The dark-money network bankrolling many of the climate-liability lawsuits against energy companies is now facing an IRS complaint, putting renewed focus on the shady financials driving this nationwide litigation campaign. [emphasis, links added]
According to The Washington Free Beacon, the left-wing funding powerhouse New Venture Fund (NVF) has been accused of improperly channeling money into climate lawsuits.
The complaint, filed by the American Accountability Foundation (AAF), alleges that NVF may be violating federal tax rules by quietly steering resources into politically-charged litigation while enjoying the benefits of tax-exempt status.
NVF Funding For-Profit Litigation
For years, climate litigation has been funded by dark money sources that disguise the true origin of their funding.
One major beneficiary is the for-profit law firm Sher Edling, which has raked in millions from wealthy donors and activists – including celebrities such as Leonardo DiCaprio – through pass-through nonprofits including NVF.
AAF’s complaint highlights how NVF’s role in financing Sher Edling may be violating the very tax-exempt purpose that the organization claims to uphold:
“to protect and preserve the environment and educate the public on environmental preservation.”
NVF’s tax filings describe its grants to Sher Edling as supporting “environmental programs.”
Yet, as AAF points out in its complaint, the law firm itself casts its climate tort work in very different terms:
“…Sher Edling’s litigation activities appear motivated by private benefit. If successful, Sher Edling’s attorneys stand to gain tens or hundreds of millions of dollars from their climate litigation portfolio.
“Notably, NVF’s disclosures provide little detail about the types of litigation that Sher Edling pursues, and Sher Edling’s own disclosures conflict with NVF’s representations about that litigation.
“This suggests that NVF’s funding of Sher Edling’s general operations is not an activity that furthers NVF’s exempt purpose but is instead meant to financially benefit Sher Edling and its attorneys.” (emphasis added)
In a statement to the Free Beacon, AAF President Tom Jones pointed out that American taxpayers are effectively subsidizing these tax-deductible contributions to Sher Edling:
“NVF funneled over $8 million to Sher Edling’s radical climate lawsuits under the flimsy guise of ‘general operations,’ defying IRS mandates that every dollar must serve a true charitable mission.
“If these slush fund schemes prove true, NVF’s nonprofit shield should be stripped and slammed with stiff penalties.” (emphasis added)
Back in 2020, EID Climate pointed out that wealthy donors were using a different pass-through nonprofit, Resources Legacy Fund, to finance Sher Edling’s lawsuits.
We wrote:
“First, is it legal and appropriate for a private law firm to accept tax exempt grants from a private foundation? […] It is not clear from RLF’s disclosure forms what work their grants are supporting at Sher Edling.”
Hopefully, AAF’s inquiry resolves this question once and for all.
Dark Money in the New Venture Fund
This is far from the first time that NVF has come under scrutiny for its shadowy funding structures.
The group was founded and is “administered” by the for-profit consulting firm Arabella Advisors, which finances a sprawling network of environmental groups, including recently defunct 350.org, the Sierra Club, and the Natural Resources Defense Council.
Arabella is heavily supported by Swiss billionaire Hansjörg Wyss, whose contributions between 2016 and 2019 totaled nearly $30 million to NVF alone.
The New York Times previously described Arabella and its network as “a daisy chain of opaque organizations that mask the ultimate recipients” of Wyss’s money.
NVF’s own origins raised red flags: when the group first applied for non-profit status in 2006, the IRS challenged the filing due to conflicts of interest – including the fact that Arabella’s founder simultaneously served as NVF’s chairman and president while Arabella accepted significant fees from NVF for consulting and administration.
Sher Edling’s financial practices have also drawn significant scrutiny. In 2023, the Senate Commerce Committee and the House Oversight Committee launched an investigation into the firm’s funding.
Their report explains how non-profits like NVF pass the costs of climate lawfare onto American taxpayers:
“American taxpayers are bearing the cost of Sher Edling’s litigation. Wealthy liberals, like George Soros, make tax-deductible donations to foundations like the Resources Legacy Fund, New Venture Fund, and the Tides Foundation (or otherwise make tax-deductible donations to other nonprofit organizations that, in turn, give money to these foundations).” (emphasis added)
Together, these funding arrangements highlight a coordinated dark-money ecosystem that enriches dark-money foundations and plaintiffs’ firms while sticking taxpayers with the bill.
Bottom Line
NVF has long been central to the dark-money scheme to fund climate litigation that seeks to bankrupt American energy companies.
If the IRS moves forward with revoking NFG’s tax-exempt status or imposing penalties, it would deliver a major blow to the coordinated climate-lawfare campaign.
Read more at EID Climate
