Cleantech companies are financing a new nonprofit run by green energy lobbyists that operates under a portion of the tax code reserved for "social welfare" organizations but appears geared toward driving government contracts to its donors.
Details on the new group are sparse, in part because those lobbyists have not maintained copies of documentation they are legally required to provide for public inspection upon request.
The nonprofit is led by Patrick Von Bargen, a former chief of staff to Energy Policy Act architect Sen. Jeff Bingaman (D., N.M.). Von Bargen is the cofounder of 38 North Solutions, a Washington, D.C., lobbying firm that works on environmental and energy policy.
"The team maintains strong relationships with the White House, a wide variety of Congressional oversight committees, the Department of Energy, the Department of Defense, and other key federal agencies," 38 North’s website boasts.
The firm disclosed this month that it is lobbying on behalf of the Project for Clean Energy and Innovation (PCEI), a 501(c)(4) "dark money" nonprofit founded this year. 501(c)(4) organizations "must not be organized for profit and must be operated exclusively to promote social welfare," according to the IRS. Four of the firm’s lobbyists are working on the account, including Von Bargen.
Von Bargen revealed that PCEI is not just a client, but is actually managed by his firm’s senior staff in an interview. "The partners at 38 North run the project," he said.
PCEI is a "place to house various campaigns and coalitions that we want to pursue on a range of issues," Von Bargen explained.
38 North’s lobbyist registration form says the firm is working on "issues related to clean energy policy, including reduced air emissions and protection of public lands." The group’s primary activity, that form says, is "clean energy and innovation issue campaigns."
Von Bargen did not specify any federal legislation on which the group will work, but the firm’s focus on green energy technology and greenhouse gas reduction dovetails with 38 North’s lobbying work.
Its clients include a number of green energy companies that have received federal subsidies, including First Wind (now owned by 38 North client SunEdison), SunRun, and Gamesa. The firm also lobbies for the National Venture Capital Association (NVCA), which represents numerous investors in green energy companies.
Von Bargen said PCEI does not disclose its donors. But he revealed that it derives revenue from private companies, which pay dues to the group for specific issue campaigns.
One of those campaigns is called the Center for Methane Emissions Solutions (CMES). The Center is working on behalf of methane mitigation companies looking to land big government contracts when the Bureau of Land Management (BLM) and the Environmental Protection Agency (EPA) impose anticipated rules restricting methane emissions at natural gas extraction sites.
The rules will present significant federal procurement opportunities for PCEI donors. "We see the opportunity to bring policy makers together with companies that are employing new technologies to solve problems," Von Bargen told Morning Consult earlier this month.
According to its website, CMES works to "encourage the deployment of proven detection and reduction technologies available today in an economical, smart, and practical way and provide incentives to monitor, measure, and reduce methane emissions."
The White House has said that the administration’s plans to regulate methane emissions will "support businesses that manufacture and sell cost-effective technologies to identify, quantify, and reduce methane emissions."
CMES representatives have already met with officials at BLM and EPA and are hoping to huddle with state-level environmental regulators as well.
"The team at 38 North has found that, while it is important to work closely with EPA on their important carbon-related rule-makings and to keep Congress informed on a wide variety of topics and issues, much of the real action in clean energy is taking place in the states," the firm said last year.
Seven companies are paying the Center for its services, Von Bargen said. "With CMES, these businesses now have a collective voice in Washington," Morning Consult noted.
Von Bargen maintains that the Center and other PCEI issue campaigns are not commercial in nature. The goal is "educating on various issues that we’ve formed groups around," he said.
Websites for both PCEI and CMES have listed their addresses as 38 North’s North Capitol Street offices. Employees there were not forthcoming with information about the group when asked for tax documentation that they are required to provide upon request.
"In general, exempt organizations must make available for public inspection certain annual returns and applications for exemption, and must provide copies of such returns and applications to individuals who request them," the IRS notes on its website.
Those documents include groups’ applications for tax exemption. When asked for its Form 1024, which is used to request a 501(c)(4) tax status, 38 North staff told the Washington Free Beacon that it did not have a copy to provide as it was not aware it needed to keep one for public inspection.
Exempt organizations that do not provide required documentation such as a Form 1024 upon request can be subject to fines, according to the IRS.
"The IRS public disclosure regulations are pretty clear. If an organization has a regular office, they have to maintain the 1024 and approval letter for public inspection," said Jason Torchinsky, a nonprofit compliance attorney with Holtzman Vogel Josefiak PLLC, when informed of Von Bargen’s explanation.
Staff did provide a copy of the IRS determination letter granting the PCEI its tax-exempt status. However, it maintained that the letter could only be inspected and would not provide a copy to be taken from the office. Von Bargen also attempted to prevent a Free Beacon reporter from taking a photo of the letter.
Von Bargen said he had put in a request with the IRS for the group’s 1024. The agency’s exempt organizations division said it would take up to two months to process a separate Free Beacon request for the documentation.
38 North’s work is geared toward using public policy to create demand for its clients’ products. The firm’s name refers to the shared latitude between Washington, D.C., and San Francisco, alluding to the synergy between the green energy technology space and the political action required to make much of it profitable.
38 North cofounder Katherine Hamilton, who is also policy director of the Energy Storage Association, a 38 North client, made that point clear while moderating the plenary session of ESA’s annual conference.
"While the underlying value of clean, reliable energy storage is readily apparent, creating market structures and policies that enable further adoption of storage systems can still be challenging," the event’s description said. Panelists discussed "how policy will develop the market opportunities of the future."
Hamilton was previously the president of the GridWise Alliance, a trade association representing "smart grid" companies. "We advocated for and helped secure $4.5 billion in the Recovery Act for smart grid projects in virtually every state," she said upon her departure from the group.
That work aligns well with 38 North’s advocacy on behalf of the NVCA. Nearly half of venture capital investment during the first quarter of 2015 backed companies working on "smart grid and energy storage," according to PricewaterhouseCoopers.
Free Beacon summer intern Robert Davis Edelman contributed to this report.
Published under: Green Energy