Like it or not the Ron Paul Phenomenon is not dead, nor should it be ignored. For one thing the phenomenon actually has less to do with Paul himself than it has to do with the growing discontent over the way Washington works. This discontent spans the political divide – as can be seen by the broad range of supporters Paul was able to attract. As one observer commented during the campaign, “Ron’s niche is huge … His niche you could drive a semi through.”1
Thus, the phenomenon has the potential to become the basis for a viable third party, particularly if other portions of the disaffected populace could be brought on board. Whether this eventuality materializes positively pales in significance when compared to our collective lack of understanding of the manner in which our personal ideologies and political choices are being shaped by a phony “war of ideas.”
This understanding must begin with an examination of the central role that tax exempt foundations and the money powers behind them have long played in the creation of both past and present political movements, now labeled “phenomenon.”
To begin this journey, we delve again into the questions of authorship and purpose of those “ancient history,”and highly controversial newsletters, otherwise known as The Ron Paul Political Reports. While Paul and his spokesman have given varying accounts over the years of just who wrote those newsletters, at least “a half-dozen longtime libertarian activists—including some still close to Paul—all named the same man as Paul’s chief ghostwriter: Ludwig von Mises Institute founder Llewellyn Rockwell, Jr.”2
So, who is Lew Rockwell?
For starters, Rockwell was Paul’s congressional chief of staff from 1978 to 1982 and a vice president of Ron Paul & Associates – which was the publishing company for the infamous Ron Paul Political Report as well as The Ron Paul Investment Letter and the Ron Paul Survival Report. Rockwell “remains a friend and advisor to Paul – accompanying him to major media appearances; promoting his candidacy on the LewRockwell.com Blog; publishing his books; and peddling an array of the avuncular Texas congressman’s recent writings and audio recordings…”2
A number of writers have identified a 1980’s collaboration between Rockwell and Murray Rothbard as the key to those infamous Political Reports. The purpose of the collaboration was to build a coalition of populist “paleoconservatives” via Machiavellian style methodology. Theirs was a deliberate “politics of hate” strategy that was at its most extreme between 1989-1994, the same time period during which the most incendiary Paul newsletters appeared. The works and writings of both Rockwell and Rothbard during that time period mirrored the most controversial of the Paul newsletters.3 Moreover, and as a result of those efforts, the 2008 Ron Paul Campaign was able to tap into the financial and networking resources of that coalition.
Those newsletters are only one of the ties that bind Rockwell, Rothbard and Paul together. The Ludwig Von Mises Institute is another, with Paul serving as a “distinguished scholar,” lecturer and frequent visitor. Rockwell is its founder and President.
According to its website, “The Ludwig von Mises Institute is the research and educational center of classical liberalism, libertarian political theory, and the Austrian School of economics. Working in the intellectual tradition of Ludwig von Mises (1881-1973) and Murray Rothbard (1926-1995), with a vast array of publications, programs, and fellowships, the Mises Institute … seeks a radical shift in the intellectual climate as the foundation for a renewal of the free and prosperous commonwealth.”4
The Mises Institute is a type of tax exempt foundation known as a think tank. Most but not all think tanks in the United States are tax exempt foundations, which as a group came about as a result of charitable foundations being granted tax exempt status by Congress in 1913. As of 2007, there were 5080 think tanks in the world, with 1776 in the United States. This represented a 91% increase since 1951 with more think tanks having been established since 1970 than in the previous 50 years.5
Examples of think tanks include The World Business Council on Sustainable Development, The American Eugenics Association, American Petroleum Institute, Accuracy in Media, The Advancement of Sound Science Coalition, The Council on Foreign Relations, Bilderberg, Southern Poverty Law Center, World Economic Forum, Rand Corporation, Progressive Policy Institute, Global Climate Coalition, as well as the Ludwig Von Mises Institute among thousands of others.6
For the most part modern day think tanks owe their existence to tax exempt foundations, which had caught the attention of Congress over fifty years ago. In 1952, the Cox Committee was set up by Congress specifically for the purpose of investigating the political and economic impact of the largest of these foundations. When Cox died unexpectedly, the Reece Committee took up where the Cox Committee had left off. Norman Dodd was appointed Director of Research and Rene Wormser served as general council. Wormser subsequently wrote a book, now out of print, called Foundations: Their Power and Influence.
A scanned copy of the Dodd report submitted May 10, 1954 to Congress can be found on the internet, as can copies of both the Cox Committee and Reece Committee hearings. The conclusion of the Dodd report reads as follows: “It seems incredible that the Trustees of typically American fortune-created foundations should have permitted them to be used to finance ideas and practices incompatible with the fundamental concepts of our Constitution. Yet there seems to be evidence that this is so. I assume it is the purpose of this committee to gather and weigh the facts.”7
The Rockefeller, Carnegie and Ford Foundations were the focus of both the Cox and the Reece Committees, and the committees together essentially documented the manner in which these foundations had been deliberately developing tools and strategies with which to influence and control education, government, the media and the country at large. Moreover, both committees found that the actions of these foundations were often the opposite of their stated purposes.
The work of the Cox and Reece committees led to a flurry of research into what became known as the left gatekeepers – the term used for the interlocked network of foundations which controlled the ideological “left.” One popular left gatekeeper chart archived on the internet identifies the Council on Foreign Relations, The Schumann and MacArthur Foundations, The Soros Foundation, The Trilateral Commission, and the Carlyle Group – together with the Rockefeller, Carnegie and Ford Foundations and a number of smaller foundations – as part of the left gatekeeper structural network. The CIA is also identified as one of the most influential of these left gate keepers.8
In 1961 Texas Congressman Wright Patman began another Congressional investigation into tax exempt foundations. Described as a “fierce populist,” his effort lasted a full eight years, culminating in 1969 with the first major regulatory controls over foundations (which perhaps not unpredictably have been watered down since then). His first report to Congress in December 1962 decried the fact that ownership of an increasing number of corporations was finding its way into tax exempt foundations. The resultant concentration of power and influence, Patman maintained, called for an “immediate moratorium on the granting of tax exemptions to foundations.”
His reasons included evidence which showed that foundations were not subjected to adequate or appropriate scrutiny by the IRS as well as the fact that many of the foundations under study had been found in violation of the law as well as Treasury regulations. Just as troubling was his discovery that some foundations were being used only to provide tax breaks for their principals and, further, that certain trustees were able to channel foundation money to themselves, their relatives and even their friends. Essentially and perhaps not surprisingly, Patman’s evidence showed that “foundation-controlled enterprises possess[ed] the money and competitive advantages to eliminate small business.”
In the forward to his 1962 report, Patman refers to the Ways and Means Committee hearings of 1948-49 which “revealed that educational institutions and private charitable foundations had moved into commercial and industrial fields. Some had inherited substantial business interests, as was the case of the Ford Foundation. Others had purchased control of businesses. A tax exempt cancer research organization, for example, had acquired a variety of industrial firms … In fact, the  record lists about 40 different types of businesses controlled by educational and charitable organizations …” Incredibly,” continues Patman, “as far back as 1916, we were amply warned by the Walsh Committee of the abuses that might flow from the creation of those privileged, tax exempt entities…”9
Drawing from Rene Wormser’s book Foundations and other sources, the author of a 1971 book titled The Money Manipulators provides additional, important insight into the way foundations work and the problem they present to the average citizen:
We must not overlook the interlocking directorship which exists within corporations and often extends into an invisible international government. Highly placed members of the Council on Foreign Relations occupy positions of prominence in many of our giant corporations and their influence extends beyond corporate corridors into the national, state and even local legislative bodies. Foundations are one of the most important power centers on our national scene. Their numbers have proliferated rapidly …
A recent  Treasury Department study revealed that there are at least 100 major United States corporations in which foundations owned at least 20 per cent of the stock. It is the belief of this writer that many corporations pay dividends primarily for the benefit of this class of stockholder…
The most serious flaw in the structure of the foundation setup from the standpoint of the average citizen is the element of thought control which is exercised. Since the officials are generally men of wealth and position, they attract followers. This is true not only in business and industry but in the educational fields as well. A bright young student will usually identify favorably with the foundation which offers him a much needed fellowship or research grant. He will tend to develop attitudes sympathetic toward the objectives and thinking of foundation officials. This is the indirect method of thought control. The more direct one is the Fullbright or similar type scholarships which are generally awarded only to students who, when properly investigated, are found to be intellectually reliable…
The Reece Committee found that the foundations tended to develop a bureaucratic structure within and were usually managed by professionals. They also found “interlock” or cooperation among the powerful big-name funds… It is also difficult to live in a vacuum. Since the money power is so extensive, any opposing voice is usually either neutralized or bought off. If occasional cries of agonized individualism persist, the time-honored technique of smear and other propaganda devices are used to discredit them sufficiently so that their protestations are rendered valueless.10
As might be expected, the use of foundations to advance an Orwellian style agenda hidden behind lofty-sounding goals did not originate with Rockefeller, Carnegie and Ford. In 1984 author-researcher Eustace Mullins penned a brief history of foundation influence in the United States, as follows:
We have read ad nauseam about men of great wealth who, after careers of astounding ruthlessness while amassing their fortunes, suddenly underwent a profound conversion, like [the Biblical] Paul, and became men of goodwill… From the outset, American foundations have exhibited a twofold image – in front is the tireless do-gooder who balks at nothing if it serves a good cause. Behind him are the evil conspirators who are intent on preserving and increasing their wealth and power.
The foundation in its present form, originated in the concept of a Boston family, the Peabodys. Henry James in his novel “The Bostonians”, ridiculed a family friend, Elizabeth Peabody, for her fifty years of relentless humanitarian zeal, portraying her as the legendary Miss Birdseye.
[Meanwhile] George Peabody, after slave trading operations in Washington and Baltimore, moved to London, where he was set up as a front by the Rothschild family. He amassed a fortune by buying up depressed stock in American panics, and chose a Boston trader, Junius Morgan, to carry on his business. In 1865, Peabody set up the first large-scale American foundation, the Peabody Educational Fund, endowing it with $1 million in government bonds. By 1867, this had grown to $2 million; by 1869, $3.6 million.
Ostensibly set up to educate Southern Negroes after the Civil War, it was a key operation in the carpetbagger strategy to gain control of Southern lands and to control their state governments. These states had to borrow heavily from Wall Street bankers to rebuild their services, and they remained deeply in debt for the next century.11
With respect to the Civil War, evidence clearly suggests that the Civil War itself was a carefully laid plan to usurp the monetary independence of the United States and create a financial empire centered on Wall Street from which the country as a whole would be governed from behind the scenes. Trial attorney and former law professor John Remington Graham summarizes the conclusions for the case he lays out as follows:
The divisive antagonisms between the North and the South, finally erupting in the spring of 1861, were not unfortunate historical accidents, nor the result of some inexorable momentum in events. Those antagonisms, rather, were deliberately agitated during the 1850s by great international banking houses with a preconceived motive of provoking secession. And secession was to be used as a pretext for a bloody war of conquest…
The war was planned to generate a stupendous national debt, mostly represented by bonds … the private interests acquiring these bonds successfully plotted to secure the passage of legislation which enabled them to convert them to the paper by them acquired in financing the war into a new and dominant system of banking and currency under their ownership and control. And those private interests fully succeeded in their sinister program, and set up a huge financial empire centered on Wall Street from which they have ever since governed the United States behind the scenes…
[Moreover], the great banking houses in Philadelphia, New York, London and Paris did not like [the Lincoln greenback, originally issued debt “free” by the Treasury] because they could not “control” it – in other words, they could not convert it into a profitable venture for themselves.12
Graham essentially lays out the case, in lawyerly fashion, that over the two or three decades leading up to the Civil War the international money powers were able to manipulate we the people and our government in such a way that radical voices on both sides of the manufactured divide became the only voices heard. Passions thus aroused created fertile ground for war.
Like Graham, general council for the Reece Committee Rene Wormser was not content to focus on the narrow issues prescribed by the media or the propagandists. Speaking of the post World War II period during which we faced the “communist threat” Wormser would bemoan the fact that “the emphasis on a search for organized Communist penetration of foundations absorbed much of the energy of the investigators [for the Reece Committee] and detracted somewhat from the efficacy of their general inquiry into subversion.”13
In similar fashion to Graham, Wormser became far more concerned with the broader picture of a newly emerging American financial elite that could wield massive amounts of political clout through the size of its wallet and the strength of its own intricate, interlocked power structure. Neither the media nor the Congress paid attention to Wormser’s broader concern, and national attention remained directed at the so-called Communist threat until it was replaced by the Cold War. Antony Sutton and others tried to expose the “Communist threat” and the Cold War for what they were but no one listened to them either.
It is worth noting that tax exempt foundations were not the only tool employed by “money powers” because concomitant with them came the deliberate infiltration of grassroots groups and development of tools such as the “left/right” political spectrum as a means by which to control the “public debate.”
Thus, as Georgetown professor Carroll Quigley wrote in his 1966 Tragedy and Hope: “More than fifty years ago the Morgan firm decided to infiltrate the Left-wing political movements in the United States. This was relatively easy to do, since these groups were starved for funds and eager for a voice to reach the people.”14
In 1913, and writing about the same time period as Quigley, Charles Lindberg Sr. wrote in his book, Banking and Currency and the Money Trust that “The [money] interests have done everything that has been possible for them to do in order to divide the people of this country into factions commonly known as political parties, because it was in their interest to do so… Partisanship is factional government and not national government … Partisanship has been the cause of retarding all social progress.”15
In 1983, Antony Sutton would write in his book America’s Secret Establishments , “More effective than outright censorship is use of the left-right political spectrum to neutralize unwelcome facts and ideas or just condition citizens to think along certain lines.”16
So it is that in the final analysis and despite the evidence uncovered by the Cox and Reece Committees about “left” gate keepers, it strains credulity to think that only the ideological left was – or is – controlled by “gate keepers.” As it turns out, Wormser was right: there was the broader concern of subversion that needed attending to.
- “Ron Paul: Republican or Revolutionary?” ABCNews Report, October 18, 2007. [↩]
- “Who Wrote Ron Paul’s Political Report? by Julian Sanchez and David Weigel, January 16, 2008, ReasonOnline. [↩] [↩]
- “Angry White Men,” by James Kirchick. January 8, 2008. The New Republic. [↩]
- About at Mises.org. [↩]
- “The Think Tanks and Civil Society Program,” James G. McGann, Ph.D. Foreign Policy Research Institute. 2007. [↩]
- “Think Tanks,” SourceWatch Encyclopedia. [↩]
- Norman Dodd Report to the Special Committee of the House of Representatives to Investigate Tax Exempt Foundations, submitted May 10, 1954. [↩]
- Left Gatekeepers.com. [↩]
- Tax Exempt Foundations and Charitable Trusts: Their Impact on the Economy. Chairman’s Report to the Select Committee on Small Business. Wright Patman, Chairman, House of Representatives, 87th Congress. December 31, 1962. [↩]
- The Money Manipulators by June Grem, Enterprise Publications, Inc. 1971. Chapter VIII. [↩]
- The World Order by Eustace Mullins. 1984. [↩]
- Blood Money by John Remington Graham. Pelican Publishing 2006, p 15-16 & 48. [↩]
- Foundations: Their Power and Influence, by Rene Wormser. 1958, p vii. [↩]
- Tragedy and Hope, by Carroll Quigley, 1966. [↩]
- Banking and Currency and the Money Trust Charles Lindberg Sr. 1913, Private Reprint, p 95. [↩]
- America’s Secret Establishment by Antony Sutton, 1983. [↩]