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December 31, 2009

Things You Didn’t Know About the Center for Consumer Freedom and Richard Berman

A front for corporate interests

The so-called Center for Consumer Freedom (CCF), founded by Washington lobbyist Richard Berman and his firm Berman & Co., is an industry front for tobacco, alcohol, and agribusiness interests. The group’s stock-in-trade involves malicious attacks on organizations that promote food safety, public health, or animal welfare.

It was started with a $600,000 grant from tobacco giant Phillip Morris. In the pay and in the pocket of corporate special interests that profit from animal cruelty, CCF has always sought to thwart The HSUS’s work to combat factory farming, puppy mills, the Canadian seal slaughter, commercial whaling, and other large-scale cruelties. Among other targets, CCF has also attacked Mothers Against Drunk Driving and the U.S. Centers for Disease Control and Prevention for their anti-drunk driving and public health campaigns. 

See media coverage about CCF as reported by the New York Times, CBS, USA Today, Newsweek, the San Francisco Chronicle, The Chronicle of Philanthropy, and more.

Irresponsible Claims

CCF and other tax-exempt nonprofit front groups controlled by Berman & Co. have flaunted the law, and surely the spirit of the law, through the following actions:

  • continuously engaging in significant non tax-exempt activities in pursuing the private business and trade group functions of its benefactors, who are often also Berman & Co. clients
  • conducting prohibited electioneering and lobbying activities
  • operating under the ruse of consulting services contracts with Berman & Co.—contracts resulting from an insider transaction signed by Richard Berman on behalf of both the for-profit and nonprofit entities that share the same employees, have some of the same directors and officers, and are located in the same office suite
  • fraudulently incorporating under the guise of an exempt public charity, with the true purpose of funneling income received from industry donor’s “charitable donations” to the nonprofit front group—totaling millions of dollars annually—to fund the for-profit business activities of Berman & Co. and its industry clients
  • making substantial payments to Richard Berman, his family, his for-profit consulting and lobbying firm, Berman & Co., and the firm’s officers, constituting prohibited private inurement and excess benefits compensation
  • In May 2005, CCF published a retraction of a press release containing a false claim about The HSUS. The item appeared on its Web site under the headline “From The ‘Our Lawyers Made Us Say This’ Department….” The retraction stated “We regret any confusion that our publications may have caused.”

Corporate License Not Consumer Freedom

In recent advertisements produced by CCF, the organization claims that “America’s obesity” problem is “hype.” Ridiculing warning labels on food, the ads say, “[t]he only warnings you really need are about food cops, bureaucrats, and scheming trial lawyers.” -The ads merely indicate that they were produced by “a nonprofit organization dedicated to protecting consumer choices and promoting common sense,” with no reference to CCF’s restaurant and food industry benefactors.

CCF was heavily criticized for the obesity ads. Dr. David Ludwig, director of the obesity program at Children’s Hospital in Boston, stated that “nobody in academia takes their arguments seriously,” and noted that they “stand for food industry freedom, not consumer freedom.” 

Quoted in a New York Times article, Dr. David Ludwig of the Children’s Hospital in Boston says, "[N]obody in academia takes [CCF's] arguments seriously... [t]hey stand for food industry freedom, not consumer freedom."

Read New York Times article» 

The ads were even criticized by some food industry companies, such as Pepsi Co. and Kraft Foods, who have declined to work with CCF because they “do not agree with some of its arguments or its approach.” A spokesman for Kraft Foods stated that “we feel we have a responsibility to address consumers’ concerns over obesity.”  Instead of telling consumers they have nothing to worry about, the spokesperson added “we’re responding by reformulating many of our products, providing more product information, creating smaller sizes and adjusting our marketing practices.”

The Lowest  of Stereotypes

In May 2006, Richard Berman’s anti-union front group, the Center for Union Facts (“CUF”) ran a sensationalist television advertisement featuring actors posed as unhappy union members. The ad claimed that today’s unions are tainted by racial discrimination, corruption, and improper political contributions. Further, the ad said workers were forced to join unions and pay dues under threat that they will lose their jobs. 

CUF bought airtime for the ad nationally on CNN, FOX News, and NBC, but a number of stations refused to air the commercial, correctly determining that CUF was peddling fallacious and malicious propaganda.  The president and general manager of a television station in Indianapolis explained that the station rejected the ad because it was “designed to be inflammatory, incendiary and pander[ed] to the lowest common denominator stereotypes about unions and union officials,” and it did not reflect “any of the qualities” of typical unions.

The Pittsburgh Post-Gazette reported that NBC affiliates in Boston, Indianapolis, South Bend, Ind., and Champagne, Ill.,  refused to run the CUF's pro-business commercial.

Read Pittsburgh Post-Gazette article»

It Adds Up to “Nonsense”

Examples abound of inaccuracy in “research” projects by Richard Berman’s front-organizations. On January 23, 2008, CCF issued a press release calling on the New York Times to retract an article reporting on a Rutgers University study finding high levels of mercury in fish sold at several restaurants and stores.  

The next day, Newsweek’s Senior Science Editor Sharon Begley reported that CCF had made glaring errors in relatively simple calculations, and called CCF’s statements (concerning the risk of adverse health effects of eating the fish) “nonsense” in light of reference dose data published by the EPA. 

Newsweek’s Senior Science Editor Sharon Begley reported that CCF had made glaring errors in relatively simple calculations and and called CCF’s statements "nonsense."

Read Newsweek article»

David Martosko responded for CCF primarily by levying an ad hominem attack against Begley, mocking her as “unprincipled” and “blissfully unaware,” and scoffing at Begley’s “science credentials” as consisting of “a bachelor’s degree in something called ‘combined sciences’ with an emphasis in physics, not biology or toxicology.” 

Martosko stands on suspect ground here—he was a music major in college and an AM radio talk show host producer before going to work for Berman & Co. Although he is employed by Berman & Co., he uses a CCF title as its “Director of Research,” a pseudo-position which is noted prominently in the by-line of his response to Ms. Begley’s article.

Not Even Close

On July 13, 2008, the San Francisco Chronicle published a letter to the editor by CCF claiming that the secret to weight loss is exercise, and not diet. In support, CCF cited research by the National Weight Control Registry at Brown University Medical School purportedly concluding that sustained weight loss is not about changing eating patterns or recording food intake, “but how much [people] move.” One week later, the Chronicle published an article stating that CCF was “wrong,” and noted that a professor of nutrition at San Jose State University had written the newspaper claiming that CCF had “distort[ed] the Registry’s conclusions.” The Chronicle contacted a Brown University Medical School professor and co-investigator at the Registry who indicated that CCF was “[n]ot even close” to correctly representing the findings of the Registry, and that, “[i]n fact, dietary restraint and monitoring are key characteristics of the successful weight losers in the [Registry research group].”

A Brown University Medical School professor told the San Francisco Chronicle that CCF was “[n]ot even close” to correctly representing the findings of a weight control research group.

Read San Francisco Chronicle article»

Blackhawk Helicopters to Take Down the Truth

Publicly, Richard Berman’s front groups would like be seen as espousing nonprofit, public interest purposes. Privately, however, Berman’s “operatives” tell their industry clients a different story. In a 2008 meeting of the National Cattlemen’s Beef Association, Berman & Co. employee David Martosko told the group that they need to be concerned that legitimate “environmental and nutritional experts” have begun to support vegetarianism. 

Martosko’s advice was not to address the public with the best substantive counterarguments to these experts, but instead that the group they should try to “diminish their credibility.” Martosko claimed that “[n]egative works” and likened CCF’s ability to do this to a clandestine military operation: “[W]e’re the Blackhawk helicopters who do the special ops and beat on the bad guys and then disappear.”

Deception on the Web

A further example of Richard Berman and his industry front groups misleading the public for the sake of promoting interests of corporate clients is the underhanded tactic of registering deceptive website domain names. 

In January 2000, Berman registered the domain name “cspinet.com.”  But he had no connection to the legitimate Center for Science in the Public Interest (“CSPI”), which had registered the CSPI trademark in 1999. CSPI had operated its website through the domain name “cspinet.org”—not .com—since 1996. Berman’s knock-off site linked to disparaging remarks about CSPI. The real CSPI complained to arbitrators. In January 2002 CSPI secured a ruling that Berman’s group had no rights or legitimate interests in the cspinet.com domain name and the registration had been used in bad faith. 

Undeterred, Berman tried again with the domain names “cspinot.com”[1]. Despite the previous ruling Berman used cspinot.org to divert Internet users to CCF’s own Web site that contained inflammatory comments about CSPI. In January 2003, a second panel of arbitrators ordered the transfer of these domain names from CCF to CSPI. 

Berman has created other Web sites with domain names deceptively similar to organizations its industry benefactors oppose, including the domain name “chefscollaborative.info,” which Berman was ordered to turn over to its rightful owner, Chefs Collaborative, in 2002[2].

Election Hijinks

On October 17, 2008, Richard Berman co-hosted a conference call with members of the business community to discuss efforts to prevent the Employee Free Choice Act from passing in Congress. A participant on the call indicated that Berman’s nonprofits had already received millions of dollars from some members of the business community to support the November 2008 election campaigns of Republican candidates who oppose the bill. The participants implored more businesses to do the same as “a way of affecting the election” while also avoiding the restrictions of the McCain-Feingold campaign finance law. 

Berman directed participants on the call to visit the Web sites of his front-group, the Center for Union Facts, and a related political action committee. Yet, as an IRS section 501(c)(3) organization, this Center for Union Facts was expressly prohibited from engaging in any electioneering activities, including supporting particular candidates for public office.

Notably, CUF's Form 990 annual returns to the IRS consistently report zero lobbying expenses.

[1] National Arbitration Forum, Decision – Center for Science in the Public Interest v. Guest Choice Network, Claim No. FA0111000102524. (Jan. 2, 2002).

[2] National Arbitration Forum, Decision – Chefs Collaborative v. Guest Choice Network, Claim No. FA0111000102484. (Jan. 16, 2002).

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