Big Green’s opaque funding

JUNE 30, 2010

By ANTHONY PIGNATARO

In the race to pass Proposition 23, the effort to roll back California’s landmark and sweeping global warming regulations this November, some of the biggest  decisions in the race are being made in a place called the Bently Reserve. Located at 301 Battery Street in San Francisco’s Financial District, Bently Reserve’s massive, stately three-story columns support a variety of meetings, conferences and social events. But up on the fifth floor, in pretty much the same suite, are the headquarters of three non-profit environmental charities that carry the financial weight to match, or even exceed, the money moving into the race from Big Oil.

Huge quantities of money are gushing into both camps, and there’s still four full months of campaigning before the election. And deciphering who exactly is giving money – especially to the No on 23 side – isn’t always easy or straightforward.

Given the most recent statements, the main pro-Prop 23 group – the California Jobs Initiative Committee – is ahead in fundraising, though not by much. So far, that committee has raked in about $1.82 million, while Californians for Clean Energy and Jobs (the similarity in names only adds to confusion) has so far collected about $1.5 million.

For the Yes on Prop 23 camp, the vast majority of those contributions have come from Big Oil: $1,058,000 ($8,000 of which came in the form of “staffing services”) from Valero Services, Inc. in San Antonio and another $350,000 from Long Beach-based Tesoro. Much of the rest of the money came from smaller oil companies.

“I think it’s safe to say we’ll be outspent by the deep pockets of the oil companies,” said Steven Maviglio, spokesman for the anti-Prop 23 campaign. “Seventy eight percent [of contributions to the California Jobs Initiative Committee] is directly from oil companies.” Maviglio added that he’d heard the pro-Prop 23 camp could eventually raise “$150 million,” though Anita Mangels, a spokesperson for the pro-Prop 23 campaign, refused to talk numbers, saying any attempt to predict her committee’s eventual fund-raising tally was “wild speculation.”

Maviglio’s apparent certainty at being outspent is not necessarily true, especially given the opaque nature of much of the money that’s going into Californians for Clean Energy and Jobs. The names Tesoro and Valero pretty much tells voters that oil companies – and firms that utilize large numbers of internal combustion engines that burn petroleum based fuels – look at AB32 with horror and want it repealed it all costs.  But where do pro-Prop 23 contributors, many of which are non-profit organizations with very deep pockets, get their money?

Some contributions are comparatively easy to understand. Like Anne G. Earhart, who gave Californians for Clean Energy and Jobs a quarter million dollars on May 25. Her full name is Anne Catherine Getty Earhart (her grandfather was oil magnate J. Paul Getty) and she lives in Corona del Mar, the old money part of Newport Beach. The Center for Responsive Politics tallied $289,350 in contributions from her to Democratic Party candidates and committees since 2006, as well as an impressive list of occupations ranging from “investor” to “philanthropist” to “Homeland Foundation President” to “gardener.” Her $775 million net worth earned her a spot on Forbes’ 400 Richest in America list in 2002.

Other contributions are far more difficult to explain because they come from non-profit organizations, which often do not have to disclose their donors. No contribution better exemplifies this than the check for $500,000 Californians for Clean Energy and Jobs received on March 31 from the Green Tech Action Fund.

Headquartered at Bently Reserve, Green Tech describes itself as a “nonpartisan not-for-profit grant making organization.”

“Our goal is to spur big new markets for clean energy technologies – especially energy efficiency and renewable energy,” says this rather sparse Web page. “These technologies deliver jobs and economic development, enhanced energy security, and big pollution reduction benefits.”

When contacted by phone, Eric Heitz, Green Tech’s president, said that AB32 was “important policy” and keeping it alive was “instrumental to making California a leader in the green technology space.”

Green Tech is a 501(c)(4) – meaning its tax-exempt status allows it to carry out political actions – with just four officials who serve without reportable compensation, as listed on their 2008 tax returns (the earliest available from the charity watchdog website Guidestar). The tax form also shows the organization took in $2,375,000 in contributions and grants, which it then distributed in the forms of grants to two other organizations: $1,675,000 to the League of Conservation Voters and $700,000 to the Sierra Club.

All of Green Tech’s $2.375 million in contributions came from a single benefactor, a non-profit 501(c)(3), which doesn’t appear on its 2008 return: The Energy Foundation, which is also located on Bently Reserve’s fifth floor.

The Energy Foundation’s 2008 tax returns show a much different organization – one that took in nearly $102 million in revenue while dispensing $64 million in contributions and grants. Statement 7 in the tax return explains that it created Green Tech Action Fund so that it could do political action.

“In 2008, the Energy Foundation (“EF”) did not participate or intervene in any political campaigns,” reads the statement. “It did, however, make a $2.375 million grant to its newly-created section 501(c)(4) affiliate, the Green Tech Action Fund (“GTAF”), for the purpose of attempting to influence legislation aimed at reducing global greenhouse gases and promoting clean energy technologies and energy efficiency.” What’s more, the statement said that Green Tech is currently “re-granting the funds to other tax-exempt organizations for the specific purpose of lobbying for legislation to combat climate change.”

And therein hangs a snag – one of those little relationships that get investigative reporters’ hearts beating. According to this New York Times story, the Stanford economist Larry Goulder – who chairs the Economic Allocation and Advisory Committee of the California Air Resources Board (which is tasked with actually implementing AB32) – sits on the board of directors of The Energy Fund. He’s also, for those not keeping track at home, one of the authors of this analysis that says AB32, when finally implemented, will create jobs.

But that’s really a side issue. The main question – where The Energy Foundation gets its money – is actually more interesting, but also difficult to answer.

The Energy Foundation’s 2008 tax returns are 479 pages long (most of the returns examined for this story are between 25 and 50 pages long). But The Energy Fund is “terminating its status as a private foundation” – a process that takes 60 months – and filled out a slightly different tax return that includes a contributors list.

The list names 17 foundations, each giving between $214,386 and $31 million. Some are well known, like the William and Flora Hewlett Foundation in Menlo Park ($26.8 million), Pew Charitable Trusts in Philadelphia ($1 million) and the Doris Duke Charitable Foundation in New York ($312,257). Others, like Sea Change Foundation, a 501(c)(3) that donated $12 million, are not so well known.

Sea Change, like Green Tech and The Energy Fund, is conveniently located on the fifth floor of old Bently Reserve. Like those foundations, Sea Change also keeps a very low Web profile. “Sea Change Foundation is dedicated to achieving meaningful social impact through leveraged philanthropy that addresses the most pressing problems facing the world today,” states this barren Web page. “The Foundation’s initial focus is addressing the serious threats posed by global climate change.”

Sea Change’s 2008 tax records show it’s funded by the Simons family – $2 million from Renaissance Technologies hedge fund founder James Simons in New York (who in 2009 alerted then New York Attorney General Eliot Spitzer to possible fraud by Bernard Madoff), and another $49 million from various Delaware trusts in the name of Nathaniel Simons, James’ son, who is also listed as the foundation’s unpaid president.

Also of interest is the ClimateWorks Foundation, a 501(c)(3) that donated $31.1 million to the Energy Foundation and is headquartered just a third of a mile away from Bently, at 235 Montgomery. Compared to the Bently Reserve tenants, ClimateWorks is a monster – $490 million in grants and contributions, according to its 2008 tax records. There’s no contributors list in ClimateWorks, but the foundation maintains a rather detailed and helpful Web site that includes a page dedicated to its funders– all three of them.

Turns out all that $490 million came from just three other non-profit foundations: William and Flora Hewlett, David and Lucile Packard and the McKnight Foundation. Between them, all three of these foundations also donated about $34 million to The Energy Foundation. The 2008 returns show Hewlett subsists on dividends from a couple hundred million dollars of investments, Packard has a wide variety of holdings and investments, including more than a billion dollars in stocks and funds and McKnight, though posting $200 million in asset sale losses, still held about $1.5 billion in some kind of investment holdings (as well as $26 million in donations from the Bill and Melinda Gates Foundation).

And there the trail would end, except that all I really did was trace back a single $500,000 contribution from Green Tech Action Fund (which, unlike Energy Foundation and Sea Change Foundation, lacks a name plate in the Bently Reserve lobby) to Californians for Clean Energy and Jobs. And when asked if Green Tech had any plans to donate any more money into the race – and draw a bit more from the foundation coffers outlined above – Heitz paused.

“At this time, we do not,” he said.

Photo of Bently Reserve and research assistance by Patrick Ryan.

8 comments

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  1. Tylerle13
    Tylerle13 30 June, 2010, 14:55

    Thats wonderful, and not the least bit surprising. The anti Prop 23 people keep complaining about big out of state companies trying to influence California policy, yet they are laundering out of state Old Money to counter act it.

    So if the money gets laundered through a couple of “charities” and then finally gets distributed by a CARB employee in charge of the money for an in state “Charity”, then they have every right to influence California’s policy, because rich people know whats best for everybody.

    I wonder why they are not complaining that out of state rich people are funding regulations that will completely eliminate the middle class. Those people donating million of inherited dollars are not the ones who will lose their jobs. The low income people are going to receive government subsidies to pay for any increased expenses due to the legislation. It’s the middle class people, who dont qualify for government subsidies, who are going to lose their jobs, companies, etc.

    It seems that those Oil companies, who actually employee people in California, have much more of a right/reason to be spending money to suspend AB 32, than some Old Money trust fund babies do. The hypocracy of the environmental nut jobs knows no bounds.

    Reply this comment
  2. EastBayLarry
    EastBayLarry 1 July, 2010, 07:11

    Follow the money.
    What do these investors stand to gain from AB32 in particular and ‘energy legislation’ in general? Are they heavily invested in *foriegn* oil exploitation? Are they positioned to partake in the “Carbon Trade” market?
    Or are they just Marxists looking to gain control of the once great nation of the United States?

    Reply this comment
  3. Chandler Madison
    Chandler Madison 1 July, 2010, 08:17

    Great work! The special interests behind the Green Machine don’t want their identities known and hide in a maze of legal money laundering. http://www.thegoraxbook.com/2010/07/01/green-machine-plays-hide-the-ball/

    Reply this comment
  4. TruthSquad
    TruthSquad 1 July, 2010, 14:02

    How about in the interest of FULL disclosure that Cal Watchdog report that it is funded by contributions from Big Oil?

    Reply this comment
  5. Tylerle13
    Tylerle13 1 July, 2010, 14:15

    Relevance fraudsquad?

    Once again, a professional liar tries to throw up a smoke screen and change the subject without answering or addressing anything. Either “Big Oil” kidnapped your family and beat you up pretty bad, or your being paid to hate them, because no matter what the subject is you always try to change the subject to how horrible oil is. And no normal person is pretentious enough to call themself “truthsquad” unless they are trying to trick people with false information in order to push the agenda of the people signing their checks.

    Reply this comment
  6. Anton
    Anton 2 July, 2010, 05:24

    I think a better question is what the point of this article is. There was no analysis and no mention of any implications. Not even anything actually dishonest. It sounds like an attempt to stir up trouble where there is none while avoiding getting hit with a libel suit.

    Reply this comment
  7. TheTruthSquad
    TheTruthSquad 7 July, 2010, 08:09

    The bigger question is why 80 percent of the $3 million spent so far FOR Prop 23 is coming from out of state (Texas oil companies, Ohio coal companies, Beltway coal trade associations).

    Reply this comment
  8. Tylerle13
    Tylerle13 7 July, 2010, 11:08

    Another big question is why the money to oppose Prop 23 is being laundered through numerous fake “charities” to disguise the fact that it is coming from Venture Capitalists who have a financial stake in many of the green companies who are benefitting from their competition being destroyed by ridiculous & fraudulent CARB regulations allowed by AB32. Much of that VC “Charity” money comes from out of state as well, they just try to hide the truth. Those “Out of State” companies supporting Prop 23 have actually been doing business in California for decades and have been employing tens of thousands of California residents as well.

    Since they have locations in California and employ California residents, doesnt that make them a California company as well? Shouldnt they be concerned about fraudulent regulations that are going to result in them being forced to lay off their employees in California?

    Come on Fraudsquad, you try to point at “out of state” companys supporting Prop 23, then ignore that the environuts opposing prop 23 are being funded by out of state Venture Capitalists who are afraid to admit that they are funding it, so they launder it through fake non-profits.

    You really seem like the kind of person who farts in a crowded elevator, then points at someone else.

    Reply this comment

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