Environmentalism on the Take -- SUMMARY
That special interests corrupt the political process is practically
a cliche. A new report, Environmentalism on the Take, from
Nonprofit Watch charges that a leading environmental group has
succumbed to the same subversion. The Natural Resources Defense
Council(NRDC) objects to the influence of polluters' campaign
contributions, yet the organization has tailored its own environmental
policy to protect the business interests of its contributors and
For the last decade, grassroots environmentalists in Los Angeles
have engaged in a heated battle to protect the Ballona Wetlands
and surrounding open space from a massive development named Playa
Vista. On this matter, NRDC has staked out a position of "neutrality."
Meanwhile, several of NRDC's trustees are linked to the developers
of the wetlands, and NRDC has accepted financial support from
NRDC's refusal to oppose the controversial Playa Vista development
is understandable in light of the following conflicts of interest.
Frederick Schwarz, NRDC's chairman
since 1992, is a senior partner in the law firm of Cravath, Swaine
& Moore, whose clients include Goldman Sachs, Morgan Stanley
Dean Witter, and DreamWorks SKG. Goldman Sachs and Morgan Stanley
are the leading investors in Playa Capital, a real estate consortium
planning to construct Playa Vista, a "mini-city" on
two-thirds of the Ballona site.
Morgan Stanley Dean Witter is listed
in NRDC's 1999 annual report as providing "$1,000 or more"
to the NRDC through "purchase of tables or gifts in kind
to NRDC benefits in San Francisco." By underwriting an NRDC
fundraiser, Morgan Stanley implicitly endorses, if not rewards,
the organization's silence on the Ballona controversy. Meanwhile,
lawyers for Morgan Stanley and Goldman Sachs have sent threatening
letters to grassroots activists attempting to distribute information
about toxic gas risks at Ballona.
DreamWorks SKG, the Hollywood partnership
of Steven Spielberg, Jeffrey Katzenberg and David Geffen, had
planned a studio at the Ballona site, but withdrew in 1999. IRS
records from the foundation of DreamWorks partner David Geffen
show that the foundation gave NRDC $75,000 from 1994-'96. According
to NRDC annual reports, the Geffen Foundation also contributed
over $10,000 in 1999 and made donations to the group in other
years as well. Furthermore, two NRDC trustees, one a former chair
of the group, belong to the law firm Paul, Weiss, Rifkind, Wharton
& Garrison that represents Mr. Geffen.
Yet another attorney serves on NRDC's
board under the shadow of conflict of interest. Frederick A.
Terry, Jr.'s law firm, Sullivan & Cromwell, has represented
Goldman Sachs, a developer of the Playa Vista.
Joel Reynolds, a senior staffer in
the Los Angeles office of NRDC, previously worked for a group
that had reached a settlement with the Ballona developers. He
has told activists that the terms of the settlement restrain
him from actively opposing the development; strangely, however,
he has represented NRDC at meetings regarding Ballona and spoken
out on the matter in recent years, professing NRDC's "neutrality"
and giving indications of tacit support.
NRDC trustee Robert Redford had pursued
a movie deal with DreamWorks a year before DreamWorks withdrew
from the Playa Vista project. Furthermore, NRDC has other strong
ties to the upper echelon of Hollywood that would make it all
the more awkward for the group to challenge a major studio.
NRDC's neutrality regarding the Ballona Wetlands is selective
at best. With multiple clear conflicts of interest, NRDC should
have conspicuously recused itself from the controversy, publicly
explaining its conflicts of interest rather than adopting a stance
Environmental writer Mark Hertsgaard describes the Ballona
Wetlands as "a 1,087-acre oasis of greenery and wildlife...
a Central Park sitting right under [L.A.'s] nose, waiting to be
noticed." Despite its intrinsic value to smoggy, park-starved
Los Angeles, Ballona is slated to be one of the biggest real estate
developments in the city's history with help from NRDC's
The Ballona case is not an isolated issue of conflict of interest
for NRDC; through its leadership NRDC is interlocked with major
corporations at odds with environmentalists. Cravath, Swaine &
Moore, the law firm of NRDC's chairman, has represented the major
U.S. financial backers of the controversial Three Gorges Dam in
China a project opposed by many environmental and humanitarian
groups about which NRDC has done little. Cravath also represents
Royal Dutch Shell, which spilled oil throughout the indigenous
Ogoni homeland in the Nigerian Delta and then funded military
repression and execution of Ogoni leaders who complained. If NRDC
actively sought justice from Shell for its activities in Nigeria,
this would conflict with the interests of Schwarz and Cravath.
Is NRDC a real environmental advocacy group, or just a greenwashing
facade for the rich and corporate fatcats? Chairman Schwarz is
related to the founder of F.A.O. Schwarz, the upscale toy store;
and the family of NRDC's executive director Frances Beinecke owned
Sperry and Hutchinson, the company that issued grocery store "Green
Stamps" rewarding consumption. These pedigrees symbolize
the nature of NRDC's advocacy it suits the needs of the
wealthy and places a green fig leaf over industrial society. The
Ballona wetlands may be a local concern, but on several major
environmental issues like NAFTA and nuclear stranded costs, NRDC
has consistently taken positions that favor corporate interests
and alienate other environmentalists of integrity. Ironically,
NRDC is also in conflict with the celebrated Norwegian environmental
group the Bellona Foundation in regards to an NRDC-supported
plan to ship foreign nuclear waste to Russia.
"NRDC's neutrality on the Ballona Wetlands can't be taken
seriously -- the group takes money from the developers of the
wetlands and its board of trustees is polluted with lawyers whose
corporate law firms represent the developers. NRDC has a vested
interest in looking the other way. Apparently NRDC's environmental
policy is as corrupt as Beltway politicians and fictional as Hollywood
Based in Washington, D.C., Nonprofit Watch examines conflict-of-interest
issues among nonprofit organizations. For more information and
a copy of the report on NRDC and the Ballona wetlands, contact
Nonprofit Watch at (202) 318-1106. The report is also available
on the web at www.nonprofitwatch.org .