Category Archives: Nonprofit News

Richard Berman: Too unethical for Big Oil

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Graphic by Oil Change International

Graphic by Oil Change International

Imagine you are Rick Berman, corporate lobbyist for cruel, polluting, and destructive industries. Imagine you are trying to open up a new line of business with the largest, most profitable industry on the planet. Then imagine you scored a platform to make the pitch of a lifetime to key executives from this industry at one of their annual meetings.

This is exactly what happened to Rick Berman last June, as he attempted to woo Big Oil, Big Coal, and Big Gas as the 2014 Annual Meeting of the Western Energy Alliance in Colorado Spring, Colo.

Representatives from a who’s-who list of energy companies were in attendance, including Anadarko Petroleum, Baker Hughes Inc., BP America, Chesapeake Energy Corporation, Devon Energy Corporation, Halliburton, Pioneer Natural Resources, QEP Resources, and Saga Petroleum, among dozens of others.

But unbeknownst to Berman, one of the executives didn’t like what he heard. So he recorded it in secret and turned over the tape to The New York Times, which yesterday published an expose of Rick Berman’s pitch to the energy industry, along with a full transcript (pdf).

“That you have to play dirty to win … it just left a bad taste in my mouth,” the executive told the newspaper.

In other words, Rick Berman is too unethical even for Big Oil.

In his pitch to oil, coal, and natural gas companies, Berman described his tactics in detail. Most of them our readers have come to know over years of Berman-watching, but a few were new even to us.

Berman starts by differentiating between public opinion and public judgment. Opinion is simply an impression people have of something, but judgment is when they decide to take some kind of action, such as voting.

While public opinion will never be for Big Oil, Berman told energy execs, it can get public judgment, but to do so it has to go on the offense. How do unpopular corporations go on the offense? Berman outlined three ways:
  • Reframing the issue.
  • Repositioning the opposition.
  • Taking away people’s moral authority.

To illustrate these tactics, Berman touted his smear campaign against HSUS:
“We represent a lot of agriculture interests who are being attacked by Humane Society of the United States. The Humane Society of the United States is not connected to your local pet shelters … So repositioning them in the public’s mind by saying, “Hey, give to your local shelter, but don’t give to the Humane Society of the United States because they are not who they say they are,” is an attempt at repositioning.”
Berman had other tidbits of advice, such as:
“Often times we’ll use children or animals. If you want a video to go viral, have kids or animals.”
“We like to use humor because humor doesn’t offend people and at the same time they get the message. If you want to have a really hard-hitting message, that’s fine. … But whenever possible I like to use humor to minimize or marginalize the people on the other side.”
“We have to achieve something that I call common knowledge … That comes from people hearing something enough times from enough different places, people repeating it to each other, that you reach a point where you have solidified your position.”
One of Berman’s statements really caught our eye. A year ago we worked on a series of graphics revealing Berman’s Smear Campaign Tool Kit. These tools include out-of-context quotes, manipulated numbers, legal intimidation, sockpuppet theater, and phony op-eds.

One graphic we never published depicted Berman going after Mother Teresa. We didn’t post it because we thought it was too far-fetched. But we were wrong. It turns out Berman would be happy to go after Mother Teresa – assuming the price is right:
“In diminishing moral authority, sometimes in this case you have to be tougher because you are going after someone that’s got a crown on their head …If you were going to attack Mother Teresa, you better have a very unusual campaign.”

Big Green Radicals

As we wrote about for a blog post in March, the $1 billion a year being spent on front groups that deny climate change has proven too much of a lure for Berman, who has now started going after environmental groups.

At the energy meeting in March, Berman’s vice president Jack Hubbard described their “Big Green Radicals” smear campaign against Sierra Club, NRDC, and Food and Water Watch.
“So we thought how are we doing to kick off this campaign? Take the typical Berman and Company model, in terms of undermining these folks credibility, and diminish their moral authority. … One of the first things we did was, we said, well, let’s make this a little personal. Let’s find out whether these people are practicing what they preach. So what we did was we conducted a whole bunch of intense opposition research digging into their board of directors, and we pulled all of the title information for all the vehicles that they own.”
Hubbard went on to describe environmental groups as “very, very powerful in Washington” with “very, very large budgets.” This is laughable on the face of it. As Hubbard stated in his own presentation, Food and Water Watch’s entire annual budget is $12 million, and the Sierra Club’s is $79 million.

This is a pittance compared to the annual earnings of the corporations in the room. Last year Anadarko Petroleum had sales revenues of $14.87 billion, Halliburton had sales revenues of $29.4 billion, and BP had sales revenues of whopping $242.5 billion.

Hubbard discussed personal research that Berman and Co. had done against Rep. Jared Polis, who at the time was leading two ballot initiatives to limit fracking n Colorado, and hedge fund manager Tom Steyer, whose NextGEN Climate PAC funds political campaigns to influence climate policy.

Hubbard also showed off the Big Green Radicals Colorado page, presumably created for this meeting. And the tactics sound eerily similar to how Berman has gone after animal protection advocates:
“In the right hand column we dig into every group. We list their money. We list their funders. We list their radical positions. And then we have a section on every single activist. Their rap sheets, their criminal records that they have. We’re really making this personal. We’re trying to make it so they don’t have any credibility with the public, with the media, or with the legislators.”

‘Endless war’

Berman went on to describe other tactics he has used against HSUS and other animal protection groups, urging the energy execs to deploy them against environmental groups.

One tactic deals with manipulating emotions. Berman devised the acronym FLAGS to stand for the five emotions he tries to manipulate: fear, love, anger, greed, and sympathy.

The two he said he works most with are fear and anger: “Fear and anger have to be part of this campaign … what you’ve got to do is get people fearful of what is on the table and then you’ve got to get people angry over the fact that they are being misled.”

Regarding budgets, Berman pulled out another tactic he has used against HSUS. “This is an endless war. What I like to do what I come up against some of these organizations … I look at their tax returns, and if they’ve got a pension plan, and it’s a well-funded pension plan, I know that these people are not going away.”

And again Berman emphasized the necessity of playing dirty:
“This offensive campaign that is designed to attack is not a positive campaign. I’ve had clients say to me, ‘Well you know, I don’t really want to attack, that’s not who we are.’ I say, ‘Well, you know, you can either win ugly or lose pretty.’ You know, you figure out where you want to be. But sometimes this is what you need.”

Going viral

Since The New York Times expose broke yesterday, numerous other media outlets picked up the story, and it lit up social media. We are thrilled to see so much exposure of Berman’s dirty tricks to such a wide audience. Read more here:

Bloomberg News: Fracking Advocates Urged to Win Ugly by Discrediting Foes
A Humane Nation: Bootlegged Speech of Rick Berman Shows Deception and Dirty Tactics Off the Charts
PR Watch: Rick Berman Exposed in New Audio; Hear His Tactics against Environmentalists and Workers Rights
Huffington Post: Rick Berman Encouraged Energy Executives To Use These Nasty Tactics On Environmentalists
Climate Progress: Lobbyist Richard Berman To Oil And Gas Executives: Treat PR Campaigns As An ‘Endless War’
Climate Progress: Here’s How Oil Industry Members Reacted When Told To Use ‘Fear And Anger’ To Win Fracking Fight
DeSmogBlog: Oil and Gas Industry’s “Endless War” on Fracking Critics Revealed by Rick Berman
DeSmog Blog: Richard Berman: Tobacco to Fossil Fuels
CREW: AUDIO: Dr. Evil Tells Oil and Gas Industry to Use ‘Fear and Anger’ in Fracking Fight
Food and Water Watch: Frackers in Bed with Dr. Evil: Covers Pulled Off
The Hill: Oil industry advised to play dirty with greens
EcoWatch: Secret Tape Exposes Fracking Industry Playing Dirty
Democracy Now: Lobbyist Richard Berman Caught on Tape Urging Oil Execs to Dig Up Dirt on Environmentalists
Salon: “Win ugly or lose pretty”: Secret tape reveals Big Oil’s sleazy P.R. pep talk
Gawker: Leaked Big Oil Speech: Wage “Endless War” Against Fracking Opponents
Daily Kos: “Win Ugly or Lose Pretty” says Oil Lobbyist in Secret Recording
TruthOut: PR Advocate for Fracking Urges a Dirty War Against Environmentalists
Common Cause: Notorious Corporate Lobbyist Rick Berman Caught On Tape
Crooks and Liars: Hear Corporate PR Scum Richard Berman Make Slimy Pitch To Energy Companies
Southern Beale: Rick Berman: He’s Baaaaaack!
Radio Or Not: Political Tricks & Musical Treats
Colorado Springs Independent: Energy lobbyist in Colorado Springs: ‘Win ugly or lose pretty’
Pennsylvania State Impact: Report: Veteran lobbyist tells industry to ‘win ugly or lose pretty’
Pittsburgh Business Times: New York Times: Consultant tells energy industry it can ‘win ugly or lose pretty’
FireDogLake: Richard Berman Secretly Recorded Telling Fossil Fuel Industry To Wage ‘Endless War’ On Critics
China Topix: Richard Berman’s Energy Industry Speech Advocating Underhanded Tactics Secretly Taped

Berman rebrands Center for Consumer Freedom, moves into new territory

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Rick Berman, former tobacco lobbyist turned shill for corporate polluters.As Stop HumaneWatchers, we have long followed the anti-animal attacks of Rick Berman and the Center for Consumer Freedom.  But we are also aware of his many other front groups campaigning on issues such as teachers unions, the minimum wage, drunk driving, high-fructose corn syrup, and tanning beds.

That’s why we figured it was only a matter of time before Berman moved into the anti-environment arena.  With large corporations and foundations plowing over $1 billion in untraceable dark money each year into front groups that deny climate change, we knew Berman would want a piece of that pie.

Last week our suspicions were confirmed with the appearance of a full-page ad in The Wall Street Journal targeting three environmental nonprofits: Natural Resources Defense Council, Sierra Club, and Food and Water Watch.

Just who was behind the ad?  The ad itself pointed readers to a new website: BigGreenRadicals.com, a project of the “Environmental Policy Alliance” – not to be confused with the Environmental Protection Agency even though it had a similar name with the same initials, a classic Berman ploy.

The website of Environmental Policy Alliance held another clue: its address of 1090 Vermont Ave., NW Suite 800, Washington, DC 20005.  If that address sounds familiar, it’s likely you have seen the tax returns for Center for Consumer Freedom, which list the exact same address.

Berman’s fingerprints

So what exactly is the Environmental Policy Alliance?  This new Berman front group has four campaigns:
  • Big Green Radicals, which bashes the three environmental organizations listed above;
  • Green Decoys, which targets hunting and fishing groups that certain powers think are too environmentalist;
  • LEED Exposed, which goes after sustainable certification in buildings;
  • EPA Facts, which targets the actual Environmental Protection Agency.
All of these sites have Berman’s fingerprints all over them.  Never one for self-reflection, Berman takes the criticisms that opponents have made of his clients and tries to turn them around on his targets.

For example, where environmentalists have charged that the oil-friendly Bush White House muzzled science to fit its politics, Berman’s EPA Facts claims the EPA uses “agenda-driven science.”

Where critics have pointed to right-wing foundation funding for climate-denial front groups like the Heartland Institute, Berman’s Green Decoys claims conservation groups like Trout Unlimited receive funding from what it calls “environmentalist foundations.”

And just as HumaneWatch paints the Humane Society of the United States as having a gigantic budget – never mind that the HSUS’s net worth is 4.6 percent that of Cargill – so Big Green Radicals paints Food and Water Watch as “among the most powerful … voices pushing the green agenda” – despite the fact its budget is 0.0026 percent of Exxon’s.

Who’s footing the bill?

Obviously someone has hired Berman to go after these environmental organizations.  The question is, who?  Berman does not list who funds his smear campaigns on any of his websites, but it’s not hard to figure out which industries are footing the bill, even if we don’t know specifically which corporations.

Green Decoys, for example, seems particularly offended that Trout Unlimited has come out in favor of regulations on hydraulic fracturing, or fracking.  TU isn’t against fracking altogether, just against unregulated fracking – but that’s enough to merit a smear campaign from Berman.

Big Green Radicals attacks not just Food and Water Watch’s opposition to fracking, but its campaign to label genetically modified food.  The Sierra Club is also attacked for its campaigns against fossil fuels and GMO foods, as well as its defense of the Endangered Species Act.

And LEED Exposed turns what ought to be a no-brainer – energy efficient construction of new buildings – into a political issue.  Who could possibly be against energy efficient buildings?  As it turns out, plastics, vinyl, and chemical companies that supply inefficient and sometimes toxic building materials don’t like LEED very much — they are behind a push for federal agencies and state governments to ban use of LEED certification.

Just this month, LEED Exposed released a new report claiming that LEED-certified buildings are not as energy efficient as traditional buildings.  That report was covered by Berman’s old friend the Daily Caller in a story made available for free to other outlets, and by the National Review, which is currently being sued for defamation after comparing climate scientist Michael Mann to child molester Jerry Sandusky.

While both outlets happily quoted Berman employee Anastasia Swearingen, neither bothered to mention who her boss is, nor that the Environmental Policy Alliance occupies the same Washington, D.C., offices as the Center for Consumer Freedom.  Fortunately these facts did not escape the U.S. Green Building Council, which refuted the report and linked it back to Berman.

Rebranding

Amidst all of our questions about the new territory Berman is venturing into, one thing caught our eye.  While Big Green Radicals, LEED Exposed and the other new smear campaigns are all projects of the Environmental Policy Alliance, which lists the same address as Center for Consumer Freedom, the Environmental Policy Alliance is itself a project of something we had never heard of called the Center for Organizational Research and Education.

The Center for Organizational Research and Education has no web footprint whatsoever.  Google it, and you will not find a website, or even a mention of it on a parent company site.

That’s because, as noted by Architect Magazine, Center for Organizational Research and Education is the new name of Center for Consumer Freedom.  CCF formally changed its name in a filing with the West Virginia secretary of state on January 30.

Why has Rick Berman taken the extreme step of changing the name of Center for Consumer Freedom?  A couple of possibilities come to mind.

First, Center for Consumer Freedom has been thoroughly exposed as a front group for Big Food and Big Ag by Stop HumaneWatch and others, including pretty much every major media outlet in the country.

When companies’ reputations are damaged beyond repair, they often respond by simply changing their name, such as when tobacco company Philip Morris changed its name to Altria shortly after settling the landmark case over health care costs related to smoking with a group of state attorneys general.

A new direction?

Perhaps Berman plans to take his Center for Organizational Research and Education in a new direction, making the attacks on environmental organizations front and center while pushing the attacks on animal welfare groups to one side.  After all, most major food producers including Smithfield and McDonald’s have already agreed to adopt more humane practices such as phasing out gestation crates.

The National Pork Producers Council may still hate HSUS, but let’s face it: Their budget pales in comparison to Big Oil, Big Coal, and Big Gas, who have a lot of money and a lot of reason to spend it with all the climate change regulations likely to start coming down the pike.

Still, we don’t think HumaneWatch is going anywhere.  As long as someone is paying Berman, he will keep running it, even as he creates new campaigns and hires more Washington operatives willing to sell their souls for profit.  And some players in the Big Ag community seem happy to keep throwing their money at Berman, even though not a single one of his campaigns against the HSUS has had an effect.

Despite all of Berman’s efforts, HSUS donations continue to grow and its programs continue to expand.  The fact is, most people support policies to treat animals with kindness, and the HSUS is the most effective organization in the country at getting these policies put into place.

People also generally like clean air and clean water.  So if Berman truly is changing his emphasis from anti-animal campaigns to anti-environment, we don’t expect him to be any more successful there either.

Berman’s “Humane Society for Shelter Pets” sinks out of sight

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The deceptively named Humane Society for Shelter Pets (HSSP) has filed for dissolution, signaling the death of yet another one of Richard Berman’s schemes to line his pockets while undermining animal welfare.

Diana “Didi” Culp: HSUS ex-employee and co-director of HSSP.

HSSP was founded by Berman to attack the Humane Society of the United States, part of his ongoing strategy to defund the nation’s largest animal protection charity by frightening away donors.  Berman selected disgruntled ex-HSUS employee Didi Culp as the figurehead of the organization.

Culp, a supposed shelter advocate who advises people to “get a better dog” from a breeder, may have seemed the ideal choice for the job.  But when HSSP was exposed as a front group for Berman’s corporate clients, Culp became the subject of an ethics investigation for her improper use of Frederick County Animal Control facilities.   The organization’s leadership fled, and Culp was left at the helm of a sinking ship.

The collapse of HSSP puts an end to Berman’s most recent attempt to deceive animal lovers. Don’t feel too badly for the millionaire tobacco lobbyist, however:  Before the collapse of HSSP, Berman managed to funnel $765,483.00 of the organization’s “nonprofit” donations into his personal and corporate bank accounts.  Berman has not disclosed how much Culp was paid for her services as the organization’s figurehead.

The shelters that Berman and Culp used as pawns received nothing, according to tax forms filed by the organization.

Rick Berman profits from nonprofits

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Nonprofit regulations are intended to ensure that nonprofit organizations exist for the public benefit, and not for the enrichment of its creators.

But when Richard Berman creates nonprofit organizations with a dubious purpose, and diverts tax exempt donations into his own coffers, he circumvents the accountability that’s meant to protect the public from fraud and abuse.

That’s why Marcus Owens, former director of the IRS Exempt Organizations Division, says that Berman’s evasive scheme “clearly, in my view, is operating for his private benefit and for the private benefit of his clients… [That’s] a clear violation of the requirements for tax-exempt status.”

We tallied the payments to Berman and his for-profit PR firm from six of the nonprofit front groups he has created: the Center for Consumer Freedom (CCF), Center for Union Facts (CUF), Employment Policies Institute Foundation (EPI), American Beverage Institute (ABI), Employee Freedom Action Committee (EFAC), and the Humane Society for Shelter Pets (HSSP).

The results are shocking.

Payments to Richard Berman or Berman and Company, Inc.

Year CCF CUF EPI ABI EFAC HSSP Total
2011$1,307,534.00$886,769.00$1,178,459.00$1,353,364.00$74.00$765,483.00$5,491,683.00
2010$1,707,511.00$587,334.00$1,658,383.00$1,395,519.00$268,873.00$0.00$5,617,620.00
2009$1,479,597.00$596,351.00$1,843,254.00$1,296,185.00$440,765.00—$5,656,152.00
2008$1,061,604.00$784,602.00$523,910.00$1,292,850.00$897,496.00—$4,560,462.00
2007$1,580,280.00$844,535.00$912,437.00$1,304,960.00——$4,642,212.00
2006$1,208,512.00$283,016.00$1,020,547.00$1,220,079.00——$3,732,154.00
2005$1,641,186.00—————$1,641,186.00
2004$1,453,056.00—————$1,453,056.00
2003$1,261,344.00—————$1,261,344.00
2002$1,044,553.00—————$1,044,553.00
TOTAL$13,745,177.00$3,982,607.00$7,136,990.00$7,862,957.00$1,607,208.00$765,483.00$35,100,422.00

Since 2002, Rick Berman has diverted over $35 million in supposedly nonprofit donations into his personal and corporate bank accounts. In some years, as much as 93% of an organization’s revenue has been funneled into personal gain.

Berman has not yet been held accountable for his abuse of nonprofit tax code. It’s a sad indictment of the Internal Revenue Service, its inability enforce its own regulations fairly and consistently, and its unwillingness to protect consumers.

To the see the raw numbers we used, consult the Form 990 tax returns for Berman’s organizations. These forms are gathered for your convenience in our Document Library, or you may obtain them from independent charity evaluators like Guidestar.org.

The relevant figures used in this table are:

  • Gross Receipts: Line G
  • Berman’s token salary: Part VII, Section A
  • Funds diverted to Berman and Company, Inc.: Part VII, Section B (Independent Contractors)
  • Grants to Berman-run organizations: Schedule I

Further reading

Charity Watchdog Issues Donor Advisory for Center for Consumer Freedom

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After evaluating Center for Consumer Freedom (CCF) tax returns, Charity Navigator has taken the extraordinary step of issuing a Donor Advisory. The Donor Advisory states that “the majority of the Center for Consumer Freedom’s program expenses are being directed to its CEO Richard Berman’s for-profit management company, Berman and Company.” As readers of this site and our Facebook page know, Richard Berman is also the mastermind behind the anti-animal welfare group, HumaneWatch. Charity Navigator has something to say about HumaneWatch, too:
…out of total program expenses of $2.4 million, $1.7 million is going directly to Berman and Company. The document (IRS Form 990) also revealed that program expenses were for ‘maintaining a dynamic website’ and ‘founding humanewatch.org’ when all of the money was given to Berman and Company (a for-profit firm). The document does not reveal how much revenue the for-profit gained from this arrangement.
The Donor Advisory then warns prospective donors:
We find such practices atypical as compared to how other charities operate and have therefore issued this Donor Advisory.
The CCF joins other questionable charities spotlighted by Charity Navigator for their conduct. These shady organizations include the “Coalition for Breast Cancer” (whose directors pleaded guilty to grand larceny, scheming to defraud and falsifying business records), “Disabled American Veterans” (a fake charity whose creator was sentenced to 10 years in prison for felony embezzlement), and Child Foundation (whose founder plead guilty to federal conspiracy charges). The CCF has yet to face criminal charges for funneling nonprofit funds to its for-profit counterparts. However, this Donor Advisory may serve to protect unwary donors who might be deceived by unscrupulous front groups posing as legitimate charities.