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 trustees.

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 developer interests.

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 of neutrality.

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 inaction.

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 movies."

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 .