Acronym/Code: AEI

Updated: 2/91

Principals:

Senior AEI staff include Robert Bork, Lynne Cheney, Charles Murray, Michael Novak, and approximately 30 other conservative public intellectuals and activists, many of whom are closely intertwined with the institutional apparatus of the right. William Baroody, Jr., AEI's president between 1978 and 1986, was explicit about AEI's intention to mobilize public and elite opinion and to shape major national policy issues, acknowledging that policy relevance depends to a great extent on effective techniques to relate ideology to constituency.

In 1995, Demuth indicated in an interview with Insightmagazine that the November 1994 elections moved national budget issues and regulatory reform higher on AEI's agenda, which has at any rate always had an emphasis on such domestic economic issues as the deregulation of business and the privatization of government services.

DeMuth has understood the importance of cultivating relationships and building influence through the marketing of policy ideas and products. In the Institute's 1994 Annual Report, DeMuth stated, "We are delighted to be members in good standing of the Washington Establishment, called upon many times each day for Congressional testimony, media commentary, and advice on all manner of current policy issues." One year later, Demuth outlined how AEI scholars were actively seeking to translate the "broad, variegated animus against government into specific policies." With a more secure funding base in the 1990s, AEI staff have actively sought to influence economic, regulatory, welfare, health, and other social policies, appearing on national media several times a day throughout the 1995-1996 period and organizing a variety of policy conferences and seminars, including five on Medicare reform, two focused on welfare policy ("Supplanting the Welfare State," and "Addressing Illegitimacy: Welfare Reform Options for Congress"), and others on tax reform, telecommunications deregulation and tort reform.

AEI staff and affiliated scholars also produced over 6OO articles and studies in 1995 and 1996, with titles like Fairness and Efficiency in the Flat Tax, The Frayed Social Contract- Why Social Security Is in Trouble and How It Can be Fixed, and Slouching Toward Gomorrah: Lberalism and American Decline. In 1995, it also published Dinesh D'Souza's racist tract, The End of Racism, the publication of which prompted the resignation of another AEI fellow, Robert Woodson, President of the National Center for Neighborhood Enterprise and himself an advisor to Newt Gingtich on neighborhood solutions to persistent poverty and other social problems.

In 1989 the members of the board of trustees included: chairman, Willard C. Butcher of Chase Manhattan Bank; vice-chairman, Paul F. Oreffice of Dow Chemical Corp; Robert Anderson, Rockwell International Corp; Griffin B. Bell, King & Spalding; treasurer, Winton M. Blount of Blount, Inc. ; Edwin L. Cox, Cox Oil and Gas; Christopher C. DeMuth; Charles T. Fisher III, National Bank of Detroit; Tully M. Friedman, Hellman & Friedman; Christopher B. Galvin, Motorola, Inc. ; Robert F. Greenhill, Morgan Stanley & Co; D. Gale Johnson, AEI Council of Academic Advisers; Richard B. Madden, Potlatch Corp; Robert H. Halott, FMC Corp; Paul W. McCracken, Edmund Ezra Day University; Randall Meyer, Exxon Co; Paul A. Miller, Pacific Enterprises; Richard M. Morrow, Amoco Corp; Paul H. O'Neill, Aluminum Co. of America; David Packard, Hewlett-Packard Co; Edmund T. Pratt, Jr, Pfizer Co; Mark Sheperd, Jr, Texas Instruments Inc; Roger B. Smith, General Motors Corp; Richard D. Wood, Eli Lilly and Co; Walter B. Wriston, former chairman of Citicorp.

Officers in 1989 were: Christopher C. DeMuth, president; David B. Gerson, executive vice president; Patrick Ford, vice president for public affairs. The council of academic advisers were: D. Gale Johnson, chairman; Gary S. Becker; Donald C. Hellmann; Gertrude Himmelfarb; Nelson W. Polsby; Herbert Stein; Murray L. Weidenbaum; and James Q. Wilson. (7) Paul McCracken was president in 1986. (4) William Baroody, Jr. was president in 1985. (3) Michael Novak was director of social & political studies in 1985. (5) Among the scholars and fellows at AEI in 1988 to 1989 were Jeane Kirkpatrick, Alan Keyes, Nobel Laureate James Buchanan, International Trade Commission Chair Anne Brunsdale, White House Counsel C. Boyden Gray, Constantine C. Menges, Joshua Muravchik, Michael Novak, Richard N. Perle, Herbert Stein, Ben J. Wattenberg, and Irving Kristol. (7) Other government notables from the Nixon, Ford, and Bush administrations that worked at AEI include: William E. Simon, Carla and Roderick Hills, L. William Seidman, and former President Gerald Ford. (1)

Categories:

Political, Education

Background:

American Enterprise Institute (AEI) is a 501(c)((3) tax-exempt organization founded in 1943 by Lewis H. Brown, then chairman of the board of Johns-Manville Corp. Its original purpose was to be a spokesperson for big business andto promote through publications and seminars the ideas and theories of free enterprise, including maintenance of a free economic order, resolute national defense, and "tradition-proven" cultural & political values. (5,8) While not as far to the right as some of the more recently established think tanks, AEI is staunchly anticommunist and promilitary. It has housed a number of "cold warriors" among its ranks, and through conferences, the media, and publications has supported "freedom fighters" such as Jonas Savimbi. (7,9)

In the 1960s the organization, determined to gain more corporate funding and expand its influence, applied for taxexempt status, which it received in the mid-1960s after a twoyear examination by the IRS. At the same time it became more overtly political in its goals. In its new guise, a main focus of AEI is to influence national policy and to place its scholars into influential positions in government. In the mid-1970s AEI joined with other conservative think tanks--backed by greatly expanded corporate funding--in a concerted effort to influence public policy in ways favorable to private enterprise. These groups churned out "books, books, and more books" attacking liberal "myths" and proposing specific conservative policy suggestions.

(43) Through effective public relations and sophisticated media campaigns, AEI has attacked "uncontrolled government spending, excessive regulation, and the evils of bureaucracy. "(8,9)

Under the leadership of the late William Baroody, Sr. , AEI, paralleling the growth of the conservative Republican movement in the U. S. , grew in the mid-1970s from a group of twelve resident "thinkers" to a sophisticated, well-funded organization with 145 resident scholars, 80 adjunct scholars, and a large supporting staff. In 1984 author John Saloma wrote that "[AEI] has developed perhaps the most effective public-relations campaign for disseminating political ideas that has ever been mounted. "(8,9) Major factors contributing to AEI's phenomenal growth were the establishment of political action committees and a shift in focus by conservative foundations to influencing the direction of politics. (8) William Baroody, Sr. was succeeded in the AEI presidency by his son William Baroody, Jr. In 1986 William Baroody, Jr. resigned and was replaced by Paul W. McCracken, who had been the chairman of AEI's Council of Academic Advisers for more than two decades. (23) Current president Christopher DeMuth took over from McCracken in late 1987. (24)

AEI began publishing its own periodicals in 1977. Among its periodicals are Public Opinion, an anti-regulation journal called Regulation, AEI, Foreign Policy and Defense Review, and The AEI Economist. Every year AEI publishes numerous books and reports generated by its scholars and fellows. (37) AEI makes these publications available to AEI-sponsored Public Policy Research Centers in more than 200 U. S. colleges and universities. (9,43)

Not only has AEI been influential in its own right, but it has fostered other think tanks and independent publications. The Center for Strategic and International Studies (CSIS), a rightwing think tank once connected to Georgetown University, is a spinoff from AEI as is the Center for the Study of American Business at Washington University in St. Louis.

(9) This World, a publication of the Institute for Educational Affairs (a group started by William E. Simon and Irving Kristol of AEI) is another spinoff that aims to combine AEI's conservative positions with moral and religious ones. (9)

At the time Ronald Reagan came into the presidential office in 1980, AEI had five centers of study: Center for the Study of Government Regulation; Economic Policy; Political and Social Processes; Legal Policy; and Religion, Philosophy, and Public Policy.

It was well prepared to support the administration's conservative economic policies. (9) Currently AEI research focuses on three broad areas: economic policy (domestic and international) led by Marvin Kosters; foreign and defense policy led by Jeane Kirkpatrick; and social and political studies led by conservative columnist and religious activist Michael Novak. (7)

AEI headquarters are on Pennsylvania Avenue half way between the White House and the "Hill.

"(8)

Countries:

U. S.

Funding:

AEI's budget in 1975 was $4 million; in 1985 it was $12 million with 51 percent coming from corporate donations. (8) AEI's income in 1987 was $9 million and in 1988 was $10 million. (7)

AEI has received major contributions from a battery of very conservative foundations, including the Smith-Richardson Foundation, the Olin Foundation,

the Scaife Foundation, and the J. Howard Pew Freedom Trust. (11,35,36) In 1985 Olin, headed by former AEI associate William E. Simon, gave AEI a total of $197,499. In the same year AT&T gave AEI $40,000; Metropolitan Life $30,000; Morgan Guaranty Trust Co Of New York Charitable Trust gave $35,000; Smith-Richardson Foundation $64,000; Proctor and Gamble Fund $125,000; TRW Foundation gave $15,000; U. S. Steel Foundation donated $40,000; and Shell Companies Foundation gave $85,000. (11)

Major foundation support for AEI in 1985 came from: the General Electric Foundation--$40,000; Amoco Foundation-$285,000; Ford Motor Company Foundation--$100,000; American Express Foundation--$25,000; AT&T Foundation $40,000; Eastman Kodak Charitable Trust--$75,000; the Henry Luce Foundation-$75,000 John M. Olin Foundation--$297,000; Texaco--$50,000; Smith-Richardson Foundation--$290,000; The Procter & Gamble Fund $125,000; the J. Howard Pew Freedom Trust--$875,000; and the Shell Companies Foundation--$85,000. Other smaller funders included BankAmerica Foundation, Gates Foundation, Metropolitan Life Foundation, and PPG Industries. (35)

Major funders in 1986 included: the General Electric Foundation--$80,000; Amoco--$450,000; Kraft Foundation-$147,000; Ford Motor Company Fund--$100,000; General Motors Foundation-- $200,000; Charles E. Culpepper Foundation--$50,000; Eastman Kodak Foundation--$50,000; the J. M. Foundation--$50,000; the Henry Luce Foundation--$66,000; Metropolitan Life Foundation--$115,000; theProctor & Gamble Fund--$135,000; the J. Howard Pew Freedom Trust--$800,000; Rockwell International Corporate Trust--$160,000; and Shell Companies Foundation-$85,000. Among the smaller funders were: Gates Foundation, Santa Fe Southern Pacific Corporation, Chrysler Corporation, Charles Stewart Mott Foundation, General Mills Foundation, Pillsbury Company Foundation, Prudential Foundation, American Express Foundation, AT&T Foundation, Corning Glass Works Foundation, Morgan Guarantee Trust, Smith-Richardson Foundation, Alcoa Foundation, and PPG Industries. (36)

The Lynde and Harry Bradley Foundation, Milwaukee, WI, gave $1 million grant for a two year foreign policy study in March, 1987. (5)

AEI, unlike some think tanks, has no endowment-something which has led the organization into financial embarrassment in 1985 when its operating budget outstripped its donations by 25 percent. (10).

AEI has received financial assistance from the U. S. International Development Cooperation Agency of the Agency for International Development (AID). In 1982 it received $33,000 to support a conference on constitutionalism and democracy; in 1983 it received $59,140 for a similar conference; in 1984 support for the conference rose to $74,269; and in 1985 AEI received $74,269 for the conference and a similar amount for public policy research. (19,20,21,22)

Activities:

AEI's main business is to promote the advancement of free enterprise capitalism and to place its people in influential governmental positions. Its activities center around self-promotion and promotion of the ideas it wants to see implemented. AEI sends a steady flow of editorials to more than 100 newspapers across the country. AEI held televised Public Policy Forums, aired on more than 600 television and radio stations in 1982, in which it advocated conservative positions on a wide variety of subjects. Its fellows and scholars regularly appear on national television as "experts". (9,33)

Each summer AEI holds a World Forum for chief executives of corporations where attendees are expected to make financial contributions to the think tank. The forum is hosted by formerpresident Gerald Ford at Aspen, Colorado. (8)

Annually AEI gives the Francis Boyer Award, sponsored by the Smith-Kline Beckman Corporation. Past award winners include: Gerald Ford, Arthur Burns, Henry Kissinger, Jeane Kirkpatrick, Robert Bork, and in 1988, then-President Ronald Reagan. (6,7)

In 1980 AEI used grants from Reader's Digest Foundation and the DeWitt Wallace Fund to establish the DeWitt Wallace Chair in Communications in a Free Society. (4)

In 1983 AEI sponsored a forum on "War Powers and the Constitution," prompted by two questionable military actions authorized by President Reagan--the invasion of Grenada and the dispatch of Marines to Lebanon. Among the panel members was then-Representative Richard Cheney, the current Secretary of Defense and National Security Adviser Brent Scowcroft. Both men were opposed to the War Powers Resolution with Cheney stating that the resolution "is an unwise and virtually unworkable intrusion by the legislative branch into the powers and prerogatives the president needs to lead the United States in a very dangerous and hostile world. "(49)

AEI along with other conservative groups such as the Council for Inter-American Security and Citizens for America, has been credited with a leading role in developing and implementing the Reagan administration's Nicaraguan contra policies. Jeane Kirkpatrick, Undersecretary of Defense for Public Policy Fred Ikle, Vice President George Bush, and Roger Fontaine--major players in contra policy--are all former AEI scholars and associates.

(2) AEI, with corporate directors from American Cynamid, Dow Chemical, and Chase Manhatten Bank--all corporations with profitable operations in South Africa-supported the pro-apartheid government of South Africa. (18)

In 1988 AEI published 42 books and over 400 articles and research papers on a wide variety of policy issues. AEI scholars and their work appeared far more frequently on national media than those of other research institutes. AEI held seminars and conferences weekly on key issues confronting our society such as employment and income, agriculture, international trade and finance, regulation, foreign and defense policy, exporting democracy and resisting communism.

AEI reports that its meetings were well attended by policymakers and congressional staffers. (7)

AEI opposed the INF (intermediate-range nuclear forces) treaty that was signed by the U. S. in 1988. A special AEI working group supported the criticisms of former Assistant Secretary of Defense Richard Perle, an AEI resident fellow. (7,25)

Government Connections:

AEI is extremely well-connected on the political scene. Among those in the top echelons of government who worked with AEI in 1988 were: then-Vice President George Bush who spoke at AEI's Annual Policy Conference; Israeli Prime Minister Yitzak Shamir who spoke at an AEI conference; and Jeane Kirkpatrick, Robert Bork, and Norman Ornstein who wrote books for AEI.

(7) William Baroody Sr. took a leave of absence from AEI in the early 1960s to organize Goldwater's presidential campaign. AEI took the lead in making "Goldwater conservatism" respectable. (9)

Christopher DeMuth was known as the "deregulation czar" in his position as administrator of the Office of Information and Regulatory Affairs during the first term of the Reagan administration. DeMuth also worked as associate director of the Office of Management and Budget. (8,24) Prior to that DeMuth served as a staff assistant to President Richard M. Nixon.

(24) James Miller III went from AEI to the Reagan administration as Federal Trade Commission chairman and than administrator of the Office of Management and Budget. (8)

William Simon was Secretary of the Treasury during the Nixon administration. (30)

Michael Novak campaigned for the creation of a White House Office of Ethnic Affairs; he served as its adviser during the administrations of presidents Gerald Ford and Jimmy Carter. He was appointed by President Reagan to act as chief of the U. S. delegation to the United Nations Human Rights Commission in Geneva. (32)

David Packard was Under Secretary of Defense under Melvin R. Laird during the Nixon administration. (9)

Carla Hills is the U. S. Trade Representative under President Bush. She was Secretary of Housing and Urban Development from 1975 to 1977 during the Ford administration. She also served as Assistant U. S. Attorney in Los Angeles from 1958 to 1961 and Assistant Attorney General for the Civil Division of the Justice Department in 1974 until she took over at HUD. (44).

Roderick Hills, husband of Carla, served as counsel to President Gerald Ford in 1975. He was chairman of the Securities and Exchange Commission (SEC) from 1975 to 1977. Hills is chairman of the U. S. ASEAN Technical Center. (44)

Constantine Menges was a CIA and National Security Council (NSC) official under the Reagan administration. While serving with the NSC, Menges, along with Lt. Col. Oliver North, attended the meetings of the Tuesday Group of the rightwing, anticommunist nongovernmental organization, the American Security Council. (13) Menges, according to authors Sara Diamond and Richard Hatch, claims to be the intellectual author of the Grenada invasion plan. (12)

Alan Keyes was an aide to Jeane Kirkpatrick at the United Nations. He served as former President Reagan's Special Assistant for National Security Affairs during which time he reportedly worked on covert funding for the Nicaraguan contras.

(17) Keyes was the Assistant Secretary of State for International Organization Affairs from 1985 to 1987. (45)

Jeane Kirkpatrick was ambassador to the United Nations in the Reagan administration. (28)

Paul McCracken was chairman of the President Richard Nixon's Council of Economic Advisers from 1969 to 1971. He served on the Council from 1956 to 1959 under President Dwight D. Eisenhower. (23)

Private Connections:

AEI worked closely with the Business Roundtable, a militant, lobbying organization formed in 1974. Members of the Business Roundtable were the chief executive officers (CEOs) from 190 major corporations, including General Motors, General Electric, IBM, AT&T, and Dupont. The business of the Business Roundtable is or was business and the CEOs involved lobbied directly with the administration and members of Congress. According to journalist Sidney Blumenthal, making contributions to AEI was a pitch made at almost every policy committee meeting of the Roundtable. (9)

Jeane Kirkpatrick was a prominent member of the Coalition for a Democratic Majority (CDM) and the Committee on the Present Danger (CPD). CDM is an anticommunist group that was formed by the conservative wing of the Democratic Party in 1972 to promote a strong military. Many of its members went on to join the hawkish CPD. (26) Kirkpatrick was also connected with PRODEMCA (Friends of the Democratic Center in Central America). (27) PRODEMCA used funds from Oliver North's illegal contra support network for media campaigns in favor of aid to the Nicaraguan contras. (40) Kirkpatrick has been on the "faculty" at the Center for Strategic and International Studies (CSIS), a rightwing think tank sometimes called "a parking lot for former government big shots. "(27) She also served on the board of Lewis Lehrman's conservative citizens lobbying group Citizens for America and on the stridently anticommunist Committee for the Free World. (16,29) She was the vice president of the short-lived Nicaraguan Freedom Fund, a group funded by the Unification church owned Washington Times which was supposed to funnel aid to the Nicaraguan contras. (30,31)

William Simon was chairman of the Nicaraguan Freedom Fund. He is or was on the board of AmeriCares and is a longtime member of the Knights of Malta, both of which were a part of the Nicaraguan contra supply network. (30,38,39) Simon served on the national council of PRODEMCA (Friends of the Democratic Center in Central America). He is or was an international business counselor at CSIS where "The William E. Simon Chair in Political Economy" is awarded annually to scholars of the free enterprise system. (27,41) Simon is or was a trustee at the Heritage Foundation and has been connected with Accuracy in Media, the media watchdog group for the Right. (42) Simon is or was on the secretive Council for National Policy, a group that considered itself the policy development body for the right. (14)

Michael Novak has affiliations with the n CPD and was a cofounder with Penn Kemble of the Institute for Foreign Policy Analysis. He has been a Hudson Institute fellow and on the advisory committee of the neoconservative journal The National Interest. (8)

Novak is on the board of the Institute on Religion and Democracy (IRD), a neoconservative religious activist group working to undermine progressive movements within the religious community. Fellow conservatives from AEI Richard John Neuhaus and Peter Berger are also on the IRD board. (15)

Novak was on the board of directors of the Nicaraguan Freedom Fund. (30)

Irving Kristol was a co-founder of CDM. (26) He is the publisher of the National Interest magazine and co-editor of the Public Interest magazine. Kristol was managing editor of Commentary and former executive vice president of Basic Books. He is a frequent columnist for the Wall Street Journal. (28) Kristol is credited with being the one who convinced big business that it would be to its benefit to fund conservative think tanks. (8)

Ben Wattenberg was a co-founder and is chairman of CDM. (26,34) He is a major producer of publications in support of neoconservative policies. He is portrayed on public affairs shows as a "Democrat," theoretically providing a liberal viewpoint. Wattenberg, a staunch neoconservative, was an outspoken supporter of the policies of the Reagan and Bush administrations. (33,34)

David Packard gave a substantial start-up grant to the promilitary Committee on the Present Danger. He has also been a leading fundraiser for AEI, the Hoover Institution on War and Peace and the Center for Strategic and International Studies. (9)

Carla Hills is on the board of directors of IBM, Corning Glass Works, American Airlines, the Federal National Mortgage Association (Fannie Mae), the Henley Group, and Chevron Corporation. She was a member of the Trilateral Association from 1977 to 1982. (44)

Constantine Menges received a $33,000 grant from the United States Institute of Peace, a quasi-private, government-funded think tank that purports to work for peaceful solutions to world conflicts. (12)

Alan Keyes is a member of the South Africa Lobby in the United States, a group supporting the pro-apartheid administration in South Africa. He left government service to join the public relations firm of Black, Manafort, Stone, and Kelly to assist in preparing for Angolan rebel leader Jonas Savimbi's tour of Washington DC. (17) Keyes served on the World Freedom Foundation's Bi-Partisan Commission on Free and Fair Elections in Nicaragua. The World Freedom Foundation (WFF) is a stridently anticommunist group and its representatives were denied visas to enter Nicaragua to observe the 1990 elections because of their strong pro-contra bias. (46) Keyes is or was chairman of the rightwing citizens' lobbying group Citizens for America, a group which worked to support the Reagan agenda. Keyes is or was head of the Council for Citizens Against Government Waste, a group promoting implementation of the recommendations of the Grace Commission. (48) He has frequently been sought as a speaker by rightwing groups to defend the South African apartheid government. (47)

AEI received an $18,000 grant from the U. S. Institute of Peace for an analysis of arms control in Western diplomacy. (50)

Misc:

President Ronald Reagan said of AEI in 1988: "The American Enterprise Institute stands at the center of a revolution in ideas of which I, too, have been a part.

AEI's remarkably distinguished body of work is testimony to the triumph of the think tank. For today the most important American scholarship comes out of our think tanks--and none has been more influential than the American Enterprise Institute. "

Comments: U. S. Address: 1150 17th Street NW, Washington, DC 20036. Sources: 1. Leonard Silk & Mark Silk, The American Establishment (New York: Basic Books, Inc. , 1980). 2. "All the President's Men," Washington Report on the Hemisphere, Dec 10, 1986. 3. Margaret Shapiro, "Republican Think Tank Faces Funding Problem," Washington Post, Dec 28, 1985. 4. AEI Memorandum, No. 51 Fall, 1986. 5. AEI Memorandum, No. 53, Spring, 1987. 6. AEI Memorandum, Special Issue, No. 50, 1986. 7. American Enterprise Institute, annual report, 1989. 8. Gregg Easterbrook, "Ideas Move Nations," The Atlantic Monthly, Jan 1986. 9. John Saloma III, Ominous Politics (New York, NY: Hill and Wang, 1984). 10. "A Think Tank at the Brink," Newsweek, July 7, 1986. 11. Foundation Grants Index, 15th edition, 1986. 12. Sara Diamond and Richard Hatch, "Operation Peace Institute," Z Magazine, July/Aug 1990. 13. Russ Bellant, Old Nazis, the New Right, and the Reagan Administration (Boston, MA: Political Research Associates, 1989. 14. Mailing list, Council for National Policy, 1984. 15. Sara Diamond, Spiritual Warfare (Boston, MA: South End Press, 1989. 16. Citizens for America, 990 tax return, 1988. 17. "Some Notes on the World Freedom Foundation," Institute for Media Analysis, 1989. 18. Prexy Nesbitt, Apartheid in Our Living Rooms: U. S. Foreign Policy and South Africa (Chicago, IL: Midwest Research, 1987). 19. Current Technical Service Contracts and Grants, AID, Oct 1, 1981 through Sep 20, 1982. 20. Current Technical Service Contracts and Grants, AID, Oct 1, 1982 through Sep 20, 1983. 21. Current Technical Service Contracts and Grants, AID, Oct 1, 1983 through Sep 30, 1984. 22. Current Technical Service Contracts and Grants, AID, Oct 1, 1984 through Sep 30, 1985. 23. AEI, "McCracken Named AEI President," Memorandum, No. 50, 1986.

-- Cherri (jessam6@home.com), September 30, 2001

Answers

Thank you for documenting this Cherri. It is re-assurring to know that our leaders have access to high-quality intellect. Keep up the good work. You might want to do the Heritage Foundation next.

-- Lars (lars@indy.net), September 30, 2001.