For Immediate Release:
October 2, 2014

Contact:
Craig Richardson
Richardson@eelegal.org

E&E Legal Asks FEC Chairman to Investigate Sierra Club Concerning the Group’s Latest Smear Ad in Iowa Senate Race for Potential Campaign Disclosure Law Violations; E&E Legal Also Files Addendum to IRS Referral Regarding Additional Possible Tax Law Violations

 Washington, D.C. – Today the Energy & Environment Legal Institute (E&E Legal) sent a letter to Federal Election Commission (FEC) Chair Lee Goodman asking the FEC to investigate potential federal financial disclosure violations by the Sierra Club in the wake of their recent $1 million ad buy aimed at smearing and defeating Republican State Senator Joni Ernst in her bid for the U.S. Senate.

On September 18, 2014, the Sierra Club announced that its Super PAC, the Sierra Club Independent Action, “bought nearly $1 million worth of television airtime in Iowa, in a strong push to defeat Republican State Senator Joni Ernst.” This comes on the heals of a $1 million ad buy over the summer targeting Ernst by a coalition of leftist groups that included yet another Sierra Club entity, the Sierra Club Political Committee, the Environmental Defense Action Fund, and the League of Conservation Voters.

Earlier this year, a similar coalition of leftist green groups also teamed-up to support U.S. Senator Kay Hagen of North Carolina, and Congressman Gary Peters, who is running for U.S. Senate in Michigan. According to the Wall Street Journal, several “green groups including the Sierra Club, the Environmental Defense Fund, and the Sustainable Business Council Action Fund, will pay for $2.5 million in TV and digital issue ads supporting embattled Sen. Kay Hagan in North Carolina, and Senate candidates Rep. Gary Peters of Michigan.”

In its latest Federal Election Committee disclosure (August 31, 2014), the Sierra Club Independent Action Super PAC reported raising only $23,451.88 since January 1, 2014, and the group had less than $50,000 Cash on Hand. The key question is, how did the Sierra Club Independent Action come up with a $1 million a couple of weeks later for a smear ad in a key U.S. Senate race?

The answer may lie in the Sierra Club Independent Action’s 2012 campaign cycle actions. In that cycle, the Sierra Club contributed a total of $700,000 in cash to its Super PAC, $640,000 of this coming in one lump sum on September 30, 2012, according to their FEC disclosure filings. Its total individual contributions for the entire 2012 cycle was $1,220,969, meaning that 57% of the Super PAC’s total receipts came from the Sierra Club itself, and 52% of the total for the entire cycle was transferred from the Sierra Club to its Super PAC within weeks of the November 2012 elections.

“The heart of the issue is that the Sierra Club, through its 501 (c) (3) and/or its 501 (c) (4), is raising money and hiding the identity of its donors, and then at least in 2012, within weeks of a critical election, making a huge transfer of money to its Super PAC to try to influence the results of the elections,” said E&E Legal General Counsel David W. Schnare. “While we don’t yet know where the Sierra Club came up with the additional $950,000 for their latest ad buy in Iowa, it’s likely some of this came from the Sierra Club itself. This is a clear violation of donor disclosure laws since the net effect is to hide the identify of individual donors through the use of the Sierra Club non-profit groups, and we have asked the FEC Chair to investigate this matter.”

Schnare also points to the hypocrisy of the Sierra Club attacking other groups involved in elections for not disclosing their donors when they are doing the exact same thing. In July of 2012, as the United States Senate considered a bill (DISCLOSE Act) that would potentially shine more light on groups spending money to influence elections, the Sierra Club Executive Director Michael Brune said, “It’s…no secret that our nation’s political discourse has hit an all-time low while the mud-slinging and flat out lies are at an all-time high…That’s why the Sierra Club supports the DISCLOSE Act, which is aimed at establishing transparency in election spending and money in politics.”

“I’m sure we can all sleep better knowing the Sierra Club, which has covertly spent millions of dollars trying influence key races, whose high priced Washington and state-level lobbyists help steer policies that personally benefit its directors, and which has made a killing off of green marketing schemes, is leading the charge for greater transparency and accountability in our political and democratic process,” said Craig Richardson, E&E Legal’s Executive Director. “This is the epitome of hypocrisy and it’s exactly why so many people today are turned off by Washington, and its approach to politics and policy making,” he added.

The recent Sierra Club Independent Action Iowa ad itself echoes this hypocrisy. In the ad, a woman accuses Ernst of allowing the “Koch Brothers…who don’t even live in Iowa,” to run $3 million dollars of ads on her behalf. She continues that they can buy a lot of ads, but “they can’t buy our votes.” This is exactly what the Sierra Club, a San Francisco-based national organization with hundreds of millions of dollars and a behemoth operation in every state and many municipalities, is doing in Iowa.

Schnare also noted that E&E Legal is filing an addendum to a referral and accompanying report it sent to the IRS on September 17, 2014 asking the agency to investigate possible Sierra Club tax violations centering on the group’s directors financially benefitting from the non-profits activities, and their non-reporting of income from commercial enterprises. The addendum to this referral asks the IRS to investigate whether the Sierra Club’s 501 (c) (3) or (c) (4) laundering of money to its Super PAC for the purchasing of ads and other campaign expenditures violates non-profit tax law regarding electioneering activities.

“Shame on the Sierra Club,” said Schnare. “This is an organization with a proud history of conserving the environment for generations of Americans beginning in the late 1800s. We have heard from local Sierra Club members who are extremely concerned about the direction the national organization has drifted in the past twenty years or so. These are ‘boots on the ground’ people who are dedicated to the cause of a clean environment, who are doing something about it at the local level, and who I know could use $1 million a lot more effectively than the national group run by a bunch of political hacks spending it on negative ads in a Senate race in Iowa,” 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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