[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]





  FUNDING OF ENVIRONMENTAL INITIATIVES AND THEIR INFLUENCE ON FEDERAL 
                              PUBLIC LANDS

=======================================================================

                           OVERSIGHT HEARING

                               before the

                         COMMITTEE ON RESOURCES
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                 TUESDAY, MAY 23, 2000, WASHINGTON, DC

                               __________

                           Serial No. 106-97

                               __________

           Printed for the use of the Committee on Resources


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house
                                   or
           Committee address: http://www.house.gov/resources


                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
68-297                     WASHINGTON : 2000

                                 ______



                         COMMITTEE ON RESOURCES

                      DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana       GEORGE MILLER, California
JAMES V. HANSEN, Utah                NICK J. RAHALL, II, West Virginia
JIM SAXTON, New Jersey               EDWARD J. MARKEY, Massachusetts
ELTON GALLEGLY, California           BRUCE F. VENTO, Minnesota
JOHN J. DUNCAN, Jr., Tennessee       DALE E. KILDEE, Michigan
JOEL HEFLEY, Colorado                PETER A. DeFAZIO, Oregon
JOHN T. DOOLITTLE, California        ENI F.H. FALEOMAVAEGA, American 
WAYNE T. GILCHREST, Maryland             Samoa
KEN CALVERT, California              NEIL ABERCROMBIE, Hawaii
RICHARD W. POMBO, California         SOLOMON P. ORTIZ, Texas
BARBARA CUBIN, Wyoming               OWEN B. PICKETT, Virginia
HELEN CHENOWETH-HAGE, Idaho          FRANK PALLONE, Jr., New Jersey
GEORGE P. RADANOVICH, California     CALVIN M. DOOLEY, California
WALTER B. JONES, Jr., North          CARLOS A. ROMERO-BARCELO, Puerto 
    Carolina                             Rico
WILLIAM M. (MAC) THORNBERRY, Texas   ROBERT A. UNDERWOOD, Guam
CHRIS CANNON, Utah                   PATRICK J. KENNEDY, Rhode Island
KEVIN BRADY, Texas                   ADAM SMITH, Washington
JOHN PETERSON, Pennsylvania          CHRIS JOHN, Louisiana
RICK HILL, Montana                   DONNA MC CHRISTESEN, Virgin 
BOB SCHAFFER, Colorado                   Islands
JIM GIBBONS, Nevada                  RON KIND, Wisconsin
MARK E. SOUDER, Indiana              JAY INSLEE, Washington
GREG WALDEN, Oregon                  GRACE F. NAPOLITANO, California
DON SHERWOOD, Pennsylvania           TOM UDALL, New Mexico
ROBIN HAYES, North Carolina          MARK UDALL, Colorado
MIKE SIMPSON, Idaho                  JOSEPH CROWLEY, New York
THOMAS G. TANCREDO, Colorado         RUSH D. HOLT, New Jersey

                     Lloyd A. Jones, Chief of Staff
                   Elizabeth Megginson, Chief Counsel
              Christine Kennedy, Chief Clerk/Administrator
                John Lawrence, Democratic Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held May 23, 2000........................................     1

Statement of Members:
    Chenoweth-Hage, Hon. Helen, a Representative in Congress from 
      the State of Idaho.........................................     1
        Prepared Statement of....................................     4
    Kildee, Hon. Dale, a Representative in Congress from the 
      State of Michigan..........................................     6
    Young, Hon. Don, a Representative in Congress from the State 
      of Alaska, prepared statement of...........................     7

Statement of Witnesses:
    Bennett, Matt, Vice President/Sales, Emmet Vaughn Lumber 
      Company, Maryville, Tennessee..............................   107
        Prepared Statement of....................................   109
    Chandler, Terence E., President/CEO and Director, Redfern 
      Resources, Limited, Vancouver, Canada......................    82
        Prepared Statement of....................................    84
    Huberty, Robert, Executive Vice President, Capital Research 
      Center, Washington, DC.....................................     8
        Prepared Statement of....................................    11
    Miller, Ted, Chairman, Pulp and Paperworkers Resource 
      Council, Gorham, New Hampshire.............................    36
        Prepared Statement of....................................    38
    Phelps, Jack, Executive Director, Alaska Forest Association, 
      Inc., Ketchikan, Alaska....................................    19
        Prepared Statement of....................................    22
    Williams, Eric, Environomics, Cheney, Washington.............    68
        Prepared Statement of....................................    70


 
 OVERSIGHT HEARING ON: FUNDING OF ENVIRONMENTAL INITIATIVES AND THEIR 
                   INFLUENCE ON FEDERAL PUBLIC LANDS

                              ----------                              


                         TUESDAY, MAY 23, 2000

                   House of Representatives
                             Committee on Resources
                                                     Washington, DC
    The committee met, pursuant to notice, at 2 p.m., in room 
1324 Longworth House Office Building, Hon. Helen Chenoweth-Hage 
(acting chairman of the committee) presiding.

STATEMENT OF THE HON. HELEN CHENOWETH-HAGE, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF IDAHO

    Ms. Chenoweth-Hage. The Committee on Resources will come to 
order.
    The committee is meeting today to hear testimony on the 
funding of environmental initiatives and their influence on 
Federal public land policies.
    Recently, one of the lead stories in Philanthropy magazine 
was about foundation funding of environmental organizations. 
Now, the article said that today foundations have much of the 
public agenda, and nowhere more so than in the area of 
environmentalism, where foundations collectively spend upwards 
of $500 million per year that we know of.
    Today we are here to analyze the relationship among large 
foundations, environmental groups, and the Federal Government 
in Federal public land management policy, in regards to 
recreation, timber harvests, mining, and other public lands 
issues. We will also explore the impacts of these policies on 
local communities. Environmental groups are relying more and 
more on a core of wealthy, nonprofit foundations to fund their 
operations.
    The largest environmental grantmaker--the $4.9 billion Pew 
Charitable Trusts--gives more than $35 million annually to 
environmental groups. Other large wealthy foundations such as 
the Turner Foundation, W. Alton Jones, and Lucile and David 
Packard Foundations, are not far behind Pew in their 
grantmaking to environmental groups.
    Foundations have funded environmental advocacy campaigns 
for more wilderness, curtailing timber harvests, and mining, 
breaching dams, and Federal control of ecosystem planning. An 
example of this type of activity is the Heritage Forest 
Campaign, the subject of an oversight hearing on February 15, 
2000, by the Subcommittee on Forests and Forest Health.
    The Heritage Forest Campaign, a coalition whose sole 
purpose appears to be lobbying the Clinton-Gore administration 
to implement the Roadless Initiative, which would withdraw up 
to 60 million acres of national forest lands from multiple use. 
This campaign is largely organized and funded by tax-free 
grants from charitable foundations such as the Philadelphia 
based Pew Charitable Trusts, with $4.9 billion in assets--the 
fifth largest U.S. charitable foundation.
    Now, since September 1998, Pew has given the National 
Audubon Society more than $3.5 million in tax-free grants to 
organize the Heritage Forest Campaign, a coalition of about a 
dozen environmental groups. The sole objective of the campaign 
appears to be the creation of widespread public support for the 
Clinton-Gore administration's initiative to restrict access on 
60 million acres of national forest lands.
    The Heritage Forest Campaign illustrates several potential 
problems with foundation-financed environmental political 
advocacy, namely the lack of fair, broad-based representation, 
and the absence of accountability. Particularly disturbing is 
this administration's acquiescence to the campaign in the 
setting of policy.
    At a recent hearing on the Roadless Initiative, I asked 
George Frampton, Director of the Council on Environmental 
Quality, for the names of all those attending any meetings he 
had held regarding the development of the Roadless Initiative. 
The list he sent in response is a who is who in the 
environmental community. Even more telling is that not one 
individual representing recreation, industry, academia, county 
commissioners, or local schools were in attendance. Only 
representatives of the national environmental groups 
participated.
    Not only was the public excluded during these meetings, but 
so was Congress. The administration's Roadless Initiative 
appears to be an attempt to bypass the role of Congress. Under 
Article IV, Section 3, of the United States Constitution, 
Congress possesses the ultimate power over management and use 
of lands belonging to the United States.
    If the Roadless Initiative is universally popular, why 
can't the Heritage Forest Campaign get it enacted by Congress 
through the normal legislative process? Administrative 
directives, such as the Roadless Initiative, bypass Congress 
and centralize policymaking authority within the hands of 
unelected bureaucrats in the executive branch.
     Foundation-funded advocacy groups make backroom deals, 
thus denying the average citizen a voice and input into the 
policy through their elected representatives in Congress. As a 
result, our Government becomes more remote and unresponsive to 
the needs of the average citizen.
    To whom is the Heritage Forest Campaign accountable? This 
campaign is put together by foundations, not the participants. 
The grantees are accountable to the foundations that fund them, 
not their own members. Foundations have no voters, no 
customers, and no investors. The people who run big foundations 
are part of an elite and insulated group. They are typically 
located hundreds or even thousands of miles from the 
communities affected by policies they advocate.
    They receive little or no feedback from those affected by 
their decisions, nor are they accountable to anyone for 
promoting policies which adversely affect the well-being of 
rural people and local economies. Today's witnesses will tell 
us how their communities are being crushed by an inaccessible 
and faceless movement, wielding great power and influence.
    The role of large foundations in funding environmental 
advocacy raises some fundamental questions. Foundation wealth 
shapes public policy at the expense of all counter views. Even 
worse, those skeptical of foundation-supported policies are 
often smeared by foundation-funded media campaigns in an 
attempt to marginalize them in the debate. Even alternative 
environmental solutions are rejected out of hand as 
environmental groups mold their programs and their agenda to 
please the large grantmakers.
    Does foundation-financed advocacy prevent full and fair 
public debate on public lands issues? Is the average citizen's 
voice and input in the government decisionmaking process 
drowned out by foundation-funded advocacy groups?
    The most fundamental question of all is, what happens to 
the towns and communities affected by policies resulting from 
foundation-funded advocacy? The people living in these 
communities are left with a ruined local economy. Their towns 
lack the income to provide even basic services. Their schools 
have no revenue to teach their children.
    The important issue here is whether the foundation 
strategies used to fund the environmental movement are buying 
undue influence for those groups on public lands policy. I 
believe it will become very clear during this hearing that this 
isn't an issue concerning the environment, but rather one 
concerning power and its use for political ends, with rural 
communities being trampled in the process.
    [The prepared statement of Ms. Chenoweth-Hage follows:]

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    Ms. Chenoweth-Hage. I look forward to listening to today's 
witnesses. I want the record to show that representatives from 
the following foundations were invited to testify before us 
today, and all declined to appear. Those organizations are the 
Pew Charitable Trust, W. Alton Jones Foundation, and the Turner 
Foundation. Some of our witnesses came several thousand miles 
to testify, yet foundations in Philadelphia and Charlottesville 
just couldn't make it.
    So now I will recognize and introduce our first panel as we 
begin the--since the ranking member isn't here, I would like to 
defer to the gentleman from Michigan for any opening statements 
he may have.

STATEMENT OF THE HON. DALE KILDEE, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF MICHIGAN

    Mr. Kildee. Thank you, Madam Chair. I shall be very brief.
    We have a wide range of foundations in the country. They 
represent every part of the political and ideological spectrum. 
And I think you and I would basically agree, even with your 
conservative point of view and my liberal point of view, that 
Government should have a natural reluctance to limit their 
advocacy and their areas of interest and support.
    But I do appreciate the fact that you are having the 
hearing today because knowledge is power.
    Ms. Chenoweth-Hage. I thank the gentleman from Michigan.
    [Prepared statement of Hon. Don Young follows:]

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    And now I will introduce the first panel--Mr. Robert 
Huberty, Executive Vice President of Capital Research Center in 
Washington, DC.; Mr. Jack Phelps, Executive Director of the 
Alaska Forest Association in Ketchikan, Alaska; Mr. Ted Miller, 
Chairman, Pulp and Paperworkers Resource Council in Gorham, New 
Hampshire.
    As has been explained to you, it is the intention of the 
Chairman to place all of our outside witnesses under oath. It 
is a formality of the committee, when I chair the committee, 
that is meant to assure open and honest discussion and 
shouldn't affect the testimony given by the witnesses.
    I believe that all of the witnesses were informed of this 
before appearing here today, and that they have each been 
provided a copy of the committee rules. So if you will please 
stand and raise your hand to the square.
    [Witnesses sworn.]
    And now the Chairman recognizes Mr. Huberty for his 
testimony.

STATEMENT OF ROBERT HUBERTY, EXECUTIVE VICE PRESIDENT, CAPITAL 
   RESEARCH CENTER, WASHINGTON, DC.; JACK PHELPS, EXECUTIVE 
 DIRECTOR, ALASKA FOREST ASSOCIATION, INC., KETCHIKAN, ALASKA; 
   AND TED MILLER, CHAIRMAN, PULP AND PAPERWORKERS RESOURCE 
                 COUNCIL, GORHAM, NEW HAMPSHIRE

                  STATEMENT OF ROBERT HUBERTY

    Mr. Huberty. I will summarize my comments, if I might, from 
my written testimony.
    Thank you for inviting Capital Research Center to testify 
on how environmental initiatives are funded. My name is Robert 
Huberty, and I am Executive Vice President of Capital Research 
Center, which is based in Washington, DC.
    Capital Research Center studies charity, philanthropy, and 
the nonprofit sector. We take a particular interest in the role 
of public interest organizations and their impact on American 
politics and society. We do not solicit or accept any 
government contracts or grants.
    Capital Research Center has published a number of recent 
studies about the groups that comprise today's environmental 
movement. We think there is inadequate public understanding 
about the underlying philosophy of these groups, the ties and 
linkages among their leaders, and, most particularly, their 
access to funders and to public policymakers.
    Specifically, today I would like to talk about the role of 
the grantmaking foundations that provided financial support for 
the Heritage Forests Campaign. These foundations have 
orchestrated a major public relations campaign to advocate for 
changes in Government regulatory policies.
    Last October 13th President Clinton directed the Forest 
Service to prepare a study that would ban road building on 
parts of the national forest system that are currently 
roadless, but that Congress has not agreed to designate as 
permanent wilderness areas. The President's speech was 
anticipated by the Pew Charitable Trusts, which acknowledges 
that it organized the campaign to promote the Roadless 
Initiative.
    On September 24, 1998, the Pew Trusts made a grant of 
$1,415,000 to the National Audubon Society, as you indicated. 
One year later, September 23, 1999, it gave an additional grant 
of $2,150,000, for 15 months ``to complete a public education 
effort for permanent administrative protection of the largest 
remaining tracts of pristine old growth remaining in the U.S. 
national forests.''
    The purpose of the Pew grant money was to assemble 
organizations working under Audubon's supervision to 
orchestrate the Roadless Campaign. The campaign has 24 
organizations as campaign partners, and its web site indicates 
that it also receives financial support from the W. Alton Jones 
Foundation and the Turner Foundation. And my written testimony 
contains a chart with additional information compiled from 
public sources on foundation funding for the initiative.
    The Pew Trusts are major funders of the campaign, but 
besides the Audubon grants, in 1998, it gave $800,000 to the 
Earthjustice Legal Defense Fund. Just this March 16th, it gave 
the Alaska Conservation Foundation $500,000. Pew also gave the 
National Environmental Trusts $3 million in grants in 1999 and 
in 2000 for general operating support. The Heritage Forests are 
one of their four target areas.
    The Pew Trust is not the only foundation promoting the 
Roadless Initiative. As you know, the World Wildlife Fund and 
the Conservation Biology Institute asked the David and Lucile 
Packard Foundation for a grant of $650,000 for roadless area 
mapping.
    Now, the groups supervised by the Audubon Society, with 
grants from Pew and other foundations, recently expressed their 
opinion of the Forest Service recommendations that were issued 
on May 9th, and they were dismayed. In looking at their web 
sites, you can see a remarkable uniformity.
    They say that the President is not to blame, but they 
assert that his administration has failed to implement his 
vision. They are disappointed that the Forest Service 
recommends a ban on new roads but does not permanently ban 
logging and offroad vehicle use.
    They are appalled at the decision to defer action on the 
Tongass National Forest, and they are unhappy that the ban 
applies to inventoried areas of 5,000 or more acres, but not to 
the uninventoried areas of 1,000 acres or more. And they urge 
their followers to turn out for the public comment meetings 
that were organized last week.
    Congress and the public have good reason to question the 
funding priorities of large foundations. Private foundations 
are peculiar creations of public law. Their assets are tax 
exempt. Contributions to them are tax-deductible. They are 
often established to avoid estate taxes.
    Government gives a foundation these privileges with the 
expectation that its trustees will respect the intentions of 
the donor who established it and that those intentions are 
benevolent and charitable.
    Certainly, a foundation may support research and education 
programs. But when a foundation organizes a lobbying campaign 
on highly divisive political issues, when it uses its largess 
to task one nonprofit organization--the Audubon Society--to 
coordinate the lobbying of other nonprofits, then the Congress 
should ask whether the spirit of the law is being upheld.
    The Pew Charitable Trusts may respond, and if they were 
here they might respond, that they are doing what they have a 
right to do, that others do it, and that no one has called on 
them to stop doing it. But by making themselves merely another 
Washington lobbying group, they undermine, in my opinion, the 
traditions and institutions of philanthropy which are a very 
vital part of our society.
    Thank you very much.
    [The prepared statement of Mr. Huberty follows:]

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    Ms. Chenoweth-Hage. Thank you, Mr. Huberty.
    And the Chair recognizes Mr. Jack Phelps for his testimony.

                    STATEMENT OF JACK PHELPS

    Mr. Phelps. Thank you. My name is Jack Phelps. I am the 
Executive Director of the Alaska Forest Association, which is 
the State-wide forest products industry trade association for 
Alaska.
    The AFA represents about 90 member companies directly doing 
business in the forest products industry in Alaska and their 
employees, and about another 160 companies that are supportive 
of the industry in terms of vendors and that sort of thing.
    The Tongass National Forest in southeast Alaska has 
historically supported a commercial forest industry that has 
provided stable year-round employment for the communities of 
the region and accounting for one-third of the region's 
economy. Over the past decade, however, declining timber 
harvests from the Tongass National Forest have eliminated 
thousands of jobs and millions of dollars from the regional 
economy.
    According to a recent study produced by the McDowell Group, 
a research firm based in Juneau, and I quote, ``Since 1990, the 
volume of timber harvested from the Tongass National Forest has 
dropped from 470 million board feet to 120 million board feet 
annually, a 75 percent decline.'' In fact, the Tongass timber 
harvest is at the lowest point since 1954, which was the year 
in which industrial timber harvests began in southeast Alaska.
    Throughout the 1960's and 1970's, the Tongass timber 
harvests ranged from 400 to 600 million board feet per year, 
fluctuating in response to world markets for pulp and lumber 
products. Market conditions pushed the Tongass harvest to a low 
point in 1985, about 230 million board feet. And the harvest 
increased to 470- in 1990 before beginning a steady decline 
throughout the 1990's in response to political forces and 
changing resource management practices.
    The McDowell report goes on to say timber industry 
employment is at its lowest point in over 30 years, now 
directly accounting for only 670 jobs. At its peak in the 
1970's, it generated 4,000 timber industry jobs in southeast 
Alaska. As recently as 1990, the industry accounted for 2,400 
direct jobs. Since 1990, however, the industry has lost jobs at 
a rate of 200 jobs per year. This includes the closures of pulp 
mills in Sitka, in Ketchikan, and a large saw mill in Wrangell.
    These mills were the single largest employers in each of 
these communities. Most recently, Metlakatla lost its largest 
private sector employer with the October closure of the saw 
mill.
    The loss of 1,700 pulp mill, saw mill, and logging jobs 
during the 1990 to 1998 period has rippled through local 
economies, resulting in additional job loss. Based on the U.S. 
Forest Service employment multiplier for the region's timber 
industry of 1.8, the job loss total is estimated at 
approximately 2,900 jobs. This job loss translates into a loss 
of over 100 million dollars in annual payroll in southeast 
Alaska.
    The loss of year-round family wage jobs has hit small 
communities the hardest. For most of the 1990's, for example, 
Wrangell has struggled with a 40 percent unemployment rate. 
Small communities on Prince of Wales Island are now beginning 
to feel the serious economic harm resulting from cessation of 
activities related to the Ketchikan pulp mill.
    While Congress has attempted to soften the blow by 
providing disaster relief money to the communities of southeast 
Alaska, this only helps in the short term and is no substitute 
for long-term employment at wage levels that sustain families 
and communities. It has affected those family's abilities to 
get health insurance as well.
    A factor significantly contributing to this decline is 
the--have been the activities of radical groups in the region. 
These groups have mounted sustained propaganda campaigns aimed 
at convincing the American public and the national 
administration that the timber industry has been devastating 
the Tongass National Forest by its logging activities. A look 
at the statistics on that--of harvest on that forest deny that 
assertion.
    The efforts of the anti-development groups are sustained by 
huge grants of money from large charitable trusts which receive 
tax protection from the Federal Government and are, therefore, 
subsidized by the American taxpayers, including the taxpayers 
in southeast Alaska who are losing their living and their way 
of life due to the efforts of these groups.
    For example, in 1997 and 1999, the Pew Charitable Trust 
gave $1.2 million to the Alaskan Conservation Foundation which 
routed most of that money into Tongass-related activities, 
including a grant of $529,000 to the Alaska Rainforest Campaign 
in 1998. I have detailed many of these in an inter alia list in 
my written testimony, but I would point out to the committee 
that this represents only the tip of the iceberg. These grants 
are hard to track down, but they are voluminous.
    It should be noted that these expenditures leverage the 
significant amount of other taxpayers' dollars running into the 
millions that were used by the agency to defend itself against 
these appeals and litigation. Furthermore, the committee should 
be aware that it is this very activity that greatly increases 
the cost of the timber sale program in Alaska.
    The same groups then turn around and publicly criticize the 
agency for running a deficit timber sale program and call it a 
subsidy to the industry. A recent Forest Service report shows 
that nearly half of the cost of the timber sale program in 
Alaska is attributable to the cost of NEPA compliance, 
including the costs of appeals and litigation.
    This taxpayer subsidized activity must be stopped or at 
least controlled. It is simply wrong for the American taxpayers 
to be supporting efforts aimed at destroying the economies of 
small American communities in Alaska and elsewhere.
    The United States is a country where people are free to 
hold whatever political and religious views they want to, and 
to actively pursue their own political goals. The Alaska Forest 
Association does not object to that. We do object, however, to 
having those groups use tax shelters to pursue their political 
ends when those ends directly harm other people and destroy the 
economies of rural communities.
    We, therefore, ask this committee to carefully investigate 
the activities of these huge, wealthy foundations, and the use 
of their tax shelters to promote campaigns that are wreaking 
devastation on the rural communities of our country.
    Thank you very much for the opportunity to testify.
    [The prepared statement of Mr. Phelps follows:]

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    Ms. Chenoweth-Hage. Thank you, Mr. Phelps.
    And the Chair recognizes Mr. Miller for his testimony.

                    STATEMENT OF TED MILLER

    Mr. Miller. My name is Ted Miller. I am an elected trustee 
and a card-carrying member of PACE Local 75 out of Berlin, New 
Hampshire, part of the union representing 700 mill workers in 
my area. I am also active in the Pulp and Paperworkers 
Resources Council, an organization representing labor in over 
100 wood product mills throughout the country.
    I have run for public office in the past as a Democrat, and 
I will be doing so again. I am here to testify about how 
foundation grants affecting public policy have already caused 
job loss in my community and threaten more jobs and also 
recreation opportunities.
    In 1990, the Jessie B. Cox Foundation awarded the 
Appalachian Mountain Club a $315,000 grant to promote a 
greenline strategy for the northern forests. In other words, 
the object is for the government to buy land and put it off 
limits to almost all human activity.
    As a direct result, the Northern Forest Alliance was 
created. This coalition of over 30 environmental groups 
includes the Appalachian Mountain Club, the Sierra Club, the 
Wilderness Society, and the National Audubon Society. They have 
targeted over eight million acres of private-owned lands in 
northern New England and upstate New York to become Government-
owned lands.
    Over $2 million from foundations, including Pew Charitable 
Trust, the John Merck Fund, the Richard King Mellon Foundation, 
as well as the Jessie B. Cox Foundation, was given to the 
Northern Forest Alliance for the purpose of advocating for huge 
purchases of private lands by the Government.
    About 85 percent of the 26 million acre northern forest is 
in private ownership. The major ownership of these lands is 
with the forest product industry, most of whom provide raw 
materials for their use and that of other producers. Under this 
current land ownership pattern, forest growth has exceeded 
harvest since 1920. This could not have happened if they were 
harvesting at the rate many environmental groups claim.
    In New Hampshire alone, the forest product industry 
provides almost 17,000 direct and indirect jobs and almost $4 
billion in direct and indirect income. This is only possible 
because most of the land is in private ownership.
    Over the last two decades, the White Mountain National 
Forest where I live and the nearby Green Mountain National 
Forest have had their annual timber harvest severely reduced, 
largely because of foundation financed activism. The impact on 
the local economy has been felt. The loss of timber revenue has 
resulted in a higher cost for community residents for their 
schools and roads. Good-paying timber jobs have been lost as 
well.
    For these reasons, those who want to see more Government-
owned lands are not the people who have lived and worked in the 
northern forest area for generations. It is foundation funds 
that are going to groups like the Northern Forest Alliance and 
the AMC, whose spokesman, Dave Publicover, told an audience at 
a meeting in North Conway, ``If my grandchildren can come up 
here and see a cougar, then we have done something right. If 
not, we have failed, no matter how many jobs there are.''
    In advocating for large Government land purchases, Mr. 
Publicover doesn't care if almost 10,000 pulp and paperworkers 
throughout the northern forest lose their jobs. The AMC doesn't 
care if almost 10,000 pulp and paperworkers throughout the 
northeast lose their jobs. The Northern Forest Alliance doesn't 
care if almost 10,000 pulp and paperworkers lose their jobs.
    And it is obvious that the wealthy foundations giving huge 
grants to those organizations don't care if 10,000 pulp and 
paperworkers lose their jobs. Indeed, that seems to be one of 
their goals.
    It is our only hope that you care about our jobs and that 
you care enough to say no to the foundations who are advocating 
huge Government land purchases. More Government lands may be in 
the best interest of the various foundations, but they are not 
in the best interest of the economy.
    More Government lands are not in the best interest of the 
American worker. And, as we have learned, more Government lands 
are not in the best interest of the environment either.
    I have submitted further documentation with the Records 
Clerk. And on behalf of the 700 pulp and paperworkers of Local 
75, I thank you for your time and this opportunity.
    [The prepared statement of Mr. Miller follows:]

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    Ms. Chenoweth-Hage. Thank you, Mr. Miller, and I do want to 
assure you I do care. It is staggering.
    Mr. Miller, I wanted to begin my questioning with you. I 
wanted to ask you what do you believe is the justification for 
the foundations having a contention that public ownership is 
probably better than private ownership. What do you think--why 
do they believe that? Do you have any idea?
    Mr. Miller. Well, apparently, if such information exists, 
they are keeping it a secret. When foundation-funded 
environmental groups meet, they have deliberately excluded 
local citizens and even public elected officials from their 
planning sessions. Their goals were developed without any 
consultation with local representatives.
    I would like--go ahead, please.
    Ms. Chenoweth-Hage. Can you tell me, have local people been 
excluded from these planning sessions? In your experience, has 
the union been included, or your neighbors, or community 
leaders?
    Mr. Miller. We have been deliberately excluded. It was in 
late 1992 when the Wilderness Society and the AMC sent out 
notices to various environmentalists and the public visitors of 
Pinkum Notch that they were invited to attend a meeting for the 
purpose of activist training at the AMC facility on the White 
Mountain National Forest.
    On the agenda was an item listed as the Northern Forest 
Alliance Overview, discuss the Alliance, and their three-part 
platform for the northern forest. When several publicly elected 
officials from various communities, the county, and even our 
Governor's executive counselor, requested to be allowed to 
attend this meeting, they were told that they were not welcome.
    After much publicity and questions about the legality of 
environmental groups, holding a meeting on Government land and 
excluding public representatives, the leaders of the meeting 
and selected guests fled to a location outside of the national 
forest--a resort in Jackson, New Hampshire.
    They then hired a policeman to keep the meeting a secret. 
No one, not even the press, was allowed to hear how they 
supposedly would achieve a healthy environment with a strong 
local economy.
    What do you think that they were trying to hide? It is 
obvious that foundation directors are using environmental 
groups to play social engineer with the lives of local people.
    Ms. Chenoweth-Hage. Mr. Phelps, you have spoken about the 
activities of environmental groups which are funded by these 
foundations, and I really found your testimony riveting and 
interesting. These well-funded foundation groups give grants 
and play an active part in hindering the timber industry's 
ability to purchase Federal timber from the Tongass National 
Forest, and that is happening all over in our national forest 
lands.
    Can you give us, from your experience, any recent examples 
of specific activities that fit into this category, perhaps an 
effort that is presently going on or--I just came back from 
Alaska, and I am shocked at the condition of the Tongass 
National Forest. So can you enlighten us, please.
    Mr. Phelps. Sure. An interesting one that is going on right 
now is a group that decided that it would be useful to its 
purposes to have a slew of postcards generated from what 
essentially has been the timber capital of southeast Alaska for 
a long time--Ketchikan.
    So they mobilized a team of people to go in and set up an 
information distribution booth in front of the local Forest 
Service facility, which is about a half a block from the cruise 
ship dock. Now, interestingly, the city has a municipal 
ordinance against distributing literature on the cruise ship 
dock, so they managed to use a Federal agency to front for them 
and allow them to distribute their propaganda on the steps of 
its own--what they call the Discovery Center, which is their 
visitor center.
    And they had claimed, of course, that they had no right to 
tell them they couldn't because of First Amendment rights. And 
in any case, the interesting thing about this organization is 
it was clearly organized by environmental groups located in the 
lower 48 and was well-publicized at the first on one of their 
web pages where they put out the word that Ketchikan 
desperately needed their help, because we had been--and I 
quote--``in the grip of the wise-use movement for many years,'' 
and we are fearful of our Congressional delegation and the 
other local political gangsters that prevented the Ketchikan 
people from speaking for themselves.
    And so it is this kind of hyperbole and gratuitous slander, 
really, that is often used to stir up the unwary and mobilize 
these fellow travelers to go and do their thing in terms of 
generating ``public support'' for Government actions that are 
damaging to our communities.
    Ms. Chenoweth-Hage. I have other questions that I would 
like to ask members of the panel, but I see my time is up. So 
the Chair will recognize Mr. Kildee for his questions.
    Mr. Kildee. You mentioned, Mr. Phelps, gangsters. Who were 
these gangsters?
    Mr. Phelps. Well, the statement was--I was making a 
quotation from the environmental groups that were saying that 
our town was in the grip of political gangsters, and we believe 
that those were references to our local State representative 
and State Senator.
    Mr. Kildee. OK. Thank you.
    Foundations are fairly heavily regulated by the IRS. I know 
in Michigan we have three large foundations--the Kellogg 
Foundation, the Ford Foundation, the Mott Foundation. I know 
they are highly regulated by the IRS.
    Are you suggesting, Mr. Huberty, new regulations, further 
regulations, for the foundations?
    Mr. Huberty. Well, I think it is something that has to be 
looked into. It is true that they are regulated, but I don't 
think they have been scrutinized very carefully because 
foundations have, generally speaking, a good reputation. There 
are 40,000 foundations in the United States, a lot of them 
family foundations. Most of them are doing charitable good 
deeds, and so I think there has been a disinclination, really, 
to look very carefully at what foundations are doing.
    But to the extent to which groups like the Pew Charitable 
Trusts increasingly involve themselves in coordinated 
activities, in designating nonprofits and telling them, ``Here 
is the money if you do particular things, and here is how the 
money is going to be distributed, and how it is going to--the 
campaign will be advanced,'' the more that orchestration is 
apparent or appears so, I think the more scrutiny they make 
themselves subject to.
    The Pew Charitable Trusts do many fine things in the 
Philadelphia area. They do historical restoration, education 
projects, and so forth. But in focusing on the environment, 
they have made it a point not of spending money on purchases of 
land and conservation, that sort of thing, but rather on this 
kind of coordinated campaign.
    Mr. Kildee. You indicated that the Government should have 
more scrutiny. What should they be looking for in their 
scrutiny of these foundations?
    Mr. Huberty. Well, right now, I think it is more to get the 
word out, to have the foundations looking at one another.
    Mr. Kildee. We don't want to scrutinize to say you are 
saying the right thing, and you are saying the wrong thing. You 
don't want Government to decide what is right and what is wrong 
in advocacy, do you?
    Mr. Huberty. It would be very troubling to have the 
Government decide what is a particular advocacy action. One 
solution would simply be more disclosure. Right now, I don't 
think the foundations are--it is not incumbent on them to make 
clear their relationships to one another, and that might be 
helpful. To come up with the research to find out what 
foundations are spending their money on is very difficult.
    Mr. Kildee. But I think you and I would agree that we would 
not want Government to say you are OK because you advocate this 
position, but you are not OK but you advocate that position. We 
wouldn't want Government to do that, would we?
    Mr. Huberty. Generally speaking, I would agree with you on 
that. On the other hand, we have the phenomenon now of Members 
of Congress being very critical about soft money spending on 
campaigns, issue advocacy campaigns. Well, this is what this is 
becoming. The foundations are becoming soft money providers to 
those who have specific issue advocacy.
    I think a lot of people have problems with that. But the 
foundations are putting themselves into that category when they 
do that.
    Mr. Kildee. I have sometimes problems with some things that 
an individual would advocate, but I certainly wouldn't want to 
take away from that individual the right to advocate that way. 
And who would want Government to say, you know, your advocacy 
is not pleasing to the Government, and, therefore, we are going 
to limit you.''
    I think you and I would agree on that, would we not, that 
we don't want to--you yourself, you are the Vice President of 
the Capital Research Center. You receive foundation funds also, 
do you not?
    Mr. Huberty. We do. We do.
    Mr. Kildee. So aren't we embarking on maybe a rather 
dangerous path, maybe an attractive path for a particular goal, 
but maybe a dangerous path if we are trying to limit 
foundations and where they can advocate, how they can advocate?
    Mr. Huberty. It is a difficult path, but on the other hand 
I think the foundations are taking the step, by injecting 
themselves in the political process, by making themselves part 
of that process. And announcing that they are going to become 
part of that process, I think they invite that sort of 
scrutiny.
    Mr. Kildee. But do they lose their basic right of advocacy 
because they are spending dollars that have been left to the 
foundation either by one person or others? Do they have less 
rights of advocacy?
    Mr. Huberty. You know----
    Mr. Kildee. You mentioned--just think about that. I think 
we are just embarking on a very dangerous path, and we are 
saying that you are an A classification because we like what 
you advocate, but you are a B classification because we don't 
like what you advocate. And Government will put some 
regulations on A category. I think it is just, in my mind, a 
dangerous----
    Mr. Huberty. But, on the other hand, we are talking not 
just about speech. But we are talking about money. And the 
money----
    Ms. Chenoweth-Hage. The gentleman's time is up.
    Mr. Huberty.--and the exercise of power that comes with it.
    Mr. Kildee. That is the whole thing with campaign finance, 
too. Is it money, or is it the advocacy, right? We are 
struggling with that down here, too, and I appreciate that.
    Ms. Chenoweth-Hage. The gentleman's time is up.
    Mr. Kildee. Could I just finish one--the Pew Foundation, 
for example, not that the chairlady and I need it, but the Pew 
Foundation each year funds a conference in Hershey, 
Pennsylvania, to help us become more civil with one another. 
Now, the chairlady never needed to go to that.
    You probably went there anyway, but you didn't need it, 
because she has always been civil----
    Ms. Chenoweth-Hage. Do you think it shows?
    [Laughter.]
    Mr. Kildee.--has always conducted these hearings--and I 
mean that seriously--in a very, very fair manner, and I 
appreciate it.
    Ms. Chenoweth-Hage. I thank the gentleman.
    Mr. Duncan?
    Mr. Duncan. Well, Madam Chairman, thank you very much.
    There are--when you are tax exempt, there are certain 
restrictions on what foundations can do. For instance, certain 
lobbying activities, although sometimes it is hard to tell the 
difference.
    But I don't know that I have any questions. I want to make 
a couple of comments, though, that maybe some of the panelists 
may want to respond to. I know a few months ago in the Forest 
Subcommittee we were told that over 39 million acres out west, 
almost 40 million acres, was in immediate or imminent danger of 
catastrophic forest fires because of all the fuel buildup.
    And now we have seen the Los Alamos and the Nevada fires, 
and I heard Secretary Babbitt on television last week saying 
our forests were 100 times more dangerous than they were 100 
years ago. I don't know exactly where he got those figures, but 
they are more dangerous, in the opinion of many people, because 
of the policies that he is following.
    Because we were told in the Forest Subcommittee several 
months ago that we have 23 billion board feet of new growth 
each year on our national forests. And yet the Congress passed, 
in the mid 1980's, what was hailed as a great environmental law 
that we would not cut more than 80 percent of the new growth. 
Now we are down to cutting less than three billion board feet a 
year, which is less than one-seventh of the new growth.
    And they told us at this hearing that we have six billion 
board feet that are dead or dying, and yet these environmental 
extremists won't even let people go in and get the dead and 
dying trees. And yet there has been such I think almost a 
brainwashing of the children that if I went to any school in 
Knoxville, Tennessee, and told them that I was against cutting 
a single tree in the national forest they would probably cheer 
or say that they thought that was a good thing.
    But they don't stop to think that if we don't cut some 
trees that we won't--we can't have healthy forests. If we don't 
cut some trees, we can't build homes, furniture, books, 
newspapers, magazines, toilet paper, all kinds of products that 
we desperately need.
    And then, even worse, as Mr. Miller has gotten into, when 
you start restricting and cutting back on this logging so 
drastically, then what do you do? You destroy thousands of 
jobs, you drive up prices.
    I remember reading five or 6 years ago that the average 
income of a member of the Sierra Club was about four times that 
of the average American. I think they were bragging about it to 
get advertisers. And I have noticed over the years that most of 
these environmental extremists come from very wealthy families.
    And I am not sure that they--I know one thing, they are 
probably insulated from the harm that they are doing, and I am 
not sure that they really realize how much harm they are 
causing for the lower income and middle income and the working 
people in this country. But I think it is kind of sad what they 
are doing.
    And yet it is amazing to me that we still continue down 
this path. We have 191 million acres in the national forests in 
this country, and I think that what people look at--they look 
at a map of the entire United States on one page in a book, and 
it looks like it is a little small country. And people forget 
how big this country is.
    And I represent half of the Great Smoky Mountains National 
Park, and about half of the Cherokee National Forest. Well, I 
can tell you the Great Smoky Mountains National Park, which is 
visited by 10 million people each year--and people who go there 
think it is huge--it is 565,000 acres. Now, the national 
forests cover 191 million acres. That is more than--that is 325 
times the size of the Great Smoky Mountains National Park.
    I just don't understand why we have to go to such extremes. 
I do know that what is--I think what happens is this. These 
environmental groups have gotten in big contributions for many 
years, and I think years ago when they were more moderate they 
did some good things. But they keep having to go to further and 
further extremes to keep those big contributions coming in. And 
I think it is all about money.
    They are backed up. You know, there are many big companies. 
For instance, I am told that we are having to import all kinds 
of Canadian lumber now because we have restricted the logging 
in our own country so much. There are a lot of big companies 
that benefit, a lot of big foreign companies that benefit when 
we don't cut any trees or dig for any coal or drill for any 
oil. There are a lot of companies in other countries that 
benefit from that.
    And I think that is what is behind an awful lot of this, 
but it is--we are getting to the point where we are destroying 
all of these thousands of jobs that Mr. Miller talked about, 
and we are driving up prices for our own people. And I think 
some people need to start speaking out about it.
    Mr. Miller, do you have any comments you wish to add or----
    Mr. Miller. Yes, I would like to just go on a little bit 
about what you were talking about. One of the things that 
bothers us the most is that there is no accountability by these 
foundations or by these groups who are doing their bidding.
    I have here, for instance, a letter from Carl Pope with the 
Sierra Club, and in one of these things they are--just one 
point that I wanted to make. He is telling people that he needs 
their help to establish the Maine Woods and White Mountain 
National Parks in the northeast to keep timber companies from 
clear-cutting nearly four million acres of pristine wilderness.
    That is absurd. That is ridiculous. It is downright 
outright false. It is simply--as we say up north, it ain't 
going to happen.
    For one thing, the practice of clear-cutting has been 
severely reduced, and for another thing when it is applied 
generally it is applied for a sound timber management purpose. 
All right. You don't have the hundreds of acres being clear-cut 
like you did in the 1980's. And when that did happen in the 
early 1980's, yes, there were some unsightly messes. I will be 
the first to admit it.
    A lot of that was because of the spruce bud worm 
infestation in northern Maine. And if those forests hadn't been 
cut--I have seen pictures of some of those areas, and those 
trees are brown. Evergreen trees turned brown because they were 
dead and dying from the blight. They were cut. Right now, 20 
years later, you have a healthy forest growing trees that are 
30 to 40 feet tall. That would not have happened----
    Ms. Chenoweth-Hage. The gentleman's time is up.
    Mr. Miller. --without some management practices. And, 
again, you know, it is very distressing that these foundations 
are giving money to these environmental organizations who are 
making all kinds of false claims. And if I was, for instance--
--
    Ms. Chenoweth-Hage. The gentleman's time is up.
    Mr. Miller. OK. I am sorry. Thank you.
    Ms. Chenoweth-Hage. The Chair recognizes Mr. Holt. We will 
have a second round of questions.
    Mr. Holt. Thank you, Madam Chair.
    It seems that our--with our vast country, with our really 
intricate environment, requires a lot of effort to look after 
from a lot of perspectives. And it seems to me that we don't 
all come at these things from the same perspective, but we, as 
a society, want to preserve the ability of people to speak out 
from different perspectives.
    It seems to me that these foundations, some of which I am 
familiar with, have some pretty good accountability built into 
their own organization, not to mention the accountability they 
face from the IRS and other Federal oversight.
    I guess I would like to pursue a couple of points. Let us 
see, Mr. Phelps, you represent the Alaska Forest Association. I 
assume that is funded primarily by corporate interests in 
Alaska. Is that correct?
    Mr. Phelps. That is correct. Our operations are funded by 
dues paid by our members based on the amount of economic 
activity they have.
    Mr. Holt. Right. And so you are here at their expense, as 
an advocate, for their views on forest management, I guess.
    Mr. Phelps. Sir, that is correct. I think the substantial 
difference is that they pay taxes on their income.
    Mr. Holt. I would like to ask a couple of you to comment on 
the comparison between the influence of corporations and of 
foundations. What is the expenditure, just take your 
association, for example, or maybe somebody comment on the 
Forest Products Association, the AFPA--what is the advertising 
budget of each of those, of your organization, Mr. Phelps?
    Mr. Phelps. Sure. Our total advertising budget per year is 
around $60,000 now. And, you know, I think it is important to 
realize that, you know, we provide services such as a group 
health insurance plan for our companies' employees, and we 
manage a pension for those employees. I mean, we are not 
strictly an advocacy group. We are an industry trade 
association which provides direct services to the employees 
that our member companies employ.
     And our total budget is--only a small slice of it is used 
for public affairs, and most of that is used to work with 
agencies on regulatory activities, so that we accomplish their 
purposes and ours at the same time.
    So, you know, our availability of money for advertising in 
response to the huge media campaigns that are funded by these 
foundations is extremely meager. I mean, I could blow my whole 
budget buying one full-page ad in The New York Times.
    Mr. Holt. None of us here are suggesting that you or the 
Forest Products Association or anyone else should be restricted 
in speaking out on subjects of interest. And, by the way, I 
dare say that the Pew Foundation and others also provide 
employee benefits for their workers.
    But my point is that there is, I think, a great deal of 
influence of public opinion that comes from corporate 
interests, that comes from nonprofit interests. There are a 
number of perspectives out there, and we want to have a vibrant 
intellectual marketplace.
    And, you know, I think you are--and all of us are--quite 
free, and, in fact, encouraged to find fault with what each 
person says from their different perspective. If they are 
making incorrect claims about clear-cutting in Maine, by all 
means expose that. And I think we can point to a number of 
examples of organizations over the years that have lost 
credibility because they have made unsubstantiated claims.
    And I think it is incumbent on you and us to try to get the 
truth out there.
    I see that my time has expired. Thank you, Madam Chair.
    Ms. Chenoweth-Hage. Thank you, Mr. Holt.
    Mr. Schaffer?
    Mr. Schaffer. Thank you, Madam Chairman.
    It seems to me that, you know, there is an interesting 
issue of free speech, which we want to, of course, encourage 
and promote and honor the Constitutional treatment of free 
speech in America.
    But this debate is an interesting one because it really 
gets down to the question of subsidized speech in many cases, 
or certainly an area where some people are taxed in order to--
at a certain level in order to organize or associate 
collectively, in the case of a professional association, for 
example, to convey a certain message, whether it is for the 
general good of--the common good of the people or whether it is 
some political effort or message to persuade those same 
individuals versus those folks who are not taxed who are 
essentially carrying on the same objective, whether it is for 
the common good or when it crosses the line and becomes 
political speech or some that are self-serving.
    So there is that question I think ultimately of the nature 
of Government's tax policy. All citizens are not treated 
equally when it comes to carrying out the same objective of 
speaking freely in a democratic republic.
    And along with that, not only the tax law as it applies to 
nonprofit corporations and educational corporations, or those 
that are designed under the education section of the Tax Code, 
but also I think the Tax Code needs to be evaluated from the 
perspective of what motivates people to donate their funds to 
some of these organizations in the first place. And that is the 
inheritance tax, largely.
    I think most of the dollars that end up in--much of the 
dollars that end up in these foundations are people simply 
trying to avoid the high tax of the Federal Government and put 
their dollars in some place that earns their confidence because 
the Government hasn't done it when it comes to sending their 
money this way.
    So this is just another classic example, in my estimation, 
of the Federal Government meddling too deeply in the affairs of 
free people, to the point where it has pushed dollars in places 
that are, frankly, unproductive and in many cases contrary to 
the best interests of the American people.
    And so that leads me to a couple of questions for Mr. 
Phelps in particular. We have heard that some environmental 
groups--from some--that they are not against all logging on 
national forests, only large-scale logging that they believe 
has been particularly devastating on forests by cutting too 
much at once.
    They say they favor smaller cottage industries that will 
harvest on a more sustainable basis and ultimately produce more 
jobs for 1,000 board feet harvested. What is your experience 
with this? In your experience, did they seem to mean what they 
say?
    Mr. Phelps. Well, bluntly, no. What we have seen in the 
Tongass has been this ever-increasing evolution of their 
target. In 1990, they said they wanted to protect the heart of 
the Tongass, so they got Congress to enact the Tongass Timber 
Reform Act, and it protected all of the areas that they 
identified as the most special places.
    And then, you know, obviously, the Tongass had a heart 
transplant because immediately thereafter they started talking 
about other hearts of the Tongass that needed to be protected. 
And so once they went after--first they went after the pulp 
mills. Then they went after the saw mills. And they kept saying 
that, you know, we want it smaller, we want it smaller, and we 
want it more focused.
    So recently the former properties belonging to Louisiana 
Pacific where the pulp mill was in Ketchikan were purchased by 
a local group of businessmen who decided that they could take 
the low-grade saw logs and utility logs that used to go to pulp 
and are virtually hard to sell now, and turn them into a 
product that can be used for engineered wood products, which in 
building construction replaces solid wood beams and that sort 
of thing.
    This was an environmental move in the right direction from 
the standpoint of industry, and I guess my prejudice would say 
from the standpoint of sanity. It puts some of the people who 
had lost their jobs back to work. It was a smaller scale. It 
did not require--it did not have the voracious appetite of a 
pulp mill, which they said that was too big.
    And yet immediately they started using a bunch of 
foundation money to try to kill this project. They filed 
lawsuits, they mounted campaigns. I mean, it doesn't--you know, 
it doesn't--no matter how small it gets, the next step is to 
get--is to lop off the next larger--you know, the next slice. 
And I think that when they talk about reducing--and some of 
them admitted they want to see the harvest reduced in the 
southeast to about 20 million feet, that will not sustain any 
mills that employ more than two or three people.
    So then you have to wonder, well, what will they do about 
those guys? Maybe those guys are tramping in the woods too 
much. It just--it seems a strategy rather than a truthful 
assertion.
    And if I could briefly respond to something else that you 
pointed out. I agree with you about the free speech issue, but 
I agree with you more about the policy issue, the tax policy 
issue. And I think I would like to point out that one of the 
things that Congress ought to be looking at is whether these 
foundations, with their special tax protected status, there are 
restrictions on what they can do with their money.
    The question is: are they doing through others what they 
themselves are prohibited from doing? In other words, they 
target their giving so that their goals that they would be 
themselves breaking the law if they pursued, you know, they 
funnel this money to get other people to do those things for 
them. And it seems to me that is an area of scrutiny that ought 
to be taken a look at.
    Mr. Schaffer. Madam Chairman, if we can't arrive at tax 
fairness at some point in time that treats all Americans 
equally with respect to free speech, political speech, or 
otherwise, maybe what we need is more tax manipulations to 
encourage people to invest in foundations to police the 
foundations, to bring lawsuits against them.
    Ms. Chenoweth-Hage. I thank the gentleman from Colorado, 
and I do have a couple more questions. But I really think that, 
as Chair, I am not going to let us lose the focus of why we are 
having this hearing.
    Clearly, I want it on the record as to why we are having 
this hearing. It isn't free speech. We agree that everyone 
should have free speech. This issue goes to the question, is 
there a shadow government? Are these foundations so large that 
they are able to wield the kind of influence through the media 
and through the influence that they have with the politicians 
that they themselves are setting the policy?
    I thought it was quite interesting that the Committee on--
in a hearing on the Committee on Forests and Forest Health when 
I asked Mr. Frampton to show me the list of those individuals 
who had met with him and members in the White House to set the 
roadless policy, the list was exclusively the environmental 
community.
    Now, this runs in direct conflict to the kind of government 
that was set up by our founders. Our founders set up a 
government where the people were supposed to be able to watch 
what the government was doing. And now we have grantmakers and 
influence peddlers who are so large and so doggone arrogant 
that they are willing to tell people like those of you who are 
sitting here at the witness table that you are not invited into 
meetings where they set public policy? And then they have the 
funds, the wealth, to be able to carry out the public policy 
through influenced peddling with the politicians?
    No, I think it is time we ring the bell. And I think it is 
time that we bring some light in on this very sad chapter in 
American history, because it is changing the course of 
certainly how we view our natural resources, and that is just 
the beginning.
    The bottom line question should be: does this Congress have 
any worth? Do the American people have any worth? Are there a 
group of people who care less if 10,000 pulp and paperworkers 
are unemployed? We better darn well care, and this goes far 
beyond public speech and freedom of speech.
    Well, usually the Chairman doesn't get this excited. But I 
will not allow the focus of this hearing to be taken away from 
us, because people's jobs are at stake, and the very future of 
the worth of this body of lawmakers is at stake, which means, 
do the people have a house? Do the people have a say in their 
communities and in their Congress?
    So this is no small issue, and I see that we have been 
called to some more votes.
    So has the Clerk found what we may be voting on? I do want 
to--I have some more questions that I think before I take off I 
am going to be--OK. OK. We have a series of three votes, but I 
have 15 minutes. And there are a couple of questions that I do 
want to ask on the record, and then I will have written 
questions for you.
    For Mr. Huberty, what are community foundations? And would 
you please state for the record what was the intent of Congress 
in creating community foundations?
    Mr. Huberty. Madam Chairman, community foundations are set 
up really as a device by which individuals who don't wish to 
establish their own individual family foundation can place 
funds within a community for charitable and benevolent 
purposes. The foundation acts at their discretion. They can 
instruct the community foundation to carry out their wishes.
    On the other hand, for those who don't wish to do that, the 
community foundation, in turn, can make grants, at its own 
discretion. The intention of the community foundation is to 
assist charities within a community. The Cleveland Foundation 
in about 1905 was the first community foundation. They are 
quite extensive around the country now. But the focus is for 
doing good works in a local community.
    Ms. Chenoweth-Hage. Mr. Phelps, a chart in your written 
testimony shows that the Alaska Conservation Foundation gave 
more than $1 million in grants in the last 2 years to stop 
timber harvesting in the Tongass. This same foundation is a 
community foundation. Their 21-member board of trustees 
includes former President Jimmy Carter, David Rockefeller, Jr., 
and eight out of State members.
    I have two questions to ask you. Did the ACF or any member 
of the board consult with local communities in southeast Alaska 
about their plans? And how did the residents of communities 
such as Sitka, Wrangell, or Ketchikan benefit from the 
grantmaking activities of ACF?
    Mr. Phelps. Well, I think it would be very difficult to 
demonstrate how any of the communities benefited, 
Congresswoman. I am not aware of any effort by ACF or other 
groups like them to consult with communities, particularly with 
community leaders. And, in fact, I know for a fact that most of 
the community leaders in the communities you mentioned, and 
others like them in southeast Alaska, are very upset about the 
disruptive effect on their economies as a result of these 
grants and the activities of the people who receive these 
grants.
    And a good illustration of that is that in our litigation 
against the United States Forest Service for its illegal 
formulation of the 1999 record of decision on the Tongass Land 
Management Plan, most of the--all of the communities but one 
that you mentioned, and several others, are co-plaintiffs with 
us because they believe that the effect on their communities 
has been devastating.
    They certainly were not consulted by these grantmakers 
because the grantmaker's position is at odds with both the 
leadership and the majority of the people that live in those 
communities.
    Ms. Chenoweth-Hage. Thank you, Mr. Phelps.
    Mr. Schaffer, do you have any other questions?
    We will recess the committee until 4:30. So we will take 
back up at 4:30. We have three votes, and I will try to get 
right back. And if we can take up even before 4:30, we will.
    This panel is excused.
    [Recess.]
    Ms. Chenoweth-Hage. The committee will come to order.
    I would like to introduce the second panel, Mr. Eric 
Williams from Environomics in Cheney, Washington; Mr. Terence 
Chandler, President and CEO and Director of the Redfern 
Resources, Limited, Vancouver, Canada; and Mr. Matt Bennett, 
Vice President in charge of sales for Emmet Vaughn Lumber 
Company in Maryville, Tennessee.
    And before I swear you in under the oath, I want to say to 
Mr. Bennett that Mr. Duncan wanted to be here to introduce you. 
He has said great things about you, and unfortunately he had to 
go give a speech. And because of all the votes, we were held 
longer than we expected.
    I want to thank you for your patience, and I do look 
forward to hearing all of your testimony. Thank you very much 
for being here.
    So as explained on the first panel, it is the policy of 
this Chairman to swear all of the outside witnesses under the 
oath. And so if you will stand raise your hand to the square.
    [Witnesses sworn.]
    The Chair now recognizes Mr. Williams for testimony.

 STATEMENT OF ERIC WILLIAMS, ENVIRONOMICS, CHENEY, WASHINGTON; 
   TERENCE E. CHANDLER, PRESIDENT/CEO AND DIRECTOR, REDFERN 
 RESOURCES, LIMITED, VANCOUVER, CANADA; AND MATT BENNETT, VICE 
   PRESIDENT/SALES, EMMET VAUGHN LUMBER COMPANY, MARYVILLE, 
                           TENNESSEE

                   STATEMENT OF ERIC WILLIAMS

    Mr. Williams. Thank you, Madam Chairman. I am honored and 
sincerely appreciate the opportunity to testify here today.
    I am Eric Williams of Environomics. My office is located in 
the small town of Cheney, Washington. We are consultants to 
various businesses, including those that provide natural 
resources to the public. Therefore, I appear to you today as an 
overpaid, undereducated social misfit. Not by choice, of 
course, but by virtual declaration of the U.S. Forest Service.
    How so? Well, let me tell you that in 1998, the Kootenai 
National Forest and the Montana Department of Environmental 
Quality issued a supplemental draft EIS for the Rock Creek Mine 
Project. The socio-econ section of that document was astounding 
and disturbing.
    Here is one example, and I will quote--``Economic and 
social dependence on resource extraction industries is widely 
regarded as an economic and social liability because it ties 
social well-being to declining economic sectors, blocking 
residents into untransferable sets of skills.
    Mining dependence decreases local social and economic 
capacity by hindering local flexibility, capability, and 
diversity of social processes. The project would be expected to 
increase local labor costs, decrease average education levels, 
and weaken the sense of community. Mining dependence increases 
community underemployment and decreases social adaptability.'' 
That is the end of the quote.
    The message was clear. According to the agencies, this 
region, with some of the highest unemployment in one of 
America's poorest states, is better off without a mine that 
would employ 300 people for 25 years. The fact that the mine 
would pay high wages and offer good benefits is actually a 
negative because other businesses might have to pay more to 
compete.
    This mine, simply by its existence, would scare off 
telecommuters and retirees, which, after all, are a better type 
of person to have around. And despite the fact that the mine 
would employ everyone from accountants to lab technicians, 
computer experts to metallurgists, their job skills are not 
transferrable.
    Mysteriously, the EIS virtually declared that miner's 
children are not as educable as other kids, and those 
communities with mines inherently lack diversity and are 
socially backward. Merely having a mine ``weakens the sense of 
community.''
    Sadly, the Rock Creek EIS isn't an isolated incident. As 
you will see in my written testimony, the recently released 
roadless conservation EIS declares that loggers are just about 
as unsavory a bunch as we miners. And as a former miner, it is 
of little consolation to me--an overpaid, undereducated social 
misfit--that the Forest Service now considers loggers as 
possessing not only those non-redeeming values but also as 
being culturally ignorant trailer trash who will seem to do 
anything for a buck.
    There is a sort of reason that this sort of language is 
appearing in these documents, which ostensibly are based on 
science and fact, not political rhetoric and dogma. It is 
because of all of the pressure brought to bear by the 
environmental industry, being well organized and heavily funded 
by wealthy foundations to produce exactly those results.
    The Needmore and Mott Foundations fund a newspaper column 
syndicate, so that newspapers nationwide can tell us that, 
``The importance of the old rural west has ended, and it is 
never coming back,'' and that, ``Montana and Wyoming don't 
lead, and at this stage don't really teach much to the rest of 
us.'' After all, they are the ones without a real city.
    This well-funded machine has denigrated a whole segment of 
society--rural resource providers. This atmosphere has been set 
with pseudo-scientific reports and non-peer reviewed studies 
released to the public through the media and through public 
agencies. This atmosphere has allowed agenda driven personnel 
within both Federal and State agencies to repeat the mantra of 
cultural smearing that we find in many management plans being 
implemented and being proposed throughout the United States.
    I am not an anti-government right-winger. I was raised a 
lunch bucket democrat and believe strongly in my country and my 
government. Yet I find it extremely disconcerting when 
nonprofit organizations and Federal land agencies are stating 
loudly that most people carrying lunch buckets are overpaid, 
uneducated social misfits.
    It is unfortunate that certain foundation funding of 
environmental groups makes it possible for the Government to 
use this type of language, and to use these types of programs 
to harm rural America.
    Thank you very much.
    [The prepared statement of Mr. Williams follows:]

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    Ms. Chenoweth-Hage. Thank you very much, Mr. Williams.
    And the Chair now recognizes Mr. Chandler.

                 STATEMENT OF TERENCE CHANDLER

    Mr. Chandler. Thank you, Madam Chairman.
    I represent a little bit of a unique viewpoint here. I am a 
Canadian citizen. I am the President of Redfern Resources, 
Limited. And Redfern is a Canadian mining company, which has 
been in existence since 1979. It is headquartered in Vancouver, 
British Columbia, and listed on the Toronto stock exchange.
    We have as our principal asset a small mine up in 
northwestern British Columbia located on the Tulsequah River. 
It is about 65 kilometers, or 40 miles as the crow flies, from 
Juneau, and about 26 kilometers upstream from an international 
waterway, the Taku River, which the Tulsequah River joins.
    This mine was actually operated in the 1950's and was shut 
down at that time. It is proposed to be reactivated as a new 
mining operation, and it was run through an environmental 
assessment process started in 1994 under the Canadian 
environment assessment process. But uniquely, because of the 
potential for transboundary impacts, the U.S. was involved in 
the project committee, the State of Alaska, and U.S. Federal 
agencies to make sure that all issues related to international 
potential for impacts were addressed.
    This study and environmental assessment reached a 
conclusion in March 1998, at which time the project received 
its environmental certification, which then gave it the green 
light to proceed to acquire operating permits and licenses.
    Shortly after that, we were astounded when the Governor of 
Alaska determined that it was in the best interest of his 
constituents that the project should be referred to the 
International Joint Commission, a body which deals with 
international disputes related to boundary waters, on the basis 
that there could be some impacts to the U.S.
    And so since that time, we have been involved in the last 2 
years in a series of protracted responses with the State 
Department and the Canada Federal Government to address those 
issues. Not surprisingly, during that timeframe, no issues and 
no impacts have been identified to Alaska resulting from this 
mine development.
    On top of that, we subsequently became aware, through 
release of a document anonymously, which is accompanied as an 
exhibit to my statement, a campaign--a coordinated campaign 
strategy outline involving, as listed on this document, 10 
groups, mostly located in B.C., in Canada, but two of which are 
headquartered in the United States.
    In that document, there are a series of--as a coordinated 
campaign strategy, it is called ``To Save the Taku River,'' 
which proposes to stop the mine, seize development within the 
whole watershed, primarily on the Canadian side of the border, 
which is 4.5 million acres, and to instigate a land use policy 
which will see this area become a protected and preserved part 
of the Canadian landscape.
    In the process, they have ignored the fact that this is 
multiple use designated land, and has already been subject to a 
review by the provincial government related to a protected area 
strategy that passed over this area while it was in the process 
of setting aside some 1.5 million acres of land in the--sorry, 
3.0 million acres of land in this area.
    This document demonstrates or lays out a strategy which 
calls for a coordinated campaign to lobby in Congress and in 
the Canadian Federal and provincial agencies. It has targeted 
the company for economic analysis and destabilization in the 
financial community.
    It has provided support and backing for legal initiatives 
by local aboriginal groups who are seeking land claims with the 
Federal Government. And it has instigated an immediate campaign 
against the company. All of this despite the fact that the 
local community actively supports the mine and is desperately 
in need of employment.
    It is interesting to me, given some of the statements you 
made at the beginning of this hearing, that U.S.-based 
environmental funds are actually seeking to export their 
advocacy to a foreign country, and actually influence land use 
policies in Canada.
    Thank you.
    [The prepared statement of Mr. Chandler follows:]

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    [The information referred to follows:]

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    Ms. Chenoweth-Hage. Thank you very much.
    And the Chair now recognizes Mr. Bennett.

                   STATEMENT OF MATT BENNETT

    Mr. Bennett. Thank you, Madam Chairwoman. I appreciate this 
opportunity to come today and share my concerns regarding the 
impact that foundation funding is having on decisionmaking on 
Federal funds. And if I could interject, I also appreciate 
those kind words that you passed along from Congressman Duncan 
to me.
    My primary concern is that many local citizens and 
community groups are underrepresented or absent altogether from 
critical phases of the planning process. That their input is 
missing is especially unfortunate, as it is they that are most 
likely to be affected by the decisionmaking process.
    Where they can participate, they often must do so at a 
considerable disadvantage. Until recently, there was a dynamic 
parity among the various national forest user groups in my 
area. However, due to foundation grants to environmental 
groups, that parity no longer exists. Let me begin with some 
background.
    In early 1995, a new coalition of local and regional 
environmental groups, the Southern Appalachian Forest 
Coalition, formed in Asheville, North Carolina. SAFC is an 
organization of organizations. It does not accept individual 
memberships, and its funding comes entirely from foundation 
grants. SAFC's funding is impressive, with a 1998 budget of 
almost a million dollars.
    SAFC's fiscal agent, the Southern Environmental Law Center, 
has a budget of just over $5 million. In contrast, counties 
containing the Southern Appalachian National Forest have not 
been so fortunate, since Census Bureau and Department of Labor 
statistics reveal that they often have higher unemployment and 
more people living below the poverty level than the national 
average. Therefore, acquiring resources comparable to 
environmental groups is difficult, if not impossible.
    There are three critical differences in public 
participation due to foundation funding. The first is 
representation and participation in the planning process 
itself. With at least six full-time paid employees, plus the 
staffs of its coalition members, SAFC has a decided manpower 
advantage when it comes to attending Forest Service meetings.
    Before foundation involvement, stakeholders were all on 
roughly the same non-professional level. This is no longer the 
case, and it is wishful thinking to believe that part-time non-
professionals can participate as fully in the planning process 
as their professional counterparts.
    Another area where foundation support has created a 
disparity between activists and local citizens is in the 
technologies of the internet, electronic communications, and 
GIS software and data. For example, SAFC received a $48,000 
technology grant from the Computer Technology Support Program. 
With GIS capability, SAFC is able to develop extremely detailed 
maps of national forests.
    Therefore, SAFC members have knowledge that is unavailable 
to other users. Compared to organizations that use advanced 
technology, those users participate at a distinct disadvantage.
    A third area of concern is legal support and 
representation. Environmental groups have long received pro 
bono legal assistance. However, foundation funding has made 
possible the development of law firms specializing in 
environmental activism and litigation. Those law firms provide 
technical assistance and legal advice on environmental laws to 
activists at little or no cost. A similar system of legal 
support is either unavailable or too expensive for other forest 
users.
    In conclusion, I maintain that foundation funding has 
created a serious disparity in the way rural citizens and 
communities are able to participate in the NEPA process. 
Financial support from foundations has enabled environmental 
organizations to hire full-time professional staff, gain access 
to the latest technologies, and to obtain free legal support 
and representation.
    As Congressman Richard Pombo noted, ``Tax-exempt foundation 
funding of environmental advocacy groups unfairly tilts the 
playing field against the views and the input of those most 
affected by the policies advocated.''
    Therefore, I maintain that this violates the intent of the 
President's Executive Order 12898, ``Federal Actions to Address 
Environmental Justice in Minority Populations and Low Income 
Population,'' and CEQ's guidance document ``Environmental 
Justice: Guidance Under the National Environmental Policy 
Act.''
    EO 12898 directs that each Federal agency shall make 
achieving environmental justice part of its mission and calls 
for analysis of the effects of Federal agency on low income 
communities.
    In the final analysis, it seems very clear to me that the 
intent of EO 12898 and the CEQ's guidance document is to 
guarantee a level playing field for participants engaging in 
the planning process. That playing field currently does not 
exist. It is not level due to foundation funding. Indeed, I 
believe those individuals and communities attempting to 
participate in planning, without similar resources of staff, 
technology, and legal support, are at a disadvantage in the 
NEPA process and are, in fact, being denied environmental 
justice.
    Thank you very much.
    [The prepared statement of Mr. Bennett follows:]

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    Ms. Chenoweth-Hage. Thank you very much, Mr. Bennett.
    Mr. Bennett, in your written testimony, you talk about the 
wildlands project.
    Mr. Bennett. Yes, ma'am.
    Ms. Chenoweth-Hage. What exactly is that?
    Mr. Bennett. The Wildlands Project is a continent-wide 
environmental initiative to set aside a minimum of 50 percent 
of North America in wildlands or wilderness areas. It was begun 
in the early 1980's by Dave Foreman, co-founder--or former co-
founder of EarthFirst. And over the time that it has been in 
existence, it has been reviewed by groups such as Science and 
the Smithsonian and some other groups like that.
    Basically, what it seeks to do is to set aside all national 
forest land or public land into what they call core areas, 
strictly for the preservation of biological diversity. These 
core areas are then surrounded by buffer zones, and then the 
buffer zones in the core areas are linked together through what 
they call corridors.
    Much of that language has found its way into many of the 
policy initiatives that the Forest Service and this 
administration are now pursuing, and it raises some concern 
among local communities as to just what the long-term goals of 
some of these policies are.
    Ms. Chenoweth-Hage. Well, in the short term, I think that 
if we, as lawmakers, are going to be honest, we have got to ask 
ourselves why. Why does the Government need all this land? You 
know, what are they doing? It is obvious that the way they 
manage the land is not to its highest and best standard, as 
indicated in New Mexico recently.
    But you pointed out that it appears that there is an 
inequity in the NEPA process with respect to the Forest Service 
planning. Can you suggest some possible remedies that you would 
like to see the committee and the Congress look at?
    Mr. Bennett. A good friend of mine, Harold Draper, who 
actually is a NEPA specialist with the Tennessee Valley 
Authority, he and I shared some discussion about this, and he 
is much more of an expert than I am. But he had some positive 
suggestions, I thought.
    His first was to identify--have the Forest Service identify 
and disclose low income communities that would be adversely 
affected by forest planning and site-specific actions. I don't 
believe they currently do that now. They could identify and 
disclose potential impacts to low income communities. And, 
specifically, they could explain in their documents how they 
involved impacted communities, and explain how they will 
minimize these impacts or the impacts of these communities in 
their finding of no significant impact.
    I suppose that Congress is much better equipped to consider 
and reflect on some of these things than I am. But it does seem 
to me that the concept behind environmental justice is not a 
bad idea, and I noted some of the concerns that the democratic 
speakers had earlier about limiting free speech. And I 
certainly wouldn't be for that.
    But I think, on the other hand, it is incumbent on 
Congress, if they are committed to the notion of environmental 
justice, to providing that across the broad spectrum, and it 
would apply to people in urban areas that where environmental 
decisions are too heavily weighted by large corporations. It 
should apply just as equally to rural communities where 
decisions on environmental issues are being made too heavily 
based on foundation participation.
    So I think it is up to the Forest Service--and, hopefully, 
Congress may at some point decide to figure out a way to 
redress this--or address this inequity and make sure we do have 
that level playing field.
    Ms. Chenoweth-Hage. I agree.
    Mr. Williams, I wanted to ask you, are you aware of 
strategies like the Taku River strategy being employed in the 
United States?
    Mr. Williams. I must say I have certainly never, until I 
was shown that document, I have never seen it quite on paper 
laid out in 10 or 12 pages, that you will do this, and you will 
do that, and this group will give that group money. However, 
almost precisely the same scenarios have played out in other 
places in the states.
    For example, the McDonald Gold Project in Montana. The 
similarities to me are eerie of different organizations with 
different funding sources doing--you are going to take on this 
part, you are going to take on that part. So, yes, a rather 
similar situation, I would say--at the Crown Butte, the famous 
mine that was going to be in the middle of Yellowstone Park 
ostensibly. Very, very similar situation.
    Ms. Chenoweth-Hage. Interesting. Well, can you tell--do you 
know anything about foundation money going to influence ballot 
measures?
    Mr. Williams. Certainly, I guess I would refer probably to 
Montana where, in 1996, and then in 1998, anti-mining ballot 
measures were placed on the ballots. And the organizations that 
were behind them were, if not exclusively, primarily funded by 
non-resident foundations. Foundations give money to six or 
seven organizations, and then those organizations run the 
ballot measure. Excuse me. They pay to get the measure on the 
ballot and then run the campaign.
    Ms. Chenoweth-Hage. My word. Do you know of grants given to 
gather intelligence on organizations or groups skeptical of 
foundation-driven policies?
    Mr. Williams. Yes. I was particularly struck, again, by Mr. 
Chandler's discussions of the financial aspect, which I would 
maybe like to address a little bit in a minute. But, for 
example, there have been grants specifically designed to 
investigate--or, excuse me, to hire a private investigator to 
investigate company X or Y, and including investigating their 
finances.
    Briefly, if I could address that, I used to be a newspaper 
reporter. I am, you know, a staunch believer in the First 
Amendment. Absolutely. Should there be restrictions on free 
speech? No. But, to me, there is a substantial difference in 
taxpayer-subsidized free speech and taxpayer-subsidized 
apparent financial interference or dumpster diving.
    Ms. Chenoweth-Hage. Very interesting.
    Mr. Chandler, what economic or other benefits would result 
from the mine that you testified to going ahead?
    Mr. Chandler. Well, we have estimated in the feasibility 
study that there would be in the range of $50 million. This is 
Canadian dollars--about $35 million U.S.--in supplies, 
services, wages, paid to keep the mine running on a yearly 
basis. And a substantial part of that would be obtained from 
the local communities.
    The town of Atlin, which is the nearest nearby community--
it is a town of about 500 people--currently, their major 
support base, economic base, is placer goldmining, which has 
been the reason for the town's existence for over a hundred 
years. With the down drop in the price of gold, they have been 
severely hit. There is over 50 percent unemployment in the 
winter months in particular. They desperately need year-round 
employment.
    The same would apply to the nearby Yukon territory, which 
has also been surviving strictly on a limited amount of tourism 
in recent years.
    In addition to that, of course, there would be about $50 
million a year--Canadian again--which would be revenues. About 
45 percent of that, under BC regulations, would be paid in 
taxes.
    Ms. Chenoweth-Hage. Do you feel the environmental campaign/
Taku River strategy, which as I look through it is just 
astounding, is influencing our State Department and its 
position in its discussion with Canada about the mine?
    Mr. Chandler. I think there is a high likelihood it has. We 
do not have any specific evidence to that. But many of the 
initial letters that came out of the Governor's Office calling 
for the IJC involvement to the State Department, and which 
later led to the State Department's investigation of this with 
the Canadian Federal side, raised the same sort of alarms that 
were in the environmental coalition's documents about the mine, 
even though during the course of the public and detailed review 
most of those alarms were shown to be false or vastly 
overrated.
    To give a specific point, we have been involved in these 
negotiations or discussions back and forth with the State 
Department. The company has participated in supplying further 
information and responses.
    Despite the fact there have now been five official 
responses over the 2-years, most recently in August a letter 
from the State Department--although it acknowledged that 
progress was being made, and that there was a likelihood that 
there was no need for an International Joint Commission review, 
raised concerns--additional concerns--some of which--and this 
is mindboggling--they suggested that perhaps the mine should 
consider treating its process water before it discharged to the 
environment and provide----
    Ms. Chenoweth-Hage. Would you repeat that, please?
    Mr. Chandler. They suggested that the mine should 
consider--and the mine plan should consider treating the 
process water that is used by the mine before discharging to 
the environment, and provide substantiation of how that might 
occur.
    In actual fact, that is the plan for the mine. It was 
supplied in detailed format in the documents supplied for the 
environmental assessment review in July 1997, and has been in 
the hands of the U.S. participants since that time.
    It is hard to believe--and I think this is the sense from 
the Canadian side as well--that this kind of issue would be 
raised at this stage of bilateral discussions because it is 
quite clear to the Canadian side that people aren't reading the 
documents. So there is a sense that there is a contrived issue.
    Ms. Chenoweth-Hage. Very interesting.
    Well, Mr. Chandler, I have--and this has become part of 
your testimony, part of the record--the Taku River strategy. 
And, you know, as I look it over, right here they have a 
campaign plan for a TR/TFN land protection plan, and their 
long-term goal is $200- to $300,000 they want to raise over a 
two- to 3-year period using the Robert Shaw Foundation in 
Bolton, Ontario; the Hewlitt Foundation; the Packard 
Foundation; the W. Alton Jones Foundation; Rockefeller Brothers 
Foundation; and Paul G. Allen Forest Trust.
    Now, they want to raise $180,000, of which $150,000 is the 
total cost of Art Poppy's representation of a TRT for 
litigation and community liaison. Now, that doesn't sound very 
promising.
    For litigation, they want to get $20,000 from the Brainerd 
Foundation, $10,000 from Endswell Foundation, $20,000 from W. & 
D. Gordon Foundation, $30- to $50,000 from W. Alton Jones 
Foundation. They are hitting them up three times, I see so far. 
Lannan Foundation, $50,000; Wilburforce Foundation, $30,000; 
David Suzuki Foundation, $30,000. That is just for litigation 
against probably the mine.
    Community liaison, Tides Donor Funds, True North 
Foundation, and Turner Foundation, $10,000.
    Mr. Chandler. I might add, Madam Chairman, that a limited 
amount of research on the internet--some of these funds do 
publish the grants that they have administered or allocated. 
And although by no means all this probably represents a subset, 
I have here a listing that indicates, since 1997, over $300,000 
in grants that have gone specifically to achieve these 
objectives. And, if possible, I would like to enter this into 
the record as well.
    Ms. Chenoweth-Hage. Without objection, so ordered.
    [The information referred to follows:]

    [GRAPHIC] [TIFF OMITTED] T8297.088
    
    I see that their budget also includes media and 
communications. Their goal is $30,000 from the same group, 
maybe a couple different. Community support, another $30,000; 
transboundary strategies, their goal is $40,000; and economic 
corporate financing strategy, their goal is $30,000.
    I see the Foundation for Deep Ecology appears here as one 
that they are going to be hitting up also. So, you know, it is 
very difficult for a mine in America, or a mine in Canada, to 
come up against anything like this.
    And I think of all the organizations who are trying to 
bring to the attention of the American people the other side of 
the story, and they exist on $5 and $10 contributions that it 
costs them $2.50 to go out and get the contribution by direct 
mail in the first place. And yet, you know, our industries, 
especially our natural resource and ag industries--not only 
here but obviously in Canada--are up against this kind of 
campaign.
    So it is very instructive and very interesting information 
that you have brought to the record.
    Mr. Chandler. I would like to add, Madam Chairman, that our 
company does not have a producing mine, so we raise our 
financing based on equity financing.
    Ms. Chenoweth-Hage. Yes.
    Mr. Chandler. We have to go to the market to raise funds, 
basically venture capital. This kind of publicity, negative 
publicity, and delays--it is quite clearly designed, if not to 
achieve its solution, to delay and perhaps cause us to go away.
    It has had an effect. We have--our share price has dropped 
by a factor of four since the time that we received our initial 
approval. We now trade at below 50 cents, and we were trading 
above $2 before. And it has become extremely difficult to raise 
funds to continue to advance the project.
    Ms. Chenoweth-Hage. Mr. Williams?
    Mr. Williams. If it is not improper, as you were reading 
those foundations, I believe you mentioned the David Suzuki 
Foundation.
    Ms. Chenoweth-Hage. Yes.
    Mr. Williams. Which I won't pretend to be an expert on, but 
something else that struck me as you were reading that is in 
researching other grants, I have noticed at times that the 
David Suzuki Foundation--again, which I am not an expert on--is 
a recipient of foundation grants from U.S. foundations.
    So, thus, you have this foundation apparently giving to 
this foundation, which then gives to this organization, and 
then I can assure you often times underneath that is that 
organization giving to other organizations. So at some point, 
there--you know, where is the level of accountability? When you 
are in a community, how do you know who you are even, you know, 
ostensibly trying to work with?
    Or, again, what is permitted--I don't mean in a mine 
permit--but what is allowable for a foundation, someone else 
mentioned earlier, may not necessarily be--or, excuse me, what 
is allowable for an organization at the bottom of this food 
chain may not be allowable for a foundation. But if you move 
the money around enough times, the tasks are accomplished 
apparently.
    Ms. Chenoweth-Hage. That is what I have noticed, that they 
move money around between each other.
    I notice that our hearing has now progressed to the point 
that it is a quarter after 5, and I want to thank you very, 
very much for your contribution to this hearing, and the 
contribution you have made to the record.
    This is an ongoing issue that this Chairman will continue 
to investigate for the rest of this year. There will be other 
hearings on this, and you have brought very, very interesting 
issues before the committee.
    I want to ask each and every one of you the following 
question: has there ever been an effort by the foundations to 
include the views of the local communities in designing the 
initiatives that they finance with tax-free grants? Do you know 
of any efforts? Mr. Bennett?
    Mr. Bennett. I don't know of them ever seeking to include 
anyone who had a different opinion from them. In other words, 
if you agree with them, they will support you and include you. 
If you disagree, you are left out.
    Ms. Chenoweth-Hage. Mr. Chandler?
    Mr. Chandler. This document lays out a local organization 
called the Taku Wilderness Committee, which is an Atlin-based 
group. To our best knowledge, it consists of 10 people. No one 
else in the community was consulted at all.
    Ms. Chenoweth-Hage. Mr. Williams?
    Mr. Williams. Very similar. I would say, at the risk of 
sounding Presidential, define--or what the definition of 
``community'' is. And the funders define ``community.'' 
Therefore, of course they are dealing with the community, but, 
again, under their definition.
    Ms. Chenoweth-Hage. I want to ask you if you have--I am 
going to ask each one of you if you have any final comments for 
the record. I usually don't do this, but, beginning with Mr. 
Bennett, do you have any final comments for the record?
    Mr. Bennett. Well, I will just briefly say that I really do 
think it is important work that you are doing here, to bring 
this information out and give everybody an opportunity to 
consider exactly what may or may not be influencing public 
policy.
    I know we see in the paper all the time references to what 
this poll says and what that poll says, and I think that those 
polls are based on a very narrow window of information, if you 
will. And so anything--certainly, the work that this committee 
has done, and the work that you have done, to expand the dialog 
and bring about a broader understanding of what may or may not 
be motivating certain groups to do what they do is very 
important.
    Ms. Chenoweth-Hage. Thank you.
    Mr. Chandler?
    Mr. Chandler. I would echo Mr. Bennett's comments, and also 
state that there does seem to be a need to address the gap of 
disclosure between public companies who are in the resource 
sector versus these organizations who, in many cases, are not 
for profit or charitable organizations and do not seem to have 
the same level of accountability to the public.
    Ms. Chenoweth-Hage. Mr. Williams?
    Mr. Williams. Thank you. I guess I will mention two things. 
At least in my mind--and I think everyone else here today--the 
issue is not closing off anyone's free speech rights. I am dead 
set against that.
    But as we have mentioned, I think there is a line, 
particularly when you have various forms of tax exemption or 
reduction, of--I am not a tax lawyer, but I think there are 
some obligations of what is public benefit and is investigating 
someone's company, their financial situation, or perhaps even 
trying to interfere with that--is that the public benefit?
    To me, my daughter has diabetes. The Juvenile Diabetes 
Foundation, to me, is public benefit. I think there is a clear 
distinction there.
    The other thing--I guess I am a little disappointed coming 
all the way from Spokane. I was, frankly, hoping to be able to 
shake the hands of some foundation people and talk to them and 
say, ``Would you come out and talk to people in our 
communities, rather than sitting in a board room in, you know, 
Amherst, Massachusetts, or wherever, and deciding our future?''
    Thank you.
    Ms. Chenoweth-Hage. Thank you. It has not gone without 
notice that the foundations refused to come. We may have to ask 
them again with a little more serious effort.
    It is a shame that they are not here. But the issue--I 
agree with you, Mr. Williams. The issue does go beyond free 
speech. We want free speech for everyone.
    But the issue goes to accountability. And I think that 
every quarter, when we have to file our income statements--the 
Congressmen, our personal income statements, and our campaign 
finance statements--we file them with the big question in mind, 
``Gosh, has anybody made a mistake that I might be hung out 
there on the front page with the press?'' Because somebody gave 
a $200--a $200, not a $3.5 million--but a $200 contribution 
that we failed to give the right address or the right 
employment to.
    So on the one hand, the standard of accountability has 
already been set up. My concern--the concern of this committee 
is that that accountability is not being imposed on the 
foundations.
    I believe in free speech to the degree I think anybody 
ought to give any amount of money that they want, and just so 
long as they say who they are, who they gave the money to, and 
what they were trying to influence.
    So accountability to the American people is the bottom 
line. And, so far, these foundations are simply not 
accountable.
    I want to thank you for coming so far and offering your 
testimony. It is greatly appreciated. And it is because of 
people like you that we continue to have the other side of the 
issue brought to this body.
    The hearing record that you have helped compile will make a 
difference. It is historic. And I thank you again for your 
patience with all of the interruptions that have gone on with 
the votes, and so forth.
    I do want to say that I will be submitting more questions 
to you in writing, and the record will remain open for 10 
business days, should you have any additional information that 
you would like to submit to the record.
    With that, this hearing is adjourned.
    [Whereupon, at 5:20 p.m., the committee was adjourned.]
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