‘Dr. Evil’ fuels dogfight between AKC, Humane Society

Introduction

In recent weeks, riders of Washington, D.C.’s metro system have seen a parade of posters inside trains that make shocking allegations about the nation’s best-known animal rights group, the Humane Society of the United States.

Featuring a baleful-looking caged dog, the ads accuse the Humane Society of giving only a tiny portion of its revenue to animal shelters and using donor money to pay employee pensions and the cost of settling a racketeering case.

“That’s interesting, because you often hear about seemingly worthwhile organizations that are not,” said one rider on his morning commute, asked about the poster by a reporter. “I wonder who is putting up the ads and how factual they are?”

Good question — and a complicated answer. The ads direct readers to a website called “Humanewatch.org,” one of dozens connected to local public relations executive Rick Berman, once dubbed “Dr. Evil” in a segment of 60 Minutes. The site is the product of the Center for Consumer Freedom, managed by Berman and Co. and supported — according to the firm — by restaurants and food companies, who are sometimes targets of the Humane Society.

Humanewatch.org is vintage Berman. He pays his public relations firm with revenue from the various nonprofits he runs. He creates online “watchdogs” that attack enemies of business, like the Humane Society, health advocates, unions and even Mothers Against Drunk Drivers.

Berman doesn’t publicize his customers, but a Center for Public Integrity search of nonprofit files revealed a few. Clients include the International Dairy Foods Association, another Humane Society target; the Corn Refiners Association; and the Institute for Humane Studies, a think tank headed by activist billionaire Charles Koch.

The Center for Consumer Freedom was created in 2000 while Humanewatch.org debuted a decade later. Berman is listed as president and executive director of the Center for Consumer Freedom. Maintaining Humanewatch.org is expensive. The nonprofit spent $2.3 million on the project over its first three years, IRS reports show. The site regularly updates blog posts. The collection of advertisements has come at a steady pace, and gone beyond D.C. They are also active on Facebook and Twitter.

Berman did not return phone calls requesting comment for this story, but generally paints himself as a free-market advocate; others say he’s simply a hired gun for industry, and still others question the ethics of his business operations. The Berman firm’s website quotes a newspaper description: “Razor-Sharp wit and unconventional tactics.” The firm’s pitch says: “We don’t just change the debate. If necessary, we start the debate.”

Enemy of my enemy

The Humanewatch.org site has gotten the attention of people like Carol Hamilton, a judge at dog shows, an occasional dog breeder and a vociferous critic of the Humane Society. The Hacienda Heights, Calif., woman called the Center for Public Integrity, suggesting an investigation of the society and directing reporters to the Humanewatch.org website.

Hamilton calls the Humane Society “the biggest scam going. They’re collecting money galore.”

“My problem is they’re doing all this scamming for lobbying and not doing it for the animals,” she said.

Hamilton said she wasn’t aware of Humanewatch.org’s origins, but will continue to use it as a source of information.

“If Humanewatch helps me get where I want to go then I want to utilize them,” she said.

Dog breeders, and especially the American Kennel Club, whose objective is to “advance the study, breeding, exhibiting, running and maintenance of purebred dogs,” are no fans of the Humane Society. One flashpoint in particular: a 13-page report the Humane Society released in July 2012 that accused the AKC of blocking laws that would crack down on “puppy mills.”

ABC News did a story on the report. In a statement released at the time, the AKC said it “supports legislation to strengthen enforcement and increase penalties for canine cruelty and neglect,” but was concerned about USDA regulations that would treat a “hobby breeder who raises puppies in their home” the same as a “large scale commercial internet puppy seller.”

The American Kennel Club maintains it is not a Berman customer. It has “never made financial contributions to HumaneWatch or the Center for Consumer Freedom, nor has it been a client of Richard Berman,” a club spokeswoman said in a prepared statement.

However, on Jan. 25 and 26, at the American Kennel Club’s 2014 Legislative Conference at its headquarters in Raleigh, N.C., one of the presenters was Sarah Longwell, a senior vice president of Berman and Co. She talked about Humanewatch.org and how to handle animal advocates. Her talk was entitled, “Taking Back the Conversation.”

When asked about how Longwell came to be present at the gathering or whether she was compensated, Kennel Club spokeswoman Hillary Prim sent an email message saying the organization would not be making any further statement. Longwell didn’t return calls seeking comment.

Accounts of Longwell’s speech laid out the Berman strategy. The Humane Society feeds off of perceived “moral authority,” she was quoted as saying in an AKC licensee’s newsletter. We must “remove that moral authority” in order to take back the conversation, she said.

Self-dealing and the IRS

So who is Berman & Co.’s client? Technically, it is the Berman-managed nonprofit.

The Center for Consumer Freedom reported total revenue of $1.25 million in 2012. Berman and Co. collected a little under $250,000 in management, advertising, research and accounting fees. In addition, the company received a $200,000 line of credit.

So Berman, the nonprofit executive director, is paying Berman the public relations executive, for services.

The self-payments prompted Charity Navigator, which guides philanthropists, to issue a donor advisory in 2011 for the Center for Consumer Freedom and four other Berman nonprofits — the American Beverage Institute, the Enterprise Freedom Action Committee, the Employment Policies Institute Foundation and the Center for Union Facts.

“We find the practice of a charity contracting for management services with a business owned by that charity’s CEO atypical as compared to how other charities operate,” the organization warned.

A Berman and Co. fact sheet says the IRS took a “comprehensive look” at the company’s nonprofit management practices and “did not change the nonprofit status of any of the groups they reviewed — nor was any organization sanctioned.”

Nonprofits are not required to reveal the names of their donors, but when funds come from other nonprofits, the information is public, though hard to find.

A contribution to the Center for Consumer Freedom of $520,000 came in 2011 from the Humane Society for Shelter Pets, a nonprofit with the same address as Berman’s company. The more than half-million-dollars paid to the Center for Consumer Freedom was for “research & program development.”

A call to a number on the Humane Society for Shelter Pets’ website seeking comment from its executive director was not returned. Tax and corporate records show the nonprofit was dissolved Sept. 30, 2013.

Among other donors to the Center for Consumer Freedom identified through tax filings:

• The Grocery Manufacturers Association gave $90,000 in 2013. The trade group has fought mandatory labeling of genetically modified foods. The Center for Consumer Freedom has praised those foods as safe and beneficial. 
• J.R. Simplot Company Foundation is a private foundation funded by the agriculture giant of the same name. It gave $20,000, in 2010 or 2011. It specializes in genetically modified potatoes. 
• The conservative Lynde and Harry Bradley Foundation gave $125,000 in 2012 and $200,000 in 2009. 

Wayne Pacelle, president of the Humane Society and a favorite target of Humanewatch.org, isn’t certain who the site’s primary backers are, but he says it shouldn’t be hard to figure out.

“I mean there’s no absolute certainty on this but I can tell you he [Berman] really hits certain issues routinely, and it has to be that those [supporters] are his funders,” he said.

Berman speaks — to pork council

Some of the issues Berman hits routinely involve pork. He has spoken at pork industry events and wrote an opinion piece for an industry publication. At “Iowa Swine Day” in 2013 he was voted the most effective speaker.

He specifically defends the use of “gestation crates” — tiny pens where pregnant pigs live before giving birth. The Humane Society caught the disturbing practice at farms owned by some of the nation’s biggest pork producers on hidden camera. It has lobbied hard to get companies to stop using them, and to urge restaurant chains not to buy pork from farms that do.

Berman urges pork producers to call them “maternity pens” instead.

One of Berman’s previous clients was Smithfield Foods, the U.S.’s largest pork producer, whose pens were featured in the film. The food giant hired Berman’s company to fend off efforts from its workers to unionize a plant in Tar Heel, N. C., according to a lawsuit, as reported in a Bloomberg News story. The suit was settled and workers voted to form a union, according to the story.

Unlike many public relations firms, Berman and Co. doesn’t identify scores of clients on its website. But the Center identified at least a few others:

• The International Dairy Foods Association which paid his firm nearly $250,000, according to its 2012 tax return, for a commercial and print ad. Dairy farming has also been a target of the Humane Society, which says “repeated reimpregnation, short calving intervals, overproduction of milk, restrictive housing systems, poor nutrition, and physical disorders impair the welfare of the animals in industrial dairy operations.” 
• The Corn Refiners Association paid his company nearly $1.2 million for “communications” services in 2011, according to a tax document. The trade association is currently fighting criticism by health groups and the sugar industry of one of its most profitable products, high-fructose corn syrup. 
• The Institute for Humane Studies paid the Berman firm nearly $300,000, according to a 2011 tax return. The libertarian think tank is housed at George Mason University. Its mission is to “support the achievement of a freer society.” Its board of directors is chaired by billionaire industrialist and conservative political donor Charles G. Koch. 

Pacelle said the Humane Society goes after “institutionalized cruelty,” like factory farming and pharmaceutical testing, which makes it a target.

“I could name 20 others that all hate the Humane Society,” he said.

Board connections

The Center for Consumer Freedom’s board members have deep connections to the food industry:

• Richard Verrecchia is a “26-year veteran of the restaurant industry,” according to his biography at Fintech, including stints with TGI Friday’s, Ground Round, Houlihan’s Restaurants, the Outback Steakhouse and others. Fintech processes payments for the alcoholic beverage industry. 
• Lane Cardwell is president of Cardwell Hospital Advisory Inc. and is a 35-year restaurant industry veteran, having worked in management or on the boards of 40 different restaurant brands, according to a trade show bio. 
• Joseph Kefauver was vice president of public affairs for Wal-Mart and served as the top lobbyist for Darden Restaurants, according to a biography from the Edgewater Group, a lobbying and consulting firm. 

Berman is a former labor lawyer with the U.S. Chamber of Commerce. Berman and Co. was created in 1986, according to the company fact sheet. The Center for Consumer Freedom was created from an earlier group, the Guest Choice Network, which got its “seed money” from Philip Morris, the tobacco company, now known as Altria.

“The money funded a specific campaign related to smoking sections in restaurants — not smoking per se. BAC [Berman and Co.] spokespersons have never advocated for smoking or said it wasn’t harmful to peoples’ health,” the Berman fact sheet reads. “However, we have supported adults’ right to free choice when it comes to legal products.”

In the 1990s, Berman was president of Beverage Retailers Against Drunk Driving(BRADD), an organization formed in response to Mothers Against Drunk Driving.

As president, he argued for “tolerance of social drinking.” He was a lobbyist for the American Beverage Institute from 1999 through 2005, according to federal records.

Berman’s fact sheet says the Center for Consumer Freedom and other nonprofits he manages are not “shadowy front groups.”

“These organizations were founded to combat a tidal wave of anti-business, anti-free market Non-Governmental Organizations (NGOs) that advocate for a battery of laws, restrictions and regulations that attack personal freedom and entrepreneurialism,” it states.

Attacks on HSUS

Berman told the New York Times that the “Humane Society wants to force us all to be vegetarians — or vegans” and that it opposes the consumption of animals, regardless of how they are treated.

The Humanewatch.org ad currently running in Washington’s metro trains says that HSUS gives 1 percent of its budget to pet shelters and “spends millions on its offshore hedge fund investments and pension fund.” It also says dues go toward paying a more than $15 million federal racketeering settlement.

“The first thing is overall it’s just a false framing of the issue,” said HSUS spokesman Alan Heymann. “It’s never been the case that we’re some sort of grant-making association for local shelters — at the same time, the figure does not take into account all the other ways we support local shelters.”

As to the racketeering charge, The Fund for Animals (now a Humane Society affiliate) was one of several animal rights activist groups that sued Feld Entertainment, the owner of Ringling Bros. Barnum & Bailey Circus, for mistreating its elephants. They lost the case, and a former Feld employee was found to have been paid at least $190,000 by the animal rights groups to back their charges.

Feld filed a racketeering lawsuit seeking legal fees and won nearly $16 million in a settlement reached in a U.S. District Court in Washington. Heymann said its share of the settlement, which was not disclosed, will be paid from insurance.

“No HSUS donor dollars are being used to pay this,” he said.

Dog breeders contacted for this story don’t seem to be bothered by Berman’s reputation as a hired gun.

Darci Brown, owner of a car dealership in Greenfield, Mass., has bred dogs as a hobby for 30 years. She says the Humane Society would like to enforce spay and neuter laws to the point where there would be no pure bred dogs left.

She was present at the legislative presentation. The fact that Berman represents unnamed clients “concerns me a little, yes,” she said, but she feels the information he produces is factual.

“I think our people are focusing on the message they’re giving,” she said. “It just happens to be one we agree with.”

Chris Young contributed to this report.

Clarification: This story has been updated to clarify that the Humane Society of the United States was not a plaintiff in the lawsuit against Feld Entertainment and to note the person paid by the animal rights group in the lawsuit was a former employee.