In 1976 and 1977, Scaife entities supplied $225,000 (the second largest grant after Mobil) to WGBH, the Boston public broadcasting station, for a series that examined topics including the CIA, defense and foreign policy.
Scaife also supplied $500,000 to public television station wqln in Erie, Pa., to help underwrite "Free to Choose," a 10-part series featuring Milton Friedman.
On the print side, Scaife has helped to underwrite a number of magazines. In the past decade, for example, Scaife has given more than $1 million to the publishers of The American Spectator, a monthly whose views range across the conservative spectrum.
The most prestigious of the periodicals with which Scaife has been associated is Daedalus, the journal of the American Academy of Arts and Sciences. Three years ago, Richard Pipes, a Harvard historian who is now a member of the Natinal Security Council staff, approached Daedalus with a proposal for a special issue on U.S. defense policy, with himself as guest editor. Pipes also proposed a backer, in the form of a Scaife charity that was willing to put up $25,000 immediately and $25,000 to $50,000 later.
Pipes was keenly interested in defense policy, having been chairman of the so-called B Team, a group of 10 outside experts convened by George Bush while Bush was CIA chief to make an assessment of Soviet military strength. The B Team conclusions, delivered in late 1976, included an estimate of Soviet defense spending that was twice as high as previous government estimates and an assertion that the Russians were bent on nuclear superiority. The conclusions, which were widely accepted as official, played a major role in shaping the current defense debate.
The Daedalus project proposed by Pipes was agreed to, but funding was sought from the Carnegie Endowment for International Peace to provide balance to the Scaife donation, and the issue of Pipes' editorship was left unresolved. As the essays began to come in, according to one source close to the project, "it became clear that this was to be the B Team's riposte to earlier liberal critics." Eventually, it was agreed that the project would have a board of advisers but no guest editor. Scaife then withdrew from the agreement to supply additional funds and insisted that the Scaife name not be associated with the project.
The size of his fortune and the narrowness of his interests make Scaife unusual, if not unique. But the significance of his activities is no less for that. Virtually unnoticed, Richard Scaife has been able to establish group after group whose collective effect has been to help shape the way Americans think about themselves and their nation's problems.
Research for this article was funded in part by the Center for Investigative Reporting. The Center is 60 per cent funded by foundations, including the Stern Fund, the Warsh-Mott Fund (its current largest single contributor, at $25,000) and media-oriented foundatiion, such as the Playboy Foundation and the Ganett Foundation.