Think tank scholar or corporate consultant? It depends on the day

WASHINGTON — Over the many months that officials in Washington debated sweeping new regulations for internet providers, Jeffrey A. Eisenach, a scholar at the conservative American Enterprise Institute, was hard to miss.

He wrote op-ed pieces, including for The New York Times, that were critical of the rules. He filed formal comments with the Federal Communications Commission, where he also met privately with senior lawyers. He appeared before Congress and issued reports detailing how destructive the new rules would be.

"Net neutrality would not improve consumer welfare or protect the public interest," Eisenach testified in September 2014 before the Senate Judiciary Committee.

Intense advocacy by a think tank scholar is not notable in itself, but Eisenach, 58, a former aide at the Federal Trade Commission, has heldanother job: as a paid consultant for Verizon and its trade association.

And he has plenty of company.

An examination of 75 think tanks found an array of researchers who had simultaneously worked as registered lobbyists, members of corporate boards or outside consultants in litigation and regulatory disputes, with only intermittent disclosure of their dual roles.

With their expertise and authority, think tank scholars offer themselves as independent arbiters, playing a vital role in Washington's political economy. Their imprimatur helps shape government decisions that can be lucrative to corporations.

But the examination identified dozens of examples of scholars conducting research at think tanks while corporations were paying them to help shape government policy. Many think tanks also readily confer "nonresident scholar" status on lobbyists, former government officials and others who earn their primary living working for private clients, with few restrictions on such outside work.

And it is a decidedly bipartisan practice.

Roger Zakheim, a visiting fellow at the American Enterprise Institute, has used research to push for greater spending for new military equipment while working as a lobbyist for Pentagon suppliers like Northrop Grumman and BAE Systems, lobbying records show.

At the liberal-leaning Brookings Institution, Dr. Mark B. McClellan led a health care studies program as he served on the board of directors at Johnson & Johnson. The company sells a high-cost hepatitis C treatment, an approach McClellan defended from his Brookings perch.

The overlapping roles are often not made clear, and even members of Congress say they are frequently unaware of the financial ties between industries and the witnesses with think tank titles appearing before them at hearings.

"They can make a very deceptive and false claim to credibility that is totally lacking," said Sen. Richard Blumenthal, D-Conn., who said he had become increasingly disturbed by the role of think tank experts on Capitol Hill. "I think about it every time there is a witness now from a 'think tank,' putting that term in very boldface quotes."

Eisenach declined repeated requests to comment in detail. But a spokeswoman for the American Enterprise Institute, Judy Mayka Stecker, said she saw no conflict in his roles.

"We believe in the open competition of ideas and encourage our scholars to engage with experts from all sectors and viewpoints," she said.

Yet even as The Times was making inquiries about the potential for conflicts of interest among some think tank researchers, officials at a number of the nation's most prominent institutions — including Brookings and the Peterson Institute for International Economics — acknowledged that they were revising conflict-of-interest policies.

"I think we have too much influence of funded research with clear interests at stake that is treated as though it is independent and academic research," said Yochai Benkler, a professor at Harvard Law School and co-director of its Berkman Klein Center for Internet & Society. "There is no culture in the discipline to mark funded research clearly, or systematically treat it as less reliable."

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Several weeks after Tom Wheeler was sworn in as FCC chairman in 2013, he received a letter signed by more than a dozen prominent economists and scholars identified by their affiliations with Washington think tanks or academic institutions.

The economic evidence, they declared, showed that the internet should not be regulated as a public utility. They urged Wheeler to reject "net neutrality" regulations that would give the federal government additional powers to oversee the $100 billion market for internet services, dominated by AT&T, Verizon and Comcast.

A footnote on the first page of the letter indicated that none of the scholars who signed had been compensated by stakeholder companies. But of the dozen studies they submitted as evidence, more than half had been funded by telecommunications giants or based on other work for the companies, industry ties that were disclosed only in footnotes in the original studies.

Few policy battles have had higher stakes in recent years than the debate over net neutrality — a catchall term for proposals to restrict internet service providers from blocking websites or regulating speed.

To bolster their claims that the regulations would hurt consumers, companies have financed research that contends the rules would reduce investment in new services and raise prices. That work is used to shape the public debate and to build an industry-funded narrative in the regulatory record, one the FCC is required by law to evaluate.

Industry-sponsored research has also figured prominently in court battles over FCC efforts to regulate the internet. When Verizon successfully opposed an earlier FCC rule on net neutrality, more than half of the 23 studies or expert declarations cited in court filings had been sponsored directly by telecommunications companies or trade associations, according to an analysis by The Times. Other studies had been published under the banner of think tanks but written by scholars who consulted extensively for companies.

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While private consulting arrangements can leave scholars' ties to corporate interests murky, the conflict is more apparent when think tank researchers do double duty as registered lobbyists.

C. Stewart Verdery Jr., as a senior associate at the Center for Strategic and International Studies, one of Washington's most influential think tanks, hosted a panel of experts in December to discuss a federal program — now being expanded — that tightens border security by having the U.S. authorities conduct passport checks in foreign airports.

Verdery made clear that he favored the preclearance effort.

"It provides unmatched benefits to our security, travel facilitation and passenger convenience," Verdery said as he introduced the other speakers, including Howard Eng, president and chief executive of the Greater Toronto Airports Authority, during an event that was broadcast on C-SPAN.

Verdery, a former senior official at the Department of Homeland Security whose office helped run the inspection program at foreign airports, briefly mentioned that in addition to his status as a scholar at the Center for Strategic and International Studies, he was the founder of the Monument Policy Group.

Left unsaid: Eng's airports authority is one of Verdery's regular lobbying clients, paying his firm $130,000 last year to influence the Obama administration and Congress.

Zakheim, of the American Enterprise Institute, is also a lobbyist at Covington & Burling LLP, where, on behalf of BAE Systems, he is urging Congress and the Defense Department to increase spending on ground combat vehicles the company manufactures. Other clients include Northrop Grumman, which is building a new long-range Air Force bomber.

In October, as a "visiting fellow," Zakheim contributed to an 87-page American Enterprise Institute report, "To Rebuild America's Military," which concluded that strengthening the military's ground forces and land combat vehicles would be an "essential key to deterrence in Europe and success in the greater Middle East."

The report did not mention that Zakheim was a paid lobbyist. His client, BAE, recently won a contract to supply the vehicles.

Some scholars add another twist: They serve on corporate boards directly related to their areas of expertise at think tanks.

McClellan, a former commissioner at the Food and Drug Administration who until January was a senior fellow at Brookings, has been a go-to expert for the federal government as it debates how to cope with surging costs of prescription drugs.

At public events, McClellan emphasized the extraordinary progress by the pharmaceutical industry in coming up with treatments for diseases like diabetes, HIV and hepatitis C.

"They are, overall, a pretty good deal," McClellan said. One such drug, manufactured by Johnson & Johnson, generated $2.3 billion in sales in its first full year, representing about 7 percent of the company's overall drug sales in 2014. The pills cost $66,000 for a standard 12-week regimen.

There was no mention in a video of the event that McClellan joined Johnson & Johnson's board of directors in October 2013 — or that he earned nearly $530,000 over the past two years in overall compensation from the company. That is in addition to his salary at Brookings, where he is one of the top-paid scholars.

McClellan, in a statement, disputed any suggestion that he might have had a conflict.

"My entire career in academics, government and public policy has focused on evidence-based ways to improve health and restrain costs for consumers, and my extensive track record speaks for itself," he said.

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Adam S. Posen, president of the Peterson Institute, recently had a series of uncomfortable conversations with three scholars he had decided to let go.

After much internal debate, Posen decided to formally prohibit Peterson's scholars from holding outside jobs that directly related to the field they wrote about on behalf of the think tank.

The three who had such outside engagements were terminated.

Posen noted that the change did not imply the researchers had done anything wrong. But tighter rules are needed, he said, to respond to a growing sense he shares with the Peterson board that the think tank industry must reassert its commitment to impartiality.

"I live in a glass house," said Posen, a Harvard-trained economist who previously served on the Monetary Policy Committee of the Bank of England, gesturing toward the floor-to-ceiling glass that provides him stunning views.

"Our reputation is built on our credibility," Posen said. "Without being perceived as credible and objective, our studies just get thrown on the scrap heap."

The Urban Institute, a Washington-based think tank that focuses on issues confronting cities, has decided to require that its scholars with any outside jobs detail the relationship in their writings.

"Urban's greatest asset is its reputation for objective research that is based upon rigorous academic and ethical standards," the institute's president, Sarah Rosen Wartell, said in a December memo to her staff.

And at Brookings, executives imposed new rules in December requiring that unpaid nonresident scholars use their title from any paying job, not from Brookings, if they testify before Congress. They are also prohibited from using their affiliation with Brookings in any research report they publish under contract with an outside party.

"These are designed to avoid not just conflicts of interests, but the appearance of conflicts of interests," said Martin S. Indyk, the executive vice president at Brookings.

Such steps are long overdue, said Thomas Medvetz, the author of the 2012 book "Think Tanks in America" and an associate professor of sociology at the University of California, San Diego.

"It has gotten to the point where everyone in Washington has their own expert," Medvetz said. "It is yet another reflection of the tremendous influence of economic power in American politics — as with money, you can create your own vehicles of political influence."