The CIA wasn't the only conservative institution that found itself embattled in the early 70s. This was a bad time for conservatives everywhere. America had lost the war in Vietnam. U.S. corporations had to cope with the rise of OPEC. The anti-poverty programs of Roosevelt's New Deal and Johnson's Great Society were causing a major redistribution of wealth. And Nixon was making things worse with his own anti-poverty and regulatory programs. Between 1960 and 1973, these efforts cut poverty in half, from 22 to 11 percent. Meanwhile, between 1965 and 1976, the richest 1 percent had gone from owning 37 percent of America's wealth to only 22 percent.
At a 1973 Conference Board meeting of top American business leaders, executives declared: "We are fighting for our lives," "We are fighting a delaying action," and "If we don't take action now, we will see our own demise. We will evolve into another social democracy."
CIA to the rescue
In the mid-1970s, at this historic low point in American conservatism, the CIA began a major campaign to turn corporate fortunes around.
They did this in several ways. First, they helped create numerous foundations to finance their domestic operations. Even before 1973, the CIA had co-opted the most famous ones, like the Ford, Rockefeller and Carnegie Foundations. But after 1973, they created more. One of their most notorious recruits was billionaire Richard Mellon Scaife. During World War II, Scaife's father served in the OSS, the forerunner of the CIA. By his mid-twenties, both of Scaife's parents had died, and he inherited a fortune under four foundations: the Carthage Foundation, the Sarah Scaife Foundation, the Scaife Family Foundations and the Allegheny Foundation. In the early 1970s, Scaife was encouraged by CIA agent Frank Barnett to begin investing his fortune to fight the "Soviet menace." From 1973 to 1975, Scaife ran Forum World Features, a foreign news service used as a front to disseminate CIA propaganda around the world. Shortly afterwards he began donating millions to fund the New Right.
Scaife's CIA roots are typical of those who head the new conservative foundations. By 1994 the most active were:
Lynde and Harry Bradley Foundation
Charles G. Koch
David H. Koch
Claude R. Lambe
Philip M. McKenna
John M. Olin Foundation