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The Far Right’s Secret Slush Fund to Keep Fear Alive


A secretive libertarian nonprofit with ties to Charles Koch bankrolled what was widely perceived to be a fear mongering effort to throw the Presidential election to Senator John McCain in 2008. Until now, where the money came from has been a hotly debated mystery.

Seven weeks before the Presidential election of 2008, approximately 100 newspapers and magazines in the U.S., including the New York Times, Wall Street Journal, Miami Herald, Philadelphia Inquirer, and St. Petersburg Times, distributed millions of DVDs of the documentary, “Obsession: Radical Islam’s War Against the West.”  The DVDs were included in the Sunday editions.  Altogether, including a separate direct mail campaign, 28 million DVDs flooded households in the swing voter states.

The newspapers did not know who was funding this massive propaganda campaign and, apparently, did not care.  They inserted the DVD in their Pulitzer properties with the casualness of throwing in a sample of suds free detergent.  The nonprofit organization named on the packaging of the DVD as the entity behind the film, the Clarion Fund, Inc., had no known history of operations and had a virtual office address in New York City with no physical presence and no employees on site. Documents submitted to the IRS to obtain its tax-exempt status show the Clarion Fund demanded total secrecy from its vendors:

“At all times, whether during or after the provision of services to Clarion, Service Provider shall keep in confidence and shall not disclose or use, for his or another’s benefit, any nonpublic knowledge, data, material, document or other information of any type that is related to Clarion, or its subsidiaries, directors, members, managers, agents, employees or other affiliates or that Service Provider otherwise acquires in the course of providing services (collectively, the ‘Confidential Information.’).”

The DVD packaging was slick, leveraging the imprimatur of the big league media outlets by listing 73 as part of its distribution network.  The cover carried a red banner blaring: “As seen on CNN and FOX News by more than 20 million viewers worldwide.”  The title of the film was graphically enhanced with the “O” in “Obsession” sporting the Islamic crescent moon and star and the “N” represented by an upended fearsome automatic weapon.  The movie content was slick as well.  The first half is endless scenes of suicide bombers and human carnage; the second half of the film intersperses clips of Hitler, Hitler Youth, or Hitler analogies intermittently with Muslim crowds and young children with fists in the air calling for death to westerners.  Once at the beginning and again at the end, the film reminds us that not all Muslims ostensibly want to kill us; in the middle of the film it quantifies the number that do (without any support to back up this hunch): a cool 100 to 150 million, i.e., 10 to 15 per cent of 1 billion Muslims.

In one particular respect, it resembles a government-made war propaganda film: it is silent on the hundreds of thousands of civilian Muslims, including women and children, killed by U.S. bombs and ground war.

One possible tie to government interests is Erik Werth.  Mr. Werth served under Treasury Secretary Robert Rubin in the Clinton White House where he worked on a Top Secret review of White House Security. He was also a segment producer at NBC’s Dateline.  In documents submitted to the IRS to gain tax exempt status for the Clarion Fund, Mr. Werth’s email address is listed.  Mr. Werth is named as the Co-Director and Co-Producer of the Clarion Fund’s subsequent documentary, “The Third Jihad.”  The Fund’s web site, advises that yet a third film is on the way, “Iraniam,” concerning Iran and nuclear weapons.

The reaction to corporate media peddling this propaganda in the final days of a Presidential race where one candidate was already being smeared for Muslim ties was immediate and harsh.  A writer at Democratic Underground using the moniker MrMickeysMom grabbed the keyboard to vent a spontaneous reaction:  “Okay – Who ELSE just picked through the Sunday advertisements and viewed this DVD today?…They’re here to warn us about the declaration of war on Western Culture and to bring down Christianity and Judaism – just in time for the election.  So, this is the heat, folks.  This blitz DVD is one more step – the biggest, boldest step I can see to orchestrate fear, hatred and to change your vote…It told me that the White House will be changed and become the Muslim House…that America has to wake up and that America is strangling itself with ‘our political correctness.’ ”

Margaret Lewis of Durham, North Carolina fired off a letter to The News & Observer of Durham, North Carolina: “I cannot believe that I was sent the hate-inflaming, fear-mongering video disk ‘Obsession’ in my newspaper! What will you enclose next? KKK robes?”

Hal Chase of Hudson wrote to the St. Petersburg Times: “My wife and I were shocked to see the CD entitled Obsession tucked innocently among the ads in our Sunday paper.  This hate-filled propaganda is just part of the right-wing extremists’ fear and smear tactics.  Their hope is to make Americans afraid of anyone who is not exactly like them, and thereby affect the outcome of November’s election.”

Approximately 60 newspapers refused to accept the DVD for distribution, including the Detroit Free Press, the Plain Dealer of Cleveland, the St. Louis Post-Dispatch and The News & Record of Greensboro, North Carolina.

At the time, John Robinson, Editor of The News & Record, said the paper declined to distribute the DVD because “…it was divisive and plays on people’s fears…As I’ve said on other occasions about news decisions,  just because you can publish doesn’t mean you should.”

CounterPunch can now report what this race-baiting, fear-mongering campaign cost and where the money, at least nominally, came from.  The 28 million DVDs were produced at a cost of $15,676,181 by Artist Direct Media which does mass manufacturing of CDs and DVDs with volume discounts.  The big media buy for Sunday newspaper insertions ran up the tidy tab of $719,436 and was conducted by NSA Media, a unit of the global ad giant, Interpublic Group, parent of McCann-Erikson. That figure seems decidedly on the light side so there may be other funding sources involved that have not yet surfaced. (NSA Media is a powerful ad buyer, representing some of the biggest print buyers and consumer brands in the country, which might help explain why so few questions were asked by the largest newspapers about this unseemly project.) The full tab, and then some, was paid by the super secretive libertarian nonprofit, Donors Capital Fund.  In 2008, Clarion Fund became Donors Capital Fund’s largest grantee by a large margin, receiving $17,778,600.  That sum constituted 96 per cent of all funds received by Clarion in 2008 and 9 times its revenue in 2007.

Donor’s Capital Fund is a “supporting organization” to Donors Trust, a sister nonprofit.  Both promise the pursuit of taking over social welfare needs with private funds rather than government solutions; they want small government.  (With 43 million Americans now living below the poverty level, it’s fascinating to know that these folks earmarked $17 million not to hunger relief but to DVD packaging.  Let them eat plastic, perhaps.)

There are shades of Charles Koch all over Donors Capital and Donors Trust.  Two grantees receiving repeat and sizeable grants from Donors Capital are favorites of the Koch foundations: George Mason University Foundation and Institute for Humane Studies.  Another tie is Claire Kittle.  A project of Donor’s Trust is Talent, a headhunter for staffing nonprofits with the “right” people.  Ms. Kittle serves as Talent Market’s Executive Director and was the former Program Officer for Leadership and Talent Development at the Charles G. Koch Charitable Foundation.  Then there is Whitney Ball, President of both Donors Capital Fund and Donors Trust.  Ms. Ball was one of the elite guests at the invitation-only secret Aspen bash thrown by Charles Koch in June of this year, as reported by  Also on the guest list for the Koch bash was Stephen Moore, a member of the Editorial Board at the Wall Street Journal.  Mr. Moore is a Director at Donors Capital Fund.  Rounding out the ties that bind is Lauren Vander Heyden, who serves as Client Services Coordinator at Donors Trust.  Ms. Vander Heyden previously worked as grants coordinator and policy analyst at the Charles G. Koch Charitable Foundation.

Legal counsel for the Kochs has declined to respond to two emails with a week’s lead time  seeking clarification of the relationship the Kochs have to Donors Capital and Donors Trust.

What remains unclear is the underlying donor within Donors Capital who made the large sum possible.  Was it a joint effort by wealthy donors to boost Senator McCain’s presidential aspirations?  Was it a single Islamophobe?  While the DVDs were hitting the front lawns bundled in newspapers, the Clarion Fund posted an endorsement for McCain as President on its web site, a legal breach for a 501 (c) (3) nonprofit.  When it was outed by the media, it quickly removed the endorsement.  What is certain is that the donor(s) had every reason to believe they would never be discovered. The organization advises contributors on its web site: “Unlike with private foundations, gifts from your account will remain as anonymous as you request.”

Prior to this sophisticated and expensive media campaign in the final approach to election day, “Obsession” was part of the 2007 college road show headed by the lefty turned radical right, David Horowitz (who dramatically improved his tax bracket by discovering the greatest threat to America’s future was radical Islam, just before the rest of the country discovered the greatest threat to America’s future was home grown terrorists with algorithms and high speed computers on Wall Street trading floors.  While Mr. Horowitz had a fourth of the country gazing at variations of Hitler’s mustache, the underpinnings of America’s financial infrastructure were imploding right under our noses.)  Mr. Horowitz joins the swelling ranks of pundits and academicians earning a fat living from tax subsidized nonprofits while railing against government welfare.  His pay at his nonprofit, Freedom Center, was a sweet $480,162 in 2008, the most recent tax filing available on line. Total   salaries and benefits at the Center represented 40 per cent of revenues in 2008.

Throughout the fall of 2007, and continuing into 2008, Mr. Horowitz promoted his “Islamo-Fascism Awareness” program to more than 100 college campuses, with the film “Obsession” made available for viewing.  His Freedom Center established a program and web site called Terrorism Awareness Project, which linked with conservative student groups on campus.

Was there a nexus between Mr. Horowitz’s drive to promote the film and it being later bankrolled by a super wealthy libertarian nonprofit?  What we do know for sure is that the far right has assembled a $6 billion interlinked machine of think-tanks, lobbyists, PACs, astroturf front groups, media sycophants, endowed professorships, state-based political fronts and now even their own centralized headhunter; all to throw us off the scent that the real threat to the poor and middle class in America is corporate domination.

PAM MARTENS worked on Wall Street for 21 years; she has no security position, long or short, in any company mentioned in this article.  She writes on public interest issues from New Hampshire.  She can be reached at

Pam Martens has been a contributing writer at CounterPunch since 2006. Martens writes regularly on finance at

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