CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Friday, March 31, 2006

ATR:  We can all use a good laugh!


Grover G. Norquist has become one of the nation's most influential activists by portraying his group, Americans for Tax Reform, as the leading "grass-roots taxpayers movement," which gets thousands of politicians to sign a pledge against any new tax.

Behind the "grass-roots" activism, however, is a multimillion-dollar donor list that is the envy of Washington. And the Massachusetts native has always refused to name his financial backers....

The biggest surprise is Norquist's largest individual donor: Richard "Dickie" Scruggs, a Democratic Mississippi trial lawyer, who contributed $4.3 million. Scruggs had received a $1 billion fee in the landmark tobacco case against the same tobacco companies that were also Norquist's donors....

Americans for Tax Reform is best known for pushing politicians to sign a no-new-taxes pledge. Norquist's website says that he heads "a coalition of taxpayer groups, individuals and businesses opposed to higher taxes at both the federal, state and local levels" and claims 90,000 members....

Norquist, who grew up in Weston and is a graduate of Harvard College and Harvard Business School, came to prominence by helping to lead Ronald Reagan's presidential campaign in Massachusetts.

He eventually helped engineer the 1994 Republican takeover of the US House....

But it is clear that Scruggs's money helped Norquist's group: At about the time Scruggs gave his $4.3 million, Norquist's group spent $4.2 million on ads that mostly praised Republicans in tight congressional races....

Scruggs, stressing his Democratic credentials, was incredulous at the possibility that his money paid for the ads.

"That is the opposite motivation for which I contributed to them," Scruggs said. "I would never have done it."

The Boston Globe
Friday, March 31, 2006
Special interests aided tax-reform advocate
A range of groups funded Norquist


Barbara Anderson's CLT Commentary

The CLT staff is enjoying the recent Boston Globe news stories about our Washington-based ally Grover Norquist. The most recent is especially interesting and we thought youd enjoy it too.  So here is our insiders' report, with the Globe article following.

Full and proud disclosure: Grover, who grew up in Massachusetts, has been CLT's friend for our entire existence.  He was a friend of our first executive director Don Feder and often came to the office when we were first working on Prop 2 and he was working to elect Ronald Reagan.  Later, as executive director of the National Taxpayers Union, he funded Chip Faulkner's position as CLT's field director during the campaign.  Chip's monthly Friday Morning Group meetings with other members of the center-right coalition are modeled on Grover's Wednesday Morning Group meetings in D.C. that are mentioned in the Globe story.  Some of you met him when he was the guest speaker at the annual CLT dinner, holding the audience enthralled with taxpayer war stories.  Grover's parents are long-time CLT members too, and his father, Warren, was a valued member of our board of directors for many years.

As head of Americans for Tax Reform, which you can access through our website, Grover created the "no new taxes" pledge of which we are so fond, and consistently fights against federal tax increases and for federal tax cuts, along with supporting state taxpayer groups in their local battles.  His close connections to Republican presidents and congressional leaders have made many of his efforts a success.  CLT participates in regular conference calls with national pro-taxpayer figures, arranged by ATR.

These are the facts. But you have to read between the lines of stories generated to discredit him to find the fun.

Read today's report, below, and think about it! Grover actually got "Dickie" Scruggs, a Democratic trial lawyer, to contribute $4.3 million to ATR!  Grover was doing what he does anyhow, opposing all new taxes, in this case a new tax on settlement fees (according to the Globe), and somehow got this anti-tobacco lobbyist to contribute EVEN THOUGH Grover had worked for years with the entire business community to fight for tort reform that would put him out of business!  Then, he used the contribution he got from the "Democrat trial lawyer" to fund ads to push for an income tax cut and abolition of the Death Tax!

The other thing that makes this beautiful is that Democrat trial lawyer "Dickie" Scruggs wanted to keep his pro-taxpayer donation a secret, but it was revealed when he was sued by a fellow lawyer.  Justice all around -- a lawyer sues a lawyer and at the end of the day every American taxpayer is better off.  We'd say to taxpayers everywhere, if you need a friend, find one who knows how to roll our enemies while working tirelessly for us.

Barbara Anderson


The Boston Globe
Friday, March 31, 2006

Special interests aided tax-reform advocate
A range of groups funded Norquist
By Michael Kranish, Globe Staff

WASHINGTON -- Grover G. Norquist has become one of the nation's most influential activists by portraying his group, Americans for Tax Reform, as the leading "grass-roots taxpayers movement," which gets thousands of politicians to sign a pledge against any new tax.

Behind the "grass-roots" activism, however, is a multimillion-dollar donor list that is the envy of Washington. And the Massachusetts native has always refused to name his financial backers.

But interviews and copies of Norquist's donor lists, obtained by the Globe, show that contributors include an array of special interests ranging from tobacco companies to Indian tribes to a Las Vegas casino.

The biggest surprise is Norquist's largest individual donor: Richard "Dickie" Scruggs, a Democratic Mississippi trial lawyer, who contributed $4.3 million. Scruggs had received a $1 billion fee in the landmark tobacco case against the same tobacco companies that were also Norquist's donors.

Scruggs, like the tobacco companies and some other leading donors, was interested in more than lifting the burdens of the taxpayer.

He said he had his own agenda: He wanted Norquist to work to defeat a congressional proposal that he feared would confiscate most of his $1 billion legal fee in the tobacco case.

"I paid a lot of money," Scruggs said. "I thought that was the way the game was played."

An examination of Norquist's activities over the past decade shows a pattern: He has maintained a highly visible public persona as a crusader on behalf of the average taxpayer, but his work has also benefited some of his biggest donors who have specific interests.

For example, Norquist has received $1.5 million from the Mississippi Band of Choctaw Indians, which runs a major casino, and he vocally opposed a proposal to tax profits at Indian casinos.

Norquist has said that he sent $1.15 million of that money to help fund two antigambling groups that fought gambling enterprises that would have competed with the Choctaws.

Other donors on the list have special interests. They include the tobacco firm of Philip Morris, which gave Norquist $460,000 for what the company described as general support, though Norquist subsequently spoke out strongly against cigarette taxes and lawsuits against tobacco companies. Several other major donors, including the Venetian Casino Resort, which gave $25,000, and International Paper, which gave $100,000, had an array of interests in Washington.

They did not respond to requests to explain their donations.

Norquist's spokesman, John Kartch, gave a written response to Globe questions.

Kartch said the group spends "all its energy and resources to work for lower tax, less spending and limited government."

Asked what might have been done for Scruggs, Kartch said the group does not try to benefit specific donors.

The questions about Norquist's operation come at a time when he is under scrutiny for his relationship with his longtime friend, former lobbyist Jack Abramoff, with whom Norquist first worked in Massachusetts; Abramoff pleaded guilty in January to conspiracy, fraud, and tax evasion. A watchdog group, Citizens for Ethics and Responsibility in Washington, has filed a complaint with the IRS, saying that Norquist violated his group's antitax status in assisting Abramoff's biggest client, the Choctow Indians.

Norquist's group has denied the charges.

But by working through tax-exempt organizations, Norquist does not have to disclose donors; this has made it difficult to track whether he's acting on behalf of contributors. That has led critics such as former US senator Warren Rudman, Republican of New Hampshire, to say that Norquist's foundation is a "front for lobbying activities."

"He really lobbies for clients, although they don't call them clients," said Melanie Sloan, head of Citizens for Responsibility and Ethics in Washington. "He will lobby for those who have made contributions."

Norquist is a lobbyist for Americans for Tax Reform, which has filed a 33-page list of bills and subjects that Norquist wants to influence, ranging from banking to gambling to taxes. But by registering only as his group's lobbyist -- rather than for specific clients -- he does not have to report who is benefiting from his work.

Americans for Tax Reform is best known for pushing politicians to sign a no-new-taxes pledge. Norquist's website says that he heads "a coalition of taxpayer groups, individuals and businesses opposed to higher taxes at both the federal, state and local levels" and claims 90,000 members. The website says those taking the antitax pledge include President Bush, 222 House members, 46 senators,and 1,247 state legislators.

"Don't let Washington insiders silence your grass-roots voice," the group says, urging public support.

Norquist, who grew up in Weston and is a graduate of Harvard College and Harvard Business School, came to prominence by helping to lead Ronald Reagan's presidential campaign in Massachusetts.

He eventually helped engineer the 1994 Republican takeover of the US House. In his position as head of Americans for Tax Reform, which he started in 1985, he was paid $192,000 in 2004, according to tax records.

Norquist's power has risen under the Bush administration; he is close to White House adviser Karl Rove and played a major role in Bush's push for tax cuts.

He chairs a Wednesday meeting to chart political strategy that includes leading conservatives and White House officials. He has arranged at least three meetings between tribal leaders and President Bush after receiving $25,000 donations from some of the tribes. One of his favorite quotes is that he wants to cut the size of government in half in order "to get it down to the size where we can drown it in the bathtub."

In addition to receiving corporate donations, the Americans for Tax Reform Foundation also received money from conservative philanthropists, including $300,000 from Richard Mellon Scaife and his foundation and $375,000 from John M. Olin and his foundation.

But Scruggs outdid them, with his $4.3 million.

A registered Democrat, Scruggs was part of a legal team that won a $246 billion settlement against tobacco companies on behalf of a group of states. Scruggs's law firm was awarded a $1 billion legal fee. If the Republican proposal to limit high legal fees became law, Scruggs stood to lose most of his fee.

Moreover, other trial lawyers who also received huge fees would also have been hit. Given that trial lawyers are major donors to the Democratic Party, Scruggs saw the attack on their fees as a Republican effort "aimed at essentially de-funding the Democratic Party by penalizing trial lawyers."

Scruggs decided that he needed to hire a prominent Republican antitax activist to fight what he viewed as a tax on legal fees. "There is an expression, 'If you need a thief, take him from the gallows,'" Scruggs said.

It didn't matter that Norquist had been fighting on the opposite side of the tobacco issue, attacking what he called "corrupt trial lawyers" who "sue the tobacco companies." Philip Morris, now known as Altria, acknowledged it has paid at least $460,000 to Norquist's foundation over the years.

The effort to reduce legal fees never became law.

It is unknown what, if anything, Norquist did to help Scruggs. But it is clear that Scruggs's money helped Norquist's group: At about the time Scruggs gave his $4.3 million, Norquist's group spent $4.2 million on ads that mostly praised Republicans in tight congressional races. Kartch, Norquist's spokesman, said Scruggs's money was used for many purposes, but declined to say whether any went to the ads.

Scruggs, stressing his Democratic credentials, was incredulous at the possibility that his money paid for the ads.

"That is the opposite motivation for which I contributed to them," Scruggs said. "I would never have done it."


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