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 they 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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