Appalachian Basin

Sustainable Markets Foundation Money Processing Being Noticed

The Associated Press (AP) has noted Yoko Ono’s “Artists Against Fracking” is collecting money to influence public policy in New York but hasn’t bother registering as a lobby group.  The article is worth reading and exposes the hypocrisy of the privileged 1% who attack the natural gas industry for lobbying efforts. Here we provide some additional facts the article missed.

There are hints in the Associated Press story that point to the bigger picture, when the Sustainable Markets Foundation is mentioned as the fund-raising arm of “Artists Against Fracking.”  Nonetheless, as we have noted on these pages before, the Sustainable Markets Foundation is at the heart of these schemes, serving as the money processing mechanism for delivering the Park Foundation and Rockefeller messaging on natural gas, using unaccountable informal groups.

Here are some of the highlights from the AP story (emphasis added):

Dozens of celebrities may be running afoul of the law as they unite under the banner of one group that is seeking to prevent a method of gas drilling in New York state.

Artists Against Fracking opposes hydraulic fracturing, or fracking, and boasts members including Yoko Ono and actors Mark Ruffalo and Susan Sarandon.

But the group and nearly 200 entertainers who are gaining attention and support in the dispute, which is splitting New Yorkers, aren’t registered lobbyists, according to a search by The Associated Press of the database of the state Joint Commission on Public Ethics. State law is designed to disclose who is trying to influence government action, how much money they are spending and where the money’s going.

“You spend money lobbying, you have to register,” said David Grandeau, former executive director of the state lobbying commission and now an attorney representing lobbyists and clients.

There’s no public record of how much money Artists Against Fracking has spent, but its website contains links for visitors to make donations, which are directed to the Sustainable Markets Foundation. Although the foundation is an established charitable organization and its donations are recorded publicly, it isn’t registered with New York as a lobbying client, either.

Under New York law, however, it appears Artists Against Fracking is required to be a registered lobbyist because the law hinges on spending over $5,000. The group hasn’t filed lobbying reports, so the amount it has spent and what it was spent on isn’t known publicly. Experts in Albany say the website and public events appear to have cost well over $5,000.

Under state law, a lobbyist is defined as any person or organization “employed, retained” in “any attempt to influence the passage or defeat of any legislation … or approval or disapproval of any legislation by the governor.”  That can include nonprofit groups and their unpaid advocates.

In the fracking case, the Assembly and the Senate Independent Democratic Conference have introduced laws that would delay a pending decision on drilling by Cuomo.

So, what we have is yet another instance of the Sustainable Markets Foundation effectively filtering money for purposes of messaging by very well-funded natural gas opponents. Our readers will recall The Flowback, which was an outrageous example of anti-natural gas venom financed with help from the Sustainable Markets Foundation.

In evaluating the funding of The Flowback we learned quite a bit about the Sustainable Markets Foundation, including how the Rockellers and Park Foundation are using it to filter money to fund anti natural gas activities. This includes not only The Flowback, but also Toxic Targeting, Frack Action, Gas Free Seneca, Water Defense, and the Coalition to Protect New York, to name a few. The excerpt below explains this in further detail.

Bill McKibben, 350.org

Bill McKibben, 350.org

The Sustainable Markets Foundation, as the reader may have guessed from the above, is funded by the Rockefeller family and is closely allied with 350.0rg, Bill McKibben’s organization, which is also financed by the famous family.  Both organizations are also closely connected to Attorney Jay Halfon, who represents New York’s trial lawyers and Ralph Nader’s lawsuit rainmaker PIRG groups.  Specifically, the Rockefeller Brothers Fund gave the Sustainable Markets Foundation $603,000 between 2008 and 2010.

Their 2010 tax return explains something else, on page 8 of the return (page 12 of the pdf) – namely that Walter Hang’s Toxic Targeting enterprise was paid $281,000 that year for services.  Given that Toxic Targeting is a provider of Phase I Environmental Database Services provider and the Foundation is an unlikely user of such services in this bulk (a typical Phase 1 audit might cost $5,000 or less), it’s fair to assume this was compensation for Walter’s anti-natural gas activities.  Surely, he felt right at home doing it, having been an employee of Nader’s PIRG groups in the past.

Even more interesting is another group funding the Sustainable Markets Foundation, namely the Park Foundation.  The latter has provided the former with $150,000 to date in 2012 to  support “Frack Action,” finance the “Physicians, Scientists and Engineers for Healthy Energy,” which “assembles and disseminates peer-reviewed research and information on hydrofracking,” and “help coordinate the broad movement of opposition to shale gas drilling in New York.”

Altogether, the Park Foundation has funneled $562,000 through the Sustainable Markets Foundation since 2009, meaning the Park and Rockefeller families (which also fund NRDC, of course) have given this entity a minimum of almost $1.2 million over the last four years to help fund natural gas opposition.  This includes not only projects such as The Flowback, but also Gas Free Seneca, the less than cordial opponent of Inergy’s propane storage facility in Watkins Glen and Water Defense’s “Water for Dimock” campaign.   Then, there’s Frack Action, of course, and the Coalition to Protect New York plus a host of other similar groups pretending to be grass roots organizations.

One might also recall the bullying tactics New York Attorney General Eric Schneiderman employed against local officials that passed pro-natural gas resolutions in their municipalities, fulfilling his anti-natural gas campaign platform. Where does the Sustainable Markets Foundation come into this discussion? Schneiderman also had connections to this organization through his campaign contributions and ties to the National Resource Defense Council (NRDC), as is explained below:

The New York Post noticed, back in June of last year, that Schneiderman was already intent on favoring his friends among environmental activist organizations such as NRDC.  Listed among significant donors to his 2010 campaign, for example, is Jay Halflon, the rainmaking lawyer associated with the Sustainable Markets Foundation, which, like NRDC and 350.0rg, is aligned with the Rockefeller family and actively involved in opposing natural gas development.  Other major donors included: NRDC Chair Daniel R. Tishman; NRDC Vice-Chair, Patricia Bauman; the Frack Action PAC; and Open Space Institute (OSI) Treasurer Paul J. Elston (OSI is, effectively, a NRDC spinoff).

Moreover, the AG actually recommends homeowners go to the NRDC website for “information on offsetting your carbon footprint” – an unusual deference to a special interest organization in a very unusual document one would expect to come from the Department of Environmental Conservation, not the AG’s office.  Schneiderman also did the NRDC’s bidding in suing the DRBC, on the former’s inartful theory the natural gas regulations the latter is developing somehow demand compliance with the environmental review requirements of the National Environmental Protection Act.

So you have the Sustainable Markets Foundation, acting as a fiscal sponsor and filtering money from New York’s wealthy elites – the Rockefellers and Park Foundation- to so-called grassroots organizations to influence public decision making. And, they’re doing it all without registering as having an interest, despite actively lobbying in the state.

What’s more is the money they are filtering often comes in at small enough amounts that it doesn’t have to be accounted for, and for some reason, there is no record of any fees assessed for acting as a fiscal sponsor, as we’ve written about in greater detail in a prior post. Below are some excerpts from that post:

ForRentSMFThe Sustainable Markets Foundation, as one can see from this list, is a 501(c)3 charity for rent, otherwise known as a “fiscal sponsor.”  Entities such as this typically charges a fee of 3-8% for acting as a pass-through funding mechanism to allow other unincorporated groups to get the benefits of tax-exemption for donations without the costs of being tax-exempt themselves (incorporating, registering with the IRS, filing annual 990 returns, etc.) or the burden of telling the world how their money is spent, as is the case with a 501(c)3 itself.

Theoretically, the fiscal sponsor assumes all the responsibilities of reporting activities for the groups it serves as a pass-through for but there are several loopholes.  Grants of $5,000 or less don’t have to be reported, for example, and, therefore, an unincorporated group that passes along money third-hand doesn’t have to tell anyone what it did with the money or even much about itself.  The tax-exempt money flows in and out with little way to know who’s involved, their agendas or their special interests.  A large donor can, using this technique, funnel money to very amorphous groups with virtually no accountability.  The Tides Foundation, for example, which is closely connected with NRDC and the Heinz Endowments, is a master at doing this.

We can’t be sure how much of this the Sustainable Markets Foundation is doing because their 990 return for 2010 indicates no program service revenue, which is where one would expect to find their fiscal sponsor charge revenue.  We do know they are collecting and funneling money to a wide variety of supposedly grass roots organizations attacking economic development and the livelihoods of ordinary New Yorkers from across the upstate region.  The list tells us that much.

Taken together, you have to wonder how a state that plans to hold the natural gas industry to an even higher standard of fiscal and operational accountability than it is already held in other states could possibly turn a blind eye to such a clear breach of the state’s laws.

The Sustainable Markets Foundation is helping to fund everyone among the natural gas opposition, from Gas Free Seneca to Yoko Ono, providing the fig leaf to cover the role of the Park Foundation and the Rockefeller family in what might otherwise appear to be small grass-roots efforts that demand no accountability.  It’s time that fig-leaf is removed and upstate New Yorkers understand the forces that are conspiring against them to reduce their economic opportunities and quality of life.

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