FOR ALEJANDRO CHAFUEN, the gathering this spring at the Brick Hotel in Buenos Aires was as much a homecoming as it was a victory lap. Chafuen, a lanky Argentine-American, had spent his adult life working to undermine left-wing social movements and governments in South and Central America, and boost a business-friendly version of libertarianism instead.
It was a lonely battle for decades, but not lately. Chafuen was among friends at the 2017 Latin America Liberty Forum. The international meeting of libertarian activists was sponsored by the Atlas Economic Research Foundation, a leadership-training nonprofit now known simply as the Atlas Network, which Chafuen has led since 1991. At the Brick Hotel, Chafuen was reveling in recent victories; his years of work were starting to pay off, thanks to political and economic circumstances - but also because of the network of activists Chafuen has been working for so long to cultivate.
Over the past 10 years, leftist governments have used "money to buy votes, to redistribute," said Chafuen, seated comfortably in the lobby. But the recent drop in commodity prices, coupled with corruption scandals, has given an opportunity for Atlas Network groups to spring into action. "When there is an opening, you have a crisis, and there is some demand for change, you have people who are trained to push for certain policies," Chafuen noted, paraphrasing the late Milton Friedman. "And in our case, we tend to favor to private solutions to public problems."
Chafuen pointed to numerous Atlas-affiliated leaders now in the spotlight: ministers in the new conservative government in Argentina, senators in Bolivia, and the leaders of the Free Brazil Movement that took down Dilma Rousseff's presidency, where Chafuen's network sprang to life before his very eyes.
"In Brazil, I have been in the street demonstrations, and I'm like, 'Hey, this guy I met when he was 17, 18 - he is up there on the bus leading this. This is crazy!'" Chafuen said, excitedly. Those in Atlas's orbit were no less excited to run into Chafuen in Buenos Aires. Activists from various countries stopped Chafuen intermittently to sing his praises as he walked through the hotel. For many, Chafuen, from his perch at Atlas, has served as a mentor, fiscal sponsor, and guiding beacon for a new political paradigm in their country.
A RIGHTWARD SHIFT is afoot in Latin American politics. Triumphant socialist governments had once swept the region for much of the 21st century - from Argentina's Cristina Fernández de Kirchner to land reform populist Manuel Zelaya in Honduras - championing new programs for the poor, nationalizing businesses, and challenging U.S. dominance in hemispheric affairs.
In recent years, however, leftist leaders have fallen one after another, sometimes in spectacular fashion. Zelaya was led from the presidential palace in his pajamas in a military coup; in Argentina, a real-estate baron swept to the presidency and Kirchner was indicted for corruption; and in Brazil, the ruling Workers' Party, facing a growing corruption scandal and a mass protest movement, was swept out of office via impeachment over charges of budget chicanery.
This shift might appear as part of a larger regional rebalancing, merely economic circumstances taking hold. And yet the Atlas Network seems ever-present, a common thread nudging political developments along.
The story of the Atlas Network and its profound impact on ideology and political power has never been fully told. But business filings and records from three continents, along with interviews with libertarian leaders across the hemisphere, reveal the scope of its influential history. The libertarian network, which has reshaped political power in country after country, has also operated as a quiet extension of U.S. foreign policy, with Atlas-associated think tanks receiving quiet funding from the State Department and the National Endowment for Democracy, a critical arm of American soft power.
Though recent investigations have shed light on the role of powerful conservative billionaires, such as the Koch brothers, in developing a business-friendly version of libertarian thought, the Atlas Network, which receives funding from Koch foundations, has recreated methods honed in the Western world for developing countries.
The network is expansive, currently boasting loose partnerships with 450 think tanks around the world. Atlas says it dispensed over $5 million to its partners in 2016 alone.
Over the years, Atlas and its affiliated charitable foundations have provided hundreds of grants to conservative and free-market think tanks in Latin America, including the libertarian network that supported the Free Brazil Movement and organizations behind a libertarian push in Argentina, including Fundación Pensar, the Atlas think tank that merged with the political party formed by Mauricio Macri, a businessman who now leads the country. The leaders of the Free Brazil Movement and the founder of Fundación Eléutera in Honduras, an influential post-coup neoliberal think tank, have received financial support from Atlas, and are among the next generation of political operatives that have gone through Atlas's training seminars.
The Atlas Network spans dozens of other think tanks across the region, including prominent groups supporting right-wing forces behind the unfolding anti-government movement in Venezuela and the campaign of Sebastián Piñera, the right-of-center candidate leading the polls for this year's presidential election in Chile.
NOWHERE HAS THE Atlas method been better encapsulated than in a newly formed network of Brazilian free-market think tanks. Recently formed institutes worked together to foment anger at socialist policies, with some cultivating academic centers, while others work to train activists and maintain a constant war in the Brazilian media against leftist ideas.
The effort to focus anger solely at the left paid dividends last year for the Brazilian right. The millennial activists of the Free Brazil Movement, many of them trained in political organizing in the U.S., led a mass movement to channel public anger over a vast corruption scandal against Dilma, the left-of-center president popularly known by her first name. The scandal, nicknamed Operação Lava Jato, or Operation Car Wash, is a still-unfolding tale of bribery involving leading politicians from all of Brazil's major political parties, including the right-wing and center-right parties. But the social media-savvy Free Brazil Movement, known by its Portuguese initials, MBL, managed to direct the bulk of outrage squarely at Dilma, demanding her ousting and an end to the welfare-centric policies of her Workers' Party.
The uprising, which has drawn comparisons to the tea party movement, especially considering the quiet support from local industrial conglomerates and a new conspiracy-minded network of far-right media voices, ended 13 years of rule by the Workers' Party by removing Dilma from office through impeachment in 2016.
The landscape that MBL sprang from is a new development in Brazil. There were perhaps three active libertarian think tanks 10 years ago, said Helio Beltrão, a former hedge fund executive who now leads Instituto Mises, a nonprofit named after the libertarian philosopher, Ludwig von Mises. Now, he said, with the support of Atlas, there are close to 30 such institutes active in Brazil, all working collaboratively, along with groups, such as Students for Liberty and MBL.
"It's like a soccer team. Defense is the academia. The forward guys are the politicians. We've scored a few goals," he said, referring to Dilma's impeachment. The midfield, he said, are the "cultural guys" that shape public opinion.
Beltrão explained that the think tank network is hoping to privatize the national post office in Brazil, calling it "low-hanging fruit" that could lead to a larger wave of free-market reforms. Many of the conservative parties in Brazil embraced libertarian campaigners when they showed they could mobilize hundreds of thousands of people to protest against Dilma, but haven't yet adopted the fundamentals of supply-side theory.
Fernando Schüler, an academic and columnist associated with Instituto Millenium, another Atlas think tank in Brazil, made the case another way.
"Brazil has 17,000 unions paid by public money, one day of salary per year goes to unions, completely controlled by the left," said Schüler. The only way to reverse the socialist trend has been to out-maneuver them. "With technology, people could by themselves participate, organize at low cost - WhatsApp, Facebook, YouTube, using networks, a kind of public manifestation," he continued, explaining the way libertarian organizers mobilized a protest movement against left-leaning politicians.
Organizers against Dilma had created a daily barrage of YouTube videos mocking the Worker's Party government, along with an interactive scoreboard to encourage citizens to lobby their legislators to support impeachment.
Schüler noted that the Free Brazil Movement and his own think tank receive financial support from local industrial trade groups, but the movement had succeeded in part because it is not identified with the incumbent political parties, most of which the general public views with suspicion. He argued that the only way to radically reshape society and reverse popular sentiment in support of the welfare state was to wage a permanent cultural war to confront left intellectuals and the media.
ONE OF THE founders of Schüler's Instituto Millenium think tank, Brazilian blogger Rodrigo Constantino, has polarized Brazilian politics with hyperpartisan rhetoric. Constantino, who has been called the "Breitbart of Brazil" for his conspiratorial views and acidic right-wing commentary, chairs yet another Atlas think tank, Instituto Liberal. He sees the Brazilian left's every move as a veiled attempt at subverting democracy, from the use of the color red in the country's World Cup logo to the Bolsa Família cash assistance program to poor families.
Constantino is credited with popularizing a narrative that Worker's Party supporters are limousine liberals, wealthy hypocrites that flock to socialism to claim the moral high ground while snubbing the working classes they claim to represent.
The Breitbartization of public discourse is but one of the many ways the Atlas network has subtly influenced political debate.
"It's a very paternalistic state. It's crazy. It's a lot of state control, and that's the long-term challenge," said Schüler, adding that despite recent victories, libertarians had a long way to go in Brazil. He hoped to copy the model of Margaret Thatcher, who relied on a network of libertarian think tanks to push unpopular reforms. "This pension system is absurd. I would privatize all education," Schüler, rattling off a litany of changes he would make to society, from defunding labor unions to repealing the law that makes voting compulsory.
Yet the only way to make all that possible, he added, would be to build a network of politically active nonprofits all waging separate battles to push the same libertarian goals. The existing model - the constellation of right-wing think tanks in Washington, D.C., supported by powerful endowments - is the only path forward for Brazil, Schüler said.
Atlas, for its part, is busy doing just that. It gives grants for new think tanks, provides courses on political management and public relations, sponsors networking events around the world, and, in recent years, has devoted special resources to prodding libertarians to influence public opinion through social media and online videos.
An annual competition encourages Atlas's network to produce viral YouTube videos promoting laissez-faire ideas and ridiculing proponents of the welfare state. James O'Keefe, the provocateur famous for needling Democrats with his undercover videos, has appeared before Atlas to explain his methods. Producers from a Wisconsin group that worked to create online videos to discredit teacher protests against Gov. Scott Walker's law busting public sector unions have also provided instructions for Atlas's training sessions.
AMONG ITS OTHER exploits of late, Atlas has played a role in a Latin American nation roiled by the region's most acute political and humanitarian crisis: Venezuela. Records obtained through the Freedom of Information Act by author and activist Eva Golinger, as well as State Department cables disclosed by whistleblower Chelsea Manning, reveal U.S. policymakers' sophisticated effort to use Atlas think tanks in a long-running campaign to destabilize the reign of Venezuelan leader Hugo Chávez.
As early as 1998, Cedice Libertad, Atlas's flagship think tank in Caracas, Venezuela's capital, received regular financial support from the Center for International Private Enterprise. In one grant letter, NED funds marked for Cedice are listed to help advocate "a change in government." The director of Cedice was among the signatories of the controversy "Carmona Decree" supporting the short-lived military coup against Chávez in 2002.
A 2006 cable laid out a strategy from U.S. Ambassador William Brownfield for funding politically active nonprofits in Venezuela: "1) Strengthening democratic institutions, 2) penetrating Chávez's political base, 3) dividing Chavismo, 4) protecting vital U.S. business, and 5) isolating Chávez internationally."
In Venezula's current crisis, Cedice has promoted the recent spate of protests against President Nicholás Maduro, Chávez's embattled successor. Cedice is closely affiliated with opposition figure María Corina Machado, one of the leaders of the massive anti-government street demonstrations in recent months. Machado has publicly recognized Atlas for its work. In a videotape message delivered to the group in 2014, she said, "Thank you to the Atlas Network, to all freedom fighters."
Think tank "entrepreneurs" from Peru, the Dominican Republic, and Honduras competed in a format along the lines of "Shark Tank," an America reality show where start-up businesses pitch to a panel of wealthy, ruthless investors. Instead of seeking investments from a panel of venture capitalists, however, the think tank leaders pitched policy marketing ideas for a contest that awarded $5,000. In another session, strategies were debated for attracting industry support to back economic reforms. In another room, political operatives debated arguments "lovers of liberty" can use to respond to the global rise of populism to "redirect the sense of injustice many feel" toward free-market goals.
One young leader from CADAL, a think tank in Buenos Aires, presented on an idea to rank each Argentine province using what he called an "economic liberty index," which would use the level of taxation and regulation as the main criteria to generate buzz for free-market reforms. The idea is consciously modeled on similar strategies from the U.S., including the Heritage Foundation's "Index of Economic Freedom," which measures countries based on criteria that includes tax policies and regulatory barriers to business formation.
Think tanks are traditionally associated with independent institutes formed to develop unconventional solutions. But the Atlas model focuses less on developing genuinely new policy proposals, and more on establishing political organizations that carry the credibility of academic institutions, making them an effective organ for winning hearts and minds.
Free-market ideas - such as slashing taxes on the wealthy; whittling down the public sector and placing it under the control of private operators; and liberalized trade rules and restrictions on labor unions - have always struggled with a perception problem. Proponents of this vision have found that voters tend to view such ideas as a vehicle for serving society's upper crust. Rebranding economic libertarianism as a public interest ideology has required elaborate strategies for mass persuasion.
But the Atlas model now spreading rapidly through Latin America is based on a method perfected by decades of struggle in the U.S. and the U.K., as libertarians worked to stem the tide of the surging post-war welfare state.
ANTONY FISHER, A BRITISH entrepreneur and the founder of the Atlas Network, pioneered the sale of libertarian economics to the broader public. The tack was simple: Fisher made it his mission to, in the words of an associate, "litter the world with free-market think tanks."
The basis for Fisher's ideals came from Friedrich Hayek, a forbearer of modern thought on limited government. In 1946, after reading the Reader's Digest version of Hayek's seminal book, "The Road to Serfdom," Fisher sought a meeting with the Austrian economist in London. As recounted by his close colleague John Blundell, Fisher suggested Hayek enter politics. But Hayek demurred, replying that a bottom-up focus on shifting the public discourse could better shape society.
Meanwhile, in the U.S., another free-market ideologue, Leonard Read, was entertaining similar notions after leading the U.S. Chamber of Commerce's Los Angeles branch into bruising battles with organized labor. To counter the growth of the welfare state, a more elaborate response would be necessary to share popular debates around the direction of society, without the visible link to corporate interests.
Fisher was propelled forward by a fateful visit to Read's newly formed nonprofit, the Foundation for Economic Education, in New York, which was founded to help sponsor and promote the ideas of free-market intellectuals. There, libertarian economist F.A. Harper, at the time working at FEE, advised Fisher on methods for creating his own nonprofit in the U.K.
During the trip, Fisher also traveled with Harper to Cornell University to observe the latest animal industry breakthrough of battery cages, marveling at the sight of 15,000 chickens housed in a single building. Fisher was inspired to bring the innovation home with him. His factory, Buxted Chickens, grew rapidly and made Fisher a substantial fortune in the process. Some of those profits went into the other goal fostered during his New York trip: In 1955, Fisher founded the Institute of Economic Affairs.
IEA helped popularize the once-obscure set of economists loosely affiliated with Hayek's ideas. The institute was a place to showcase opposition to British society's growing welfare state, connecting journalists to free-market academics and disseminating critiques on a regular basis through opinion columns, radio interviews, and conferences.
Businesses provided the bulk of funding to IEA, as leading British industrial and banking giants - from Barclays to BP - pitched in with annual contributions. According to "Making Thatcher's Britain," by historians Ben Jackson and Robert Saunders, one shipping magnate remarked that, since universities were providing ammunition for the unions, the IEA was an important source of bullets for business.
As the economic slowdown and rising inflation of the 1970s shook the foundations of British society, Tory politicians gravitated more and more to the IEA to provide an alternative vision - and IEA obliged with accessible issue briefs and talking points politicians could use to bring free-market concepts to the public. The Atlas Network proudly proclaims that the IEA "laid the intellectual groundwork for what later became the Thatcher Revolution of the 1980s." IEA staff provided speechwriting for Margaret Thatcher; supplemented her campaign with policy papers on topics as varied as labor unions and price controls; and provided a response to her critics in the mass media. In a letter to Fisher after her 1979 victory, Thatcher wrote that the IEA created "the climate of opinion which made our victory possible."
"There's no doubt there's been enormous progress in Britain, the Institute of Economic Affairs, which Antony Fisher set up, made an enormous difference," Milton Friedman once said. "It made possible Margaret Thatcher. It made possible not her election as prime minister but the policies that she was able to follow. And the same thing in this country, the developing thought along these lines made possible Ronald Reagan and the policies he was able to follow."
IEA had come full circle. Hayek set up an invitation-only group of free-market economists called the Mont Pelerin Society. One of its members, Ed Feulner, helped found the conservative Washington think tank the Heritage Foundation, drawing on IEA's work for inspiration. Another Mont Pelerin member, Ed Crane, founded the Cato Institute, the most prominent libertarian think tank in the U.S.
IN 1981, FISHER, who had settled in San Francisco, set out to develop the Atlas Economic Research Foundation at the urging of Hayek. Fisher had used his success with IEA to court corporate donors to help establish a string of smaller, sometimes regional think tanks in New York, Canada, California, and Texas, among other places. With Atlas, though, the scale for Fisher's free-market think tank project would now be global: a nonprofit dedicated to continuing his work of establishing libertarian beachheads in every country of the world. "The more institutes established throughout the world," Fisher declared, "the more opportunity to tackle diverse problems begging for resolution."
Fisher began to fundraise, pitching corporate donors with the help of letters from Hayek, Thatcher, and Friedman, including an urgent call for donors to help reproduce the success of IEA through Atlas. Hayek wrote that the IEA model "ought to be used to create similar institutes all over the world." He added, "It would be money well spent if large sums could be made available for such a concerted effort."
The proposal was sent to a list of high-level executives and soon, money began pouring in from corporate coffers and Republican mega-donors, including Richard Mellon Scaife. Companies, such as Pfizer, Procter & Gamble, and Shell, all gave to Atlas. But their influence would need to remain cloaked for the project to work, Fisher contended. "To influence public opinion, it is necessary to avoid any suggestion of vested interest or intent to indoctrinate," Fisher noted in a proposal outlining the purpose of Atlas. Fisher added that IEA's success hinged on the perception that it was academic and impartial.
Atlas grew rapidly. By 1985, the network featured 27 institutions in 17 countries, including nonprofits in Italy, Mexico, Australia, and Peru.
And the timing could not have been better: Atlas's international expansion came just as the Reagan administration was doubling down on an aggressive foreign policy, hoping to beat back leftist governments abroad.
While in public, Atlas declared that it received no government funding (Fisher belittled foreign aid as just another "bribe" used to distort market forces), records show the network quietly worked to channel government money to its growing list of international partners.
In one 1982 letter from the International Communication Agency, a small federal agency devoted to promote U.S. interests overseas, a bureaucrat at the Office of Private Sector Programs wrote to Fisher, in response to an inquiry about acquiring federal grants. The bureaucrat said he was barred from giving "directly to foreign organizations," but could cosponsor "conferences or exchanges with organizations" hosted by groups like Atlas. He encouraged Fisher to send over a proposal. The letter, sent one year after Atlas's founding, was the first indication that the network would become a covert partner to U.S. foreign policy interests.
Memos and other records from Fisher show that, by 1986, Atlas had helped schedule meetings with business executives to direct U.S. funds to its network of think tanks. In one instance, an official from the U.S. Agency for International Development, the principal foreign aid arm of the federal government, recommended that the head of Coca-Cola's subsidiary in Panama work with Atlas to set up an IEA-style affiliate think tank there. Atlas' partners also drew funding from the coffers of the National Endowment for Democracy, a government-charted nonprofit, founded in 1983, that is funded largely by the State Department and USAID to build U.S.-friendly political institutions in the developing world.
WITH CORPORATE AND U.S. government funding pouring in, Atlas took another fortuitous turn in 1985 with the arrival of Alejandro Chafuen. Linda Whetstone, Fisher's daughter, remembered in a tribute that, in 1985, a young Chafuen, then living in Oakland, showed up to Atlas's San Francisco office "and was willing to work for nothing."
The Buenos Aires-born Chafuen hailed from what he described as "an anti-Peronist family." They were wealthy and, though raised in an era of incredible turmoil in Argentina, Chafuen lived a life of relative privilege. He spent his teenage years playing tennis, dreaming of becoming a professional athlete.
Chafuen credits his youthful ideological path to his appetite for devouring libertarian texts, from Ayn Rand to booklets published by FEE, the Leonard Read group that had originally inspired Fisher. After studying at Grove City College, a deeply conservative Christian liberal arts school in Pennsylvania, where he served as the president of the student libertarian club, Chafuen returned to his home country. The military had stepped in, claiming a threat from communist revolutionaries. Thousands of students and activists would be tortured and killed in the crackdown on left-wing dissent following the coup d'etat.
Chafuen remembers the time in a mostly positive light, later writing that the military had acted out of necessity to prevent a communist "takeover of the country." While pursuing a teaching career, Chafuen encountered "totalitarians of every style" within academic life. After the military coup, he wrote that he noticed that his professors became "gentler," despite their differences with him.
In other Latin American countries, too, libertarianism was finding a receptive audience among military governments. In Chile, after the military swept out the democratically elected government of Salvador Allende, Mont Pelerin Society economists quickly flocked to the country, setting the stage for widespread libertarian reforms, including the privatization of industry and the country's pension system. Throughout the region, under the watch of right-wing military leaders that had seized power, libertarian economic policies began to take root.
For his part, Chafuen's ideological zeal was on display as early as 1979, when he published an essay for FEE titled "War Without End." He described the horrors of leftist terror, "like the Charles Manson family, or in regimental strength, like the guerilla troops in the Middle East, Africa, and South America." There was a need, he wrote, for the "forces of individual freedom and private property" to fight back.
His enthusiasm garnered attention. In 1980, at age 26, Chafuen was invited to become the youngest member of the Mont Pelerin Society. He traveled to Stanford, an opportunity that put him in direct contact with Read, Hayek, and other leading libertarians. Within five years, Chafuen had married an American and was living in Oakland. He began reaching out to Mont Pelerin members in the Bay Area, including Fisher.
According to Atlas's board meeting notes, Fisher told his colleagues he had made a $500 ex gratia Christmas payment that year to Chafuen, and hoped to hire the young economist full-time to develop Atlas think tanks in Latin America. The following year, Chafuen organized the first Atlas summit of Latin American think tanks in Jamaica.
CHAFUEN UNDERSTOOD THE Atlas model well and worked diligently to expand the network, helping to launch think tanks in Africa and Europe, though focusing his efforts in Latin America. Describing how to attract donors, Chafuen once noted in a lecture that donors cannot appear to pay for public surveys because the polls would lose credibility. "Pfizer Inc. would not sponsor surveys on health issues nor would Exxon pay for surveys on environmental issues," Chafuen noted. Libertarian think tanks, such as the ones in Atlas's network, however, could not only present the same survey with more credibility, but do so in a way that garnered coverage in the local media.
"Journalists are very much attracted by whatever is new and easy to report," Chafuen said. The press is less interested in quoting libertarian philosophers, he contended, but when a think tank produced a survey people would listen. "And donors also see this," he added.
In 1991, three years after Fisher died, Chafuen took the helm of Atlas and would have the opportunity to speak to donors with authority about Atlas's work. He quickly began to rack up corporate sponsors to push company-specific goals through the network. Philip Morris contributed regular grants to Atlas, including a $50,000 contribution to the group in 1994, which was disclosed years later through litigation. Records show that the tobacco giant viewed Atlas as an ally for working on international litigation issues.
Journalists in Chile, however, found out that Atlas-backed think tanks had worked to quietly lobby against smoking regulations without disclosing their funding from tobacco companies, a strategy similar think tanks repeated across the globe.
Corporate giants, such as ExxonMobil and MasterCard, were among Atlas's donors. But the group also attracted leading figures in libertarianism, such as the foundations associated with investor John Templeton and the billionaire brothers Charles and David Koch, which lavished Atlas and its affiliates with regular contributions.
Chafuen's fundraising prowess extended to the growing number of wealthy conservative foundations that were beginning to flourish. He was a founding member of Donors Trust, a secretive donor-advised fund that has doled out over $400 million to libertarian nonprofits, including members of the Atlas Network. He also serves as a trustee to the Chase Foundation of Virginia, which was founded by a Mont Pelerin Society member and similarly sends cash to Atlas think tanks.
Another wellspring of money came from the American government. Initially, the National Endowment for Democracy encountered difficulty setting up U.S.-friendly political nonprofits. Gerardo Bongiovanni, the president of Fundación Libertad, an Atlas think tank in Rosario, Argentina, noted during a lecture with Chafuen that the early seed money from NED's grant partner, the Center for International Private Enterprise, totaled $1 million between 1985 and 1987. The think tanks that received those initial grants quickly folded, Bongiovanni said, citing lack of management training.
Atlas, however, managed to turn U.S. taxpayer money coming through the NED and Center for International Private Enterprise into an important source of funding for its growing network. The funding vehicles provided money to help boost Atlas think tanks in Eastern Europe, following the fall of the Soviet Union, and, later, to promote U.S. interests in the Middle East. Among the recipients of the Center for International Private Enterprise's cash is Cedice Libertad, the group thanked by Venezuelan opposition leader María Corina Machado.
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