New revelations about the Nike founder's tax-dodging schemes raise questions about his charitable giving.
Charles Wiggins, running for re-election to the Washington State Supreme Court this year, did what state judicial candidates do nowadays: He raised campaign funds, about $200,000 in 10 months. This looked substantial — until Bill Gates and Paul Allen swamped his effort in a single day. The Microsoft founders-turned-multibillionaire philanthropists gave $200,000 and $300,000, respectively, to Wiggins’s opponent on October 17.
In so doing, Gates and Allen joined the corps of super-rich donors who pour money into state supreme-court races, usually through outside interest groups. They used Citizens for Working Courts — Enterprise Washington. Enterprise Washington sets up political-action committees for the state’s business community, pledging in its online mission statement to help members “get the best return on their political investments.”
This trend is growing and worrisome. Judicial races attract only modest public attention and even less grass-roots money. When the mega wealthy write checks for hundreds of thousands of dollars to a single candidate, they can overwhelm opponents’ campaigns and sway the vote. According to a report by the Brennan Center for Justice at the New York University School of Law, spending on television ads by outside interest groups in state supreme-court elections surpassed all previous records this cycle.
The flood of money “raises troubling questions about whether crucial judicial decisions on issues such as voting rights and equality in education are on the docket, on the ballot, or up for sale,” the center said.
Big-time donors rule American politics as never before, but among the most problematic of them are philanthropist barons. They can combine outsized political contributions with the glow of their reputations as selfless doers-of-good and the nonstop advocacy of their tightly held, tax-exempt foundations, which fund large swaths of the nation’s immense nonprofit machinery.
The result is excessive influence over public policy, far outstripping that available to most citizens or organizations. Philanthro-barons exert this sway without public input or accountability.
Consider the whopping Gates-Allen money drop to alter their home state’s Supreme Court. Justice Wiggins ignited their wrath in 2015 when he joined the 6-to-3 court majority that declared unconstitutional the state law that steered taxpayer money to independently run charter schools. The court’s reasoning was straightforward: Washington’s constitution stipulates that only public schools can receive government funding, and all public schools must be subject to local voter control. The law gave control of charter schools to appointed boards and private organizations.
The ruling, sound though it was, was bound to outrage the former tech titans: They had bankrolled the 2012 ballot initiative that established the charter-school law (as did Connie Ballmer, the wife of former Microsoft CEO Steve Ballmer). The court had struck down “their” law, so they would pay to change the membership of the court.
A spokesperson for Vulcan, Mr. Allen’s investment firm and the vehicle for his donations, confirmed the reason for trying to oust Justice Wiggins:
“We were dismayed by the court’s 2015 ruling to strike down charter schools and are committed to ensuring that politics don’t hinder the development of practices that could provide life-changing experiences for all types of students.”
Note the reasoning in this statement: “Politics,” not the wording of the state constitution, determined the court’s 2015 decision. The noble philanthropist will banish squalid politics as an obstacle to “life-changing experiences” by donating heaps of money to a candidate in a judicial race.
This attitude typifies the worldview of contemporary philanthro-barons: They are above politics. They act disinterestedly to promote the common good. Billionaire philanthropists may indeed aim to do good, but each defines “good” according to his or her own beliefs, or even passing notions.
Bill Gates, for example, has become infatuated with one education “innovation” after another: first, a top-down formula for breaking large high schools into small units, then grading teachers by using an algorithm to analyze their students’ test scores. When the experiments don’t work out, the Gates Foundation moves on to another theory, often leaving behind a mess in the schools that have taken its money.
Of course, money doesn’t always determine election results. The Gates and Allen judicial investments this year didn’t pan out. Charles Wiggins retained his Supreme Court seat with 57.5 percent of the vote. The other two justices up for re-election, both of whom also voted to strike down the charter law (and one of whom, Chief Justice Barbara Madsen, wrote the opinion), won handily as well.
Clearly a solid majority of voters were satisfied with the performance of these jurists. Many have, no doubt, wearied of the philanthro-barons’ two decades of hammering to get charter schools into the state. As private individuals, billionaire philanthropists can fund political campaigns for a pet policy indefinitely. They can simultaneously promote the same policy from the offices of their ostensibly nonpolitical, tax-exempt foundations. The synergy compounds their influence.
Getting charter schools into Washington is a textbook example of how to coordinate political campaigns with foundation work. The state held ballot initiatives on charter schools in 1996, 2000, 2004, and 2012. Pro-charter philanthropists funneled millions of dollars into the last three of these campaigns, finally eking out a victory in 2012 with 50.7 percent of the vote. With the charter law in place, Gates, Allen, Walmart heir Alice Walton, venture capitalist Nicolas Hanauer, and the other billionaire philanthropists who funded the campaign stepped aside to make way for the Gates Foundation.
From 2012 to 2015, the foundation spent more than $31 million to “give public charter schools in Washington State a strong start,” as one 2014 grant announcement put it. This meant selecting and financing organizations and individuals to start schools, advise charter boards, and develop education programs. The foundation shaped the charter system with no public involvement.
When the court struck down the charter-school law, three nonprofit groups — all Gates Foundation grantees — funded a PAC to contribute to legislators willing to approve a modified charter bill. That measure became law in April 2016. A court challenge is now underway.
Philanthro-barons, their foundations, and their funded surrogates can hammer away at a pet policy ad infinitum with no concern for public opinion or for anyone else’s notion of the public good. In judicial terms, you might call this case Big Philanthropy vs. the People. Polls show that Washingtonians’ top education priority is full and equitable funding for all existing public schools. The legislature has been under a State Supreme Court order since 2012 to create such a funding formula. The philanthro-barons have taken no active interest in the problem.
Criticizing mega philanthropists is tricky: Most people admire generosity and are loath to find fault with philanthropy. It sounds churlish — yet another instance of no good deed going unpunished. As a result, philanthro-barons receive much less critical scrutiny than other actors in public life. They’re generally treated like royalty, with awe and obsequiousness, which breeds hubris — their occupational disorder. We live in a country where money translates too easily into political power and where philanthro-barons make the problem worse. Critics need to speak up.
Writer Joanne Barkan focuses on the relationship between philanthropy and public policy, particularly in education. This piece first appeared in the Chronicle of Philanthropy December 16, 2016.