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Quick Analysis

Undue Influence at the EPA

Among the most important stories not covered by the major media in 2014 was the scathing report by the U.S. Senate’s Committee on Environment and Public works Minority Staff Report concerning undue influence within the Environmental Protection Agency. 

The executive summary of the report is reproduced here:

In his 2010 State of the Union Address, President Obama famously chided the Supreme

Court for its recent campaign finance decision by proclaiming, “With all due deference to the

separation of powers, the Supreme Court reversed a century of law to open the floodgates for

special interests – including foreign corporations – to spend without limit in our elections.”

 

In another speech he further lamented, “There aren’t a lot of functioning democracies around the

world that work this way where you can basically have millionaires and billionaires bankrolling

whoever they want, however they want, in some cases undisclosed. What it means is ordinary

Americans are shut out of the process.”

 

These statements are remarkable for their blatant hypocrisy and obfuscation of the fact

that the President and his cadre of wealthy liberal allies and donors embrace the very tactics he

publically scorned. In reality, an elite group of left wing millionaires and billionaires, which this

report refers to as the “Billionaire’s Club,” who directs and controls the far-left environmental

movement, which in turn controls major policy decisions and lobbies on behalf of the U.S.

Environmental Protection Agency (EPA). Even more unsettling, a dominant organization in this

movement is Sea Change Foundation, a private California foundation, which relies on funding

from a foreign company with undisclosed donors. In turn, Sea Change funnels tens of millions

of dollars to other large but discreet foundations and prominent environmental activists who

strive to control both policy and politics.

 

This report examines in detail the mechanisms and methods of a far-left environmental

machine that has been erected around a small group of powerful and active millionaires and

billionaires who exert tremendous sway over a colossal effort. Although startling in its findings,

the report covers only a small fraction of the amount of money that is being secreted and moved

around. It would be virtually impossible to examine this system completely given the enormity

of this carefully coordinated effort and the lack of transparency surrounding it.

 

The failure to openly acknowledge this force and the silence of the media with whom

they coordinate further emphasize the fact that until today, the Billionaire’s Club operated in

relative obscurity hidden under the guise of “philanthropy.” The scheme to keep their efforts

hidden and far removed from the political stage is deliberate, meticulous, and intended to

mislead the public. While it is uncertain why they operate in the shadows and what they are

hiding, what is clear is that these individuals and foundations go to tremendous lengths to avoid

public association with the far-left environmental movement they so generously fund.

The report attempts to decipher the patterns of “charitable giving.” Often the wealthiest

foundations donate large sums to intermediaries – sometimes a pass through and sometimes a

fiscal sponsor. The intermediary then funnels the money to other 501(c)(3) and 501(c)(4)

organizations that the original foundation might also directly support. The report offers theories

that could explain this bizarre behavior, but at its core, the Billionaire’s Club is not, and

seemingly does not, want to be transparent about the groups they fund and how much they are

supporting them.

In advancing their cause, these wealthy liberals fully exploit the benefits of a generous

tax code meant to promote genuine philanthropy and charitable acts, amazingly with little

apparent Internal Revenue Service scrutiny. Instead of furthering a noble purpose, their tax

deductible contributions secretly flow to a select group of left wing activists who are complicit

and eager to participate in the fee-for-service arrangement to promote shared political goals.

Moreover, the financial arrangement provides significant insulation to these wealthy elite from

the incidental damage they do to the U.S. economy and average Americans.

Through these arrangements, the Billionaire’s Club gains access to a close knit network

of likeminded funders, environmental activists, and government bureaucrats who specialize in

manufacturing phony “grassroots” movements and in promoting bogus propaganda disguised as

science and news to spread an anti-fossil energy message to the unknowing public. Not only is

the system incredibly sophisticated, but the Club’s attorneys and accountants have mastered the

loopholes and gray areas in the tax code, which enable them to obtain a full tax benefit, even

when the recipient of the grant is not recognized as a public charity, and even if the money

indirectly and impermissibly funds political activities.

In order to understand how the Billionaire’s Club colludes with the far-left

environmental activists and government officials, the report articulates the fundamental

framework that governs these relationships. Essentially, the far-left environmental machine is

comprised of hundreds of nonprofit organizations. Each entity is set up according to its

designated purpose and is either a private foundation or a public charity, depending on where the

cog fits in this well-designed wheel.

The facilitators – both organizations and individuals who bring together the private

foundations and the activists – are a key component of the movement’s success. The report

identifies three organizations that serve prominent roles as facilitators: the Environmental

Grantmakers Association, the Democracy Alliance, and the Divest/Invest movement. There is

also a narrow set of individuals whose careers are part of the fabric of the far-left environmental

movement and who serve as coordinators and intermediaries between the Billionaire’s Club and

the activist groups.

The ultimate recipients of donations from the Billionaire’s Club work in tandem with

wealthy donors to maximize the value of their tax deductible donations and leverage their

combined resources to influence elections and policy outcomes. Often, they lobby on behalf of

the EPA and advance policy positions important to the agency, which is statutorily prohibited

from lobbying on its own behalf. But most importantly, they serve as the face of the

environmental movement and present themselves as non-partisan benevolent charities to a public

not aware of the secretive backroom deals and transfers.

The Billionaire’s Club achieves many of its successes through the “capture” of key

employees at EPA. These “successes” are often at the expense of farmers, miners, roughnecks,

small businesses, and families. This report proves that the Obama EPA has been deliberately

staffed at the highest levels with far-left environmental activists who have worked hand-in-glove

with their former colleagues. The green-revolving door at EPA has become a valuable asset for

the far-left and their wealthy donors. In addition to providing insider access to important policy

decisions, it appears activists now at EPA also funnel government money through grants to their

former employers and colleagues. The report tracks the amount of government aid doled out to

activist groups and details a troubling disregard for ethics by certain high powered officials.

The report further describes what the Billionaire’s Club is purchasing with their fortunes.

It reveals that activists are skilled at creating and pushing out propaganda disguised as science

and news. For example, both the Park Foundation and the Schmidt Family Foundation have

financed questionable scientists to produce anti-fracking research, which the Huffington Post,

Mother Jones, and Climate Desk – all grant recipients themselves – eagerly report on.

The Billionaire’s Club has also perfected the craft of assembling and funding fake

grassroots movements to assist in ballot measures and other state initiatives. The efforts in New

York and Colorado to ban fracking are prime examples. The report explains how these faux

grassroots efforts are actually funded by foundations outside the states they seek to influence.

All these groups are similarly utilizing their platform to attack jobs, economic development, and

infrastructure projects across the country.

The Energy Foundation is a quintessential example of a pass through frequently

employed by the Billionaire’s Club. Energy Foundation receives money from several key

foundations and redirects it to activists. In doing so, they are providing two services: distance

between the donor and the activist, and enhancing the clout of the donors as their individual

influence is maximized by pooling resources. One of the major funders of the Energy

Foundation is Sea Change, which has gone to great lengths to hide the source of its money. This

is especially concerning in light of recent revelations that environmental activists do not appear

to be morally conflicted over where their money comes from – so long as it supports their goals.

The Billionaire’s Club is also adept at converting charitable donations into political

outcomes by taking advantage of loopholes in the tax code. Numerous examples raise questions

as to whether the charitable donations are indirectly supporting political activity. For example,

in many cases they fund a 501(c)(3), like the Energy Foundation or the League of Conservation

Voters, which then transfers large sums to an affiliated 501(c)(4), which can engage in political

activity. The affiliated groups often share office space, staff, and even board members. In the

case of the 501(c)(4) Green Tech Action Fund, which received donations from the Energy

Foundation, and in turn, donated funds to 501(c)(4) far-left environmental activist organizations.

The evidence provided in this report highlights the lengths the far-left environmental

movement goes to hide sources of funding and to disguise their actions – bought and paid for by

millionaires and billionaires – as charitable acts in service of their fellow man. This report

outlines a sampling of the individuals, foundations, and practices that are active in our political

system today, shedding light on just a fraction of the activities of the far-left environmental

machine that undermines American free enterprise and resource security.

FINDINGS:

  • The “Billionaire’s Club,” an exclusive group of wealthy individuals, directs the far-left

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environmental movement. The members of this elite liberal club funnel their fortunes

through private foundations to execute their personal political agenda, which is centered

around restricting the use of fossil fuels in the United States.

  • The Billionaire’s Club has established a dozen prominent private foundations with huge

sums of money at their disposal to spend on environmental causes.

  • Members of the Billionaire’s Club also donate directly to 501(c)(3) public charities.

Generally, the public charity is considered the preferred status under the tax code, based

on the greater tax benefits and protections on donor disclosures.

  • Public charities attempt to provide the maximum amount of control to their donors

through fiscal sponsorships, which are a legally suspect innovation unique to the left,

whereby the charity actually sells its nonprofit status to a group for a fee.

  • Nearly all of the public charities discussed in this report have an affiliated 501(c)(4) that

engages in activities designed to influence elections and have no restrictions on their

lobbying efforts. The funding of a 501(c)(4) by a 501(c)(3) affiliates is provocative in

light of the legal restrictions on public charities from participating in political

campaigning, either directly or indirectly, while permitting a 501(c)(4) to significantly

engage in campaign activities.

  • Members of the Billionaire’s Club put a premium on access to the complex

environmental infrastructure that has evolved to leverage substantial assets towards

achieving defined policy outcomes.

  • Environmental Grantmakers Association (EGA) is a place where wealthy donors meet

and coordinate the distribution of grants to advance the environmental movement. EGA

encourages the use of prescriptive grantmaking. It is a secretive organization, refusing to

disclose their membership list to Congress.

  • Democracy Alliance (DA), a facilitator for wealthy donors seeking to advance a broader

far-left agenda, does not disclose the details of any transaction it facilitates, and its

members and donor-recipients cannot speak publically about the organization. (Pg. 18)

  • Environmental activist groups are well aligned with the greater far-left agenda. One of

DA’s acclaimed successes in the last year includes President Obama’s executive actions

on climate change. (Pg. 20)

  • Many far-left environmental foundations and groups have pledged to divest in fossil fuels

and invest in renewable projects as well as “philanthropy.” (Pg. 22)

iv• There is a narrow set of individuals whose careers are part of the fabric of the far-left

environmental movement. These individuals exercise outsized influence regarding the

distribution of funds. (Pg. 23)

  • Public charity activist groups propagate the false notion that they are independent,

citizen-funded groups working altruistically. In reality, they work in tandem with

wealthy donors to maximize the value of the donors’ tax deductible donations and

leverage their combined resources to influence elections and policy outcomes, with a

focus on the U.S. Environmental Protection Agency (EPA).

  • Far-left environmental activists, while benefiting from nonprofit status, essentially sell a

product to wealthy foundations who are seeking to drive policy and political outcomes.

  • The Obama Administration has installed an audacious green-revolving door among

senior officials at EPA, which has become a valuable asset for the environmental

movement and its wealthy donors.

  • In one example, senior EPA officials planned to use Michelle DePass’s position on the

Board of Directors of EGA, her eminent employment at EPA, and her relationship with

former EPA Administrator Lisa Jackson, to enhance her influence with EGA.

  • Former far-left environmentalists working at EPA funnel government money through

grants to their former employers and colleagues, often contributing to the bottom line of

environmental activist groups.

  • Under President Obama, EPA has given more than $27 million in taxpayer-funded grants

to major environmental groups. Notably, the Natural Resources Defense Council and

Environmental Defense Fund – two key activists groups with significant ties to senior

EPA officials – have collected more than $1 million in funding each.

  • EPA Region 2 Administrator Judith Enck appears to be inappropriately and personally

involved in the allocation of EPA grants to favored groups. Enck is also the subject of an

inquiry led by the EPA Office of Inspector General.

  • EPA also gives grants to lesser-known extreme groups. For example, the Louisiana

Bucket Brigade received hundreds of thousands of grants under former Administrator

Lisa Jackson despite challenges by state regulators over the use of such grants.

  • Some of the most valued services activists provide the Billionaire’s Club includes

promulgation of propaganda, which creates an artificial echo chamber; appearance of a

faux grassroots movement; access to nimble and transient groups under fiscal

sponsorship arrangements; distance/anonymity between donations made by well-known

donors and activities of risky activist groups; and above all – the ability to leverage tens

of millions of dollars in questionable foreign funding.

  • Foundations finance research to justify desired predetermined policy outcome. The

research is then reported on by a news outlet, oftentimes one that is also supported by the

same foundation, in an effort to increase visibility. In one example, a story reporting on a

Park Foundation-supported anti-fracking study was reproduced by a Park-funded news

organization through a Park-funded media collaboration where it was then further

disseminated on Twitter by the maker of Park-backed anti-fracking movies.

  • Another service provided to the Billionaire’s Club is the manufacturing of an artificial

grassroots movement where it is not the citizen’s interest that drives the movement;

rather, it is part of a well-funded national strategy.

  • In New York and Colorado, a pseudo grassroots effort to attack hydraulic fracturing has

germinated from massive amounts of funding by the NY-based Park Foundation, as well

as CA-based Schmidt Family Foundation and Tides Foundation

  • The same California and New York-based foundations behind the New York antifracking

efforts have shifted to Colorado through two coalitions – Local Control

Colorado and Frack Free Colorado.

  • Bold Nebraska is another example of faux grassroots where a purportedly local

organization is, in fact, an arm of the Billionaire’s Club. It is nothing more than a shield

for wealthy and distant non-Nebraskan interests who seek to advance a political agenda

without drawing attention to the fact that they, too, are outsiders with little connection to

the state.

  • The Energy Foundation is a pass through public charity utilized by the most powerful

EGA members to create the appearance of a more diversified base of support, to shield

them from accountability, and to leverage limited resources by hiring dedicated

energy/environment staff to handle strategic giving.

  • The Energy Foundation is the largest recipient of grants from the foreign-funded Sea

Change Foundation; yet, it appears the Energy Foundation attempts to hide donations

from Sea Change, as it is not listed as one of Energy Foundation’s partners.

  • The circumstances surrounding the flow of money from 501(c)(3) and 501(c)(4) groups,

and the likelihood of lax oversight, raises questions as to whether 501(c)(3) nonprofit

foundations and charities are indirectly funding political activities.

  • 501(c)(4) Green Tech Action Fund receives millions of dollars from green 501(c)(3)

organizations, then distributes the funds to other 501(c)(4) groups that donate to political

campaigns.

  • Many of the large environmental organizations form both 501(c)(3) and 501(c)(4)

nonprofits that are publically advertised as separate and independent entities. In reality,

they are closely associated groups that transfer money from the Billionaire’s Club to

nonprofits, and eventually into political campaigns.

vi• Between 2010 and 2012, Tides Foundation gave over $10 million to Tides Center, and

Tides Center gave over $39 million to Tides Foundation. It is unclear what purpose the

transfer of funds between these two organizations serves, other than obscuring the money

trail.

  • Tides Center is a fiscal sponsor to over 200 groups, which are subject to Tides Center’s

oversight and direction in important aspects that include forming a governing board,

managing payroll, and monitoring risk.

  • The New York-based Sustainable Markets Foundation is also a significant fiscal sponsor

and receives vast sums from the Billionaire’s Club. It only exists on paper and has zero

public presence – no website, no Facebook page, no Twitter account, nothing.

  • The Billionaire’s Club knowingly collaborates with questionable offshore funders to

maximize support for the far-left environmental movement.

  • The little information available on Sea Change is limited to a review of its IRS Form-990

for 2010 and 2011 as its 2012 form is not public, and a sparsely worded website – listing

solely the logo and a three-sentence mission statement.

  • Klein Ltd., an overseas company contributing tens of millions to organizations dedicated

to abolishing the use of affordable fossil fuels through a U.S. private foundation is highly

problematic. This is only compounded by the fact that it is deliberately and completely

lacking in transparency – having no website and withholding its funders.