Mellon Leads 2020 GOP Donors, Defends Use of Racial Stereotypes

(Bloomberg Businessweek) -- The top Republican donor in the 2020 election is the reclusive heir to one of the great fortunes of the Gilded Age, who over the course of a long career has flown commercial jets for Pan American Airlines, battled with unions, and sued over money he gave to search for Amelia Earhart’s lost plane. This election cycle, he’s given millions to support GOP candidates who, he hopes, will dismantle social welfare programs he calls “Slavery Redux”—but once championed.

Timothy Mellon, the great grandson of Mellon Bank founder Thomas Mellon and grandson of Andrew Mellon, the U.S. Treasury secretary during the initial years of the Great Depression, has given $30 million in this cycle to super PACs backing Republican candidates. That includes $10 million—one of the year’s single biggest donations—to America First Action, the group backing President Donald Trump’s reelection.

In an interview with Bloomberg, Mellon, 77, says of Trump, “He’s done the things he promised to, or tried to do the things he’s promised to.” He says the president’s major first-term achievement is “in trade and righting the balance between our country and the rest of the world, especially China.”

Mellon’s generosity puts him well ahead of Republican stalwarts such as Blackstone Group Inc. Chairman Steven Schwarzman, who has given $17.7 million, gambling mogul Sheldon Adelson, who has given $1.6 million, and Koch Industries Inc. Chairman Charles Koch, whose company has given $8.3 million.

Unlike those better-known figures, Mellon has largely avoided public prominence, spending much of his time on his Wyoming ranch. He might have stayed out of view if it weren’t for his use of racial stereotypes about Black Americans in his 2015 self-published autobiography, which recently drew the attention of the Washington Post.

In the book, Mellon laid out his political journey from being a liberal using his fortune to try to solve racial and social inequities to becoming a staunch conservative railing against the failure of Great Society programs. He wrote that Black people had become “even more aggressive” and “unwilling to pitch in to improve their situations.”

Under President Barack Obama, Mellon wrote in the book, federal programs such as food stamps and the Affordable Care Act had become “Slavery Redux,” a system in which poor people are given goods for votes, with beneficiaries beholden to “a new master, Uncle Sam.”

“For delivering their votes in the Federal Elections, they are awarded with yet more and more freebies: food stamps, cell phones, WIC payments, Obamacare, and on, and on, and on. The largess is funded by the hardworking folks, fewer and fewer in number, who are too honest or too proud to allow themselves to sink into this morass,” he wrote.

Mellon says he stands by the book. “I said everything I wanted to say,” he says. “I don’t have any regrets.”

But he didn’t always think this way.

From the early 1970s through the mid-1980s, Mellon backed a philanthropy that focused on redressing the racial disparities that have again become central to the national conversation after Minneapolis police officers killed a Black man, George Floyd. He wrote that he cast his first vote in a national election for President Lyndon Johnson in 1964.

Mellon graduated from Yale University in 1964 and completed a graduate degree in city planning at Yale in 1966. He then created the Sachem Fund, a New Haven, Conn.-based family foundation, to “tackle problems of race, poverty and environmental despoliation that were plaguing the country,” he wrote in the book. To lead the endeavor, he recruited his friend Ernest Osborne, a pioneer among African-American foundation executives.

The foundation supported the Cooperative Assistance Fund, an effort to economically empower poor and minority entrepreneurs to revitalize inner cities; underwrote Black Horizons, a Pittsburgh public television show that became the longest-running minority affairs program in the U.S.; and sought alternatives to incarceration for recidivist felons and ways to improve educational outcomes for minority students in public schools.

In his autobiography, Mellon said he now considers most of those projects to be failures. “I believe we overlooked some fundamental attributes of human behavior that would have precluded success,” he wrote.

Mellon wrote that the breakdown of the family, rising crime rates, and drug addiction convinced him of the ineffectiveness of the War on Poverty and Great Society programs. In the end, a disillusioned Mellon distributed the foundation’s remaining funds to conservative groups.

Mellon’s enthusiasms have turned to hostility in other realms. In 2012, he gave more than $1 million to the International Group for Historical Aircraft Recovery, or Tighar, to fund its search for the lost plane of pioneering aviator Amelia Earhart. A year later, Mellon sued Tighar, claiming the group defrauded donors like him by hiding evidence that it had found Earhart’s Lockheed Electra, lost in 1937 while she tried to become the first woman to fly around the world.

To support his case, Mellon posted grainy pictures on a Tighar forum of the ocean floor, claiming to see crash debris that ranged from parts of wings and cockpit seats to rolls of toilet paper still intact after 76 years. The judge in the case wasn’t persuaded. After the suit was dismissed and Mellon’s appeal failed, he reported the group to the Internal Revenue Service, claiming it was using its charitable donations to fund what he called the lavish lifestyle of its executive director. The IRS investigated and found the complaint groundless.

His political change of heart was bound up with his business dealings. “I think it came largely from going into business with certain small companies and seeing the interaction between commerce and government—it just seemed like government was making things way too difficult and against the interests of working people,” he says. “The more restrictions you have, the less likely you are to hire people.”

Already independently wealthy in the 1960s, with a net worth of about $1 billion, according to Forbes, Mellon started in business by selling software for big IBM computers. He founded a treated-wood business in 1977. He paid $28.5 million for the bankrupt Pan American Airlines in 1998 and operated it as a regional carrier for a few years, even becoming certified as a commercial 727 pilot. Mellon personally captained some of his airline’s commuter routes before deciding to shut it down, rather than continue paying union rates to the rest of his pilots. He kept the brand and its distinctive logo, though, renaming his short-line railroads in New England Pan Am Systems.

Mellon acquired railroads in the Northeast in the early 1980s after Congress allowed carriers to set their own prices for hauling freight, leading to price competition. Union contracts negotiated before the change left some railroads with high labor costs, he says: “The main problem was the government had deregulated rates but not deregulated the costs. It was like a squeeze play.” He clashed with unions and, according to his book, reduced freight crews from five to two.

By 1984, Mellon was voting for conservative Republican President Ronald Reagan. Apparently, though, his faith in Reagan wasn’t absolute. In the mid-1980s he bought a ranch in Texas, located between Midland and El Paso, where he thought he could ride out the fallout of a nuclear war between the U.S. and the Soviet Union. His ranching operations proved to be a failure after he purchased calves from Mexico that, he claimed, were infected with a disease similar to mad cow disease.

While he has been the GOP’s biggest backer so far in this go-round, the billionaire’s recent giving hasn’t been limited to the Republican side.

He donated $2,700 to socialist firebrand Alexandria Ocasio-Cortez in 2018 because he thought that, if elected, her outspokenness would cause headaches for Democrats. Her campaign has since tried to give him a refund, Mellon says, but he says he will “neither cash nor deposit the check but rather, frame it.” He also contributed $2,800 to Representative Tulsi Gabbard of Hawaii’s run for the 2020 Democratic presidential nomination.

Mellon contrasts this year’s protests over racism and police brutality with the racial unrest of the 1960s. He says protesters then, unlike now, were trying to work within the system. “I don’t think that the Black Panthers were trying to take power; I think they were trying to make a point, and they did make it,” he says. “I think people listened, and they tried to do something about it.”

Mellon’s journey from left to right isn’t unique, says Peter Wood, president of the National Association of Scholars, a conservative nonprofit advocacy group, but exemplifies a common arc. (Wood says he has never met Mellon, and his group has never received a donation from him.) “He expresses some of the bitterness that older people who had similar experiences also gave voice to,” Wood says, noting that there is an entire genre of books by disappointed liberals who explained why they joined the right.

“It’s certain he could have said it in better ways,” Wood adds.
 
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