FOR IMMEDIATE RELEASE –
E&E Legal Files Referral With IRS Regarding Sierra Club and Sierra Club Foundation Tax Law Violations
Washington, D.C. – Today, the Energy & Environment Legal Institute (E&E Legal) filed a formal referral with the Internal Revenue Service alleging the Sierra Club and the Sierra Club Foundation are in potential noncompliance regarding two areas of tax law: impermissible benefit to private interests and failure to pay taxes on unrelated business income. A detailed report authored by E&E Legal’s General Counsel David W. Schnare outlining the specific violations accompanied the IRS referral, which seeks the tax agency’s careful review and investigation into these potential tax law violations.
Regarding its failure to pay taxes on unrelated business income, the Sierra Club sends its members into communities to sell the products of a selected local solar panel company in Maryland, Utah and dozens of other states in exchange for contributions to the group. In Maryland, for example, the Sierra Club makes a $750 profit from every sale and has never paid taxes on that commercial enterprise.
As the Sierra Club’s Chief of Staff Jesse Simons has stated, “This has been a great revenue-generating tool for the Sierra Club.” The Sierra Club markets the products of a single company in each jurisdiction, in direct competition to several other similar companies who cannot rely on the Sierra Club sales force. “This violates the law,” says Schnare.
In terms of impermissible benefits to private interest, the Sierra Club’s use of its War on Coal not only produce profits, but apparently conspires with the companies that profit from that war. Eight of the Sierra Club Foundation’s 18 directors own or operate organizations that directly benefit from the War on Coal. These directors are the captains of the renewable energy industry. While the Sierra Club Foundation doesn’t pay these directors, their companies directly profit from the Sierra Club Foundation’s primary “program,” the War on Coal.
Beyond the illegal inurement to these directors’ interests is the direct benefit to major donors. Natural gas producer Chesapeake Energy paid $26 million to the Sierra Club for the express purpose of forcing coal-fired electricity companies to switch to natural gas. David Gelbaum, who controls more than 40 “clean tech” companies that directly benefit from forced shutdown of the coal-power industry, donated more than $100 million to the Sierra Club.
“The Sierra Club Foundation wages a war on coal to the direct financial benefit of its directors and top donors,” added Schnare. “This, too, is not lawful.”
Schnare notes that such IRS referrals are not unusual as they receive complaints from the general public, members of Congress, federal and state government agencies, and internal sources every year and the have established an office tasked exclusively to review these referrals. “The E&E Legal referral, however, is different from recent high-profile complaints to the IRS regarding nonprofits spending money in campaigns since our complaint is not about politics and political spending,” he adds.
Thirty-one years ago, Bruce Yandel coined the phrase “Bootleggers and Baptists” to describe how these strange bedfellows work together to corrupt the economy and the law. “Baptists” point to the moral high ground and give vital and vocal endorsement of laudable public benefits. Bootleggers are simply in it for the money. Today, Yandel’s theory is in full bloom and there is no more prominent “baptist” than the Sierra Club and no more prominent bootleggers than anti-coal/renewable energy businesses.
“These bootleggers and baptists have taken a step too far, and despite their claims of moral superiority, the Sierra Club has become a huckster for the bootleggers and the Sierra Club Foundation has been infiltrated and controlled by the bootleggers themselves,” said Schnare. “In so doing, they have broken the law,” he concluded.
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The Energy & Environment Legal Institute (E&E Legal) is a 501(c)(3) organization engaged in strategic litigation, policy research, and public education on important energy and environmental issues. Primarily through its petition litigation and transparency practice areas, E&E Legal seeks to correct onerous federal and state policies that hinder the economy, increase the cost of energy, eliminate jobs, and do little or nothing to improve the environment.
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This is not surprising, since the unholy relationship between big business and the governent has been getting more unholy as each year passes. It is not just eco-for-profit-interests, even though their lever for getting the government to do their bidding is the farce sometimes called Global Warming.
So when is a sum of money a donation vs. a profit? When the executive branch in charge allows it to be so through it’s influence on the IRS.
I’m sure the IRS and DoJ will get right on it /sarc
Thanks for finally talking about >Sierra Club and Sierra Club Foundation Accused
of Tax Law Violations; Liked it!
Different but similar investigations happening here in Canada, as many of these eco organizations (David Suzuki Foundation, etc.) have charitable status under Canadian Tax Law. Now don’t expect me to be able to explain the nuances of tax law, but in essence donations to these organizations are tax-deductible which means an effective subsidy. The question is why should a lobby group have charitable status just like an organization that provides the poor with food and clothing. Naturally, the eco-lobby groups are outraged, claiming political interference, etc.
Fair Tax
No exceptions, period.
http://fairtax.org/
Won’t work. It eliminates deductions for home mortgages and many other necessities. The flat rate is 23%. How long until the great and powerful government decides to make it 24%? And 25%? Soon, we’d all be paying the same highest rate as before, but without any shelters. Just another bad idea, like not buying gas on Wednesdays.
Part of what pains me about this story is the fact that Chesapeake Energy, which paid $26m to the Sierra Club to undermine the coal industry, is a HUGE recipient of taxpayer subsidies. They have paid an effective tax rate of less than 1% on $5.5b of taxable profits. This is nothing less than the work of the Green Mafia, and it’s subsidized by us.
If you make them raise their taxes congress will let them raise their prices to cover it.
We lose either way.
green crooks
More kleptocracy.
Easiest way to power, seize the bureaus and hide in the woodwork.
The Brits has a sitcom Yes Minister, that gently mocked this, but we can no longer afford the bite being put on us.
Those fundamentals of civilization are always the first things cast aside in the name of great causes and self enrichment.
The level of corruption at the Sierra Club must be unpalatable.. as evidenced by that Polar Bear which pulled a SC lawyer out of his tent and then spat him out.
However this corruption is government.
Unless kept on a strict diet and mandate, government is a cancer.
Simply because it is so easy for ethically challenged persons to thrive inside the bureaus.
It may be a necessary prerequisite for those seeking these positions.
Same reason our Progressives are comparable to RUST.
Charges could and should be brought against Sierra Club in each and every State they failed to pay state and local income/business taxes. Every State should initiate a tax evasion suit against Sierra Club, forcing them to spend their legal resources (money and manpower) on a host of court cases, and endeavor to bankrupt them by legal expenses, recovered taxes plus interest, and penalties.
Especially large penalties…..
This is the same method Sierra Club uses to delay pipelines and prevent private and public lands from economic use. Turnabout is fair play! And would be sweetly ironic justice!
Mac the Knife,
IMHO, that’s where they should have started. If local jurisdictions rule that taxes are due, that is harder for state and federal jurisdictions to reverse.
But if the feds don’t stop these shenanigans, the locals don’t have much chance of collecting their taxes.
“The IRS Is No Longer Needed
No more complicated tax forms, individual audits, or intrusive federal bureaucracy. Retailers will collect the FairTax just as they do now with state sales taxes. All money will be collected and remitted to the U.S. Treasury, and both the retailers and states will be paid a fee for their collection service.”
If find this “No need for an IRS” argument ludacris. If there are taxes, there will always be an agency to collect them. Call it what you want, there will be some part of the government to collect taxes and enforce the laws.
Even states with no income tax have revenue departments.
There is nothing fair about the FAIR tax.
Old retired folks, having been taxed on their profits from profitable enterprise, all of their lives, look forward to the end of income, and income taxes, so they can retire on what they were able to protect from stupid taxes on savings.
So now you FAIR goons, have figured out how to keep taxing them to death, by switching from taxing a renewable resource (income), to taxing a fixed and rapidly losing to inflation retirement nest egg.
A px on you and your FAIR tax. You can only tax a profit making and renewable resource, which is income.
I’m not sure what a px is or why you called me a goon. I’m not even in a union.
If you want less profit making, income and savings…tax it. I believe that’s how economists say the system works.
Some people believe since retirement money has already been taxed they’re done.
But!
Consumers (including seniors) currently pay corporation business taxes, plus the employer and employee federal taxes (and more) every time they purchase anything.
The FairTax is replacement, not reform!
It replaces federal income taxes including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes. Federal taxes are replaced by a single federal sales tax at the point of sale.
A great feature is it will eliminate congress’ ability manipulate the tax code for favors.
Plus!
It will remove the IRS need for personal data collection and help take the IRS out of our lives. They won’t need to know how much money you make or even how you make it. Your salary and benefits are between you and you employer. Money is taxed when it is spent so if you’re an illegal alien, a Wall Street broker, in some other bookmaking business, a pastor in a church or a kidnapper you will pay federal taxes and the government will get their vig. No exceptions.
What concerns me is you’re sounding like the folks in congress that got us in this financial mess.
They don’t like the FairTax either but, I understand their reason.
Do you have a workable solution that can slow down government growth?
I’m pro Fair Tax but mostly anti IRS and government reach.
The FairTax is a replacement tax. It is not an additional Value Added Tax (VAT).
http://fairtax.org/faqs/
mikerestin,
This FairTax is similar to the GST that is collected in Australia and New Zealand. It is not a guarantee of anything in terms of tax collection. All you end up encouraging is a cash based economy. Pay cash = pay no tax.
Simples …
Truthseeker
I appreciate your position but people already cheat on their taxes.
Congress has the responsibility to levy taxes but they must do it without violating the Constitution.
This is the least intrusive method of collecting necessary taxes.
If I work a 40 hour week at $50/hr I get my $2,000.
It’s impersonal and if millionaires and billionaires want to buy a $25M houseboat pay the tax.
We need to revenue to cover $3B – $4B dollars in spending or slow down congress’ spending.
Please feel free to provide workable suggestions.
It doesn’t matter, neither the IRS nor the DOJ will do anything about it. You notice that none of the MSM has said a word about this issue. There is no way that the Obama administration and the people that work for it are going to do anything but say, “So what, who cares what E&E Legal thinks?”
I find it amazing it doesn’t even bother you that we are getting shafted.
Are we just good little sheeple?
I think you read my comment entirely incorrectly. I am pointing out that it doesnt matter, because the government isn’t about to do anything that will damage the reputation of the Sierra Club and there is nothing that normal people can do to fix the problem short of asking god to hit it with an asteroid.
On what basis was the particular ‘solar panel installation company’ chosen for each particular ‘franchise’?
One would like to think that these were companies that delivered a high quality product, good value for money, extended warranties and excellent after sales service!
The marketplace is the mechanism to guarantee all that. We don’t need either the government or the Sierra Club to make our decisions on such investments.
“A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator’s family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests.” – the IRS
The directors at issue are uncompensated which is good, but they are alleged to have ties to for profit companies that do benefit from this ‘campaign’. The campaign is arguably not political but many points of view say that it is with coal being penalized to the benefit of other providers. We are in a gray area of the law it seems to me. When does a charitable campaign become too political? What would lead the Sierra Club back onto safer ground? Get some new directors without ties to companies that would benefit from the demise of coal.
Well, I guess that is what happens when the IRS is focused only on “Radical Right Wing” groups. The left knew this, and knew they had a free pass to do whatever they liked.