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It’s Time for Think Tank Funding Disclosure

Congressional ethics reform, lobbying disclosure requirements and options backdating lawsuits all rely on a simple premise: Disclosure is healthy. Disclosure shines sunlight on self-dealing in politics, provides vital data to investors and allows consumers to make informed purchasing decisions.

As Congress returns from summer recess to debate these and other pending issues, it will be heavily influenced by the one segment in the Washington, D.C., food chain that thrives without disclosure and exercises enormous power by issuing research and opinions without telling who is paying for these points of view.

Think tanks are Washington mushrooms, sprouting quickly and freely without any visible food source. They issue important-sounding opinions and research which vary in (nutritional) value but almost never indicate who really paid for those results. Some think tanks, like the Heritage Foundation, Cato Institute and Brookings Institution, have impeccable credentials, a broad contribution base and a real political philosophy, but others simply are fronts for lobbying groups paying for someone else to take their position.

The association I head, the Consumer Electronics Association, represents more than 2,100 technology companies. Our membership, our funding and our interests all are disclosed in many ways, including through studies we produce in-house, our tax returns, lobbying disclosures and our annual report. Our self-interest and revenue sources are visible and apparent. We are passionate about technology positively changing the world. But the fact is not all industries view the advance of technology as positive, and we daily fight industries that ask the government to restrict technology to preserve their old business models. That’s fine and fair and part of the give-and-take of a free society. All trade associations lobby, run ads, testify and try their best to convince the government that the national and consumer interest matches their industry causes.

But increasingly, the policy battleground has shifted to think tanks. Taking on a think tank is like countering a sniper — it’s hard to shoot back at what you can’t identify. One think tank, the Institute for Policy Innovation, just issued a report claiming that the U.S. music industry is losing billions because of the advent of digital media. We would counter that digital technologies create economic opportunity for traditional content companies, and we have our own economic research proving that point. But we don’t know against whom we are arguing. There is no way to find out who funds the IPI or the study from its Web site or tax returns. The study includes a disclaimer that “[n]othing written here should be construed as an attempt to influence the passage of any legislation before Congress.” But some in Washington — including perhaps the backers of IPI — are pushing legislation to expand the role of the federal government as the police force for the content companies, and this study surely will be one of many “independent” sources cited for advancing the legislation.

It is not good for policy or objective analysis if lobbying groups can buy research and hide behind anonymity. If drug companies must disclose paid research and tobacco companies have been exhorted for secretly funding research, why do other interest groups get a free ride? If the major funding for think tanks were disclosed, policymakers, the media and the public would have context. They could evaluate the merits of the research and look for bias. It seems a fair trade for the tax-free status of the groups.

Even without any federal law governing disclosure, any journalist or legislator can and should insist on understanding the funding before running stories on or allowing into evidence think tank research.

Obviously, we are frustrated that our opponents may be buying influence, albeit legally. Our critics also would argue that we are not without sin, for we have contributed to pro-technology groups such as Public Knowledge and Cato and we have funded the Digital Freedom Campaign and supported the Home Recording Rights Coalition. But we will freely admit to these contributions, when many of our critics don’t. We will never hide behind someone else’s research we funded and not disclose it. It’s not only about the law, it’s about ethics.

It’s time that the law, ethics and journalists marched in step on the issue of think tank funding.

Gary Shapiro is president and CEO of the Consumer Electronics Association.

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