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This article by Center Executive Vice-President Ron Arnold appeared in the January 2005 issue of Foundation Watch, a publication of Capital Research Center in Washington, D.C.

The Rockefeller Family Fund:

Puppet Master for Leftist Front Groups
 

"The Rockefeller Family Fund is now a public charity. Through a magical loophole we are no longer a private foundation.”

 

Those are the words of Donald Ross, executive director of the Rockefeller Family Fund in 1992, speaking to the annual meeting of the Environmental Grantmakers Association.

 

The “magical loophole” is an obscure IRS provision that allowed the New York City-based Fund to change its classification so it could do what it previously could not do. Previously the Fund could only make grants from its own endowment of funds that were contributed mainly by the fourth generation of Rockefellers, the greatgrandchildren of John D. But thanks to the “loophole” that allowed it to transform itself into a “public charity,” the Fund may now accept grants made to it by other foundations. It also may spend any amount to operate its own programs—including substantial lobbying efforts.

 

In the past decade more and more private foundations have decided to slip through this public charity loophole. The most recent, in January 2004, is the giant Pew Charitable Trusts (2003 assets: $4.1 billion). Critics worry over the lobbying power that “charity” status confers on endowments like Pew, but their ability to run their own in-house policy programs is even more alarming. The public is none the wiser when a former private foundation becomes a public charity, allowing it to launch and operate well-funded, politically- charged programs under assumed names that hide the true source of controversial and highly-publicized projects.

 

Here’s an example.

 

In early March 2004, the Washington, D. C.-based Campaign to Protect America’s Lands (CPAL) published a scathing report accusing the Bush Administration of giving a Republican campaign contributor special access to drill oil in New Mexico’s Otero Mesa. CPAL denounced the Bureau of Land Management for acting under the influence of Deputy Secretary of the Interior Steven Griles in issuing a drilling permit to a company controlled by the prominent Yates family.

 

Griles—second in command to Interior Secretary Gale Norton—had been a lobbyist for mining, coal and oil companies, including Yates, prior to joining the Bush administration, and environmentalists predictably campaigned against him from the day he was nominated as Deputy Secretary in 2001. The CPAL report wasn’t really about the Yates commitment to environmental protection. It was about Griles—and by implication, the Bush Administration.

 

After a year in office, Griles faced accusations that he had violated ethics rules—specifically, that he played a key role in several decisions that directly benefited his former clients. The Office of Government Ethics (OGE) began an 18-month-long investigation. Only seven workdays after CPAL released its disquieting document, the OGE cleared Griles of wrongdoing. (Griles resigned recently after serving out the full first term of the Bush administration.)

 

CPAL’s anti-oil campaign forged ahead anyway, unfolding with some peculiar twists. First, a CPAL news release touted “an unusual coalition of ranchers, environmentalists and free marketers, joined together to oppose rampant development on Otero Mesa.” But ranchers on Otero Mesa denied they were part of any coalition. In fact, there was no coalition. CPAL’s rhetoric that Otero Mesa was a “pristine” wilderness about to be “desecrated by drilling rigs” worried its inhabitants for a different reason. It looked like a first step toward pressuring Congress to put the area (which was hardly a “wilderness,” since ranchers had lived and grazed cattle there for more than a century) off-limits to all domestic and commercial use.

 

Ranchers were stunned by newspaper headlines announcing that New Mexico Governor Bill Richardson, a Democrat, had joined CPAL’s anti-industry crusade—a move both puzzling and disturbing, since New Mexico is the nation’s second-ranking producer of natural gas, a significant source of state school and tax revenue.

 

Then rumor had it that Gov. Richardson was contacted by Sen. John Kerry’s presidential campaign about a potential slot in a Kerry administration. Richardson’s denunciations of the Bush administration for “selling Otero Mesa” looked more partisan than substantive.

 

The questions began: Who was the “Campaign to Protect America’s Lands”? Who paid for it? And why? The answers are anything but transparent, and to unearth them, you have to do some patient digging.

 

CPAL’s website lists Peter Altman as its executive director. Altman is no stranger to industry-bashing. He was formerly executive director of the Austin-based Texas Fund for Energy and Environmental Education (TFEEE), an extreme anti-industry group that operates under six assumed names, including “Campaign ExxonMobil” and “Citizen’s Clean Air Project.”

 

Altman’s CPAL calls itself a “nonprofit, non-partisan organization.” However, IRS Publication 78, the cumulative list of all exempt organizations in the nation, has no record of a “Campaign to Protect America’s Lands.” A further search of the group’s website uncovers this disclaimer: “CPAL is a campaign of the Environmental Integrity Project (EIP).”

 

So Altman and CPAL are fronting for EIP. But what is EIP?

 

It, too, is not listed in IRS Publication 78. Its website says EIP was founded by Eric Schaeffer, “who directed the U.S. Environmental Protection Agency’s Office of Regulatory Enforcement until 2002, when he resigned after publicly expressing his frustration with efforts of the Bush Administration to weaken enforcement of the Clean Air Act and other laws.”

 

So Schaeffer is the brains behind Altman and CPAL. The political motive is solid, but still not transparent. Why is a former bureaucrat who spent years regulating factory emissions suddenly heading a group running a campaign on federal land issues? And who’s paying for it all?

 

EIP’s website provides a clue: It says the organization was founded “with support from the Rockefeller Family Fund and other foundations.” The Rockefeller Family Fund’s 2002 Form 990 annual report, Schedule A, “Compensation of the Five Highest Paid Employees,” shows Eric Schaeffer at the top of the list, with a salary of $116,218 and benefit package of $22,709.

 

So Schaeffer is a well-paid Rockefeller Family Fund employee. In short, the Rockefeller Family Fund is behind Eric Schaeffer’s EIP—which, in turn, is behind Peter Altman’s CPAL.

 

The Rockefeller Family Fund’s Form 990 shows it gave EIP $150,000 in 2002, a full year’s grant. (Eric Schaeffer didn’t resign from the EPA until March.) In 2001, the Fund also spent $150,000 on its Environmental Enforcement Project “to support EPA oversight.”

 

How long had Rockefeller Family Fund officials known Eric Schaeffer before he chose to dramatically resign from the EPA? The whole episode suggests hat his resignation was part of a prearranged, high profile and highly political “Dump Bush” project.

 

There’s more telling evidence for this scenario. In 2002, at the time that it set up Schaeffer in the Environmental Integrity Project, the Rockefeller Family Fund also spent $80,000 to create EIP’s front group, the Campaign to Protect America’s Lands. EIP was a kind of “double-blind,” distancing the overtly anti-Bush CPAL from the Rockefeller name.

 

The Fund’s own grant description for CPAL’s 2002-2003 financial support was “to expose and prevent actions by the Department of Interior that pose an environmental threat to federally protected public lands.” That may have been too obviously aimed against Steven Griles, so the Fund’s description for its $150,000 2004 grant was altered thus: “to stop antienvironmental public lands decisions through sustained grassroots and media efforts, expose the pro-industry agenda of top political appointees and hold public officials accountable for these decisions.”

 

It’s no accident that the Fund selected Peter Altman to run CPAL. It gave his Texas Fund for Energy and Environmental Education $140,000 in 2002 and $50,000 in 2001, fully aware of his record of disrupting ExxonMobil shareholder meetings and of his hatred of the petroleum industry.

 

The Rockefeller Family Fund is well known for the financial and logistical support it gives anti-industry projects. It’s pointless to speculate why the descendents of oilman John D. Rockefeller hold these views, but hold them they do. Consider this statement by fourth-generation family member Laura Rockefeller Chasin (Laura’s husband, Richard Chasin, is a trustee of the Rockefeller Brothers Fund, which represents money from the third generation of Rockefellers.):

 

“It’s hard to get rid of the money in a way that does more good than harm. One of the ways is to subsidize people who are trying to change the system and get rid of people like us.” (Cited in The Rockefellers, by Peter Collier and David Horowitz, page 573.)

 

A final irony. The Rockefeller Family Fund operates a project called “Transparency in Government.” With its own front groups dancing on shadowy strings, it seems the Fund could benefit from a bit of transparency itself.

Ron Arnold is Executive Vice President of the Center for the Defense of Free Enterprise, a free-market think tank based in Bellevue, Washington.

This article, along with a major profile of the Rockefeller Brothers Fund by Martin Wooster article in the January 2005 issue of Foundation Watch, published by Capital Research Center in Washington, D.C. This is a PDF document that requires Adobe Acrobat Reader, available free at www.adobe.com.

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