Big Change has a Big Problem
The Firebreak Celebrates a US Decision to Force Activists and Foundations to Finally be Transparent
For the last ten years, the Big Change activist movement has benefitted from unlimited dark funding coming from billionaire philanthropists, funneling hundreds of millions of dollars into their networks of NGOs, law firms, large media groups, academics, scientists and influencers to control public policy. A large part of this money was undeclared, non-transparent and free from scrutiny as Big Change bought control of the public narrative, from climate hysteria to chemophobia, from fast food to pharma, from the microplastic mania to the arbitrary rejection of vaping and nicotine pouches as tobacco harm reduction tools…. Forcing their needless transitions on consumers, affecting western economies and prosperity, Big Change then moved to the task of dismantling capitalism and industrialization … that is … until somebody pulled the plug on the party.
Yesterday (April 23), the US Department of the Treasury announced that organizations claiming tax exempt status (NGOs, foundations, universities and some media groups) will have to be transparent about who is funding their projects and campaigns. The Firebreak has spent three years exposing a series of egregious violations where foundations were spending hundreds of millions of dollars creating NGO front groups, false research centers and media reporting organizations to advance their interests. Today we celebrate this announcement as the first step in a return to fairness in the policy arena.
This does not mean the misuse of foundation funding will end, but that it can no longer enjoy tax exempt status (ie, paid for by taxpayers). As billionaires hate to pay taxes, it will force most activist funding out into the light of day. The press release notes how fiscal sponsorship has been misused to hide abusive activist behavior.
“Fiscal sponsorship is an umbrella term for several longstanding and lawful structures through which a tax-exempt organization may support charitable projects and initiatives. Recent congressional oversight has raised concerns that some fiscal sponsorship arrangements may be used to obscure who is operating a project, who controls project funds, and how those funds are being used.”
The fact that fiscal sponsorship hides funding sources is one issue, but activist groups also pretend to be NGOs or legal entities when they don’t actually exist outside of the fiscal sponsoring organizations. As they are not legal entities, there is no accountability. In the Department of the Treasury’s press release, Scott Bessent states:
“When bad actors misuse charitable structures, directors and officers should understand that transparency can lead to scrutiny, accountability, and liability under the law.”
Big Change should be able to understand this given how NGOs like US Right to Know or Corporate Europe Observatory demand that industry be transparent. As these two NGOs are, themselves, funded by dark, donor-advised funds, the hypocrites actually thought the rules did not apply to them.
A good example of this was in the three-part Firebreak exposé on Beyond Plastics, a phantom NGO run out of a tiny academic institution in Vermont, Bennington College, acting as its fiscal sponsor. While there is no declaration of how much Beyond Plastics receives (as it only exists as a project sponsored from within Bennington College), it is known that Bloomberg Philanthropies has committed $85 million to the Beyond Plastics and Beyond Petrochemicals “projects” (and that the foundation is a donor to Bennington). But worse, how can a phantom NGO be held accountable if they don’t exist? When Beyond Plastics published false claims about the safety of plastic (PVC) water pipes, the industry body wanted to file a complaint, but to whom?
Q: How much is a 15% administration fee on $85 million?
A: Enough to hold your nose and stay quiet.
Bennington simply ignored the complaint and put Beyond Plastics’ false claims down to “academic freedom”.
Even more ridiculous is that the head of Beyond Plastics, Judith Enck, was allowed to testify in front of Congress representing this phantom NGO to advance her campaign. Judith must be exhausted after having to cover up so many years of deception.
A Call Finally Answered
The Firebreak has been regularly calling for the removal of the tax exempt status of any non-transparent donations, arguing it would reduce corrupt campaigns and the manipulation of policy debates. See below, for example, our recent recommendations to end conflicts of interest within the scientific community (where researchers are paid dark money to generate studies creating a baseless fear of microplastics).
Why is this Important?
Activist groups have been using this dark money loophole to hide funding, conflicts of interest and accountability for their claims. People can easily be bought (sorry) and some bad actors have destroyed the good will and public trust of NGOs. This is why The Firebreak proposes a distinction between humanitarian-based civil society NGOs and policy lobbying non-profits (that should be called: Alternative Policy Enterprises).
Take, for example, the smoke and mirrors show at Earthjustice. Registered as an NGO (tax exempt), this organization functions like a law office, filing lawsuits to support other activist campaigns. They have an annual budget of over $200 million although they only earn around $5 million in awards from successful lawsuits, which means not only that they must not be very good lawyers, but that the rest of their budget must come from donations or investments. But donations from whom?
The NGO is not at all transparent. A look at their 2023 IRS Form 990 shows that they received two donations from two “persons” totaling over $29 million. Earthjustice does not have to declare who paid this pseudo-law firm such large, kind grants. The only thing we are allowed to know is that this funding was tax-deductible (so a part of these millions was courtesy of the American taxpayer).
It is not correct for an organization that functions as a law firm, filing lawsuits against industries (and thus in favor of the interests of other industries), to take any anonymous donations … of any size. But this illustrates how corrupted the practice has become. Earthjustice no doubt believes that they are doing “God’s work” and can be trusted with such dark money, without having to reveal what earmarks or which interest groups were involved in $29 million worth of lawsuits. But in reality, whoever donates $15 million to a law firm has a clear interest in the outcome of the lawsuit (likely for some alternative product that will benefit if its competition is banned or bankrupted).
The presence of hundreds of millions of dollars via dark foundation funding tools has skewed policy debates, allowing activists to control the narrative, media groups, scientists and law firms. It has created a monolithic policy force dubbed “Big Change”. The decision of the Department of the Treasury to finally demand transparency and accountability will make important inroads into dismantling the Big Change policy dominance.
But don’t think for a moment these activists will just give up and come clean. They are not willing to go back to begging for funds or not controlling the narrative. They are not willing to give up the private jets and move back into the strip mall. Big Change organizations still have other tools at their disposal to hide donations from special interest groups, like dark donor-advised funds. The Firebreak will continue to expose these violations until a certain degree of fairness and transparency returns to the policy arena. But for now, let’s celebrate this win.