THE ENVIRONMENTAL MOVEMENT -- (Senate - September 25, 2008)
Mr. INHOFE. Mr. President, let me first say that this has been a very difficult subject, and I have the utmost respect for the Senator from Georgia. As he said, I am looking forward to waiting and seeing a final product. I look at what is there right now, and I do have concerns. I have concerns as to who the asset managers will be, what institutions will be involved, and what types of assets. It would seem to me, as I read it, that as the $700 billion is paid down, other assets could be purchased, and I just wonder where it would end. I believe some new heads will come in and kind of look at these proposals and perhaps come up with something that will resolve a looming problem we all are concerned about.
Today, my concern is on a different subject and one that is very important to me as an American citizen and as the ranking member of the Environment and Public Works Committee. The situation I am about to discuss reminds me of an old saying: Beware of wolves dressed in sheep's clothing. Today's so-called environmental movement can be described in much the same way.
Campaigns to ``save a cuddly animal'' or ``protect the ancient forests'' are really disguised efforts to raise money for Democratic political campaigns. Take this ad, for example, displayed on the League of Conservation Voters'--or the LCV's--Web site. This is LCV's standard text used to raise money for a nonprofit organization. In turn, the LCV takes these donations, given to ``save the environment,'' and then uses them to fund ads for Democratic candidates, such as Ben Lujan from New Mexico. LCV, similar to other groups I will highlight later, disguises itself as an environmental group dedicated to saving the environment. Yet, as shown by this political ad, it is simply an extension of the Democratic political party.
In the fall of 2004, I came to the Senate floor to discuss this very topic. This report and my remarks today are an update of the 2004 report. Over the last several months, my staff has put considerable time and effort into examining this deception. This examination has uncovered the tangled web of charitable and environmental organizations, political campaigns, and large foundations. Environmental groups are tax-exempt, IRS-registered, 501(c)(3) charitable organizations, meaning that contributions to these groups are tax deductible. I think it is very important that people understand, because there is always confusion here, that a 501(c)(3) is not supposed to be a political organization. It is a charitable organization. And there are many legitimate ones out there that deserve the tax-exempt status they have.
These groups profess to be stewards of the environment and solicit contributions from a variety of sources using these claims, but they demonstrate more interest in hyping the extreme environmental scenarios to raise money for raw political purposes than working toward actual real-world environmental change for the benefit of all Americans. Not surprisingly, given these deceptions, these nonprofit groups are tightly affiliated with and fund the 501(c)(4) lobbying organizations and 527 organizations. And we all know that 501(c)(4) organizations and 527 organizations are lobbying organizations that get involved in political campaigns.
With these intertwined organizations, it is extremely difficult to differentiate the source of funds and track their use. This problem is highlighted in a report prepared by my staff which provides preliminary examples based on the five most politically active environmental groups. The report describes their activities, the foundations that provide their financial support, and the interconnected web among these organizations.
Mr. President, I ask unanimous consent to have printed in the Record at the conclusion of my remarks the staff report to which I just referred.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. INHOFE. Mr. President, my staff is not the first to uncover this sham. A December 19, 2007, article in the Wall Street Journal highlighted the very same problem, stating:
Because the IRS doesn't require 501(c) organizations to detail election spending or to list contributors, it is difficult to track their political activity.
The Journal analyzed data on 30 separate 501(c) groups active in elections from 2000 to 2006, culled from a variety of sources. The data--this again is from the Wall Street Journal--showed that the 30 organizations spent at least $155 million on the 2006 elections, nearly twice what they spent in 2000.
Environmental groups have become experts at duplicitous activity, skirting laws up to the edge of illegality and burying their political activities under the guise of nonprofit environmental improvement. This chart demonstrates this interconnected ``enviro-family affair'' of nonprofits and their benefactors. As you can see, the six organizations at the bottom of this chart are all either 527 groups or political 501(c)(4)s.
Let's take a look at the League of Conservation Voters, which is a poster child for this deceit. The LCV is an IRS-registered 501(c)3. Contributions to the organization are tax deductible. However, contributors should understand that LCV is a political organization affiliated with a 501(c)(4) organization, a political action committee, and a 527 organization. All three of these are political.
LCV represents itself as ``turning environmental values into national priorities,'' and much of its funds, even from its 501(c)(3) organization, goes to fund voter mobilization and education drives.
In each election cycle, LCV endorses political candidates. Since 1996, LCV has published a ``Dirty Dozen'' list and bragged about its effectiveness in ousting candidates on the list. Not surprisingly, the list singles out all Republican candidates, but they almost always throw in one Democratic candidate--just one--to make it appear as if it is technically bipartisan. To date, 83 names have been placed on the LCV's ``Dirty Dozen,'' 74 of which are Republicans. By their bipartisan claims, it would be expected that the LCV's support would be split evenly. The publishers of the ``Dirty Dozen'' list have yet to name even a dozen Democrats to their list in the last 12 years.
In 2006, LCV had two 527 groups, the League of Conservation Voters SSF and the League of Conservation Voters, Inc., SSF-527 II. These 527 groups were fined by the Federal Election Commission for three violations of Federal election law. One of the violations was that LCV knowingly accepted individual donations in excess of $5,000. LCV collected over $6 million in donations during 2004 that violated the $5,000 individual maximum amount restriction, and the ultimate fine was a total of $180,000 by the FEC.
According to an FEC press release, LCV received this fine for acting as a clear political committee and violating Federal election law. The Wall Street Journal highlighted these violations in an article published in December 2007. Following this incident, the LCV restructured its organization into a 501(c)(4), which allows the organization to run with fewer disclosure restrictions.
LCV has a long history of direct involvement in political campaigns. In 1996, LCV spent nearly $1.5 million in ads focused on defeating its ``Dirty Dozen'' list targets of 11 Republicans and, oh yes, 1 Democrat. In 1988, the LCV spent $2.3 million targeting its ``Dirty Dozen'' list of 12 Republicans and, oh yes, 1 Democratic candidate. In 2000, the LCV spent nearly $4 million, again targeting 11 Republicans and 1 Democrat on its ``Dirty Dozen'' list. And I can't forget that in 2000, the LCV also endorsed Al Gore for President--clearly a political endorsement. In 2002, LCV once again targeted 11 Republican congressional candidates and 1 Democrat. Clearly there is a partisan pattern here. LCV spends hundreds of thousands of dollars in congressional contests against Republican candidates.
That same year, the group undertook its strongest single effort to date, focused on my friend, Senator Allard, who will be speaking right after me. The LCV claims to have budgeted $700,000 for that race--I am talking about incumbent Senator Allard from Colorado--and hired a campaign staff of 12 to coordinate phone banks and precinct walks. In addition, LCV ran television and radio advertisements against Senator Allard. Of course, as we all know, Senator Allard won in spite of that.
Altogether, the LCV reportedly spent $1.4 million in independent expenditures during the 2002 election cycle. Of that total amount, LCV spent $1.3 million benefitting Democratic candidates while only spending $136,000 for Republican candidates. That again is the ratio we see consistently, 10 to 1, to make it look as though it is not an arm of the Democratic Party. Two years later, in 2004, the ``Dirty Dozen'' list contained twelve Republicans and one Democrat. LCV and its affiliates spent a new record total of $16 million during that year's elections targeting the 13 candidates. As in previous years, the 1 Democrat on the list retained his seat while 4 of the 12 Republicans were defeated. For the first time, in 2004, the LCV included a Presidential candidate on their list. The LCV endorsed Senator John Kerry for President--again all political.
In 2006, the LCV chose 15 candidates for their ``Dirty Dozen'' list. The list was comprised of 13 Republicans and 2 Democrats. While the two Democrats on the ``Dirty Dozen'' list retained their seats, nine Republicans lost their seats. The LCV and its affiliates used its extensive budget of $27 million on campaign activities.
The 2006 elections also highlighted the intertwined political activities of LCV and other groups. A coalition of environmental organizations, that included LCV and the Sierra Club, worked together in 2006 to defeat their top target Richard Pombo, then chairman of the House Resources Committee. This coalition invested more than $1.7 million in the race to defeat him. If that figure alone is not startling enough, then look at this chart that shows part of a Sierra Club press release that gloats about their activity in this House race. We see that the Sierra Club invested $545,000 in this race and had 643,000 contacts with voters, and sent 397,000 pieces of mail in this race alone--Richard Pombo, in California.
At the time of this report, the LCV had yet to release a completed version of the 2008 ``Dirty Dozen'' list. However, it has released the names of nine individuals who will fill up the ranks of the completed list. Of those nine, there is one Democrat joining the ``Dirty Dozen.'' I would be remiss not to mention that it looks like I will be on their list this year. It should come as no surprise that for the 2008 Presidential election, the LCV has endorsed Senator Barack Obama for President.
As one individual who will be running, I am sure there will be a lot of money that will be in my race. I think it is kind of interesting that in this day, when we are all concerned with what might be happening on Wall Street and some of the people who have made huge salaries and then turn around and have a defunct company, we see the Environmental Defense Fund's Fred Krupp receiving a salary of $357,000; Sierra Club, Carl Pope, $207,000. I am hoping these contributors know that not only are their contributions going to organizations that are not doing anything about the environment, but they are paying very large salaries to large staffs.
While there is no means of calculating or anticipating what LCV will spend this year, as their budget has grown every election cycle, they will most likely have at least the $27 million that they did in 2006.
LCV is certainly not the only organization doing this. The Sierra Club, which describes itself as ``America's oldest, largest, and most influential grassroots environmental organization,'' has a similar record of trickery. The Sierra Club Foundation is a 501(c)(3) tax-exempt organization with an affiliated 501(c)(4) group, Sierra Club. There is also a 527 organization called the Sierra Club Voter Education Fund, which claims to be a ``separate segregated fund of the Sierra Club.'' The Sierra Club Foundation does not claim affiliation with this 527 organization, however the Sierra Club Voters Education Fund does not have its own board of directors, officers or trustees.
In 2006, the Sierra Club 501(c) organizations brought in more than $110 million and spent nearly $104 million; the Sierra Club 527, the Sierra Club Voter Education Fund, only brought in $60,000, but managed to spend nearly $1 million. That is pretty tricky.
Similar to LCV, the Sierra Club has a history of endorsing candidates for political office. Most recently, the Sierra Club announced its support of Senator Obama's Presidential bid. While there is no reported activity yet from the organization, the Sierra Club has been known to run television and radio advertisements both supporting their candidate and criticizing the opposition. At the time of this report, Sierra Club had announced its support of 13 candidates for seats in the United States Senate. Of those 13 candidates, none are Republicans. The organization has also announced its endorsement of 156 candidates for the U.S. House of Representatives. Of the candidates, four are Republicans. Essentially, 98 percent of Sierra Club's endorsements favor Democrat candidates.
Another example is the Natural Resources Defense Council.
The Natural Resources Defense Council, Inc. is registered as a 501(c)(3) organization. It is also affiliated with a 501(c)(4) organization, the NRDC Action Fund, and a 527 organization, the Environmental Accountability Fund. By having at least one of each category of tax-exempt organizations, these groups can transfer wealth throughout their family of organizations and remain virtually undetected. In its 2006 tax filing, Natural Resources Defense Council, Inc. transferred $98,801 to NRDC Action Fund, and NRDC Action Fund transferred $124,500 to undisclosed ``other organizations'' that same year.
Founded in 1970, NRDC purports to be the ``nation's most effective environmental action group'' whose mission is to ``[t]o safeguard the Earth: its people, its plants and animals and the natural systems on which all life depends.'' The NRDC claims to use grassroots efforts and the power of legal and scientific expertise to achieve its goals, which they describe frequently as ``independent.''
From 2001 through 2005, the NRDC reported on the Bush administration by creating the Bush Record. The Record categorized President Bush's time in office as an administration that ``will cater to industries that put America's health and natural heritage at risk.'' The NRDC predicted that Bush would continue ``to undermine environmental enforcement and weaken key programs.'' The organization gave up the effort and stopped tracking the administration's moves after President Bush defeated Senator Kerry in the 2004 election. It is interesting, I remember the ``Clear Skies'' legislation that was the largest reduction of pollutants of any President in the history of America and it was defeated by the Democrats in the Environment and Public Works Committee.
My staff examined two other organizations, Greenpeace and Environmental Defense Fund, and found similar patterns of partisan fund-raising and spending.
Greenpeace, like other environmental activist organizations, has strong ties to other politically oriented groups. The chairman of the board of directors, Donald Ross, is involved in multiple organizations, including the LCV, where he is a board member. Ross is also the founder of M+R, a campaign strategy firm whose clients include, among others: Environmental Defense Fund; LCV; and the Democratic Congressional Campaign Committee. Greenpeace is also a client of Earthjustice, the legal entity that represents the Sierra Club, NRDC, and Environmental Defense Fund. Additionally, Greenpeace remains officially affiliated with the Partnership Project, whose members also include Sierra Club, Environmental Defense Fund, NRDC and LCV. While Greenpeace may not make a Dirty Dozen list, or endorse hundreds of Democratic candidates, it is affiliated with and supports the organizations that do. Furthermore, it represents those affiliations to the rest of the world.
Environmental Defense Fund, EDF, describes itself as an organization that ``is dedicated to protecting the environmental rights of all people'' by using a scientific approach that is ``nonpartisan, cost-effective, and fair.'' Environmental Defense Fund is represented by its family of organizations, Environmental Defense, Inc., a 501(c)(3) organization, and Environmental Defense Action Fund, Inc., a 501(c)(4) organization.
EDF is also intimately connected with other environmental and political organizations. Trustee Frank Loy currently serves as one of Senator Obama's ``top environmental advisers'' for the 2008 Presidential campaign. This past year, trustee Douglas Shorenstein donated $272,100 to Democratic political objectives, including the Hillary Clinton and Al Franken campaigns. Trustee Joanne Woodward, wife of noted Hollywood star Paul Newman, donated significantly to both the Clinton and Obama campaigns. Until 2006, Teresa Heinz, wife of Senator John Kerry served on the board of trustees for EDF. Heinz is also the current chairman of Heinz Endowments, a part of the Heinz Family Foundation, one of the Nation's 25 largest charitable foundations. Current EDF trustee George Woodwell also serves on the board of the NRDC.
EDF reported raising $71.8 million for the 2006 calendar year, and reported receiving contributions totaling more than $94 million during the 2006 IRS filing period. Of that amount, the organization spent $18.9 million to promote their stance on climate change issues, and $19.5 million collectively on land and ocean environmental issues.
In addition to the publicly professed alliances among these groups, they are all connected by the foundations that provide them with a significant amount of funding.
The Heinz foundations are some of the largest contributors to these nonprofit environmental organizations, and, of course, Ms. Teresa Heinz Kerry is either chairperson of the board of trustees or member of the board of trustees on each foundation. In fact, Ms. Heinz Kerry oversees more than $1.5 billion of Heinz foundation resources.
Last year alone, Heinz gave $160,000 to NRDC directly. Since 2002, Heinz has given a total of $740,000 to EDF, LCV, and NRDC specifically. Over the past 5 years, Heinz has also given $3.8 million to Tides. Tides has donated significantly to all five of the mentioned environmental organizations, and receives a large portion of their funding from foundations such as Heinz.
Another major supporter of environmental groups is the Turner Foundation, founded in 1990 by Ted Turner. The Turner Foundation sponsors special projects including the Partnership Project comprised of 20 national environmental groups. Since 2002, the Turner Foundation has contributed more than $2.9 million to the Partnership Project. Additionally, the Turner Foundation has given more than $1 million to the NRDC, $778,875 to EDF, and $6.7 million to the LCV Education Fund.
The Pew Charitable Trust, which claims it is ``an independent non-profit serving to inform the public on key issues,'' also gives substantially to environmental groups. Two of Pew's environmental priorities include global warming and wilderness protection.
Since 2002, Pew has given a substantial amount of money to environmental activist groups directly and through other private funds that finance these groups. Pew contributed $431,000 to EDF, $900,000 to NRDC, and $700,000 to the Partnership Project, a joint venture of the Nation's leading environmental groups. Additionally, Pew gave more than $7 million to the Tides Foundation. During that time, the Tides Foundation contributed a collective $1.8 million to the following organizations: EDF, LCV, Greenpeace, NRDC, and Sierra Club.
This tangled web of political financing and private dollars should be disconcerting and even scary to American's concerned about transparency and honesty in our Government. Clearly, where these environmental groups are concerned, there is no line between issue advocacy and political activity. And most disturbing is the fact that one cannot tell if these so-called environmental groups that claim to protect and conserve our environment, really spend any money on actually improving our environment.
Why is this important? Well, it is important because our environment is important to all of us. Despite what you may hear from these groups in their attack advertisements against President Bush and Republican candidates across the Nation, our air is cleaner, water more drinkable, and our forests are becoming healthier. For instance, over the last 30 years, we have cut air pollution in half.
This is also important because these wolves disguised in sheep's clothing are deceiving the America people. When an individual gives their hard-earned money to one of these organizations, most expect it to be used for the environmental cause they support, not political campaigning.
It seems that it is more important to these groups to turn their once laudable movement into a political machine misleading the American public regarding their purely politically partisan agenda under the guise of environmental protection. Again, a wolf in sheep's clothing.
Our nation's first Chief of the U.S. Forest Service, Gifford Pinchot, said, ``Conservation means the wise use of the earth and its resources for the lasting good of men.'' He also said that ``conservation is the application of common sense to the common problems for the common good.''
Those words ring true today. Unfortunately, it is clear to me that the environmentalist movement is deaf to them. What we find now is the fleecing of the American public's pocketbooks by the environmental movement for their political gain. We also find exhausting litigation, instigation of false claims, misleading science, and scare tactics to fool Americans into believing disastrous environmental scenarios that are untrue.
Mr. President, especially in this election year, the American voter should see these groups and their many affiliate organizations as they are: the newest insidious conspiracy of political action committees and perhaps the newest multi-million dollar manipulation of Federal election laws.
As an American citizen concerned about our environment and our country, I am dismayed and saddened by this deception. If these groups actually used the hundreds of millions of dollars they raise for actual environmental improvement, just think how many whales and forests we could save.
These wolves should be seen for what they really are: massive democratic political machines, disguised as environmental causes.
You know, I think a lot of people on this floor understand, both Democratic and Republican, and the American people, there has been a wake-up call. When you look at what happened in the bill back in 2005 that came forward on trying to put caps on the greenhouse gases and cap and trade, a very expensive system that would cost the American people over $300 billion a year.
At that time, there were only three Senators who came down to oppose that bill. Yet this was overwhelmingly defeated. Then fast forward 3 years to 2008. We had a similar bill on the floor of the Senate a few weeks ago. This time, 24 Senators, or 23, came down and joined me to tell the truth as to the economic destruction that would come should we pass this legislation.
So I think that wake-up call is there. In spite of the millions of dollars that are channeled through 501(c)(3)s to defeat Republican candidates, I think reason is winning.
Environmental activism has become a multibillion dollar industry in the U.S. campaigns to save the whales or stop mining beg average Americans for their support through donation of their hard earned dollars. These environmental campaigns also receive millions from charitable foundations such as the Pew Foundation, Turner Foundation, and Heinz Foundation. But what most don't know when they donate to a cause to ``save the rainforest'' or ``save the polar bear'' is that their money could end up being used for partisan activities that are only tangentially related, if related at all, to the cause for which they are intended.
The majority of environmental activist groups present themselves as objective, nonpartisan, nonprofit groups that are dedicated to environmental integrity and protection. To accomplish their goals, these groups typically set up 501(c)(3) nonprofit organizations with affiliated 501(c)(4) organizations. It is difficult to detail these organizations' specific spending habits. On December 19, 2007, the Wall Street Journal published an article that documented just how difficult this process is, and how political several 501(c) organizations were in the last year. The article stated:
``Because the IRS doesn't require 501(c) organizations to detail election spending or to list contributors, it's difficult to track their political activity. The Journal analyzed data on 30 separate 501(c) groups active in elections from 2000 to 2006, culled from a variety of sources. The data show that the 30 organizations spent at least $155 million on the 2006 elections, nearly twice what they spent in 2000.''
As early as 1995, the Internal Revenue Service (IRS) noticed a growing problem in today's non-profit sector. The IRS published an educational document about the difficulties in separating such non-profit organizations' nonpartisan status from the legislative and political activities that such organizations undertake. The report stated: ``[T]he work of exempt organizations specialists reflects diverse ways in which political agendas are forwarded. Today, political agendas are being forged by political parties, candidates, legislative caucuses, educational organizations, and political action committees. When entities employed in this process seek recognition of exemption under IRC 501(c)(3) or 501(c)(4), questions arise about the scope of political campaign, legislative, and political educational activities permitted under these sections.''
The IRS categorizes a broad issue that has become very prominent among today's leading environmental activist groups. For years, there has been public and political scrutiny over the activities of major environmental activist groups, such as Environmental Defense Fund (EDF), the Natural Resources Defense Council (NRDC), and the League of Conservation Voters (LCV), and their financial links to charitable institutions, such as the Tides Foundation and Heinz family foundations. These issues were brought to the public's attention several years ago through various publications such as the 2004 articles in The Hill and The Washington Post.
This report will focus on the financial intricacies and political ties of major environmental activist groups including the League of Conservation Voters, the Environmental Defense Fund, Greenpeace, the Natural Resources Defense Council, and the Sierra Club, and the major foundations that support them.
501(C)S AND 527S
The three different types of nonprofit groups analyzed in this report are 501(c)(3), 501(c)(4), and 527 organizations, all of which have tax-exempt status under the Internal Revenue Code. A single group is often affiliated with other types of organizations. For example, the League of Conservation Voters, Inc. is a 501(c)(3) that is affiliated with two 501(c)(4) organizations and two ``527 groups'' and a political action committee (PAC). There are different requirements and restrictions placed upon each group, as analyzed below.
501(c)(3) nonprofits are tax-exempt organizations that can participate in political issues, but not specific campaigns. These organizations must be organized and operated for a qualifying purpose (e.g., a charitable, educational, or religious purpose) and serve the public interest. They are commonly thought of as charitable organizations. The majority of the funds raised by these organizations come from individual donors and other public sources. The individual donations are tax deductible for the donor as long as they meet certain criteria. One such criterion is that the donor must present receipts for amounts of more than two hundred and fifty dollars. These organizations can lose their tax exempt status by supporting or opposing a candidate and engaging in campaign activities that are specifically linked to election periods, such as a presidential primary election.
A 501(c)(3) can lobby on their issues, but lobbying cannot be a substantial part of their activities. The organizations can also educate the public and fund research that supports their positions. However, 501(c)(3) organizations cannot ``participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.'' Some examples of popular 501(c)(3)s are The Salvation Army, United Way, and Habitat for Humanity. Any funds transferred by the 501(c)(3) to an affiliated organization cannot be used for impermissible purposes (e.g., campaign activities).
Another type of tax-exempt organization is a 501(c)(4) organization. These organizations are typically ``social welfare organizations'' whose purpose is to promote the common good and general human welfare. Unlike 501(c)(3) organizations, donations to 501(c)(4) organizations are not tax deductible. Under the scope of promoting the general welfare, the 501(c)(4) organizations can engage in political activities with fewer restrictions than a 501(c)(3). For example, a 501(c)(4)'s general lobbying efforts are almost unlimited. Additionally, a 501(c)(4) can promote a candidate for office, as long as campaigning is not the organization's primary purpose. A 501(c)(4) can generally receive and give funds to both its affiliated 501(c)(3)s and 527s without risking its tax-exempt status. Any transferred funds, however, may be subject to tax if those funds are used for a taxable purpose.
One of the most prominent examples of a 501(c)(4) campaign is Moveon.org Civic Action, more commonly known as Moveon.org. This organization, which began in 2002, is most famous for its television and print advertisements campaigning against the war in Iraq. The organization also utilizes electronic mail and petitions to achieve its goals. Under the scope of promoting the social welfare, Moveon.org is legally able to become politically involved to campaign for its goals and objectives.
Many 501(c)(3) and 501(c)(4) organizations also have affiliated 527 political organizations. Because 527s are political organizations, they can cross the partisan barrier that is off-limits to 501(c)(3) organizations. For example, a 527 organization can attempt to directly influence the election, appointment, or nomination of a particular political candidate for public office. 527 political organizations include the entities that are regulated as political committees under federal election law, such as political action committees (PACs). They also include organizations that appear intended to influence federal elections in ways that may be outside the scope of federal election law and therefore are not regulated by the Federal Election Commission (FEC). These latter organizations are commonly referred to as ``527s'' or ``527 groups,'' and that is how this report identifies them. A 501(c)(3) may not transfer money to an affiliated 527 organization for campaign activities, but a 501(c)(4) organization may be able to do so without losing its tax-exempt status, although the funds may be subject to tax.
A 527 group can conduct several partisan activities similar to a PAC. However, unlike a PAC, a 527 group cannot have as its major purpose the nomination or election of a federal office candidate, cannot expressly advocate for election or defeat of a clearly identified federal candidate, and cannot contribute money directly to a candidate's campaign. 527 groups can, however, utilize unregulated ``soft'' money to highlight specific candidate's strengths or weaknesses, and generally promote said candidate without specifically endorsing his or her election. Therefore, a 527 group may be able to essentially operate as a ``soft money'' PAC without having to register with the FEC.
In recent history, 527s have received increased scrutiny for not complying with IRS regulations, including donor disclosure requirements. Consequently, some organizations may have switched over to campaigning through their 501(c)(4) organizations. The 501(c)(4) retains the ability to engage in campaign activities but is not subject to donor disclosure requirements.
It is the ability to shift funds easily among these different organizations that has generated a stir of political attention and has raised some very serious questions about the validity of each. Supposed ``nonprofit, nonpartisan organizations'' can shift funds very easily to organizations formed for the sole purpose of partisan, political activity. 501(c)(3) organizations can shift funds to 501(c)(4) organizations, which can participate in partisan activities, although the funds could not lawfully be used for campaign activities. A 501(c)(4) can shift funds to a 527 organization, often founded for political campaign purposes. Clearly, without a system for tracking funding in these types of organizations, a donor could contribute to a nonpartisan, nonprofit organization and the donation could ultimately be used for partisan political activities. While this practice, if caught, would cause a 501(c)(3) organization to lose its tax-exempt status, it is nearly impossible to detect these funding shifts.
There are also questions about the exact scope and limitations placed upon 501(c)(3), 501(c)(4)s, 527s and PACs. With the existence of the 501(c)(4) and the PAC, what is the point of the 527? With significant partisan campaign activity undertaken by 501(c)(4) and 527 groups which are regulated by the IRS, how do lawmakers control and police how much money is actually being spent on campaigns, when the FEC's role in regulating these organizations is often unclear?
Outlined below are several examples that highlight the complexity of the web of nonprofit organizations and their political activities.
LEAGUE OF CONSERVATION VOTERS
LCV represents itself as ``turning environmental values into national priorities.'' The organization's mission is ``to advocate for sound environmental policies and to elect pro-environmental candidates who will adopt and implement such policies.''
The LCV is registered as a 501(c)(4) organization, with affiliations to several other organizations: the League of Conservation Voters Education Fund, a 501(c)(3), which claims to refrain from campaign activities, and the LCV Accountability Project, another 501(c)(4) organization. These affiliates, referred to as a ``family of organizations,'' are committed to running ``tough and effective campaigns to defeat anti-environment candidates, and support those leaders who stand up for a clean, healthy future for America.'' The very purpose of LCV is to campaign against anti-environmental candidates, an action that a 501(c)(3) cannot engage in. LCV does, however, make the claim that the LCV Education Fund is a separate entity, committed ``to bring[ing] the environment to the center of the public's attention as an issue critical to good public policy and a healthy political system.''
In 2006, LCV had two 527 groups: the League of Conservation Voters--SSF, and the League of Conservation Voters Inc. SSF--527 II. These 527 groups were fined by the FEC for violating the following three separate provisions: Failure to register with the FEC as a PAC, failure to report contributions and expenditures to the FEC, and knowingly accepting individual's donations in excess of $5,000. (The FEC found that more than $6 million of LCV's expenditures during 2004 violated the $5,000 individual maximum amount restriction.)
The LCV was fined a total of $180,000 by the FEC. According to an FEC press release, LCV received this fine for acting as a clear political committee and violating federal election law. The organization was required to disclose all current and future contributions and expenditures and register as a PAC should it engage in activities that qualified it as such. The Wall Street Journal highlighted these violations in an article published in December 2007. Following this incident, the LCV restructured its organization into a 501(c)(4), which allows the organization to run with fewer disclosure restrictions.
Every election cycle, the LCV lists ``the Dirty Dozen,'' a list of federal candidates for election or re-election whom the LCV deems as environmentally unfriendly. The first list was created in 1996, and contained four members of the Senate, and eight members of the House. That year, LCV spent $1.5 million ``sending two hundred and fifty-four pieces of persuasion mail to targeted voters [and] running nine thousand television and radio ads'' against the members of the ``Dirty Dozen'' which included eleven Republicans and one Democrat. The one Democrat listed on the ``Dirty Dozen'' regained his seat in the House that year while seven of the Republican candidates on the list were not re-elected.
In 1998, the ``Dirty Dozen'' list was comprised of eleven Republicans and two Democrats. That year, the LCV spent a total of $2.3 million on election campaigning, ``where our efforts could provide the winning margin of difference.'' The two Democrats on the list retained their seats and nine of the eleven Republicans on the list were defeated.
In 2000, the LCV spent more than $4 million, ``the largest expenditure in history,'' on the election. Their ``Dirty Dozen'' list focused on eleven Republicans and one Democrat. In that election cycle, seven of the Republicans on the list were defeated; the one Democrat kept his seat.
Again, in 2002, the ``Dirty Dozen'' list was comprised of eleven Republicans and one Democrat. LCV did not report how much it spent on the year's election cycle. Five Republicans on the list lost their seats while the one Democrat retained his seat.
Two years later, in 2004, the ``Dirty Dozen'' list contained twelve Republicans and one Democrat. LCV and its affiliates spent a total of $16 million during that year's elections targeting the 13 candidates. As in previous years, the one Democrat on the list retained his seat while four of the twelve Republicans were defeated. For the first time, in 2004, the LCV included a presidential administration on their list. The LCV endorsed Senator John Kerry (D-MA) for President.
In 2006, the LCV chose fifteen candidates for their ``Dirty Dozen'' list. The list was comprised of thirteen Republicans and two Democrats. While the two Democrats on the ``Dirty Dozen'' list retained their seats, nine Republicans lost their seats. During this election, the LCV asked viewers of their web site to choose one candidate for the ``Dirty Dozen'' list. The viewers chose Rep. Charles Taylor (R-NC) to join the ``Dirty Dozen'' list. Taylor lost his seat in 2006 to Heath Shuler (D-NC). The LCV and its affiliates used its extensive budget of $27 million on campaign activities.
At the time of this report, the LCV had yet to release a completed version of the 2008 ``Dirty Dozen'' list. However, it has released the names of nine individuals who will fill up the ranks of the completed list. Of those nine, there is one Democrat joining the ``Dirty Dozen.''
While there is no means of calculating or anticipating what LCV will spend this year, as their budget has grown every election cycle, they will most likely have at least the $27 million that they did in 2006.
For more than a decade, the LCV has produced its ``Dirty Dozen'' list, targeting select Congressional figures. The organization has operated under the guise of ``the independent political voice for the environment,'' since even before the publication of the ``Dirty Dozen''. To date, eighty-three names have been placed on the LCV's ``Dirty Dozen'', including seventy-four Republicans. By their bipartisan claims, it would be expected that LCV's support would be split evenly; however, almost 90 percent of LCV's recommendations have been to remove Republican candidates. The publishers of the ``Dirty Dozen'' have yet to name even a dozen Democrats to their list in the past twelve years. It has become increasingly apparent that the LCV has been allowed to participate in partisan politics while conveying the impression of objectivity. The organization, however still continues to make the claim that they don't support one political party over another.
The Natural Resources Defense Council, Inc. is registered as a 501(c)(3) organization. Like the LCV ``family of organizations,'' it is also affiliated with a 501(c)(4) organization, the NRDC Action Fund, and a 527 organization, the Environmental Accountability Fund. By having at least one of each category of tax-exempt organizations, groups can essentially transfer wealth throughout their family of organizations and remain virtually undetected. In its 2006 tax filing, Natural Resources Defense Council, Inc. transferred $98,801 to NRDC Action Fund, and NRDC Action Fund transferred $124,500 to undisclosed ``other organizations'' that same year.
Founded in 1970, NRDC purports to be the ``nation's most effective environmental action group'' whose mission is to ``[t]o safeguard the Earth: its people, its plants and animals and the natural systems on which all life depends.'' The NRDC uses grassroots efforts and the power of legal and scientific expertise to achieve its goals, which they describe frequently as ``independent.''
From 2001 through 2005, the NRDC reported on the Bush Administration by creating the Bush Record. The Record categorized Bush's presidency as an administration that ``will cater to industries that put America's health and natural heritage at risk.'' The NRDC predicted that Bush would continue ``to undermine environmental enforcement and weaken key programs will be made.'' The organization gave up the effort and stopped tracking the Administration's moves after President Bush defeated Sen. Kerry in the 2004 election.
NRDC has also showed their party leanings in popular culture. In an episode of the HBO long-running comedy, Curb Your Enthusiasm, the NRDC was featured in connection with Senator Barbara Boxer (D-CA). The episode, which features Boxer as the event opener for the NRDC event, initially aired on September 16, 2007. Boxer currently serves as Chairman of the Senate Committee on Environment and Public Works.
At the time of this report, the NRDC had made no formal declaration of support for a presidential candidate.
The Sierra Club Foundation is a 501(c)(3) tax-exempt organization with an affiliated 501(c)(4) group, Sierra Club. There is also a 527 organization called the Sierra Club Voter Education Fund, which claims to be a ``separate segregated fund of the Sierra Club.'' The Sierra Club Foundation does not claim affiliation with this 527 organization, however the Sierra Club Voters Education Fund ``does not have its own Board of directors, officers or trustees.'' In 2006, the Sierra Club 501(c) organizations brought in more than $110 million and spent nearly $104 million; the Sierra Club Voter Education Fund only brought in $60,000, but managed to spend nearly $1 million.
The Sierra Club Voter Education Fund has a history of receiving support from its ``unaffiliated and unpartisan company'' of the same name and address. During 2002, the Sierra Club Voter Education Fund reported total contributions of slightly more than $3 million. During that calendar year, the Voter Education Fund reported received $2.25 million, the vast majority of their total revenue, in contributions from the Sierra Club.
It's not hard to understand why the Sierra Club's web of affiliations, or ``non-affiliations,'' becomes so intertwined. A brief glimpse at the activities of Carl Pope, Sierra Club's executive director, shows a tangle even more convoluted than the organization that he spearheads. In the past five years, Carl Pope has played a major role in the following organizations: Sierra Club; California League of Conservation Voters, executive director; Public Voice; California Common Cause; Zero Population Growth, now Population Connection, political director; America Coming Together, founding member and treasurer; America Votes; American Rights at Work; and America's Families United. In addition to Pope's extensive organizational involvement, he also co-authored a book, ``Strategic Ignorance: Why the Bush Administration Is Recklessly Destroying a Century of Environmental Progress.'' The Sierra Club continues to maintain that it is an independent organization whose mission is solely ``to receive, administer, and disburse funds donated for tax-exempt, charitable, scientific, literary, and educational purposes.''
The Sierra Club has a history of endorsing candidates for political office. Currently, the Sierra Club has announced that it will support Senator Obama's (D-IL) presidential bid. While there is no reported activity yet from the organization, Sierra Club has been historically known to run television and radio advertisements both supporting their candidate and criticizing the opposition. Additionally, at the time of this report, Sierra Club announced its support of thirteen candidates for seats in the United States Senate. Of those thirteen candidates, none are Republicans. The organization has also announced its endorsement of one hundred and fifty-six candidates to the United State House of Representatives. Of the candidates, four are Republicans. Essentially, ninety-eight percent of Sierra Club's endorsements favor Democrat candidates.
Greenpeace USA presents itself as ``an independent campaigning organization that uses peaceful protest and creative communication to expose global environmental problems.'' With two hundred fifty thousand members in the United States (and 2.5 million worldwide) Greenpeace is represented by Greenpeace, Inc., a 501(c)(4) organization, and Greenpeace Fund, Inc., a 501(c)(3) organization. Through those organizations, Greenpeace reported that it had raised $11.5 million in 2006; its 501(c)(3) and (c)(4) collectively reported contributions of $26 million for their 2006 tax filings (which extend past the 2006 year).
Greenpeace, like other environmental activist organizations has strong ties to other politically oriented groups. The chairman of the Board of Directors, Donald Ross, is involved in multiple organizations, including the LCV, where he is a board member. Ross is also the founder of M+R, a campaign strategy firm whose clients include, among others: Environmental Defense Fund, LCV, and the Democratic Congressional Campaign Committee. Greenpeace is also a client of Earthjustice, the legal entity which represents the Sierra Club, NRDC and Environmental Defense Fund. Additionally, Greenpeace remains officially affiliated with the Partnership Project, whose members also include Sierra Club, Environmental Defense Fund, NRDC and LCV. While Greenpeace may not make a Dirty Dozen list, or endorse hundreds of Democratic candidates, it is affiliated and supports the organizations that do. Furthermore, it represents those affiliations to the rest of the world.
ENVIRONMENTAL DEFENSE FUND
Environmental Defense Fund (EDF) describes itself as an organization that ``is dedicated to protecting the environmental rights of all people'' by using a scientific approach that is ``nonpartisan, cost-effective and fair.'' Environmental Defense Fund is represented by its family of organizations, Environmental Defense, Inc., a 501(c)(3) organization, and Environmental Defense Action Fund, Inc., a 501(c)(4) organization.
EDF is also intimately connected with other environmental and political organizations. Frank E. Loy, Environmental Defense Fund's chairman of the board, served as Clinton's Under Secretary of State for Global Affairs. Until 2006, Teresa Heinz, wife of Sen. John Kerry (D-MA), served on the board of trustees for EDF. Heinz is also the current chairman of Heinz Endowments, a part of the Heinz Family Foundation, one of the nation's twenty-five largest charitable foundations. This report will discuss the Heinz Foundation's activities in more detail later. Current EDF trustee George Woodwell also serves on the board of the NRDC.
Additionally, the trustees of EDF are connected with partisan activities. Trustee Frank Loy currently serves as one of Senator Obama's ``top environmental advisers'' for the 2008 Presidential Campaign. This past year, trustee Douglas Shorenstein donated $272,100 to Democratic political objectives, including the Hillary Clinton and Al Franken campaigns. Trustee Joanne Woodward, wife of noted Hollywood star Paul Newman, donated significantly to both the Clinton and Obama campaigns.
EDF reported raising $71.8 million for the 2006 calendar year, and reported receiving contributions totaling more than $94 million during the 2006 IRS filing period (which extends beyond the 2006 calendar year). Of that amount, the organization spent $18.9 million to promote their stance on climate change issues, and $19.5 collectively on land and ocean environmental issues.
All of the above groups receive a significant amount of their funds from foundations that regularly give to groups with allied interests. Note that each foundation and charity mentioned is also organized as a 501(c)(3) and is not able to engage in campaign activities. These foundations, however, do not have to make meaningful disclosures about the purpose of their donations and grants or what happens to the money after it is donated. Therefore, tracking such funds is impossible. Many times these foundations donate significant funds to other foundations who in turn donate significantly to environmental groups. The Tides Foundation has a history of making donations and grants to every environmental group mentioned in this report. While neither the Pew Charitable Trust nor the Heinz family of foundations has given directly to all five mentioned groups, they have donated millions to Tides, creating an interlocking system of money-changing, with no transparency.
The following are a few of the foundations that regularly give to environmental activist, ``nonpartisan,'' groups such as those mentioned above.
Pew Charitable Trusts
Made up of seven different charities, the Pew Charitable Trusts claims that it is an ``independent nonprofit'' that ``applies a rigorous, analytical approach to improve public policy, inform the public and stimulate civic life.'' In 2004, Pew made the switch from a private foundation to a public charity in order to provide the organization more flexibility and range in their efforts. The switch to a public charity gives Pew the ability to lobby on the federal and state level, and combine certain resources required to be separate when Pew was operating as a private foundation.
The switch to public charity also allows the organization to spend the money generated on issues and in sectors not originally intended by its founders. According to a 2004 Wall Street Journal article, the foundation was set up ``to disburse money to charities and research that the founders believed reflected their values and priorities,'' not to venture into the whims of the current directors.
The change in Pew's status allows the organization to pursue more partisan activities than it had undertaken previously. The Wall Street Journal article highlighted that Pew, because of its status shift, would now be able to spend five percent of its budget on lobbying efforts, funding ``a lot of K Street lunches.'' With a $4 billion budget, that means that Pew can spend $200 million in lobbying. This means that ``Pew's shift promises to have a seismic impact on the foundation and political worlds.''
Since the shift, Pew has given a substantial amount of money to environmental activist groups directly, and through other private funds that finance those groups. Pew contributed $431,000 to EDF; $900,000 to NRDC; and $700,000 to the Partnership Project, which is a joint venture of the nation's leading environmental groups. The Partnership Project's membership includes such names as LCV, EDF, NRDC, Greenpeace, and Sierra Club. Additionally, Pew gave more than $7 million to the Tides Foundation. During that time, the Tides Foundation contributed a collective $1.8 million to the following organizations: EDF, LCV, Greenpeace, NRDC, and Sierra Club.
Based in Pittsburgh, the Heinz family of foundations is made up of several different foundations. Two of the major organizations within this empire are the Heinz Endowments, and the Heinz Family Philanthropies (hereinafter collectively referred to as ``Heinz''). In 2006, the Heinz Endowments combined the Howard Heinz Endowment and the Vira I. Heinz Endowment, two of the Heinz foundations more major funds, with a common purpose ``to develop solutions that are national in scope.'' The Heinz Family Philanthropies are made up of three funds: The Teresa and H. John Heinz III Foundation, the H. John Heinz III Foundation, and the Heinz Family Foundation. The Philanthropies focus on three key issues: healthcare and the elderly, environment concerns, and advancing female opportunities in the workplace.
At the center of the Heinz empire is Teresa Heinz. She is the current chairman of both the Heinz Endowments and the Heinz Family Philanthropies. As previously stated, Ms. Heinz, wife of Sen. John Kerry (D-MA), is known for her environmental and political activities. When her husband ran for President in 2004, the LCV publicly endorsed him--the earliest the organization had ever endorsed a Presidential candidate. LCV had previously received more than $57,000 from Heinz donations, but made the assertion that the money had no effect on their endorsement. Ms. Heinz oversees more than $1.5 billion of Heinz foundation resources.
Heinz, like Pew, has a history of giving both to environmental organizations individually, as well as to other funds and private foundations that also donate significant sums to environmental activists. Last year alone, Heinz gave $160,000 to NRDC directly. Since 2002, Heinz has given a total of $740,000 to EDF, LCV, and NRDC specifically. Over the past five years, Heinz has also given $3.8 million to Tides. Tides, as previously stated, has donated significantly to all five of the mentioned environmental organizations, and receives a bulk of their funds from foundations such as Heinz.
Founded in 1990 by Ted Turner, the Turner Foundation is a self-proclaimed ``private, independent family foundation committed to preventing damage to the natural--water, air, and land--on which all life depends.'' Since 1991, the Turner Foundation has reported giving out $297.6 million in grants to organizations ``aimed at creating a better world.'' In its 2006 filing, the Turner Foundation raised more than $12 million and contributed more than $8.6 million in grants.
The Turner Foundation focuses its philanthropic efforts almost solely on environmental pursuits. In 2001, for instance, Ted Turner co-founded the ``Nuclear Threat Initiative,'' with former Democratic Senator Sam Nunn, to combat the growing nuclear threat. In addition, the Foundation has historically undertaken ``special projects'' which include the League of Conservation Voters Education Fund and the Partnership Project.
Since 2002, the Turner Foundation has contributed more than $2.9 million to the Partnership Project. The Turner Foundation also contributed significant sums to several of the mentioned members individually. Since 2002, the Turner Foundation has given more than $1 million to the NRDC; $778,875 to EDF; and $6.7 million to the LCV Education Fund.
This report by no means paints a complete picture of environmental activism and its political and financial ties to election politics. There are additional activities that the environmental groups mentioned participated in, and additional organizations that the foundations mentioned funded. Each of the groups cited, including the foundations, are represented by a 501(c)(3) organization. Under this structure, these organizations collect funds from individual donors by representing themselves as unbiased, objective, and nonpartisan. They are able to amass wealth because those funds are tax-deductible to their donors.
Each of these organizations has also, both individually and collectively, given numerous examples of their partisanship activities. The LCV is, by its very nature, a partisan organization. Additionally, its history has shown it to consistently favor Democratic candidates. It is closely followed by the Sierra Club, which is currently only giving two percent of its support to Republican candidates this year. The NRDC has gone on television showing its support for a Democratic Senator. EDF has a board comprised of publicly-disclosed advisors and financial supporters to the Senator Barack Obama Presidential Campaign. Greenpeace, aside from being affiliated with all the above organizations, is chaired by a man who is directly associated with the Democratic Congressional Campaign Committee. Furthermore, all of these organizations are associated with each other through the Partnership Project, which has consistently supported the Democratic environmental platform.
In conclusion, as we turn to another election year, these environmental groups continue to campaign in much the same manner. With a presidential campaign in full swing, these organizations and foundations are likely to wield an even bigger sword than in years previous. Yet for all of the activities that take place, both those mentioned above and others, these groups remain unchecked. They continue to do business under the scope of charitable organizations. While it is not likely that their partisan habits are going to change, the public should see these nonprofits for what they are, and what they stand for.
Because of the complicated web of 501(c), 527, and PAC organizations, it is clear that individuals who donate to a 501(c)(3) organization intending to contribute to the cause of the organization, have no clear mechanism for verifying that their donation was used for the cause. Unsuspectingly, these donors may be contributing to partisan activities when they originally intended their donation to aide an environmental cause. Additionally, there is not sufficient oversight over these organizations to police their political and campaign activities.
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