The Heat Is Online

Energy Magnate Koch Funds New Anti-Cape Wind Group

Alliance forms a new Anti-Wind Farm lobbying arm


Advocates for Nantucket Sound, Inc. to be IRS-501-c-4 non-tax-deductible
By Dick Farley, Cape Cod Today Washington Correspondent, August, 2006

Washington, DC -- The Alliance to Protect Nantucket Sound, a tax-exempt, nonprofit, charitable organization established in 2001 to block development of the Cape Wind offshore power generating project six to eleven miles off Cape Cod, has created a new lobbying arm.


The fledgling organization, Advocates for Nantucket Sound, Inc., was registered with the Commonwealth of Massachusetts on June 28 of this year. The address listed for Advocates for Nantucket Sound, Inc. is the same as the Alliance To Protect Nantucket Sound, at 4 Barnstable Road, Hyannis.


Additionally, the Articles of Incorporation filed with the Secretary of the Commonwealth's office list only one "member" in the new organization: "The sole member of the Corporation (sic) shall be the Alliance to Protect Nantucket Sound, Inc., a Massachusetts charitable organization." 


Another stealth move by The Alliance?


No announcement of its new nonprofit subsidiary had appeared on the Alliance's web site as of Monday night nearly two months after incorporation, although a brief mention of it was made in the Barnstable Patriot. A few hours after being interviewed by this reporter it was available .


A local observer said, "Nobody goes to the trouble of setting up an entire, new corporation with the same 'members' without a strong reason, and past stories indicate that The Alliance has probably

exceeded the 17% allowed for lobbying by a non-profit."


Advocates for Nantucket Sound, Inc., has three founding board members, two of whom also serve as its officers. 


Charles Vinick, currently president and CEO of the Alliance, is listed as a director and president of "Advocates." Cape Wind foe Wayne Kurker, operator of Hyannis Marina and a current director of the Alliance to Protect Nantucket Sound, is also named as treasurer and "clerk" of the new organization, as well as being a director.


Things go better with Koch, Same names, same goal, different non-profit


Coal, oil and gas magnate William I. Koch, of West Palm Beach, FL and Hyannisport, is the third "Advocates" director listed on the incorporation papers. Koch has been identified in several published reports as a major financial supporter of the Alliance to Protect Nantucket Sound in its efforts to stop the Cape Wind project. Koch also is a current director of the Alliance.


(Editor's Note:  Koch was identified in a recent coal industry memo  as a source of revenue for a new disinformation campaign that would fund a major motion picture to counteract Al Gore's "Inconvenient Truth", to pass out "global warming fact sheets" to employees so they can spread disinformation among their friends, and to raise more funding for Pat Michaels and other industry-funded "greenhouse skeptics.")   


Application has already been made to the Internal Revenue Service for "Advocates" to be designated by the IRS as a "501-c-4" lobbying and advocacy organization, allowing it to channel non-tax-deductible contributions into activities that are either prohibited or severely limited for "501-c-3" groups, which solicit funds that provide donors with a tax deduction.


"We've stayed within all of the applicable IRS guidelines," Vinick told Cape Cod Today on Sunday. "Our 'Form 990s' are available to confirm this, but I'm looking at all of that." The Form 990 is the "tax return," akin to an individual's or corporation's income tax return, which must be filed annually with the IRS by all nonprofit organizations, and which then become public records.


Vinick said other organizations, such as Greenpeace and the Sierra Club, previously have had to create separate lobbying and advocacy organizations with IRS 501-c-4 designations, leaving educational, research and nonpolitical communications activities to their IRS 501-c-3 charitable counterparts. He said the Alliance and Advocates will have a similar relationship.


"We would continue to do some lobbying through the 501-c-3 (the Alliance) to some extent, and we'll have some of it going through Advocates for Nantucket Sound," Vinick said. He referred questions about what those limits are to IRS regulations and Alliance Form 990s.


He said one way he and the others will utilize the Advocates is for allocating his own time and pay when Vinick is engaged in activities beyond the allowable scope of the Alliance's tax exempt status, (such as lobbying elected officials for specific legislation and soliciting funds for same, or directing campaigns asking the public to express opinions on specific legislation or public policy, according to IRS regulations governing nonprofit behaviors).


"What you cannot do with a 501-c-3 is donate revenue from it for a 501-c-4," Vinick said, in response to questions about his currently being paid by the Alliance to Protect Nantucket Sound for what has so far been his apparent full-time coordination of its opposition to Cape Wind, lobbying federal and state legislators and regulatory agencies to pass amendments and policies specific to Cape Wind , while coordinating media campaigns paid for by the Alliance or its donors.


"If I were to need to do some activity that is beyond what the 501-c-3 (Alliance) can do, the 501-c-4 (Advocates) can do it, or I would charge a percentage of my time to the 501-c-4," Vinick continued, maintaining that he does not believe he has yet crossed that line.


Vinick acknowledged creation of the non-tax-exempt lobbying organization was in part prompted by what recently has been happening in Washington, but he again voiced his belief that Alliance activities, and specifically his own, thus far in their anti-Cape Wind campaigning have been IRS compliant.


Has the old non-profit exceeeded lobbying limits?
In Washington, a recent rash of investigations, indictments and plea deals roiling both political parties has exposed alleged irregularities and improprieties in dealings among lobbyists, nonprofit organizations and elected or appointed officials targeted for influence, including how tax-exempt charities are sometimes used for prohibited political purposes.
"Congress is certainly looking at all of that, so we wanted to set up a structure giving us the ability to assure we are in compliance with regulations," Vinick said. "I don't see us doing anything differently, and I don't see us needing to make any significant changes, but I sure want to be able to if we need it."
Vinick acknowledged published reports that Koch's lobbyists have worked on some of the same issues and campaigns as the Alliance to Protect Nantucket Sound. He said the interests of some of Koch's companies and those of the Alliance at times overlap.
"Bill (Koch) has lobbyists he uses in his work, and they do sometimes become involved in issues in which we have interests," Vinick said. "We hire our own lobbyists, as well."
Advocates for Nantucket Sound, Inc. will not hire its own staff or maintain separate offices, Vinick told Cape Cod Today.
"It (Advocates) will purchase services from the 501-c-3 (the Alliance) until such time as it would need to hire any staff, if it ever becomes necessary." Vinick said.