How Mobil pushed its oil agenda through ‘charitable giving’

local residents paddle a canoe past oil installations belonging to the mobil oil company in bonny island, nigeria
Local residents paddle a canoe past oil installations belonging to the Mobil oil company in Bonny Island, Nigeria. Photograph: George Osodi/AP

The Mobil Foundation funded universities and civic groups in the 90s, documents reveal, but largesse was not disinterested

— A two-foot-wide pipe connecting the Mobil oil company’s Idoho offshore platform to a terminal near Nigeria’s eastern border ruptured in January 1998, spewing crude oil directly into the Atlantic Ocean.

Dr David Page visited Nigeria after the spill and offered his views of its impact to the New York Times, which were published in special report dated 20 September that year. Page’s arrival on the scene was anticipated years earlier in Mobil’s plans, internal Mobil Foundation documents newly obtained by the Guardian reveal.

“Between Mother Nature and Mobil’s highly effective and targeted response, the shoreline was spared what could have been a very serious environmental event,” Page, described as a Bowdoin College professor and “an American oil spill expert”, told the New York Times.

“I’m not an attorney,’’ Page continued, “but it’s fair to say that because so little oil got ashore, I’d be very surprised if fishermen’s livelihoods were cut off.’’

Others found the spill far more significant, however. It proved to be one of the largest in Nigerian history – by the gallon, one-sixth the size of the Exxon Valdez catastrophe. Roughly 1 million people lived in areas Human Rights Watch later listed as “the worst hit” by the spill. Crude reached as far as Lagos harbor, over 500 miles away.

Mobil collected oil-clogged nets from fishermen and burned them, offering in exchange sums locals said were a fraction of replacement costs. Legal battles, protests and unrest continued for two decades.

Five years before the spill, the Mobil Foundation, run by top Mobil executives, had named Page in its decision to continue funding Bowdoin College’s Marine Research Laboratory – writing that a proposed $10,000 grant for the lab could help “assure rapid response to any possible Mobil spill events”.

“Drs [Edward] Gilfillan and Page … are our most valuable marine pollution contacts outside the industry,” Mobil Foundation wrote in the documents, adding that the lab had already received $132,000 from Mobil from 1986 to 1993, and that the lab maintained “a healthy attitude toward the oil industry’s requirements for transportation and storage of petroleum on the world’s waters”.

The foundation had listed Nigeria as one of four areas worldwide where Page’s work on mangrove swamps could prove useful, especially when it came to “litigation concerning environmental damage”.

In an email response to the Guardian’s questions about Mobil Foundation funding for Bowdoin, Page said: “At no time was there an expectation of a quid pro quo – in any form. It was a philanthropic activity in an area of interest to Mobil.”

He said the grants went towards funding summer research student placements.

“In the case of the 1998 IDOHO spill, Mobil asked us to work with a group of Nigerian academic and non-academic professionals to share our experience and help them conduct a post-spill impact study that would meet international standards,” he wrote.

Shaping regulations

Nigeria was not the only place Mobil reaped benefits its tax-exempt foundation sought to claim from its charitable giving, according to previously undisclosed internal documents from the early 1990s.

The Mobil Foundation also sought to use its tax-exempt grants to shape American laws and regulations on issues ranging from the climate crisis to toxic chemicals – with the explicit goal of benefiting Mobil, the documents show.

Recipients of Mobil Foundation grants included Ivy League universities, branches of the National Academies and well-known civic organizations and environmental researchers.

Benefits for Mobil included – in the foundation’s words – funding “a counterpoint to so-called ‘public interest’ groups”, helping Mobil obtain “early access” to scientific research, and offering the oil giant’s executives a forum to “challenge EPA behind-the-scenes”.

The documents, which include research, engineering and environmental affairs grant recommendations for 1994, cover over 120 proposals worth about $1.2m – roughly 10% of the foundation’s total budget that year – and list more than 700 grants from prior years.

Dozens of the single-page grant recommendations include full paragraphs on the “benefits to Mobil” that Mobil executives predicted the company could cull from the foundation’s gifts.

Each recommendation offers an unprecedented window into Mobil’s internal reasoning.

One page lists $100,000 in grants from 1990-1993 for the Harvard School of Public Health’s Center for Risk Analysis. The center’s director, John Graham, “has been effective in … pointing out the safety risks associated with excessively stringent fuel economy standards”, Mobil Foundation wrote as it proposed more funding. Graham had previously published a 1992 report titled The Safety Risks of Proposed Fuel Economy Legislation which made no mention of Mobil’s funding for the Harvard-based center.

mobil merged with exxon in 1999, creating the world’s largest publicly traded oil company
Mobil merged with Exxon in 1999, creating the world’s largest publicly traded oil company. Photograph: Jim Bourg/Reuters
 

Another page reveals the former Environmental Protection Agency (EPA) assistant administrator John Moore sought out grants from Mobil and at least seven other large corporations for the Institute for Evaluating Health Risks, where Moore served as president and chief executive officer.

Mobil gave $40,000 to help the newly formed institute “staff up and demonstrate its effectiveness”. Mobil Foundation recommended more for 1994, writing that Moore’s work offered a way “ultimately to influence the development of more cost-effective [environmental, health and safety] regulations”.

A third page reveals Mobil Foundation’s efforts to expand its audience inside environmental circles via a grant for the Environmental Law Institute, a half-century-old organization offering environmental law research and education to lawyers and judges.

“Institute publications are widely read in the environmental community and are helpful in communicating industry’s concerns to such organizations,” the entry says. “Mobil Foundation grants will enhance environmental organizations’ views of Mobil, enable us to reach through ELI activities many groups that we do not communicate with, and enable Mobil to participate in their dialogue groups.”

‘A wake-up call’

The documents also show Mobil Foundation closely examining the work of individual researchers at dozens of colleges and universities as they made their funding decisions, listing ways that foundation grants would help shape research interests to benefit Mobil, help the company recruit future employees, or help combat environmental and safety regulations that Mobil considered costly.

“It should be a wake-up call for university leaders, because what it says is that fossil fuel funding is not free,” said Geoffrey Supran, a postdoctoral researcher at Harvard and MIT.

“When you take it, you pay with your university’s social license,” Supran said. “You pay by helping facilitate these companies’ political and public relations tactics.”

In some cases, the foundation described how volunteer-staffed not-for-profits had saved Mobil money by doing work that would have otherwise been performed by Mobil’s paid staff, like cleaning birds coated in oil following a Mobil spill.

In 1987, the International Bird Rescue Research Center’s “rapid response and assistance to Mobil’s West Coast pipeline at a spill in Lebec, CA not only defused a potential public relations problem”, Mobil Foundation said, “but saved substantial costs by not requiring our department to fly cross country to respond”.

If Mobil classified donations as charitable contributions but it actually received valuable services as a result of its “gifts”, that could raise concerns about illegal self-dealing, tax experts told the Guardian.

The “benefits to Mobil” paragraphs struck Marcus Owens, a Loeb & Loeb attorney who served for 10 years as the director of the exempt organizations division of the Internal Revenue Service, as out of the ordinary.

“I’ve looked at all kinds of grant files in my career, both wearing an IRS hat and in my private practice,” he said, “and I’ve never seen that. The reason is because, even if it isn’t an act of self-dealing, it sure smells like it.”

“It’s like a red flag,” he added, “a blinking red siren light.”

The IRS had little institutional capacity to investigate self-dealing by private foundations, Owens said, citing a lack of IRS enforcement staff focused on not-for-profits.

The IRS today, he added, has less ability to investigate than it did in the 1990s, when there were at times special audit programs looking at foundations.

An IRS representative declined to comment on the bureau’s investigation capacity.

Tax benefits

Mobil might have been able to claim similar tax benefits by signing contracts for services with some of the not-for-profits they funded and listing the expense as a business deduction, tax experts told the Guardian – but not-for-profits on the other side of those deals might have faced their own ethical, tax or legal questions if they took payment for the services Mobil sought.

In addition, by offering funding through the Mobil Foundation, Mobil created the impression that the grants were made at arm’s length and explicitly not for the company’s private benefit.

Publicly available disclosures shed little light on Mobil’s motives for funding – and outwardly similar grants could appear very different from inside the foundation.

The Mobil Foundation’s tax filings for 1994 – the only information Mobil would generally have been required to make public – list a $25,000 “civic” grant for the Academy of Natural Sciences in Philadelphia.

The newly uncovered documents reveal the foundation had separately considered two distinct donations to the academy.

One $10,000 grant was for “environmental research and science education programs”, listing “special employee nights at the museum” among the “Benefits to Mobil Foundation, Inc”.

A second $15,000 grant was directed at the Academy’s Environmental Associates Program, founded by a pioneering scientist, Dr Ruth Patrick, who got her start at the academy in 1933, taught generations of scientists during three decades at the University of Pennsylvania, and helped to draft the Clean Water Act.

“Based on the contacts of the Academy,” the Mobil Foundation wrote as it recommended that larger grant, “the Environmental Associates Program has the potential to challenge the EPA behind-the-scenes on the effectiveness of a regulation for the environment and whether sound science supports the proposed law.”

Another $15,000 grant for the American Council on Science and Health (ACSH) is listed under “Health Agencies” in the Mobil Foundation’s 1994 tax filing. Mobil Foundation’s internal documents reveal concern over regulation motivated its grant-makers.

“ACSH promotes rational understanding of the relative minor risks from most industrial chemicals compared with those accepted as normal from natural causes,” the Mobil Foundation wrote as it recommended a $15,000 grant for 1994, adding that the proposed grant had the support of Mobil’s medical and public relations departments.

“One of the major benefits is due to the Executive Director, Dr Elizabeth Whelan, an articulate spokesperson who often appears as a counterpoint to so-called ‘public interest’ groups.”

The statute of limitations for any tax code violations from the 1980s and 90s is probably long expired, tax experts said. The IRS approved Mobil Foundation’s merger into the ExxonMobil Foundation in 2001, after Mobil Corp joined with Exxon to form the world’s largest publicly traded oil company.

ExxonMobil is currently facing investigations or lawsuits by multiple state attorneys general, related to claims the oil giant failed to communicate known climate change-related risks to investors and the public.

Mobil and climate change

While much attention has focused on what Exxon knew about climate change before the two companies merged, the records reveal Mobil’s growing alarm about climate change in the early 1990s.

From 1991 to 1993, Mobil gave $75,000 to Columbia University’s Lamont-Doherty Geological Observatory, famed for its climate change research, and recommended an additional $25,000 for 1994 so employees could “develop personal relationships with some of the key experts” on what Mobil predicted would be “the key international environmental issue of the 1990s”.

“While there currently are no regulations limiting emissions of greenhouse gases, such regulations are a real possibility within the next five years,” the grant recommendation adds. “Technical information and understanding will be key to Mobil’s ability to participate in the debate on these regulations.”

A Mobil vice-president named John J Wise signed the approvals for that recommendation, along with about $1.2m in other grants for the year.

Within roughly five years, Wise counted himself both a member of the board of trustees at the Woods Hole Oceanographic Institution (recipient of listed donations totalling over $200,000 from Mobil) and a part of UN efforts to study climate change.

Wise ultimately co-authored two UN Intergovernmental Panel on Climate Change reports, serving as a lead author on one. One report chapter Wise co-authored prominently recommended, among other things, burning natural gas (an ExxonMobil product) instead of coal as a way to combat climate change.


by Sharon Kelly | The Guardian

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