by Iain Murray
October 29, 2003

"Have you got a minute for Greenpeace?" ask the enthusiastic young people who often waylay pedestrians on Washington, D.C.'s Farragut Square. Knowing a bit about the organization, I normally answer, "Not even a second." But the rainbow warriors might soon be facing several years to think about their actions.

A nonprofit watchdog organization, Public Interest Watch, after investigating Greenpeace's finances, recently filed a complaint with the IRS alleging that Greenpeace has "illegally solicit[ed] millions of dollars in tax-deductible contributions." As those young activists might say, "Uncool!"

Greenpeace has changed a great deal since its founding in the early 1970s.  It began as a group dedicated to ensuring conservation by confronting people with the facts while maintaining a neutral position politically. It has now become a different beast entirely.  Greenpeace co-founder Patrick Moore left the movement after 15 years "to switch from confrontation to consensus… to stop fighting and start talking with the people in charge." However, he notes, "this would bring me into open and direct conflict with the movement I had helped bring into the world. I now find that many environmental groups have drifted into self-serving cliques with narrow vision and rigid ideology… The once politically centrist, science-based vision of environmentalism has been largely replaced with extremist rhetoric."

Moore is not alone.  Greenpeace began as several different organizations, most of which consolidated into Greenpeace USA and Greenpeace International.  However, one of the original bodies, Greenpeace Foundation, Inc., based in Hawaii, refused to do so.  Like Moore, Greenpeace Foundation is openly critical of Greenpeace USA and Greenpeace International, whom they accuse of deceptive fundraising tactics, anti-Americanism, and failure to do much for wildlife preservation (especially in the case of dolphins).

It is this consolidation that is at the core of Public Interest Watch's complaint.  Greenpeace USA is in fact two different organizations. Greenpeace, Inc. is the main entity conducting Greenpeace operations in the United States.  As a tax exempt organization under section 501(c)(4) of the internal revenue code, it is free to lobby for legislation "germane to the organization's programs" and to engage in other advocacy activities, but because of these freedoms, it may not accept tax-deductible contributions. Greenpeace Fund, Inc., on the other hand, is a 501(c)(3) organization, and can accept tax-deductible contributions but cannot engage in lobbying or advocacy. Any funds it spends must by law be spent on strictly-defined charitable purposes, such as education.

However, Greenpeace Fund's definition of "education" stretches to include advocacy and activism -- and so does its money.  The complaint, citing Greenpeace Fund's tax forms, alleges that, in 2000, the organization passed all of the money that it raised on to Greenpeace Inc, based in Washington, Greenpeace International, based in Amsterdam, and a few other affiliates.  In 2000, according to its IRS returns, Greenpeace Fund raised $7.5 million, while disbursing $4.5 million to Greenpeace, Inc., $3.7 million to Greenpeace International for "general support," and $0.8 million to other Greenpeace organizations and projects around the world.

According to the complaint, Greenpeace Fund acts solely as "a shell corporation established for the purpose of enabling tax-deductible contributions from big donors and from foundations to flow illegally to Greenpeace, Inc. and Greenpeace International."

The law states that a 501(c)(3) organization will not retain its tax-exempt status, "if more than an insubstantial part of its activities is not in furtherance of an exempt purpose."  Given the activities of Greenpeace, Inc., Public Interest Watch argues that "grants made by Greenpeace Fund, Inc. to Greenpeace, Inc., suggest that charitable funds are being spent for non-501(c)(3) purposes. The grants to Greenpeace International and other foreign Greenpeace organizations, which are known to frequently engage in aggressive advocacy efforts, also point to an abuse of charitable trust."

Public Interest Watch gives the following examples of exempt funds being used to support non-exempt advocacy and activism:

·         Campaigning against genetically-modified crops;

·         Blockading a naval base in protest of the war in Iraq;

·         Boarding an oil tanker for a "banner hang";

·         Breaking into the central control building of a nuclear power station; and

·         Padlocking the gates of a government research facility.

Greenpeace has reacted strongly to the accusations. "There really is no story there … There's no merit to what they are accusing us of," a Greenpeace spokesperson told National Review's Deroy Murdock. "Given the severity of these accusations by Public Interest Watch, Greenpeace USA is now considering its various legal options." So should the IRS.

If Greenpeace is found guilty of illegal accounting practices, it will be a huge moral blow to all those well-meaning people who have had "a minute for Greenpeace." However, it is not as if many who were there at the beginning, like Patrick Moore and Greenpeace Foundation, did not warn us.