Air Date: Week of May 16, 2003

The Nature Conservancy recently suspended a number of its activities following a three-day series about the organization published in the Washington Post. Host Steve Curwood speaks to Post reporter Joe Stephens about the investigation.

Transcript

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CURWOOD: Welcome to Living on Earth. I'm Steve Curwood. A series of investigative reports in The Washington Post has prompted the nation's most affluent conservation organization, The Nature Conservancy, to suspend a number of its activities pending an internal review. These activities include tax-sheltered land deals with past and present members of the Conservancy's governing boards.

Senator Charles Grassley, an Iowa Republican, and Senator Max Baucus, a Montana Democrat, have called for a probe of these transactions. A Post investigative team also detailed The Conservancy's ties to major corporations with poor environmental records. The mission of The Nature Conservancy is to protect millions of acres of sensitive habitat in the U.S. and abroad. But Joe Stephens of The Washington Post says something went wrong when the Conservancy went drilling for oil in Texas.

STEPHENS: Well, in Texas City, Texas, the Conservancy a number of years ago was given a plot of land by Mobile Oil that contained the last native breeding ground of a very rare form of speckled grouse called the Atwater's Prairie Chicken. And the Atwater’s Prairie Chicken is very close to extinction. The Conservancy calls it the most endangered bird in North America.

The Conservancy took over this plot, and a couple of years after they took it over, they announced that they were going to drill for oil and gas directly under the speckled grouse's habitat, which they did. And they held that up as a model of compatible development, the way you could make money off of drilling for oil--they had made millions off of selling natural gas they had extracted--as well as nurse along an endangered species.

CURWOOD: Did that work?

STEPHENS: Well, that's questionable. We found the story was a little more complex than the Conservancy had said publicly in the past. We found that there was a lawsuit that The Nature Conservancy got entangled in, on the business side, where another national charity and some other mineral rights owners had charged that The Conservancy had, in essence, stolen their oil-- that's their word, stolen--by drilling sideways into a pocket of gas which went across a property line. They filed suit. That suit was eventually settled for a payment of $10 million paid by The Conservancy, the drilling partners, and their insurance company.

Now, on the other side, on the conservation side, we found that there were indications that the birds hadn't fared so well during the drilling operation. In fact, we came across a biological opinion written by The Conservancy's Texas State science director that said that the drilling operation and the laying of a pipeline had led to a "higher probability of death" among the Atwater's Prairie Chickens. And, in fact, the number of Prairie Chickens has declined steadily since the Conservancy started drilling. There are now roughly 16 Atwater’s Prairie Chickens left on the preserve today.

CURWOOD: The Nature Conservancy has frozen what they call "conservation buyer transactions." They've frozen this for now in response to The Washington Post articles. What are these transactions?

STEPHENS: Well, they take a number of forms. What we wrote about in our series were transactions where The Conservancy would buy land, attach an easement restricting some kinds of development, and then resell it to so-called conservation buyers. And what we found is, in many instances, these buyers were current and former state trustees for The Conservancy. And they often would get large discounts on the purchases.

For example, we looked at one transaction which took place on Shelter Island, New York. It's near the Hamptons. where The Conservancy bought ten acres which was bordering their Mashomack Preserve. And they bought the ten acres for $2.1 million. They then added some development restrictions to the deed, and seven weeks later resold that land to one of its former local trustees for $500,000.

The buyer then turned around, and over some period of time, made $1.6 million in charitable contributions to The Conservancy. Well, if you do the math, that adds up to making the Conservancy hold $2.1 million in total. This has an advantage for the buyer, too, in that he could write that contribution off on his federal income taxes and realize some very substantial savings in income tax.

CURWOOD: Now, some would dispute your use of the word "discount," saying that if the development rights or other restrictions were placed on the land, in fact it would be worth less, and that therefore, there's a fair exchange given the value of the property.

STEPHENS: Yes. That's kind of the idea behind conservation easements. And this is since what we found, is The Conservancy would write the easements specifically tailored to the buyer's needs. And--actually I might read to you specifically--the Shelter Island land did allow the buyer to potentially build a home on the site. And the easement did restrict some commercial uses. But here's a list taken directly from the easement of what could be done on the property.

You can construct a single-family house of unrestricted size, garages, a swimming pool, a tennis court, a home office, a guest cottage, and a writer's cabin. The easement allows relocation of an access road, installation of septic facilities, construction of foot trails and related excavating, filling and bulldozing, and, on a particular portion of the property, it authorizes tree cutting, hillside terracing, gardening and lawn planting, all with the idea of providing what are called “enjoyment of views.” And it specifically does not permit public access.

The buyer told me that given those restrictions, it didn't change his potential use of the property at all in the future. He just wanted a home.

CURWOOD: Some environmental activists accuse The Nature Conservancy of greenwashing for corporations that have records of pollution or other problems with environmental stewardship. What were you able to find?

STEPHENS: Well, we found that their Board does include executives and directors from major corporations, including some with significant environmental issues. We also found the same thing in what The Conservancy calls it's International Leadership Council. This is an advisory group where corporations can make a large contribution to The Conservancy and get a seat on this council.

And we found, for example, sitting on these boards were senior executives from American Electric Power, which is the nation's largest power generator. It runs many power plants. And has been called by some other environmental groups the largest source of air pollution in the U.S. Also, the chairman of GM sits on The Conservancy's Board. The Conservancy also has close ties to some paper products companies, such as Georgia Pacific, and some oil companies, such as BP, Amoco, and Exxon-Mobile. And that's not to suggest that there's anything wrong with that. But we did think it was interesting in that these companies--not because they're necessarily dirtier than their competitors, but just because they're large companies--they're involved to a great degree in environmental issues because of the regulatory aspects of that. And we thought it was interesting to see how they can reconcile their fiduciary responsibility to the corporations, and their responsibilities as board members of The Conservancy.

CURWOOD: The Nature Conservancy says that your articles, well, they really weren't fair in terms of the vast amount of land that they've protected around the globe. And that the problems that you highlight are really very small in comparison to their entire body of work. How do you respond to that?

STEPHENS: Well, we think the articles were fair. We took some pains to point out the projects that The Conservancy is proud of. We included a full page of graphics illustrating the breadth of their work and how it extends around the globe. We think we've put everything in the proper context. But we chose to highlight projects that seemed novel, interesting and represented trends for the future. And we kind of dug down into a handful of those projects, and our series is what resulted. We don't know what occurred in the projects we did not look at in great depth.

CURWOOD: Joe Stephens co-wrote a three-day series of front page articles for The Washington Post on The Nature Conservancy. Thanks for speaking with us.

STEPHENS: Thanks for having me.

[MUSIC: Various Artists - Kwaito Hits - EMI (2001)]