Nonprofit Watch's Counter-Response to LCHR's Response to Critical Report

Nonprofit Watch noted in its report that,"Admittedly the Lawyer's Committee for Human Rights(LCHR) has voiced criticism of its donor corporations as it has done in the case of Nike and the Gap regarding specific egregious cases. However, the question remains whether the group is structurally hamstrung in the extent to which it would challenge corporate interests such as in demanding that these companies pay their workers 'living wages' -- the issue that caused the The Interfaith Center on Corporate Responsibility(ICCR) to withdraw from the FLA." Nonprofit Watch stands by this statement.

LCHR certainly can say the right things -- for example it has a page on its website critical of the current billion dollar plus aid package to Columbia that has been criticized by human rights and environmental activists. Yet in LCHR's criticism, does it bring serious pressure to bear upon these powerful interests? Nonprofit Watch has no reason to think it does.

Consider that United Technologies, manufacturer of Black Hawk helicopters, has been heavily lobbying for the aid package with all its military funding. If we look at the law firms representing United Technologies, we see that several also support LCHR. Cleary, Gottlieb, Steen & Hamilton; Covington & Burling; Crowell & Moring; Kirkpatrick & Lockhart; and Wachtell, Lipton, Rosen & Katz all provide pro bono support to LCHR. Of these, Cleary Gottlieb as well as Wachtell Lipton are major donors to the group as revealed by the group's 1998 annual report. Covington and Burling is represented on LCHR's board of directors. Now one could interpret this as a sign of the group's independence. LCHR is taking a stance in opposition to the interest of a client of these firms, United Technologies. Yet Nonprofit Watch views LCHR's role as pathetically weak, especially in light of the legal powerhouses that are affiliated with the group. If these firms truly care about human rights, why are they not applying their enormous resources to oppose the aid package. Well, it would lose them their client United Technologies and no doubt others as well. Moreover, the aid package appears to be rolling through Congress. Yet LCHR seems to barely be doing anything to bring attention to its concerns -- certainly no hunger strike from LCHR executive director Michael Posner; no sit-in at the White House or Congress; no activism that might embarass the administration or Congress; not even a measly lawsuit from this bunch of lawyers. In fact, Nonprofit Watch can find no news articles within the last 90 days where LCHR has been quoted raising the issue. Looks like the issue of the Columbian aid package is well on its way to being another successful loss for the human rights community (notable past ones being Rwanda and Nigeria.and multiple others). Students would be smart not to entrust their cause to such a squish -- weak and ineffective -- group as LCHR.

Based upon examination of LCHR's 1996 and 1998 annual reports, Nonprofit Watch strongly disagrees with some of LCHR's comments regarding its corporate funding. Because the original scans on our website were a bit fuzzy, better ones have been posted showing the financial statements of LCHR that are available to Nonprofit Watch. 1996 Financial Statement ; 1998 Financial Statement

LCHR says "a few" apparel companies support it. We counted six in the 1998 donor's list . Is six "a few?"

LCHR states that "corporate contributions have declined since 1996, both in actual amount received and as a percentage of its annual budget." Here exact figures are not available to to the public, so LCHR has to be trusted on this statement. Nonetheless, the statement is not clear to us and appears false based on the records of LCHR that we reviewed. According to the 1996 Financial Statement, corporate donations were $188,000 in 1996; in 1998 they were reported as $433,496 -- seemingly a major increase. Perhaps LCHR is referring to more recent figures? The 1996 corporate support is 5.4% based on the "total support and revenue" figure of $3,477,647. LCHR lists its annual revenue for fiscal year 1998 as $12.8 million, a major increase from 1996 because LCHR has decided to include a value of $8.2 million of "contributed services" from "lawyers and others" to LCHR. When this latter amount is subtracted, LCHR's monetary revenue drops to $4.6 million. Of this, $433 thousand comes from corporations. It is interesting to note that in the 1996 annual report, the figure for pro bono support was not included in the LCHR total revenue figure. While LCHR lists its 1998 corporate donations as 3.4%, when one removes the contributed services amount from total revenue, corporate donations actually represent about 9.5% of revenue. Was LCHR trying to hide the increasing corporate support by this accounting trick of conflating donated time and money? (Perhaps some math whizzes on this list could double check my calculations?)

LCHR's response claims that "FLA members contribute less than 1% to the Lawyers Committee's annual operating budget." This does not seem to have been the case in 1996. According to Corporate Giving Directory published by the Taft Group, in 1996 Reebok gave $315,OOO to the LCHR -- this would mean 9% of the budget that year came from just one apparel company. (Figure arrived at from calculation of 315,000 divided by 3,477,647.) Now if the group were a political party, one would presume that this was a hefty soft money donation made to buy influence. This seems to be at odds with LCHR's figure of $188,000 for 1996 -- perhaps it was spread out over several years in LCHR's accounting or occurred within a different part of the fiscal cycle than the one described in the 1996 annual report. This is unclear. In recent years a cursory examination suggests that Reebok's donations have been lower. Nonetheless, LCHR owes the public a full accounting of the contributions from Reebok and other apparel companies. However, one can probably bet that in the next annual report of LCHR, there will be a very evident decrease in corporate support. What will not be clear is whether this represents an actual decrease or in light of the Nonprofit Watch report, merely a facade since by law they are not required to disclose these donations. Regardless, it will not change the fact that LCHR is extremely cozy with the corporate sector, both directly (witness the International Rule of Law Council) and indirectly via corporate law firms.

This matter of finances raises a question regarding the "contributed services" of the corporate lawyers. Is this $8.2 million that LCHR assigns to "contributed services" based upon standard fees that these lawyers charge of $100 to 300 per hour? While acknowledging the importance of the pro bono effort, nonetheless these corporate lawyers are emblematic of the gross discrepancy in legal representation that exists in our society. To the wealthy and powerful there is unlimited legal representation while for many of the impoverished there is limited access to legal aid and patronizing pro bono contributions.

Finally, Nonprofit Watch reiterates the charge that these very law firms that provide funding, pro bono service, and oversight(through the board of directors) to LCHR at the same time represent a rogue's gallery of corporate scoundrels which profit by damaging the environment and ignoring human rights abuses. As a case in point consider the corporate law firm Davis, Polk and Wardwell. As Nonprofit Watch has shown in an in depth analysis, the firm has represented companies such as Freeport McMoran, Exxon, Mobil, and General Electric as well as apparel companies The Limited and VF Corp. (Read an article about a report from the National Interfaith Committee for Worker Justice which accused a VF Corp. contractor of abusing its workers.) Interestingly, this previous analysis was part of a critique of the Environmental Defense Fund, an environmental group that supported NAFTA and was silent in regards to Fast Track trade authority when the matter came to a major showdown a few years ago. LCHR took no stance on either of these trade debates, even though Pharis Harvey of ILRF had urged LCHR to consider involvement in the NAFTA agreement, a matter discussed in Nonprofit Watch's report. Interesting how Davis Polk Wardwell and its attorneys gravitate to groups that just happened to have not stood in the way of these controversial trade agreements.

LCHR may claim that regardless of the source, contributions to the group do not affect its independence. However, what does it say about LCHR's work if these companies are supporting it. Nonprofit Watch's interpretation is that elite and corporate interests prefer the incremental and moderate approach of LCHR based on the liberal paper tiger model of addressing human rights cases one at a time as opposed to systemic critiques and support for systemic action. There is no doubt a preference from the viewpoint of corporate interests for LCHR's approach which does not strongly challenge the political and corporate establishment. ("Oh please, LCHR -- Tongue-lash me! Tongue-lash me! Oh you brute LCHR. Please don't post a slap on your website.You're just so rough on us corporations. What can we do to please you?") Consider the struggle that students have carried out to force the apparel companies to disclose and begin seriously considering allowing a program to monitor their activities -- students have given up much of their time in pushing their cause -- sacrificed social life, adversely affected their academic performance, gone sleepless, fasted, been arrested, and much more. Could one say anything of that sort of LCHR. The apparel industry wasn't brought to the table of the Fair Labor Association because LCHR Executive Director Michael Posner and LCHR pushed them, but because of burgeoning grassroots activism around the country.

Emblematic of the coziness of LCHR to established interests, consider that at its 1996 annual Human Rights Award Dinner, Madeline Albright, then Ambassador to the United Nations, was a special guest at the dinner. You can find her smiling mug at the bottom of the page of LCHR's 1996 donors. Certainly it is desirable to dialogue with important government officials; however do you think she would want to join the dinner party if LCHR were pushing hard on issues of importance to the human rights community -- the drug war, the U.S. leadership in selling military arms around the world, constructive engagement policies as with Nigeria and China, the death penalty, etc. Nonprofit Watch believes not.

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The Response from LCHR as posted to United Students Against Sweatshop's Listserv:

Subject:
[USAS] REPLY TO ALL: Lawyers Committee for Human Rights Response to the Report of Nonprofit Watch
Date:
Thu, 6 Apr 2000 14:52:08 -0400
From:
Jobina Jones <JonesJ@LCHR.ORG>
To:
"'usas@listbot.com'" <usas@listbot.com>

U.S.A.S. - http://www.umich.edu/~sole/usas

> -----Original Message-----
> From: Jobina Jones
> Sent: Thursday, April 06, 2000 2:34 PM
> To: 'usas@listbot.com'
> Subject: Please Distribute to your listserv: Lawyers Committee for
> Human Rights Response to the Report of Nonprofit Watch
> Importance: High
>
>
>
Lawyers Committee for Human Rights Response to the Report of
Nonprofit Watch

* LCHR's Role in Addressing violations of Workers Rights
In its 22 years of operations, the Lawyers Committee has
built a reputation of independence and integrity. Consistent with a
commitment to promote labor rights as human rights, the Lawyers Committee
has criticized corporations, including several members of the FLA, for
practices that violate workers rights. We will continue to do so in the
future.

* LCHR involvement in the Fair Labor Association and Apparel Industry
Partnership
For the last three and a half years, the Lawyers Committee
for Human Rights has been actively involved in creating the Fair Labor
Association (FLA), a new non-profit organization aimed at protecting the
rights of apparel and footwear workers worldwide. The FLA Charter Agreement
creates a first of a kind industry-wide code of conduct and monitoring
system to reduce the scourge of sweatshop labor both in the US and abroad.

Our continuing participation in the FLA is based on our own
commitment to hold companies accountable to internationally recognized labor
rights standards. We, along with five other NGO's, will assume a seat on
the FLA Board and continue our role as an advocate for workers' rights. We
have also played a significant role in establishing an FLA NGO Advisory
council which currently has the support of 18 human rights, labor, consumer,
religious representatives from both the US and abroad. We believe the FLA
is an innovative model for empowering workers and NGO's to work together
with labor and corporations to improve factory conditions. For more
information see: www.fairlabor.org.

* LCHR's Funding Sources
Nonprofit Watch asserts that the LCHR has experienced "a
specific increase in apparel industry companies donating to the group since
the formation of the Apparel Industry Partnership." It goes on to charge
that "This coincides with a doubling of the general corporate contributions
to LCHR, quite likely in part from the sweatshop sector."

While the Lawyers Committee receives financial support from
a few apparel companies, FLA members contribute less than 1% to the Lawyers
Committee's annual operating budget. Contrary to the assertion of a
"doubling of general corporate contributions to the LCHR", corporate
contributions have declined since 1996, both in actual amount received and
as a percentage of its annual budget.