In a darkened hotel ballroom in Pittsburgh, a middle-aged man with a boyish affect stands before the enthusiastic, if graying, activists of the Americans For Prosperity Foundation, gathered in August 2009 for its annual RightOnline conference.
“How many people here read the Wall Street Journal editorial page?” asks Stephen Moore, who sits on the paper's editorial board. The crowd responds enthusiastically. “What would we do,” he continues, “without the Wall Street Journal and Fox News, right? And Americans for Prosperity?”
As the nation's largest-circulation newspaper and the paper of record for the nation's financial sector, the Wall Street Journal occupies a unique place amid the panoply of American news sources, and not only for its influence on the nation's economy. The paper is matched only by Fox News in its unabashed alliance with political advocacy organizations associated with Charles and David Koch, the billionaire brothers and noted conservative funders who run Koch Industries, the second-largest privately held corporation in the United States.
Along with his colleague, John Fund, a columnist for the paper's OpinionJournal Web site, Moore is a frequent and popular speaker at events sponsored by the Americans for Prosperity Foundation (AFP Foundation). The foundation, which aims to inculcate a right-wing economic agenda among citizen activists, is chaired by David Koch, whose personal wealth is estimated at more than $20 billion. Ubiquitous as pundits on cable news, both Moore and Fund also participate, AlterNet has learned, in a workplace “education” program, Prosperity 101, that is linked to the Wisconsin chapter of Americans for Prosperity, which mobilizes activists to advocate for policies and politicians who support a pro-business agenda.
The Prosperity 101 program was presented, according to Moore, in at least a dozen workplaces in the heat of the 2010 election campaign — most of them in Wisconsin. Organizers of Prosperity 101, a for-profit company, were unwilling to speak with AlterNet about it, as were executives at most of the participating companies. So, too, were executives of the Wall Street Journal.
Moore's involvement with such a blatantly political organization — one whose agenda aligns so obviously with that of the GOP — is an anomaly for an editorial board member of a national newspaper. AFP pledged to spend $45 million in the 2010 election cycle and launched a barrage of televised attack ads against Democratic candidates.
Founded by Koch in 2003, the AFP Foundation and its sibling organization, simply called Americans for Prosperity (the two share staff but have separate boards of directors), did not gain widespread public notice until the brutal battle against President Barack Obama's health-care reform legislation. The two groups organized battalions of Tea Party activists to oppose the bill at noisy protests and town-hall meetings.
Yet opposition to health-care reform is but one part of the AFP agenda. The groups have also made it a priority to battle energy reform and, according to Tim Phillips, who leads both organizations, to shrink both the government workforce and the unions that represent its rank and file. Last January, in a speech to activists at the Leadership Institute, a right-wing training center located in Arlington, Virginia, Phillips explained that the reason fiscal conservatives failed to win the day on their issues during the tenure of former House Speaker Newt Gingrich was that right-wingers did not “have an army on the ground” while “the left did.”
“They had the public employee unions,” Phillips said, “which have only gotten stronger, have only gotten better-funded, have only gotten better organized in the period of time between the 1990s and today.”
Less than six weeks later, Wisconsin governor Scott Walker, whose career has been propelled by Americans for Prosperity (AFP), introduced the anti-labor budget bill that incited 18 days of mass protests in the state capitol.
A Koch-Murdoch Alliance
The Prosperity 101 program endorsed and fronted by Moore claims to “educate” workers in their workplaces about several high-priority policy concerns for “business prosperity.” Program materials have a decidedly anti-government slant, and Prosperity 101 boosters, including Moore, are well known for their anti-labor views. In a promotional video for the program, the Journal's Moore asserts that “the most important lessons of economics — from Prosperity 101 — is that jobs come from businesses; jobs do not come from government.” The program's textbook,Prosperity 101™: Job Security Through Business Prosperity, asserts: “Government can never create prosperity” and argues against social service programs, implying that those who need them lack the values of “hard work and determination.”
Much is made in liberal and progressive circles of the echo chamber in which right-wing news outlets amplify the talking points of right-leaning think tanks and often succeed in pushing these themes into mainstream media. Fox News is widely reviled for its prowess at such message projection, but the Wall Street Journal is rarely mentioned — perhaps because theJournal is perceived as far more mainstream. (Both the Journal, which is part of Dow Jones & Company, and Fox News belong to the same parent company, Rupert Murdoch's News Corporation.) There are good reasons for this perception: the Journal's celebrated news pages are fair to their subjects, and its hard-right opinion pages are seen as a separate realm.
Yet the Journal's opinionators have reaped rewards from the AFP Foundation for conveying views that coincide precisely with the Koch agenda. For starters, Moore receives speaking fees for his frequent appearances at AFP Foundation events. While requests for information on Moore's compensation for these engagements received no response from the AFP Foundation, spokesperson Mary Ellen Burke did say it was a “specific negotiated honorarium,” arrived at on an event-by-event basis. (Burke recently left the organization.) The speaker's bureau that represents Moore lists his fee as between $7,500 and $10,000 per appearance. Since 2006, Moore has made at least 18 appearances at AFP Foundation gatherings. If Moore received his minimum listed fee for each of these appearances, he'd have earned upward of $135,000 from the AFP Foundation so far. Moore says he has given all of his earnings from the Americans For Prosperity Foundation to charity.
Both Moore and Prosperity 101 founder Linda J. Hansen say he was not compensated for his multiple appearances on behalf of the for-profit Prosperity 101.
Wall Street Journal Editorial Page Editor Paul Gigot declined to answer an e-mail request for theJournal's guidelines on outside activities by its employees, nor would he comment on Moore's AFP Foundation gigs, forwarding my query to Ashley Huston, senior director of corporate communications for Dow Jones. She replied, “Journal editorial page staff attend a variety of meetings and conferences in their capacity as journalists. We address the utility and appropriateness of attending such meetings on a case by case basis.” Huston would not say whether the Journal had signed off specifically on Moore's AFP Foundation appearances or his involvement in Prosperity 101.
For a point of comparison, I asked a spokesperson for the New York Times, which has a mostly liberal editorial page, whether editorial board members are permitted to accept speaking fees from political advocacy groups, including those that run political television advertisements. “NO,” replied Eileen Murphy, vice president of communications for the New York Times Company, by e-mail. “In fact a Times editorial board member would not be permitted to take speaking fees from a political organization…full stop.”
The same standard, she wrote, applies to Times opinion columnists who are not on the editorial board.
A New Paradigm
While paid appearances by Moore at conferences and events sponsored by AFP and its foundation may raise eyebrows, Moore's involvement with Prosperity 101 is more troubling, given the program's uncertain provenance and the reluctance of its founder to discuss the program with reporters.
The idea behind Prosperity 101 is simple: Employers gather employees for a “voluntary” seminar where nervous workers, already sweating in an economy that is shedding jobs, are told that government regulation, unions and tax increases — even if only on the wealthy — are bad for their employers, thereby threatening the workers' own livelihoods. Then they're reminded to vote — for example, in last year's midterm elections. (The Prosperity 101 textbook includes a sample voter registration form from the State of Wisconsin.) And in the program textbook, employee participants are urged to join Americans for Prosperity, which has a history of alliances with GOP candidates.
In the textbook's introduction, Hansen, Prosperity 101's creator, plays on workers' fears of economic insecurity, stirred up by the lingering recession:
You go to work every day, giving your best efforts in hopes of keeping your job through every economic cycle and every corporate downsizing…Will you be included in the next round of layoffs?… Do you know your job security is not just dependent on your performance?...Prosperity 101TM is designed to empower you, the employee, to go beyond your paradigms and look at job protection in a new way.
Set up as a for-profit, limited liability company, Prosperity 101's registered agent is Hansen herself. She also serves as executive director and senior vice president of the Wisconsin Prosperity Network, founded in 2009 as a non-profit umbrella group for a number of the state's right-wing think tanks and activist groups in the state. The network's “main organizer,” as he described himself to the Wisconsin State Journal, is Mark Block, 54, who at the time served as state director for AFP's Wisconsin chapter. (Block left as director last December, concluding a five-year tenure that helped sweep into power a number of AFP Wisconsin favorites, including Scott Walker, in both the state house and the U.S. Congress.)
The lines between these various entities are often quite tangled. At a February 2010 Tea Party rally in the small city of Sheboygan, Hansen told supporters that Prosperity 101 — a for-profit company — was part of the Wisconsin Prosperity Network, the non-profit she directs.
But when I tracked down Moore at a September religious-right conference, he was under the impression that Prosperity 101 was a program of the AFP Foundation. And when I spoke with Tim Phillips, who heads up both AFP and its foundation, after his January 2011 appearance in Virginia, he told me he didn't know if Prosperity 101 was affiliated with his organizations or not. Mary Ellen Burke, then a spokesperson for both AFP and its foundation, responded to an e-mail query in more definitive terms.
“Prosperity 101 is NOT part of Americans for Prosperity,” Burke wrote. “Some of our state chapters have worked with them as they would any other like-minded coalition.”
Burke suggested that I speak with Mark Block, then AFP state director in Wisconsin, who failed to respond to a phone message and follow-up e-mail. When I caught up with him at February's Conservative Political Action Conference in Washington, D.C., Block, now serving as “chief of staff” to keynoter Herman Cain, the fast food magnate turned GOP presidential hopeful, denied having any involvement with Prosperity 101. Yet at a Prosperity 101 event the previous summer in Las Vegas, Cain told his audience that it was Block who, with Hansen, had recruited him for the program.
The Right's “Answer to ACORN”
Last July, before a crowd of some 200 activists at the Venetian Hotel in Las Vegas, Cain, Hansen, and the Wall Street Journal's John Fund promoted Prosperity 101 at a presentation that was part of the AFP Foundation's RightOnline conference, the foundation's answer to the yearly liberal Netroots Nation convention. While Netroots convened off the main drag at the comparatively modest Rio Hotel and Casino, Tim Phillips made a point of telling his audience that the AFP Foundation chose the opulent Venetian because it is the only non-union hotel on the Strip.
As Hansen introduced her program to AFP activists, she couldn't resist taking a swipe at what was once the left's best-known community organizing group, felled by a smear campaign led by right-wing blogger Andrew Breitbart, also a Koch ally.
“A key component of Prosperity 101 is working with employers to help them encourage voter registration among their employees,” Hansen, trim and stylish at 52, explained to the crowd. “So when Herman [Cain] first heard the concept here, he said, 'You've come up with the answer to ACORN!'”
Hansen then played the Prosperity 101 promotional video, which features Cain and the Journal's Stephen Moore.
Moore's segment confers a crucial air of legitimacy upon Prosperity 101 by virtue of his post at the world's premier financial newspaper, an affiliation that is highlighted both in the video and in the program's other promotional materials. “Washington is working against employers,” Moore tells viewers. “It's working against people who are trying to create wealth and are trying to employ workers.”
Each audience member received a copy of the program's textbook, a slender paperback that features material by Cain and Moore, among others.
In “The Keys to Prosperity,” Moore's chapter in the Prosperity 101 textbook, he offers up a series of charts, some of them indecipherable, including a pie chart called “Where Your Federal Tax Dollar Goes.” (Apparently derived from an earlier presentation Moore made at an AFP Foundation event, the same charts can be found here; scroll to slide no. 16 for this one.) Citing such official sources as the Internal Revenue Service, the Government Accountability Office, and the Bureau of Labor Statistics, it features eight slices labeled “Flushed Down a Toilet, ”Pissed Away,“ ”Down a Rat Hole,“ ”Sleaze,“ ”Corruption,“ ”Given to 'Supporters,'“ ”Tossed Down the Drain,“ and ”Postage Stamps.“ (The latter, Moore baselessly contends, accounts for 6 percent of your tax dollars — which is, incidentally, six times the allotment for non-military foreign aid.)
After the video, John Fund, 54, took to the mic, devoting his presentation to a story about the right's favorite hero, Ronald Reagan, from Reagan's days as a pitchman for General Electric in the 1950s.
While Reagan's time at GE was memorialized by the GE-sponsored television show he hosted, his other duties included rallying the conglomerate's 250,000 employees. He regularly appeared before workplace gatherings ”as a spokesman for its free market, anti-union, anti-Communist, anti-welfare creed,“ in the words of journalist Gary Kamiya, who has written about the period. The Prosperity 101 program, Fund indicated, draws on the legacy of Reagan's workplace-indoctrination sessions — often with Stephen Moore serving as the Reagan figure, an affable educator, opening the eyes of employees of participating companies.
Reagan, Fund said, was impressed with the knowledge of free-market economics displayed by GE workers, thanks to a company book exchange — a kind of lending library that circulated ideological economic texts, including The Road to Serfdom, by the Austrian writer Friedrich A. Hayek, a title that has been made newly popular, Fund pointed out, by Glenn Beck.
Following Fund's presentation, Timothy Nerenz, executive vice president of the Oldenburg Group, a privately held, Wisconsin-based manufacturer of mining and defense equipment and commercial lighting, sketched out the salutary effects of Prosperity 101 on his employees. Nerenz, 56, a bespectacled and wry end-the-Fed libertarian who launched a brief run for Congress in Wisconsin's 2nd District last year, spoke of how his company's facilities have book exchanges like the one that so impressed Reagan, for which Nerenz took to supplying some of his favorite texts. He cited, by way of illustration, Ayn Rand's libertarian classic, Atlas Shrugged, which, during an appearance on Glenn Beck's radio program, Moore called ”my bible.“
Then, Nerenz said, he began putting copies of the Prosperity 101 textbook into circulation, and found it a useful resource for talking to his employees about issues that affected Oldenburg's interests, which he identified as ”card check“ (a reference to the Employee Free Choice Act, which would make it easier for private-sector workers to form a union), ”cap and trade“ (the carbon-trading scheme in the Obama energy reform proposal), and health-care reform.
”If cap-and-trade passes, it means half of our factories are in jeopardy,“ he said, as if talking to his workers. ”We probably will not be able to operate. You ration my energy, I can't run this factory. I've got at least twelve countries who want me to move it there.“
Then Nerenz turned to the question of unions. ”Now, you certainly have a right to a union, right?“ he said. ”You got rights, I got rights, all God's children got rights. But you need to know before you make that decision what's involved in that decision.“
When I pressed him after the panel to clarify whether he was threatening to shut down factories whose workers chose to unionize, he said, ”It's not a threat, it's just a statement of fact: We don't operate union facilities.“ He added that his employees have shown they don't want a union, anyway, since previous attempts to organize in his factories have failed.
Herman Cain, who had delivered a rousing speech earlier in the day at the conference's general session, wrapped up the breakout. An anomaly among the Tea Party crowd, Cain is African American, and his presidential bid positions him as a kind of anti-Obama steeped in free-market principles.
”Now, it's probably wise to give up on a lot of the stupid people“ running government, said the 65-year-old businessman. ”But there are a lot of uninformed people...They just have not been given access to easy-to-understand information about some of the garbage that they are hearing about these various pieces of legislation. So, it's this uninformed group that is the target for Prosperity 101.“
The Moore Factor
None of the key players behind Prosperity 101 were keen to speak to AlterNet, and Stephen Moore, the Wall Street Journal editorial board member, was no exception. After Moore failed to respond to an e-mail request for an interview, I tracked down him at last September's Values Voter Summit, an annual political gathering of the Christian right in Washington, D.C., where he took part in a break-out session sponsored by the Heritage Foundation on why fiscal conservatism is a natural part of the ”family values“ agenda.
Heritage is one of the two Koch-funded think tanks through which Moore launched his career as an anti-tax guru; the other is the Cato Institute. Both Cato and the Heritage Foundation issue materials denying the human role in climate change, a major tenet of the Koch agenda, as Koch Industries' core businesses are rooted in oil and gas. Moore has repeatedly told audiences that global warming is ”the greatest hoax of the last 100 years.“
Before he joined the Wall Street Journal, Moore served as the founding president of the Club for Growth, an organization which, as of March 9 — the day Walker's union-stripping bill passed the Wisconsin Senate — had purchased 826 ads in support of the bill, at a cost of $193,605, according to the Green Bay Press Gazette, outstripping opposition spending by the AFL-CIO.
When I caught up with Moore between sessions, he said that he had appeared at a dozen Prosperity 101 sessions so far across the country, including eight in Wisconsin. Moore, who, at 51, exudes a youthful air, complete with Harry Potter-style glasses, offered up a benign description of his Prosperity 101 speaking engagements. ”You know, they have forums on how to create prosperity, create jobs, high-income-paying jobs,“ he said. ”So we just walk them through the ABCs of how our economy works. And what happens is, a lot of employers ask their workers, just voluntarily, if they'd like to take an hour and just hear a presentation on this. So, we've been going around the State of Wisconsin with this.“
”So, do you think of yourself as an activist?“ I asked.
”No,“ he replied. ”Well, I once was, but now I'm a journalist.“
Astroturfing the Fourth Estate?
While it's not uncommon for big-name journalists to supplement their incomes on the lecture circuit, Stephen Moore's relationship with such expressly political groups as AFP and Prosperity 101 is unusual.
Kelly McBride, who teaches journalism ethics at the Poynter Institute, a non-profit center for journalism education, said that while she was unfamiliar with the particulars of the Moore case, ”outside employment with organizations that are promoting a political agenda“ is prohibited in most news organizations — even for editorial board members.
”Even in a newsroom that has a political tilt to its editorial board,“ McBride continued, ”in most cases, it's important for that newsroom to maintain its independence so that the readers believe that the editorial board's loyalties are with the readers — and not necessarily with another organization.“
But the Journal isn't quite like other papers, suggested Nicholas Lemann, a longtime New Yorkerwriter and dean of the Columbia University School of Journalism. Moore's tenure as founder and president of the anti-tax group Club for Growth would have disqualified him as an editorial board member in most newsrooms, Lemann said, but the Wall Street Journal appears to have long operated according to a different standard. ”The fact that [the Journal] would hire Steve Moore as an editorial writer in a sense proves the point,“ he said. (As far back as the 1980s, writers for the Journal's editorial page would turn up at meetings of the American conservative movement, Lemann recalled, mentioning John Fund in particular, ”and the vibe was that they were attending as a member of the movement.“)
”I don't think the New York Times would hire as an editorial writer somebody who ran a major advocacy organization on the left,“ he said.
Lemann suggested that the key to assessing the Moore situation is whether or not his involvement with Prosperity 101 and the AFP Foundation violates the Wall Street Journal's own ethical standards. Per the Journal’s Policies for News Departments, Moore's involvement with Prosperity 101 would appear to violate a proscription against ”outside activities“ that exploit theWall Street Journal's name. The code also clearly states that employees of the Journal's news departments are prohibited from accepting speaking fees or honoraria of any kind. Editorial page personnel are typically considered to be part of a paper's news staff, according to Poynter's McBride.
Beyond the Journal's standards, Moore flouts a basic tenet of journalism ethics when, while appearing as a pundit in discussions about the Tea Party and AFP, he fails to disclose his own close political and financial ties to the AFP Foundation.
Take as an example a Journal column he wrote last year in which he quoted an Americans For Prosperity official, Texas chapter director Peggy Venable, to support his point, while never mentioning his own relationship to the AFP Foundation. Or the September 2 edition of ”The Diane Rehm Show,“ a syndicated NPR program, in which Moore appeared in his journalist guise for a discussion of the Tea Party movement.
When the discussion turned to the role of Americans for Prosperity and the Koch brothers in fueling the Tea Party, Rehm turned to Moore to ask what he thought ”these outsider groups,“ were looking for. ”What policies do they want?“ Rehm asked. ”What do they want to discard? What do they want to change?“
In answering, Moore failed to disclose his repeated paid appearances at AFP Foundation events, and instead answered in such a way that appeared to cast himself as a disinterested journalist.
”I see some parallels to the Perot movement back in 1992, which, you know, Ross Perot ran sort of on fiscal responsibility and a balanced budget,“ Moore replied. ”But I think a lot of those Perot voters have kind of become part of this Tea Party movement. When I talked to these folks, they feel like things are out of control in Washington.“
Prosperity 101: The Companies
The back cover of the Prosperity 101 textbook features testimonials from executives at six privately held corporations. Two of them, Menards and Reinhart Food Service, are among the top 40 privately held corporations in the United States, according to Forbes. Taken together, the companies led by executives who endorse Prosperity 101 employ some 53,500 U.S. workers. All six companies are headquartered in Wisconsin.
Menards, which operates more than 250 home-improvement retail stores, as well as a lumber-fabricating business, is No. 40 on the Forbes list; Reyes Holdings, which owns Reinhart Food Service, is No. 20. Rounding out the group is Wausau Homes, a manufacturer of custom prefabricated dwellings; Kwik Trip Inc., a chain of convenience stores and discount tobacco outlets; and the Oldenburg Group, the defense contractor whose vice president spoke on behalf of Prosperity 101 in Las Vegas.
Menards executives, whose company is known for its poor environmental record, virulent anti-labor practices and workplace rules that border on the abusive (see sidebar, ”Notorious Wisconsin Retailer Backs Anti-Union Program,“ below), failed to respond to several requests for comment on the company's participation in Prosperity 101. Likewise, Steve Loehr, Kwik Trip's vice president for operations, whose endorsement appears on the cover of Prosperity 101's textbook, did not respond to a request for comment.
The Oldenburg Group's Tim Nerenz, whose testimonial also graces the cover, along with his company affiliation, wrote by e-mail that his endorsement of Prosperity 101 is personal. ”[T]he company does not participate directly in groups outside of relevant trade associations,“ Nerenz wrote. ”However, our executives and managers are encouraged to participate in charitable, educational, and policy advocacy in the communities and when we do, we typically will use our titles and company affiliation so people can assess the relevance of our ideas and contributions.“
But he did confirm that he uses the Prosperity 101 textbook as a way to discuss his employer's interests with its employees. ”We have found Prosperity 101 to be useful in educating employees with an interest in economics, tax policy, and legislative initiatives,“ he wrote. ”We have made P101 materials available in common areas for voluntary selection.“
Of all the executives listed by Prosperity 101 as endorsers of the program, only Tom Schuette, owner of Wausau Homes, agreed to be interviewed about his company's participation in the program. I reached him in April by telephone at his office. Schuette and members of his family donated a total of $25,000 to Scott Walker's gubernatorial campaign and even hosted Walker at company headquarters during a campaign stop last year.
Schuette is also active with the Wisconsin AFP chapter. Last year, he joined Kwik Trip's Steve Loehr and Oldenburg's Nerenz, along with Cain, Moore, Fund and Hansen, as a presenter at the Wisconsin Defending the American Dream conference, co-sponsored by the Wisconsin chapter of the AFP Foundation and the Wisconsin Prosperity Network. The team addressed a session for high-level donors on the topic of Prosperity 101.
Wausau Homes is by far the smallest of the companies publicly associated with Prosperity 101. With the bursting of the housing bubble, Schuette said, he was forced to lay off 500 people, yielding him a remnant workforce of 54. Schuette sees the government as the culprit in the housing market's demise — not because of deregulation, but because of, as he sees it, government's ”meddling in our free-enterprise system.“ He believes that government changed mortgage rules to encourage ”disadvantaged“ people to buy homes, creating a bubble that was destined to burst. (Actually, deregulation of the mortgage industry in 1980, and changes to the tax code in 1986 — the latter signed into law by President Reagan — had much to do with creating the conditions for the bubble.)
When he had to lay off 500 ”innocent“ people, as he described them, Schuette made a vow, he said, to ”do something about it.“ That's when he began working with AFP, he said, and it was how he met Hansen, who allowed him to use Prosperity 101when it was still ”in the development level“ without paying a fee. So, Schuette said, he implemented the program himself, convening small groups over the course of last summer at Wausau Homes headquarters to study Moore's charts. The small groups, he said, allowed them to ”have better discussions.“ Schuette said that the sessions did not place undue political pressure on his employees, and insisted that the workers who participated were not told how to cast their votes last November.
”Let's face it,“ he added, ”the press is typically biased, so how do they get information if we're not providing it to them as an employer?“
Research assistance by Neima Jahromi.
This article was reported in partnership with The Investigative Fund at The Nation Institute, now known as Type Investigations.
Notorious Wisconsin Retailer Backs Anti-Union Program
In June of last year, as the 2010 election campaigns gained steam — just five months before Wisconsin elected its famously anti-union governor, Scott Walker — Linda Hansen, executive director of the Walker-allied Wisconsin Prosperity Network, stood, beaming, behind a podium bearing the logo of the Americans for Prosperity Foundation. She was there at Southern New Hampshire University in Manchester to introduce her new “employee education” program, Prosperity 101, to a lively group of conservative activists. (See the video here.)
During the question-and-answer session that followed, Hansen offhandedly mentioned one company whose participation in her AFP-linked workplace program was likely a big coup:Menards, a major retailer one of the nation's largest privately held companies. The firm would join a list of other local firms working with Prosperity 101 to educate the retailer's employees on policies Hansen contended could negatively impact their jobs. The policies Hansen listed — including energy and healthcare reform — just happen to be endorsed and advanced by Democrats. As the nation's third-largest home improvement retail chain — just behind Lowes and Home Depot —Menards, based in Eau Claire, Wisconsin, operates more than 250 retail stores, mostly in the Midwest,and employs more than 40,000. It was now poised to become one of Prosperity 101's largest participants.
Set up as a for-profit company, Prosperity 101 preaches an anti-union, anti-government gospel to workers right in their own workplaces. Of the known participating firms, Menards is perhaps the most notorious. The subject of a 2007 exposé in Milwaukee magazine, Menards is known throughout Wisconsin as a particularly bad operator, abusive to its employees and dismissive of environmental protection laws. Reporter Mary van de Kamp Nohl found that the company docked employees' pay for circumstances beyond their control, such as a customer failing to pick up an order within ten days. Menards store managers were penalized for failure to inspect employees' lunch boxes before they left the premises and were prohibited from hiring anyone who had at any time been a union member. One store manager told Nohl that he was “forced to fire two promising management trainees because they'd been baggers at a unionized grocery store while in high school.” Another Menards manager told Forbes in 2003 that his contract contained a provision for “a 60 percent cut in pay should his store be unionized.”
Menards and CEO John Menard have been cited for dozens of environmental code violations; in 1997 Menard and his company were fined $1.7 million when Menard himself was found to have used “his own pickup truck to haul plastic bags filled with chromium and arsenic-laden wood ash to his own home for disposal along with his household trash,” according to Milwaukee. Earlier this year, Menard, Inc. was ordered by a judge to pay $30,000 to resolve a complaint of illegal hazardous waste disposal in Onalaska, Wisconsin.
Menards has also run afoul of the Internal Revenue Service, which in 2004 billed Menard, Inc. for $5.9 million in back taxes and penalties, claiming that a substantial part of John Menard's $20 million salary and bonus actually constituted a dividend that had been improperly reported as employee compensation. And in 2005, the federal Equal Employment Opportunity Commission filed suit against the firm for its failure to submit required reports documenting the number of women and minority employees.
Since 2009, John Menard has contributed $10,500 to state Republican Parties ($10,000 to the Minnesota GOP and $500 to the Republican Party of Wisconsin), and a total of $10,800 to the campaigns of a number of Republican candidates for national office, including $3,400 to the Senate campaign of Ron Johnson, who went on to defeat Russell Feingold.
Menards' company spokesman Jeff Abbott referred queries about Menards' relationship to Prosperity 101 to the firm's executives, who failed to respond to requests for information.
This article was reported in partnership with The Investigative Fund at The Nation Institute, now known as Type Investigations; research assistance by Jed Bickman.