Non-Profit Cronyism

By Jack McMullen

Back in the 1960s when the first Public Interest Research Group was established in Washington, DC by Ralph Nader and into the 1970s and 1980s when the movement spread to college campuses around the country, these organizations really did fulfill their stated mission of representing the public interest when the voices of ordinary citizens were drowned out by special interest lobbyists. Over the years, they took on and changed the law on issues of auto safety, water pollution, worker health and safety, unjustified utility rate hikes, toxic waste, mandatory bottle recycling, credit card and banking fees, and many others.

The campus-based PIRGs were initially funded by controversial, automatically billed student activity check-off fees. Later, these organizations morphed into state PIRGs funded chiefly by foundations and wealthy individuals while still nominally student activist organizations. Today, they are permanent, non-profit entities with paid lobbyists. Although they claim to be wholly autonomous in their operations, they are funded by many of the same foundations and wealthy donors.

In the years since they took root in the 1970s, these organizations have evolved in many cases to represent causes other than the “public interest” as that phrase is commonly understood. Often those causes are championed by its foundation or wealthy funders; in other instances they advance the interests of private sector businesses whose executives serve on their Boards.

VPIRG, active since 1972, is one of these. It portrays itself today as one of Vermont’s most successful public watchdog organizations “promoting and protecting the health of Vermont’s environment, people, and locally-based economy”.

Some of what it does accomplishes that mission. For instance, recently VPIRG’s collaboration with the Alliance for a Clean and Healthy Vermont, financially supported by the Johnson Family Foundation and the Lintilhac Foundation, was successful in eliminating harmful phthalates (plasticizers) from children’s toys in the state.

But there is a darker side to VPIRG’s activities these days. For instance, VPIRG’s relentless efforts to shut down Vermont Yankee, an activity financially supported and lauded by the Lintilhac Foundation which cites VPIRG as one of the Foundation’s partners. Another of Lintilhac’s partners is the Conservation Law Foundation, also a tireless opponent of the continued operation of Vermont Yankee.

Now let’s have a look at current and recent past members of VPIRG’s Board of Trustees. When we do, we find an interlocking web of private sector, Democratic elected official, foundation, and non-profit components rife with many overlapping conflicts against the public interest which the organization purports to serve.

In this example and similar situations, VPIRG appears to be advancing the personal agendas of its Board of Trustees.

These Trustees presently include: officer trustees, Mathew Rubin (East Haven Windfarm entrepreneur and developer of other alternative energy projects) and Crea Lintilhac (a Director of the Lintilhac Foundation), trustees Ed Flanagan (former Democratic state senator), Floyd Nease (former Democratic Majority Leader of the Vermont House), Mark Sinclair (former senior attorney and VP of the Conservation Law Foundation), Drew Hudson (former fellow at MoveOn.org), and Duane Peterson (former Democratic and progressive political operative and, more recently, adviser to Ben Cohen of Ben & Jerry’s on alternative business projects).

Recent past trustees have included: David Bittersdorf (CEO of Earth Turbines and founder of NRG Systems — wind power related companies), David Rapaport (who worked five years for Mathew Rubin’s East Haven wind company), and Leigh Seddon (founder of Solar Works, a renewable energy and contracting firm). In addition, past Vermont Democratic Party chairmen Scudder Parker and Ian Carleton as well as former Democratic state senator and now governor, Peter Shumlin, have worked for or closely with VPIRG.

What has this witch’s brew of intertwined relationships wrought? David Bittersdorf (sometimes with his wife) has been a heavy contributor to the state Democratic Party, its Vermont Senate 2010 campaign, and Democratic gubernatorial candidate, Peter Shumlin. Doubtless he is also a contributor to VPIRG on whose Board he sat for a number of years though we can’t know for sure how much since the organization has no obligation to disclose the names of individuals who contribute or the amounts.

One example of the apparent return on these investments is Bittersdorf’s alternative energy projects receiving $4.3 million (of a total of $7 million) of tax credits from Vermont’s Clean Energy Development Board on which David Bittersdorf served until shortly before the award.

In addition, VPIRG never misses an opportunity to lobby for shutting down Vermont Yankee, a carbon-free energy source that wind and solar companies would be unable to compete with in a free and open market. Another competitive problem for wind and solar is Hydro Quebec, also with zero carbon emissions, a clearly renewable and low-cost resource. VPIRG successfully lobbied to classify it as non-renewable (since rescinded as opponents protested this obviously absurd classification).

Moreover, VPIRG has successfully lobbied for large state subsidies (paid for by taxpayers, of course) for wind and solar energy as well as for mandates on utility companies to buy specified amounts of power from these sources — without which these projects could not survive in the open market.

VPIRG’s success appears to be a direct result of its great influence upon, and cozy relationship with, the Vermont Democratic Party and its elected officials.

The net effect is reminiscent of the culture of a banana republic in the early 20th century where well-connected private individuals direct public resources to their own interests by cultivating and controlling the government which allocates them.

The wrinkle in Vermont is that the vehicle for doing this is a “public interest” non-profit. We could call this phenomena non-profit cronyism.

Jack McMullen of Burlington is Managing Principal of the Cambridge Meridian Group, Inc., a strategy consulting firm serving Fortune 500 and technology-oriented companies, a Board member of GBIC and of AIV, and a director of the Ethan Allen Institute. He was the 2004 Republican nominee for the U. S. Senate from Vermont.