Rupert Cornwell: Big money takes aim at the heart of Washington

Out of America: Party political bankrollers are mounting a takeover of think tanks. If they succeed, US politics will become more partisan than ever

A protester outside the Kochs' ranch demonstrates against the involvement of big donors such as the billionaire brothers in shaping the political agenda (AP)

'First in war, first in peace, and last in the American League," once ran the joke about this imperial city, in reference to its consistently hopeless baseball team. But that's changed. Great things are expected of the Washington Nationals this year – in the National League, now. As for Washington's role in war and peace, after Iraq and Afghanistan, many people would probably put it at the bottom of the league. But in one area Washington's supremacy is indisputable. When it comes to think tanks, nowhere on earth beats the capital of the US.

A study a couple of years ago counted 393 of them in the city proper, and it's a fair bet that number is higher today. Throw in the Maryland and Virginia suburbs and you're talking 550-plus – hotbeds of wonkery and expertise, researching every subject under the sun, from defence and foreign policy to Aids and inner cities.

Think tanks range from mighty institutes with budgets of close to $100m to a few idealistic souls operating out of rented rooms. The centre of this industry, though, is Massachusetts Avenue, which is to think tanks what Lord's is to cricket, lined by such institutions as Brookings, Carnegie, SAIS, and the Heritage Foundation. Roughly midway, at number 1000, you will find the Cato Institute, embroiled in a dispute that calls into question just about everything that Washington think-tankery stand for.

Cato was founded in 1977. It takes its name from the Roman republican who opposed Julius Caesar, but its direct inspiration was Cato's Letters, the essays by the British writers John Trenchard and Thomas Gordon, promoting the ideas of individual freedom and limited government that would fuel the American revolution.

Today, Cato is a bastion of libertarianism, quirky and contrarian, but admired for sticking to its principles. But that may be about to change. Cato is independent, but it is 50 per cent owned by the billionaire brothers Charles and David Koch, who control the huge energy conglomerate Koch Industries. The Kochs are bankrollers of the Tea Party movement and "Americans for Prosperity", an advocacy group dedicated to getting Barack Obama out of the White House.

Earlier this month the Kochs filed a lawsuit against Cato that would allow them to appoint a majority of the think tank's board. At which point, critics maintain, Cato's independence would be lost. The Kochs deny such intentions, insisting that any suggestion they would turn it into a partisan political organisation is "absolutely false". But Bob Levy, Cato's chairman, has retorted that if the lawsuit succeeds, the organisation would be reduced to a mere front for Koch Industries. Or, as a Cato researcher Jonathan Blanks neatly put it in a blog post: "Just because we support legalised prostitution doesn't mean we want to live it."

At which point a reader might ask, so what? Is this not merely a spat between the conservative right and the cranky right? However, what Levy calls "this lamentable and unwelcome dispute" does matter – a great deal.

Think tanks occupy a unique position in the Washington firmament, something less than government but more than mere academia, places where officials may recharge their batteries while their party is out of power; and they are important instigators of policy.

In one sense, a Koch takeover would not be a radical departure. Think tanks have always been politically aligned, to a degree. The revolving door tends to whisk officials from a Democratic administration into the Brookings Institution, while Republicans gravitate to the American Enterprise Institute.

But in the 20 years since I arrived in Washington, they've become far more partisan. The Heritage is a Republican megaphone; matched now by the Centre for American Progress, set up by John Podesta, a former Clinton chief of staff, in 2003 when Democrats realised they were being outgunned in the war of ideas.

In the process, something important has been put at risk. A think tank gains respect for its intellectual honesty, not for toeing the party line. Cato might be dotty on occasion. But in its calls for withdrawal from Iraq and Afghanistan, or for the legalisation of drugs, its experts were anything but Republican ciphers.

Happily, Cato has its candidate on the 2012 campaign trail. The libertarian Ron Paul may be seeking the Republican nomination, but many of his policies, including his tolerant social views and his opposition to an attack on Iran, are heresy to the party. At least they make you think – unlike the simplistic pabulum issuing from the mouths of Mitt Romney and Rick Santorum. At bottom, a takeover of Cato by the Kochs would dig still deeper partisan trenches in a political system already made near-unworkable by excess partisanship. Is that what people really want?