Pennies From Heaven

The word philanthropy first appears in Western thought in the fifth century BC to denote an act of rebellion and name the crime of treason.

Lapham’s Quartly

Lapham’s Quarterly Summer 2015: Philanthropy

by Lewis H. Lapham

Prometheus Bringing Fire to Mankind, by Friedrich Heinrich Füger, 1817. Neue Galerie, Kassel, Germany.

It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God. —The Gospel According to Matthew

But if the rich men are left standing around on earth with the camels, wherefrom the pennies that drop from the skies of philanthropy? Who carries up the treasure to the pay windows in heaven? At what altitude does hard coin resolve itself into dew, and so fall, gently like rain, on the sorrow and heat of the desert? How high the cloud level before greed becomes good?

These questions inform the discussion of the philanthropic largesse that in America over the last fifty years has become a very big business. Big enough to warrant the casting of suspicion on its motives, doubt on its objectives, stones at its privileges. Scolding voices in the media and Congress lobby for the adage that the mark of a good deed is its not going unpunished, and the increasingly harsh tone of the complaints—philanthropy as false front for funding a political campaign, as setup for a tax dodge, preservation of a family fortune, whiteout of a criminal rap sheet—rises to the occasion of the national economy’s nonprofit sector becoming an ever larger part of the whole. The most recent numbers available from the Urban Institute speak to the presence of divinity.

Nonprofit organizations report over $4.8 trillion in total assets, $2.16 trillion in total revenues, $2.03 trillion in total expenses.

Nonprofit organizations account for 5.4 percent of the country’s gross domestic product, roughly 10 percent of all wages and salaries, $887 billion in annual spending.

Total annual private giving (from individuals, foundations, and businesses) in the amount of $335 billion.

Around 1.5 million nonprofit organizations in the United States, roughly one for every 213 Americans, to which more than one in four Americans volunteered an estimated 8.1 billion hours of work valued at $163 billion.

So glorious a concentration of wealth makes a joyful noise unto the Lord; the accounting for its uses opens a Pandora’s box from which swarms forth a screech of lawyers. Section 501(c)(3) of the Internal Revenue Code bestows tax exemptions on nonprofit enterprises recognized as “religious, charitable, scientific,testing for public safety,literary,or educational,”but a string of handsomely abstract adjectives doesn’t furnish clear definition of the noun philanthropy. Among the vast multitude of would-be loaves and fishes, how to distinguish those that are morally wholesome, financially sound, socially nourishing? Where is it written that all good intentions are good, and which ones escape or deserve being nailed to a cross? Does support for the Metropolitan Museum of Art require equal protection for the San Francisco Bay smelt?

The questions follow from a careless use of the term philanthropy (“love of humanity” in the ancient Greek) as a catch-all synonym embracing different forms of its expression in societies past and present, among them those noted in this issue of Lapham’s Quarterly under the headings of Sumerian debt forgiveness, Roman bread and circuses, Muslim almsgiving, Chinook potlatch, Catholic charity and sin removal, Protestant good works, democratic government.

 

The deed is everything, the glory naught.

– Johann Wolfgang von Goethe, 1832

Although endowed over the centuries with many benevolent connotations (compassion, forbearance, kindness, humility), the word philanthropy first appears in Western thought in the fifth century BC, in Aeschylus’ play Prometheus Bound to name an act of rebellion and denote the crime of treason. Alone among the deities on Mount Olympus, the Titan Prometheus takes pity on the “sad, care-laden” human race living like “ants in sunless caves,” their every act without hope or direction, “dayflies” lost in meaningless confusion. Zeus intends to delete the species and “grow another one more to his liking.” Prometheus would have it otherwise. Disposed to the love of humanity (for reasons left unstated, but none of them to do with grace or wit or beauty), he steals the “bright and dancing fire” of the gods and gives to mortal men its “wonderworking power”—heat and light, but also freedom of thought, the stores of memory and the arts of divination, knowledge of numbers and letters, of medicine, carpentry, animal husbandry, and astronomy.

Prometheus thus defies the will and tyranny of Zeus “by granting mortals honor above their due,” and the punishment is merciless—his immortal flesh bound in chains, nailed to a barren rock at the far limit of the world, condemned to endure relentless torture “through endless time.”

The godlike powers transferred by Prometheus as unrestricted gift to mortal men serve their purpose at sea level, here on earth with the hummingbirds and the camels, their saving grace not deferred until the beneficiaries attain celestial cruising speed. The society that was Hellenic Athens didn’t assign high real estate values to an afterlife, and the rich men within the polis, their formidable wealth placing them at Promethean cloud level, were expected (expected, not obliged) to provide, at their own and often ruinous expense, enhancements of the public spirit and the common good—votive offerings, sacrifices and temples, gymnasia, festivals, games, banquets, the outfitting of naval vessels, and the staging of plays.

Generosity was virtue, the value of money the having it to give away. The reward was double-edged—the pleasure inherent in the act of freely giving, the honor for doing so a gift freely bestowed by one’s fellow citizens. Honor, not gratitude. As long as the haves placed a higher value in their stores of virtue than on their hoards of wealth, the have-nots could look to them in admiration instead of with envy and resentment. Pericles delivering his funeral oration in 431 BC (the first year of the Peloponnesian War) praises Athenians as patrons of the public good, willing to make noble expenditures (of their lives, their fortunes, and their sacred honor) to preserve the city’s freedoms of thought and action.

The happy state of affairs didn’t survive the war with Sparta. The government of Athens fell into the grasp of an oligarchy afflicted with the disease diagnosed by the ancient Greeks as pleonexia, the pathological craving for more—more property, more publicity, more bling. Athens divided into a city of the poor and a city of the rich, one at war with the other and neither inclined to temper its bitterness in the interest of the common good. Aristotle mentions a faction of especially reactionary oligarchs who swear an oath of selfishness: “I will be an adversary of the people…and in the Council I will do it all the evil that I can.” (So, too, our Republican members of Congress obliged to sign Grover Norquist’s pledge opposing any and all efforts to increase marginal income-tax rates.)

IMAGE:Adele Bloch-Bauer I, by Gustav Klimt, 1907. © Neue Galerie, New York, USA/De Agostini Picture Library/E. Lessing /Bridgeman Images

Democracy congealing into oligarchy conformed to Aristotle’s theorem of governments changing form in a sequence as certain as the changing of the seasons. Regimes come and go, but the have-nots always outnumber the haves, and no matter what the political name of the game (monarchy, aristocracy, or democracy), the well-being of the less-fortunate many, says Aristotle, must always depend on the philanthropy of a privileged few who give direction to dayflies, light to ants in sunless caves.

 

This issue of Lapham’s Quarterly comes with a follow-up question: To what extent does the glorious concentration of wealth lovingly noted by the Urban Institute portend relief from the diseased oligarchy that for the past forty years has proclaimed itself the enemy of the American democracy, and vows to do all the evil it can to a government of the people, by the people, for the people?

One would like to think the odds favor if not full recovery, at least remission of the illness. Americans in their daily dealings with one another prove themselves unfailingly open-hearted and forbearing; among the world’s peoples few are more generous in the giving of money, time, and effort to the practice of philanthropy. Confronted with sudden misfortune or disastrous accident (the flooding of New Orleans, the bombing of the World Trade Center) they respond with heartfelt outpourings of voluntary assistance. Wealthy patrons of humanity furnish the country with its expensive collection of museums, orchestras, hospitals, libraries, colleges, universities, churches, and football teams—more or less the same goods and services distributed in pagan antiquity by the selfless and therefore self-ennobling rich in the form of amphitheaters, baths, aqueducts, menageries of wild beasts, sacrificial pairs of gladiators.

 

It is more blessed to give than to receive.

– Acts of the Apostles, 80

Add to the inventory of America’s goodwill the Christian love of humanity arising among the poor and for the poor, from the presence of God within all men. The Greek and Roman patrons of the public good bestowed their gifts on citizens belonging to the city or the state, not on slaves, outcasts, beggars, immigrants. Neither Pericles nor Caesar recognized a human life form classified simply as “the poor.” The grouping suited the political ambition of the Christian church rising on the ruins of the Roman Empire in the fourth century, the congregations of the faithful drawn from the vast throng of have-nots littering the shores of the Mediterranean and bound together in a commonwealth of suffering. The Christian theologian Tertullian refutes the pagan faith in wealth: “Nothing sacred is to be had for money….We have all drunk of one and the same Holy Spirit…are all delivered as it were from one common womb of ignorance, and called out of darkness into his marvelous light.” Lactantius, early father of the Christian church, says, “The only true and certain obligation is to feed the needy and useless…men may have no use for them, but God has.”

It is Thomas Paine, the incendiary voice of the American Revolution, who in the eighteenth century converts the Christian love of humanity (shared among equals in the lower strata of society) into the promise of democratic self- government—“The strength of government and the happiness of the governed” is the freedom of the common people to “mutually and naturally support each other.” One’s fellow citizens are to be held in honorable regard not because they are rich or notably generous but because they are one’s fellow citizens.

The abundance of Paine’s writings flows from the springs of his optimism. Celebrating the declaring of independence as “the birthday of a new world,” he counts himself a friend of the world’s happiness, invariably in favor of a new beginning and a better deal. His plan for a just society is set forth in Rights of Man, published in England in two volumes, in 1791 and 1792; it anticipates much of the legislation that shows up 150 years later in the United States under the rubrics of Franklin Roosevelt’s New Deal—government welfare payments to the poor, pensions for the elderly, public funding of education, reduction in military spending.The sale of 500,000 copies prompted the British government to charge its author with treason—the same crime committed by Prometheus in defiance of the will and tyranny of Zeus.

Traveling in America in 1831 and 1832, the French aristocrat Alexis de Tocqueville finds democracy to be a work in progress along the lines projected by Paine, the common people mutually supporting one another by forming associations to hold fêtes, found seminaries, build inns, establish hospitals, dispatch missionaries, distribute books. “When the world was controlled by a small number of powerful and wealthy individuals,” says Tocqueville, “they liked to advertise how glorious it is to forget oneself and how fitting it is to do good without self- interest just like God himself…In the United States, the beauty of virtue is almost never promoted. It is considered useful and this is proved daily.”

The fact of which Walt Whitman was daily reminded during his three years as a Civil War hospital volunteer attending to sick and wounded soldiers both Union and Confederate. He notes in his diary that he’d sat next to the cots of as many as a hundred thousand frightened young men, talking to them at length, distributing gifts of writing paper or tobacco, a stamped envelope, an apple or an orange, small pieces of money. From his experience with others like him on his hospital rounds, he learns “one thing conclusively—that beneath all the ostensible greed and heartlessness of our times there is no end to the generous benevolence of men and women in the United States, when once sure of their object. Another thing became clear to me—while cash is not amiss to bring up the rear, tact and magnetic sympathy and unction are, and ever will be, sovereign still.”

 

Governments reflect the quality of the men charged with their conduct and deportment. Within the Greek city states, as also in republican and imperial Rome, the record shows that as wealth accumulates, men decay. An aristocracy that once might have aspired to wisdom and virtue degenerates into an oligarchy distinguished by a character that Aristotle likened to that of “the prosperous fool”—its members so besotted by their faith in money “they therefore imagine there is nothing that it cannot buy.”

Which, most if not all things considered, was the way things were going during America’s late nineteenth-century Gilded Age, so named by Mark Twain to denote a society amounting to the sum of its vanity and greed, so seen by Andrew Carnegie as a parasitical oligarchy devouring the happiness of the many to feed the pleasures of the few. Twain is defender of the democratic motions of the heart, Carnegie the progenitor of what in the twentieth century becomes large-scale philanthropic enterprise established by wealthy patrons of the common good.

Born in poverty in Scotland, Carnegie moved with his immigrant family to Allegheny, Pennsylvania, in 1848; as a boy of twelve, he was working twelve hours a day in a cotton mill. By 1889 he is owner of dark satanic steel mills in Pittsburgh, a captain of industry, abundantly rich, fearful for the future of a country herding its working classes into the shambles of desperate, possibly communist, revolt. That same year he brings forth “The Gospel of Wealth” as remedy for all the ills that overfed capitalist flesh is heir to. The manifesto first appeared in the North American Review, offered by its author as “the true antidote for the temporary unequal distribution of wealth, the reconciliation of the rich and the poor.” Let the rich men throughout the land give over their great fortunes before they die for the use of the living, and “we shall have an ideal state, in which the surplus wealth of the few will become, in the best sense, the property of the many.” Better yet, the rich man acts as trustee and agent for his “poorer brethren,” grants the blessing of his “superior wisdom,” directs the money to its best uses—to dignified public works, never in the form of alms in trifling amounts to “the drunken, the slothful, the unworthy.” Like Cicero in 44 BC, Carnegie distinguished between the deserving and undeserving poor. So did Ralph Waldo Emerson in 1841 in his essay “Self-Reliance”, “I tell thee, thou foolish philanthropist, that I grudge the dollar, the dime, the cent I give to such men as do not belong to me.” He blames himself for sometimes having given “alms to sots.”

Carnegie’s philanthropy was pagan, not Christian. The reward was honor, not gratitude. A rich man who dies with his wealth intact, he said, “dies disgraced.” It didn’t occur to him to relieve the poverty of the workers in his mills (twelve-hour shifts, paltry wages, crowded and filthy housing), but he did his best to leave no money on the table of his life. When in 1901 he sold his steel mills to J.P. Morgan for $480 million he became the richest man in America; before he died in 1919 he gave away $350 million to the building of 2,811 libraries in America’s cities and towns, to the setting up of numerous institutes and foundations.

The big American foundations formed during the first half of the twentieth century—Rockefeller, Ford, Pew, Sage, Rosenwald, Kellogg—deployed Carnegie’s lines of reasoning and priority.They pursued large-scale projects based on scientific research—the eradication of yellow fever and malaria, the restoration of colonial Williamsburg, the preservation of the Hudson River Palisades.

The good intentions multiplied over the course of the next hundred years, as did the number of foundations lobbying for social and political change, backing civil and human rights initiatives, funding think tanks grouped around the ideological campfires on both the left and the right.

The storylines are appropriately multicultural and diverse, not subject to equal opportunity generalization. What little I know of them I borrow from Mark Dowie’s American Foundations: An Investigative History, published in 2001. Dowie notes that the governance of big foundations eventually passes down over generations from the Promethean figure present at the creation to staffs of foundation officials, philanthrocrats apt to be more concerned about the safety and well-being of the money under their care than about the uses to which it might be put. The law requires the country’s 86,000 grantmaking foundations to distribute every year a minimum of 5 percent of their endowments, but if carefully managed, even that minimum need not leave the premises. The tax returns filed by the Bill, Hillary, and Chelsea Clinton Foundation in 2013 teach the self-promoting lesson. The foundation received more than $140 million in grants and contributions but squandered only $8.8 million on direct aid and research projects, reserving $30 million for payroll and employee benefits, $8.7 million for rent and office expenses, $9.2 million for conferences, conventions, and meetings, $8 million for fundraising, and nearly $8.5 million for travel.

Dowie’s investigation fits with Dwight Macdonald’s account of his meeting in 1955 with the “forty-odd philanthropoids, who, for all practical purposes, are the Ford Foundation.” Assigned by The New Yorker to review the proceedings in what was then the foundation’s new headquarters building on Madison Avenue, Macdonald found the office staff conversing in foundationese—“like Latin, a dead language…designed for ceremony rather than utility. Its function is magical and incantatory—not to give information or to communicate ideas or to express feelings.” Gilded functionaries loyal to the will and tyranny of Zeus, intent upon preserving rather than overturning the status quo.

The character and intent of the early generation of philanthropy I learned to appreciate in the person of John D. Rockefeller III, grandson of the nineteenth-century oil baron, son of the early-twentieth-century philanthropist, elder brother of David and Nelson Rockefeller. John III was the member of the family entrusted to carry forward its tradition of philanthropic largesse, a task he had performed with skill and determination since his graduation from Princeton in 1929, but one for which his chief publicist in 1963 thought he hadn’t received proper recognition. His brother Nelson was governor of New York, his brother David the president of Chase Manhattan Bank, their names in the papers nine mornings out of ten but nowhere a mention of John, who had created the Asia Society and the Population Council and provided strong support for the International Rice Research Institute in Manila, and who was putting together the $184 million needed to complete the building of Lincoln Center on the west side of Manhattan.

I was employed that year as a writer for the Saturday Evening Post when the publicist called to ask if I would consider traveling with John III to Asia for three months with a view to writing an article about his various projects underway in Japan, Taiwan, the Philippines, Thailand, India, East and West Pakistan. I would have access to any and all meetings and negotiations with government officials, bankers, scientists, politicians, and I was to be paid a per diem, with John III reserving the right to review the completed manuscript and, if so inclined, to forestall its publication.

IMAGE:Portrait of Sir Francis Ford’s Children Giving a Coin to a Beggar Boy, by William Beechey, 1793. Tate Museum, London.

I had no objection. I didn’t care whether the article was published or not; I was being given a chance to see the world from a high elevation of wealth and power, as it might have looked to Prometheus from the heights of Olympus. Every year for twelve years John III had been making the same journey (concentrating on the problem of birth control and high-yield plantings of rice), and at all points on the itinerary he was met with honors befitting royalty—cars on the airport tarmac, receptions at the palace, banquets with the prime minister. His knowledge of various Asian societies was profound, as was his delight in each of the people to whom he introduced me in the hope I might catch sight of their value as singular human beings. Not once in three months did he not know the name of the person to whom he was talking—the name, the pronunciation of the name, the family story, the problem at hand, the detail of the particular circumstance. Although he was a tall and imposing figure, he was modest to a fault, shy in the company of scholars and politicians, hesitant in the expression of his emotions.

Maya Angelou once said she found that “among its other benefits, giving liberates the soul of the giver.” So it was with John D. Rockefeller III. His philanthropy was his escape from the prison of his shyness, his becoming part of the larger story that is the sharing in man’s love for his fellow man. The Chinese philosopher Mencius came upon the thought around 330 bc. “Not to be benevolent when nothing stands in the way is to show a lack of wisdom. A man neither benevolent nor wise, devoid of courtesy and dutifulness, is a slave.”

The article was never published. The Population Council’s attempt to encourage birth control in Taiwan, India, and Pakistan went against the grain of local sentiment and politics, and John III believed it counterproductive to advertise these difficulties in print. To do so might cause trouble for his friends running the clinics in Asia. Self-glorifying publicity in New York wasn’t worth the price of a doctor’s loss of face in Dhaka.

 

The times have changed. Billionaire philanthropists these days delight in the photo ops of their giving to the public good, stepping down from helicopter or horse to baptize their new naming opportunity of a football stadium or concert hall. Their magnificence recalls the story told by the Stoic philosopher Seneca in the first century about Alexander the Great presenting the gift of an entire city to a man who didn’t think himself deserving of it. “I do not ask what is becoming for you to receive,” replied Alexander, “but what is becoming for me to give.”

 

Charity is murder and you know it.

– Dorothy Parker, 1956

The displays of noble expenditure (on the part of movie stars and prime- time athletes as well as George Soros and the Koch brothers) derive from the far larger stores of private wealth created over the past forty years as a consequence of the systematic rigging of the nation’s economic outcomes to favor the rich at the expense of the poor. The familiar story (democracy smothered by oligarchy) has often been told—long ago by Aristotle, more recently in our American context by the Nobel Prize–winning economist Joseph Stiglitz—but it is nowhere better illustrated than by the reversal over the past half century of the meaning within the words public and private. In the 1950s the word public connoted an inherent good (public health, public school, public service, public spirit); private was a synonym for selfishness and greed (plutocrats in top hats, pigs at troughs). The connotations traded places in the 1980s. Private now implies all things bright and beautiful (private trainer, private school, private plane), public becomes a synonym for all things ugly and dangerous (public housing, public welfare, public toilet).

The repositioning of the words underwrites the gospel according to the Bill and Melinda Gates Foundation, which, among the current generation of big-time philanthropies, is the fairest of them all. It commands an endowment of $43.5 billion (roughly a third of that sum added to its pot by Warren Buffett), and because of its size and market share it points the direction for much of the nation’s foundation giving. No week goes by without the announcement of another Gates Foundation grant meant to allay disease in Africa, improve test scores in American public schools.

A self-made Promethean figure in the image of Carnegie, Gates also looks to avoid the disgrace of dying rich. To the small company of his fellow billionaires he wrote a letter in 2010 suggesting they give, “during your lifetime or through your will,” the majority of their wealth to charity. To help “improve the overall quality” of their giving he offers the superior wisdom of a man who knows that private profit and public good are mutual friends, that doing well is doing good. The thought is as tried and true as the metaphor that Cotton Mather, the seventeenth-century Puritan divine, bestowed upon the Boston faithful in 1701: “A Christian, at his two callings, is a man in a boat, rowing for heaven” with two oars, one of them glorifying God “by doing good for others,” the other by “getting of good for himself.”

Gates repackaged the good news as a speech delivered to the World Economic Forum at Davos, Switzerland, in 2008:

“I like to call this idea creative capitalism…Such a system would have a twin mission: making profits and also improving lives of those who don’t fully benefit from today’s market forces…a market-based reward for good behavior.”

The gospel was well received in the temples of the god who also is Mammon; the foundation clergy have learned to come and go speaking of metrics, time frames, benchmarks, grantmaking made “cost-effective,” “impact-oriented,” “data-based.” The language is designed for ceremony, “magical and incantatory” assigning virtue to having and holding wealth, not to letting it wander away, unescorted, into the sorrow and heat of the desert. Philanthrocapitalism opening the golden door to the best of all futures that money can buy, nourishing the belief (very à la mode in the media shiny sheets) that it is the big-ticket, glamorous rich who will rescue the country from ruin.

IMAGE:Nectanebo I presenting an offering to a crocodile-headed demon, dolerite relief, Egypt, fourth century BC. © De Agostini Picture Library/A. Dagli Orti/Bridgeman Images

The hope springs from the publicity from whence the money cometh, not in the accounting for whither it goest. The National Committee for Responsive Philanthropy estimates that only 8 percent of foundations in the United States bestow as much as 25 percent of their largesse on “social justice purposes.” In 2011 the wealthiest Americans, those with earnings in the top 20 percent, contributed an average of 1.3 percent of their income to charity. Americans in the bottom 20 percent, and therefore unable to itemize a tax deduction, donated 3.2 percent.

Dowie suggests the stores of private wealth likely to be accumulated over the next two generations could increase the total assets of organized philanthropy to $4 trillion. It’s an impressive number, but small in comparison with the money likely to be furnished by individual contributions that now add hundreds of billions of dollars to most of the country’s charitable enterprises set up as credit unions and health clinics, food and wind-power cooperatives, crowdfunding platforms.

The opulent foundations tend to believe that money is good for rich people, bad for poor people, best given to private institutions or public acronyms; they seek the honor of being praised, as did the wealthy suppliers of the glory that was Greece and the grandeur that was Rome, “for doing good without self-interest, just like God himself.” Their philanthropy, like that of Carnegie and Gates, is the giving of direction to dayflies. The philanthropy inherent in democracy as conceived by Paine, attested by Tocqueville, practiced by Whitman, is the care of other human beings, virtue “considered useful,” almost never gloriously promoted. A democratic society places a premium on equality; a capitalist economy does not. The separation of powers is the difference between the worth of a thing and the price of a thing, between the motions of the heart and the movement of a market. Plato in the Republic puts the proposition as simply as it can be put:

“As wealth and the wealthy are valued more in a city, so goodness and the good are valued less…what is valued at any particular time becomes the common practice, what is not valued is neglected.”

Governments reflect the quality of the men charged with their conduct and deportment. Relief from “the ostensible greed and heartlessness of our times” (Whitman’s phrase in 1864 as telling now as then) doesn’t fall in a shower of gold from the heaven that is a $95 million apartment on the ninety-fifth floor of a Manhattan co-op. It collects in pennies on the ground, from people who don’t confuse themselves with God, who know, as did Walt Whitman, that love, not money, is “sovereign still.”

[The founder and editor of Lapham’s Quarterly, Lewis H. Lapham is also editor emeritus of Harper’s Magazine. Lapham was inducted into the American Society of Magazine Editors Hall of Fame in 2007. He is the author of thirteen books, among them Money and Class in America, The Wish for Kings, Waiting for the Barbarians and Theater of War. He produces a weekly broadcast, “The World in Time” for Bloomberg News, and his documentary film, The American Ruling Class has become part of the curriculum in many of the nation’s schools and colleges. A member of the Council on Foreign Relations in New York, Lapham has lectured at many of the nation’s leading universities, including Yale, Princeton, Dartmouth and Stanford.]

How Tides Canada Controls the Secret North American Tar Sands Coalition

[photo] Ms. Berman presenting a “Green” Award to former Liberal Party of B.C. premier, Gordon Campbell … the man who privatized British Columbia, sold it to General Electric and other international corporations, who built highways across farmland and called it “green;” who reversed dioxin effluent safeguards that we fought for and instituted in B.C. to protect our water; who sold off the public and natural heritage of British Columbia and opened the doors to General Electric to occupy hundreds of watersheds, devastate riparian ecosystems, and destroy forests for transmission lines to carry expensive power to mines in the north and to sprawling cities in the U.S. – Photo source: BC government.

Repeat This Aloud

Counterpunch

October 16, 2013

By Macdonald Stainsby

Before Tzeporah Berman began her current position as head of the North American Tar Sands Coalition, Tides Canada had already established these structures to create near-total control over budgets– and therefore, most decisions– for staggering numbers of organizations. Berman was around at the time, working for PowerUp pushing forward offsets garnered by river destruction. Some of the participant organizations already had working partnerships with multiple tar sands producers. The over-whelming majority were already greased by primarily high donors and foundations. Thus, joining the NATSC meant, essentially, double dipping.

As the Planet Burns: Hot Air, Photo Ops and Bill McKibben’s “Greenest” City

Counterpunch

November 05, 2012

by MICHAEL DONNELLY

SPECIAL REPORT: EXPOSING U.S. AGENTS OF LOW-INTENSITY WARFARE IN AFRICA

The “Policy Wonks” Behind Covert Warfare & Humanitarian Fascism

August 8, 2012
by Keith Harmon Snow

Conscious Being Alliance

This special report includes three unpublished video clips of interviewees from the Politics of Genocide documentary film project: Ugandan dignitary Remigius Kintu, former Rwandan prime minister Fautisn Twagiramungu, and Nobel peace prize nominee Juan Carrero Saralegui.

               From the 1980s to today, an elite group of Western intelligence operatives have backed low-intensity guerrilla warfare in certain African ‘hotspots’.  Mass atrocities in the Great Lakes and Sudan can be linked to Roger Winter, a pivotal U.S. operative whose ‘team’ was recently applauded for birthing the world’s newest nation, South Sudan.  Behind the fairytale we find a long trail of blood and skeletons from Uganda to Sudan, Rwanda and Congo.  While the mass media has covered their tracks, their misplaced moralism has simultaneously helped birth a new left-liberal ‘humanitarian’ fascism.  In this falsification of consciousness, Western human rights crusaders and organizations, funded by governments, multinational corporations and private donors, cheer the killers and blame the victims—and pat themselves on the back for saving Africa from itself.  Meanwhile, the “Arab Spring” has spread to (north) Sudan.  Following the NATO-Israeli model of regime change being used in Central & North Africa, it won’t be long before the fall of Khartoum. 

SPLA Tank in South Sudan: An old SPLA army tank sits in the bush in Pochalla, Jonglei State, south Sudan in 2004.  Israel, the United States, Britain and Norway have been the main suppliers of the covert low-intensity war in Sudan, organized by gunrunners and policy ‘wonks’.  Photo c. keith harmon snow, 2004.

It is, oh! such a happy fairy tale!  It begins as all happy fairy tales do, in fantasy land.  The fantasy is one of human rights princes and policy ‘wonks’ in shining armor and the new kingdom of peace and tranquility, democracy and human rights, that they have created.  That is what the United States foreign policy establishment and the corporate mass media—and not a few so-called ‘human rights activists’—would have us believe about the genesis of the world’s newest nation, South Sudan.

“In the mid-1980s, a small band of policy wonks began convening for lunch in the back corner of a dimly lit Italian bistro in the U.S. capital,” wrote Rebecca Hamilton in the recent fairytale: “The Wonks Who Sold Washington on South Sudan.”  Hamilton is a budding think-tank activist-advocate-agent whose whitewash of the low intensity war for Sudan (and some Western architects of it), distilled from her book Fighting for Darfur, was splashed all over the Western press on 11 July 2012. [1]

The photos accompanying Hamilton’s story show a happy fraternity of ‘wonks’—what exactly is a ‘wonk’?—obviously being your usual down-jacket, beer- and coffee-slurping American citizens from white America, with a token black man thrown in to change the complexion of this Africa story.  Their cups are white and clean, their cars are shiny and new, their convivial smiles are almost convincing.  There is even a flag of the new country just sort of floating across Eric Reeves’ hip.

Because of Dr. Reeves’  ‘anti-genocide’ work in Sudan, Boston College professor Alan Wolfe has written that the Smith College English professor is “arrogant to the point of contempt.”  (I have had a similar though much more personal experience of Dr. Reeves’ petulance.)

“John Prendergast (L-R), Eric Reeves, Brian D’Silva, Ted Dagne and Roger Miller [sic]—pose for a photograph in this undated image provided to Reuters by John Prendergast,” reads the original Reuters syndicated news caption for the posed image of the Council of Wonks.  (U.S. intelligence & defense operative Roger Winter is misidentified as “Roger Miller”.)

The story and its photos project the image of casual, ordinary people who, we are led to believe, did heroic and superhuman things.  What a bunch of happy-go-lucky wonks!  Excuse me: policy wonks!  And their bellies are presumably warmed by that fresh Starbucks ‘fair trade’ genocide coffee shipped straight from the killing fields of post-genocide [sic] Rwanda… where, coincidentally, Starbucks reportedly cut a profit of more than a few million dollars in 2011.

This is a tale of dark knights, of covert operators and spies aligned with the cult of intelligence in the United States.  Operating in secrecy and denial within the U.S. intelligence and defense establishment, they have helped engineer more than two decades of low intensity warfare in Sudan (alone), replete with massive suffering and a death toll of between 1.5 and 3 million Sudanese casualties—using their own fluctuating statistics on mortality—and millions upon millions of casualties in the Great Lakes of Africa.

Behind the fantasy is a very real tale of war crimes, crimes against humanity, genocides real and alleged, and mass atrocities covered up by these National Security agents with the aid of a not-so-ordinary English professor—their one-man Ministry of Disinformation—Dr. Eric Reeves. →

The Philanthropic Complex

Hal assured me that while all this might be true someone had to take up the issue, and Orion was willing to do so. And I was the right person to write the essay precisely because I was not an insider but simply an honest intelligence. So, with many misgivings I said I’d try.

I interviewed about a dozen people on both sides of the field, both givers and getters, and some in the middle. The people I spoke to were eager to articulate their grievances even if they were just as eager to be anonymous. I also should acknowledge that the development of these grievances was no doubt colored by my own experiences as a board member and president of the board of two not-for-profit organizations in the arts.

After working for several months writing and revising the essay, Hal Clifford announced that he would be leaving Orion. My first thought was “uh-oh.” The editor-in-chief, Chip Blake, took over my essay and at that point things got dicey. Ultimately he explained that he hadn’t been fully aware of my assignment, that he hadn’t known the essay would be an attack on “the oligarchy,” that it didn’t seem to be fully a part of the magazine’s usual interests, and that–fatally–from the magazine’s point of view publishing the essay would be an exercise in “self-mutilation.”

Which was exactly what I said at the beginning! They had come to their senses even if it had taken a long time and cost me a lot of work to get there.

But, secretly, I was pleased. This editorial catastrophe was the best possible confirmation of everything I argue in the essay.

In the United States, everyone may enjoy freedom of speech so long as it doesn’t matter.  For those who would like what they say to matter, freedom of speech is very expensive. It is for this reason that organizations with a strong sense of public mission but not much money are dependent on the “blonde child of capitalism,” private philanthropy. This dependence is true for both conservative and progressive causes, but there is an important difference in the philanthropic cultures that they appeal to.

The conservative foundations happily fund “big picture” work.  They are eager to be the means for disseminating free market, anti-government ideology. Hence the steady growth and influence of conservative think-tanks like the Heritage Foundation, Accuracy in Media, the American Majority Institute, the Cato Institute, the Brookings Institute, the Manhattan Institute, the Hoover Institute, and on (and frighteningly) on.

On the other hand, progressive foundations may understand that the organizations they fund have visions, but it’s not the vision that they will give money to. In fact, foundations are so reluctant to fund “public advocacy” of progressive ideas that it is almost as if they were afraid to do so. If there is need for a vision the foundation itself will provide it. Unfortunately, according to one source, the foundation’s vision too often amounts to this: “If we had enough money, and access to enough markets, and enough technological expertise, we could solve all the problems.” The source concludes that such a vision “doesn’t address sociological and spiritual problems.”

Indeed.

The truth is that organizations whose missions foreground the “sociological and spiritual” go mostly without funding. Take for instance the sad tale of the Center for the New American Dream (NAD), created in 1997 by Betsy Taylor (herself a funder with the Merck Family Fund).  NAD’s original mission statement gave a priority to “quality of life” issues.

We envision a society that values more of what matters—not just more…a new emphasis on non-material values like financial security, fairness, community, health, time, nature, and fun.

This is exactly the sort of “big picture” that philanthropy has been mostly unwilling to fund because, it argues, it is so difficult to provide “accountability” data for issues like “work and time” and “fun” (!).  (To which one might reasonably reply, “Why do you fund only those things that are driven by data?”)

In any event, in 2007 NAD ran an enormous deficit, $500,000 in a budget of less than $2,000,000.  In 2008, however, NAD staged a remarkable recovery.  Suddenly, its restricted grants grew from $234,000 in 2007 to $647,000 in 2008.  The cavalry, apparently, had arrived.  NAD’s savior was the Richard and Rhoda Goldman Foundation which had given a restricted grant of $350,000 for 2008.

Good news except that the money did not fund NAD’s vision; it was restricted to a narrow project.  NAD was now in the bottled water business, as in “don’t buy bottled water.”  NAD’s 2008 Take Action! section in its newsletters was devoted to the Goldman Gospel: get local athletic teams off bottled beverages, etc.  In short, a visionary organization had become a money chaser.

One source summarized the general situation in this way, “Progressive funders say all things are connected, but act as if all things are disconnected.  Conservative funders never argue that all things are connected, but then they act—and spend money—as if they were.”

§

 One of the most maddening experiences for those who seek the support of private philanthropy is the lack of transparency, that is, the difficulty of knowing why the foundation makes the decisions it makes. In fact, most foundations treat this “lack” as a kind of privilege: our reasons are our own.  One of the devices employed by philanthropy for maintaining this privilege is what I call the mystique of the foundation’s Secret Wisdom.

So you want to ask, “What do you know that I don’t know?  What do you know that makes your decisions wise?”  The closest thing to an answer you’re likely to hear is something like this: “The staff met with some Board members last night to discuss your proposal, and we’re very interested in it.  But we don’t think that you have the capacity [a useful bit of jargon that means essentially that the organization should give up on what it thought it was going to do] to achieve these goals.  So what we’d suggest is that you define a smaller project that will allow you to test your abilities [read: allow you to do something that you have little interest in but that will suck up valuable staff time like a Hoover].  Meanwhile, we’d like to meet with your Board in six months and see where you are.”

And on you go one year at a time. But cheer up, you’ve made your budget for the year!

The uncertainty and opacity of this reality leave organizations frustrated and bewildered. No matter how many meetings are held, no matter how carefully the questions are posed, the fundamentals remain maddeningly elusive. It is as if grant seekers were Kafka’s K in The Trial searching absurdly for someone to tell him exactly what crime he has committed.

The foundation has money but it has no organic idea (no idea that is native to its being) what to do with it.  Perhaps the foundation really would like to help someone somewhere, but it can’t quite bring itself simply to trust the organizations it funds and set them free to do their work, in part because it fears that once freed this intelligence and competence might produce results not in keeping with the interests of the foundation.

Not wanting to acknowledge that brutal fact, all that the foundation is left with is the chilling satisfaction of its own undiminished and unaccountable authority. None of this, of course, can be said, least of all by the organizations that are still hoping for support.

Like the system of patronage that served the arts and charity from the Renaissance through the 18^th century, private foundations have the rarest privilege of all: they do not have to explain themselves. They do not have to justify the origins of their wealth, or how they use that wealth, or what the real benefit of their largesse is.

 §

In the end, what the foundation can be trusted to understand is not forest health, or climate change, or the imperatives of recycling; what it can be trusted to understand is the thing that gives it its privileges: its endowment.  Unfortunately, managing how the endowment is invested often leads to conflicts with the stated social purpose of the foundation.

For example, one of the emerging controversies in the world of private philanthropy is the 95-5 question.  Foundations are required to give away just 5% of their endowment each year.  The other 95% is invested.  But invested where?  Environmentalists are particularly sensitive to this question because if the money is invested in companies that continue to pollute, you have a very disturbing reality.  5% does (theoretical) good while 95% does demonstrable bad: chasing profits in the same old dirty and irresponsible way.

This issue came to a head when the Los Angeles Times concluded a long investigation into the investment practices of foundations by revealing that the Gates Foundation funded a polio vaccination clinic in Ebocha, Nigeria, in the shadow of a giant petroleum processing plant in which the Gates Foundation was invested.

The Los Angeles Times report states:

But polio is not the only threat Justice [a Nigerian child] faces. Almost since birth, he has had respiratory trouble. His neighbors call it “the cough.” People blame fumes and soot spewing from flames that tower 300 feet into the air over a nearby oil plant. It is owned by the Italian petroleum giant Eni, whose investors include the Bill & Melinda Gates Foundation.

Say what you like about the need to invest wisely for the future of the foundation, but this is prima facie evidence of a deep moral conflict not just at Gates but in all of private philanthropy.  The simple fact is that most boards actually don’t know if their investments and their missions align.  When pushed on the matter, most foundations respond as Gates did:  investments are the foundation’s private concern and no business of ours.

But the problem remains, when organizations receive funding, what confidence do they have that this happy money is not itself the expression of a distant destruction?  (Perhaps your funder owns stock in British Petroleum.  Of course, for the people of Louisiana, that’s anything but distant.)  When philanthropy proceeds without acknowledging this reality, it proceeds without conscience.  It proceeds pathologically.  It destroys the thing it claims to love.  And it makes the organizations it funds complicit.

§

 Because this culture of unaccountable authority is rarely challenged, especially by the organizations that receive funding, the foundations become little more than, as one source put it, dramas of “self-aggrandizement.”—the lavish year-end celebrations in which many indulge being a particularly noxious demonstration. They like to be thanked for their generosity, and they like the warm feeling of virtue that washes over them when they receive their thanks.

It is as if they could not tell which was the more worthy: the organization for its work or the foundation itself for its generosity.  You can sense this tension in the films that the big  foundations underwrite for PBS.  “Support is provided by the John D. and Catherine T. MacArthur Foundation,” emblazed on the screen with heraldic force, as if it had been struck with a single blow into brass.

Without an understanding of this psychology, it’s difficult to explain the most perplexing question asked of private philanthropy: why do most foundations give away only 5% of their endowment each year, the legal minimum?

Let’s say the funding is going to address the problem of global warming.  If that problem must be successfully addressed within the next two decades, if it’s really the critical moral issue of our time, or any time, why spend only 5%?  For a simple reason: spending 5% annually will allow the foundation to do its work into eternity. Sadly, a world without a livable climate is easier for the philanthropist to imagine than a world without the dear old family foundation.

 §

Most of the sources that I contacted for this essay requested anonymity.  The reasons for this may be obvious and hardly worth mentioning except that what’s hardly worth mentioning is a powerful emotion: fear.  Fear of losing a grant or a job, fear of harming a client, or fear of becoming persona non grata in the field. Everyone has skin in the game, so “discretion is the better part of valor,” as Falstaff put it. One source spoke of being threatened with blackballing by one wealthy donor.  His error? He’d supported Ralph Nader rather than Barack Obama.

Mark Dowie reports in his book Losing Ground that in the early 1990s the Pew Charitable Trust entered the fray over public land forestry.  Josh Reichert, Pew’s environmental program officer, created a foundation coalition, the National Environmental Trust, to address forestry among other issues.  Once the money was held out, large organizations like the Sierra Club fell in line, talked the talk, and took the money.

The downside was that this program was not allowed to consider a “zero cut” position.  The organization would be about moderating policy on behalf of corporate interests.  Smaller, more principled organizations like the Native Forest Council were “left out in the cold.”  But Reichert was unapologetic.  According to Dowie, “Reichert stipulated that no one advocating zero cut, criticizing corporations by name, or producing ads that did so would be eligible for membership in the forest coalition—or for funding.”

All of this leads to the reasonable assumption that to criticize is to invite punishment.  All that’s left is a lot of smiling and bad faith.

Part Two:

Why Organizations Experience What They Experience

In the end, philanthropy wants the wrong thing.  It may think that it ought to want what the lovers-of-nature want, but its actions reveal that, come what may, it loves other things first: the maintenance of its privileges, the survival of its self-identity, and the stability of the social and economic systems that made it possible in the first place.

This is not an inhuman feeling.  As Nietzsche put it, it is “all-too-human.”  The people who live within the culture of wealth can’t do the things that grassroots environmentalists want them to do without feeling that they are dying.  They can’t fund the creation of ideas that are hostile to their very existence; they can’t abandon control over the projects they do fund because they fear freedom in others; and they can’t give away all of their wealth (“spending out”) without feeling like they’ve become the Wicked Witch of the West (“I’m melting!”). Instead, philanthropy clings to the assumption of its virtues. Its very being, it tells itself, is the doing of good. It cannot respond to criticism because to do so might lead it to self-doubt, might lead it to honesty.  And that would be fatal.

The great paradox of environmental philanthropy is this: How do institutions founded on property, wealth, and privilege (in short, plutocrats) seek to address the root source of environmental destruction if that source is essentially the unbridled use of property, wealth, and privilege?   And yet when we ask that foundations abandon their privileges and simply provide funding so that we activists can do our work without hindrance, what the foundation hears is a request that they will their own destruction.  Not unreasonably, they are bewildered by the suggestion and unwilling to do so.

 §

There’s an old saying on the Left that goes something like this: Capitalism accepts the idea that it will have enemies, but if it must have enemies it will create them itself and in its own image.  In fact, it needs them in the same way that it needs the federal government: as a limit on its own natural destructiveness.

The periodic Wall Street meltdown aside, the most dramatic problem facing capitalism for the last thirty years has been its tendency to destroy the very world in which it acts: the environmental crisis in all its manifestations.  The response to this crisis has been the growth of the mainstream environmental movement, especially the Environmental Protection Agency and what we call Big Green (the Sierra Club, et. al.).  But, it should go without saying, Big Green was not the pure consequence of an up-swelling of popular passion; it was also the creation of philanthropic, federal, and corporate “gift giving”.

For instance, the Natural Resources Defense Council was created by the Ford Foundation, just as Pew created the National Environmental Fund.  (Pew itself was first endowed with money from the Sun Oil Company.  At its inception, Pew’s political views were deeply conservative.  It advocated free markets and small government, and funded the John Birch Society.)  These large environmental organizations are more dependent on federal and foundation support, and accordingly tend to take a “soft” line on economic and industrial reform.  As Mark Dowie reports, “They are safe havens for foundation philanthropy, for their directors are sensitive to the economic orthodoxies that lead to the formation of foundations and careful not to do anything that might diminish the benefactor’s endowment.”

As with the Environmental Protection Agency, Big Green is not so much an enemy as a self-regulator within the capitalist state itself.   The Sierra Club is not run by visionary rebels, it is upper management.  It really does have effects that are beneficial to the environment (many!), but in no way are those benefits part of an emerging new world that is hostile to the industries that are the most immediate origin of environmental destruction.

Consequently, a given industry may attack environmentalism when it interferes with its business, but the plutocracy as such is dependent on Big Green and will regularly replenish its coffers so that it may stay in existence, never mind the occasional annoyance for an oil company that wants to spread its rigs and pipelines across delicate tundra.

Capitalism has taught environmentalism how to protect it from itself.  Federal and philanthropic funding allows Big Green to play a forceful national role, but it also provides the means for managing and limiting the ambitions of environmentalism: no fundamental change. Sadly left out of negotiations between government, industry and environmental NGOs are the communities of people who must live with whatever decision is reached. As Paula Swearengin of Beckley, West Virginia, commented after House Republicans stripped the EPA of its authority to refuse a permit for yet another project for mountain top coal mining, “The people of Appalachia are treated like we’re just disposable casualties of the coal industry. We live in the land of the lost, because nobody wants to hear us.”

Will environmental philanthropy ever convince the federal government to limit the ability of the coal industry to destroy mountaintops in West Virginia?  Maybe. But will they seek to curb that industry’s constitutional freedom to deploy capital in their ruinous “pursuit of happiness”?  No.  Absolutely not.  In the aftermath of the British Petroleum disaster in the Gulf of Mexico, no one understands the importance of environmentalism better than the stockholders of BP.  They will be very happy for environmental groups to put pressure on the oil industry to provide more safety for deep sea drilling.  But they are most unlikely to welcome the end of deep sea drilling itself, and putting an end to the reign of corporations is utterly beyond the pale.

Philanthropy and the organizations it funds are what they are.  They are not in the revolution business.  They are in risk management.

Curtis White is a novelist and social critic. His recent work includes The Barbaric Heart: Money, Faith, and the Crisis of Nature and Requiem, a novel.

A Tar Sands Partnership Agreement in the Making?

By Macdonald Stainsby
Canadian Dimension
August 1st 2011

Campaigns against tar sands production have grown rapidly over the last four years. From the relative obscurity in Alberta to an international lightning rod for people trying to address all manner of concerns from indigenous and community self-determination to peak oil and climate change – criticisms of the largest industrial project in human history have gained a major voice.

The voices are certainly not homogenous, but a large contingent of these voices call for a shut down of tar sands production and a move away from fossil fuels – if not an outright move away from market-led growth of any sort. But, in the language of the environmental elite, what are the “decision makers” preparing to do with all this anti-tar sands resistance?

While there are still small scale, community led victories against certain developments – like the defeat of the recent Prosperity Mine proposal in British Columbia – I contend that mainstream environmentalism has effectively become a means by which corporations (who used to be anathema to environmentalists) now get the social license necessary to operate. There are obvious examples such as the World Wildlife Fund running commercials with Coca-Cola. But the real social management is done out of sight, and involves some of the most important players in the circles of the North American ruling class.

Co-opting Environmentalism

In the United States, major foundations – led at the time by the Sunoco-oil founded and controlled Pew Charitable Trusts – stopped fighting against environmentalism and sought instead to co-opt it and make it a “partner.” This model expanded over the next couple of decades until it slowly began to creep north of the border into Canada. Now this same technique dominates the Canadian enviro landscape as well, in some cases with a new twist. The Canadian Boreal Initiative [CBI] – a champion of “working with industry to find common solutions” – is not even an organization, but receives their money from Ducks Unlimited Canada who receive theirs from Ducks Unlimited in the United States. All of this funding originates with the Pew Charitable Trusts in Philadelphia. The Pew Foundation was started with a multi-billion dollar grant from Sunoco and today their board of directors is more than 50 percent tied to Sunoco, either through the Pew family or executive work with the oil giant. This same Pew gives funding to other well-known policy right-wing hawkish think tanks like the Heritage Foundation and the American Enterprise Institute.

The CBI spearheads something they call “the Boreal Conservation Framework,” a plan to protect at least half the Boreal Forest. Fact: far, far less than half the boreal forest has been developed or is slated for development. This “initiative” partners openly with corporations such as Suncor, Nexen and several leading forestry corporations. The CBI, funded and directed by the Pew, also signs on to their framework the International Boreal Conservation Campaign – another Pew front group in the US. Along with corporate friendly organizations like the WWF, Canadian Parks and Wilderness Society, the Nature Conservancy and of course, Ducks Unlimited are a smattering of First Nations governments. Also among their signatories are the Tides Foundation and the Ivey Foundation.

With this behind them, the CBI then “negotiates” what the final deal of a particular industry should look like. Guaranteed at the outset is that corporations will continue operations, and that the general public is out of the loop right up until the moment the “deal” is announced.

Many other foundations – most but not all American – now play the same game of social manipulation in the environmental field. Foundations such as Rockefeller Brothers, Ford and Hewlett have not only entered into the fray in a major way, in the case of the tar sands campaigns, they have collaborated with the Pew to take social manipulation to a new level. The aforementioned Tides Foundation was set up as a sort of clearing house for other philanthropists and foundations, for many years receiving the overwhelming bulk of their money through the Pew. Today, other groups and foundations give them money and earmark where they want it spent. Tides exercises total control over something you are not supposed to hear about: The North American Tar Sands Coalition.

The Tides and the North American Tar Sands Coalition

The routine is fairly straightforward. After a long stretch when grassroots and community led struggles build up support using a multitude of strategies – from direct action blockades to boycott campaigns and speak outs, demonstrations and more – suddenly many of the organizers who started the campaign are shuffled aside. Professionals are either appointed within the ranks or are imported from outside and all are given foundation-led salaries. With or without public knowledge (almost always without) a “stakeholder” negotiation is undertaken between corporations, government and the new “professional” environmentalists will take place. The terms of the negotiations do not reach the public until a smiling photo-op of the “stakeholders” appears at a press conference to announce an “end” to a particular “campaign” now called a “win-win.” Details will vary, but they always include three things: A promise to stop organizing against a particular industry, market-based incentives that would lead to “change practices” and a guarantee for that industry to be allowed to develop, now unhindered. Such a process is slowly being constructed for tar sands production in Canada.

As if on cue, once the multitude of forces against tar sands development began to crack into both national and international media the large foundations appeared in the background. In this particular case, they had set up a spider’s web of control from the getgo. All the usual foundations – Pew Charitable Trusts, Hewlett, Rockefeller Brothers, Ford Foundation – now use the Tides Foundation as a singular source to centralize control over the would be recipients of funding.

By funnelling all money through the Tides Foundation all organizations and movements that approach any of these sources can be directed to only one source – the Tides Foundation and their “North American Tar Sands Coalition.” The NATSC is headed by one Michael Marx. While they also have “Canadian” and “American” campaign leaders, Marx has near total authority to forge the funding decisions, policy directions, media strategy and over-all focus of how the “coalition” will operate. Who then, is Michael Marx?

Marx is known as a “corporate responsibility” campaigner. Previously working with Forest Ethics and now, along side his control over the tar sands campaign, he is a head of Corporate Ethics International. His own personal bio celebrates that he has previously helped “green” Wal-Mart, one of the largest and most labour exploitative corporations in the world. He does not believe that the tar sands can or should be shut down, and is shaping political messaging to that end. The list of ENGO’s that are funded by Michael Marx’s NATSC is long, but to list merely the largest of the Canadian ones that have been with them from the beginning of the “invisible to the outside” coalition: The Pembina Institute, Environmental Defense Canada, ForestEthics, World Wildlife Fund (Canada), The Sierra Club of Canada (and associated regional chapters), Eco Justice and the Canadian Boreal Intiative. Perhaps most important to note is that the coalition also involves Greenpeace Canada – important because historically GPC did not take foundation funding but has now been listed for several grants from Tides Canada for this work.

There are also many regional only organizations – working on regional only campaigns, such as to ostensibly stop the Enbridge Gateway Pipeline across arts of unceded first nations territory in northern British Columbia. These groups involve Living Oceans society, The David Suzuki Foundation, west Coast Environmental Law and the Dogwood Initiative with a host of community led groups. These regional grants are controlled by Canadian understudy to Michael Marx, Jennifer Lash.

Since the highly criticized deal called the “Canadian Boreal Forest Agreement” was signed in 2010 between what was called nine environmental NGOs and 21 forestry companies, Tides has started muttering in public as their own voice – calling for the “bridging of the two camps” of environmentalists and energy companies over the tar sands. No first nations have been mentioned in their pronouncements. Nonetheless, in Europe they have moved in to steer the direction of anti-tar sands campaigning. Marx himself showed up recently in the UK, speaking out on campaigns to “stop tar sands expansion” in ads paid for by Corporate Ethics International. These same ads have appeared in Alberta; Marx himself lives in San Francisco.

Astro-turfing is a term often applied to various Republican or Tea Party ventures in the United States, ones where money and slick marketing are used to build an appearance of a grassroots network where, in fact, none truly exists. While there most certainly is such a grassroots network against the tar sands – and it is expanding globally – the astro-turfing of “demands” to go into the backroom negotiations is tailored to appear genuine. The manner it is done is to put forward a vague and almost completely uncontroversial call and ask people to sign on to some declaration.

As of late that has appeared to be towards the blight of the toxic tailings ponds littering the landscape by the vast open-pit mines. In recent months as well, Suncor (the original tar sands corporation, former property of Sunoco oil and largest energy company in Canada) announced they had developed “dry tailings technology” and that they planned over time to roll out and implement it. Considering that Suncor is openly partnered with the Canadian Boreal Initiative, it seems strangely convenient that the astroturfing campaign is now targeting tailings ponds – shortly after many of the more corporate environmental organizations and the largest players among tar sands operators were caught – trying to have a private, unreported meeting together.

The first attempt at such a meeting, last April, was spearheaded by the Pembina Institute. The Pembina is employed as consultants for Nexen, Suncor, TD Financial and many other industrial corporations and has partnered with the original tar sands giant Suncor Energy since 1982. That meeting was to be a “fireside chat” but it was cancelled when people got wind of it and it appeared first on the mediacoop.ca and later on in the Globe and Mail. Today, the Canadian Association of Petroleum Producers, the Tides Foundation and others are calling for “dialogue.”

What Would a Tar Sands Partnership Agreement Look Like?

Based on the market trajectory of the Marx-led team, it will involve beyond promises on water and tailings – including carbon offsets, promised investments in “green” energy technology alongside perhaps some announcement on further research into carbon capture and sequestration (CCS).

Based on all previous deals in Canada and the United States, such a framework could only be announced as the “end to the war over tar sands” – to effectively give social license to tar sands operations permanently. This would then eliminate Tides based on all previous deals in Canada and the United States, such a framework could only be announced as the “end to the war over tar sands” – to effectively give social license to tar sands operations permanently. This would then eliminate Tides based anti-tar sands funding for all organizations in the NATSC. Certain groups such as Greenpeace, the Indigenous Environmental Network, Rainforest Action Network as well as several community initiatives have official positions to end tar sands development. The Pembina Institute, CBI, Tides, David Suzuki Foundation, Sierra Club, and near the totality of ENGO’s who receive NATSC funding in the United States do not call for the cessation of tar sands development, but mitigation of the “worst” impacts.

The breathtaking pace and size of tar sands development in Canada has not gone unnoticed to other would-be producers; many countries around the planet have deposits of bitumen that would require much the same technology. Those investors have been visiting Canada, learning, and heading elsewhere where bitumen beckons. A partial list of locations that are now threatened with tar sands extraction includes Trinidad and Tobago, The Republic of Congo, Madagascar, the US state of Utah, China, Russia and Jordan. There is also the country that may have even larger deposits than Canada – the Bolivarian Republic of Venezuela.

With the exception of Venezuela, whose production is still but a fraction of Canada’s, none of these countries have gone into commercial production at this point. It will be nearly impossible to stop tar sands developments in Africa, Latin America Asia and elsewhere if all of our collective work in opposition to the development of tar sands is sacrificed to a “partnership deal” that allows for continued tar sands extraction. Corporations like France’s Total in Madagascar could then argue: “If this development is clean and responsible enough for Canada, why not so for Madagascar?” Such a dynamic must be avoided at all costs on many levels, not least of which is the remaining sliver of hope that the worst effects of climate change can be avoided, rather than simply managed or mitigated.

Climate justice organizing is, in part, an attempt to go beyond the counting of C02 emissions and to get to the heart of solutions to the climate crisis – solutions that involve the end of oppression of the communities that bear the brunt of the climate crisis, and do so in ways that respects their self-determination. Addressing the needs of these communities as they speak for the solutions they want cannot be a part of a backroom, anti-democratic model of development pushed forward with money from the very industries trying to eliminate them from history. It will take a global effort to hear and then amplify the voices – from Africa to Asia, and north to south in the Americas. None of these voices can be heard if someone closes a door to hold secret meetings with the financial powers whose assets already scream so loudly – as we edge ever closer to a point of no return.

MacDonald Stainsby is a social justice activist and journalist currently living in Edmonton and is the coordinator of http://oilsandstruth.org.

http://ecosocialismcanada.blogspot.com/2011/08/tar-sands-partnership-agreement-in.html

http://canadiandimension.com/

Shaky Foundations: Toxic Sources, Tainted Money

Shaky Foundations: Toxic Sources, Tainted Money

The Decline of Big Green, Part One
Shaky Foundations: Toxic Sources, Tainted Money
Weekend Edition
June 4 – 6, 2010
By JEFFREY ST. CLAIR

Back at the start of the 20th century, John D. Rockefeller remarked that “not even God himself can keep me from giving my money to the University of Chicago.” The old bandit’s investments duly paid off, with platoons of Chicago economists and jurists all hymning the free market and invoking the inexorable laws requiring that some be rich and many be poor.

Philanthropy and its purposes haven’t changed much since Rockefeller millions were dispensed to winch the family name out of the mud, particularly after the Ludlow massacre when Rockefeller minions broke a strike by spraying with oil and then igniting tents filled with women and children.

Even before Ludlow, Rockefeller money was ladled out to the wildcatters in central Pennsylvania to absorb them into the many-tentacled Standard Oil Trust, with satisfactory results.

Nearly a century later, the environmental movement, supposedly big oil’s implacable foe, found itself on the receiving end of about $50 million a year from three oil conglomerates, operating through front groups politely described as private foundations. According to an analysis of financial reports from the Clinton years, the top givers were were the Sun Oil Company (Sunoco) and Oryx Energy, which controlled vast holdings of natural gas in Arkansas and across the oil patch. The Pew family once entirely controlled both Sunoco and Oryx, maintained large holdings in both, and was, in fact, sued for insider trading by Oryx shareholders.

In 1948 the family set up the Pew Charitable Trust, based in Philadelphia, with an endowment totaling nearly $4 billion in the year 2000. In its early days the foundation (a collection of seven separate trusts) was vociferously rightwing, with money going to the John Birch Society, to Billy Graham and to population control, always a preoccupation of the rich.

The utility of buying the loyalty of liberals impressed itself on the impressed itself on the family rather late, in the 1980s. But since then they have more than made up for lost time. By the beginning of the second Clinton term, the Pew Charitable Trusts represented one of the largest donors to the environmental movement, with about $250 million a year invested.

During Clintontime, the Pew environmental sector was headed by Joshua Reichert. Reichert and his subordinates, Tom Wathen and John Gilroy, not only allocated money to individual Pew projects, such as the Endangered Species Coalition, but they also helped direct the donations of other foundations mustered in the Environmental Grantmakers’ Association.

Pew rarely went it alone. It preferred to work in coalitions with those other foundations, which meant almost no radical opposition to their cautious environmental policies can get any money. There were some notable foundations that objected to Pew’s leveraged buyouts of environmental campaigns, notably the Levinson, Patagonia and Turner Foundations.

Still, Pew was the sort of Trust that John D. would have understood and admired.

But this did not tell the full story of coercion through money. One of the conditions attached to the receipt of Pew grant money was that attention be focused on government actions. Corporate wrongdoers were not to be pursued. With Pew money rolling their way, the environmental opposition became muted, judicious and finally disappeared. As long-time New Mexico environmentalist Sam Hitt put it: “Pew comes into a region like a Death Star, creating organizations that are all hype and no substance, run by those whose primary aim is merely to maintain access to foundation funding.”

Meanwhile, the endowed money held by these trusts was carefully invested in the very corporations that a vigorous environmental movement would be adamantly opposing. An examination of Pew’s portfolio in 1995 revealed that is money was invested in timber firms, mining companies, oil companies, arms manufacturers and chemical companies. The annual yield from these investments far exceeded the dispensations to environmental groups.

Take just one of the seven Pew trust funds: the Pew Memorial Trust. This enterprise made $205 million in “investment income” in 1993 from such stocks as Weyerhaeuser ($16 million), the mining concern Phelps-Dodge ($3.7 million), International Paper ($4.56 million) and Atlantic Richfield, which was pushing hard to open even more of the Arctic to oil drilling ($6.1 million). The annual income yield from rape-and-pillage companies accruing to Pew in this single trust was twice as large as it total grants, and six times as large as all of Pew’s environmental dispensations that year (about $20 million in 1993).

Next of the big three in environmental funding was an oil company known as Cities Services, which endowed the W. Alton Jones Foundation, based in Charlottesville, Virginia. (In the merger frenzy of the 1980s, Cities was ultimately taken over by Occidental Petroleum, in a move that saved Ivan Boesky from financial ruin. It was later parceled off to the Southland Corporation, owners of Seven Eleven, then finally, in 1990, it was sold to Petroleos de Venezuela.)

In the crucial Clinton years, Alton Jones maintained an endowment of $220 million and in 1994 handed out $15.8 million in grants. According to the charity’s charter, the purpose of the foundation was two-fold: preservation of biological diversity and elimination of the threat of nuclear war. Although Alton Jones doled out about $14 million a year to environmental causes during the Clinton years with the same engulf-and-neuter tactic of Pew, this apostle of peace maintained very large holdings in arms manufacturers, including Martin-Marietta ($3.26 million), Raytheon ($1.32 million), Boeing ($1.38 million), and GE ($1.4 million).

Alton Jones’ portfolio was also enhanced by income from bonds floated by Charles Hurwitz’s Scotia-Pacific Holdings Company, a subsidiary of Maxxam, which was at that very moment trying to cut down the Headwaters Grove, the largest patch of privately owned redwoods in the world. The charity’s annual statement to the Internal Revenue Service also disclosed a $1.4 million stake in Louisiana-Pacific, then the large purchaser of timber from publicly-owned federal forests. The company had been convicted of felony violations of federal environmental laws at its pulp mill in Ketchikan, Alaska, where L-P was butchering its way through the Tongass National Forest.

At the same time, Alton Jones maintained a position (just under $1 million in stock) in FMC, the big gold mining enterprise, who dousing of endangered salmon habitat in Idaho with cyanide at the Beartrack Mine was greased by Clinton’s Commerce Secretary Ron Brown. Picking up revenue from FMC’s salmon destruction with one hand, in 1993 the foundation gave about $600,000 with the other hand to supposedly protect salmon habitat in the same area. The grants went to the compliant and docile groups in the region, such as the Pacific Rivers Council.

At a crucial moment in January 1994, Pacific Rivers Council and the Wilderness Society–another recipient of W. Alton Jones cash—demanded that a federal judge suspend an injunction the groups had–to their great alarm—just won. The injunction had shut down FMC’s Beartrack Gold Mine, from which the company expected to make $300 million courtesy of the 1872 Mining Act, whose reform the Clinton administration carefully avoided. When the Wilderness Society’s attorneys asked Judge David Ezra to rescind the injunction, he was outraged but had no alternative but to comply. FMC’s stock promptly soared, yielding extra earning for Alton Jones’ holdings in the mining concern.

The last of the three big environmental foundations is the Rockefeller Family Fund. In the Clinton era, the RFF was run by ex-Naderite Donald Ross, who pulled down, according to IRS filings, $130,000 a year, plus another $23,000 in benefits. The relationship of the Family Fund to Rockefeller oil money scarcely needs stating. Though the Fund dispensed a relatively puny $2 million a year in grants, it exercises great influence by dint of the foundation’s leadership of the Environmental Grantmaker’s Association. The Fund also functioned as a kind of staff college for foundation executives. Pew’s John Gilroy and Tom Wathen both learned their trade under Ross’s tutelage.

In the 1980s, when the Multinational Monitor revealed that the ten largest foundations in America owned billions in stock of companies doing business in South Africa, Donald Ross lamented that many foundations “simply turn their portfolios over to a bank trust department or to outside managers and that’s the last they see of it.”

If the innuendo here was that conscientious foundations should keep an eye on their investments, Ross has some explaining to do. The Rockefeller Family Fund, in its 1993 IRS filing, held $3.5 million in oil and gas stocks, including Amerada Hess (one of the first companies to drill on Alaska’s North Slope and company convicted of price fixing), As an old Nader man, Ross should have presumably felt some embarrassment in the Fund’s extensive holdings in the Ten Worst Corporations, as listed by Multinational Monitor, a Nader operation.

The the Rockefeller Family Fund also maintained heft investments in mining companies, including ASARCO, an outfit with a distinctly noxious environmental rap sheet. Its activities have laid waste to western Montana, easily overwhelming the yelps of the Mineral Policy Center, which conducted a futile campaign against the company, partially funding by the RFF.

The Ross-run fund also invested money in FMC and Freeport-McMoRan, whose worldwide depredations were on the cutting edge not only of ecocide but–in Indonesia—of genocide as well. The Rockefeller Funds’ mineral and chemical companies holdings exceeded a million dollars in 1993.

In that same year, the RFF had a strong position in timber giant Weyerhaeuser, the largest private landowning company in North America. The potential for conflicts of interests endemic to all foundations with the ability to influence federal policy is sharply illustrated here. The Rockefeller Family Fund was one of the lead architects of the foundation-funded campaign to protect ancient forests on federal lands in the Pacific Northwest. Any reduction, actual or prospective, of timber available for logging on public lands drives up the value of privately-held timber tracts. The Fund was in a position to make a killing by buying Weyerhaeuser stock low and selling it high, before large-scale logging resumed on public lands.

The Family Fund was nicely covered because it also had holdings of $237,000 in Boise-Cascade, which at the time was the largest purchaser of federal timber sales in the Northwest. Indeed, in 1993 Boise-Cascade bought the rights to log the controversial Sugarloaf tract of 800-year-old Douglas fir trees in southern Oregon’s Siskiyou National Forest, courtesy of a released injunction engineered by a deal between the Clinton administration and environmental groups funded and closely supervised Ross’s organization. Ross also played a key role in the hiring of Democratic Party hack Bob Chlopak (another former Naderite) to oversee the conversion of a tough national grassroots movement to fight Clinton to the death over the permanent protection of old-growth forests into a supine national coalition that swiftly draped itself in the white flag of surrender.

Even after Donald Ross left the Rockefeller Family he continued to stride between two worlds. Ross formed a lobby / PR shop called M + R Strategic Services, where his clients, according to SourceWatch, included both environmental groups (the Nature Conservancy, NRDC, the National Wildlife Federation and Earth Justice) and environmental foundations (Hewlitt Foundation, Patagonia, Lazar Foundation, and Wilberforce—as well as the Rockefeller Family Fund). He didn’t forget the corporations either. In 2009, Ross became chairman of the board of a defanged GreenPeace.

All of these foundations had their bets nicely covered, both politically and financially. The once unruly grassroots green movement was brought under tight control through annual disbursements of funds, rewarded on the condition that these groups follow the dictates of the funders. At times this meant giving up hard-won legal injunctions. In other instances, it meant refraining from filing politically sensitive lawsuits to stop timber sales or gold mines and muting its public criticism of Democratic politicians.

With court injunctions lifted, there was only one way for environmentalists to confront illegal and ecologically destructive operations: civil disobedience. And that was a tactic the big foundations would never underwrite. Disobey these conditions and a group risked the annual renewal of its funding.

Precious few did.

Jeffrey St. Clair is the author of Been Brown So Long It Looked Like Green to Me: the Politics of Nature and Grand Theft Pentagon. His newest book, Born Under a Bad Sky, is published by AK Press / CounterPunch books. He can be reached at: sitka.

(This article is excerpted from Green Scare: the New War on Environmentalism by Jeffrey St. Clair and Joshua Frank, forthcoming from Haymarket Books.)

http://www.counterpunch.org/stclair06042010.html

http://oilsandstruth.org/shaky-foundations-toxic-sources-tainted-money

• Alberta (& Saskatchewan) Tar Sands
• International oil & gas
• Corruption
• Economics

Secret Agreement in the Works Between ENGOs and Tar Sands Industry

Secret Agreement in the Works Between ENGOs and Tar Sands Industry

Will environmentalists continue to allow foundation funding to dictate to the movement?

by Dru Oja Jay

A slew of recent articles have pointed to the likelihood that some foundation-funded environmental groups and the tar sands extraction industry are getting ready to make peace and sign a deal. The precedent, these reports note, has been set with the Canadian Boreal Forest Agreement and the Great Bear Rainforest Agreement. What the media coverage doesn’t mention is the actual character of these previous deals, and the unprecedented consolidation of funder influence in the hands of one man that is driving environmental groups toward such an agreement.

Things got started back in April, when a secret "fireside chat" was planned between oil industry executive and ENGO leaders including former Great Bear Rainforest Agreement negotiators Tzeporah Berman and Merran Smith, and representatives from Tides Canada, World Wildlife Fund, Pembina Institute and others. After word circulated about the "informal, beer in hand" discussions, the meeting was called off–temporarily.

The idea hit the corporate media in September 2010, with reports that Syncrude Chairman Marcel Coutu had solicited David Suzuki to broker an agreement between environmentalists and tar sands operators. Suzuki rebuffed him, saying that a dialogue was not possible while oil companies were funding lies about their environmental impact.

But the idea didn’t die–and neither did the lies. In October 2010, during a major ad campaign from the Canadian Association of Petroleum Producers that compared tar sands tailings to yogurt, the Edmonton Journal and Calgary Herald published a report by Sheila Pratt entitled "Is an oilsands [sic] truce possible?"

In this report, Pratt chronicles the Syncrude executive Marcel Coutu’s efforts to woo David Suzuki into brokering an agreement between environmentalists and tar sands operators. Pratt interviews Avrim Lazar, CEO of the Forest Products Association of Canada (FPAC), the group of logging companies that signed an accord the with Greenpeace, the David Suzuki Foundation, and several other Environmental Non-Governmental Organizations (ENGOs). That was the "Canadian Boreal Forest Agreement" (CBFA).

(Pratt repeats the false claim that the agreement preserves 72 million hectares of forest. In fact, the CBFA maintains the current rate of logging, simply shifting a small portion (about the size of metro Toronto) to areas outside of the caribou range. Furthermore, it requires ENGOs to defend the logging companies that signed against criticism and help them market their products.)

Of all of Pratt’s interviewees, only Greenpeace’s Mike Hudema states the obvious: it not possible to green the tar sands.

On October 21, John Spears of the Toronto Star interviewed FPAC’s Avrim Lazar, who told Spears of the calls he was fielding from oil company executives curious about the logging companies’ experience finding common ground with environmental groups. Lazar said that an important precursor to an agreement is for both parties to recognize that tar sands operations have an environmental impact, but for environmentalists to "stop calling oil sands extraction ‘an abomination that has to be stopped’.

"Once you have those two, then you have something to talk about," Lazar was quoted as saying. "You can go to problem-solving mode… It doesn’t become easy, but it becomes possible."

Oil companies left no doubt about their interest in an agreement. What about their ENGO partners?

They waited until October 23rd to express interest. Ross McMillan, CEO of Tides Canada Foundation, wrote a letter to the Financial Post in response to a right wing attack on foundation funding for anti-tar sands work published on October 15.

"At Tides Canada we are working to bridge these two polarized camps," wrote McMillan, referring to environmentalists and oil companies. McMillan went on to cite Tides’ role in the 2001 Great Bear Rainforest Agreement, which dealt with a massive area of BC’s central coast. When that agreement was signed, ForestEthics negotiators emerged from secret negotiations with logging companies to announce that they had signed a deal for 20 per cent protection. That was less than half of what scientists said was the minimum area that would need to be preserved to avoid damaging biodiversity, and it violated protocol agreements they had signed with local ENGOs and First Nations. None of that mattered to the signatories, who proclaimed themselves victorious.

There are two key differences between agreements signed ten year ago, and those anticipated today.

First, deals have become even more transparently meaningless. Greenpeace and company literally declared that they had "saved the Boreal forest" by signing an agreement that actually makes no net change in the amount of logging. No CBFA signatory can say with a straight face that they have protected an area the size of Germany, though press releases on their site still make that claim. Even the Great Bear Rainforest Agreement completely preserved 20 per cent of the vast forest. Though some activists say that ENGOs subsequently turned a blind eye to clearcutting on Vancouver Island, negating even those gains.

Second, and most crucially, funders have consolidated control of funding for anti-tar sands campaigns to an unprecedented extent. Anyone who wants foundation funding (which most ENGOs rely on to a large extent) for their campaigns has to talk to Corporate Ethics founder Michael Marx. Marx and his coordinators set funding priorities through the "Tar Sands Coalition," a structure that, according to internal documents, is supposed to remain "invisible to the outside."

All of the money for the Tar Sands Coalition comes through Tides Canada Foundation. We know little about where it originates, though the bulk of it comes from US mega-foundations like the Pew Charitable Trusts, which outed itself as the architect of the CBFA after giving tens of millions to environmental groups doing Boreal forest work. Other big donors include the Rockefeller Brothers Fund, the Gordon & Betty Moore Foundation, William & Flora Hewlett Foundation, and the David & Lucile Packard Foundation.

Together, they have given at least $4.3 million to tar sands campaigns since 2000. Together, they hold vast power to decide the fate of those campaigns.

Control over the vast majority of ENGO funding for tar sands work is firmly in the hands of Michael Marx, on behalf of foundations with a taste for collaborative agreements. Journalists seem willing to print claims about "saving the Boreal forest" or "protecting an area the size of Germany" without seeing any actual agreement.

Our future hinges on the tar sands. Will any level of environmental destruction, loss of human life, or climate change be considered an acceptable cost to continue consumption of fossil fuels? Or is there a limit to the amount of destruction we will accept?

If a secret agreement is allowed to go forward, then those who cannot accept ever-escalating destruction will have to fight other ENGOs in addition to fighting the oil companies. Will the Tar Sands Greenwashing Accord continue as planned?

For more about ENGOs and the collaborative model, read the 2009 report Offsetting Resistance: The effects of foundation funding from the Great Bear Rainforest to the Athabasca River, by Macdonald Stainsby and Dru Oja Jay.

http://montreal.mediacoop.ca/story/secret-agreement-works-between-engos-and-tar-sands-industry/5089

(U.S.) Senate Climate Bill Dies-Does the Environment Win?

“For over a dozen years, since before the 1997 Kyoto climate summit, the Environmental Defense Fund, the Natural Resources Defense Council, the Pew Charitable Trust and other Big Green groups have been unshakably committed to cap-and-trade. Without bothering to consult grassroots activists or more maverick groups like Greenpeace or Friends of the Earth, Big Green anointed cap-and-trade as its climate mantra and forged a high-minded Beltway alliance with corporate giants like Exelon and GM.”

Charles Komanoff

July 28, 2010

Despite a Democratic supermajority in Congress, and despite President Obama’s campaign promise to tackle global warming, there will be no climate bill this year. The demise last week of the Kerry-Lieberman Senate bill makes that official. But that may actually be a good thing: it clears the way for genuine solutions to global warming­­—solutions that ordinary Americans can understand and support. And remember, most Americans do want their government to tackle climate change. A recent Stanford University poll found that 74 percent of the public believes climate change is human-caused, poses real threats and requires government action.

The bill that was withdrawn last week, like the Waxman-Markey bill that squeaked through the House last year and similar measures dating back to a 2003 Senate bill sponsored by John McCain, would have attempted to curb carbon emissions by creating a cap-and-trade market, a corporate-friendly approach to reducing greenhouse gas emissions. Under this system, a “capped” number of carbon emission permits are offered to coal, oil and gas extractors and importers, who can then sell (trade) the permits among themselves. As the volume of emissions permitted by the cap declined over time, the price of the carbon permits would rise, causing fossil-fuel energy to cost more and creating incentives to use less.

Cap-and-trade was popular inside the Beltway—some business interests and many mainstream environmental groups insisted on it—but it is a total loser in the larger battle to excite and mobilize public opinion. Attacks by climate-change denialists took a toll, but the arcane nature of cap-and-trade made it hard to love, and its links to the financial industry, originally viewed as an asset, turned toxic after the housing bubble burst.

There is a better way. Virtually everyone who truly desires emissions reductions agrees that putting a (rising) price on carbon is essential. But there’s another, better way to do that, one that also would deliver an economic bonus to a majority of Americans: the government should institute a fee-and-dividend system.

Like cap-and-trade, fee-and-dividend would limit emissions by building a fee for carbon emissions into the price of gasoline, coal-fired electricity and other carbon-based fuels, thereby giving consumers and businesses powerful incentives to use less. As in cap-and-trade, the fee would be imposed at the wellhead or import dock, eventually to be passed down the supply chain to consumers. But there are two critical differences.

First, fee-and-dividend would turn the proceeds of these higher energy costs over to the American public to spend as they wish, rather than to corporate emitters to fatten their bottom lines or to Washington lawmakers to lavish on pet projects. Under fee-and-dividend, each and every American would receive a monthly check, which for most people would offset the higher energy prices caused by the fee.

The other difference is a bit technical but is just as key. Under a cap, the price on carbon would be murky, since it would be set in a vast trading market and determined by fluctuating factors like the economic growth rate, consumer and producer price elasticities and hedge bets by speculators. With the carbon fee, the carbon price would be set up front and its rising trajectory known in advance, allowing consumers and entrepreneurs to bank on the future value of saving energy. The price incentive to move away from carbon-emitting fossil fuels would penetrate every crevice of the economy, ensuring that few if any opportunities to reduce climate-changing emissions were left on the table.

Fee-and-dividend is superior to cap-and-trade on grounds of both political appeal and economic efficiency. Here’s how James Hansen, the nation’s pre-eminent climate scientist, contrasted the two approaches in an op-ed in the New York Times last December:

Consider the perverse effect cap and trade has on altruistic actions. Say you decide to buy a small, high-efficiency car. That reduces your emissions, but not your country’s. Instead it allows somebody else to buy a bigger SUV—because the total emissions are set by the cap. In a fee-and-dividend system, every action to reduce emissions—and to keep reducing emissions—would be rewarded. Indeed, knowing that you were saving money by buying a small car might inspire your neighbor to follow suit. Popular demand for efficient vehicles could drive gas-guzzlers off the market. Such snowballing effects could speed us toward a pollution-free world.

Hansen’s example applies equally to renewable energy. Under a cap system, a wind farm, no less than his efficient auto, will lower the price for carbon emission permits, thus undermining the price incentive for other actions that would reduce emissions. In contrast, a carbon fee is immune to this effect, since individual actions have no effect on the legislated carbon price.

But can the environmental movement unite around cap-and-dividend?

For over a dozen years, since before the 1997 Kyoto climate summit, the Environmental Defense Fund, the Natural Resources Defense Council, the Pew Charitable Trust and other Big Green groups have been unshakably committed to cap-and-trade. Without bothering to consult grassroots activists or more maverick groups like Greenpeace or Friends of the Earth, Big Green anointed cap-and-trade as its climate mantra and forged a high-minded Beltway alliance with corporate giants like Exelon and GM.

The idea was to “put a price on carbon,” but in secret. Decision-makers at utilities and auto companies would use economic models to intuit the extent to which mandated declines in the amount of carbon emissions permitted by the cap over time would cause the prices of carbon permits (and, hence, fossil fuels) to rise, and would retool their power plants and products accordingly. But ordinary Americans, ponying up more for electricity and heat and gasoline, wouldn’t know that the declining cap was driving the higher prices.

That was the plan. Alas, though cap-and-trade had functioned well in a kind of pilot program involving electric utilities and acid rain, it wasn’t up to the job of transitioning the American economy from fossil fuels to energy efficiency and renewable sources. To manage that Herculean task in decades rather than centuries, the rising trajectory of fossil fuel prices must be not just steep but plainly visible to all—from the aircraft manufacturer weighing the use of costly exotic materials to raise fuel efficiency, to local officials wrestling with whether a new school should be built in town, near the bus stop and bike lane, or on the car-dependent outskirts. Millions of similar carbon-critical decisions, from the individual level of riding transit and switching light bulbs to the societal level of ensuring that those options are available, attractive and valorized, must be taken with full knowledge of those prices. A stealth price on carbon, one that’s lost in the noise of fluctuating prices and general inflation, won’t do the job.

The fate of the climate—and perhaps the viability of EDF, NRDC et al. as well—may now turn on the environmental lobby’s willingness to embrace the alternative that has been there all along: a revenue-neutral, steadily rising carbon fee, the proceeds from which would be redistributed to Americans via equal monthly dividends—or, in a variant favored by some economists, in which the regressive and anti-jobs payroll tax is phased out as carbon fee revenues ramp up.

A climate bill based on a revenue-neutral and rising carbon fee would not require a cap-and-trade market in carbon derivatives; would be transparent and hence less vulnerable to the K Street carve-outs that turned cap-and-trade bills into laughing stocks; could be imitated internationally (since carbon fees are fungible while carbon caps are not); and wouldn’t require a PhD in complexity to grasp. Indeed, one such bill, America’s Energy Security Trust Fund Act of 2009, sponsored by Connecticut Democrat John Larson, is all of twenty-one pages, versus upwards of 1,500 for the Waxman-Markey cap-and-trade bill that squeaked through the House last year and the similar Kerry-Lieberman bill that just died in the Senate. Yet the emission reductions under the Larson bill would be two to three times as great as those from Waxman-Markey.

A climate bill like the Larson bill would also honor a fundamental tenet of environmentalism: that the costs of pollution must be internalized into the price of the activities that cause it.

We can drive emissions reductions throughout the economy while protecting Americans’ pocketbooks if we reframe the climate debate. Cap-and-trade is dead, and not a moment too soon. With its simplicity, its transparency and its economic rewards for everyone but die-hard polluters, fee-and-dividend could be a political winner. If environmentalists and others who care about averting climate catastrophe can unite around this approach, the public is ready to be convinced and, one hopes, mobilized. And, as two centuries of struggle for racial, labor and gender justice should have taught us, a mobilized public is essential to winning the climate battle.

http://www.thenation.com/senate-climate-bill-dies-does-environment-win