News Release
Center for the Defense of Free Enterprise
Date: February 20, 2002
Contact: Sandy Fields, Communication Director
Telephone: 425-455-5038
Letter comes in wake of Center's
complaint to IRS against EWG
For the text of the notice letter to Joyce Foundation, click here.
Bellevue, Washington ― The non-partisan Center for the Defense of Free Enterprise has notified the Joyce Foundation that it made an apparently illegal grant of $1.62 million to the Washington, DC-based Environmental Working Group (EWG). The Center has filed a complaint against EWG with IRS Commissioner Charles O. Rossotti, asking that EWG's privileged non-profit status be revoked for violations of several tax laws.
Ron Arnold, Center executive vice president, said, "The Joyce Foundation may be involved in the violations by EWG and needs to be put on notice. Our organization tracks over a hundred foundations, and Joyce Foundation is among the most prescriptive and aggressive grantmakers."
The Joyce Foundation is prominently mentioned in the Center's IRS complaint. Among the violations charged in the complaint are allegations that EWG:
Functioned as an illegal political action organization, including pressuring Vice President Gore during his run for President;
Operates as a lobbying organization, including receiving a $1.6 million grant to lobby the 2002 Farm Bill from the Chicago-based Joyce Foundation;
Lobbied the California legislature for a year without registering as lobbyists
Submitted false or misleading reports to the IRS about its lobbying expenditures;
Hid its lobbying political expenditures while operating as a project of the Tides Foundation.
Researchers at the Center employed the database of the Foundation Center, a New York City-based organization that tracks non-profit groups. There they obtained records of foundation grants to the Environmental Working Group. Among more than 90 grant records was a year-2000 grant from the Joyce Foundation in the amount of $1.62 million, with the stated purpose "For work on 2002 Farm Bill." Foundations are strictly forbidden by tax laws from donating to influence the outcome of specific legislation. This grant appears to be completely illegal.
Recipient non-profit groups such as EWG are allowed a modest amount of lobbying, and EWG is qualified to spend 20 percent of its annual budget on its own lobbying, plus 5 percent urging others to influence the outcome of specific legislation. Even though the Joyce Foundation grant was to be spread over 3 years, even one-third of $1.6 million exceeds EWG's maximum allowable lobbying amount. The Joyce grant alone, not to mention numerous others, puts EWG beyond the limits of the tax law.
Arnold said, "The Center has requested that Joyce Foundation revoke and retrieve this highly irregular $1.62 million grant from the Environmental Working Group."