Corporate Website that Attacked
OCA Revealed As Tobacco Company
Front Group

From <www.prwatch.org>
Jan. 9, 2002

ActivistCash.com

Personnel

History

Funding

Case Study: A Visit to the ActivistCash Web Site

Case Study: Cash to ASH
Case Study: A Comedy of Errors
Contact Information
Related Resources

ActivistCash.com

ActivistCash.com states that its mission is to expose "where anti-consumer
organizations and activists get their money." It attacks activists as
"nannies," "anti-choice zealots" and "hypocrites" who pretend to represent
grassroots citizens while taking money from foundations. How are activists
"anti-choice" or "anti-consumer"? According to ActivistCash, they have a
hidden agenda aimed at eliminating your right to eat, drink and smoke as you
please in restaurants, hotels and taverns.

In reality, none of the information that ActivistCash "exposes" has ever
been hidden. It is available in public foundation reports and IRS tax
statements that nonprofit organizations make available to anyone who asks.
Most of the information in the ActivistCash database can already be found in
public libraries or downloaded via the Internet. Nonprofit organizations are
not required to disclose the names of specific individual or institutional
donors, but most of the organizations attacked by ActivistCash have gone
beyond the requirements of the law in providing the information which
ActivistCash is now using to attack them.

As for hypocrisy, ActivistCash keeps the details of its own finances hidden
to conceal the fact that its funding comes from the very industries that
share a vested interest in attacking activists alcohol lobbies, as well as restaurant
chains and taverns that want to keep employee wages low, avoid paying
health insurance, and drive up sales of their high-markup products: booze,
soda pop, fatty foods and cigarettes.

ActivistCash is one of several front groups created by Berman & Co., a
public affairs firm owned by lobbyist Rick Berman. Based in Washington,
DC, Berman & Co. represents the tobacco industry as well as hotels, beer
distributors, taverns, and restaurant chains. In addition to ActivistCash.com,
Berman sponsors the following other organizations and web sites:

* The Guest Choice Network (recently renamed as the Center for Consumer
Freedom) states that its mission is to expose what it calls "the Nanny
Culture < the growing fraternity of food cops, health care enforcers,
anti-meat activists, and meddling bureaucrats who 'know what's best for
you.' "

* The Employment Policies Institute (EPI) calls itself a "non-profit
research organization dedicated to studying public policy issues surrounding
employment growth." In reality, EPI's mission is to oppose any increases in
the minimum wage so that restaurants can continue to pay their workers as
little as possible.

* Berman's EPI also owns the internet domain names to MinimumWage.com
and LivingWage.com, a website that attempts to portray the idea of a living
wage for workers as some kind of insidious conspiracy. "Living wage activists
want nothing less than a national living wage," it warns (as though there is
something wrong with paying employees enough that they can afford to eat and
pay rent).

* Some of Berman & Co.'s most visible lobbying has been waged against
efforts to lower the legal blood-alcohol limit for drivers. It runs the
American Beverage Institute, which was organized in 1991 with the stated
mission of promoting "responsible alcohol consumption," but actually
represents restaurants and retailers that sell alcohol. The ABI's arch-enemy
is Mothers Against Drunk Driving (MADD).

Anyone who criticizes tobacco, alcohol, fatty foods or soda pop is likely to
come under attack from Berman's front groups. His enemies list has included
such diverse groups and individuals as the Alliance of American Insurers;
the American Academy of Orthopedic Surgeons; the American Medical
Association, the Arthritis Foundation; the Consumer Federation of America;
New York Mayor Rudy Giuliani; the Harvard School of Public Health; the Marin
Institute for the Prevention of Alcohol and Other Drug Problems; the
National Association of High School Principals; the National Safety Council,
the National Transportation Safety Board, the Office of Highway Safety for
the state of Georgia; Ralph Nader's group, Public Citizen; the U.S. Centers
for Disease Control and Prevention (CDC); and the U.S. Department of
Transportation.

In a 1999 interview with the Chain Leader, a trade publication for
restaurant chains, Berman boasted that he attacks activists more
aggressively than other lobbyists. "We always have a knife in our teeth," he
said. Since activists "drive consumer behavior on meat, alcohol, fat, sugar,
tobacco and caffeine," his strategy is "to shoot the messenger. ... We've
got to attack their credibility as spokespersons."

ActivistCash.com was established for precisely this purpose. It attempts to
discredit activists by suggesting that there is something disreputable about
the money they have received from foundations.

Personnel

Richard Berman is listed as president and his wife Dixie is listed as
secretary/treasurer of Berman & Co. Two of Berman's front groups < the
Guest Choice Network and the Employment Policies Institute Foundation
< have registered as tax-exempt nonprofit organizations, and both list Berman
as their executive director. The two groups have the following listed officers:

Employment Policies Institute Foundation

* Ray Kraftson, director
* Thomas K. Dilworth, secretary, is also listed in some news stories as
EPI's research director
* James R. Ledley, director
* Jacob Dweck, director

Guest Choice Network

* Ray Kraftson, director
* Dixie L. Berman, secretary/treasurer
* Dan Popeo, director (Popeo is also chairman of the Washington Legal
Foundation, a corporate-funded right-wing think tank which paid him $301,593
in salary and benefits in 2000.)
* Allison Whitesides, director (Whitesides has also worked as a public
relations representative for Coca-Cola North America and Outback Steakhouse.
In November 2001, she went to work as a legislative representative for the
National Restaurant Association.)

The Guest Choice Network also has an advisory panel, which in 1998 included
the following individuals:

* Dave Albright, National Steak & Poultry
* Jane Innes, Perkins Family Restaurants, L.P.
* Steve Bartlett, Meridian Products Corporation
* Robert Basham, Outback Steakhouse, Inc.
* John F. Berglund, Minnesota Licensed Beverage Association
* Lou Chatey, Sebastiani Vineyards
* H.A. "Andy" Divine, University of Denver
* Timothy J. Doke, Brinker International, Inc.
* Richard Fisher, Tetley USA, Inc.
* William L. Hyde, Jr., Ruth's Chris Steakhouse
* James Spector, Philip Morris, USA
* Michael Middleton, Cargill Processed Meat Products
* Daniel J. Popeo, Washington Legal Foundation
* Richard G. Scalise, Armour Swift-Eckrich
* Daniel Timm, the Bruss Company
* Carl Vogt, Fulbright & Jaworski
* Richard Walsh, Darden Restaurants, Inc.
* Terry Wheatley, Sutter Home Winery

In addition to these officers, the names of several other Berman employees
and associates have appeared in news stories:

* Restaurant magnate Norman Brinker has served as chairman of EPI.
Brinker is the chairman and CEO of Brinker International. He is also the
founder of the Steak and Ale restaurant chain, a former chairman of Burger
King, and past President of the Pillsbury restaurant group (all of which are
either former employers of Rick Berman or clients of Berman & Co.).

* Mike Burita has worked for a variety of conservative causes, including
Republican election campaigns, Phyllis Schlafly, Frontiers of Freedom, and
Brent Bozell's Media Research Center

* Paul Carson

* John Doyle, communications director for Berman & Co., also doubles as a
spokesman for the Guest Choice Network, the Employment Policies Institute
and the American Beverage Institute.

* David Martosko has been described in news stories as the Guest Choice
Network's director of research.

* Jody Triandiflou, researcher, Employment Policies Institute

Other individuals who have worked with Berman & Co. include lobbyist Ann
Eppard (formerly a top aide to House Transportation Committee Chairman Bud
Shuster); Kevin Lang of Boston University (who has authored a study
sponsored by EPI); and Mark Gorman of the National Restaurant Association;

In 1994 Berman scored a coup when he managed to hire Candy Lightner to lobby
on behalf of the American Beverage Institute. Lightner was best known as the
founder of Mothers Against Drunk Drivers but was fired as the group's
executive director in 1985 over disagreements including her request for a
$10,000 bonus on top of her $76,000 annual salary. As an ABI lobbyist,
Lightner fought MADD's call for lowering the legal blood-alcohol limit for
drivers from 0.10 percent to 0.08 percent. Criticized as a traitor to the
movement she helped launch, Lightner left her job with Berman after less
than a year.

History

Rick Berman began his career as an attorney for the steel and automobile
industries and became labor law director for the U.S. Chamber of Commerce
before going to work for the Pillsbury Restaurant Group and Steak & Ale
restaurant chain in the 1970s. In 1986, he launched his own public affairs
firm, Berman & Co. He has maintained a friendly relationship, however, with
Norman Brinker, CEO of Brinker International, Inc. (the former owner of
Steak & Ale Restaurants and chairman of Pillsbury). In 1995, these ties
figured in a House Ethics Committee investigation into allegations that
House Speaker Newt Gingrich gave favorable treatment to Brinker and Berman
in exchange for a $25,000 contribution.

In 1990, Berman lobbied on behalf of restaurant chains as they fought
against the Pepper Commission, a blue-ribbon panel studying the problem of
uninsured Americans which recommended that the federal government oblige
restaurateurs and other employers to provide employees with medical
insurance. His first front group, the Employment Policies Institute, was
launched in 1991, around the time of the economic recession that led to the
electoral defeat of then-president George Bush. Launched in 1991, the EPI
deliberately attempted to create confusion in the eyes of journalists and
the general public by adopting a name which closely resembles the Economic
Policy Institute, a much older, progressive think tank with ties to
organized labor. In addition to imitating the name and acronym of the
Economic Policy Institute, Berman's outfit even used the same typeface for
its logo. In reality, the two groups have dramatically different public
policy agendas. The Economic Policy supports a living wage and mandated
health benefits for workers. Berman's organization opposes both and in fact
opposes any minimum wage whatsoever.

In 1992, Los Angeles Times business columnist Harry Bernstein noted that
EPI was using "misleading studies" to help put a positive spin on rising
unemployment. "The conservative EPI, financed mostly by low-wage companies
such as hotels and restaurants, is issuing reports the titles of which alone
could help put a bright face on the miserable job scene," Bernstein wrote.
"The latest one is 'The Value of Part-Time Workers to the American Economy.'
It hails as a great thing the distressing growth of part-time jobs because
they offer 'flexibility' in economic planning for both workers and
companies, and say that flexibility is vital 'in the growing and
increasingly competitive global economy.' Tell that nonsense to the more
than 6.5 million workers forced to take part-time jobs because nothing else
is available. That is an increase of more than 1.5 million involuntary
part-timers since 1990, the Bureau of Labor Statistics says." EPI has been
doing more or less the same thing ever since, sponsoring cooked studies and
issuing tendentious sound bytes whenever attempts are made to establish
healthcare or better wages for workers.

Berman continued to fight against mandated insurance in 1992 and 1993, when
president-elect Bill Clinton attempted to make health care reform one of his
first legislative priorities. Berman created yet another front group, called
the "Partnership on Health Care & Employment," representing mostly large
companies known for paying low wages and high worker turnover. It sponsored
a study claiming that compulsory insurance for business would wipe out nine
million jobs. During the health reform debate, Berman's study was cited in
TV commercials sponsored by the Republican National Committee. The
commercials continued to air even after Berman admitted that his study had
actually been produced before the Clinton administration even formulated the
details of its health plan.

Berman launched the Guest Choice Network in 1995. Its initial funding came
entirely from the Philip Morris tobacco company. "I'd lke to propose to
Philip Morris the establishment of the Guest Choice Network," Berman stated
in a December 11, 1995 letter to Barbara Trach, PM's senior program manager
for public affairs. "The concept is to unite the restaurant and hospitality
industries in a campaign to defend their consumers and marketing programs
against attacks from anti-smoking, anti-drinking, anti-meat, etc. activists.
... I would like to solicit Philip Morris for an initial contribution of
$600,000." The purpose of the Guest Choice Network, as Berman explained
in a separate planning document, would be to enlist operators of "restaurants,
hotels, casinos, bowling alleys, taverns, stadiums, and university hospitality
educators" to "support mentality of 'smokers rights' by encouraging responsibility
to protect 'guest choice.'" According to a yearend 1995 budget, Guest Choice
planned to spend $1.5 million during its first 13 months of operation, including
$390,000 for "membership marketing/materials development," $430,000 to
establish a communication center and newsletter (which Berman promised
would have a "60% to 70% smoking focus"), $110,000 to create a "multi-industry
advisory council," and $345,000 for "grassroots network development/operation."

The tobacco company complied with Berman's initial funding request for
$600,000 and pitched in another $300,000 early the following year. "As of
this writing, PM USA is still the only contributor, though Berman continues
to promise others any day now," wrote Philip Morris attorney Marty
Barrington in an internal company memorandum dated March 28, 1996. No
further information is publicly available about Guest Choice's finances or
activities until its public launch two years later, in April 1998, sporting
an advisory board comprised mostly of representatives from the restaurant,
meat and alcoholic beverage industries.

In 1999, Berman continued to combine tobacco flackery with his role as a
restaurant lobbyist, as his American Beverage Institute published a study
titled "Effects of 1998 California Smoking Ban on Bars, Taverns and Night
Clubs." The study surveyed bar owners and managers, asking whether business
increased or decreased after January 1, 1998, the date the California bar
ban went into effect. It claimed to find that business declined an average
of 26.2%, but no hard numbers were used to arrive at this percentage. Rather
than look at actual sales receipts, the ABI survey merely surveyed the
opinions of bar owners. Numerous other studies have examined the effect of
smoking bans on the hospitality industry, and studies that actually look at
taxable sales receipts show no significant impact.

In September 1999, Berman launched another group, the Employment Roundtable,
to "build on the successes" of the EPI and to "find solutions for problems
such as social security and health care."

In May 2000, Berman launched cspinot.com, an attack website aimed at the
Center for Science in the Public Interest, which Berman accuses of
anti-alcohol zealotry that "combines scare tactics and junk science to scold
adult college students about alcohol consumption."

ActivistCash.com was launched in November 2001. In January 2002 the Guest
Choice Network renamed itself as the Center for Consumer Freedom.

Funding

As a private company, Berman & Co. is not required to disclose its finances.
However, two of its front groups Policies Institute Foundation organizations,
and they are required to disclose some financial information
to the Internal Revenue Service which is publicly available by inspecting
their IRS Form 990s. None of Berman's groups disclose the identity of their
funders, but some information about the Guest Choice Network has become
publicly available thanks to the 1998 attorney generals' settlement with the
tobacco industry, which required tobacco companies to release millions of
pages of previously secret company documents.

The IRS Form 990 for the Employment Policies Institute Foundation shows that
it received revenues of $1,237,566 during the 1999 calendar year. Of that
amount, $508,173 went to Berman & Co. for "consulting services." Another
$163,026 in salary and benefits went directly to Rick Berman as EPIF's
executive director, a job on which he reportedly spent 28 hours per week.
EPIF secretary Thomas Dilworth (sometimes described in news stories as the
organization's "research director") worked an average of 8 1/2 hours per
week and received $32,863 in salary and benefits for the year.

The Guest Choice Network claims to represent "more than 30,000 U.S.
restaurants and tavern operators." However, the IRS Form 990 which it filed
for the the six-month period from July to December 1999 shows that almost
all of its financial support came from a handful of anonymous sources. Its
total income for that period was $111,642, of which $105,000 came from six
unnamed donors. It received no income from membership dues. Some of its
funding apparently comes from one of Berman's other organizations, the
American Beverage Institute, which "contributes monthly amounts to the Guest
Choice Network to assist with media expenses." The Guest Choice Network does
not report paying salaries to any of its employees, who are presumably paid
by other sources.

Although Guest Choice refuses to disclose the identity of its anonymous
funders, the following companies have been linked to Berman & Co. in news
reports and other public documents:

* American Restaurant Group, Inc.
* Arby's
* Brinker International, Inc.
* Burger King
* Carson Restaurants Worldwide
* Chili's
* Chi-Chi's
* Cracker Barrel
* El Torito
* Empire State Restaurant and Tavern Association
* Hard Rock Café
* Hooters of America, Inc.
* Houston's Restaurants, Inc.
* International House of Pancakes
* Jack-in-the-Box
* KKR Enterprises, Inc.
* Luby's, Inc.
* Marie Callender Pie Shops, Inc.
* Marriott Corp.
* Metromedia Restaurant Group
* Olive Garden
* Outback Steakhouse, Inc.
* Panda Management Company, Inc.
* Perkins Family Restaurants, L.P.
* Philip Morris
* Rare Hospitality International
* Red Lobster
* Shoney's, Inc.
* Sizzler
* Steak & Ale
* TGI Friday's
* Uno Restaurant Corp.
* Vicorp Restaurants, Inc.
* Wendy's

Case Study: A Visit to the ActivistCash Web Site

The Wall Street Journal assisted the public launch of ActivistCash.com with
a December 2001 editorial column by Kimberley Strassel. Relying entirely on
information provided by ActivistCash, Strassel made several claims for which
she offered no evidence, some of which are demonstrably false:

* "These days, most 'grassroots' groups are far better moneyed, networked
and operated than many corporations and political lobbies." Actually,
grassroots groups only spend a tiny fraction of the money that corporations
spend on lobbying and public relations. According to statistics compiled by
the Center for Responsive Politics, environmental organizations spent a
total of $4.7 million on lobbying Congress in 1998. The sum total for all
single-issue ideological groups combined, on all sides of the
issues groups, consumer organizations, senior citizens, and a variety of other
groups alone spent $119.3 million, and the lobbying expenditures of all industries
combined added up to $11.2 billion.

* "Companies operations transparent and regularly make public their financial records.
Activist groups, even though most receive non-profit status and must file
with the IRS, have been reluctant to let anyone see their records." Yet
Strassel does not cite any examples of activist groups "being reluctant to
let anyone see their records." In fact, all of the information that appears
on ActivistCash was provided to Berman's researchers by the activist groups
themselves (with the exception of some erroneous information that we detail
below). As for the claim that corporations regularly make public their
financial records, this is only true of publicly-traded corporations, and as
the recent Enron scandal demonstrates, even this information can sometimes
be limited and misleading. Moreover, corporations rarely disclose the
details of their spending on PR campaigns designed to influence public
opinion. Case in point: the Guest Choice Network and ActivistCash.com
themselves do not provide any information about their corporate sponsors.

Strassel also quoted John Doyle, Berman & Co.'s communications director.
"What we uncovered is an intricate, organized, well-funded web of what you
might call the 'new left,' " Doyle said. "It allows a person to finally link
the environmental activists with the animal rights activists with the
anti-corporate activists, and see that they all operate together in the
anti-choice arena."

To test these claims, we visited ActivistCash on December 18, 2001. The
first thing we noticed was the site's preoccupation with a narrow list of
organizations. Only 16 activist groups appeared in its database. (By
contrast, the Capital Research Center, another tobacco-funded think tank
that purports to "expose" the funding sources of nonprofit organizations,
lists 1,177 groups in its database, ranging from the American Bird
Conservancy to Zero Population Growth.) Organized by main area of interest,
the groups listed on ActivistCash were:

* Anti-tobacco
Action on Smoking and Health (ASH)
* Anti-alcohol
Mothers Against Drunk Driving (MADD)
* Food Safety
Center for Food Safety
Center for Science in the Public Interest (CSPI)
Institute for Agriculture and Trade Policy
Mothers for Natural Law
Organic Consumers Association
* News Media
Center for Media & Democracy (publisher of PR Watch)
* Animal rights
EarthSave International
Farm Animal Reform Movement
People for the Ethical Treatment of Animals
Physicians Committee for Responsible Medicine
United Poultry Concerns
* Environment
Greenpeace USA
Natural Resources Defense Council (NRDC)
SeaWeb

Of course there are many other groups that work on these issues, so
ActivistCash is being very selective in its choice of targets. But do these
groups really form an "intricate web"? Upon examination, it turns out that
neither ASH nor MADD has any discernible connection with any of the other
groups on the list. The "connections" section of ActivistCash.com admits,
"We have not found ... networking connections with other organizations in
our database at this time." These groups appear to have been included simply
because ActivistCash.com dislikes their stance on booze and cigarettes.

Contrary to the claim that these activist groups all work in concert, they
actually have different and sometimes opposing agendas. PR Watch, for
example, has published lengthy articles criticizing Greenpeace, as well as
shorter but pointed criticisms of the NRDC and CSPI.

ActivistCash points to a number of allegedly sinister "connections" between
some of the groups on its list, but upon examination, these connections
actually turn out to be fairly obvious and innocuous. For example,
ActivistCash.com says that Greenpeace is "connected" to PETA because
one of its employees used to work for PETA. SeaWeb is connected to NRDC
because it was originally a project of NRDC before spinning off to become
a separate organization Organic Consumers Association are both connected to
each through CMD director John Stauber, who serves on their advisory boards.
EarthSave and Physicians for Responsible Medicine are "connected" because
some of their staff members have spoken at the same events. If this sort of thing
constitutes an "intricate, organized web," then PR Watch is also "intricately
organized" with Harvard and Johns Hopkins Universities, Borders and Barnes
& Noble bookstores, and dozens of newspapers and radio stations
throughout the United States that have chosen to interview us. Moreover,
Berman & Co. itself must be part of the conspiracy, because Berman employee
John Doyle is the brother of Mary Beth Doyle, an environmental activist who
once helped arrange a speaking tour of Michigan featuring PR Watch editor
Sheldon Rampton.

ActivistCash tries to deepen the sense of a wide-ranging conspiracy by
listing 24 popular celebrities who support activist causes, including Pamela
Anderson, Bob Barker, Kim Basinger, Harry Belafonte, David Duchovny,
Danny Glover, Stephen King, Ann Landers, Yo-Yo Ma, Robert Redford,
Barbra Streisand and Mary Tyler Moore. Once again, there is nothing
particularly remarkable or secret about fact that celebrities have publicly
endorsed various causes. These endorsements have all been widely publicized
course is the purpose of celebrity endorsements. Here too, ActivistCash
seems to have done only superficial research. Former X-Files star David
Duchovny is included on the ActivistCash list of celebrities, based solely
on the fact that he and wife Tea Leoni once participated in a fundraiser in
which they sold "butt paintings" to raise funds for an unnamed animal rights
cause. (One of the "connections" that ActivistCash seems to have missed is
the fact that PR Watch editor Sheldon Rampton and David Duchovny both
graduated in the same year from Princeton University. Even when the "truth
is out there," ActivistCash apparently can't find it.)

ActivistCash.com also provides some information about the funding sources
for the 16 activist groups in its database, but the data actually undermines
their claim that the groups are intricately connected. The 16 activist
groups received funding from 212 different foundations. If anything, this
suggests that the activist groups draw their support from a diverse range of
funders. To assess the degree of coordinated foundation giving, we looked at
the first 50 foundations in the ActivistCash database. Only 14 of the 50 had
given grants to more than one of the activist groups listed, and none had
given grants to more than three groups. Of the foundations which did give
money to more than one group, most gave to groups with similar missions.
For example, the David & Lucile Packard Foundation (established by one
of the founders of the Hewlett-Packard Company) made grants to SeaWeb,
Greenpeace and the Natural Resources Defense Council

The giving history of the foundations listed on ActivistCash.com also
undermines the claim that activist groups are rolling in cash these days.
Most of the foundations listed give the majority of their money to
non-activist groups and causes. The Benjamin J. Rosenthal Foundation, for
example, is listed as a grantmaker to Greenpeace, PETA, and the Physicians
Committee for Responsible Medicine. Rosenthal's grants to these three groups
total $22,000 over the course of three years Rosenthal Foundation gives away
more than $500 million annually.

Case Study: Cash to ASH

ActivistCash seems to find enormous significance in the funding that the
F.M. Kirby Foundation has given to Action on Smoking and Health (ASH),
headed by law professor John Banzhaf III . It states: "John Banzhaf has done
a masterful job of fooling people into thinking that ASH is a grassroots
effort. The group's web site even boasts that 'ASH is entirely supported by
tax-deductible contributions from people like you concerned about smoking
and protecting the rights of nonsmokers.' However, publicly available
documents show grants totaling $330,000 from New Jersey's F.M. Kirby
Foundation."

Actually, this charge of deception is based on a straw man argument to begin
with, because ASH does not really describe itself as a "grassroots"
organization. Our search of the ASH website turned up only 17 pages that
contain the word "grassroots," none of which used that word in reference to
ASH itself. Two of the pages, in fact, used the term to describe the tobacco
industry's fake grassroots organizations. When describing itself, ASH states
that it is a "national antismoking organization which is entirely supported
by tax-deductible contributions." Since the Kirby Foundation's grants fall
into the category of "tax-deductible contributions," this claim is accurate.

Moreover, the grants which ASH has received from the F.M. Kirby Foundation
represent only a small part of the ASH budget. During fiscal year 2000, ASH
received $60,000 from the Kirby Foundation<5.5% of its total revenues of
$1,079,279.

Kirby's grants to ASH are also small by Kirby Foundation standards, and
represent only a tiny fraction of its overall giving. The Kirby Foundation
including F.W. Woolworth States, with assets of more than half a billion
dollars. Administered today by Kirby's descendants, it gives grants to a
wide range of nonprofit organizations. Recent examples include: a $2 million
grant to support research on the brain; $5 million to fund construction of
an addition to a business school in North Carolina; $2 million to create a
neurobiology research chair at Rockefeller University; $1 million to the
United Network for Organ Sharing; and $32.5 million to Lafayette College
in Easton, PA.

Ironically, the F.M. Kirby Foundation gives most of its "public policy"
grants to right-wing organizations. Kirby has been a major funder of the
Intercollegiate Studies Institute (ISI), one of the most prominent
conservative organizations on college campuses. ISI's annual budget of $5
million funds more than 60 conservative student newspapers and pays for
prominent conservative speakers like Oliver North to speak at campuses
across the country. Its 23-acre national headquarters in Delaware is called
the "F.M. Kirby Campus" in recognition of the $1.5 million grant single grant
in ISI's history its purchase.

Kirby is also a major funder of the Young America's Foundation (YAF), which
also sponsors conservative activism on campus. YAF's annual budget is close
to $9 million, and, like ISI, its national headquarters is named after the
Kirby Foundation in appreciation of the grant that paid for it.

The Kirby Foundation has also funded Citizens for a Sound Economy (CSE),
one of the leading corporate-funded think tanks. According to budget documents
obtained by Public Citizen, CSE takes millions of dollars of year from
corporate interests, including Exxon for projects related to global warming,
Philip Morris and R.J. Reynolds for tobacco projects, and the Florida sugar
growers' lobby to oppose a federal plan for Florida wetlands restoration. In
1998, CSE received $1,124,050 from tobacco companies at the same time that
it was spearheading the opposition to new cigarette taxes. That same year,
CSE received $22,500 in unrelated funding from the Kirby Foundation.

Members of the Kirby family are entitled to give their money away as they
please. Some people would deplore the fact that they contribute to
right-wing propaganda centers like the ISI, YAF and CSE. ActivistCash
chooses to deplore the comparative pittance which the same foundation has
given to a group that opposes smoking. If ActivistCash were honest, however,
it should note that Kirby also provides funding to pro-tobacco groups.
Moreover, ActivistCash should own up publicly to the fact that its own work
is supported by tobacco money. Actually, Berman & Co. has taken more money
from Philip Morris in a single year than ASH received from the Kirby
Foundation during all of the years combined for which ActivistCash has
bothered to collect data.

Case Study: A Comedy of Errors

We also reviewed what ActivistCash.com has to say about our own
organization, the Center for Media & Democracy. We were not surprised to
find ourselves quoted out of context or to read hostile rhetoric describing
us as "self-anointed watchdogs," "scare-mongers," "reckless" and
"left-leaning." Rhetoric is everyone's right, and if the Guest Choice
Network wants to call people "zealots" and "nannies," that's their Guest
Choice. However, we were surprised (and rather amused) by the number of
demonstrably false claims that they managed to sandwich into our fairly
brief profile:

* ActivistCash says that the Center for Media & Democracy "seems to
largely be a PR tool for selling Stauber's books." Wrong! CMD was founded in
1993. Our first book, Toxic Sludge Is Good For You, was not written until
1995. Moreover, no royalties or payments from any of our books accrue to the
authors. All rights are held by the Center, and all revenues from the sale
of books go to the Center.

* ActivistCash claims that CMD has received $10,000 in grants from the
John Merck Fund, $5,000 of which went to buy an advertisement in the New
York Times for our book, Mad Cow USA. Wrong! CMD to date has never
received any funding from the John Merck Fund for any purpose.

* David Merritt, another CMD board member, is listed as executive
director of the Citizens Utility Board (CUB), a Wisconsin consumer advocate
that opposes utility rate increases. Wrong! Dave used to executive director
of CUB, but he has not worked for them in five years.

* ActivistCash claims that PR Watch editor Sheldon Rampton has "directed
the Wisconsin Coordinating Council on Nicaragua, taking part in a project
that he said 'channeled more than $7 million in loans to Nicaragua' while
that nation was under Sandinista (Marxist) control." Wrong! Sheldon Rampton
has been active with WCCN for many years, including serving as a paid WCCN
staff member from 1993-1997. He currently serves as a volunteer on the WCCN
board of directors but has never been its executive director. The project
that channeled "more than $7 million in loans to Nicaragua" is the
Nicaraguan Credit Alternatives Fund (NICA Fund). It offers loans to
low-income Nicaraguans with no access to commercial credit so that they can
start their own small businesses. Typical borrowers are engaged in
activities such as farming, ranching, retail, carpentry and making
tortillas. It's a great project that continues to operate and has actually
given out more than $10 million in loans to assist some of the poorest
people in the western hemisphere. However, the NICA Fund did not channel
money to Nicaragua during the years of the Sandinista government. It was not
even started until 1992, two years after the Sandinistas lost the 1990
Nicaraguan elections

* ActivistCash says that Rampton is a member of the CMD board of
directors. Wrong! Rampton edits PR Watch, but he has never even been to a
board meeting.

* ActivistCash says that John Stauber is a member of the CMD board of
directors. Wrong again! Stauber is the executive director of CMD, but he is
not a board member.

* Finally, ActivistCash says that CMD only has two staff members. Wrong
yet again! Actually, we have three staff members. Anyone who visits our
staff biographies page can see a nice color photograph of Laura Miller, our
associate editor.

Contact Information

The Guest Choice Network, ActivistCash.com, the Employment Policies
Institute and the American Beverage Institute all share office space with
Berman & Co., at the following address:

Berman & Co.
1775 Pennsylvania Ave. NW, Suite 1200
Washington, DC 20006
Phone: (202) 463-7110
FAX: (202) 463-7107
Email: rberman@new-reality.com

Websites:

* http://www.abionline.org
* http://www.activistcash.com
* http://www.consumerfreedom.com
* http://www.cspinot.org
* http://www.epionline.org
* http://www.guestchoice.com
* http://www.livingwage.com
* http://www.minimumwage.com

Related Resources

* We first exposed the shenanigans of Berman & Co. in the First Quarter
2001 issue of PR Watch, including details of his lobbying activities to keep
wages low and drivers drinking, as well as the cash-for-favors scandal
involving Berman, Norman Brinker and Newt Gingrich

* The Philip Morris documents web site has additional correspondence and
company memos related to Berman & Co. To search it yourself, use the
following keywords: "Guest Choice"; "American Beverage Institute"; "Berman,
R"; and "Berman, RB."

* IRS tax forms for the Guest Choice Network and the Employment Policies
Institute can be found by searching the GuideStar web site. GuideStar also
has similar information about more than 100,000 other organizations,
including the groups that ActivistCash attacks.

* The Chain Letter, a magazine for restaurant chains, published a profile
of Rick Berman in its December 1999 issue.

* ActivistCash is not the only tobacco front group that has claimed to
expose the finances of industry enemies while trying to hide its own funding
source. In 1996, PR Watch exposed the secret tobacco funding behind
Contributions Watch, a self-proclaimed "independent watchdog organization"
that tried to establish itself as a "leading authority on money and
politics." (Like ActivistCash, Contributions Watch was launched with
editorial support from the Wall Street Journal.)

* Finally, some readers may think that turnabout is fair play and ask who
funds the Center for Media & Democracy and PR Watch. This is an entirely
legitimate question, and we are happy to answer it. Although we operate on a
smaller budget than Berman & Co. and do not accept corporate grants, we do
need funding to support our work. Most of our budget comes from three
sources: individual member contributions, sales of our books and newsletter,
and foundation grants. Our own IRS Form 990 is available at the GuideStar
website, and we provide a list on this web site of foundations that have
supported our work . We encourage other nonprofit groups to follow similar
standards of transparency.

Center for Media & Democracy, 520 University Ave., Suite 310, Madison, WI
53703; phone (608) 260­9713; email editor@prwatch.org