AEI: Caught Between Its Likudist Heart and Its Corporate Head by Jim Lobe

AEI: Caught Between Its Likudist Heart and Its Corporate Head

Today’s quotation in the Financial Times attributed to Danielle Pletka, the Vice President for Foreign and Defense Policy Studies of the American Enterprise Institute (AEI), was a stunner. “If we …begin to sanction foreign companies through more stringent sanctions in the Iran Sanctions Act, I think there will be serious repercussions for our multilateral effort.”

Whatever would possess AEI and Pletka, who personally has been one of the most prominent and enthusiastic cheerleaders of the rapidly spreading state divestment movement against companies doing business in Iran, to offer a cautionary note about adopting unilateral sanctions, let alone stress the importance of preserving multilateral unity with limp-wristed European allies in dealing with a charter member of the “Axis of Evil”? Judging from its provenance at what must be considered Neo-Con Central, it certainly couldn’t be common sense.

In fact, Pletka’s observation probably reflects growing tensions between AEI’s corporate contributors, many of whom are represented on its board of trustees, on the one hand, and, on the other, the hard-line neo-conservative views of its foreign-policy fellows, such as Richard Perle, Michael Ledeen, Michael Rubin, Joshua Muravchik, and Pletka herself; academic advisers, such as Gertrude Himmelfarb, Eliot Cohen, and Jeremy Rabkin; and its board chairman, Bruce Kovner.

As AEI jumped on the divestment bandwagon initiated by Perle protégé Frank Gaffney’s Center for Security Policy (CSP) earlier this spring with its publication of a list of evil-enabling companies, some of its corporate contributors with interests in some of those same companies — or in countries where those companies are based — objected. After all, multinational corporations, such as ExxonMobil, Motorola, American Express, State Farm Insurance, Dow Chemical, Merck & Co., Dell Inc. – all of which are represented in various ways on AEI’s board of trustees – not to mention General Electic, Amoco, Kraft, Ford Motor, General Motors, Eastman Kodak, Metropolitan Life, Proctor & Gamble, Shell, General Mills, Pillsbury, Prudential, Corning Glass Works, Morgan Guarantee, and Alcoa – all of whose foundations have reportedly contributed significant amounts of money to AEI – generally oppose economic sanctions that interfere with their investment and commerce, especially if they are unilateral and especially if they result in many jurisdictions (i.e. states) enacting different sanctions with which companies must comply.

“I know for a fact that some companies who are AEI contributors have complained to the president of AEI [Christopher DeMuth] about AEI’s involvement in this,” said William Reinsch, the president of the National Foreign Trade Council (NFTC), an association of some 550 of the biggest U.S. companies that, among other things, opposes unilateral economic sanctions. “There has been a significant level of upset by a number of [them].” In some cases, he added, companies complained about their inclusion on the list posted by AEI, while “others believe that it’s not an appropriate activity for AEI to be engaged in.”

Indeed, it is very strange that a think tank purportedly devoted to “limited government,” “private enterprise,” free markets and other neo-liberal ideals and funded in major part by the foundations of multinational corporations is actively leading a campaign to impose unilateral sanctions (and divestment) against multinational corporations like themselves and, in some cases, their own subsidiaries. After all, the history of such sanctions – against the Soviet Union, Cuba, and Iran itself, for example — shows that they often result in both resentment and retaliation – not just by the target country (Iran in this case), but also by friendly governments whose own companies stand to be negatively affected. That, in fact, was the point of the FT article whose lead sentence ran: “European governments are warning Congress that US legislation aimed at Iran could hit European energy groups, undermine transatlantic unity on Tehran’s nuclear programme and provoke a dispute at the World Trade Organisation.”

(Even the Bush administration, whose incumbency was due largely to the financial contributions of corporate givers, has opposed pending divestment and related sanctions legislation. “The Administration fears legislation such as H.R. 2347 would have the effect of dividing and splintering the coalition of allies and friends, which would be harmful to our common goal. Thus, passage of such legislation could result in a net loss, alienating friends, and having little to no prospect of modifying Iranian behavior.” The letter, delivered August 1, had virtually not impact, as the legislation in question, the Iran Sanctions Enabling Act, was approved by the House, 408-6.)

While Pletka’s statement shows that she clearly understands the argument, however, there is no sign yet that AEI is reassessing its championship of sanctions and divestment. Despite her caution, the conference at which she voiced it was described by one corporate attendee as a “pep rally” for the divestment campaign. The question then is what will the corporate funders of AEI – which clearly like its free-market orientation but abhor divestment and sanctions – do? Will they back up their complaints by pulling their support? Or do they believe that the costs of its neo-conservative foreign-policy agenda are outweighed by the benefits of its effectiveness in promoting its neo-liberal economic agenda?

Not that corporate money is the only funding that keeps AEI afloat. Far-right foundations, which lined up behind the neo-cons in the late 1980s, leaving the paleo-cons penniless, have provided a lot of support. Scaife-related foundations have given the think tank more than two million dollars since 2002; while the Lynde and Harry Bradley Foundation has given well over three million dollars since 2003; and the Smith-Richardson Foundation almost as much. And the neo-conservatives themselves aren’t without means, either. The Kovner Foundation, presumably the AEI chairman’s main philanthropy, gave nearly 4.2 million dollars to AEI in 2002, more than 3.7 million dollars in 2003, approximately 2.3 million dollars in 2004, and 1.3 million dollars in 2005, according to tax filings reviewed by IPS. Even multi-national corporations may find it hard to keep pace.

Still, the question remains: why do corporations provide funding to highly political think tanks that aren’t more responsive to their interests?

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