Ted's Blog

In an effort to ingest more vegetables but not actually have to eat them, I bought a Juiceman (you may remember the infomercial with the crazy orange man with wild white eyebrows touting the benefits of juicing and calling both himself and his product “Juiceman”).

It’s pretty neat as far as tools go. Chews through carrots like they were nothing. And carrot juice doesn’t taste bad, it’s actually kind of sweet. I tried mixing some carrots and tomatoes. Tastes like carrot juice. Bad thing about carrot juice: it stains instantly and permanently anything it touches (including the Juiceman man). Why not just make the entire machine orange?

I’ll post updates on whether I will get my money’s worth ($100) from this thing. So far it has involved 3 very expensive glasses of carrot juice (one with tomato).

I was reading more about it today. One of the real big problems that could come back and nail all parties is that the Nature Conservancy would buy land for someone else clamp conservation restrictions on it and sell the property at a loss. The “conservation restrictions” are usually just what the new landowner wants, including houses, farming, logging, whatever. They then re-appraise the land at a lower rate and sell the property at that new value. Where they almost certainly ran afoul of the law was in requiring the new landowner to give a “donation” that would bring the amount paid back up to the original asking price. This allows the owner to get land (maybe the owner wouldn’t sell it to an individual but doesn’t mind selling it to a nice organization like TNC) at the same price and do exactly what they intended anyway, but they get a write-off of the “donation”. So really the loser is the government. And I also kind of wonder if there isn’t another deal struck with the original landowner where they donate a conservation easement to TNC before selling the land for less money and are able to write off the difference between the asking price and the lower amount as a “donation” as well. Then the government gets hit twice.

Anyway it also brings up the whole idea of conservation easements. You get a double savings where you donate an easement to an organization. First you write off the difference between the market price of your land with restrictions and without as a donation. So you get a tax break now. But because the land will now appraise for less money you can petition the county or city and have your assessment reduced. Then you save money every year on property taxes.

This is what I wrote to the Nature Conservancy after reading Part 1 of the Washington Post article:

I have been a member of The Nature Conservancy for about 12 years. I have been giving every year in increasing amounts and support the Georgia chapter as well. I joined because I liked the idea of an organization that doesn’t do a lot of lobbying, doesn’t go to parades, doesn’t do publicity stunts, and just concentrates on buying and preserving land.

I read the Washington Post article (Part 1 anyway) and while I took some of the information with a grain of salt, the article also put its finger on some issues that have concerned me in the past. Rather than saying you’ve been improperly portrayed and that TNC is doing a great job, you need to look at what they’re saying and see how much of it indicates some problems or at least opportunities to do better.

One concern I have is the ballooning number of employees at TNC. I’m not sure why it takes so many people, offices, jeeps, etc. to preserve land. While any landowner needs to dedicate resources to protecting that land and managing that land, I wonder how many employees do just that? Employees and overhead are very expensive to have and maintain. The money that pays one $40k employees (with at least another $40k in overhead) will buy a lot of land. And buy more every year. My entire yearly contribution of about $150 pays that employee for less than one day.

Another concern I have when I read the annual report is the number of acres TNC *sells* every year. There is a lot of income from land sales and I would bet that some years TNC sells more land than it buys. I just have to wonder about that. While you are quick to say you have protected X acres, how much of that is owned? I would bet that many of your supporters are thinking you own that land. I may be mistaken but I remember the Gray ranch being touted as a great acquisition and then several years later it was sold.

I see a lot of money in the annual report going towards the vague notion of “education” and “programs”. I wonder what those mean. Is a letter I get telling me about the need to raise money for a new purchase considered “education” or is it “marketing”. To me, it is marketing. Is the cost of the magazine considered marketing? It probably should be. I wonder if marketing costs aren’t hidden in programs and education just to make the organization look better. I wonder that with all organizations I support, so it isn’t unique to TNC.

And yes I wonder why some of the nations biggest polluters always seem to team up with The Nature Conservancy. I think it’s great to raise money from them and put it to good use. And I like the idea of helping them come up with better policies. But I wonder if that relationship legitimizes those businesses. And I wonder if such a tight relationship doesn’t open the possibility of abuse. I work for the government managing consultant contracts and dealing with consultants every day. Therefore I am very aware of how vigilant one must be to avoid conflicts of interest, even the appearance of them.

I hope that The Nature Conservancy takes the questions raised by the Post and uses the information as an opportunity for reflection. I hope that you can build on the information and opinions stated in the article (and those you are no doubt receiving as a result of the article) and use those as a guide to do a better job of protecting land.

Sincerely,

Ted C*****

The Washington Post this week had a series of articles about The Nature Conservancy, a nonprofit dedicated to buying and preserving land. They’re a big organization (one that I’ve supported for many years and will continue) and in their zeal to preserve land they get into dealings as questionable as some similar size corporations. And it is worth noting that when the head of a charitable organization calls himself the “CEO” you’ve got trouble.

Anyway, this one particular part of the series deals with a piece of land on Martha’s Vineyard. The owner was looking for a way to subdivide and develop the land, but the authorities would let him rezone the land. So he lined up some buyers including The Nature Conservancy and told the authorities he was selling the land to the Conservancy. All the sudden he wasn’t a bad guy anymore. To sweeten the deal he asked that he be granted permission to subdivide the land into 35 parcels which would greatly increase the value from the planned six lots. In fact it increased the value by $14 million. The guy then sells the land for the original appraisal of $64 million but writes off $78 million. Basically the guy got the full value of the land plus a $14 million writeoff.

But all’s well that end’s well, right, because the Nature Conservancy can preserve this land now. Not exactly. $45 million of the purchase price came from “donors” who would get to build on the property! In fact, one guy is building a $14 million mansion. And half the land will become an “educational farm” so it won’t really be preserved. And one of the other donors (David Letterman) got to keep the mansion that was already on the property. Of course I’m sure the “donors” all wrote off their donation to The Nature Conservancy as well.

Because the article involves math, I’m sure nobody will really care about what it says. But the bottom line is these guys all got to dodge millions of dollars in taxes and still build vacation homes.

http://www.washingtonpost.com/wp-dyn/articles/A17879-2003May5.html

The whole series is very good, but a little depressing. There’s another story where the Conservancy bought land from a lumber company but in order to afford the price they agreed to “sell” the lumber on the land back to the company. This way the company wrote off a huge donation (including the value of the timber) but still wound up with the lumber and left the conservancy with stripped land to replant.

When you hear that rich people don’t pay taxes, this is how they do it.

Now that Bush has put his billion dollar program to push hydrogen-powered cars, it seems to be coming up more often.

US News had a interesting article (that I’ve already quoted once) about some of the different technologies.

http://www.usnews.com/usnews/issue/030217/biztech/17oil.htm

They pretty much trashed ethanol, saying that the energy it takes to harvest the corn and turn it into alcohol is roughly equal to the power you get from burning it. Essentially it amounts to a huge government subsidy ($1 billion per year) of Archer Daniels Midland, the primary producer of ethanol, and others. They called it “unsustainable, subsidized food burning.” They did say that some new biotechnologies for rapidly breaking down vegetable waste like the cobs, stalks, grasses, etc. was encouraging and currently that stuff is tilled under (which still gives it some use). So they didn’t give up completely. Currently the US produces 2.13 billion gallons of ethanol a year, which I thought was pretty amazing.

They pointed out that natural gas burns much cleaner than diesel or gasoline (or gasohol) and doesn’t cost as much, running about 25% cheaper than the equivalent in gasoline. I thought that it was pretty easy to run a conventional engine on natural gas, but they said for a car that it was about $8,000 for the upgrade. That’s pretty prohibitive I think, given that my car cost $16k brand new (but if they used the ethanol subsidy the government could upgrade 125,000 cars a year the current total number of natural gas vehicles). For big diesel engines like buses it costs an extra $20-50k. Washington DC is spending $100 million to add 250 natural gas buses to its fleet (includes fueling stations and entire cost of new buses). They also said finding natural gas stations isn’t easy but for $1,000 you can get a device that hooks up to your home gas line and refuel at home. I thought that was pretty cool, but it still wouldn’t help you on long trips. Plus there’s the problem that a lot of newer power plants run on natural gas and if you throw in a bunch of cars as well, the cost could escalate pretty quickly (already has, given my last gas bill). And it’s more expensive in the winter when everyone is heating their homes with it. Natural gas in vehicles is currently displacing only 124 million gallons of gasoline per year, about 5% of the ethanol market.

They mentioned vegetable diesel fuel which is essentially soy bean oil. It costs twice what diesel costs, but can run in a regular diesel engine (that’s amazing to me). But it’s use last year was only 15 million gallons.

So you’ve got all this stuff out there and then you’ve got hydrogen, which for some reason everyone wants to only burn in “fuel cells” that cost hundreds of thousands of dollars. Why not just combust it? That would be a lot cheaper. The problem with hydrogen is that it takes more electricity to generate it than the power you get out of it so you’re still burning coal or gas or building nuclear plants to produce it.

They talk about hybrid cars and touched on an interesting point. There’s really no point in building tiny hybrid cars. You can build tiny gasoline cars that get 30-40 mpg, so what’s it matter if you get 50 mpg from a hybrid? They need to be building hybrid trucks and SUV’s, that’s where the fuel is being burned and where the potential for savings is greater. People just won’t trade in SUV’s for tiny hybrid cars, so just accept it and make hybrid SUV’s.

Also there’s Bush’s least favorite remedy because it doesn’t involve a subsidy to any lobbyist or corporation: insisting on higher efficiency vehicles. That would greatly reduce our dependence on foreign oil and it’s easy to achieve. Hey, and smaller cars cost less than big ones! There’s no development curve, you don’t pay more for the fuel, and so on.

Looks to me like the easiest and smartest solutions are using natural gas more often and encouraging the use of smaller cars. We could save billions by eliminating the ethanol subsidy, not developing far out technologies, and just drive smaller cars. US cars and trucks burn 600 billion gallons of gas per year. Increasing the average mileage 2 miles per gallon would save 60 billion gallons. That’s 30 times the amount of gasohol and 500 times the amount of natural gas we’re burning in vehicles. And how hard would it be to raise the average from 20.8 mpg to 22.8? Plus it costs the taxpaying consumer less to buy smaller cars and costs less to run them! No government subsidy required. In fact, by reducing demand, the price of gas would decrease. Why doesn’t Bush push that program?!