Keene for the Money: Who are the ACU’s Clients?

Those conservatives who dissent from the party line are often accused of selling out our principles in hope of snagging an invitation to a Georgetown cocktail party.

It costs much, much more than that to buy Washington’s pillars of conservative orthodoxy. Thanks to the brave people at FedEx, the whole world now knows exactly how much more.

FedEx is locked in a Washington legal battle against UPS. I won’t burden you with a lot of unnecessary details, but the issue boils down to this: UPS operates under one set of rules very favorable to unionization, FedEx operates under a different and less favorable set. UPS wants the same law applied to its main competitor. FedEx objects.

Both sides want allies. FedEx thought it had found one in the American Conservative Union. ACU is not just another conservative outfit. When you hear a member of Congress described as more or less conservative than another, it’s the ACU’s voting index that is being cited. ACU sponsors the annual Conservative Political Action Conference, CPAC, the biggest event on conservatism’s annual calendar.

If ACU joins your side, in other words, you have acquired a formidable friend.

The leaders of ACU know the value of their support. On June 30, they wrote a letter proposing a national campaign on FedEx’s behalf. For a price: $3.4 million.

FedEx declined to pay. Two weeks later, July 15, ACU’s chairman David Keene and ACU board member Grover Norquist signed an open letter endorsing UPS’ position. Payback? If so, it prompted a remarkable counter-payback: On July 17, somebody leaked the June 30 demand letter to Mike Allen at Politico.com.

Around the conservative world, the reaction to this naked attempt to sell political influence has been shock, outrage, and surprise.

But really: the only surprise is that anybody is surprised.

The ACU itself, as well as its officers and board members, have previously taken positions in other intra-corporate battles: in favor of Microsoft and against Netscape, in favor of AT&T and against Verizon.

Officers of the ACU took a central role in the epic 1998-99 round of electricity deregulation, a contest so lavish that some wit called it a “two Lexus fight” – meaning that every lobbyist involved could look forward to a bonus big enough to buy a new Lexus not only for himself or herself, but also for his or her spouse. The story is intricate, but it is worth the attention of anybody interested in American conservatism in its decadent phase.

Historically, electrical utilities had been regulated by the states. But as technological improvements made it possible to distribute electricity over wider and wider distances, some suggested that it might be more rational for electrical distribution to be regulated federally, in the same way as natural gas distribution is.

Investor-owned utilities preferred the status quo. They had developed very comfortable relationships with their state regulators, to put it mildly.

State legislators also preferred the status quo. Electrical utilities give generously to fund state elections. If control over electricity moved from state capitals to Washington, so too would the utilities’ political contributions.

In the middle of this debate appeared a group called Citizens for State Power. CSP’s leadership overlapped fascinatingly with the leadership of the American Conservative Union. CSP leaders wrote op-eds and articles, spoke to editorial boards, invited old comrades from the Reagan years to lunch. They invoked the venerable principle of state sovereignty, and bemoaned this latest power grab by the special interests in Washington DC. Washington in those years felt like a giant Tupperware party, where people you had known for years were suddenly using that friendship to sell you something you would never have bought from anybody else.

A total of $17 million flowed through CSP in 1998-2002, including $160,000 paid to the lobbying firm that employed David Keene, the chairman of the American Conservative Union.

The scale of the CSP effort went undisclosed at the time, but the gist of the story was obvious enough to anybody who cared to know. Too few conservatives did care to know – or else decided it was bad form to mention it.

It had better be mentioned. The activities of the ACU have damaged the good name of every American conservative organization. The next time conservatives take a stand on an issue that helps or hurts an industry or firm, everybody will have reason to ask: Who’s paying you this time? Or are you exacting revenge from somebody who opted not to pay you?

What was once a cause has degenerated into a racket. FedEx exposed the racketeering. Now conservatives must make the fateful choice whether to cleanse themselves of the racketeers.