Susan Crawford: Melanie Sloane founded Citizens for Responsible Ethics in Washington. She's a very experienced prosecutor with a lot of Hill experience as well, and really one of our leading experts in this area in congressional ethics. So Melanie can you bring us home with a case study?
Melanie Sloan: So I want tell you about Richard Berman. Richard Berman is a public relations executive in Washington DC. And his particular gimmick is that he runs at least twenty‐five different organizations of which he is the Executive Director, and most of these groups are nonprofit organizations. They’re 501(c)(3) organizations, and that’s particularly important because that means donors to 501(c)(3) organizations can remain anonymous.
As Executive Director of each of these organizations what Mr. Berman does is he contracts with his own public relations firm, Berman and Company. And all of the staff of Berman and Company then serve as the staff of these different organizations, and they will often have very different titles in all of these different organizations but it’s the same group of about four people.
All of his activities are funded by corporate interests and they make huge donations that are never revealed to the public. He also goes across all media platforms. He uses advertisements in newspapers, including full‐page ads. He has run billboards. He uses Facebook. He has web sites. And he runs commercials on television.
Back in the 1990s I think his first organization was the one you see up here now. It’s called the Center for Consumer Freedom. First it was known as the Guest Choice Network. And it received a $600,000 donation from Philip Morris so that he could portray smoking in restaurants before there was the smoking ban as a choice, because he was positing to Philip Morris that Americans prefer to have choices and if you posit this as a choice you will make a better argument.
Center for Consumer Freedom also received a lot of money from say the beef industry to go after the People for Ethical Treatment of Animals and go after its tax status. And PETA was eventually subject to an investigation by Senator Charles Grassley, then on on the Senate Finance Committee.
In 2004 CREW filed a complaint with the Internal Revenue Service— My organization, CREW, filed this complaint against Berman arguing that the Center for Consumer Freedom was violating its tax status as a charitable organization. First it wasn’t really engaged in charitable activities, it was actually just engaged in paid activities. And secondly, Mr. Berman was engaged in something called “private inurement,” which means that he was on both sides of the transaction by being the Executive Director of these organizations then contracting with his own organization and he was paying himself a fortune to do this.
Apparently we lost. You never hear anything from the IRS, but Berman only expanded his activities after this. For example he then created another organization. Sweet Scam is another. One of the major things that Mr. Berman does is work in the food and beverage world. And Sweet Scam talks about the myth of childhood obesity and the dangers of corn syrup are overrated. Similarly, he has Fish Scam, which argues that mercury in fish isn’t really a problem after all.
And he has another organization called Interlock Facts, and if any of you actually read your USA Today this morning, there was a story about interlocks. And in it was quoted the American Beverage Institute, and a woman named Sarah Longwell the Managing Director of the American Beverage Institute. But really what she is is a paid employee of Berman and Company. So here it was, an article in USA Today about interlocks and it was really being paid for by the people who are opposed to interlocks.
Berman also has his own weekly column on the conservative website The Daily Caller. The bio posted there describes him as a long‐time consumer advocate who “champions individual responsibility and common sense policy.”
One of the most devious campaigns I think he’s been involved with is HumaneWatch, which targets the Humane Society, claiming that money donated to the group doesn’t really go to local shelters at all. He ran these billboards against the Humane Society in Times Square in January of 2011, and he ran other similar ads later in the year. And in fact just last week during the Academy Awards, he ran an advertisement that reached an estimated 39 million viewers. He’s also using Facebook, and HumaneWatch’s Facebook page has 389,000 fans, probably people who are animal lovers who believe that they are actually supporting more likely the Humane Society.
So what Berman does is he claims this group CharityWatch, which is also known as the American Institute of Philanthropy, gives the Humane Society a D rating. On the other hand, the nation’s leading charity evaluator, Charity Navigator, gives the Humane Society 4 out of 4 stars, and the Better Business Bureau says it complies all of their requirements for charitable accountability. So, many of the animal lovers who are targeted by all of this are being misled, and likely this is being paid for by the meat industry, which suffered a huge black eye when the Humane Society used secretly‐made video tapes to expose the abuse of cattle.
Aside from food and beverage issues, Berman has probably spent the most time on union issues. He runs something called the Center for Union Facts, and I want to run this ad he ran actually during the Super Bowl for you.
So, Berman was the guy in the gold watch. Most guys probably working in the mechanics shop aren’t wearing gold watches but Berman was wearing a gold watch where he said, “Not me.” But think about how much money he must’ve had. This ran during the Super Bowl. And it reached potentially over 111 million viewers. The ad has also been viewed 250,000 times on YouTube.
In addition to television ads—and he’s run these kind of ads for a long time on CNN, MSNBC, and Fox—the Center for Union Facts has run full‐page ads comparing union leaders to Hugo Chavez, King Jamil, and Fidel Castro, and he’s run these in The New York Times, The Wall Street Journal, USA Today, and The Washington Post, and these are full‐page ads which costs over $100,000 a shot.
He’s also managed to trick a lot of journalists into writing stories with his viewpoint on these union‐related issues. For example in May of 2009, a Harper’s Magazine article went through and analyzed a piece that appeared in the Orlando Sentinel which was called the “Growing Numbers of Dems Opposing EFCA,” which is the Employee Free Choice Act. This cited a political consultant named Joe Kefauver and another leading political official, both long‐time Democrats who supported Obama—according to the story—as being real opponents of EFCA. And Kefauver also said that being supportive of organized labor shouldn’t be a litmus test for being a good Democrat. And then the article ran on the Center for Union Facts web site.
But the truth was Kefauver was a Director of the Center for Consumer Freedom, and was the paid Director of Development for Berman’s Employment Policies Institute, which is a group that says the minimum wage hurts employment. (That’s also a Berman group.) And Berman and Company also paid Kefauver’s firm for consulting. Further, this guy in early 2007 had been paid by Walmart, and Walmart was a major funder of the Center for Union Facts.
By CREW’s count, Berman now has at least twenty‐five of these groups—here’s a bunch of them—and web sites, all of those as I said which are staffed by those who work for his PR firms. These self‐described experts then push Berman’s views. One of his employees alone, for example, is the Chief Administrative Officer of Berman and Company; the Senior Economic Analysis and Senior Research Analyst with the Employment Policies Institute; the Government Affairs Director for the Center for Consumer Freedom; and Director of State Affairs, spokesperson, and lobbyist for the American Beverage Institute. I don’t know about you, but my full‐time job really takes me busy full‐time. I don’t have time to be the Executive Director of twenty‐five groups, much less have all these different positions in all these other kinds of groups.
Appalled by Berman’s antics, years ago CREW started a web site called bermanexposed.org to try and inform journalists about the truth about Berman and his conduct. When we find a new group, we add it to the site. When we see Berman or one of his cronies cited in a news article, we call the journalists, we call the papers, and we try to let them know what’s really going on.
And we must be getting to him because last summer, mimicking our website, Berman developed a new website called crewexposed.com, which is designed to expose the truth about CREW. He ran a full‐page ad in Politico against us last August, and then last week he ran two ads, one in Politico and one in The Hill, Calling us a Democratic front group. And I think the real point of these ads, which are run in trades in Washington, is to try and undermine CREW’s credibility with reporters so that when we call him out and we talk about the kind of things he’s doing, nobody will listen to us and we will be undermined.
But under the theory that imitation is the sincerest form of flattery, I suppose I should be pleased. Still though, Berman’s operation is thriving. He’s making money hand over fist, and from paid corporate interests that are against the public welfare. And it’s important for folks like you to know about him and know what he’s doing and expose him, because I think this is a growing industry problem given his success, the fact that the IRS is letting him continue to do this. There’s bound to be more Bermans out there. So thank you.
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