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  • Scaife Series: database and related stories
  •   Page Two
    Hundreds of Millions Flow to Congenial Groups
    Continued from preceding page

    Scaife's money was probably most important to the cause in the '70s and '80s, when conservatives enjoyed the exhilarating reversal of what they had seen as their traditional, inconsequential status in American life. Scaife gave about $200 million to conservative causes from 1974 (his first gift to the Heritage Foundation) through the end of the Bush administration in 1992.

    As soul mates in what they considered a war over American values, the groups to which he gave shared a core set of conservative beliefs evident in the way they described their missions.

    For example, the Foundation for Economic Education promotes "individual freedom, private property, limited government, free trade." The Pacific Legal Foundation works "for less government and the preservation of free enterprise, private property rights and individual liberties." The Reason Foundation advocates "public policies based upon individual liberty and responsibility and a free-market approach." Lower taxes and fewer regulations are also part of the broadly shared program.

    In the realm of national security, Scaife-supported groups have a similarly shared view of the need for a bristling national defense and vigilance against communism and terrorism.

    There are disagreements, of course, particularly on emotional issues such as abortion, free trade and immigration. Scaife has long favored abortion rights, to the chagrin of many of those he has supported. In the first years of his philanthropy he stuck to a pattern set by his mother and sister and gave millions to Planned Parenthood and other population control groups, though most such giving stopped in the 1970s. He also has favored stricter controls on immigration and trade, though many Scaife-supported groups do not.

    By concentrating his philanthropy on a relatively small number of beneficiaries, Scaife maximized his impact.

    Over four decades he has nurtured enduring institutions, not just short-lived crusades. Nineteen percent of his conservative giving went to Heritage, the Hoover Institution, the Center for Strategic and International Studies (CSIS) and the American Enterprise Institute (AEI), four of the biggest think tanks in America.

    This list is revealing for its political coloration. Heritage is the most aggressively conservative of the four, but it is hardly extremist. Hoover and AEI are plainly conservative institutions also, but CSIS, now run by former senator Sam Nunn and Robert Zoellick, a protege of former secretary of state James A. Baker III, is more centrist.

    Much of Scaife's philanthropy has gone to recipients that made no lasting mark; many have gone out of business. For example, the Capital Legal Foundation, which represented Gen. William C. Westmoreland in his unsuccessful 1984 libel suit against CBS, was granted at least $1.7 million from Scaife sources between 1977 and 1987, then folded.

    On some occasions Scaife has given money to an individual project just because it struck his fancy. One was a book project proposed in the early '90s by Elliott Abrams, a Reagan State Department official at the time of the Iran-contra affair and a foreign policy specialist for the Hudson Institute when he decided he wanted to write a book about American Jews.

    Leslie Lenkowsky, then the president of Hudson, suggested they ask Scaife to help fund the project. He and Abrams went to Pittsburgh, where they had lunch at the Duquesne Club with Scaife, his son David and Richard Larry. Abrams said he found Scaife fascinated by his subject. "He couldn't figure out the American Jewish community. He wondered why it seemed to be so liberal politically," Abrams recalled.

    Scaife gave a $175,000 grant for the project, with one string attached: that it be funded also by some Jewish donor or group. It was. "Faith or Fear" was published in 1997. It argued that "liberal politics" had become for many Jews "the heart of their Jewish identity," often replacing the Jewish religion, and gravely jeopardizing the future of Judaism in America. It sold 6,190 copies.

    From Quiet Benefactor to 'the Arkansas Project'

    Today it is difficult to find an important organization that depends on Scaife's money. The pattern of his giving hasn't changed much, but more and more individuals, corporations and foundations have become contributors to Scaife's causes. The Olin Foundation (assets of $103 million at the beginning of 1998) and the Bradley Foundation (assets of $545 million) have become particularly important. The success of the conservative movement has made Scaife a less significant player.

    In many Scaife-supported organizations, the founders have been supplanted by successors unfamiliar with his role. Robert K. Best, president of the Pacific Legal Foundation, oldest and perhaps most influential of the conservative public interest law firms, was surprised to learn that Scaife contributions had constituted at least half the group's budget in its early years.

    It is tempting to speculate that the routinization of Scaife's role might have prompted him – or his key aide, Larry – to get involved in more adventuresome anti-Clinton activities. Their involvement in what became known as "the Arkansas Project" – an aggressive and ultimately fruitless attempt to discredit a sitting president – marked a clear departure from years of relatively anonymous philanthropy, and Scaife could not have foreseen the consequences: He became a celebrity.

    The full realization of the trouble he had made for himself probably came one day last September when he appeared, under subpoena, before a federal grand jury in Fort Smith, Ark., that was investigating possible tampering with a federal witness. On that day, Scaife could have felt he was being treated like a suspect – not the status a Mellon from Pittsburgh worth perhaps a billion dollars expects. According to several associates, Scaife was furious.

    The Arkansas Project was apparently cooked up largely by Larry, 63, who has worked for Scaife for 30 years. A former Marine with a deeply ideological view of the world, Larry had developed a powerful dislike for Clinton. "I noticed a change in Dick Larry – at the mention of Clinton he became almost hyperthyroid," said one prominent figure in the conservative world who knows Larry well. A second prominent conservative close to him said: "I never saw Dick Larry do anything like this before. The only thing I can figure is that Larry dislikes Clinton intensely."

    As the chief administrative officer of Scaife's philanthropies for many years and the main contact for anyone seeking a grant, Larry has long been a controversial figure among conservatives. They discuss him with the same reluctance to go on the record that many demonstrate when Scaife is the subject. "Sometimes [Larry] makes you wonder if it is the Richard Scaife foundations, or the Richard Larry foundations," said one source who worked with both men.

    In his written answers to questions from The Post, Scaife attributed his support for the project to his doubts that "The Washington Post and other major newspapers would fully investigate the disturbing scandals of the Clinton White House." He explained those doubts: "I am not alone in feeling that the press has a bias in favor of Democratic administrations." That is why, he continued, "I provided some money to independent journalists investigating these scandals."

    The Arkansas Project itself relied on several private detectives, a former Arkansas state police officer and other unlikely schemers, including a bait shop owner in Hot Springs, Ark. The two men running the project were a lawyer and a public relations man. Scaife's role became the subject of a special federal investigation because of accusations that the money he donated ended up in the pocket of David Hale, a former Clinton associate and convicted defrauder of the Small Business Administration who had become a witness for Starr's investigation of the president.

    Sources at the American Spectator say it was Larry who played an instrumental role in the project. But there is no doubt that Clinton had gotten under Scaife's skin.

    Scaife's penchant for conspiracy theories – a bent of mind he has been drawn to for years, according to many associates – was stimulated by the death of Vincent W. Foster Jr., Hillary Clinton's former law partner and a deputy White House counsel. He has repeatedly called Foster's death "the Rosetta stone to the Clinton administration" (a reference to the stone found in Egypt that allowed scholars to decipher ancient hieroglyphics).

    Last fall Scaife told John F. Kennedy Jr. of George magazine, "Once you solve that one mystery, you'll know everything that's going on or went on – I think there's been a massive coverup about what Bill Clinton's administration has been doing, and what he was doing when he was governor of Arkansas." And he had ominous specifics in mind: "Listen, [Clinton] can order people done away with at his will. He's got the entire federal government behind him." And: "God, there must be 60 people [associated with Bill Clinton] – who have died mysteriously."

    Even before the Arkansas Project had gotten underway, Scaife personally hired a former New York Post reporter named Christopher Ruddy to write about Foster's death for the Pittsburgh Tribune-Review, the daily newspaper Scaife has owned since 1969. Ruddy's stories about Foster's death – most of them challenging the suicide theory, without offering an alternative explanation – began to appear in January 1995.

    Scaife has funded other Clinton efforts as well: Two zealous and resourceful (and rival) public interest law firms that have pursued Clinton and his administration relentlessly, the Landmark Legal Foundation and Judicial Watch, have received more than $4 million from Scaife. Judicial Watch, which is aggressively suing several branches of the government and has questioned numerous White House officials under oath, has received $1.35 million from Scaife sources in the last two years, a large fraction of its budget.

    The Fund for Living American Government (FLAG), a one-man philanthropy run by William Lehrfeld, a Washington tax lawyer who has represented Scaife in the past, gave $59,000 to Paula Jones's sexual harassment suit against Clinton. FLAG has received at least $160,000 in Scaife donations. And lawyers who belong to the conservative Federalist Society, which has enjoyed Scaife support for 15 years (at least $1.5 million), were members of a secretive group who provided important legal advice to Paula Jones and who may have pulled off the key legal maneuver in the Clinton case by connecting the Jones suit and the Starr investigation.

    Officers of the Scaife-supported Independent Women's Forum have appeared on many television programs as Clinton critics. William J. Bennett, author of "Death of Outrage: Bill Clinton and the Assault on American Ideals," is on the board of the Sarah Scaife Foundation, and has received Scaife support as a fellow of the Heritage Foundation and other enterprises.

    One of the most publicized allegations of a tie between Scaife and Clinton's enemies was the suggestion that Scaife was trying to set up independent counsel Kenneth W. Starr in a posh deanship at Pepperdine University in Malibu, Calif. Starr briefly toyed with accepting the job early in 1997.

    Scaife has been a generous supporter of Pepperdine, donating more than $13 million since 1962 (in personal gifts as well as foundation grants), according to the school. But Scaife and the current president of Pepperdine, David Davenport, both have said that Scaife played no role whatsoever in the offer to Starr. Scaife and Starr have said they don't know each other, and have never met.

    Only the Arkansas Project has caused Scaife serious trouble. The possibility that money from the project had tainted Hale, a federal witness, led to the appointment of Michael J. Shaheen, a former senior Justice Department official, as a special investigator. It was Shaheen who summoned Scaife to the Fort Smith grand jury.

    Shaheen's investigation apparently is complete. Lawyers involved said they don't expect any indictments.

    One result of the enterprise was to strain Scaife's relationship with Larry almost to the breaking point. "He almost fired Larry," said one friend.

    The other result has been the emergence of Scaife as a public figure and punching bag for liberals.

    "I'm a very private person – I think I'm essentially shy," Scaife told Kennedy last fall. But now, he acknowledged, he is recognized by passersby on the street – "thanks to CNN."

    Monday: Burdens of wealth

    © Copyright 1999 The Washington Post Company

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