Is John Arnold a "Self-Interested" Funder? And What Will Happen To That $3.5 Million His Foundation Just Got Back From WNET?

The Laura and John Arnold Foundation (LJAF) has been a major advocate of pension reform, funding research and awareness on this issue, and sponsoring a nationwide legislative push to encourage local and state governments to address their unfunded pension liabilities. So it made sense when New York PBS affiliate WNET approached them for a grant to fund their “Pension Peril” series.

The foundation thought it made sense too, awarding WNET $3.5 million for the project. After a report by David Sirota on what he called the secret corruption inside PBS’s news division, detailing the relationship between WNET and the Arnold Foundation, and accusing the organizations of deliberately obscuring their relationship, however, WNET decided to return the grant, citing a perceived conflict of interest. The loss of funding also resulted in the series being halted. 

For its part, the foundation fired back, releasing a statement saying that Sirota’s report made “false and incendiary allegations regarding the [Foundation’s] relationship with this grantee,” noting that the foundation “encouraged WNET's full editorial autonomy," and "never sought to influence in any way the content of the series, its programming schedule or any other editorial matter.” In line with the foundation's general agreements with all their grantees, the grant was made “with the explicit understanding that WNET would provide fully independent reporting." 

While that may well be the case, WNET concluded that the grant violated their rules nonetheless, which read, in part, “when there exists a clear and direct connection between the interests… of a proposed funder and the subject matter of the program, the proposed funding will be deemed unacceptable regardless of the funder’s actual compliance with the editorial control provisions.”

This, of course, begs the question, what "interests" do the Arnold's have in pension reform?

Sirota calls John Arnold a "billionaire political powerbroker who is actively trying to shape the very pension policy that the series claims to be dispassionately covering" and Sirota details the activist efforts of the Arnolds in this area. To be sure, the Arnolds are pulling every lever they can to move the needle on the pension issue. Just like, say, the Gill Foundation has pulled every lever it can to move the marriage equality issue or the Sea Change Foundation pulls every lever it can to move the climate change issue or the Robert Wood Johnson Foundation pulls every lever it can to move the obesity issue and on and on. 

Let's face it: Nearly all funders have an agenda, and many big funders pursue that agenda in multiple ways, including education and direct legislative advocacy. We report elsewhere on IP today that Thomas Steyer is not just giving philanthropic donations to change U.S. climate policy; he's now planning to spend $50 million on political ads to shape the 2014 election.

The Arnolds are playing the same game as any number of other funders. 

Sirota calls WNET's relationship with the Arnolds "corruption," but that term implies that the couple has a direct financial interest in promoting pension reform. That doesn't appear to be the case. We may or may not agree with how the Arnolds approach the pension issue, but they are hardly alone in seeing pension liabilities as a major threat to the fiscal solvency of states and cities—and a specific threat to education spending, which the Arnolds care about strongly.

Is this "self-interested" funding? Sure, of a kind. But not in a corrupt sense, and this broader form of self-interested funding is everywhere: Gay funders like Tim Gill and John Stryker have bankrolled an entire advocacy infrastructure aimed at expanding rights for people like themselves. Michael J. Fox has raised and donated money to get more federal research funding for Parkinson's. We can think of plenty of funders that are more directly self-interested than the Arnolds are on pension reform. 

In short, what we have with LJAF is a funder doing typical things to advocate ideas that are center-right, but hardly unusual. And if we dug, we could probably find any number of foundations and individuals who have funded any number of programs by public television and radio outlets to advocate ideas that they are also trying to advance in the legislative arena. 

Is this a problem? It certainly is. Our public broadcasting system should be generously funded by government, not private individuals and foundations with an agenda. 

Until that happens, though, we're left with a flawed system. Sirota may have gone overboard in attacking the Arnolds, but he was absolutely right to raise the alarm about how bad things have gotten with private influence of public broadcasting and he did a good thing by bringing transparency to WNET's relationship with LJAF, which should never have been veiled to begin with. It's bad enough that big money can help set the agenda of public broadcasting. It's even worse when these ties are hard to see. 

And, clearly, for WNET to hook up with a funder like LJAF for coverage of so politicized an issue was poor judgment. 

Okay, enough on the big picture. Let's get to the more immediate question raised by this mess: What will happen with that $3.5 million that Laura and John Arnold is getting back from WNET?

It seems as though there may be some newly freed up grant money for production companies and reporting organizations interested in taking a look at the pension issue.