The term "native advertising" may be new, but the principles of deception and camouflage that define it are not.

The Federal Trade Commission used to call this kind of thing "deceptive advertising" and punish the purveyors of it. Some countries called it "subliminal advertising" and outright banned it. Of late in the United States, though, it has become a seemingly new $2.4 billion business. But again, it has been around for a long time - most prominently in the public policy arena, where special interest content and ideological agitprop is routinely disguised as nonpartisan empiricism and dispassionate news.

The most recent reminder of this came from billionaire anti-pension activist John Arnold, whose foundation's goal is to convince governments “to stop promising a (retirement) benefit” to public employees.

As Pando's "Wolf of Sesame Street" investigation documented, Arnold's (still) secret deal with public television created a native advertising conduit for him to launder that political agenda through shows like PBS NewsHour. As we noted in our report, this $3.5 million project was but one tentacle of Arnold's sprawling native advertising campaign to justify cuts to retirement benefits for police officers, firefighters, teachers and other public workers. It is a campaign that involves everything from foundation grants to campaign contributions to state-based advocacy groups to ballot initiatives.

This week, another of Arnold's native-advertising tentacles slithered through the political world - this one a report advocating cuts to pension benefits published by one of the seemingly most dispassionate think tanks in Washington: the Brookings Institution.

It is significant not just as a part of Arnold's ongoing campaign to raid public workers' pensions, but also as a blueprint for how the most effective - and deceptive - native advertising campaigns are engineered. Indeed, the paper embodies the five fundamental rules that guarantee a native advertising campaign leads unsuspecting audiences to a native advertiser’s pre-determined conclusions.

Rule 1: The native advertiser should pick a credible platform for its campaign

Fresh off of being humiliated for his public television scheme, Arnold is back in the native advertising game with a sponsored white paper from Brookings that amplifies his $10 million crusade to slash pension benefits. Citing examples from Utah, Rhode Island, New Jersey, and Illinois, the paper proposes various political strategies for pension cutters to continue slashing retirement benefits in states and localities across the country.

To know this is a native advertising play, just remember that Arnold has his own eponymous foundation that could publish the paper. But he's choosing to fund another foundation to put it out as their own native content. That's no accident.

Arnold's particular choice of venue follows the first rule of effective native advertising - the rule about picking the most credible platform to reach and subsequently deceive a target audience.

In this case, Arnold is looking to coerce legislators, policy staff, political reporters and the larger universe of so-called opinion leaders. The most influential platform for that elite crowd is typically a non-profit .org or an academic .edu. Brookings was therefore a shrewd pick. Why? Because it presents itself as both. Yes, Brookings is branded as a political think tank yet also has a .edu website to give it the facade of independent, academia research.

That makes Brookings a perfectly positioned vehicle to launder Arnold's biased views on pension policy. In short, Brookings is positioned to present his views not as the plutocratic ideology of a former Enron trader whose old company destroyed pension funds. Instead, with a big grant from the Arnold Foundation, Brookings can present Arnold's agenda as staid academic research.

The decision has already paid political dividends to Arnold. A quick perusal of the news about the paper shows it being promoted as a "middle ground" Brooking Institution project - with no prominent mention of Arnold's involvement.

Rule 2: Obscure the true identity of the native advertiser and create an echo chamber

Of course, "facade" is the accurate term, because the Brookings report is anything but independent. As mentioned, it appears to be financed by Arnold as part of his half-million-dollar grant to Brookings "to analyze improvements to public pension systems." But you have to look carefully to discover this because the paper follows the second rule of native advertising - the one about obscuring the true identity of the native advertiser.

This tactic creates the "native" in native advertising in that it makes sponsored content look like any other content. In Arnold’s earlier public broadcasting scandal, it meant not explicitly disclosing to PBS NewsHour viewers that Arnold was funding the show's "Pension Peril" series. It also meant not disclosing that a California ballot initiative touted by the "Pension Peril" series was being bankrolled by the series' benefactor, Arnold.

In the Brookings paper, it is the same tactic. It meant just one line on the last page acknowledging Arnold's funding of the paper. It also meant omitting mention that the same John Arnold funding the paper is also funding many of the seemingly independent individuals and organizations being touted in the paper.

For example, the Brookings report touts the pension-cutting legislation of Utah State Senator Dan Liljenquist without mentioning that Liljenquist was a paid pension-policy consultant for John Arnold's foundation. The report also trumpets the pension-cutting work of Rhode Island State Treasurer Gina Raimondo without mentioning that Raimondo's political career is being financially subsidized by Arnold.

Likewise, the Brookings report repeatedly quotes anti-pension material from the Pew Center on the States, without mentioning that Arnold is financing Pew's pension research with a $4.8 million grant. And the Brookings report promotes the work of EngageRI, but only mentions in a fine-print endnote that the anti-pension advocacy group was financed by Arnold.

These native advertising techniques manufacture an image of many disparate voices sponetaneously calling for pension cuts. Yet, in reality it is an an airtight echo chamber whereby only one voice is actually speaking.

This native advertising tactic is a sophisticated version of what's often called sockpuppetry or astroturfing. It serves to create the illusion of a political groundswell that is organic, grassroots and decentralized, even when it is precisely the opposite.

Rule 3: Forward prepackaged assumptions that serve the native advertiser's goals, and do not mention facts that undermine the native advertiser's agenda

Self-serving assumptions and strategic framing are among the most critical components of native ads. Arnold's public television series, for example, was called "The Pension Peril" - the idea being that pensions are primarily or even singularly causing a financial crisis in states.

It's the same technique in the Arnold-funded Brookings paper. By the paper's own admission, it "starts from the premise that the pension systems in many states have simply become unsustainable." Largely ignored is the data showing that while some pension funds face problems, those problems are typically small compared to other bigger budget problems.

For instance, the Center for Economic and Policy Research notes that pension shortfalls are “less than 0.2 percent of projected gross state product over the next 30 years” and “even in the cases of the states with the largest shortfalls, the gap is less than 0.5 percent of projected state product.” Similarly, Boston College’s Center for Retirement Research reports that pension contributions “account for only 3.8 percent of state and local spending.”

Summing all that data up, McClatchy Newspapers has noted that “there’s simply no evidence that state pensions are the current burden to public finances that their critics claim.” Meanwhile, what pension shortfalls do exist are far smaller in total than the amount state and local governments are spending each year on subsidies and tax breaks to corporations.

These facts are nowhere to be found in the Brookings report. Instead, pension cutting politicians like New Jersey Gov. Chris Christie (R) are lauded for "successfully creating a sense of crisis around the pension system" and for pleading poverty to justify retirement benefit cuts. Amazingly, the paper does not contrast Christie pleading poverty with his handing out a record amount of corporate subsidies, signing legislation to expand those expensive corporate handouts and proposing expensive new tax cuts for the future.

Why are these and other basic facts omitted and obscured? Because the most effective native advertising doesn't dare focus on facts that might inconvenience the native advertiser. In this specific case, mentioning the context of pension shortfalls and the size of corporate subsidies would undermine Arnold's ideological crusade to cut pension benefits. Consequently, those facts are excised from the native advertisement's narrative.

Rule 4: Portray the native advertiser as an underdog and its work as heroic, all while ignoring facts to portray the native advertiser's opponents as an evil Goliath

The best native advertising flips the script. It casts the monied native advertiser as the earnest underdog David and the native advertiser's disadvantaged opponent as the big bad Goliath. The Arnold-funded Brookings paper does exactly this.

For instance, the paper asserts that "public employee unions are one of the most—if not the most—powerful political actors in state politics." Readers are expected to believe that this makes unions the omnipotent villain that needs to be thwarted by poor powerless corporations, even though that’s the opposite of what the data show.

According to the National Institute on Money in State Politics, unions have spent a combined $1.7 billion on state politics since 2000. That's a lot - but it is dwarfed by the $8.1 billion spent on state politics by the business sector in that same period. Those numbers are hardly surprising or secret - they track the same rough ratio that exists at the federal level.

Such an imbalance predictably results in a political debate that assumes public employee pensions must be cut in order to balance state budgets, all while much larger corporate subsidies to Big Business must be preserved. Yet, even as the debate is skewed that way, the official story of politics is the one the Brookings' native advertisement presents - the one that ignores data and leads the audience to believe Big Business is the politically disenfranchised player and the unions are all-powerful.

At the same time, the Brookings paper effusively celebrates "the political courage and effective leadership” of Rhode Island State Treasurer Gina Raimondo (D), who slashed public employee pension benefits at the very moment the state was spending millions on corporate handouts.

In this bold spectacle of innovative mythmaking, Brookings' native advertisement asks its audience to believe it takes courage for a politician to do the bidding of corporations, Wall Street firms and billionaires like John Arnold who dominate American politics and financially support her political career. It further asks the audience to believe it is courageous for an elected official to move retirees' money into high fee hedge funds and other schemes that lose taxpayer money but enrich the financial industry that is funding that official's campaigns. Most amazingly, it asks the audience to believe it is courageous for that elected official to divert public money into risky investments that potentially personally enrich the elected official herself.

With such up-is-down myth making, Brookings has created a powerful native advertisement for the ages.

Rule 5: Depict the native advertiser's goals as the only possible choice

With states and cities both cutting taxes and spending so much on handouts to corporations, there’s clearly plenty of public money available to deal with a 30-year $1.38 trillion pension shortfall. That’s a gap of about $46 billion a year - far less than the $80 billion a year the New York Times reports that states and cities are spending every year on subsidies to companies.

But, then, eliminating those subsidies or raising taxes on the rich and using the new resources to meet pension obligations is probably not what Big Business or billionaires like John Arnold want. And so Brookings loyally follows the fifth and final rule of native advertisement - it simply presents the plutocrats’ agenda as the only course of action.

Specifically, the Brookings paper declares that “while it is possible to raise taxes to pay off pension obligations, this appears politically impossible.”

Not surprisingly, Brookings ignores polls showing the public wants taxes raised on the rich. Also not surprising is the fact that Brookings offers no actual proof that this raising taxes is “politically impossible.” It just throws out the assertion as if it is an unquestioned truism, facts be damned. When sculpted most effectively, those fact-free assertions present the native advertiser’s goals as the one and only path forward.

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You may love John Arnold’s crusade to slash the retirement benefits of police officers, firefighers, teachers and other public workers. You may hate it. Either way, what’s clear from his public broadcasting efforts, his Brookings initiative and his other efforts is that he is a virtuoso of native advertising.

That doesn’t make him unique. After all, many political powerbrokers, media organizations and interest groups are right now developing ever-more-deceptive ways to camouflage political and commercial messages as dispassionate analysis and news. But as the Brookings paper proves, it does mean Arnold has so mastered the dark arts of native advertising that trillions of dollars of retirement funds are threatened - and relatively few are even paying attention to the man behind the curtain.

[Image credit: woodleywonderworks (Creative Commons)]