House lawmakers want the Trump administration to investigate reports that a wealthy foundation used an offshore shell company to give millions of dollars to environmental activists opposed to U.S. energy development.
“If you connect the dots, it is clear that Russia is funding U.S. environmental groups in an effort to suppress our domestic oil and gas industry, specifically hydraulic fracking,” Texas Republican Rep. Lamar Smith said Friday.
Smith and Texas Republican Rep. Randy Weber asked Treasury Secretary Steve Mnuchin to investigate whether or not environmentalists were funneling money to U.S. environmental groups through a Bermuda-based shell company.
Republicans are pitching it as part of a larger investigation into the extent of Russian meddling in U.S. politics. Russia, after all, has an incentive to keep U.S. oil and natural gas “in the ground” — a slogan used by many environmental activists.
Activists call the allegations were “absurd and false smears.” Though none of the groups seem keen on heading off a potential investigation by giving back the millions they got from the non-profit under investigation.
So, here’s everything you need to know about the alleged connection between Russia and environmentalists.
Where It All Began
Conservatives and some energy experts have speculated for years Russian oligarchs may have funneled money to environmentalists to oppose energy development, especially hydraulic fracturing, or fracking.
Fracking unleashed a U.S. energy boom and contributed to the collapse in oil prices in 2014. Eastern European officials claimed the Kremlin had backed environmental protects against oil and gas operations to keep those countries dependent on Russian imports.
The former head of NATO and former Secretary of State Hillary Clinton also said Russia had backed environmental activists in Europe, so is it that far-fetched they would also try and influence U.S. energy policy?
A 2015 report by The Washington Free seemed to confirm those fears based on findings from the Environmental Policy Alliance (EPA), which is run by the PR firm Berman and Company.
The Free Beacon reported the Sea Change Foundation got $23 million in 2010 and 2011 from a Bermuda-based shell company based out of a law firm with ties to Russian oligarchs. The law firm, Wakefield Quinn, also manages two Simons-run hedge funds.
What Is The Sea Change Foundation?
Investor Nat Simons and his wife Laura Baxter-Simons founded the Sea Change Foundation in 2006, in part, to “address the serious threats posed by global climate change.” Sea Change held about $168 million in net assets in 2015, according to tax filings.
Simons, who commutes to work every day on a 54-foot yacht, runs a hedge fund with investments in green energy technology, so any policies to boost renewables could benefit his bottom line.
Inside Philanthropy noted that Sea Change’s “skeletal staff quietly shovels tens of millions of dollars out the door annually to combat climate change” and “that’s pretty much all it does.”
Their website is just one vague page with a short paragraph of information. The website also mentions the non-profit does not take unsolicited grant proposals.
The Bermuda Connection
Sea Change took millions from a shell company set up by Wakefield Quin in 2011 “exclusively for philanthropic purposes,” according to documents. The shell company, Klein Ltd., gave Sea Change $23 million in 2010 and 2011. Klein Ltd is out of Wakefield Quin’s office.
The same year prominent U.S. environmental groups took millions from Sea Change many were ramping up campaigns to oppose fracking operations popping up all over the country.
“The Sierra Club, the Natural Resource Defense Council, the League of Conservation Voters, and the Center for American Progress were among the recipients of Sea Change’s $100 million in grants in 2010 and 2011,” The Free Beacon reported, adding that as “many as 20 companies and investment funds with ties to the Russian government are Wakefield Quin clients.”
Wakefield Quin also has ties to two Simons-run hedge funds, which are run out of the law firm and operated by attorney Roderick Forrest. Those hedge funds held $80 million the same years Klein Ltd. gave $23 million to Sea Change.
Several Wakefield Quin employees have ties to Russian firms with Kremlin links, according to the EPA report.
One firm, Spectrum Partners Ltd, is a holding company run out of Wakefield Quin that has a fund “with 53% of its assets invested in the Russian oil and gas industry.” Wakefielf Quin has ties to a firm co-directed by Hans Rudloff, the chairman of the Russian state-owned oil company Rosneft.
Wakefield Quin also has tied to the “holding company of Russian investment banking firm Troika Dialog,” which “is one of the largest shareholders in an oil company owned by Russian oligarch Alexander Lebedev,” according to EPA. The Bermuda-based firm also has ties to the Firebird New Russia Fund, which invests in Russian energy, and at least two other companies being investigated for money laundering.
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