Secret funding for UK think tanks: Transparency, Lobbying and Fake News in Brexit Britain

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Most British think tanks are financially transparent, indicating that most major policy research institutions in the UK have confidence in their intellectual independence and research integrity. However, a minority continue to take money from hidden hands behind closed doors:

(Transparify’s full report and methodology, including numerous references and additional data, is available online.)

Think tanks’ value depends on audiences being able to distinguish between genuine think tanks committed to rigorous research and intellectual independence on the one hand, and undercover lobbyists masquerading as think tanks on the other. On at least one occasion, “fabricated evidence” presented by an opaque organization in London has already caused British media into reporting fake news (see further below), and only recently British media (together with news outlets as far away as India and Japan) have regurgitated fake news generated by a financially opaque French ‘fake tank’ that appears to receive funding from Russian sources.

Institutions rated with the maximum of five stars are highly transparent about who funds them. Think tanks with four stars are broadly transparent; typically, they do not disclose the precise amounts given, but instead group their donors into several funding brackets. On the opposite end of the spectrum, the funding of think tanks with zero stars or one star is highly opaque as they fail to disclose even the names of some or all of their donors. An additional category, “deceptive”, is applied to think tanks whose disclosure of funding sources appears to be transparent but conceals one or more key donors.

Transparify identified seven highly opaque and deceptive ‘think tanks’ in Britain that take money from hidden hands behind closed doors. Fuelled by over £22 million of dark money, these organisations collectively employ over 200 people in their quest to shape public debates and influence politics and policies in the country.

Four of them are registered charities, and one (the Adam Smith Institute) solicits funds via a registered charity. In contrast to private sector lobbyists, they enjoy tax breaks and thereby are effectively subsidized with public money.

Below is some background on the highly opaque and deceptive organisations in our cohort. (For more details and sources used, please see the full report.)

Adam Smith Institute: Transnational dark money trail

The organisational structure of the Adam Smith Institute (ASI) is so opaque that it is not only unclear who gives the money that funds its lobbying efforts, but also who takes it. Our research suggests that most Adam Smith Institute outputs and activities may be financed from abroad, raising concerns that foreign interests may be using opaque think tanks to secretly influence British voters and politicians.

In the United States, there is a private foundation called the Adam Smith Institute which lists the London ASI’s co-founders among its trustees. It received over $1.2 million in funds over the course of 2015 alone. Its donors included the JP Humphreys Foundation, which has reportedly also bankrolled the US-based Heartland Institute, notorious for launching a campaign that claimed that “the most prominent advocates of global warming aren’t scientists. They are murderers, tyrants, and madmen.”

According to TobaccoTactics, ASI has repeatedly lobbied against anti-smoking policies while receiving funding from the tobacco industry. In one case, the employee of a tobacco industry front group reportedly ghostwrote the smoking-related section of an ASI report. (Note that any media coverage citing such fake “research” outputs falls into the category of fake news.) In another instance, ASI reportedly entered discussions with Philip Morris about setting up a journalism centre to “conduct training for print and electronic journalists on free market principles that would be ideologically consistent with PM's [Philip Morris'] issues and interests.”

In 2016, ASI published a study arguing that “To protect their influence on health policy, boosters of more government control need to advance the fiction that industry, driven only by the profit motive, must always be reined in by government regulations. Yet the private sector, rightfully driven by the profit motive, tempered by tolerance for risk, rewards innovation.” The report calls Phillip Morris International, British American Tobacco, and Japan Tobacco International “true public health heroes” for investing in the development of e-cigarettes and similar products.

While it is unclear who pays for the Adam Smith Institute’s activities, and despite ASI’s chequered track record to date, journalists keep providing it with free advertising space. For example, the ASI earlier this year went on a media offensive “debunking” an Oxfam report according to which the world's eight richest people have the same wealth as the poorer half of the globe’s population. On one single day in January 2017, according to the organisation’s website, a spokesperson for the Adam Smith Institute got airtime on BBC World News, BBC Radio 4, BBC Radio 2, BBC Radio Scotland, BBC Wales, BBC World Service Radio, “appearing in the hourly news bulletins across every BBC regional station”.

Centre for Policy Studies: Transparency begins elsewhere

According to TobaccoTactics, the Centre for Policy Studies (CPS) has in the past repeatedly received money from tobacco companies, and may continue to do so. In 2011, it co-signed a public letter calling on the government to “call a halt to the relentless campaign to ‘denormalise’ smoking through an endless barrage of new controls, directives and diktats”.

In 2006, the Royal Society’s president accused then CPS director Ruth Lea of a “combination of denial and complacency” in her writings on climate change. In 2013, the CPS published a report on fracking whose authors appeared to have substantial conflicts of interest. A 2015 report by CPS calling renewable energy the “most expensive policy disaster in modern British history” was dismissed by experts as biased and analytically flawed. The CPS did not disclose who funded these outputs, or its other work.

In 2015, CPS published a report titled “Transparency Begins at Home: Why Charities Must State Who Funds Them”. The report notes that “Charities are subjects of legitimate public interest. They enjoy privileged exemption from taxes on the grounds that they confer some form of public benefit to the community as a whole.”

Civitas: Temporary lapse in transparency?

Civitas received a 2-star rating in 2016, but dropped into the “highly opaque” category this year because the (limited) donor information its website contains has by now become completely outdated. Its Director of Communications informed Transparify by email that this was due to oversight rather than design, but declined to specify when the think tank would place more recent funding information online. Future Transparify ratings will track Civitas’ performance on disclosing up-to-date data on who finances its work.

Institute of Economic Affairs: Distorting public debate

According to TobaccoTactics, the Institute of Economic Affairs (IEA) has in the past regularly received substantial amounts of money from tobacco companies, and may continue to do so. Over the years, the IEA has consistently spoken out against tighter tobacco regulations, including in a 2010 publication that claimed that introducing tobacco display bans could lead to "a deterioration in public health." In 2014, the IEA submitted evidence to a UK government policy review that according to TobaccoTactics “re-iterated common tobacco industry arguments”.

In early 2016, The Independent reported that the IEA had “secured [a] change in government policy” on the back of a £15,000 donation from a “mystery donor” whose identity the IEA refused to reveal. The IEA told the newspaper that it had met with ministers or officials “as often as we were able” to discuss the proposal with them. A subsequent report claimed that the chairman of the Institute of Economic Affairs had given the responsible minister £22,000 in donations.

Cigarette manufacturer JTI explained in 2013 that "We work with the Institute of Economic Affairs and the Adam Smith Institute as their economic and behavioural expertise help us better understand which tobacco regulation measures will work and which will not. We believe the contributions of organisations like the ASI and the IEA are very valuable in an open and free society.” The IEA has accused the UK government of “pumping billions of pounds into tens of thousands of putatively ‘voluntary’ organisations thereby distorting public debate”.

Policy Exchange: Generating fake news

Policy Exchange’s website informs prospective donors that “our ideas have impact and that our research consistently makes headlines, influences the national debate and has its recommendations adopted into policy… We have seen our proposals on education, policing and prisons, the health service and community cohesion adopted by the major political parties and there can be no doubt we are framing the debate of the new politics. We know that the commitment of our supporters stems from the strength of their ideas and we strive to keep all our donors as involved as possible.”

Under the heading “Corporate Engagement”, the organization’s website informs prospective corporate donors that “Policy Exchange appreciates the intellectual and practical input business can make to the wider policy debate.” Corporate donors can “partner” with Policy Exchange by funding research programmes, events, or its Business Forum which “allows participants to comment on key policy areas, contribute ideas and give advice to Policy Exchange’s research programme.” It then cautions readers that “we always retain full editorial control over all of our research… donors have no say over the outcome of the research.”

Transparify’s 2016 think tank ratings sparked some heated discussions in the blogosphere and Twittersphere about Policy Exchange’s influence on education policy in the UK, including through a regular column one of its staff was writing in the TES, a publication widely read within the sector. In a lively Twitter exchange, the Head of Content for TES refused to disclose the financial aspects of this arrangement.

The Policy Exchange website claims that “the authority and credibility of our research is our greatest asset.” According to Powerbase, Policy Exchange in one instance published a report that claimed to be “the most comprehensive academic survey of such literature ever produced in this country” and attracted wide media coverage. Later, the report was found to be based in part on “fabricated evidence”, and Policy Exchange eventually retracted some of its claims and removed the report from its website. However, by then the damage had been done, as several newspapers had already churned Policy Exchange’s faux evidence into fake news. The Times later acknowledged that its coverage had been inaccurate and publicly apologised for the “distress” its fake news had caused. It is unclear who funded the original Policy Exchange report.

IISS: Secret cash from Bahrain

In December 2016, leaked documents revealed that the International Institute for Strategic Studies (IISS) had secretly taken at least £25 million from the oil-rich Gulf monarchy Bahrain over the course of several years. In response, the IISS issued a statement affirming “its absolute intellectual and operational independence as an international organisation that does not participate in any manner of advocacy”.

At the time, the IISS funding disclosure webpage seemed to list all major donors in contribution brackets, making the organisation appear broadly transparent. Even today, the IISS website fails to disclose Bahrain’s central role in its overall funding portfolio.

A 2011 Memorandum of Understanding outlining the financial arrangement, which was signed by the Chief Executive of IISS and two Bahraini government ministers, explicitly stated that:

"The Kingdom of Bahrain and the IISS shall not disclose the contents of this MOU or any related information to any third party unless the written consent of the other party has been obtained and both parties shall take all necessary steps to keep confidential all classified information which is disclosed or obtained in relation to this MOU, and neither shall divulge such information to any third party."

In a separate 2013 Memorandum of Understanding, Bahrain guaranteed to fund a local IISS branch office for the next ten years. Exactly how much money the IISS has received from Bahrain remains unclear. The Guardian reported a figure of £25 million, noting that this would account for “more than a quarter of IISS’s income“. Compiling data from multiple sources, pro-democracy group Bahrain Watch arrived at a figure of £30 million, corresponding to just over a third of IISS’ overall income. The Middle East Eye published calculations according to which Bahraini funds may add up to nearly half of total IISS income. According to some observers, the IISS Chief Executive’s “remarkable remuneration” and commercial activities in the region also raise questions about possible conflicts of interest.

Bahrain Watch claims that “the Bahraini government is willing to spend so much on the IISS and the Manama Dialogues because they allow the government to portray itself as modern, liberal and business-friendly… Almost 30% of the Bahraini delegates at the 2015 Manama Dialogue were members of the Al Khalifa royal family.” Bahrain may also be hoping to influence UK foreign and security policy. In a document submitted to the Charity Commission in 2015, the IISS reported that “the Manama Dialogue is now sufficiently established to serve as an instrument of regional security. There was a powerful demonstration of this when on the sidelines of the Manama Dialogue 2014 the United Kingdom signed a landmark agreement with the Kingdom of Bahrain to expand and reinforce its naval presence in the Gulf. The deal will establish the first permanent British base 'east of Suez' for nearly half a century."

During the 2015 Manama Dialogue, the Chief Executive of IISS told the assembled dignitaries that "we thank him [the Crown Prince of the Kingdom of Bahrain] and His Majesty King Hamad bin Isa al Khalifa for the splendid partnership between the IISS and the Kingdom of Bahrain that has allowed the IISS to grow in this region and for the region to become a more important part of IISS work." One year later, during the 2016 event, he announced that “when we conclude this summit, we intend, within the week, to sign an agreement to continue the Manama Dialogue for a new five-year term.”

Policy Network: Regaining public trust with opacity

According to the Sunday Times, Policy Network was initially bankrolled by Sir Evelyn de Rothschild, a banker who by 2002 had reportedly donated £250,000 to the organisation. At the time, de Rothschild was estimated to be worth around £500 million. The newspaper reported that “The name of the donor is missing from the think tank’s accounts, but its directors have been privately concerned that they will look secretive if they continue to hide his identity. One tipped off The Sunday Times last week.”

Policy Network’s website currently lists its 2014 donors, but provides no information on who has bankrolled the organisation over the past two years. The website explains that Policy Network also offers consultancy services.

Meanwhile, the highly opaque organisation notes with alarm that “politics is no longer seen as a force for good, particularly among younger generations.” In response, its website explains, Policy Network “seeks to promote solutions to declining political trust. We research how technology, individual empowerment and new forms of political organisation can help counter populism and ease democratic fatigue,” including through “new forms of representative democracy”.

Want to learn more?

Transparify’s full 2017 UK report and methodology, including numerous references and additional data, is available online. Transparify’s four annotated bibliographies contain a large collection of past media stories and other publications about think tanks, financial transparency and lobbying. Keep an eye on Transparify’s Twitter handle for news about think tanks, transparency, and fake news, and evolving debates about evidence-based policy making versus post-fact and post-truth politics.