Beacon Center grows, helps defeat Insure TN

Six full-time employees, a million dollars and an argument. The main ingredients in the recipe used by the Beacon Center of Tennessee to kill Insure Tennessee aren't complex.

There were a few other key components to the plan's demise — other organizations and lawmakers advocating against a controversial proposal tied to an unpopular president. But the Beacon Center and its consultants were the only outside groups to testify before the General Assembly against the proposal.

They foretold of increasing the federal deficit by more than a billion dollars. They warned of doctors unwilling to see more Medicaid patients. They asked mainly Republican lawmakers to trust a president and administration after many of those same lawmakers chastised his leadership.

They faced Gov. Bill Haslam, doctors, health care experts, lobbyists, nurses and people desperately in need of help.

The coalition in support of Insure Tennessee includes 100 of the most politically and financially powerful organizations in the state: drug companies Pfizer and Glaxo Smith Kline; health insurer BlueCross Blue Shield and hospital giant HCA Health Care; the Tennessee Hospital Association, including Vanderbilt University and the UT Health System; the Chambers of Commerce for Nashville, Knoxville, Chattanooga and Memphis; and the Tennessee chapter of the AFL-CIO.

Many editorial pages across the state, including The Tennessean's, called on lawmakers to support Insure Tennessee.

The governor had this coalition, a supermajority of fellow Republicans in the House and Senate, all the Democrats supporting the plan and a promise to deliver health care to as many as half a million Tennesseans without spending a dime of state money.

And he lost. Badly. Twice.

"I think they underestimated us in that respect," said Justin Owen, president and CEO of the Beacon Center, based in Nashville.

"We had a compelling argument that legislators really listened to. Just because one side had more lobbyists, had more money, had fancier commercials, didn't mean that they should automatically win."

Don't call them a think tank

In 2004, at age 24, Drew Johnson launched the Tennessee Center for Policy Research. The goal: pursue public policy that promotes limited government and provides free-market solutions to expand personal freedoms.

That kind of talk is typically reserved for Republicans and Libertarians. Owen, an attorney by trade who said the firm is officially nonpartisan, put the mission in sports terms.

"Imagine running a race: you show up and think you're running a sprint, then there are a bunch of hurdles there that you have to learn to jump," Owen said.

"We feel like our role is to identify those hurdles and eliminate them, or stop them from being put up in the first place. And that's essentially what we try to do."

The center is a nonprofit and considered by most to be a think tank. Owen thinks that term is a little limiting — "that makes it sound like we just write a bunch of 50-page white papers that pointy headed academics read" — and doesn't encompass their advocacy work.

They are affiliated with the State Policy Network, a larger organization with connections to conservative and libertarian groups across the country. Owen likened the connection to belonging to a trade society, saying the organization is a good way to learn about similar policy efforts in other states.

The Beacon Center's past Tennessee successes include tort reform, a cap on the amount of money that can be awarded for "pain and suffering" in lawsuits — although that was recently deemed unconstitutional by a Hamilton County judge — and repealing the state's tax on inheritance, or what the center and other critics call the "death tax."

Those successes, and advocacy on issues like school vouchers, helped the center gain attention and money from the general public, Owen said.

A security chief, a car mogul and a bean tycoon

The full-time workers run the plays that Owen calls, but he answers to a board of directors when it comes to long-term strategy. That board includes a security company executive, a bean tycoon and a well-known conservative car mogul with a track record of involvement in local and state politics.

John Cerasuolo is the chairman of the board and runs Nashville-based ADS Security. According to the center, the company is the 25th largest security firm in the country. Other board members include Jim Ethier, a leader of the company that makes Bush's Baked Beans, and Nashville car dealership owner Lee Beaman.

Cerasuolo said the board helps spread the word about the Beacon Center with small businesses who don't have or can't afford lobbyists. The center lobbies, but that's not the bulk of what it does, Owen said. It spent roughly $10,000 on lobbying last year, a tenth of what it could spend as a nonprofit and a fraction of what massive corporations spend regularly.

A chief responsibility of the board is to help the center raise money. Owen said the center currently has a roughly $1 million budget, considerably larger than when Johnson started and ran the organization. Tax records show the center received roughly $481,000 in donations in 2012, compared with $300,000 in 2007.

But that jumped to more than $1.2 million in 2013. Owen chalked up the increase to more exposure for the group due to the "death tax" repeal, more work finding donors who support school vouchers and a "fairly large, multiyear gift in 2013 from one donor."

Tom Ingram, a longtime GOP political adviser who's worked with Haslam, U.S. Sen. Lamar Alexander and others, said he thinks the center's financial success can be tied to Beaman, a heavyweight donor in Tennessee conservative politics.

"Lee, I think, is the moving force as the primary financial source for the Beacon Center," Ingram recently told The Tennessean, adding he thinks lawmakers know about Beaman's advocacy work.

"My impression is without Lee's energy, and possibly without his financial support, the Beacon Center wouldn't be as much of a force."

A message left Monday with Beaman's secretary was not returned. Owen downplayed Beaman's role..

"Lee Beaman is on about 1,000 boards," Owen said.

The center's website says he's on seven boards and previously served on others.

Owen is adamant the center's donations come because of its policy stances, not the other way around. The center receives 54 percent of its funding from foundations, 43 percent from individual donors, 1.5 percent from corporate donations and 1.5 percent from other sources.

A 'partisan nitwit' and respect

The Beacon Center's strategy on what issues to champion and how to successfully convey its message with lawmakers has changed under Owen's tenure.

Johnson dug up information that at times received national attention. For instance, he was the first to publish information about Al Gore's Belle Meade mansion using 20 times the electricity of an average home in the midst of the former vice president's campaign on climate change.

But Johnson had something of an abrasive reputation at the statehouse. In a 2008 profile in the Nashville Scene, then-Gov. Phil Bredesen adviser and current Metro Nashville School Board member Will Pinkston called Johnson "a partisan nitwit who basically spends all his time dreaming up ways to terrorize rank-and-file state employees."

(Pinkston, who said he doesn't follow state politics as closely since leaving state government, said recently he thinks the organization is "a little better" now. A school voucher and charter opponent, Pinkston did say, "I don't think most people take them that seriously, but it's important ... to be on the lookout for their creepy crawly ideas.")

The information provided by Johnson might have been good, but the delivery was suspect. Owen thinks lawmakers lacked respect for Johnson and the TCPR under his leadership.

Owen, 30, grew up on a small farm just outside the "bright lights" of McKenzie, Tenn., where his family still lives. "You would be forgiven for missing it on a map, but they probably like it that way," he said.

He joined the Beacon Center in 2008 after graduating from the law school at the University of Memphis and earning his undergraduate degree from Middle Tennessee State University.

When he took over the center in 2010 — Clint Brewer, current spokesman for the Department of Economic and Community Development, headed the organization between Johnson and Owen — he made a point to change how the center interacted publicly and privately with lawmakers.

"We said from Day 1: You don't call legislators names and you don't question their motives. ... You can criticize their policy positions, you can criticize their policies all day long," Owen said. "I think we've earned that respect because we don't do that."

Johnson left the Beacon Center in 2012 for a job at the Chattanooga Times Free Press. The newspaper has two editorial pages and Johnson edited the conservative Chattanooga Free Press page. He was fired in 2013; the paper said he was sacked because he changed the headline on a piece after it was approved by an editor. The headline read, in part, "Take your jobs plan and shove it, Mr. President." Johnson and the paper disagree on the nature of what led to Johnson's firing.

Johnson is currently a columnist for the Washington Times, a right-leaning Washington, D.C., publication, and a senior scholar at the Taxpayers Protection Alliance, an organization Johnson described as a government watchdog group. He said recently he thinks his work pointing out what he considered corruption at the statehouse helped move the political dialogue to policy issues.

"There's not a need for basically a think tank to act as sort of a nonprofit investigative journalist/you know, government watchdog group. There's less of a need for watchdog as there was back then," Johnson said.

"If somebody was corrupt we would actually call them corrupt, which most people weren't prepared to do because they were more scared of politicians at the time."

The TCRP changed its name to the Beacon Center of Tennessee in 2011 and focused on its new strategy. But Owen acknowledges Democratic state lawmakers would say they don't agree with the Beacon Center as much as Republicans. Instead of criticizing those lawmakers, though, the center chooses, at times, to work with other organizations that have a better relationship with the lawmakers.

Civil forfeiture — the practice of law enforcement confiscating property before a conviction — is a big issue for the center. But Democrats are more likely to champion removing that policing power than Republicans. So Owen and the center are working with the ACLU of Tennessee and its Executive Director Hedy Weinberg.

"I think that piques the curiosity of legislators," Weinberg said, of the ACLU and Beacon Center working together.

"It's actually quite gratifying when two groups who seem to be polar opposites cannot only find common ground but can create systemic gains to protect privacy rights and due process rights of Tennesseans."

Un-sure Tennessee

Beacon stood alone before lawmakers against Insure Tennessee, but Owen is quick to say the organization doesn't deserve "all the credit" for killing the proposal.

It did get help on its policy arguments from the Foundation for Government Accountability, a Florida-based conservative organization that has advocated against Medicaid expansion. And the work of Americans for Prosperity, another conservative policy organization funded and founded by wealthy investors David and Charles Koch, gained considerable attention outside and inside the statehouse.

AFP never testified against the plan. But it did advocate at the community level by pushing out a radio advertising campaign against the plan and anything it perceived to be as lawmaker support of the proposal. But Owen thinks its work on Insure Tennessee was different.

"It's like a Venn diagram: there's overlap in a sense that we both advocate for certain issues. But they do more grassroots stuff, engaging the grassroots," Owen said. "We take on a more educational role, we develop the policy. I think we can complement each other, we were on the same page of an issue, but I see us by and large doing different things in this realm."

That doesn't mean Insure Tennessee supporters made any distinction between the two groups. While Owen may have testified before lawmakers, those lawmakers also noticed the hundreds of red AFP shirts opponents wore during the special legislative session earlier this year.

"I think, you know, groups like that certainly had an impact. No question. They put out a lot of misinformation, tied this whole thing to the president and that certainly didn't help matters," said House Minority Leader Craig Fitzhugh, D-Ripley.

"They also, just quite frankly, I think initially anyway, out-organized us Insure Tennessee folks. There were a lot of red shirts in the plaza that week. I think our side has gotten better over time, but initially they took us all by surprise."

A spokesman for the Coalition for a Healthy Tennessee, the business coalition Haslam helped create in support of the program, didn't respond to a request for comment about the Beacon Center's role in Insure Tennessee. A Haslam spokesman pointed to comments Haslam recently made where he downplayed the role outside interest groups played in killing Insure Tennessee.

"We are fortunate to have a number of locally-based organizations, like the Beacon Center, that provide detailed policy information to our members on issues of importance facing our state," House Speaker Beth Harwell, R-Nashville, said in a statement.

Owen's wife, Kara, is Harwell's spokeswoman; Harwell never came out for or against Insure Tennessee during the legislative session. Justin Owen said the relationship doesn't give him a leg up to getting the ear of the speaker.

"It would be nice," Justin Owen said, laughing. "In all honesty, it's more times the opposite."

The couple knows there are things they can't talk about at home, Owen said. More often than not they'd rather discuss their dog or travel plans than politics after they leave the office.

Ingram said he believes the organization has an impact, but also noted the more conservative nature of the legislature. There are simply more Republicans and conservatives who would be open to policies backed by the center now than when Democrats controlled the statehouse.

Haslam and Insure Tennessee supporters hoped to use the coalition to "ram this thing through the legislature," Owen said.

"I don't think they worked hard enough to convince (lawmakers). They just expected legislators would go along. They didn't convince legislators. And granted, it's hard to do, because it's a losing issue. I think we've made our case that Insure Tennessee is rife with flaws," Owen said. "They didn't work to address or overcome those concerns with members."

The center pushed several arguments against the plan. Those included arguing the more than $1 billion needed from the federal government for the plan will increase the national deficit and isn't just sitting in a pot waiting for Tennessee; and alleging doctors don't want to take more Medicaid patients, so many of the Insure Tennessee population would still face issues getting care.

Owen thinks asking lawmakers if they could trust the federal government to keep their end of the bargain and allow Tennessee to end the program whenever it wanted had the biggest effect on the General Assembly.

The governor and Insure Tennessee supporters continue to tout the program. The Beacon Center continues to fight back.

Reach Dave Boucher at 615-259-8892 and on Twitter @Dave_Boucher1.

Beacon Center of Tennessee

• Founded: 2004

• Original name: Tennessee Center for Policy Research, changed to Beacon Center of Tennessee in 2011

• Original full-time staff: 1

• Current staff: 6 full-time, 1 part-time research fellow and eight volunteer "scholars"

• Contributions, 2007: $303,000

• Contributions, 2013: $1.2 million

• Website: www.beacontn.org