Tax-exempt nonprofits that can engage in unlimited lobbying and do not have to disclose the source of their funding have become a favored vehicle for corporate lobbyists who wish to remain anonymous.
They inhabit a “shadowy world,” writes Boston Globe’s Michael Kranish, involving “groups that have vague but high-sounding names” where corporate operatives seek to shape public opinion “without leaving fingerprints and without having to directly associate their name and brand with the attacks made on their behalf.”
Last week, Union Leader reporter Dave Solomon reported on a nonprofit social welfare organization that is using so-called “dark money” to organize opposition to the Northern Pass energy project. Protect the Granite State (PGS), a Delaware-registered nonprofit, can legally raise unlimited funds without disclosing its donors – and it’s keeping them a secret. “The organization is a 501( c )(4) whose donors choose to remain anonymous,” PGS spokesman Jim Merrill told the Union Leader.
Solomon was unable to lift the group’s cloak of anonymity but he did document a connection between PGS and a Massachusetts-based nonprofit group that opposes the Access Northeast Pipeline project, Consumers for Sensible Energy (CSE). PGS and CSE share “some of the same key players and very similar presentation in their websites,” Solomon wrote.
A broad network of connected organizations
In an effort to determine who might be behind the organizations, we were curious to see if there might be additional nonprofit social welfare organizations with connections to PGS and CES. We found five.
Each site’s terms and conditions begins with the sentence, “In order to create an enjoyable and safe online experience on our sites, we ask that all users understand and comply with our site Terms and Conditions.” From there, they are all virtually identical except for the organization name and contact information.
A link on the NMCES website led us to another energy-related advocacy organization. A Twitter icon on the NMCES website links – inadvertently, we assume – to the Twitter feed for Wind Future Pennsylvania (WFP) which led us to the WFP website.
On the WFP website, we found a section describing the benefits of wind energy for Pennsylvania that is almost identical to a similar section on the SDCES site. “Wind energy has created over 102,000 American jobs. That includes between 1,000-2,000 jobs in Pennsylvania … a number we need to grow!” reads the WFP site. “Wind energy has created over 102,000 American jobs. That includes between 1,000-2,000 jobs in South Dakota … a number we need to grow!” echoes the SDCES site.
Connecting the dots
All seven of the websites we identified belong to nonprofits advocating for, or against, specific energy projects or energy-related legislation. In addition to the two New England organizations lobbying to block specific power projects, the group in Virginia is lobbying in support of a natural gas pipeline project while the groups in Pennsylvania, North Dakota, South Dakota and New Mexico all promote wind energy projects or legislation favoring renewable energy suppliers.
The connections among the groups suggest at least some level of coordination, if not funding, by a single entity. We took a look at the projects and legislation each group promotes (or opposes) and matched them to the energy companies that would benefit.
That analysis – and a bit of stray metadata – makes a compelling case that the one company whose corporate initiatives align with each group’s advocacy work is the nation’s largest electric utility: NextEra Energy.
To make that case, we’ll walk through each organization’s history, its advocacy positions and the related NextEra Energy initiatives that align with the group’s advocacy.
Protect the Granite State
NextEra Energy claims to be the world’s largest generator of renewable energy from the wind and sun but it is best known in northern New England as the owner of the Seabrook Station nuclear power plant and the Wyman Station power plant in Yarmouth, Maine.
The utility giant’s opposition to Northern Pass is well documented. In March 2017, Allie Morris noted NextEra’s objections to a plan by Eversource to buy power off the proposed Northern Pass transmission line. In July, Central Maine Power announced a partnership with NextEra to bring energy from proposed wind and solar facilities in western Maine to Massachusetts, competing with Northern Pass for the largest renewable energy contract in New England history.
PGS’s mission is clearly stated: “Help us stop Northern Pass.” The group’s website describes Northern Pass as “a monstrous extension cord” across the Granite State that “will benefit big corporations – not New Hampshire consumers.”
Consumers for Sensible Energy
CSE, which registered with the state of Delaware in April 2016, reported 2016 expenses of over $1.4 million organizing opposition to the Access Northeast Pipeline, a proposed $3.2 billion natural gas pipeline project being developed by Eversource Energy, National Grid and Spectra Energy Partners (now part of Enbridge).
In addition to opposition from the anonymously-funded nonprofit, the Press Herald has documented efforts by NextEra Energy Resources and Public Service Electric and Gas to block the project with a petition to the Federal Energy Regulatory Commission to deny the funding mechanism by which electricity ratepayers would shoulder the pipeline cost.
“Environmental and citizen groups grab headlines in the fight over new gas pipelines,” reporter Tux Terkel wrote. “But don’t look for these power generators to be marching around with protest signs that denounce climate change, or raising their voices at town meetings where pipeline routes are debated. Their fight is being waged quietly in legal filings at the Federal Energy Regulatory Commission in Washington, D.C., the key agency that must approve interstate power projects.”
Coalition for Jobs & the Economy
In February 2017, Coalition for Jobs & the Economy (CJE) registered with the state of Virginia. The group’s website describes the organization as “a non-profit, non-partisan coalition formed to advocate for projects that help build infrastructure, create jobs, and support local growth in Southwest Virginia.”
The site, branded as “Virginians for Jobs & the Economy,” identifies a number of initiatives it calls “projects that matter.” One of the projects the group supports is the Mountain Valley Pipeline (MVP). The website quotes Gov. Terry McAuliffe describing the pipeline project as part of a “world-class energy infrastructure that provides abundant access to low-cost energy sources.”
NextEra Energy has a 31% ownership interest in the MVP joint venture that will build and own the proposed $3.5 billion, 303-mile natural gas pipeline. On October 13, 2017, the Federal Energy Regulatory Commission approved the controversial pipeline project, a process that began in 2014 with the initial application. The pipeline, which will run parallel to the Appalachian Trail for over 90 miles, still needs to obtain state permits and will likely face legal challenges from environmental groups.
Wind Future Pennsylvania
Wind Future Pennsylvania Inc. registered with the state of Delaware on June 12, 2017, the same day that Goldman Sachs announced that it has entered into a long-term agreement with a subsidiary of NextEra Energy Resources that will enable the investment and development of a new 68-megawatt wind farm outside Scranton, Pennsylvania.The announcement noted that the project “is anticipated to facilitate up to 150 construction jobs.”
The Wind Future Pennsylvania website, dedicated to supporting “the development of renewable wind energy, produced in Pennsylvania and used locally,” promotes wind energy and asks visitors to sign a petition to support the development of a proposed new wind energy project in Lackawanna County near Scranton. “150 jobs will be created during construction,” the website notes.
New Mexicans for Comprehensive Energy Solutions
Americans for Comprehensive Energy Solutions, Inc. (ACS) registered with the state of Delaware in January 2017. Three nonprofit organizations describing themselves as “affiliated” with ACS subsequently registered in New Mexico, North Dakota and South Dakota. The groups’ websites promote wind energy as part of an “all-of-the-above energy strategy.”
In February, legislation was introduced in both chambers of the New Mexico legislature to extend state tax credits for renewable energy production. The next week, New Mexicans for Comprehensive Energy Solutions, Inc. registered with the state of Delaware and launched a website that lobbied for the proposed legislation.
“The Tax Credit that helped encourage investment in these projects will expire on January 1, 2018,” the website warned, “leaving New Mexico caught short when it comes to realizing the full economic benefits of renewable opportunities in the state.” The Santa Fe New Mexican reported a lobbyist for ACES/NMCES spent $16,857 in March on advertising urging the legislature to extend the renewable energy tax credits.
A subsidiary of NextEra Energy Resources owns and operates three wind farms in New Mexico that generate over 400-megawatts of energy. Last year, NextEra was on the record supporting similar legislation and warning of the consequences if the state fails to renew the tax credits. The Santa Fe Reporter quoted a company representative telling a legislative committee, “If you don’t have the production tax credit, that makes a difference between whether projects build here or elsewhere.”
North Dakotans for Comprehensive Energy Solutions
In February 2017, a North Dakota state senate committee approved a two-year moratorium on wind development projects. The Associated Press reported that the bill’s sponsor complained that “the state’s wind industry enjoys more favorable tax incentives and less onerous regulations than coal factories, putting them at an unfair advantage.“
A representative from NextEra Energy Resources, which provides about half of North Dakota’s wind-generated power, called the legislation “extremely shortsighted.” AP’s James MacPherson reported that NextEra criticized the bill for ignoring “the fact that wind development in North Dakota is a significant source of tax revenue and job creation, not to mention a source of income for private landowners.”
On March 1, ACS registered with the state of North Dakota as a social welfare organization promoting energy policy and registered the trade name, North Dakotans for Comprehensive Energy Solutions. The group’s website includes a review of the 2017 legislative session that notes, “The session was challenging for private property development and local decision-making by bills that included an ‘anti-wind’ element.”
As with all of the advocacy websites, NextEra’s name does not appear on the NDCES site. However, the metadata included with a document that details energy-related federal incentives indicates the document was prepared by one “Angela Pitale.” In 2016, the NextEra Energy Resources regional director for state tax policy testified before a North Dakota legislative committee in support of a sales tax exemption for electrical generating facilities. Her name is Angela Pitale.
South Dakotans for Comprehensive Energy Solutions
Americans for Comprehensive Energy Solutions, Inc. registered with the state of South Dakota in August 2017, doing business as South Dakotans for Comprehensive Energy Solutions. “While SDCES supports the consumption of all types of domestic energy, including coal, oil, natural gas, solar, wind, and other types of renewable energy,” the group’s website notes, “SDCES is particularly focused on the development of wind and solar resources.”
“Wind energy is the future,” the website proclaims. “It’s clean. It’s local. And it supports a thriving economy, money for schools and roads, and creates local jobs.” The site lists the benefits of a proposed new wind farm in South Dakota: “Construction of the project will create 600 jobs and bring business to South Dakota construction companies in procuring supplies. [It will contribute] $75 million dollars in property tax payments to South Dakota.”
The launch followed a March announcement by Xcel Energy, in which the utility company described plans to build South Dakota’s largest wind farm to be developed by a subsidiary of NextEra Energy. The Argus Reader reported that the 600-megawatt Crown Ridge Wind Project will generate $75 million in property taxes. “Construction of the wind farm is also expected to create about 600 jobs and bring business to South Dakota construction companies in procuring supplies,” Xcel Energy regional vice president Laura McCarten told reporter Megan Raposa.
Dark money ‘undermines our democracy’
NextEra Energy did not respond to our email seeking comment for this story. A 2016 review by the Center for Political Advocacy (CPA) noted “NextEra Energy does not disclose its contributions to candidates, parties, and committees, or its payments to trade associations and other tax-exempt groups, such as 527 or 501(c)(4) organizations.”
Efforts to close the 501(c)(4) “dark money” loophole have included legal challenges, proposed legislation, campaigns urging the IRS to tighten regulations and even a request for presidential executive action. Ultimately, however, the most efficient and effective path to reform may run through company shareholders.
“Dark money not only undermines our democracy, but also poses serious legal, reputation, and business risks to companies,” the CPA warns. “Corporations can safeguard their reputations by being forthcoming with shareholders and consumers, and by adopting transparency and accountability policies.”
CPA is spearheading a campaign for disclosure and accountability in corporate political spending. As a result of their efforts, 292 companies now disclose some or all of their political spending; more than 150 large companies – including more than half of the S&P 100 – have signed political disclosure agreements; and 68 companies now disclose or restrict dark money payments to trade associations and 501(c)(4) nonprofit groups.
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