Koch-Funded Think Tank Linked to George Mason University Is Now Pretending It’s Not Part of George Mason University

The Mercatus Center, a Koch-funded think tank housed within George Mason University, wants to have it both ways.

George Mason University in Fairfax, Va., May 3, 2018. GMU recently released documents that millions of dollars in donations from conservative-leaning donors like the Charles Koch Foundation had come with strings attached, including influence on committees that selected candidates. (Tom Brenner/The New York Times)
George Mason University in Fairfax, Va., on May 3, 2018. Photo: Tom Brenner/The New York Times/Redux

This past Sunday, when Alexandria Ocasio-Cortez was interviewed on CNN’s “State of the Union,” Jake Tapper quizzed her about the cost to the government of “Medicare for all,” pegged at more than $30 trillion over a 10-year period. CNN’s chyron told viewers the research came from three sources: George Mason University, the Center on Budget and Policy Priorities, and the Congressional Budget Office.

The George Mason paper touched off controversy when it was released in July, because buried in the findings was an estimate that the $32.6 trillion price tag would also result in a $2 trillion savings over national expenditures on health care, relative to the status quo. Designed to create sticker shock for “Medicare for All,” instead the study, produced by the Mercatus Center, which bills itself as part of George Mason, inadvertently proved a point of progressive supporters of single payer.

The Mercatus Center, which gets most of its funding from foundations like the Koch family foundations, scrambled to dispute its own finding. Working paper author Charles Blahous argued that an alternative scenario he constructed using higher provider payment rates (which, by definition, costs more money) is actually the correct one. This makes no sense, since “Medicare for All” is based on Medicare rates. But fact-checking organizations largely took Blahous’s side, while making factual errors over and over again and attributing incorrect statements to “Medicare for All” supporters.

Throughout this debacle, as in this story from the Associated Press, the working paper is routinely identified as an “analysis by the Mercatus Center at George Mason University in Virginia.” When a Mercatus senior outreach associate sent repeated emails to policymakers touting the working paper and fact-check articles that adopted the think tank’s spin, she also identified herself as coming from “the Mercatus Center at George Mason University.”

This association with a college gives Mercatus the imprimatur of academic research, something to be taken more seriously by the media than the flurry of white papers churned out by ideological think tanks.

The Intercept wanted to learn more about how Mercatus sought to massage public opinion and contain the fallout from the unintended implications of their paper. George Mason University is a public university in Virginia that is subject to the state’s Freedom of Information Act, which The Intercept used to request communications between Mercatus and members of the media.

That’s when The Intercept learned that the Mercatus Center at George Mason University is not, apparently, part of George Mason University.

That, at least, was the contention of Elizabeth Woodley, compliance officer at George Mason University, when asked for communications between Blahous, Mercatus senior outreach associate Jessica Paska, and members of the media. “Neither Charles Blahous nor Jessica Paska are employees of George Mason University,” Woodley wrote in her response. “They appear to be employees of the Mercatus Center Inc., an independent 501(c)3 not-for-profit organization.”

To call the Mercatus Center at George Mason University “independent” ignores a host of linkages between the organization and the college. The Intercept reviewed the Mercatus Center’s affiliation agreement with the university, which identifies Mercatus as “a Center of the University.”  The center is authorized to use the university’s name and seal, according to the agreement, and is led by a faculty director (currently the blogger and economist Tyler Cowen, an employee of George Mason University), jointly chosen by the Mercatus board of directors and the George Mason provost. The provost also approves all members of the Mercatus board. The faculty director governs Mercatus on behalf of George Mason, according to the affiliation agreement.

Mercatus is required to mention George Mason University in everything it publishes: Indeed, the Blahous working paper on “Medicare for All” is attributed to the “Mercatus Center at George Mason University.” On its own website, Mercatus calls itself “the world’s premier university source for market-oriented ideas” and “a university-based research center” that “trains students.”

According to the affiliation agreement, all of Mercatus’s activities and programs “shall be carried out consistently with the educational and research missions” of the university, including cooperation with other units of the university on “projects of mutual interest.” While Mercatus employees are explicitly not to be designated as employees of George Mason, Mercatus leases office space on the George Mason campus in Arlington, Virginia (for the low price of $1 for a 28-year lease, according to a space usage agreement reviewed by The Intercept); employees of Mercatus receive ID cards from George Mason; employees are eligible to be appointed as “affiliate faculty members” of George Mason (Blahous does not appear to be an affiliate faculty member); and the university pays tuition costs for any Mercatus employees who want to take classes, as it does for George Mason employees.

FILE - In this July 28, 2014, file photo, Public Trustee Charles Blahous speaks as then-Treasury Secretary and Managing Trustee Jacob Lew, left, and then-Labor Secretary Thomas Perez, right, listen during a news conference at the Treasury Department in Washington. A new study says ‘Medicare for all’ would raise government health care spending by $32.6 trillion over 10 years. “Enacting something like ‘Medicare for all’ would be a transformative change in the size of the federal government,” said Charles Blahous, the study’s author. Blahous was a senior economic adviser to former Republican President George W. Bush and a public trustee of Social Security and Medicare during the Obama administration. (AP Photo/Susan Walsh, File)

Charles Blahous speaks during a news conference at the Treasury Department in Washington, D.C., on July 28, 2014.

Photo: Susan Walsh/AP
Finally, Blahous and Paska, along with all Mercatus employees, have “@mercatus.gmu.edu” email addresses, which presumably would be under the control of the university. However, when questioned about this, Woodley maintained that “the addresses are ‘@mercatus.gmu.edu’ email addresses, not ‘@gmu.edu’ addresses,” and that “our IT department has informed me that they do not have access to the ‘@mercatus.gmu.edu’ addresses.”

In other FOIA requests reviewed by The Intercept, Woodley asserted that communications from George Mason faculty members who worked for outside organizations related to the university, much like the setup with Mercatus, were not subject to public records requests, because they were “prepared outside the context of the professor’s University employment.”

Freedom of information experts briefed on the matter said the Mercatus Center was trying to have it both ways, benefiting from being associated with an academic institution while shirking the responsibilities of that institution. “Organizations love to get that official letterhead,” said Michael Morisy, founder and chief executive of MuckRock, a nonprofit that assists journalists and researchers in public records requests. “It’s pretty weird for Mercatus to be giving the impression that they’re part of a public body, while also claiming they’re exempt when it’s more convenient.”

Under Virginia law, a public body is one that is either “supported wholly or principally by public funds” or an entity “created to perform delegated functions of the public body or to advise the public body.”

Mercatus is privately funded, though the reputation boost they get from the George Mason affiliation could be seen as in-kind support, Morisy noted. “Even if the public is subsidizing the brand they benefit from, they do benefit,” he said. On the second point, however, given the litany of linkages, a case can be made that Mercatus is performing delegated functions of George Mason University.

“It could create confusion at best among the public as to whether this is a university entity, and if so, why isn’t it publicly accountable as the rest of the university is?” said Megan Rhyne, executive director of the Virginia Coalition for Open Government, a public records advocacy group.

The email blasts from Paska, the public relations associate at Mercatus, also include references to George Mason. “A growing number of politicians are voicing support for a proposal of ‘Medicare for All.’ Is this a realistic policy? How much would it cost?” writes Paska in the first of four emails sent over a three-week period to policymakers and media outlets.

The Intercept obtained the emails from Warren Gunnels, a policy director for Sen. Bernie Sanders, I-Vt., the lawmaker most closely associated with “Medicare for All.” Other legislative staffers received the same emails. They list Paska’s title as “Senior Outreach Associate – Spending, Budget, Tax; Mercatus Center at George Mason University.” (Paska was previously a communications director for Republican Freedom Caucus member Rep. Morgan Griffith of Virginia.)

Paska’s emails directly confront the finding in the Mercatus paper that “Medicare for All” would reduce national health care expenditures, using Blahous’s contention that it’s more proper to use rates other than Medicare when making the calculations. “Another way to explain Chuck’s findings: Medicare for All doesn’t save money; cutting payments to doctors, nurses, and hospitals saves money,” Paska writes.

After fact-check organizations picked up on these subjective readings of the paper, Paska blasted out links to those fact checks. Mercatus even ran numerous Facebook ads in August promoting the paper and friendly media articles. This suggests a form of intellectual and media laundering which The Intercept couldn’t assess further, because the Mercatus Center at George Mason University won’t comply with George Mason University public records requests.

The relationship between George Mason and Mercatus is not necessarily unique. Across academia, 501(c)(3) organizations partner with universities to obtain resources or simply reputation-related benefits for their work. “It’s funny that you emailed us, we are the Knight First Amendment Institute at Columbia University,” said Alex Abdo, a staff attorney with the institute. The Brennan Center for Justice at New York University is another example. “I don’t think people would attribute our views to Columbia or theirs to NYU,” Abdo said.

Of course, those are both private universities not subject to public records requests. And the Mercatus Center in particular, in addition to all the linkages to George Mason University in its affiliation agreement, has in the past carried unusual influence over the selection of university professors.

According to a successful Freedom of Information Act request this April, made by the activist group UnKoch My Campus, from 2003 to 2011, gift agreements between Mercatus and George Mason created professorships in the university’s economic department. The Mercatus donors who funded the professorships were allowed to participate in the selection and evaluation of the professors.

Samantha Parsons, a George Mason alum and co-founder of UnKoch My Campus, believes that Mercatus’s ties to the university allow the organization to essentially launder its agenda so it appears more objective. “It’s always described as the Mercatus Center at George Mason University,” Parsons said. “Just that automatically lends comfort to the public, that it’s associated with the university, not biased.”

As Rhyne similarly wondered, “If that’s how [the research is] being promoted, is the university willing to be on the record saying, ‘Yes, this is something we would stand behind?’”

The Koch family foundation does not use only George Mason University for this purpose. Troy University’s Johnson Center also receives Koch funding, as does the Center for the Study of Free Enterprise at Western Carolina University. The economics department at Florida State University initially gave the Koch Foundation control over hiring and curriculum. An investigation into the Kochs’s infiltration of campuses showed that the foundation gave $108 million to 366 colleges and universities between 2005 and 2014.

The Blahous working paper on “Medicare for All” in particular shows the impact of these university-based research centers. The paper got wide pickup in the media, and even when its finding in support of “Medicare for All” was exposed, the Mercatus Center fought back and rallied media outlets to report its spin. Whether or not the association with a public university played a role in that is unclear, because Mercatus refuses to honor the public records requests.

That last point is rather ironic. The Charles Koch Institute is a core funder of the National Freedom of Information Coalition, an association of public records groups in all 50 states. The Koch Foundation, the same group funding the Mercatus Center amid its resistance to Freedom of Information Act requests, gave $80,000 last year to the American Society of News Editors for its freedom of information hotline program, among other investments supporting media efforts aimed at government transparency.

Top photo: The George Mason University campus in Fairfax, Va., on May 3, 2018.

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