TESTIMONY ON THE NATIONAL FISH AND WILDLIFE FOUNDATION
ESTABLISHMENT ACT AMENDMENTS OF 1997

 WRITTEN STATEMENT OF
 JONATHAN H. ADLER
 DIRECTOR OF ENVIRONMENTAL STUDIES
 FOR THE COMPETITIVE ENTERPRISE INSTITUTE

 TO

SUBCOMMITTEE ON FISHERIES, CONSERVATION,
WILDLIFE AND OCEANS
COMMITTEE ON RESOURCES
 U. S. HOUSE OF REPRESENTATIVES

SEPTEMBER 25, 1997








Thank you, Mr. Chairman, for the opportunity to present testimony before this Committee.  My name is Jonathan Adler, and I am Director of Environmental Studies at the Competitive Enterprise Institute in Washington, D.C.  CEI is a non-profit, non-partisan research and advocacy institute dedicated to the principles of free enterprise and limited government.  CEI's work includes efforts to advance the public understanding of government regulation and its impacts, and to research and promote free market approaches to policy issues.  CEI is wholly dependent upon voluntary contributions for its funding; it accepts no government money of any kind.

For the past six years I have researched and analyzed environmental issues, ranging from air pollution and hazardous waste to property rights and habitat conservation.  While at the Institute I oversaw the development and launch of the Center for Private Conservation, which studies and promotes private, non-governmental efforts to advance environmental objectives.  I also researched the government funding of environmental organizations for my book Environmentalism at the Crossroads (Capital Research Center, 1995).  Some of the issues raised in my testimony are discussed at greater length in my book.

OVERVIEW

 The National Fish and Wildlife Foundation (NFWF) was created by Congress in 1984 to help promote conservation efforts by public and private entities.  Congress intended to launch the Foundation with some seed money, in the hopes that it would become a self-sustaining entity.  Instead, NFWF continues to be reliant upon the federal government.  When NFWF was created in 1984, it received only $100,000 per year – a mere pittance of what it now receives at taxpayer expense.  By comparison, H.R. 2376 would authorize $25 million per year for fiscal years 1999, 2000, and 2001.

Today, NFWF is a substantial recipient of taxpayer funds, from both state and federal governments.  According to NFWF’s records, among the government funds that NFWF received in the previous fiscal year (10/95-9/96) are the following (figures are rounded):
 
 
 
GOVERNMENT ENTITY AMOUNT
U.S. Agency for International Development  $265,000
U.S. Dept of Agriculture $5,500,000
U.S. Dept. of Commerce  $569,000
U.S. Dept. of Defense  $171,500
U.S. Dept. of Interior  $15,465,000
Subtotal Federal  $21,970,500
State of California $757,000
State of Colorado  $253,000
State of Montana  $237,000
Virginia Dept. of Game  $107,000
Subtotal State  $1,354,000
TOTAL GOVERNMENT FUNDING $23,324,500

Even were this Committee to refuse to authorize money for NFWF from the Interior and commerce Departments, it is very likely that NFWF would continue to receive substantial funding from various government entities.

The issue for this committee is not whether NFWF supports any worthwhile projects.  Nor is it whether it was wise for the federal government to create the National Fish and Wildlife Foundation over a decade ago.  Nor even is it whether NFWF should continue to exist.  The issue is whether NFWF should continue to receive an annual appropriation of taxpayer dollars – whether the Congress should continue to appropriate several million dollars to a specific private charity that engages in politically-oriented and controversial grant-making.  And, if so, what conditions should be placed upon the Foundation’s acceptance of federal funds.

There is no doubt that NFWF has supported, and will continue to support, many worthwhile conservation projects, from wetlands restoration to tiger conservation.  The Competitive Enterprise Institute itself , through the Center for Private Conservation, has documented two private organizations – Chesapeake Wildlife Heritage and the American Chestnut Foundation – that are engaged in admirable conservation activities and also have received funding through NFWF.  That NFWF often does good things does not, however, mean that it is entitled to receive annual appropriations of millions in taxpayer dollars nor does it mean that NFWF should not be the subject of Congressional oversight

In some respects NFWF could be seen as the environmental equivalent of the National Endowment for the Arts.  Both were created to address the private sector’s perceived failure to adequately fund something of national concern – art in the case of the NEA, conservation in the case of NFWF.  The motivating theory in both cases is that the federal government, by providing seed money, could facilitate the proliferation of divided activities.  Both entities have funded worthwhile projects and not-so-worthwhile projects; both have funded things that are unobjectionable, and both have funded things that are extremely controversial.  Finally, there are reasons to question the continued federal funding of both endeavors – a step that the House has taken in the case of the NEA, and should with NFWF as well.

While NFWF does support valuable efforts, there are reasons why this Committee should consider phasing out NFWF’s funding authorization, or at the very least subjecting the Foundation to more stringent oversight. Among the most significant is evidence of NFWF’s political activity and support of ideological activist groups, an issue that this Committee has heard about before.  Moreover, there is no reason to believe that either private conservation efforts or corporate philanthropic grants are in need of direct financial support from the federal government.  Finally, there are valid concerns about NFWF’s lack of accountability and openness to taxpayers and their elected representatives about NFWF expenditures and activities.

NFWF AND POLITICAL ACTIVITY

 The National Fish and Wildlife Foundation has carefully maintained its image as a neutral conservation organization that focuses on facilitating public-private partnerships and landowner-friendly conservation policies.  According to NFWF Chairman Magalen O. Bryant, a hallmark of the Foundation’s efforts is the development of “proactive, voluntary partnerships that deliver a greater common solution to issues that are naturally divisive.”  Unfortunately, NFWF also makes its own contributions to the divisiveness of existing and proposed environmental policies, typically to the detriment of small landowners and resource-dependent communities.  Throughout its history, NFWF has promoted controversial policies ranging from wolf reintroduction to the expansion of endangered species regulations through the development of habitat conservation plans.  It is this sort of political activity that makes NFWF itself a controversial recipient of federal funds.

 For example, in its report The Next Wave in Conservation, NFWF celebrates it’s “human-friendly approach” to endangered species protection.  What the report describes, however, is not particularly landowner friendly.  For instance, NFWF takes credit for helping to develop Natural Community Conservation Planning (NCCP) in southern California.  While hailed as a model by Interior Secretary Bruce Babbitt, the ecosystem management approach embodied in NCCP is anything but landowner friendly, especially for smaller landowners.  The additional certainty that regional habitat conservation planning purportedly affords to large developers comes at the expense of subjecting far greater amounts of land to regulatory controls and imposing additional burdens on small landowners that may wish to utilize their property.  The NCCP approach is not voluntary for those who own property in affected jurisdictions, nor does it address the primary concerns that landowners have about the impact of the Endangered Species Act on private property.  Even “safe harbors” and the other incentive programs that NFWF trumpets as proactive reform efforts do little to ameliorate potentially devastating impacts that federal land-use controls can have on property values.

Of course NFWF is sometimes more overt in promoting political positions.  To give one example with which I am sure members of this Committee are familiar, on March 15, 1995, NFWF deputy director Barbara Cairns, in her official capacity, sent a memo to NFWF’s board of directors requesting the assistance of each member to prevent Congress from defunding the National Biological Service (NBS), a federal program created by the Clinton Administration without Congressional authorization to help implement the Endangered Species Act.  The NBS was controversial because landowners were concerned that the NBS would generate information that would lead to the listing of additional endangered species, thus prompting additional federal land-use controls.  The NBS has also been a recipient of NFWF funds.

In her memo, Cairns wrote that, “U.S. Department of Interior Secretary Bruce Babbitt is seeking assistance in his effort to save the National Biological Service (NBS) from recission action by the U.S. Congress.” She suggested that any board member favoring continued funding of the NBS should “demonstrate support” by contacting any of the members of Congress listed on the memo, and then added “As you know, NFWF is prohibited from lobbying members of Congress. Your letter or phone call should reflect your support as a citizen rather than as an NFWF Board Member.”  Attached to the memo were Interior Department fact sheets defending the NBS.

NFWF Executive Director Amos Eno testified before Congress in 1995 that “No taxpayer dollars have ever been used by the Foundation to lobby Congress.”  As a technical legal matter, that may well be true.  But as members of this Committee know, non-profit organizations can make extensive efforts to affect public policy and federal legislation without being caught in the legal definition of “lobbying.”  The simple fact is that NFWF receives substantial federal funds, and NFWF employees, in their official capacity, sought to mobilize the NFWF Board to affect legislation before Congress at the request of the Interior Department.  Call it lobbying, call it something else.  There is no doubt about what occurred, and every reason to believe that it was not an isolated occurrence.

Indeed, former Interior Secretary Manuel Lujan wrote to Rep. David McIntosh that the Foundation sought to “undermine” those environmental policies of the Bush Administration with which the Foundation staff did not agree and sought to strip the Interior Secretary’s power to make appointments to NFWF’s board.  While NFWF characterizes its annual “Needs Assessment” as a neutral source document, it routinely calls for an increase in spending and regulatory authority for federal agencies involved with wildlife conservation.  According to Lujan, these documents “essentially refuted the Bush Administration’s budget proposals.”

The record strongly suggests that even when NFWF is not directly encouraging a specific political outcome, it consistently advances positions that support greater federal land-use control at the expense of small landowners.  This is not to say that all NFWF activities are political, but when they are, they consistently advocate greater government control of land-use and spending increases for federal environmental programs.

 I understand that NFWF consistently disavows spending taxpayer dollars on political advocacy.  But money is fungible.  When federal funds, from annual appropriations and other sources, make up a substantial portion of a single organization’s funding, it is implausible to suggest that federal funding does not indirectly aid that organization’s political efforts.

NFWF AND ACTIVIST ORGANIZATIONS

 In the past few years greater attention has been paid to the extent to which federal funds are diverted to political organizations that actively seek to influence government policy. Non-profit organizations that seek to influence the policy-making process increasingly rely upon taxpayer-funded government agencies to support their activities.

 The funding of activist organizations with taxpayer dollars raises two important concerns.  The first is that the government funding of ideological advocacy is incompatible with a free, democratic system. As Thomas Jefferson noted, it is tyranny to force individuals to support the propagation of ideas with which they disagree.  There is something fundamentally wrong with using taxpayer dollars to promote and disseminate partisan or controversial views outside of the formal or deliberative process.  Yet insofar as NFWF funnels federal dollars toward environmental advocacy groups, that is precisely what it is doing.

 Second, government funding of interest groups creates a vicious circle that promotes the expansion of the federal government.  Government agencies fund advocacy groups that turn around and call for increases in government programs and appropriations, often for the same agencies that provide a portion of their funding.  Indeed, among those interest groups that receive funding from the Interior Department or Environmental Protection Agency, few – if any – call for the scaling back of federal regulatory programs or returning more authority over environmental matters to the states.   The Fish and Wildlife Service, for example, is far more likely to give funds to an environmental organization that supports the extension of its authority under Section 9 of the Endangered Species Act than it is to support a landowner group that seeks to lessen regulatory burdens.

This pattern can be seen both in federal support of NFWF and the Foundation’s own pattern of grant giving.  NFWF is a source of money for activist organizations pursuing ideological agendas on environmental issues.  While NFWF maintains that its funds do not support the advocacy efforts of activist groups, money is fungible, particularly for non-profits, and fulfilling an organization’s funding needs in one area inevitably frees up resources for other endeavors.  Once the decision is made to fund a particular group, it is difficult to ensure that the grant does not contribute, even indirectly, to other efforts.

 I feel confident that all members of this committee are familiar with NFWF’s support of the Pacific Rivers Council.  Two months after receiving a $60,000 grant from NFWF to protect salmon in the Pacific Northwest, the Council joined the Sierra Club Legal Defense Fund to sue the federal government to impose new regulations to protect salmon.  A subsequent federal court decision called for the halting of logging, grazing, and road-building in several Idaho forests.  This decision generated so much controversy that the Pacific Rivers Council requested that the court temporarily lift the injunction.

This is not the only case in which NFWF money appears to have supported political activism.  Consider just a few examples:
 


With such a track record, it is hard to swallow the contention that NFWF does not support advocacy efforts. Indeed, the above are only a small portion of the grants that NFWF has given to organizations that engage in lobbying or political advocacy in favor of greater federal environmental regulation.  According to materials that NFWF provided to Representative Chenoweth, the following environmentalist organizations received funds from NFWF between 1986 and 1995:
 
ORGANIZATION TOTAL NFWF GRANTS
American Rivers  $ 55,000
Center for Marine Conservation  $ 94,398
Defenders of Wildlife  $ 149,000
Environmental Defense Fund  $308,000
Izaak Walton League  $39,000
National Audubon Society  $209,000
National Wildlife Foundation  $72,000
Natural Resources Defense Council $16,575
Pacific Rivers Council  $143,500
Rainforest Alliance  $157,980
World Wildlife Fund  $356,580

The donation of money to activist groups continues today.  A cursory review of NFWF’s 1996 annual report reveals grants to Defenders of Wildlife ($35,000), Environmental Defense Fund ($11,500), the Rainforest Alliance ($32,500), and World Resources Institute ($50,000 to the Management Institute for Environment and Business, a WRI subsidiary), among others.  Other grants support the development of reports and studies for distribution to Congress and administration officials to bolster the support of the Endangered Species Act and other existing or proposed environmental programs.

For years NFWF has provided funds to activist organizations with an ideological stake in current debates over environmental policy.  Those activist groups receiving NFWF funds uniformly support an increased federal role in environmental regulation and oppose the protection of private property rights from excessive land-use controls.  This is not a proper use of taxpayer money, and is another reason why this committee should phase out the authorization of funds to NFWF.

PRIVATE CONSERVATION AND CORPORATE CHARITY

 Private conservation has a long and proud history in the United States, from the recovery of the American bison and the planned reintroduction of the American Chestnut to the protection of Hawk Mountain and the proliferation of wood duck boxes on private land.  Americans have always been willing to undertake direct efforts to protect the natural world around them.  Government involvement in conservation, most will agree, has had a more spotty history.  With the possible exception of those efforts explicitly designed to limit the exploitation of open-access commons, government conservation successes have been few and far between.  Indeed, some of America’s proudest conservation efforts were undertaken at private expense at a time when governments were hostile or indifferent to conservation objectives.  Were it not for the private efforts of individuals such as Rosalie Edge and William Hornaday, and their willingness to act when governments could not or would not, much of America’s natural heritage would have been lost.  The conservation spirit was alive and well in America prior to the establishment of NFWF, and it will remain long after NFWF has received its last government dime.

Of course, NFWF itself would in all probability continue to exist even were its government funding to end tomorrow.  Some of its projects and priorities may change, but the Foundation would be unlikely to close its doors.  As evidence of NFWF’s ability to raise substantial funds from non-government sources, consider some of the grants it received in the previous fiscal year (figures are rounded):
 
FUNDER AMOUNT
Anheuser-Busch  $215,000
Cyprus/Amax Coal  $100,000
David and Lucille Packard Foundation  $140,000
Ducks Unlimited  $1,571,000
Exxon Corp $1,555,000
Gregory T. Smith  $320,000
Hofmann Company  $200,000
Iowa Natural Heritage  $157,000
Isis Fund  $100,000
John and Catherine MacArthur Foundation  $125,000
Kenai River Sportfishing  $200,000
Long Live the Kings  $200,000
Monomet Observatory, Inc.  $202,000
National Geographic Society  $210,000
Paul Tudor Jones/Tudor Investment Corp.  $250,000
Phillips Petroleum Foundation  $100,000
Quail Unlimited  $112,000
Resource Management, Inc.  $288,000
Rocky Mountain Elk Foundation  $205,000
Second Nature, Inc.  $150,000
Self Reliance Foundation  $125,000
Sweet Water Trust  $110,000
Curtis & Edith Munson Foundation  $105,000
Nature Conservancy  $584,000
Pew Charitable Trust  $993,000
Trust for Public Land  $250,000
Unocal Corp.  $1,026,000
Vermont Law School  $110,000
World Forestry Center  $200,000

 As the above demonstrates, NFWF receives substantial corporate and foundation support.  This is no doubt a testament to the fundraising skill of the Foundation’s employees and officers, and the many valuable projects with which NFWF is involved.  It is also a reason to question whether annual federal appropriations are necessary to sustain those activities of the Foundation that are truly worthwhile.  Were NFWF’s annual appropriation phased out over a set time period, say three years like the NEA, it is likely that private contributions would fill the void left by government funds for those projects that are truly worthy of support.

 No doubt one reason that corporations give so heavily to NFWF is the public relations benefit of supporting environmental causes.  Another is that it is an opportunity for corporations to double their philanthropic dollar through NFWF matching funds.  Fortune 500 firms regularly trumpet their donations to environmental causes and their conservation efforts – often with good cause.  However, it is questionable whether the taxpayer should indirectly underwrite those philanthropic efforts by supporting NFWF’s donation of matching funds to these projects.  If corporations wish to receive the goodwill and positive publicity that accompanies underwriting conservation efforts, surely they can be expected to fully fund those efforts for which they wish to take credit, rather than relying on matching support from a taxpayer-funded entity.

 Private conservation benefits from corporate and foundation support, but thankfully its roots are far deeper, for private conservation efforts will be essential to meeting the environmental challenges of the coming decades.  Transforming government regulations into conservation subsidy programs, however, is not a sustainable approach.  Whether we like it or not, government supported conservation faces many of the same problems as other government subsidized efforts. The lack of competition and accountability often results in inefficiency and waste. Political institutions also have a hard time supporting diverse objectives simultaneously, whereas successful conservation often requires a multiplicity of efforts aimed at a single objective.  Political considerations or special interest influence interfere with sound priority setting.  In the long run, private conservation efforts will be healthier and more effective insofar as they remain private and avoid political entanglements, such as those created by government funding.

A NOTE ON ACCOUNTABILITY

 One concern that some have with NFWF is that it receives a substantial amount of taxpayer dollars, yet it does not seem very responsive to taxpayers and their elected representatives that wish to know more about it.

For one, it can be difficult to track which organizations are recipients of NFWF funds because the grants are listed by their purpose, not the recipient organization.  As a result, only the diligent taxpayer or policymaker who is willing to slog through pages of grant records will be aware of the extent to which NFWF funds activist organizations – and even then it is not clear where grants end up.  As noted above, NFWF was credited with supporting a Wilderness Society/Endangered Species Coalition position paper calling for an expansion of the Endangered Species Act, yet no clear record of the donation appears in NFWF’s list of grants.

 Certainly private charitable organizations should be free to present their grant reports in a manner that is congruent with their internal procedures and the demands of their supporters.  The reason I raise this issue is that so long as the taxpayer is a substantial supporter of NFWF, there should be complete openness about the manner in which NFWF funds are spent, particularly when NFWF funds go to support political advocacy of one kind or another.  As a  recipient of taxpayer dollars, NFWF has a special obligation to be transparent about the use to which its dollars are put.  Insofar as this is not already a legal obligation or a condition of receiving government funds, it should be.

 As a 501(c )(3) organization, NFWF has additional responsibilities to provide information to private citizens who are interested in learning more about its activities.  Here again, however, there are questions about NFWF’s accountability and openness, particularly with members of Congress.

 For example, earlier this year, Representative Helen Chenoweth wrote to NFWF asking for information about the Foundation’s expenditures, including a copy of NFWF’s most recent Form 990 and information on the salaries of NFWF personnel.  NFWF Deputy Director Alex Echols forwarded portions of NFWF’s 990 to Rep. Chenoweth, but maintained that “specific individual salaries are confidential.”  This is simply untrue.

As a 501(c )(3) organization, the National Fish and Wildlife Foundation is required to submit a Form 990 to the Internal Revenue Service, and to make a copy of their Form 990 available for public inspection for any individual who wishes to see it.  Among the information that must be included on the 990 is a list of officers, directors, trustees, and key employees and their salaries and benefits.  However, that portion of NFWF’s 990 was not forwarded to Rep. Chenoweth’s office.

NFWF’s Form 990 is public information that any individual can obtain either by making a request to the IRS or visiting NFWF’s office.  Indeed, CEI obtained a copy of NFWF’s 990 for the 1996 tax year, and it included the information that was withheld from Rep. Chenoweth.  For the Committee’s reference, I have reproduced the information as it appeared in NFWF’s most recent 990 below:
 
 
EMPLOYEE TITLE SALARY BENEFITS
Amos S. Eno Executive Director/ Secretary $156,000 $21,055
Alex Echols Deputy Director $90,375 $6,437
Ginette C. Ring Director of Finance & Administration $70,000 $6,146

As someone who has worked for a 501(c )(3) organization for the past several years, I am surprised that a taxpayer-funded non-profit would not provide this information to a member of Congress on request and would even claim that such information is “confidential” when federal law states otherwise.  Indeed, I see no reason why any responsible and accountable non-profit would not be willing to disclose such information upon request.

CONCLUSION

 As noted at the beginning of this testimony, the real question that this Committee should consider is whether or not NFWF should continue to receive financial support at taxpayer expense.  The issue is not whether or not NFWF should continue to operate; cutting off federal appropriations would force NFWF to reorient some priorities but it would not close its doors.  Nor is the issue whether NFWF has ever promoted sound conservation, for it undoubtedly has.  These questions are separate from the question whether NFWF deserves taxpayer support.

 My recommendation would be for Congress to follow the lead that was taken with the National Endowment for the Arts and begin to phase out federal funding of NFWF over a period of two to three years.  This would provide NFWF with the opportunity to prepare itself for life without federal appropriations and relieve federal taxpayers of yet another small, but significant, claim on their hard-earned resources.  In this day and age, there is simply no reason why NFWF, and similar organizations, should continue to survive at taxpayer expense.

 Barring a move to phase-out federal appropriations for NFWF, this Committee should take additional steps to ensure that NFWF does not support controversial programs or political advocacy.  The provisions in H.R. 2376 are welcome, particularly the explicit limits on NFWF’s activities in Section 5, but they do not go far enough.  Put simply, NFWF should be barred from giving money to any organization that does not agree to limit its own advocacy efforts to those that would be permitted to NFWF itself under Section 5 of the bill.  That is to say that recipients of NFWF funds should forswear any efforts to influence federal legislation beyond that necessary for the recipient organization to protect its immediate interests as an organization.  If NFWF is as devoted to enhancing conservation efforts as its supporters claim, such restrictions should not be a hindrance to its work.

 The National Fish and Wildlife Foundation has a role to play in America’s continuing conservation efforts.  I simply believe that it should pursue this role without the support of federal taxpayers.  The sooner NFWF joins the ranks of truly private conservation organizations, the more valuable its contribution to finding real and lasting solutions to current conservation problems will be.

Thank you for your time and attention.