The Shadow Party: Part I

By: David Horowitz and Richard Poe
FrontPageMagazine.com | Wednesday, October 06, 2004

Part 1: Origins

"My family is more important to me than my party," declared Senator Zell Miller, a Georgia Democrat, as he spoke from the podium of the Republican National Convention on September 1. "There is but one man to whom I am willing to entrust their future and that man's name is George Bush." [1]


Many Democrats howled in outrage at Miller's "betrayal" - former President Jimmy Carter in particular. In an angry personal letter to the Georgia senator, Carter accused Miller of "unprecedented disloyalty" and declared, "You have betrayed our trust. [I]t's quite possible that your rabid speech damaged our party..." [2]


But nothing Miller said could possibly have damaged the Democratic Party more than its own leaders had done in making the war in Iraq a partisan issue and embracing the anti-war cause. In his anger, Carter had mistaken the symptom for the disease. Long before Zell Miller's démarche, Ronald Reagan -- a Roosevelt Democrat who re-registered as a Republican in 1962 -- followed a similar course, explaining, "I didn't leave the Democratic Party; the Democratic Party left me."[3]


The leftward drift of the Democratic Party accelerated through the Vietnam years, spurred by the anti-war candidacies of Bobby Kennedy, Eugene McCarthy and George McGovern. When the congressional Democrats pulled the plug on aid to our allies in southeast Asia in the 1970s, a contingent of anti-Communist "Scoop" Jackson Democrats crossed the aisle in protest and became Republicans - an act for which they were labeled "neo-conservatives." Rank-and-file Democrats staged a silent but even more devastating walk-out after four years of Jimmy Carter's "blame America" Administration, casting their ballots by the millions for the Gipper.


The Democrats' current presidential aspirant John Kerry has ambitiously modeled his political career after John F. Kennedy’s. Yet their politics bear little resemblance. If Kennedy were alive today, Democrats would condemn his sweeping capital gains tax cuts as a sop to the rich. His militant anti-Communism would evoke charges of right-wing "paranoia." And the vow he made in his inaugural address to confront tyranny anywhere in the world would win him the label of "neo-conservative" imperialist among today’s Democrats. Instead of calling on Americans to "support any friend" and "oppose any foe" -- as Kennedy did in his famous address - many Democrats are busy sabotaging our war effort in Iraq, with speeches as strident as any that emanated from the New Left during the Vietnam era.


The devolution of the Democrats from the Cold War party of Harry Truman and John F. Kennedy to the progressive party of Edward Kennedy and John F. Kerry has long been in progress, and is not quite complete. But the Democrats' final transformation into a party of the left in the European mode may not be far off. Barely noticed by political observers, an activist juggernaut has seized control of the party’s national electoral apparatus, organized, financed and directed by the left.


This party within the party has no official name, but some journalists and commentators have begun referring to it as the Shadow Party, a term that we will use as well. It denotes a network of non-profit groups presently raising hundreds of millions of dollars for deployment on the campaign battlefield. This money pays for advertising, get-out-the-vote-drives, opposition research, dirty tricks and virtually every aspect of a modern electoral campaign. But it does so through independent groups with no formal connection to the Democratic Party.



Follow the Money


The Shadow Party emerged from the dense thicket of campaign finance reforms engineered by Senators John McCain and Russ Feingold. Thanks to the soft-money ban enacted by the McCain-Feingold Act of March 27, 2002, the Democratic Party entered the current election cycle hard pressed to raise enough money legally to undertake a winning campaign. This created an imperative that found its inevitable loophole (as critics of McCain-Feingold always warned it would). Consequently, the driving force in the political war against George Bush is now a group of billionaires and millionaires operating through the veiled structures of the Shadow Party.


Under McCain-Feingold, political parties and candidates can only accept “hard money” contributions – that is, contributions given to a specific political party for a specific political campaign. Such contributions must be reported to the Federal Election Commission, and are limited to a $2,000 maximum per donor for each candidate, or $5,000 per donor if they are paid to a federally registered political action committee (PAC). Historically, Republicans have enjoyed a 2-1 advantage over Democrats in raising hard-money contributions from individual donors. Democrats have relied much more heavily on soft-money contributions from large institutions such as unions.


Soft money refers to political contributions, which for one reason or another have been exempted from the limits imposed by the FEC. Before McCain-Feingold outlawed such contributions, soft money donors could give as much money to political parties as they wished. Their contributions often numbered in the millions of dollars. McCain-Feingold deprived the Democrats of their soft money, but the Shadow Party has provided an alternate channel for collecting unlimited contributions. For example, government unions used to lavish multi-million-dollar contributions on the Democratic Party – money which the unions drew from their members, through mandatory dues. The unions still collect their membership dues, but, under McCain-Feingold, they may no longer pass that money along to the Democratic Party, at least not directly. The solution? They give it to the Shadow Party instead.


The Shadow Party uses various expedients to evade McCain-Feingold’s limits. First, it works through independent non-profit groups that ostensibly have no connection to the Democratic Party, either structurally or through informal coordination. The Shadow Party contains many types of non-profit groups, but most of its big fundraisers are “527 committees” – named after Section 527 of the IRS code – sometimes called “stealth PACS” because, unlike ordinary PACS (political action committees), they are not required to register with the Federal Election Commission nor to divulge their finances to the FEC (except in special circumstances).


Another expedient used by the Shadow Party is to claim that it is not engaged in electioneering at all. Most Shadow Party groups say they are soliciting funds not to defeat a particular candidate, but to promote “issues” and non-partisan get-out-the-vote drives. Of course their issue promotions have, in most cases, turned out to be savage attacks on the opposing candidates and their get-out-the-vote drives have used sophisticated demographic marketing techniques to target exclusively Democratic constituencies. All of this casts doubt on the Shadow Party’s claim to be aloof from the electoral struggle and therefore exempt from FEC regulation. However, a pliant Federal Elections Commission has conveniently declined to rule on the Shadow Party’s legality until after the election, when it will no longer matter.


Needless to say, McCain-Feingold also bars the Republican Party from raising soft money. However, Republicans never had a problem raising individual contributions for their candidates and never made a habit of raiding union treasuries for “soft money.” Thus Republicans have felt less urgency than Democrats to seek alternative fundraising methods, and they have proved slower in pursuing the 527 escape route from McCain-Feingold. Republicans have built no network of independent, non-profit groups comparable in numbers or scale to the Democrat Shadow Party.


No one knows who first coined the term “shadow party.” The term has become popular among journalists, but likely originated among the freelance fundraisers themselves. In the November 5, 2002 Washington Post, writer Thomas B. Edsall wrote of “shadow organizations” springing up on both sides of the political fence to circumvent McCain-Feingold’s soft money ban.[4] Lorraine Woellert of Business Week appears to have been the first journalist to apply the term “shadow party” specifically to the Democrat network of 527 groups, in a September 15, 2003 article titled, “The Evolution of Campaign Finance?”[5] Other journalists followed her example.



The Soros Factor


According to conventional wisdom the Shadow Party began taking form shortly after March 27, 2002 – the date President Bush signed the Bipartisan Campaign Reform Act, popularly known as McCain-Feingold. However, the Shadow Party’s earliest origins predate the Reform Act by many years. The principal mover behind the Shadow Party is Wall Street billionaire and leftwinger George Soros. A New York hedge fund manager, global investment banker and currency trader, Soros has a personal net worth in the $7 billion range. Under his aegis, the Shadow Party has created a new power base for the left, independent of the mainstream party apparatus – a leverage point from which to tilt the party in an ever-more-radical direction.


Only Soros knows when he first conceived the idea of forming this network. However, clear hints of his intentions began to appear as early as the 2000 election. By that time, Soros had already baffled friend and foe alike with his increasingly strident attacks on capitalism – the very system which had elevated him from a penniless Hungarian refugee to one of the world’s wealthiest men. In his 1998 book The Crisis of Global Capitalism, Soros predicted an imminent collapse of the global financial system. Financiers like himself were largely to blame, he wrote, for they had allowed greed to overwhelm their humanity. “The (global capitalist) system is deeply flawed,” wrote Soros. “As long as capitalism remains triumphant, the pursuit of money overrides all other social considerations.” [6]


Soros offered no coherent solution to the problem. He simply continued his long-established pattern of pouring money into a hodge-podge of fashionable leftwing causes, such as promoting mass immigration into the United States; financing anti-gun lawsuits and lobbyists; demanding voting rights for felons; seeking the abolition of capital punishment; exacerbating Palestinian unrest; promoting abortion; feminism; population control; gay liberation; euthanasia; radical theories of education; marijuana legalization and global government.


In 2000, Soros stepped up his attack on the status quo – dramatically raising his profile in U.S. electoral politics in the process – by sponsoring the so-called “Shadow Conventions.” Organized by author, columnist, social climber and political gadfly Arianna Huffington, the Shadow Conventions were counter-cultural events that gave a spotlight to critics of the electoral mainstream, most from the far left. In an effort to lure news crews away from the national party conventions, Huffington held her “Shadow Conventions” at the same time and in the same cities as the Republican and Democratic conventions in Philadelphia and Los Angeles respectively.


The largest single donor to the Shadow Conventions was George Soros, who put up about one third of the cost, according to Time magazine.[7] Media commentators at the time played the Shadow Conventions for laughs. Yet these events conveyed a serious message; a comprehensive radical agenda which Soros evidently endorsed.



Third Force

The Shadow Conventions promoted the view that neither Democrats nor Republicans served the interests of the American people. Like the New Left of the 1960s and today’s Green Party, both of which dismiss the major parties as instruments of the “corporate ruling class,” Huffington declared that US politics needed a third force to break the deadlock. Among the issues highlighted at the Shadow Conventions were racism, special interest lobbies, marijuana legalization and the allegedly growing concentration of wealth – a radical hobgoblin since Karl Marx first raised its specter 150 years ago. Most speakers and delegates at the Shadow Convention hewed to a hard-left line, their views resonating with the “Free Mumia” chants that erupted periodically from the crowd and with Jesse Jackson’s incendiary charges that Republicans were racists. Huffington herself was a sometime conservative whose cult-like worship of Newt Gingrich had formerly evoked titters of amusement from media gossips. At the Shadow Conventions, she told reporters: “I have become radicalized.”


Not all the speakers were hucksters in the Jackson mold, however. Senator John McCain whose campaign finance crusade had put him at odds with both parties was one of the few mainstream politicians to accept Huffington’s invitation to speak. He made an impassioned plea for campaign finance reform, a crusade which – perhaps not coincidentally – George Soros had been a major force in pushing since 1995.


The Shadow Conventions were symbolic affairs. They represented no party and nominated no candidates for office. However, many of Soros’ activities during the 2000 campaign went beyond symbolism. It was during the 2000 election cycle that Soros first began experimenting with raising money through 527 committees. He assembled a team of wealthy Democrat donors to help him push two of his favorite issues – gun control and marijuana legalization. Soros collected contributions greatly exceeding the $5,000 limit allowed to federal PACs, but he evaded those limits by using 527 committees.


One of Soros’ committees was an anti-gun group called The Campaign for a Progressive Future, which sought to neutralize the influence of the National Rifle Association (NRA) by targeting political candidates whom the NRA endorsed. Mainstream Democrats had backed off the gun control issue when candidate Al Gore learned that 40 percent of union households owned guns. However, Soros was no mainstream Democrat. He personally seeded The Campaign for a Progressive Future with $500,000.[8]


During the 2000 election, Soros’ Campaign for a Progressive Future funded political ads and direct mail campaigns in support of state initiatives favoring background checks at gun shows. Soros and his associates also funneled money into pro-marijuana initiatives, which appeared on the ballot in various states that year.[9] Donors to Soros’ stealth PACs during the 2000 election cycle included insurance mogul Peter B. Lewis and InfoSeek founder Steven Kirsch, both of whom would turn up later as major contributors to Soros’ Shadow Party during the 2004 campaign.



The Southampton Meeting


To the extent that the Shadow Party can be said to have an official launch date, July 17, 2003 probably fits the bill.[10] On that day, a team of political strategists, wealthy donors, leftwing labor leaders and other Democrat activists gathered at Soros’ Southampton beach house on Long Island. Aside from Soros, the most noteworthy attendee was Morton H. Halperin. Soros had hired Halperin in February 2002, to head the Washington office of his tax-exempt Open Society Institute – part of Soros’ global network of Open Society institutes and foundations located in more than 50 countries around the world. Given Halperin’s history, the appointment revealed much about Soros’ political goals.


Halperin has a long and controversial track record in the world of Washington intrigue, dating back to the Johnson Administration. Journalists sympathetic to Halperin’s leftwing sentiments give him high marks for blowing the whistle on the Vietnam War, but his activism helped undermine America’s war effort and contributed to the Communist victory.


The Johnson Defense Department placed Halperin in charge of compiling a secret history of U.S. involvement in Vietnam, based on classified documents. This secret history later emerged into public view as the so-called “Pentagon Papers.” Halperin and his deputy Leslie Gelb assigned much of the writing to leftwing opponents of the war, such as Daniel Ellsberg who, despite his background as a former Marine and a military analyst for the Rand Corporation, was already evolving into a New Left radical. In his memoir, Secrets, Ellsberg admits to concluding, as early as 1967, that, “we were not fighting on the wrong side; we were the wrong side” in the Vietnam War. [11] Evidently Ellsberg had come to view Ho Chi Minh’s Communist regime as the wave of the future.


With Halperin’s tacit encouragement – and perhaps active collusion – Ellsberg stole the secret history and released it to The New York Times, which published the documents as “The Pentagon Papers” in June 1971.[12] This was a violation of the Espionage Act, which forbids the removal of classified documents from government buildings. Not surprisingly, “The Pentagon Papers” echoed Halperin’s long-standing position that the Vietnam War was unwinnable, and ridiculed Presidents Kennedy and Johnson for stubbornly refusing to heed those of their advisors who shared this opinion. It marked a turning point in America’s failed effort to keep Indo-China from falling to the Communists. The government dropped its case against Ellsberg as Nixon’s power collapsed during the Watergate intrigues.


Halperin went on to become the director of the American Civil Liberties Union from 1984 to 1992 and head of its "National Security Archives." From this position, he waged open war against U.S. intelligence services, through the courts and the press, seeking to strip the government of virtually any power to investigate, monitor or obstruct subversive elements and their activities.[13] It did not take long for Halperin to go the next logical step and argue for abolishing America’s intelligence services altogether. “Using secret intelligence agencies to defend a constitutional republic is akin to the ancient medical practice of employing leeches to take blood from feverish patients. The intent is therapeutic, but in the long run the cure is more deadly than the disease,” Halperin wrote in his 1976 book, The Lawless State: The Crimes of the U.S. Intelligence Agencies.[14]


In a March 21, 1987 article in The Nation, Halperin expanded on this theme and, like Ellsberg, took the position that America was the real villain in the Cold War. He wrote, “Secrecy does not serve national security. Covert operations are incompatible with constitutional government and should be abolished.”[15] This was a call for unilateral disarming of our intelligence services to match the universal disarmament of our military which has long been a staple of the radical agenda.


Evidently, Soros wishes Halperin to continue his war on America’s intelligence services. According to an Open Society Institute press release, one of Halperin’s principal assignments on the Soros team is to battle “post-September 11 policies that threaten the civil liberties of Americans.” [16]



The Plan


No one has published a full list of the attendees at Soros’ July 17 meeting in Southampton, at which Soros laid out his plan to defeat President Bush.[17] However, a partial list is available in accounts that appeared in the Washington Post and the Wall Street Journal. These include an impressive array of former Clinton administration officials, among them Halperin. Prior to working for Soros, Halperin had served eight years under Clinton, first as Under Secretary of Defense for Policy and finally as Director of Policy Planning for the Clinton State Department.


The guests at Soros’ beach house also included Clinton’s former chief of staff John Podesta; Jeremy Rosner, former special advisor to Clinton’s Secretary of State Madeline Albright; Robert Boorstin, a former advisor to Clinton’s Treasury Secretary Robert Rubin; and Steven Rosenthal, a leftwing union leader who served the Clinton White House as an advisor on union affairs to Labor Secretary Robert Reich. Carl Pope, executive director of the Sierra Club, and Ellen Malcolm, founder and president of the pro-abortion lobby Emily’s List, also attended the meeting, as did such prominent Democrat donors as auto insurance mogul Peter B. Lewis; founder and CEO of RealNetworks Rob Glaser; Taco Bell heir Rob McKay; and Benson & Hedges tobacco heirs Lewis and Dorothy Cullman.


Months earlier, Soros had hired two political analysts to probe Bush’s defenses. They were Tom Novick, a lobbyist for the Western States Center – a group of radical environmentalists in Oregon – and Democrat media strategist Mark Steitz, president of TSD Communications in Washington DC, whose clients have included the Democratic National Committee and the Clinton presidential campaigns of 1992 and 1996. Jeanne Cummings of The Wall Street Journal reports that both Novick and Steitz were present at the Southampton meeting, to brief the team in person.


Working independently, the two analysts had reached similar conclusions. Both agreed that Bush could be beaten. Voter turnout was the key. The analysts proposed massive get-out-the-vote drives among likely Democrat voters in seventeen “swing” or “battleground” states: Arizona, Arkansas, Florida, Iowa, Maine, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Mexico, Ohio, Oregon, Pennsylvania, West Virginia, Wisconsin and Washington.


“By morning,” reports Cummings, “the outlines of a new organization began to emerge, and Mr. Soros pledged $10 million to get it started.” The name of that organization was America Coming Together (ACT) – a grassroots activist group designed to coordinate the Shadow Party’s get-out-the-vote drive. ACT would dispatch thousands of activists – some paid, some volunteers – to knock on doors and work phone banks, combining the manpower of leftwing unions, environmentalists, abortion-rights activists and minority race warriors from civil rights organizations.


ACT was not exactly new. A group of Democrat activists had been trying for months to get it off the ground. But, until George Soros stepped in, ACT had languished for lack of donors. Laura Blumenfeld of The Washington Post describes the scene at the July 17 meeting at Soros’ beach house: “Standing on the back deck, the evening sun angling into their eyes, Soros took aside Steve Rosenthal, CEO of the liberal activist group America Coming Together (ACT), and Ellen Malcolm, its president. … Soros told them he would give ACT $10 million. …Before coffee the next morning, his friend Peter Lewis, chairman of the Progressive Corp., had pledged $10 million to ACT. Rob Glaser, founder and CEO of RealNetworks, promised $2 million. Rob McKay, president of the McKay Family Foundation, gave $1 million and benefactors Lewis and Dorothy Cullman committed $500,000. Soros also promised up to $3 million to Podesta's new think tank, the Center for American Progress,” which would function as the policy brains of the new network.[18]


The Shadow Party had been born. Three weeks later, on August 8, The New York Times announced the official roll-out of America Coming Together (ACT), describing it as a political action committee led by Ellen Malcolm and Steven Rosenthal.


Soros next summoned California software developer Wes Boyd to meet him in New York on September 17. Boyd was best known among computer users for his “Flying Toasters” screen saver. The political world knew him as founder of the radical Web site MoveOn.org, the Internet force behind Howard Dean’s anti-war presidential campaign. Boyd had launched the Web site during the Clinton impeachment trial in 1998, offering a petition to censure the President and “move on” to more important matters. Hundreds of thousands of readers responded, and Boyd quickly began milking his growing membership for political contributions. His Web site raised millions for Democrat candidates in three national elections – two mid-terms and one presidential race. When they met in New York, Soros offered Boyd a deal. He and his associate Peter Lewis would donate $1 to MoveOn.org for every $2 Boyd could raise from his members, up to $5 million total from Soros and Lewis combined. Boyd accepted.[19]


By November 2003, the Shadow Party was ready to go public. As Cummings notes in the Wall Street Journal, Soros calculated that the best way to launch his network would be to issue a public statement, calling attention to the record-breaking contributions he had pledged to the Shadow Party. Such an announcement would “stimulate other giving” from Democrat donors still sitting on the fence, Soros thought.[20]


He chose The Washington Post to carry his message. Soros sat down with reporter Laura Blumenfeld and issued his now-famous call for regime change in the USA. “America under Bush is a danger to the world,” Soros declared in that November 11, 2003 interview. Toppling Bush, he said, “is the central focus of my life… a matter of life and death. And I’m willing to put my money where my mouth is.” Would Soros spend his entire $7-billion fortune to defeat Bush, Blumenfeld asked? “If someone guaranteed it,” Soros replied.

NOTES:
[1] “Text of Zell Miller’s Speech at RNC,” The Associated Press, 1 September 2004

[2] “Carter to Miller: `You Have Betrayed Our Trust,’” Cox News Service, 7 September 2004

[3] “The Life of Ronald Wilson Reagan: 1911-2004,” The Washington Times, 7 June 2004, A12

[4] Thomas B. Edsall, “Campaign Money Finds New Conduits As Law Takes Effect: Shadow Organizations to Raise `Soft Money,’” The Washington Post, 5 November 2002, A02

[5] Lorraine Woellert, “The Evolution of Campaign Finance?” Business Week, 15 September 2003, 62

[6] George Soros, The Crisis of Global Capitalism (New York: PublicAffairs, 1998), 102

[7] Andrew Ferguson, “The Arianna Sideshow,” Time Magazine, 31 July 2000, 22

[8] Barry Massey, “Ads in New Mexico Paid For By `Stealth PACS,’” Associated Press, 4 November 2000

[9] Aimee Welch, “When Voters Are the Legislators,” Insight on the News, 11 December 2000, 22

[10] Jeanne Cummings, “Soros Has a Hunch Bush Can Be Beat,” The Wall Street Journal, 5 February 2004

[11] Daniel Ellsberg, Secrets: A Memoir of Vietnam and the Pentagon Papers (New York: Viking, 2002)

[12] Ellsberg, Secrets, 2002; Seymour M. Hersh, “Kissinger and Nixon in the White House,” The Atlantic, May 1982

[13] Morton H. Halperin and Jeanne M. Woods, “Ending the Cold War at Home,” Foreign Policy, Winter 1990–1991, 136.

[14] Morton H. Halperin, Jerry Berman, Robert Borosage and Christine Marwick, The Lawless State: The Crimes of the U.S. Intelligence Agencies (Washington, DC: Center for National Security Studies, 1976), 5

[15] Morton Halperin, “The Case Against Covert Action,” The Nation, 21 March 1987, 345

[16] Andrea Pringle, “George Soros Opens Washington Office: Wants Open Society Institute to Have Added Impact on Policy” (press release), Open Society Institute, Washington DC, 10 June 2002

[17] Jeanne Cummings, “Soros Has a Hunch Bush Can Be Beat,” The Wall Street Journal, 5 February 2004

[18] Laura Blumenfeld, “Soros’s Deep Pockets vs. Bush,” Washington Post, 11 November 2003, A03

[19] Blumenfeld, “Soros’s Deep Pockets vs. Bush”; Michelle Goldberg, “MoveOn Moves Up,” Salon.com, December 1, 2003

[20] Cummings, The Wall Street Journal, 5 February 2004