Cato Institute

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The Cato Institute is a non-profit think tank with strong libertarian leanings, headquartered in Washington, D.C. Cato states that it favours policies "that are consistent with the traditional American principles of limited government, individual liberty, and peace." Cato was founded in 1977 by Edward H. Crane and Charles Koch, the billionaire co-owner of Koch Industries. Koch industries is the largest privately owned company in the United States. Though diversified, the company amassed most of its fortune in the oil trading and refining.

Overview

Cato argues for the abolition of the welfare system, against the U.S. government pursuing an interventionist foreign policy, in favor of civil liberties and limits on executive power, and in favor of more relaxed immigration policies and for a more deregulated healthcare system. The Cato Institute is named after Cato's Letters, a series of libertarian pamphlets that Cato's founders claim "helped lay the philosophical foundation for the American Revolution." Its stated mission is "to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets, and peace" by seeking greater involvement of the "lay public in questions of public policy and the role of government."

In the preamble to its 2006 annual report, Cato's President and CEO, Edward H. Crane and Chairman, William A. Niskanen, argue for a limited role of government. "The list of reasons why it is not smart to turn to government to solve social and economic problems is, if not endless, extensive. Yet, despite a truly horrendous record over the decades, the politicians of both major parties reflexively assume that the state is the proper vehicle for solving problems," they wrote. Crane and Niskanen describe Cato as embodying a "classical liberal/libertarian philosophy."

Cato's work has a strongly ideological flavor, but the institute has not consistently aligned itself with either major political party. Although the Institute has close ties with elements of the Republic Party, it has often been critical of Republican officeholders—especially President Bush—in recent years. Cato staff have criticized such the 2003 decision by U.S. President George W. Bush to go to war with Iraq, prosecution of the war on drugs, giving federal money to faith-based organizations, and the decision of President George H.W. Bush to fight the first Gulf war. The Cato Institute has argued repeatedly against the Republican party on spending issues. Democratic politicians have likewise received criticism from Cato scholars. For example, President Obama's stimulus legislation has received strong criticism from Cato personell.

Funder of Like-Minded Think Tanks

Aside from its own advocacy efforts, the Cato Institute has become a substantial funder of other "like-minded" think tanks around the U.S. In its 2006 annual report Cato lists 26 organizations and one individual it provided grants totaling $1,243,00 to. Groups the benefited from Cato's generosity were Agencia Americana ($30,000 "to help fund study on S.A. corruption"); the Philanthropy Roundtable ($5,000); the Manhattan Institute ($5,000); the American Enterprise Institute ($5,000); the Fund for American Studies ($10,000); the Bluegrass Institute ($50,000); the Cascade Policy Institute ($25,000); the Ethan Allen Institute ($50,000); the Evergreen Freedom Foundation ($100,000); the Grassroot Institute of Hawaii ($40,000); the Illinois Policy Institute ($50,000); the James Madison Institute ($100,000); the John Locke Foundation ($20,000); the Maine Heritage Policy Center ($50,000); the Maryland Public Policy Institute ($40,000); the Nevada Policy Research Institute ($50,000); the Oklahoma Council of Public Affairs ($50,000); the Rio Grande Foundation ($50,000); the Show-Me Institute ($50,000); the South Carolina Policy Council ($90,000); the Sutherland Institute ($40,000); the Tennessee Center for Policy Research ($50,000); the Texas Public Policy Foundation ($100,000); the Virginia Institute for Public Policy ($25,000); the Yankee Institute ($68,000); and the Independent Institute ($60,000). In addition Jim Powell received $25,000 as a Hoiles Fellowship. (note, the Cato annual report refers to the "South Carolina Policy Institute" when the correct name of the think tank is the "South Carolina Policy Council". Similarly, the Maryland Public Policy Institute was misidentified as the Maryland Public Policy Center.)

Positions

Support for Social Security Privatization

The Cato Institute has been a long-time advocate of Social Security privatization. A chief early architect of Cato's thinking on private accounts was Peter J. Ferrara. The Washington Post's Thomas Edsall wrote in February 2005: "The emergence of the center-right phalanx backing the Social Security proposal is a major victory for the Cato Institute, a prominent libertarian group. In the late 1970s and early 1980s, Cato was almost alone in its willingness to challenge the legitimacy of the existing Social Security system, a politically sacrosanct retirement program. Recognizing the wariness of other conservatives to tackle Social Security, Cato in 1983 published an article calling for privatization of the system. The article argued that companies that stand to profit from privatization -- 'the banks, insurance companies and other institutions that will gain' -- had to be brought into alliance. Second, the article called for initiation of 'guerrilla warfare against both the current Social Security system and the coalition that supports it.'"

By early 2005, business groups such as the Business Roundtable and the National Association of Manufacturers and political groups like Progress for America were devoting millions of dollars to the campaign to get rid of the existing Social Security program. It is worth noting that the website SocialSecurity.org is run by the Cato Institute, under the heading Project on Social Security Choice.

Cato & Civil Liberties

Cato has characterized the Bush administration's encroachments on individual rights as being the actions of an "intrusive federal government." A little over a month after the September 11 terrorist attacks on the U.S., the Cato Institute republished an adapted version of an article by Charlotte Twight cautioning against proposals by then Attorney-General Ashcroft for greater government surveillance powers. (The original article had been published in 1999 by The Independent Institute.) (Twight, a professor of economics at Boise State University, also had a column on the potential erosion of civil liberties also re-published by Cato in March the following year).

In the months after the September 11 attacks, Cato scholars wrote several articles criticizing the Bush administration's attacks on civil liberties. Timothy Lynch, the director of the Cato Institute's Project on Criminal Justice, testified before Congress in December 2001 in opposition to an executive order signed by Pres. Bush on government detention of suspected terrorists. A few months later, Lynch cautioned that "to assuage the wide-spread anxiety of the populace, policymakers make the dubious claim that they can prevent terrorism by curtailing the privacy and civil liberties of the people." Cato scholars gave particular attention to the case of Jose Padilla. Proposals by the Bush administration for the Terrorism Information and Prevention System, which aimed to recruit volunteers willing to monitor their neighborhood, also drew a rebuke.

On the eve of the first anniversary of September 11 attacks, Lynch wrote that "on the home front ... President Bush has been doing a poor job of defending freedom. Based upon the official actions he has taken, Bush seems to think that the only part of the Constitution that really matters is the section spelling out presidential powers."

Cato scholars continued to write regularly about the civil liberties issues in the following years. Major reports on the erosion of civil liberties by the Bush administration was published in June 2002, , December 2003,, and June 2005. Cato scholars also penned numerous op-eds defending civil liberties against encroachments by the Bush administration during this period. For example, senior fellow Robert A. Levy penned 10 op-eds criticizing the Bush administration's conduct of the War on Terrorism in the first two years after the September 11 attacks.

Cato authors seem to have become more voluble on civil liberties issues the more September 11 receded and the more tangible the attacks on individual rights became. Robert Levy, Timothy Lynch, Edward H. Crane, William A. Niskanen and Clyde Wayne Crews Jr. had railed against the Bush administration for its civil liberties record on, for example, the Padilla case, military tribunals, national ID cards, the creeping militarization of domestic law enforcement, border patrol, the drug war, grand jury abuse, the PATRIOT Act, federal surveillance of ordinary Americans, operation TIPS, and mandatory vaccinations against potential bioterror threats.

Perhaps the most comprehensive response was the May 2006 report by Lynch and Cato senior editor Gene Healy on the Bush administration's abuse of power. The same year Cato director of information policy studies Jim Harper did a study, along with Jeff Jonas, criticizing the Bush administration's civil liberties record. A study by Cato staffer Radley Balko attacked the militarized "no knock" raids that often victimize low-income, minority individuals.

Cato has also collaborated on occasion with the president of the American Civil Liberties Union, Nadine Strossen. president contributed a chapter to a 2000 book on President Clinton's civil liberties record, and she delivered the B. Kenneth Simon Lecture at Cato's 2005 Constitution Day event, a speech that was subsequently turned into the lead essay in Cato's Supreme Court Review.

Cato staff have not been unanimous in their defense of civil liberties. Roger Pilon has endorsed some Bush administration's moves to restrict civil liberties as part of the war on terror, sparking disagreement from other Cato staff. Indeed, the Institute sponsored a rare debate on the Bush administration's domestic wiretapping program, with Cato senior fellow Robert Levy representing the traditional libertarian stance in favor of civil liberties.

The Cato Institute's libertarian roots have been apparent in their research in other areas, as well. A 2006 study on the Federal Marriage Amendment, which would have outlawed gay marriage, was titled "Unnecessary, Anti-Federalist, and Anti-Democratic." A Cato amicus brief was cited by the Supreme Court when it struck down sodomy laws in the case of Lawrence v. Texas.

Cato & Marijuana

Cato staffers have called for legalization of currently controlled substances, on the grounds that the War on Drugs does not work, is expensive, causes crime, is used as an excuse to reduce civil liberties and to pursue overly aggressive policies abroad, and infringes on the principle of personal liberty. The Cato Handbook, which typically represents a consensus view that the Institute as a whole wants to put its political weight behind, suggests that "Congress should repeal the Controlled Substances Act of 1970, repeal the federal mandatory minimum sentences and the mandatory sentencing guidelines, direct the administration not to interfere with the implementation of state initiatives that allow for the medical use of marijuana, and shut down the Drug Enforcement Administration." In its 2006 Annual Report, the Cato Institute lists the Marijuana Policy Project as a foundation funder, though the amount and purpose of the funding is unspecified.

Cato and the tobacco industry

The Cato Institute appears on several Philip Morris lists of "national allies," including a 1999 "Federal Government Affairs Tobacco Allies Notebook," and in a less-specific list of "National Allies" dated 2000.

R.J. Reynolds (RJR) in a September 2000 document also names Cato Institute as an organization the company could rely upon to help the tobacco industry "shift the debate and framework under which cigarette-related issues are evaluated in the future." In the document, titled "Reframing the Debate Communications Plan," RJR states, "Work with CATO Institute ... to empanel a group to debate legality and future management of cigarette industry. Open forum to media (pitch C- SPAN coverage); issue press release and transcript of remarks to media not in attendance." A subsequent part of the plan says RJR could help sustain public interest in their points of view by encouraging Cato Institute to send [pro-tobacco] columns to the national media.

Cato staff have also raised a number of objections to cigarette taxes. Such taxes are frequently justified by the claim that smokers impose unfairly high costs on society, but in a January 10, 1998 commentary published in the Chicago Tribune titled "Smokers Actually Pay their Way," Peter Van Doren, Assistant Director of Environmental Studies at the Cato Institute, pointed out that smokers' premature deaths actually save taxpayers money, calling into question the fairness of imposing ever-higher tobacco taxes on them. Van Doren also pointed out that high tobacco taxes are highly regressive, noting that smokers tend to be disproportionately poor and minority.

Robert A. Levy, an independently wealthy businessman who became a senior fellow at the Cato Institute in his 50s, has published numerous editorials criticizing higher tobacco taxes, lawsuits against the Tobacco Institute, and other anti-smoking policies. In one 1999 piece written with Cato fellow Rosalind B. Marimont and published in the Cato magazine Regulation, Levy acknowledged that smoking was a serious health problem but argued that the common estimates of 400,000 smoking-related deaths each year exaggerated the magnitude of the problem. In another 1999 piece published in the Wall Street Journal, Levy decried the Clinton administration's Department of Justice lawsuit against tobacco companies to recoup the federal government's cost for treating sick smokers.

Cato has also criticized the 1998 Master Settlement Agreement (MSA) that 46 U.S. states signed with the tobacco industry. For example, Levy argued that the 1998 MSA, which he argues effectively created a government-run tobacco cartel for the benefit of large tobacco companies, crated a situation in which tobacco companies no longer need worry about new competitors pushing down tobacco prices. He pointed out that the four largest tobacco companies have managed to maintain a 96 percent market share despite the costs of the settlement, and called the agreement a "sweetheart deal" between state attorneys general and the tobacco industry.

Cato staffer Radley Balko testified before the Washington D.C. City Council in opposition to clean indoor air laws, arguing that smoking restrictions infringe on the liberty of business owners to decide what policies they wish to adopt for their restaurants, and the freedom of smokers. In his testimony, Balko claimed that "the health risks associated with secondhand smoke are debatable." If one possible libertarian position was to defend the right of individuals -- whether restaurant patron or employees -- not to be exposed to secondhand smoke, it wasn't an argument Balko embraced. Instead, he argued that employees worried about the impact of smoking on their health should work elsewhere: "A waiter or bartender who chooses to work for an establishment that allows smoking knows what kind of environment he'll be working in," he stated. As for non-smokers rights, Balko argued that "you don't have the right to walk onto someone else's property, demand to be served food or drink someone else has bought, and demand that they serve you on your terms. Free societies don't work that way," he stated. In his testimony, Balko did not disclose that the Cato Institute received funding from both R.J. Reynolds Tobacco Company and Altria, the parent company of Philip Morris.

Immigration

Cato staff have angered some conservative activists by strongly advocating the liberalization of immigration laws.. The Cato Handbook calls for expanded immigration quotas and new visa programs for low-skilled as well as high-skilled workers, and for allowing more refugees to enter. The handbook speaks approvingly of a policy of "immigration yes, welfare no" that resolves the tension between low-skilled immigration and the welfare state not by keeping immigrants out, but by letting them in and making them "ineligible for public assistance." It also characterizes the issues of "immigrant welfare use" as "often overstated."

Call for elimination of ballot referendum disclosure requirements

In March 2007, Cato, along with the Institute for Justice, called for eliminating disclosure requirements for those who contribute funds in support or opposition of ballot measures. One of the primary reasons the two groups cited was the high costs associated with disclosure requirements. At the time, these requirements were already weaker than those required for contributions to a candidate’s political campaign.

Howie Rich, a real estate investor and CATO Board Member, had helped to sponsor sixteen different ballot initiatives in 2006. His major effort was the so-called “Taxpayer Bill of Rights” or TABOR, which Rich attempted to place on the ballot in eight states. Courts in five of the states ultimately stripped TABOR from the ballot for numerous reasons, including what one Montana judge called a “pervasive and general pattern of fraud” by Rich and others in their campaign to pass the referendum.

The Ballot Initiative Strategy Center, an advocacy group in support of ballot initiatives to reach progressive political and policy goals, believe that donor disclosure protects both the voters and the process of direct democracy from secret money and hidden goals. In response to Cato’s position, Kristina Wilfore, the group’s executive director, stated “The problem with being a front group for corporate fat cats like Exxon, Enron, and Howie Rich, is that you are always a little out-of-touch with the public…CATO aligning itself with more corruption in political giving is taking the side of the powerful against the people – and they call themselves libertarian?”

Cato and Water Policy

The Cato Institute claims that deregulation of water use will more effectively reduce scarcity than will government management. Jerry Taylor, the Director of Natural Resource Studies at Cato, alleges that water shortages are indeed "the product of government mismanagement," and should therefore be regulated through the market. Terry argues that government regulation of water has kept water prices "artificially low -- about half the price of delivery on a national basis -- with over-consumption the inevitable result." If water use was instead treated as a property right, it would create incentives for those holding the rights to use them efficiently, and then transfer the excess to others at a profit. Cato claims that the market regulation of water use that will develop if water rights are treated as property rights will lead to much greater efficiency and fewer problems with water scarcity. Critics point out that this market based approach to water policy concentrates the rights to use water in the hands of a few powerful people, who become even more powerful by controlling the public's use of something as essential as water. Privatization of water could also lead to corruption and loss of local authority.

Funding

Cato is a non-profit group established under Section 501(c)(3) of the Internal Revenue Code and states on its website Cato states that "in order to maintain its independence, the Cato Institute accepts no government funding." According to its 2006 annual report, which cover the year to the end of March 2007, the Cato Institute had 2006 expenses of approximately $19.4 million and revenue of $20.4 million. (Expenses, the report states, "have not been finalized as of the annual report’s printing.") The report notes that 74% of Cato's income that year came from individual contributions, 15% from foundations, 3% from corporations, and 8% from "programs and other income" (e.g., publication sales, program fees). (It is worth nothing that some of the foundations are corporate foundations).

In its 2006 Annual report, Cato lists its major corporate, foundation and individual financial supporters. However, it does not list the amount or the purpose of corporate or foundation contributions. (See also Cato Institute financial data.)

In their 1996 book No Mercy, University of Colorado Law School scholars Jean Stefancic and Richard Delgado describe a shift in Cato's patron base over the years. "Early on," they wrote, "Cato's bills were largely paid by the Koch family of Wichita, Kansas. Today, most of its financial support from entrepreneurs, securities and commodities traders, and corporations such as oil and gas companies, Federal Express, and Philip Morris that abhor government regulation."

Cato's corporate fund raising may be hampered by its staffs' tendency to take positions that are at odds with some of the interests of some large corporations. Cato has published numerous studies criticizing what it calls "corporate welfare," the practice of funneling taxpayer money to politically well-connected corporate interests. For example, in 2002, Cato president Ed Crane and Sierra Club executive director Carl Pope teamed up to write an op-ed in the Washington Post calling for the abandonment of the Republican energy bill, arguing that it had become little more than a gravy train for Washington lobbyists. And in 2005, Cato staff Jerry Taylor teamed up with Daniel Becker of the Sierra Club to attack the Republican Energy Bill as a give-away to corporate interests.

Corporate sponsors

In 2006 Cato raised approximately $612,000 from the following 26 corporate supporters:

• Altria (the report identifies Altria Corporate Services as the contributor)
• American Petroleum Institute
• Amerisure Companies
• Amgen
• Chicago Mercantile Exchange
• Comcast Corporation
• Consumer Electronic Association
• Ebay Inc
• ExxonMobil
• FedEx Corporation
• Freedom Communications
• General Motors
• Honda North America
• Korea International Trade Association
• Microsoft
• National Association of Software and Service Companies
• Pepco Holdings Inc.
• R.J. Reynolds Tobacco Company
• TimeWarner
• Toyota Motor Corporation
• UST Inc
• Verisign
• Verizon Communications
• Visa USA Inc
• Volkswagen of America
• Wal-Mart Stores

Foundation support

The Cato Institute has been supported by:

• Castle Rock Foundation (Formerly Coors Foundation)
• Charles G. Koch Charitable Foundation
• Claude R. Lambe Charitable Foundation
• Earhart Foundation
• JM Foundation
• John M. Olin Foundation, Inc.
• Koch Family Foundations
• Lynde and Harry Bradley Foundation
• Scaife Foundations (Sarah Mellon Scaife, Carthage)

In its 2006 annual report, Cato listed that it had received funding from 72 foundations during the year, amounting to $3,113,000 or 15% of total income. (See Cato Institute/2006 Foundation Funders for more detail).

Personnel

Board of Directors

• William A. Niskanen, Chairman.
• Edward H. Crane, President CEO $121,975
• K. Tucker Andersen, Senior Consultant, Cumberland Associates LLC
• Frank Bond, Director, Chairman, The Foundation Group
• Richard J. Dennis, Director, President, Dennis Trading Group
• William Erickson, Vice-President of Finance and Admin $38,900
• Ethelmae C. Humphreys, Chairman, Tamko Roofing Products, Inc.
• David H. Koch, Executive Vice President, Koch Industries, Inc.
• Robert A. Levy, Senior Fellow in Constitutional Studies, Cato Institute
• John C. Malone, Director, Chairman, Liberty Media Corporation
• David H. Padden, President, Padden & Company
• Lewis E. Randall, Director, Board Member, E*Trade Financial
• Howard S. Rich, Director , Chairman, Americans for Limited Government
• Donald G. Smith, President, Donald Smith & Co., Inc.
• Frederick W. Smith, Director, Chairman & CEO, FedEx Corporation
• Jeff Yass, Director, Managing Director, Susquehanna International Group, LLP
• Fred Young, Director, Former Owner, Young Radiator Company

Notable members

Penn Jillette and Raymond Teller, are fellows at the Cato Institute and the hosts of the Showtime network television show Penn and Teller: Bullshit!. Penn Jillette is an H.L. Menkin Research Fellow and writes the Final Word column for Regulation magazine. A profile of Penn on the Cato Institute website describes it as a program that looks to debunk junk science, scares and scams with reason and logic. They have lampooned such subjects as global warming, environmentalism, recycling, health advocacy, alternative medicine, smoking bans, alcohol bans, drinking age limits, twelve step programs, gun control, animal rights, vegetarianism, anti-hunting and anti-vivisection stances. Koch Industries own ranches with a total of 15,000 head of cattle in Kansas, Montana and Texas. Recently, the company has become an aggressive opponent of climate legislation and a major funder of climate skeptics, including the Cato institute. See also Penn and Teller.

Australian media mogul Rupert Murdoch previously served on the board of directors of Cato.

Contact Information

1000 Massachusetts Avenue, N.W.
Washington D.C. 20001-5403
Phone (202) 842-0200
Fax (202) 842-3490
Website: http://www.cato.org/

Related Sourcewatch articles

• Barbara Conry
• Penn and Teller
• Koch Industries
• Charles G. Koch
• Altria
• Climate change skeptics

External resources

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References

• Portions of this article were taken from the Wikipedia encyclopedia article about the Cato Institute.

External resources

Other Cato Websites

• http://www.elcato.org (Spanish)
• http://www.cato.ru (Russian)
• http://www.misbahalhurriyya.org (Arabic)
• http://www.cheragheazadi.org (Persian)
• http://www.chiraiazadi.org (Kurdish)
• http://www.tiandaocn.org (Chinese)
• http://www.Unmondelibre.org (French)
• http://www.Africanliberty.org (Swahili)
• http://www.Ordemlivre.org (Portguese)
• http://www.socialsecurity.org,
• http://www.freetrade.org,
• http://www.libertarianism.org,
• http://www.individualrights.org,
• http://www.cato-university.org.

External articles

• zFacts, "Privatization of Social Security" Cato's 1983 "Leninist" strategy. It's about to succeed.
• Mike Huben, "Criticisms of the CATO Institute," in "Critiques Of Libertarianism."
• "No Problem With New FBI Surveillance Guidelines, Scholar Says" Cato Institute news release, May 30, 2002.
• Richard Morin and Claudia Deane, "The Hot New Americans Get Hotter," Washington Post, November 26, 2002, p. A27.
• Hans Riemer, "Zogby Polling for Cato Institute, Other Clients, Manipulates Findings," Campaign for America's Future, February 6, 2003.
• Jeffrey H. Birnbaum, "Private-Account Concept Grew From Obscure Roots," Washington Post, February 23, 2005.
• Americans for Nonsmokers Rights Fact Sheet on Cato Institute (2004)

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