Here is part of a high-minded statement of purpose from a Canadian non-profit organization; see if you can guess which one.

The objects for which the Company is established are:

(a) To support and encourage research and education respecting the following:

(i) the use and development of natural resources including, without limitation, the extraction, production, development, conservation, protection, and distribution of natural resources, and other related matters, throughout Canada and the World;

(ii) conservation and protection of the environment;

(iii) ethical issues and considerations in respect of the items described in subparagraphs (i) and (ii) including, without limitation, issues and

considerations of environmental responsibility, peace, treatment of workers, democratic rights, and human rights; ….

Suzuki Foundation? Nope. Well then, how about the energy think tank Pembina Institute? Wrong again, although this newer organization is also based in oil rich Alberta.

Say hello to – wait for it – the Ethical Oil Institute. Today I’ll take a first look at the hitherto unknown entity behind the latest push to defend the Alberta oil sands (a.k.a. tar sands). I’ll review the emerging roles of the Conservative-linked masterminds behind the initiative, namely pundit and author Ezra Levant and government spokesperson turned blogger Alykhan Velshi. And I’ll introduce Levant’s silent partner in the Institute: Calgary lawyer Thomas Ross,who also happens to be a partner at oil patch law firm McLellan Ross and one of the leaders of the firm’s OilSandsLaw.com initiative. All of this belies the studiously cultivated image of Ethical.org as a “grassroots” organizational effort; indeed, it looks more and more like industry sponsored astroturf.

In retrospect, it all seems inevitable. As I noted last March, 2011 saw the rapid promotion of Levant’s “ethical oil” meme (elaborated in his 2009 book of the same name) into adoption as a Conservative government catch-phrase. That was followed quickly by the surprising transition of Conservative government spokesperson Alykhan Velshi into a new career as blogger at Levant’s Ethicaloil.org, recently made over in a slick relaunch.

In interviews Velshi spun the ad hoc nature of his involvement, stating that “he wasn’t paying himself” and pointing to the apparently improvised reliance on small PayPal donations to fund Access-to-Information requests to the dreaded CBC (Canada’s state-owned broadcaster). But somehow the narrative of Velshi bolting from a rising career in government in the wake of a comfortable Conservative majority, into an uncertain future helping out an old friend never quite added up. Ironically, it was a click on that very same PayPal button that yielded an important clue to the more complete story.

Well, well – the Institute that dares not speak its name. In fact, as of this writing, there were still only two Google hits for the mysterious Ethical Oil Institute. But one was crucial: the publication of a notice of incorporation in the official Alberta Gazette.

ETHICAL OIL INSTITUTE/INSTITUT DU PETROLE ETHIQUE

Non-Profit Private Company Incorporated 2011 MAR 09

Registered Address: 600, 12220 STONY PLAIN ROAD, EDMONTON ALBERTA, T5N 3Y4.

The address turned out to be the Edmonton office of McLennan Ross, a pre-eminent Alberta law firm (more on that in a moment). And the registration date of March 9, 2011 shows plans for the Ethicaloil.org were well underway long before Velshi’s initial blog posts in June, and indeed before the Canadian election campaign (which was called in late March).

Birds of Feather



The biographies of Levant and Velshi both show a long involvement with the Harper-led Conservatives (and in Levant’s case, its western-based predecessors, the Canadian Alliance and the Reform Party). Indeed the arc of their careers are remarkably similar, with the elder Levant about 10 years ahead of Velshi. Both cut their teeth at right-wing think tanks: Velshi was an intern in 2005 at the American Enterprise Institute (where he prepared a summary of an anti-U.N. conference), while Levant started out as a 1996 intern at the Fraser Institute.

And both have extremely hawkish views on the Middle East and have gotten into hot water with over-the-top attacks on their political enemies. Perhaps Levant’s lowest point (and that’s saying something) came last year when he wrote a column in the Toronto Sun falsely accusing financier and philanthropist George Soros of having been a Nazi collaborator. Meanwhile, Velshi is feeling the heat for his role in Conservative government efforts to ban former U.K. MP George Galloway from entering Canada; along with his ex-boss Immigration Minister Jason Kenney, he faces a $1.5 defamation million lawsuit for allegations that Galloway financed terrorism.

However, it was their common political affiliation that first brought them together. Levant is now a commentator and talk show host at the the fledgling Sun News TV network in Toronto. But much earlier he worked for parliamentary aide for Reform Party leader Preston Manning, and Canadian Alliance leader Stockwell Day, before winning the nomination as Alliance candidate in Calgary Southwest. That political career ended when Levant reluctantly stood aside to let newly-elected leader Stephen Harper run in his stead and re-enter Parliament in 2002. However, Levant did go on to work in the all-important “war room” in subsequent elections, as Harper presided over the merger of the Canadian Alliance into the Conservative Party and formed the government in 2006.

Meanwhile Velshi held various posts with the Conservatives, notably as an advisor to Environment Minister John Baird, and communications director for the aforementioned Kenney. He too was a valued member of the Conservative re-election team in the 2008 election campaign, and that’s apparently when he and Levant became good friends.

A new non-profit …. and a career change

The first inkling of the Ethical Oil project came in a late May report in the Hill Times. In an email to friends just after the May 2 election, Velshi had announced he was about to leave his government post. He was coy about his future plans, which he said he didn’t “yet know for certain”. But he told the Hill Times in that he was “pursuing an opportunity in the not-for-profit sector, outside partisan politics” and that he had wanted to leave Parliament Hill at the “least disruptive” time.

Another Hill Times report, at the time of EthicalOil.org’s late June soft launch, presented Velshi as a passionate oil sands advocate and grassroots organizer on a shoestring budget,”mooching off free Wi-Fi at coffeehouses and wearing flip-flops”. Oh, and “not raking in any dough”, at least for the time being.

He also explained a little bit about the genesis of EthicalOil.org, or rather what we now know to be the Ethical Oil Institute.

“I think with [Levant] going to the Sun [News Network], I think he hasn’t had enough time to push out this argument in the media, in panels and in debates,” said Mr. Velshi. “I said, ‘Well, look, I’m looking to do something after government. Why don’t I set this up? And I’d be looking for your advice on how to do that.'”

Well, then, let’s take a closer look at the organization Velshi and Levant “set up” back in early March. A close examination of Institute’s founding documents (available from the Alberta corporate registry) reveals a lot of information that has otherwise been emerging in dribs and drabs, or else not at all.

Take, for instance, the rather basic matter of the organization’s location. The Ethical Oil Institute is incorporated under Alberta Companies Act Part 9 (governing non-profit organizations), with its registered office at the Edmonton address of law firm McLellan Ross. The two shareholders (and board directors) are Levant and McLellan Ross partner Thomas Ross. They have given as their addresses the firm’s smaller Calgary office, which is indeed Ross’s place of work.

But the EthicalOil.org Facebook page proclaims that it is a “Non-Governmental Organization (NGO)” located in Toronto, Ontario, neatly hiding the Ethical Oil Institute’s proximity to the oil industry, physical and otherwise.

Similarly, the involvement of Ross – made public here for the first time as far as I know – has inconvenient optics. Ross is a lynchpin of McLellan Ross’s Calgary office, where he is one of ten lead partners in McLellan Ross’s “Oil Sands Law.com” initiative, described as a “Slick new oilsands cross-selling strategy” in a 2009 Canadian Lawyer article.

The respective official roles of Levant, Ross and Velshi can be surmised by an examination of the list of officers in the Articles of Association, cross referencing to the occasional crumb offered up by Velshi and Levant.

The executive officers of the Company shall be the President & Executive Director, a Treasurer, and a Secretary, or alternatively, a President & Executive Director and a SecretaryTreasurer. The President & Executive Director, Treasurer, and Secretary may be elected by the Board at the first or any subsequent meeting of the Board held after each Annual General Meeting. The Board may also elect or appoint at any time and from time to time as officers or executive officers a Chairman of the Board, …

Velshi recently described himself, for the first time, as the “executive director of EthicalOil.org”. That came in a press release last week describing his latest stunt – an Ottawa “protest” featuring a gruesome post card handout and two niqab wearing young women (one blue-eyed and one brown-eyed, presumably to provide politically correct eye colour balance). And Levant apparently has the Chairman’s seat on the Institute’s board, according to this week’s Ottawa Sun newspaper report on the new Ethical Oil TV ad now running on the Oprah Winfrey Canadian network. I guess they should know these things.

… That’s the stark message from a new group dubbed Ethical Oil, founded by a former Tory staffer and chaired by Sun News Network’s Ezra Levant. Levant wrote an award-winning book by the same name and provided start-up cash.

Logically, that means Thomas Ross is Secretary-Treasurer – the money guy. Makes sense.

Finances: The median is the message

In the late June Hill Times interview, Velshi discussed the new Ethical Oil venture.

Mr. Velshi said he plans to devote the next six months to the project. “If it takes off, this will become my career for the next little bit,” he said. Mr. Velshi said Mr. Levant has offered some of the $20,000 he won from a National Business Book Award for Ethical Oil to pay for the project’s start-up costs. Individual donations or membership fees are meant for publicity, not overhead costs, said Mr. Velshi. He said he won’t accept money from “foreign interests or lobbyists” and won’t seek or accept money from government. He said he had no plans for a corporate membership category, but that individual members of political parties or oil and gas companies would be free to donate to the not-for-profit project. “I certainly expect that people who work in the ethical oil industry, whether they’re welders or pipe fitters from Newfoundland who work in Fort McMurray, or whether it’s geologists in Calgary, maybe some Conservative activists in Ottawa, may chip in $10 or $15,” he said.

Fortunately, the Institute’s Memorandum of Association doesn’t tie Velshi down to such pesky details as whether corporate donations would or would not be accepted, or what individual donations would fund. That’s a good thing, because the PayPal button asking for “$5, $10 or $15” first appeared alongside a blog post asking for donations to fund Velshi’s Access to Information request to the Canadian Broadcasting Corporation. That doesn’t sound like “publicity”, although arguably all of Velshi’s antics so far could be classified as publicity stunts.

But if small individual donations are going only to publicity, then how are overhead costs – including Velshi’s eventual remuneration – going to be funded?

Perhaps the EthicalOil.org PayPal donation statement will help us understand this.

The No Tar Sands Coalition, Greenpeace, and other opponents of Ethical Oil are funded by grants from foreign foundations. EthicalOil.org, by contrast, will not take money from foreign corporations, foundations, governments, or lobbyists. We will not allow foreign corporate interests to compromise our independence. This means we rely on small donors like you to sustain our grassroots advocacy. Please consider making a $5, $10, or $15 donation

So, let’s see. The small donations pay for publicity (also known as “grassroots advocacy”). And no “foreign corporate interests” are allowed to contribute (although presumably a well-heeled individual foreign shareholder could press that PayPal button just like anyone else).

That leaves large donations from Canadian corporations and possibly their individual executive officers. (Note that would also include foreign controlled companies like ExxonMobil subsidiary Imperial Oil and Koch-owned Flint Hills Resources Canada).

So let’s sample some of Velshi’s various statements about corporate donations (with emphasis added):

Hill Times, June 27 (Kristen Shane): “[Velshi] said he had no plans for a corporate membership category , but that individual members of political parties or oil and gas companies would be free to donate to the not-for-profit project.” [That strongly implies individual donations only, without explicitly ruling out corporate donations.]

, but that individual members of political parties or oil and gas companies would be free to donate to the not-for-profit project.” [That strongly implies individual donations only, without explicitly ruling out corporate donations.] Guardian, July 28 (Leo Hickman): “Velshi said: ‘I won’t take money from any foreign corporations, any governments.’ He added, though, that, if offered, he wouldn’t refuse Canadian corporate donations.

Huffington Post, August 28 (Althia Raj): “Velshi wouldn’t say whether EthicalOil.org collects money from big oil companies. He described his campaign as ‘grassroots’, saying all Canadians who care about ethical oil are invited to donate and that the median donation is in the $20-$25 range. ‘We are 100 per cent independent of government and industry,’ he wrote in an email.”

Not to mention 100 per cent evasive. I especially like the comment about the “median donation”, which begs the obvious questions about the amount and source of the largest donations.

I dare say Friends of Science also had a median contribution of about $25 in their heyday (they too offered memberships for that amount). But the dozens of membership fees were dwarfed by the corporate and foundation donations funnelled through Barry Cooper’s bogus research fund at the University of Calgary.

Of course, it took years for the truth about Friends of Science to start to emerge, and some details are still missing. And in that case the egregious use of a university research fund as a conduit meant that key information could not be covered up forever.

So we may never know the identity of Ethical Oil’s biggest supporters. However, besides the obvious connection in the person of Thomas Ross, there is one other intriguing bit of evidence that the Calgary oil patch was being canvassed for support, even before Velshi’s first blog post (courtesy of that second Google hit).

It turns out the Ethical Oil Institute was a “birdie” sponsor of this year’s Kinnear Classic celebrity golf tournament, an annual fundraising event in support of the Calgary Health Trust. That’s no doubt a worthy cause, but one wonders why a cash-starved startup non-profit would participate in such an event. Presumably, you have to spend money to make money, and what better way to introduce the new kid on the non-profit block to Calgary’s corporate elite.

Onwards and upwards

In a few short weeks, Ethical Oil has gone from a humble blog to a slick social media website, complete with a Facebook presence and Twitter feeds. The stakes could be not be higher, as oil sands defenders and opponents battle over the Obama administration’s final decision on the Keystone XL pipeline, widely expected in the next three months. That decision could set the course for oil sands development for decades to come.

The hypocrisy of Ethical Oil’s framing of the issue as a choice between “ethical oil” and “conflict oil” has been duly noted elsewhere. After all, pretty much every important player in the oil sands has operated in the Middle East or Africa, and several still do. Less noticed has been Velshi’s math challenged mangling of the usual talking points downplaying the greenhouse gas impact of the oil sands.

According to Environment Canada’s measurements, the oilsands has reduced its GHG output by 29% since 1990. Despite massive expansion of oilsands production in the last two decades, Canada’s oil companies have managed to cut their carbon output by nearly a third.

It’s emission intensity (i.e. GHGs per barrel), not output, that has been cut by 29%; that’s a figure that’s often quoted precisely to avoid discussion of the steep rise in total GHG output from the oil sands, a trend that Environment Canada projects will result in a tripling of GHG output from 2005 to 2020. Clearly, Ethical Oil’s “research and education” in this area deserves more detailed scrutiny.

Nevertheless, the most insidious aspect of the Ethical Oil campaign is its attempt to present itself as a broadly supported, independent “grassroots” movement. There is now every reason to treat that narrative with, shall we say, extreme skepticism.

[Update, September 11: The misidentification of George Galloway as a Labour MP has been corrected (he had been expelled from the Party in 2003 and sat as an independent until 2010). As well, Ezra Levant was never an MP; he was nominated as Canadian Alliance candidate, but stepped aside for Stephen Harper before the 2002 election. ]