investigativejournalism

Uncovering Corruption: How the Franklin Center Is Using Journalism to Keep Big Government in Check

IN LATE MARCH, a federal investigator announced that Hillary Clinton’s brother Anthony Rodham and Virginia Gov. Terry McAuliffe (D) had used their political influence to press the U.S. Citizenship and Immigration Services to speed visa approvals for foreign citizens investing in their startup electric car company—approvals that came despite the objections of agency staff.

The IG’s report confirmed findings of a two-year investigation by Watchdog.org, a project of the Washington D.C.-based Franklin Center. In a series of articles about McAuliffe’s company, Watchdog reporters documented the Obama administration’s politicization of a controversial federal program that fast-tracks visas for foreign investors in U.S. companies. The Watchdog investigation was punctuated in April 2013 by an $85-million lawsuit in which McAuliffe and Rodham’s GreenTech Automotive alleged that Watchdog’s reporting defamed the company.

Despite the lawsuit, Watchdog reporters kept digging, producing their findings in more than 70 articles. And when the Inspector General released his audit in March, the facts of the case, first uncovered by Watchdog reporters, were clear to all: McAuliffe, while campaigning for governor, had bragged that he had created an American car company. Bill Clinton had helped broker the deal with Chinese backers that put McAuliffe in a position to make that claim. Anthony Rodham had served as president of GreenTech’s financial arm, Gulf Coast Funds Management, which solicited investments from foreign investors in exchange for visas under a controversial federal program. Several former Clinton and Obama officials were among the company’s highest-profile executives. Virginia state economic development officials and staff at the U.S. Citizenship and Immigration Services considered the car company’s business model unworkable—“a cash-for-visas scheme,” one of them called it. McAuliffe and Rodham used their connections to press high-ranking Department of Homeland Security and White House officials—including then-Homeland Security Secretary Janet Napolitano and White House green-energy aide Greg Nelson, the man behind the Solyndra debacle—to speed visa approvals for GreenTech investors.

The story that was under the radar when McAuliffe began his successful run for Virginia governor was ultimately picked up by network news affiliates in Virginia and Mississippi, and by such national outlets as the Drudge Report, The New York Times, Washington Post, Washington Examiner, Washington Times, PBS NewsHour, TownHall.com, Human Events, National Review, Reason, FOX News, and Glenn Beck’s TheBlaze.

The series has been cited in three federal investigations into the company—by the Securities and Exchange Commission, by the Department of Homeland Security’s Inspector General, and by the Senate Judiciary Committee.

“The McAuliffe story is one example of how our reporting system works—by looking for local stories that have national resonance,” says Erik Telford, a longtime senior executive of the Franklin Center and now president of the six-year-old organization. “We started with a Virginia state reporter just checking out candidate McAuliffe’s resume, and then digging into his claim that he’d created a new American car company. That led the reporter to the federal visa program and to Mississippi, where McAuliffe ultimately cut the deal to open a state-supported operation.”

In the beginning, the Franklin Center was a grant-making organization, funding and training reporters who worked closely with state-based free-market think tanks. There have been notable successes: The Illinois Policy Institute’s state news bureau is headed by the entrepreneurial Scott Reeder, founding editor of Watchdog. The Idaho Freedom Foundation’s news content is a product of former Montana Watchdog reporter Dustin’s Hurst’s muckraking style. Independent of the Franklin Center, former journalist John Hood has established not just a destination website but also Carolina Journal, a powerful, sharp-elbowed monthly newspaper operating out of the John Locke Foundation.

The Franklin Center now has evolved from making grants and training reporters to doing journalism itself—with more than 30 Watchdog reporters on staff who cover every state in the nation. In its profile of Watchdog, “‘Serious, point-of-view journalism’?” Columbia Journalism Review called the Franklin Center’s national reporting network “the most ambitious conservative news organization you’ve never heard of.” Governing Magazine observed: “What is clear is that, when Watchdog sinks its teeth into a story, it doesn’t let go.” Intending to terrify its liberal audience, the activist group Media Matters said Watchdog’s Wisconsin bureau “has reached a level of influence hard to match.” Later in the same piece, political reporter Dan Bice of the Milwaukee Journal Sentinel said of Watchdog: “What they have done is influence the outcome of elections.”

But Watchdog’s real goal: to root out government waste, fraud and overreach, and to illuminate successful limited government policies that are often ignored by the mainstream press.

“In most of those cases, our reporters still work closely with state policy groups,” says Telford. “And in all those states we hope to build full news bureaus—not just one reporter contributing to a national news site, but bureaus with several reporters, and video and podcasting capacities.”

As an example of this full-fledged bureau, Telford points to Watchdog’s foray into Texas. There, reporter Jon Cassidy caught the attention of local donors thrilled by Cassidy’s 18-month investigation of influence peddling at the University of Texas at Austin Law School.

When Cassidy began his investigation, Wallace Hall, an appointee of Gov. Rick Perry (R) to the University of Texas Board of Regents, was about to be impeached for alleged ethics violations, charges driven by University of Texas at Austin President Bill Powers. Eighteen months later, Powers is resigning in disgrace and Wallace Hall is a Texas hero.

Until Cassidy’s arrival, the media, the university, and the legislature were railroading Hall. His crime, they said: blowing the whistle on influence peddling at the university’s law school. Lawmakers accused Hall of making frivolous document requests, of making wild accusations, and even of trying to destroy the university. Cassidy cut through the accusations and proved that Hall was right: A bipartisan group of legislators had for years used the University of Texas admissions process as their own spoils system. Wallace Hall threatened that privilege.

Cassidy showed Hall’s allegations were on target by developing sources in the legislature and the university. He began with a simple working strategy—simple but difficult: If he could identify students who were unqualified for admission into the prestigious school but who were admitted anyway and who then failed the Texas bar, then he might find a common denominator—a link between the student and a powerful patron inside government.

Cassidy built a database that tracked over a decade’s worth of academic data of students admitted to the University of Texas at Austin Law School and then traced those who later performed poorly on the Texas Bar exam. Then he found the smoking gun: documents that linked an extraordinary number of the under-qualified students to a powerful lawmaker or state official.

An independent audit subsequently confirmed Cassidy’s findings. Without admitting any wrongdoing, Powers, the well-named president of the University of Texas at Austin, resigned.

Now, Cassidy is a foundational player in a more ambitious Texas Watchdog bureau. Austin-based Watchdog editor Mark Lisheron will manage a staff of reporters, including Cassidy, in Houston, West Texas, and Dallas-Fort Worth. Lisheron, who has been an investigative reporter at the Milwaukee Journal Sentinel and the Austin American-Statesman, says Watchdog’s first “model bureau” will have the reportorial firepower “to bring honest journalism to a state increasingly in the thrall of government power.”

“We’ve made quite a mark with just one reporter,” Lisheron says. “But Texas is a big state with issues that deserve big coverage. When fully staffed we intend to run rings around the Texas Tribune and the big, but increasingly lazy and out of touch daily newspapers.”

Watchdog reporters are uncovering malfeasance all over the country. In Wisconsin, Matt Kittle has revealed an anti-Scott Walker Democrat is using the power of his District Attorney’s office to harass conservative activists. In Colorado, Art Kane’s series on welfare withdrawals at ATMs in casinos, liquor stores, and pot shops led to a new law to stop the misuse of taxpayer funds. In New Jersey, reporter Mark Lagerkvist has illuminated Gov. Chris Christie’s (R) failure to rein in out-of-control public-employee pensions. In Vermont, Bruce Parker helped publish videos of ObamaCare architect Jonathan Gruber mocking voters. In these states and around the nation, Watchdog is on the ground and watching.


Mr. Swaim is Vice President of Journalism at the Franklin Center for Government and Public Integrity.