A foreign charity that is funded by an Australian billionaire has paid an American law firm to represent four tax-exempt environmental activist groups in a lawsuit against a major publicly traded domestic energy company, explicitly to advance a particular ideological—indeed, political—special interest agenda on a significant public policy matter. This is problematic, and it highlights the potential need for new legislation on foreign funding of U.S. litigation.
Philanthropy and Foreign Agents
In September 2024, San Francisco Baykeeper, the Surfrider Foundation, the Sierra Club, and Heal the Bay—four California-based environmental activist groups whose combined 2023 revenues totaled over $194 million—filed a lawsuit against ExxonMobil. The lawsuit alleges that the energy giant had “concealed the harms caused by single-use plastics” and supposedly misled the public as to their recyclability. A press release from the groups asserted that “it’s time to hold Exxon responsible for decades of deceit about recycling, for overproducing plastics, and for the harm they cause to our environment and our bodies.” California Attorney General Rob Bonta filed a simultaneous suit against the company on similar grounds, claiming in a separate press release that the litigation was about holding Exxon “fully accountable for its role in actively creating and exacerbating the plastics pollution crisis through its campaign of deception.” Exxon rejects these claims and has countersued all of these parties for disparagement and defamation, accusing them of using “smear campaigns (and lawfare) for politics, publicity, and private gain.”
There are multiple layers to all of this, but one that deserves scrutiny is the foreign philanthropic funding that is evidently underwriting the nonprofits’ ideologically driven lawsuit against Exxon. Environmental lawfare is certainly nothing new, and neither is Big Philanthropy’s support for it. A nationwide litigation campaign by state and local governments to hold energy companies civilly liable for the claimed costs of climate change has been financed with millions of dollars from giant private foundations such as the MacArthur Foundation and the Freedom Together Foundation (formerly known as the JPB Foundation). Notably, the Center for Climate Integrity—one of the primary nonprofit activist groups supporting this climate litigation effort—also operates a campaign on what it calls “plastics deception” and spotlights the litigation against ExxonMobil.
The plastics lawsuit stands out because foreign philanthropy is funding it, to such an extent that the law firm representing the nonprofits (Cotchett, Pitre & McCarthy) was required to register under the Foreign Agents Registration Act (FARA). Materials accompanying that registration disclosed that the firm was acting on behalf of an Australian charity called the Intergenerational Environment Justice Fund (IEJF), for the purpose of providing “legal services in California lawsuit.” Other filings revealed that IEJF paid Cotchett $452,943 for this purpose from July 2023 through December 2024.
A contract attached to the foreign agent registration explained that the firm “will represent IEJF and non-profit organizations in the investigation and prosecution of a lawsuit against companies potentially responsible for the production and sale of plastics, polymers and additives commonly used in problematic, unnecessary and single-use plastics that account for pollution and pose a major threat to environmental and human health.” It also clarified that while IEJF itself would not be joining as a plaintiff, it would financially support the efforts of groups that did.
Importantly, the contract further explained that IEJF “views litigation as a means to achieve environmental objectives” and that the ultimate goal of the lawsuit was “to bring positive change to the plastics industry.” This is the hallmark characteristic of lawfare: litigation that is brought to achieve an ideological or political objective that has proven elusive through the traditional democratic process. Environmental activists are particularly fond of this tactic.
The FARA registration also disclosed that IEJF was controlled by the Minderoo Foundation, though a subsequent statement IEJF provided to The Guardian directly contradicted this. The Minderoo Foundation is a gigantic philanthropy established by billionaire Australian mining magnate Andrew Forrest, and the two groups share the same street address in Perth. A spokesperson for Forrest told the New York Times that he had donated to IEJF in his personal capacity, while FARA registration materials state that IEJF “has received charitable donations from Dr. Andrew Forrest and Minderoo Foundation.”
In its countersuit (which named IEJF as a defendant, but not Minderoo or Forrest), Exxon alleged that Forrest harbored both ideological and business animosity toward the company. For his part, Forrest claimed to be “personally delighted” that Exxon had filed its countersuit, and he attacked the company for what he called “its toxic grip on society.” He also levelled the rather odd accusation that “their only priority is to maximise their profits—and produce as much oil and gas as possible.” Exxon, of course, is a publicly traded energy corporation with shareholders. It is hard to see why profit maximization within the company’s core industry should represent a problem.
Thoughts and Questions
Putting aside the merits (or lack thereof) of the litigation itself, the manner in which the initial nonprofit lawsuit was brought against ExxonMobil raises at least two distinct issues that deserve consideration.
First, three of the four nonprofit plaintiffs in this case are organized as 501(c)(3) charities. Is this kind of foreign-funded ideological litigation that these groups have undertaken against ExxonMobil “charitable” within our collective understanding of that word’s meaning? More to the point: Is it the sort of activity we wish to incentivize through the tax code? If not, what (if anything) could or should be done about that?
Second, we only know much of the above information because Crotchett, Pitre & McCarthy was required to register as a foreign agent under FARA, which in turn highlights the importance of recent advisory opinions and proposed rulemaking from the Department of Justice on the matter. Perhaps there is also a need for new federal statutory law. For example, the Protecting Our Courts from Foreign Manipulation Act, which was introduced back in 2023, would have required the disclosure of foreign litigation funders.
Transparency legislation along these lines probably makes sense. When it comes to the rather pernicious phenomenon of philanthropically funded litigation brought by special interest groups to further their own ideological and/or political objectives, sunlight may prove to be the best disinfectant. This is doubly true when that money comes from overseas.
