Insurers and some green groups remain friends of Heartland despite climate flap

Correction appended.

Hours before secret documents sprayed across the Web revealing details of the Heartland Institute's efforts to undermine climate science, the group's libertarian president was rubbing shoulders with top environmentalists and insurers who see rising temperatures as a threat to the globe.

Heartland's Joe Bast was side by side with influential interests that vehemently disagree with his group's effort to cast climate change as a myth orchestrated by elite lawmakers and apocalyptic environmentalists. Bast snorts at the notion of carbon "pollution," rejects evidence of significant man-made warming and fights renewable energy policies.

But here was Bast, surrounded by obvious opponents, less than 12 hours before a climate scientist would leak stolen Heartland documents to environmental bloggers, exposing its private network of donors. That day in February, he was their ally. And by many accounts, Heartland remains a helpful partner on a group of policies promoting climate adaptation.

Like environmentalists and insurers, Heartland is working to end subsidies in public insurance programs. Green groups believe suppressed rates for flood insurance lead to unwise construction in areas ripe for disaster. Heartland's interest lies in free-market principles, like rolling back discounted public insurance rates and eventually privatizing the flood program.

The sides favor the same results for different reasons, allowing the awkward allies to look past their deep divisions on climate change.

"We work on a lot of hard issues, and it's always great to have diverse coalitions," said Joshua Saks, the legislative director for the National Wildlife Federation, which is working with Heartland's Washington office. "We'll agree sometimes and disagree other times. Heartland does its thing on climate, but that's completely outside the realm of the [flood insurance] work."

The news conference in February was designed to leverage that complicated relationship. Groups of all persuasions appeared on Capitol Hill to push for a flood insurance bill that raises rates, allows the government to test private reinsurance and provides some funding to strengthen homes at risk. It was similar to other events that brought discordant groups together to work on public policies.

Insurers paying Heartland as a 'hired gun'


But new textures of the relationship between Heartland and a handful of private insurers would be revealed as Bast was making his return trip to the Midwest later that night. Five insurance companies and associations would be seen as significant donors to Heartland with the release of its budget documents.

Rather than just adding their voice to Heartland's in a public policy effort, the insurers are now seen as financial allies providing $1.03 million to the Chicago group in 2010 and 2011. Insurers provided about 8 percent of Heartland's total budget in those two years.

One industry official was startled to see the group's breadth of financial support from insurers, some of which have expressed concern at the weather effects that rising temperatures might have on their policyholders scattered along seacoasts and other disaster-prone areas.

"I'm sorry to see that funding support for [Heartland]," said the insurance official, who asked not to be identified. "It just has a ... hired gun sort of character."

Several insurers that contributed to Heartland emphasized that their donations are not being used for controversial climate programs, like the group's effort to design a school curriculum that questions the science behind greenhouse gas emissions.

The funding promotes insurance reforms in the public sector, they said. Thus, the money goes to Heartland's Washington-based Center on Finance, Insurance and Real Estate (FIRE), run by Eli Lehrer.

The center publishes an insurance blog named Out of the Storm, contributes to the annual Green Scissors report in partnership with Friends of the Earth, and is a key member of, a coalition of insurers and environmentalists working to prevent public insurance subsidies seen as promoting maladaptive climate activities.

Heartland denies science; its friends say it's real

Heartland's biggest insurance donor is Renaissance Reinsurance, a leading industry voice on the perils of climate change. The company gave $407,000 to Heartland in 2010 and 2011, according to the Heartland documents, and is expected to contribute $280,000 this year.

RenaissanceRe believes climate change "is real and is impacted by global warming," a threat that poses "enormous potential litigious exposure" that could cost as much to insurers as claims linked to cancer-causing asbestos, according to Weather Predict, an affiliate of RenaissanceRe.

"In addition, the prominent role of human contribution to this warming is now on a very firm scientific footing," Weather Predict says on its website.

RenaissanceRe declined to comment on the record. One source familiar with the company, however, said Heartland's climate plans divulged in the stolen documents did not alter the company's assessment that Lehrer is a valuable ally on insurance issues.

"I think everyone knew where Heartland stood on climate change. They weren't exactly keeping it a secret," the source said.

Another major donor is State Farm Insurance, which gave $344,200 to Heartland over the past two years. The company warned of the threats of climate change as early as 2007, when CEO Edward Rust Jr. endorsed the Business Roundtable's statement on global warming, which points to the rising evidence of warming and climbing emission levels.

"As the largest insurer of homes in the U.S., State Farm is very concerned about natural and man-made causes to property damage," Rust said at the time.

A State Farm spokesman, Phil Supple, said in an email last week, "Our support was specifically limited to the FIRE Center and we did not fund nor were we involved in the climate change activities of the Heartland Institute."

No Lehrer, no funding

Other donors echoed that assertion. And several suggested that their funding was contingent on Lehrer's presence at Heartland. Lehrer, 36, joined the group about two and a half years ago, after working on similar insurance programs with the Competitive Enterprise Institute. He has a master's degree from Johns Hopkins University, where he focused on the Federal Emergency Management Agency and flood insurance.

"Eli Lehrer at the Heartland runs an insurance reform project. That's the work that we think is important that Heartland does," said Bradley Kading, president of the Association of Bermuda Insurers and Reinsurers, which gave the group $125,000 in the past two years.

In 2009, the Bermuda association declared in a policy statement that human activity "is affecting the climate of the earth" and that "the ability to forecast future loss experience based on past historical experience is jeopardized."

Other donors from the insurance industry include Allied World Assurance Co., which gave $110,000 over the last two years, and United Services Automobile Association (USAA), which gave $45,000 in 2011.

In Lehrer, the insurance industry is supporting an advocate for the private market with a measured approach to politics. He embraces conservatism but hesitates to echo the conspiratorial notions around climate change espoused by his boss, Bast.

Lehrer said he was raised in a Chicago household with "left-wingers" for parents, and played Bill Clinton in his high school's mock election. He won. Later, Lehrer would vote for Clinton, the last Democrat to receive his support.

"I just don't work on climate change," Lehrer said in an interview last week. "And honestly, my personality and inclination -- a lot of the issues that I work on aren't the most controversial ones. They're ones where you can build bridges."

He added, "In general, insurers support Heartland to work on insurance issues. Period. The way Heartland is structured, there is really no sort of cross-subsidy of insurance and noninsurance work."

Among a million problems, climate change isn't one

But he acknowledges that he will help his colleagues, "in passing," on climate issues if they ask. For example, Lehrer's assistant provided some administrative duties for Heartland's sixth annual conference on climate change last year, an event that raises suspicion on the underpinnings of climate science.

In an interview in February, Lehrer said many of the insurance prescriptions he's promoting are smart policies whether there is or is not climate change. Suppressed insurance rates will encourage development along coastlines, putting homeowners -- and insurers -- at risk of financial loss from hurricanes, whatever the atmospheric content of carbon dioxide, he said.

"Subsidizing development near sea coasts -- as we do to an enormous extent -- is a terrible idea for a million reasons that have nothing to do with climate," Lehrer said in February. "And you take the most alarmist climate models, you have a few extra inches of sea level rise, which is significant and can make a difference. But a few extra inches of sea level rise over 100 years is nothing compared to the fact that [a home] is going to be blown away by a hurricane every 10 years."

The Heartland documents indicate that Lehrer is hunting for additional insurance donors. The papers list three new industry organizations from which Heartland hopes to receive $85,000 this year. Two of them -- Nationwide Insurance and Farmers Insurance Group -- told ClimateWire that they will not be contributing to Heartland.

An official with the third target, the Wisconsin Insurance Alliance, said he was considering working with Heartland on issues around workers' compensation and medical fee schedules. The budget documents indicated that Heartland anticipates receiving $50,000 from the association this year.

"I am currently not working on the climate change issue at all," said Andrew Franken, president of the Wisconsin alliance.

Correction: Lehrer's past role at the Heritage Foundation was focused on projects related to crime, policing and urban affairs. A previous version of this story misstated that he worked on insurance issues there.

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