Global Policy Forum

Answering For Taking a Driller's Cash

Can environmental NGOs form partnerships with corporate bodies and maintain their integrity? Time magazine sparked controversy when it reported a $25 million donation from Chesapeake Energy, a natural gas company, to the Sierra Club, one of the oldest environmental groups in the USA. The size of the donation, and the secrecy surrounding it, make this corporate/environmental partnership notable, but such partnerships are not in themselves rare. This has brought to the fore a longstanding debate within the green community, about integrity, conflicts of interest, and the price of activism.

By Felicity Barringer 
New York Times
February 13, 2012

The recent disclosure of the Sierra Club’s secret acceptance of $26 million in donations from people associated with a natural gascompany has revived an uncomfortable debate among environmental groups about corporate donations and transparency.

The gifts from the company, Chesapeake Energy, have drawn criticism from some environmentalists. “Sleeping with the enemy” was a comment much forwarded on Twitter posts about the undisclosed arrangement.

“Runners shouldn’t smoke, priests shouldn’t touch the kids, and environmentalists should never take money from polluters,” John Passacantando, a former director of Greenpeace who is now an environmental consultant, said in an interview.

Yet the donations to the Sierra Club, reported by Time magazine’s Ecocentric blog and a blog called Corporate Crime Reporter, have plenty of precedents. Between 2004 and 2006, the National Audubon Society accepted $2.1 million from the chemical giant Monsanto to find a strategy for ensuring the safety of waterfowl near industrial farms using pesticides, for example.

The Environmental Defense Fund was an early adopter of the partnership model, working two decades ago with McDonald’s to stop using polystyrene clamshells for packaging, thus eliminating tens of thousands of tons of waste. Later it teamed with Fedex to reduce the emissions of its truck fleet. But it accepts no donations from corporate partners, its leadership says.

The Sierra Club used the Chesapeake Energy money, donated mainly by the company’s chief executive from 2007 to 2010, for its Beyond Coal campaign to block new coal-fired power plants and shutter old ones. Carl Pope, then the club’s executive director, promoted natural gas as a cleaner “bridge fuel” to a low-carbon future.

Immediately after the Time report surfaced on Feb. 2, the Sierra Club’s executive director, Michael Brune, acknowledged the donations and said he had decided to cut them off after he took over in 2010. In a blog post, he wrote that the group no longer viewed natural gas as a “kinder, gentler” energy source because of the environmental risks posed by hydraulic fracturing, a controversial gas-drilling process.

He did not address the secrecy of the donations in the letter. But in a statement e-mailed on Friday, Mr. Brune said, “After I arrived and learned about the situation, I realized this would be controversial information.” Rather than disclose the donations then, he said, he and the club’s board decided to focus on “immediate priorities” like changing “how we campaign and organize on natural gas issues” and accept gifts.

Ken Cook, the president of the Environmental Working Group, a research and advocacy organization, said in an interview that while he admired Mr. Pope, “one of the most important environmental leaders of my generation,” it seemed that “everyone was so focused on ending coal that judgments about things got muddied” at the Sierra Club.

He said he found the secrecy of the Chesapeake donations particularly troubling. Mr. Cook noted that the Environmental Working Group, which, among other things, reports on how toxic substances from industry and agriculture can affect people and the environment, accepted funds from trial lawyers for research on asbestos litigation, which has been a drain on the insurance industry.

“We disclosed,” he said. “We took a hit from people for doing it — it made our research less newsworthy. But it would have been unthinkable to us not to.”

The issue of accepting money from industry is particularly sensitive for membership-based groups like the Sierra Club, whose adherents, like those of Greenpeace, do not trust commercial companies to be good environmental stewards. David Yarnold, president of the Audubon Society and a former executive at the Environmental Defense Fund, pointed out that even as it accepted money from Monsanto, his group resisted requests to endorse genetic modification of crops.

Still, “there are good, hard questions to be asked about corporate partners,” he said.

“It reminds me a little of what happened during the fight for climate legislation,” Mr. Yarnold wrote in an e-mail. He recalled that groups like the Environmental Defense Fund were criticized in some quarters for forming alliances with General Electric, Duke Energy and others in 2007 to campaign for climate change legislation. Later they drew fire for compromising on legislative mandates.

Noting that the battle for passage of a cap-and-trade measure was grueling, Mr. Yarnold posed a question to those critics: “Would you rather have had” tough climate legislation “or the legislation we eventually got?”

“Oh, right,” he continued. “We didn’t get any.” Climate-change legislation died in Congress in 2010.

Then there is the issue of environmental groups’ staying afloat in recessionary times. The year before the Sierra Club cut off donations associated with Chesapeake, forfeiting $30 million in gifts, income from dues and donations dropped by one-third, to $39 million from $56 million, as the recession set in, according to the Sierra Club Foundation’s tax return.

“It’s difficult just because it was such a large portion of the Sierra Club’s financial backing,” Bruce Hamilton, the Sierra Club’s deputy executive director, said last week on the radio program “Between the Lines.”

Mr. Brune also ended a controversial 2008 financial arrangement with Clorox under which the company paid the club $1.3 million over four years for the right to display the Sierra Club’s logo on a new line of “Green Works” cleaning products.

Mr. Cook of the Environmental Working Group said the recent disclosures underscored the balancing act that environmental groups face in accepting corporate largess. “It’s a slippery slope when you work with industry when you’re in our business, ” he said.

“It’s often very important to do it, and very valuable,” he added. But in this case, “it was a misstep, that’s for sure.”


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