Environmental Group Admits Using Secretive Foundation to Conceal Funder’s Identity

One of America’s oldest environmental groups uses a secretive foundation in San Francisco as a pass-through entity to protect the identity of one of its donors, a revelation that could reignite a years-long controversy over the source of millions of dollars that flow each year to environmental advocacy campaigns.

In a largely overlooked admission, Melinda Pearce, legislative director for the Sierra Club, told POLITICO last month that the money it receives from the Sea Change Foundation is being funneled through that entity by a private donor.

“We have confirmed that the origin of these funds is a private U.S. donor who cares about climate change and has invested in the work the Sierra Club does to tackle the climate crisis and advance the clean energy economy,” Pearce said. She did not disclose the name of the donor.

The admission brings new attention to the complex financial networks that support the anti-fossil fuel “Keep It In the Ground” agenda, which critics have accused of being secretly funded by a variety of interests who will benefit financially if fossil fuels are curtailed. It also provides more details on how wealthy, green-minded donors use large foundations to conceal their identities and avoid scrutiny.

Dark Money and Links to Renewable Interests

The Sea Change Foundation was founded in 2006 by Nat Simons, who also co-founded Prelude Ventures, a “cleantech investment fund which focuses on emerging companies that will speed the transition to a low-carbon economy,” according to Prelude’s website. Simons’ bio also describes Sea Change as an entity that “works nationally and internationally to implement public and private policies that will reduce reliance on coal, tar sands, and high greenhouse gas (GHG) fossil fuels.”

Inside Philanthropy, a non-profit watchdog, writes that Sea Change “quietly funds the giants of climate change work” with “very little public presence.” Simons, the foundation’s president and primary donor, is the CEO of Elan Management, which “invests in early-stage renewable energy and cleantech companies,” according to Inside Philanthropy.

It’s unclear if the donor who uses Sea Change to funnel money to the Sierra Club is invested in energy technologies that would gain market share if fossil fuels are restricted.

Sea Change’s website is just a logo and three sentences, one of which says the organization “does not accept unsolicited proposals.” Despite its lack of a public presence, Sea Change is a major funder of U.S. environmental groups. In 2016 alone, Sea Change doled out more than $43 million in contributions, gifts, and grants, according to filings with the Internal Revenue Service. That included more than $3 million to the League of Conservation Voters and more than $1.7 million to the Natural Resources Defense Council. Sea Change also distributed two $875,000 grants to the Sierra Club Foundation last year.

Russia Connections?

In recent years, Sea Change has been put under an intense public microscope, particularly its relationship to a Bermuda-based firm called Klein Ltd., which some have linked to Russian energy interests. Klein gave $23 million to the California-based Sea Change Foundation in 2010 and 2011, according to a report by the Washington Free Beacon, a conservative news publication.

In 2014, the U.S. Senate Environment and Public Works Committee (EPW) published a report identifying a “club of billionaires” who fund environmental groups in the United States with various pass-through entities. The Sea Change Foundation was prominently featured in the EPW report.

Earlier this year, Rep. Lamar Smith (R-Tex.), chairman of the U.S. House Science, Space and Technology Committee, penned a letter to Treasury Secretary Stephen Mnuchin asking for an investigation of Klein, which the congressman called a “pass through for foreign funds.” Smith mentioned a potential link to Russian interests in his letter.

An attorney at Klein has denied any connections to Russia, calling the allegations “completely false and irresponsible.” Sierra Club has also “denied that any of the money it receives from Sea Change ultimately came from Moscow,” according to POLITICO.

Double Standard

In 2013, a Drexel University researcher published a study on the “dark money” that funds the so-called “climate denial” movement. The study examined what it called a “trend toward concealing the sources” of funding through the use of “donor directed philanthropies.” The study further explained that the funding “has shifted to pass through untraceable sources.”

The report received wide attention in the media, including the Washington Post, The Guardian, and even Smithsonian magazine, among others.

In coverage published by Scientific American, the study’s author, Robert Brulle, said more disclosure is needed among foundations who distribute millions of dollars to groups advocating on energy and environmental issues:

“Without a free flow of accurate information, democratic politics and government accountability become impossible,” he said. “Money amplifies certain voices above others and, in effect, gives them a megaphone in the public square.”

Powerful funders, he added, are supporting the campaign to deny scientific findings about global warming and raise doubts about the “roots and remedies” of a threat on which the science is clear.

“At the very least, American voters deserve to know who is behind these efforts.”

If it were true for “influential climate denial organizations,” then American voters also “deserve to know” more about who is funding politically active environmental advocacy groups like the Sierra Club, whose annual budget is nearly $100 million.

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