Public tax filings show that in 2017 and 2018, a San Francisco-based non-profit with ties to key funders of the “Exxon Knew” campaign gave roughly $1.75 million in grant money to the for-profit law firm Sher Edling – the firm recently hired by Washington D.C. Attorney General Karl Racine to sue ExxonMobil, BP, Chevron and Shell for allegedly misleading consumers on climate change.
Resources Legacy Fund (RLF) claims it works “closely with philanthropists to achieve significant outcomes,” focusing on “conservation of land, ocean, and water resources, climate change resilience, and conservation funding and policies that benefit all communities.” However, it appears they left out one key item: funneling well over a million dollars to a for profit law firm.
Climate Litigation and “Exxon Knew” Campaign Ties
RLF gave Sher Edling a $432,129 grant and a $1,319,625 grant in 2017 and 2018, respectively.
RLF’s grants to Sher Edling are all the more notable when you consider the groups funding the foundation. Over the past several years, RLF has received hundreds of thousands of dollars in donations from the foundations behind the “Exxon Knew” campaign; specifically, the Rockefeller Brothers Fund and Rockefeller Philanthropy Advisors. In 2018 alone, the Rockefeller Brothers Fund gave RLF $175,000, while Rockefeller Philanthropy Advisors contributed $301,000 to RLF that same year.
Moreover, RLF provides grants to the activist groups active in the “Exxon Knew” campaign. For example, from 2015 to 2016, RLF gave a combined $170,000 to the Union of Concerned Scientists, a driving force in the campaign since co-hosting the 2012 La Jolla Conference where the playbook for bringing climate litigation against energy companies was conceived.
Getting Paid Twice?
Taken together, the connections between RLF, Sher Edling and the “Exxon Knew” campaign raise more questions than answers.
First, is it legal and appropriate for a private law firm to accept tax exempt grants from a private foundation? It is unusual for a private foundation such as RLF to provide a tax-exempt grant to a non-charitable organization, but it’s permitted if used for very specific purposes. According to the U.S. Internal Revenue Service:
“A private foundation cannot make a grant for a purpose not described in section 170(c)(2)(B) of the Internal Revenue Code. Permitted purposes are religious, charitable, scientific, literary or educational, fostering national or international amateur sports competition (but only if no part of the activities involve providing athletic facilities or equipment), and preventing cruelty to children or animals.”
It is not clear from RLF’s disclosure forms what work their grants are supporting at Sher Edling. The grants are only listed under the broad categories of “land or marine conservation” and “advancing healthy communities.”
Second is the question of whether Sher Edling is effectively being paid twice for the same work. Sher Edling is representing its clients on a contingency fee basis – an agreement that the firm won’t be paid directly for their work during litigation but, if successful, will be rewarded with a percentage of the total damages. In the Washington D.C. case, for example, the two firms (Sher Edling and Tycko & Zavareei) stand to make up to $70 million if they win the case. Considering contingency fees allow for plaintiffs’ attorneys to be compensated only if they are successful, in principle, they disincentivize lawyers from bringing countless frivolous lawsuits against companies in the hope that one sticks, because there is a risk they won’t be compensated for the work. The problem with RLF giving Sher Edling over $1.7 million in addition to any contingency fee agreements is that it offsets this risk, allowing Sher Edling to bring forward as many suits as they can fund since they are still being paid, win or lose.
Finally, are the state officials bringing these lawsuits aware that they are working with an outside counsel that is effectively bought and paid for by an agenda-driven private foundation like RLF? Are these elected officials putting the interests of private foundations ahead the interests of their constituents?
