An IRS complaint accuses the New Venture Fund of potentially violating federal tax laws by covertly funding climate-liability lawsuits, raising questions about transparency and accountability in environmental activism.
The dark-money funding network behind many climate-liability lawsuits targeting energy companies has come under renewed scrutiny following an IRS complaint that could have significant repercussions for the ongoing nationwide litigation campaign. The American Accountability Foundation (AAF) has lodged allegations against the New Venture Fund (NVF), a prominent left-wing funding group, accusing it of potentially breaching federal tax regulations by covertly channeling resources into politically charged climate lawsuits while benefiting from tax-exempt status.
According to the complaint highlighted by The Washington Free Beacon, NVF’s purported environmental mission, to protect and preserve the environment and educate the public, stands in stark contrast to its financial support for for-profit law firms such as Sher Edling LLP. This firm is one of the main beneficiaries of NVF funding and is known for its aggressive climate tort litigation representing states, cities, tribes, and public agencies against major energy companies. Sher Edling’s litigation portfolio, which includes cases related to climate deception and environmental contamination, often targets entities in states like Delaware, Minnesota, Rhode Island, and New Jersey, as well as cities such as Baltimore, Oakland, and New York City.
AAF’s complaint highlights an inconsistency: NVF’s tax filings categorise grants to Sher Edling as funding “environmental programs,” yet Sher Edling emphasizes the private financial benefits accruing to its attorneys should their climate lawsuits succeed. The complaint asserts that such litigation is motivated by private gain, potentially undermining the charitable purpose that NVF claims to uphold. Tom Jones, AAF’s president, pointed out to the Free Beacon that American taxpayers are effectively subsidising these suits through tax-deductible donations funnelled by NVF, which has reportedly steered over $8 million to Sher Edling’s climate litigation efforts under the broad label of “general operations.” Jones stated: “If these slush fund schemes prove true, NVF’s nonprofit shield should be stripped and slammed with stiff penalties.”
The New Venture Fund is not new to controversy over its opaque financial structures. It is administered by the for-profit consulting firm Arabella Advisors, notable for overseeing a network of influential environmental groups including the Sierra Club and the now-defunct 350.org. Arabella has received substantial funding from Swiss billionaire Hansjörg Wyss, who donated nearly $30 million to NVF between 2016 and 2019. The New York Times has described Arabella and its affiliated organisations as a “daisy chain of opaque organisations” that obscure the ultimate recipients of these funds, raising longstanding concerns about the lack of transparency in environmental activism funding.
Sher Edling itself has been the subject of congressional scrutiny. In 2023, both the Senate Commerce Committee and the House Oversight Committee launched investigations into the funding arrangements supporting its litigation. Reports have highlighted how tax-exempt donations from wealthy liberals, including figures such as George Soros, pass through foundations like NVF and the Resources Legacy Fund before reaching plaintiffs’ firms like Sher Edling. This financial ecosystem effectively transfers the cost of aggressive climate lawfare onto American taxpayers, despite the political nature of the lawsuits.
This complex web of funding raises critical questions about the use of nonprofits in political litigation and the propriety of such groups enjoying tax-exempt status while backing litigation that can yield substantial private financial returns for law firms. Should the IRS decide to revoke NVF’s tax-exempt status or impose heavy penalties, it would represent a significant blow to the coordinated funding mechanisms supporting climate litigation campaigns aimed at American energy companies.
The unfolding challenge to NVF and its role in climate litigation funding underscores ongoing debates about transparency, accountability, and the broader impact of dark money in environmental advocacy. The outcome of this inquiry may well shape not only the future of climate lawsuits but also the regulatory approaches to nonprofit involvement in politically motivated legal actions.
- https://climatechangedispatch.com/dark-money-climate-lawsuits-irs-scrutiny/ – Please view link – unable to able to access data
- https://www.energyindepth.org/dark-money-climate-litigation-network-faces-irs-scrutiny/ – An article discussing the IRS scrutiny faced by the New Venture Fund (NVF) for allegedly channeling funds into climate lawsuits, potentially violating federal tax rules. The American Accountability Foundation filed a complaint against NVF, highlighting concerns over its tax-exempt status and the funding of politically charged litigation. The piece also mentions NVF’s connections to Arabella Advisors and its support from Swiss billionaire Hansjörg Wyss, who contributed nearly $30 million to NVF between 2016 and 2019. The article underscores the complex financial networks behind climate litigation funding.
- https://www.influencewatch.org/for-profit/sher-edling/ – A profile of Sher Edling LLP, a law firm representing states, cities, public agencies, tribes, and businesses in environmental cases. The firm focuses on climate deception litigation, drinking water contamination, and land, air, and water pollution. Sher Edling has been involved in lawsuits against major energy companies on behalf of various governmental entities, including the states of Delaware, Minnesota, Rhode Island, and New Jersey, as well as cities like Baltimore, Charleston, Oakland, Honolulu, and New York City.
- https://www.influencewatch.org/for-profit/sher-edling/ – A profile of Sher Edling LLP, a law firm representing states, cities, public agencies, tribes, and businesses in environmental cases. The firm focuses on climate deception litigation, drinking water contamination, and land, air, and water pollution. Sher Edling has been involved in lawsuits against major energy companies on behalf of various governmental entities, including the states of Delaware, Minnesota, Rhode Island, and New Jersey, as well as cities like Baltimore, Charleston, Oakland, Honolulu, and New York City.
- https://www.influencewatch.org/for-profit/sher-edling/ – A profile of Sher Edling LLP, a law firm representing states, cities, public agencies, tribes, and businesses in environmental cases. The firm focuses on climate deception litigation, drinking water contamination, and land, air, and water pollution. Sher Edling has been involved in lawsuits against major energy companies on behalf of various governmental entities, including the states of Delaware, Minnesota, Rhode Island, and New Jersey, as well as cities like Baltimore, Charleston, Oakland, Honolulu, and New York City.
- https://www.influencewatch.org/for-profit/sher-edling/ – A profile of Sher Edling LLP, a law firm representing states, cities, public agencies, tribes, and businesses in environmental cases. The firm focuses on climate deception litigation, drinking water contamination, and land, air, and water pollution. Sher Edling has been involved in lawsuits against major energy companies on behalf of various governmental entities, including the states of Delaware, Minnesota, Rhode Island, and New Jersey, as well as cities like Baltimore, Charleston, Oakland, Honolulu, and New York City.
- https://www.influencewatch.org/for-profit/sher-edling/ – A profile of Sher Edling LLP, a law firm representing states, cities, public agencies, tribes, and businesses in environmental cases. The firm focuses on climate deception litigation, drinking water contamination, and land, air, and water pollution. Sher Edling has been involved in lawsuits against major energy companies on behalf of various governmental entities, including the states of Delaware, Minnesota, Rhode Island, and New Jersey, as well as cities like Baltimore, Charleston, Oakland, Honolulu, and New York City.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative presents recent developments regarding the IRS complaint against the New Venture Fund (NVF) and its funding of Sher Edling LLP. The earliest known publication date of similar content is from 2024, indicating that the core information is relatively fresh. However, the report has been republished across various platforms, including low-quality sites and clickbait networks, which may affect its perceived freshness. Additionally, the narrative is based on a press release, which typically warrants a high freshness score. No significant discrepancies in figures, dates, or quotes were found. The inclusion of updated data alongside older material suggests an attempt to provide a comprehensive overview, though the update may justify a higher freshness score but should still be flagged.
Quotes check
Score:
7
Notes:
The narrative includes direct quotes attributed to Tom Jones, president of the American Accountability Foundation (AAF). The earliest known usage of these quotes appears in a 2024 publication. Identical quotes have been used in earlier material, indicating potential reuse. The wording of the quotes varies slightly across sources, which may suggest paraphrasing or selective quoting. No online matches were found for some of the quotes, raising the possibility of original or exclusive content.
Source reliability
Score:
5
Notes:
The narrative originates from the Climate Change Dispatch, a platform known for its critical stance on climate change issues. This raises questions about the reliability and potential bias of the source. The report mentions the American Accountability Foundation (AAF), which is a known conservative advocacy group. While the AAF has a public presence, its credibility may be questioned due to its political affiliations. The New Venture Fund (NVF) and Sher Edling LLP are established entities with verifiable records, lending some credibility to the report.
Plausability check
Score:
6
Notes:
The narrative makes significant claims about the funding mechanisms behind climate litigation, including the involvement of NVF and Sher Edling LLP. These claims are plausible and align with known information about the entities involved. However, the report lacks supporting details from other reputable outlets, which is a concern. The report includes specific factual anchors, such as names, institutions, and dates, enhancing its credibility. The language and tone are consistent with the region and topic, and the structure is focused on the main claim without excessive or off-topic detail. The tone is formal and resembles typical corporate or official language.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The narrative presents claims about the IRS scrutiny of NVF’s funding of Sher Edling LLP, with some elements of freshness and plausibility. However, the source’s reliability is questionable due to its known biases, and the lack of supporting details from other reputable outlets raises concerns about the report’s credibility. The reuse of quotes and potential recycling of content further diminish the overall trustworthiness of the narrative.