October 8, 1997

By Martin Espinoza

WHEN SISTER Bernie Galvin, who runs Religious Witness with Homeless People, recently asked the $289 million Evelyn and Walter Haas Jr. Fund for a small grant to wage her campaign to preserve low-income housing at the new Presidio National Park, she had no reason to believe she would be rejected.

The cause was hardly radical. Soldiers had been living on the site for decades, in usable houses that were now vacant. The former army post once housed hundreds of families left homeless after the 1906 earthquake and fire.

Furthermore, the Haas empire, the San Francisco family that controls Levi Strauss and Co., has a long history of trying to help the needy.

In 1995 the Haas foundation awarded more than $7 million in grants, with a median award of $35,000. A grant of that amount would have covered half the cost of the aggressive civil disobedience efforts that have made Religious Witness with Homeless People such a visible presence at the Presidio.

The rejection letter that arrived Aug. 20 was telling.

"We appreciate learning more about [your] efforts to preserve housing in the Presidio for use by homeless and low-income families," Diana Bermúdez, senior program director for the fund, wrote. "Unfortunately, we cannot be encouraging of Fund support. The Fund is not currently funding advocacy efforts in the Presidio."

But the Evelyn and Walter Haas Jr. Fund was indeed funding "advocacy" at the Presidio. It was funding Sister Bernie's opponents.

In 1995, records show, the fund gave two grants worth $36,000 to the Golden Gate National Recreation Area, a National Park Service agency that has vigorously opposed preserving the Wherry Housing for low-income and homeless tenants. What's more, the fund gave $50,000 to the Trust for Public Land and $35,000 to the Golden Gate National Park Association (GGNPA). The other big Haas family foundation, the Walter and Elise Haas Fund, gave $25,000 to the GGPNA in 1994 and another $25,000 in 1995, according to IRS records.

Those groups supported the creation of the Presidio Trust, a redevelopment scheme to let private corporations and real-estate developers determine the future of the park. The trust directors see no role for the homeless at the new national park, and Sister Bernie's efforts are a thorn in their sides.

Sister Bernie refuses to back off from her confrontational style of activism, and it has cost her. "We are fully aware that financial support from certain foundations will not be forthcoming, because of the controversial nature of some of the issues which we address in a very public manner," she told the Bay Guardian. "But we have not, nor will we ever, sacrifice our integrity or betray our strong public commitment to poor people by bending our direction for the sake of obtaining funding."

But Religious Witness with Homeless People is an unusual organization. The vast majority of the self-described progressive and environmental groups in San Francisco -- including the progressive foundations -- were more than willing to go along with the Presidio Trust plan. And, unlike Sister Bernie, many appear to have been well rewarded -- with juicy grants and nice offices in the scenic Presidio park. In one case, the executive director of a local nonprofit got to move into a house at the Presidio (see "Who's Living in the Park?").

A six-month Bay Guardian investigation, involving dozens of interviews and thousands of pages of documents, shows how the privatization of the Presidio is a case study in the way private foundations are setting the political agenda in the Bay Area, buying off activists, blocking progressive reform, undermining environmental activism, and limiting the terms of acceptable political debate.

Some of the organizations that get money from these foundations are doing important progressive work. Many of the people who donate to the foundations sincerely believe in social change, and in many cases their contributions wind up supporting legitimate causes that badly need the money.

But overall, the evidence is clear: the marriage between grassroots activism and private and corporate foundations has caused key issues, including homelessness, public power, renewable energy, and the privatization of public resources, to disappear from the progressive agenda at the Presidio and in the Bay Area and elsewhere.

Among other things, our investigation found:

* A closely knit nexus of foundations, led by the Energy Foundation and the Tides Foundation, along with corporate foundations such as Hass, have helped fund a long list of Bay Area organizations that actively supported the Presidio privatization or sat by quietly and let it happen. As Congress debated a bill that would turn the park over to a private, unelected board, the Tides Foundation -- with at least eight nonprofits under its wing -- was negotiating a sweetheart lease for plush Presidio offices.

* The relationship between the Tides Foundation and the corporate backers of Presidio National Park has created an atmosphere of fear among some progressive organizations that oppose the privatization scheme, causing them to refrain from speaking out against the plan.

* Tides has created an unusual for-profit subsidiary, with the foundation director as president, that is poised to profiteer off private development and leasing at the Presidio.

* Tides is closely linked to Pew Charitable Trusts, a Philadelphia-based outfit controlled by the heirs to the Sun Oil fortune (see "Buying the News," page 43). Pew, which has a demonstrated agenda of supporting the privatization of public resources, pours huge sums of money independently and through Tides into organizations that seek to defuse active political dissent. Among the beneficiaries of Pew money is the Energy Foundation, a Pew-founded and -funded group that supported a huge pro-utility nuclear bailout (see "The Energy Elite," page 37) and that has also moved into spacious offices at the Presidio. Many of the Bay Area's biggest newspapers and broadcast outlets -- all of which also supported Presidio privatization -- have also received grants from Pew (see "Buying the News," page 43).

* While activists are trying to preserve Wherry Housing, Tides and the park service may be violating the Presidio management guidelines by converting 47,197 square feet of residential housing space to office use.

* Many of these "progressive" foundations, including Pew, the New World Foundation, and Tides, have significant investments in the economic institutions (such as oil, logging, mining, and chemical companies and manufacturers that exploit third-world child labor) that for many liberals and progressives represent the causes of so many environmental and social problems. In some cases, foundations arguably invest more in the corporate problem than they contribute in grants to the grassroots solution (see "Sleeping with the Enemy," page 27).

* A questionable funding and management scheme that essentially amounts to nonprofit money-laundering could end up tainting the local tax-exempt Tides Foundation empire that supports countless small, progressive organizations.

Walden at the Presidio

On some warm San Francisco days, a sprinkler connected to a nearby fire hydrant waters the lush and carefully manicured lawn -- and sidewalk -- outside the Thoreau Center for Sustainability in the Presidio National Park. A $5.6 million renovation project has transformed the handsome and historic General Hospital Ward into a modern office facility run by a private real-estate developer in partnership with the Tides Foundation. Among its tenants: the Energy Foundation, Institute for Global Communications, the Wilderness Society, and many others.

Even when fog blankets the Presidio in cold, quick-moving sheets, the center is a scenic and beautiful place, where dozens of people are now working to solve the world's social and environmental problems. It's a sort of social-justice ivory tower.

The center is situated in the northeast corner of the Presidio, once an elite army post equipped with its own golf course, tennis courts, bowling alley, theater, swimming pool, and breathtaking views of the Golden Gate Bridge and the bay.

In 1972 Rep. Phillip Burton convinced Congress that if the Presidio were ever to cease being used as a military base, it should become part of the park service's Golden Gate National Recreation Area, which includes parts of the peninsula coast, the Marin Headlands, and Alcatraz.

When the Department of Defense slated the Presidio for closure in 1989, the Department of the Interior (the parent agency of the park service) started planning to convert the military post to a park -- as Burton's legislation mandated. At first the park service had ambitious plans for the Presidio: it was supposed to be, early documents show, a global model for sustainable development, an urban park with its own renewable energy system, state-of-the-art resource conservation programs, and low-cost office space for nonprofit groups working on environmental and public-interest issues.

But along the way a handful of big corporations and foundations hijacked the conversion process. They convinced Congress to hand over control of the park to a private nonprofit agency called the Presidio Trust that would manage it not for ecological sustainability but for financial gain. It became the nation's first privatized national park, representing a sellout of monumental proportions (see "The Presidio Power Grab," 1/12/94).

And the nonprofits that wound up out there helped the process along.

Stolen base

For years, park service researchers had been trying to expand the agency's policies toward natural resources beyond traditional conservation practices. In early 1991 a team of park service analysts and environmentalists convened meetings to discuss ways to take publicly owned electrical infrastructure off the private-utility grid to promote self-sufficient and sustainable water, sewage, and electricity technologies.

Park service analyst David Behler and UC Berkeley researcher Dale Sartor were the primary catalysts behind the move to bring real sustainable energy practices to the Presidio. When they learned that the park service and the Presidio Council were intent on turning over the electrical distribution system -- then owned by the U.S. Army -- to Pacific Gas and Electric Co., they protested privately. Behler calculated that it would cost more to privatize the system than it would to maintain it as a public resource.

But they ran into a major obstacle: PG&E wanted to run the Presidio's electricity system. The contract to sell power to tenants at the park could be worth millions of dollars.

Much more was at stake: The new park was a perfect place for San Francisco to establish a publicly owned electrical utility beachhead. The new park would be under the purview of the Interior Department, which had, in 1913, allowed San Francisco to dam Hetch Hetchy Valley in Yosemite National Park for water and power -- on the condition that the power be used by a municipal utility system to be established to compete with PG&E. The city could easily have used its Hetch Hetchy electricity to power the Presidio.

So PG&E got involved early on with other business leaders and helped take control of the planning process -- and early on, company officials pressured the park service to pay the private utility millions of dollars to take over the electrical infrastructure and begin providing power to the Presidio's tenants (see "The Energy Elite," page 37).

Meanwhile, a nonprofit organization called the Golden Gate National Park Association was working behind the scenes to raise millions of private dollars to finance a team of consultants who would draft a plan for the new park that would emphasize the importance of bringing private business into the Presidio.

For most of its life the GGNPA was a harmless nonprofit that helped the park service provide visitor and educational services for sites such as Alcatraz. But in 1991, when it became clear that the Presidio would no longer be a military base, the GGNPA's mission was essentially hijacked by some of the city's biggest downtown leaders. Their point person was Toby Rosenblatt, a GGNPA board member and the former San Francisco planning commission president who during the early '80s helped orchestrate the biggest high-rise boom in San Francisco history.

Rosenblatt used his seat on the GGNPA to fund the Presidio Council -- a group that claimed only to be interested in helping provide for the orderly transition from military base to national park.

Rosenblatt -- assisted by a pro-downtown National Park Service busybody named Amy Meyer, enlisted some of the city's most powerful business executives for the council, including then-Transamerica Corp. chair James Harvey and Richard Clarke, the chair of PG&E. The late Walter Haas Jr. was also a member of the council.

The Presidio Council had a radical plan -- to transfer the immensely valuable piece of real estate out of the hands of the National Park Service and into the control of private interests. The plan called for establishing a special nonprofit corporation with an unelected private board that would manage the park without public input or oversight. The rationale: Private interests could better handle the park's finances, and a privatized park could make enough money that the federal government wouldn't have to subsidize its operations.

That had never been done with a national park. The last time anyone tried was in the early 1980s, when Ronald Reagan's interior secretary, James Watt, suggested that Disney Corp. should manage the Grand Canyon. The idea aroused such outrage from environmentalists that it was shelved immediately.

Ten years later, the private interests realized the only way they could win public support for privatizing a park -- especially in San Francisco -- was if enough environmental and progressive organizations could be convinced to go along.

In 1993, one year before the army was slated to give up the property, the sleepy, well-respected GGNPA received thousands of dollars from both private and corporate foundations as well as downtown CEOs. The donors, according to GGNPA's IRS Form 990, included BankAmerica Foundation ($25,000), Transamerica's James Harvey ($20,000), the Gap's Donald and Doris Fisher ($15,000), the Fred Gellert Foundation ($15,000), the Wallace Alexander Gerbode Foundation ($50,000), and the William G. Gilmore Foundation ($5,000).

In 1994 more money went to GGNPA for Presidio planning; this time the donors were Donald and Doris Fisher ($20,000), the Walter and Elise Haas Fund ($25,000), James Harvey ($15,000), the Koret Foundation ($50,000), and the San Francisco Foundation ($40,000).

The Energy Foundation, a self-described progressive outfit (see "The Energy Elite," page 37), got involved with the Presidio when it granted the GGNPA $100,000 in late 1992, according to IRS documents.

Greenwashing the Presidio

During the early stages of Presidio planning, business leaders worked closely with mainstream environmental groups to create the illusion of community support for the Presidio Trust. At first, some activists were critical of the plan or unsure of its merit. Privately, some expressed the concern that any reasonable person would expect to hear from environmentalists: the Presidio Council wanted to give a public asset away to a private outfit.

But over the next two years, as a privatization bill by Rep. Nancy Pelosi made its way through Congress, virtually every major local and national environmental group turned around.

In the end, among the supporters of the Pelosi bill were the Sierra Club, the Energy Foundation, the Natural Resources Defense Council, the League of Conservation Voters, the National Parks and Conservation Association, and Earth Island Institute. The only opposition came from the Bay Guardian; the Preserve the Presidio Campaign, made up of retired military veterans worried about the loss of the Presidio's Letterman Army hospital; a few animal-rights activists concerned that animal testing would go on in the Letterman research facility under a privatized park; and a handful of neighborhood and public-power activists.

At the same time, something else was going on at the Presidio: the private foundations that funded many of those environmental groups -- and some of the groups themselves -- were jockeying to get office space in the abandoned military buildings at the park.

By late 1994 the Tides Foundation, which would soon become the national model for how nonprofits could help privatization, was negotiating an immensely favorable lease for more than 70,000 square feet of space at the Presidio, which it would call the Thoreau Center.

In the meantime, almost all the environmental groups that turned around on the Presidio were getting money -- either from Tides or from Pew.

Between 1993 and 1996 Pew gave the Sierra Club (and the Sierra Club Legal Defense Fund) a total of $1,875,000, the Natural Resources Defense Council $1,771,000, the Trust for Public Land $485,000, and the Wilderness Society $1,100,000, Pew's annual reports show.

Between 1993 and 1996 Tides gave the Environmental Defense Fund $78,750, the League of Conservation Voters $3,450, Earth Island Institute $39,211, the Natural Resources Defense Council $79,540, the Sierra Club (and the Sierra Club Foundation and Legal Defense Fund) $82,994.32, the Trust for Public Land $5,250, and the Wilderness Society $186,483.

Every one of those groups has a history of opposing private encroachment on public resources. Not one raised a finger in opposition to the privatization of the Presidio.

Here's how bad it got: Marc Kasky, executive director of the Fort Mason Foundation, told the Bay Guardian after Pelosi introduced her bill in 1994 that he had serious concerns about the Presidio Trust. But the Fort Mason Center appeared on the list of supporters that Pelosi submitted to the House of Representatives Sept. 18, 1995.

In November 1995, Kasky moved into a nice house in the Presidio (see "Who's Living in the Park?" page 26).

Tides rising

The Tides Foundation quickly became the nonprofit centerpiece of the plan to bring private development -- including for-profit development -- into a national park.

Tides was founded by Drummond Pike in 1976 with the goal of helping promote social change through philanthropic giving and the nurturing of progressive nonprofit organizations. Tides was an unusual sort of foundation: instead of raising its own money, it was a conduit for donors who wanted to support organizations or causes anonymously.

Wealthy patrons give big chunks of money to Tides -- and their names are kept confidential. The Tides donation is completely tax deductible. But the donor can discreetly designate an organization that he or she wants to see receive the money -- and Tides will pass the donation along, minus a small administrative fee.

Often, the recipient group doesn't know where the money really came from. And there's no way for the public to find out either.

By the end of the 1980s Tides had significantly expanded another of its tasks: providing a tax shelter to small nonprofits unable or unwilling to win tax-exempt status from the federal government (see "Tax-Exempt Secrecy," page 24).

For a fee, Tides took care of an organization's payroll, bills, donor contributions, and administrative expenses. With Tides getting up to 9 percent of all contributions going to these projects, the incentive for the foundation to expand its empire became stronger every year.

Last year the Tides Foundation awarded almost $15 million in donor-advised grants and had $55,300,772 in assets. The Tides Center (the part of Tides that handles projects) manages a flow of more than $2 million every month.

When Tides, which is now the 31st largest grant recipient in the country, moved to the Presidio in April 1996, it expanded its mission to a different level. It created the model for the privatization of a national park.

Tides unveiled that month its Thoreau Center for Sustainability -- which, although shrouded in green, was nothing less than the first private development at the Presidio.

Here's how it worked: Drummond Pike created an unusual for-profit corporation called Highwater Inc. -- a wholly owned subsidiary of the Tides Foundation. Pike then formed a partnership -- Thoreau Center Partners -- between Highwater and the private development firm Equity Community Builders.

According to public records, Pike is the president of Highwater, and Highwater and Equity are the partners in the Thoreau Center.

The Thoreau Center Partners rehabilitated the old Presidio General Hospital Ward at a cost of $5.6 million, with $3.1 million in financing coming from a bank and $2.4 million coming from private loans and equity. The project also received a boost from the government through $1 million in historic preservation tax credits.

What's more, according to an April 3, 1997, General Accounting Office report, for the next 10 years Pike and Tides are not expected to pay any rent to the park service -- while the nonprofits leasing space in the Thoreau Center for Sustainability are expected to pay market-rate rents.

Pike told the Bay Guardian that "the Thoreau project combines historical preservation with the provision of office space for organizations working on educational and scientific subjects. We have been happy to use private financing to create the project, and we are happy that small nonprofit groups will benefit as a result." Pike promises that all proceeds of Highwater Inc. will go back to the Tides Foundation. That remains to be seen.

At least 18 nonprofit organizations at the Thoreau Center supposedly are paying market-rate rent for their space. There is no way to determine, based on public records, how much the private, for-profit Tides subsidiary will earn in rental fees. And Tides refuses to say.

Meanwhile, the Bay Guardian has learned that Tides and the park service are probably violating the Presidio's general management plan and environmental impact statement by converting into office space 47,197 square feet that apparently should have been used for residential purposes.

When Rene Cazenave of the Council of Community Housing Organizations learned of the possible EIS violation, he said that it could give Religious Witness and other housing activists the necessary ammunition to go to court to possibly persuade the park service to preserve Wherry Housing for low-income and homeless use.

There are activists who work in offices in the Thoreau Center for Sustainability who support the preservation of Wherry Housing for homeless people, but they're afraid to take on their landlord -- the Tides Foundation and the park service.

Sources at the Presidio told the Bay Guardian that last July, just days before a planned civil disobedience action at the Presidio at which homeless advocates planned to occupy vacant housing, the group Homes Not Jails sought support from Thoreau Center tenants.

Pike agreed to host a brown-bag lunch meeting with housing activists, including Ted Gullicksen of the Tenants Union. Some Tides tenants privately said they were prepared to support the action -- but they backed down at the last minute.

"We didn't get a real solid commitment," Gullicksen said. "[Some tenants] talked about possibly coming [to the protest] with a banner that identified them to show their support."

That didn't happen.

Several Tides employees have told the Bay Guardian they have concerns about the Presidio Trust as a model for park management, but none will make that criticism in public for fear of jeopardizing their relationship with the park service -- and their cushy lease at the Presidio.

Pew's 'wet dream'

Tides still claims to be a progressive institution -- but it takes a huge amount of money from the pro-privatization, anti-environmental Pew Foundation. Between 1991 and 1994 the Tides Foundation distributed $5,118,525 in funds for Pew. Tides gets a percentage of that money (although Pike would not disclose how much).

Tides was also getting a cut for funneling Pew money to Tides projects. According to Pew Charitable Trusts' 1993 annual report, Tides funneled $625,000 ($600,000 awarded during 1993) for the Pew Global Stewardship Initiative, a resource center that provides support to organizations working to slow global population growth.

Another $650,000 was passed through Tides for a project called Environmental Strategies. The money, according to a 1994 annual report, was granted "to establish a nonprofit organization to help coordinate the efforts of the environmental community to promote constructive environmental policies at the national level."

With Tides controlling the money for some 260 nonprofit projects, at minimum, the Presidio-based do-gooder foundation offers Pew a vehicle for playing a major national role in progressive environmental and social justice campaigns.

Pike justifies Pew's activism. "Private philanthropy has played a significant role in the history of the conservation movement in this country, from supporting acquisition of critical wilderness lands to support for advocacy of progressive governmental policies regarding parks and the use of other federally owned lands."

"[Tides] can knit together all of these various groups that they're funding," said Jeffrey St. Clair, environmental editor of Washington, D.C.-based CounterPunch. St. Clair has spent the last few years researching Pew's adverse influence on the environmental movement.

"It's really who controls the money that's important.... Tides is a kind of manager for hire, and it fits exactly in the [Pew] pattern, because there are some situations where Pew just can't go out and create its own group. So in those situations it's much better to essentially maintain the control over the bureaucracy of that group, and if they can do that through Tides, then I think that they're very pleased."

"Tides is thought of as a progressive foundation," St. Clair continued. "Pew doesn't have the same reputation. Sure, they've tried to do some cosmetic surgery, but even the new Pew isn't thought of the same way Tides is."

Pew officials argue that Pew's relationship with Tides is purely one of convenience. Since many of Pew's projects and campaigns are short-term, they say, it doesn't make sense for a Pew project to go through the hassle of doing all the paperwork required to get 501(c)(3) tax-exempt status from the IRS. At press time, Pew's director of environmental campaigns, Joshua Reichert, had not responded to faxed questions on the issue.

Pike said, "We work very hard to provide services to projects in a way that helps them develop strong management and organizational practices. Projects can become independent at any time, and we actively assist them."

"Some projects at Tides are time-limited," he said. "Why would you want to require all nonprofit projects to become independent institutions?"

But critics say it's actually a major change in the direction of charitable giving.

"This is a significant shift in the attitude of philanthropy, progressive philanthropy," St. Clair said. "The whole idea of progressive philanthropy was that foundations would come in with seed money [to build] movements that were sustainable and perhaps permanent.

"Well, if [Pew] can say we're going to invest, over the next three years, a million dollars in an ancient forest campaign in California, Oregon, and Washington, and then one of the obligations of accepting this money is that you agree to become self-sustaining through a membership base, through other funding sources, or whatever, and you'll be there to fight the fight for the next 15 to 20 years -- that has value. But campaigns where Pew comes in and creates its own groups, it's there for three years, and then it's gone -- that violates some of the fundamental tenets of progressive political, grassroots action."

St. Clair said the privatization of the Presidio represents a "wet dream" for Pew, because Pew's theory on how to solve environmental problems is to privatize everything, "charge recreation fees, obtain corporate sponsorship, form public-private partnerships.... It couldn't be any better expressed than the Presidio."

"This is why all these bad ideas start in California and then begin to mutate across the country," he said. "Here, the ultimate liberals are opening the door. Maybe they don't see it, maybe they do see it and they don't care. But if you do this in San Francisco, think what [Republican representative] Don Young's going to do in Alaska, think what [Republican representative James] Hanson's going to do in Utah, think what [Republican senator Conrad] Burns is going to do in Montana. When you start screwing around with private developments on public lands, and you have Drummond Pike as the poster child for this, how can you then turn around and say, 'Don Young, your plan to privatize the Tsongas National Forest in Alaska, or have the Carnival Cruise Lines take over management of Glacier National Park, is a ludicrous idea'? It violates the basic tenets of national park policy, but you can no longer say that because here is the foundation which is funding all these environmental groups who are supposedly the great defenders of public land engaged in that very process.

"I mean, this is going to come back like a sledgehammer to the forehead."

Martin Espinoza broke the first Bay Guardian stories on the Presidio sellout and has been covering it ever since.

Deborah Bone provided extensive research for this report.

On Sunday Oct. 12, religious and community leaders will once again be protesting the National Park Service and the Presidio Trust's refusal to homeless people to live in Wherry Housing. Those interested should meet at 2 p.m. at the main post/visitor's center. Use the Lombard Gate entrance to the park. Call (415) 885-6401 for more information.

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Introduction
Privatizing the public agenda
By Tim Redmond

The private energy elite
How the Energy Foundation has abandoned environmentalists and used big money to greenwash the private utility industry.
By Savannah Blackwell

Anatomy of a sellout
How the Tides Foundation, the Energy Foundation, the Haas Fund, Pew Charitable Trusts, and a long list of the nonprofits they support sold out the Presidio to private interests.
By Martin Espinoza

Who's living in the park?
Presidio National Park
By Martin Espinoza

Plundering the parks, 1913-97
How big business and private foundations bought off environmental groups to promote the privatization of the Presidio and energy deregulation in California. A (slightly) expurgated timeline.
By Daniel Zoll

Buying the news
How private foundations are quietly underwriting -- and shaping -- local news coverage of major issues.
By Ron Curran

Following the money
Is the alternative press wire service compromised by secret foundation support?
By Ron Curran

The new power brokers
Private foundations are bursting with money and influence -- and very little trickles down.
By Eileen Ecklund

Sleeping with the enemy
They say that all's fair in love and war. But it still hurts when you find out your non-profit is sleeping with your worst enemy.
By Martin Espinoza

Tax-exempt secrecy
Obscuring where millions in tax-exempt dollars are coming from and how they are really being used.
By Martin Espinoza