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June 2019 Networker: Public Money in the Public Hands for the Public Good



Volume 24 (5) June 2019

"In this issue we tell a detective story of the use and misuse of public money in one state. Then we provide a scenario for a different outcome. Imagine that public money was no longer used to make rich corporations richer, but was actually used to promote human well-being and protect the common wealth."

-Carolyn Raffensperger


Friends of SEHN,

In this issue of the Networker we begin a two-part series on what government would look like if public budgets followed the idea of “public money in public hands for the public good.” As it stands, in Iowa, our public money is frequently transferred to private hands for private gain. For example, in 2017 Iowa gave 208 million dollars in tax abatements and tax credits to Apple for 50 full time jobs . We became the laughing stock of the nation for that deal.

If you study a state or city’s budget, you find out what that government actually does. Is government primarily trying to grow the economy at the expense of human well-being? Is it fulfilling its duty to take care of the common wealth and public health?

A public budget is an essential environmental and public health issue for the simple reason that almost every step toward human well-being requires public money. Clean air, clean water, healthy ecosystems, public transportation,public education, and public safety all require public money as well as regulations that limit the “rights” of corporations to trash our shared assets.

If you think that government’s primary job is mainly to nurture the economy, free enterprise and the market then you protect private property at the expense of human well-being and you starve environmental and public-service budgets.

In this issue we tell a detective story of the use and misuse of public money in one state. Then, we provide a scenario for a different outcome. Imagine that public money was no longer used to make rich corporations richer, but was actually used to promote human well-being and protect the common wealth.

In the next issue of the Networker we will provide tips on analyzing your state or local budget so you can track how much money is going for corporate welfare and how to reframe the budget to promote public well-being.

Carolyn Raffensperger
SEHN Executive Director


Last year a group of Iowa environmentalists convened by SEHN and the Iowa Chapter of the Sierra Club began studying the Iowa budget because some state spending seemed peculiar: the state was giving away money to big corporations like Apple but slashing the budget for things like clean water. If Iowa was a pristine environmental state lacking in business, those give-aways might make some sense. But Iowa is the most ecologically damaged state in the Union with about 2% of its land base left in any kind of ecological wholeness. We’ve paved and plowed all of Iowa and reduced its biodiversity to four species: pigs, corn, soybeans and humans. Or maybe five species if we add in concrete. So why would we cut money for university research on clean water but give tax rebates to corporations that simply conduct research? Why would we hand over millions of dollars to big tech companies and starve the Department of Natural Resources?

To find the answer to those questions we would have to go back to a 1971 memo written by Lewis Powell to the U.S. Chamber of Commerce . He essentially laid out one theory of government: free enterprise is the real foundation of the United States and government is an impediment to the economy. Consumer protections and environmental regulations impede free enterprise, Powell believed. Powell set an agenda that became the playbook of industry and led to Newt Gingrich’s Contract with America (1994), numerous conservative think tanks, and what now seems like an irrefutable assumption that government’s primary role is to grow the economy.

Some years ago we at SEHN worked with various state and municipal agencies to develop the precautionary principle for decision-making. Precaution is the logical way to make policy when great harm is probable (or is already occurring), but the science on cause-and-effect isn’t yet conclusive. How much did we need to know before we took action to protect babies’ brains from neurotoxic pesticides? Agency after agency told us that even though their mandate was to protect public health and the environment they couldn’t use the precautionary principle because the economy got the benefit of the doubt, not children.

We began casting about for different approaches to government. If the economy was dethroned, what could take its place? The ancient legal idea called the public trust doctrine gave us an answer: the common wealth, public health, and public well-being. What if we expanded the public trust doctrine from its limited role in ensuring that people had access to shorelines to a new understanding of governance? What if instead of primarily protecting private property, business and the economy, government’s job was to be the trustee of all the things that contribute to public well-being— air, water, parks, roads, public schools, wildlife, public health and more?

So we Iowa environmentalists set out to compare the existing state budget under the two ideas of what government should do: grow the economy or advance public well-being? We began by looking at the 2019 governor’s budget to see how it was put together. We discovered that the governor had 4 goals that included

  • Creating a Competitive Business Environment;

  • Developing the Most Innovative Energy Policy in the World;

  • Educating our Children for the Knowledge Economy;

  • Training Iowans for the Jobs of Tomorrow.

We couldn’t find even a single mention of clean water in the governor’s goals in spite of the millions of pigs and the filthy rivers that plague our state. We were stunned to learn that we actually wrote checks to corporations as tax rebates for merely conducting research. At the same time the tuition and debt of students at our 3 state universities was overwhelming and public funding for research at these institutions was being cut.

We discovered other things that surprised us. Wells Fargo, a bank that willfully and aggressively funded the Dakota Access crude oil pipeline (which runs through Iowa), and just as important, has been sanctioned for fraud, is the main bank that held the state’s money. There are other options. The Iowa state constitution mentions a state bank so there is nothing stopping us from having a public bank, just like North Dakota.

The reason that we were appalled that Wells Fargo, a bank that has committed fraud not once, but repeatedly, holds our state’s money, is that governments as trustees have a fiduciary duty to the beneficiaries of the state’s goods--which include both money and the commons. Keeping the money in Wells Fargo is a breach of that fiduciary duty. But then again, so is allowing industrial agriculture to trash our rivers and air.

The outcome of our investigation was a report which can be found here: https://www.sierraclub.org/iowa/peoples-budget-for-iowa

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In this episode, I have the pleasure of speaking with environmental activist and community organizer, Joy Towles Ezell. Joy talks about her work in the last 40 years to rally against pollution of the Fenholloway River in Florida, how she got started in this movement, her acts of courage and fearlessness, the importance of asking questions, and even having her phone tapped! Joy is an inspiration to us all-- listening to her talk about her experiences is exhilarating and we are so fortunate to know her.

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Kayhla Cornell