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- [00:02]
Ralph Nader
Greetings.
- [00:02]
David Feldman
I'm Chuck Foster.
- [00:03]
David Gelles
Join me at 2pm Sundays for reggae Central, playing ska, rocksteady, roots, dub and dancehall, new releases, old favorites and delightful obscurities right here on KPFK 90.7 FM in LA. You're listening to KPFK 90.7 FM in Los Angeles and on the web at.
- [00:26]
Steve Scrovan
Kpfk.Org Pacifica Radio for All of Southern California and beyond, I'm Tom Morello and.
- [00:32]
David Gelles
You'Re listening to the Ralph Nader Radio Hour. Stand up. Stand up. You've been sitting way too long.
- [00:44]
Steve Scrovan
Welcome to the Ralph Nader Radio Hour. My name is Steve Scrovan, along with my co host, David Feldman. Hello, David.
- [00:50]
David Feldman
Hello, Steve.
- [00:52]
Steve Scrovan
And our producer, Hannah Feldman. Hello, Hannah.
- [00:55]
David Gelles
Hello, Steve.
- [00:56]
Steve Scrovan
And the man of the hour, Ralph Nader. Hello, Ralph.
- [00:59]
Ralph Nader
Hello, everybody.
- [01:01]
Steve Scrovan
In Ralph's book, the Rebellious CEO, 12 leaders who did It Right, he highlighted Yvonne Chouinard, founder of the clothing company Patagonia. Our first guest today, New York Times reporter David Gellis has written an entire book about Chouinard entitled Dirtbag Billionaire. In this case, the word dirtbag is a compliment. So we'll talk to Mr. Garris about how the iconoclastic Yvon Chouinard built a successful company on his own terms without bowing to the Jack Welchian obsession with shareholder value. Next up, we welcome back former IRS Commissioner John Koskinen, who's going to outline for us the damage that the Trump administration is doing to the country by dismantling the IRS and meddling with our personal data. As always, somewhere in the middle, we'll check in with our ever vigilant corporate crime reporter, Russell Mokhyber. But first, let's hear about how a CEO built Patagonia, made a fortune and gave it all away. David.
- [01:56]
David Feldman
David Gallis is a reporter on the New York Times Climate team and he leads the Times Climate Forward newsletter and event series. He's the author of the man who Broke How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America and How to Undo His Legacy. And his new book is Dirtbag Billionaire. How How Yvonne Chouinard Built Patagonia, Made a Fortune and Gave It All Away. Welcome back to the Ralph Nader Radio Hour. David Gellis.
- [02:27]
David Gelles
Thanks so much for having me.
- [02:29]
Ralph Nader
Well, this book is published in September and it raises an interesting question, David. Can good news from a corporation that has almost defined the far frontiers of proper behavior and social responsibility excite the American people? And I think that's one of the tests that this book is trying to meet. Dirtbag Billionaire led by Yvonne Chouinard is an extraordinary corporation. Maybe there are only three that can be even described at this level. And he grew up in New England in such dire poverty that his French Canadian parents had to suffer from that his father couldn't afford a dentist and pulled out his own teeth. That's the kind of life that began for Yvonne until his mother said to his father, we have to leave New England and go to Southern California. And this is a book that describes how he started manufacturing climbing equipment just for himself and his friends because he didn't think the existing products were good and safe enough. And soon they thought of, well, maybe other climbers want this. And they started a business and it led to the creation of Patagonia, named after the remote area in southern Argentina. And it has just recently exceeded $1 billion in sales. Now, with that background, let me ask you this question. What do you think drove him?
- [04:01]
David Gelles
Well, Ralph, thanks for that generous and well informed introduction. You, as always, clearly know your stuff. I think it's important to focus on something you said right there, which is that he was sort of an accidental businessman. So he was not one of these CEOs or entrepreneurs that had some aspiration to create a world beating company. That is just not the kind of man he is. But what I think drove him all along was his commitment to quality and in particular his commitment to quality products. And at every juncture that I document in this book, I show instances where he was dissatisfied with the status quo and he had the conviction and also the talent, by the way, to make a better product. And in doing so, he kept finding opportunities to grow the company, to find new markets, and ultimately to create what, as you note, is this really extraordinary company that's been around for, for more than 50 years now. So again, not his great ambition to go build a company. This man would, as you noted, be much happier climbing a mountain or these days fishing in a river in Wyoming. But he was always drawn to this north star of how to make a better product. And in doing that, he understood that there was, A, the opportunity to create this enduring company, but B, and this is just as important. And this explains some of his motivation for the continuing commitment to the company. He saw a way to show other business leaders that there was a way to do it differently. He saw Patagonia as a role model for other corporations and believed that by running Patagonia in a different way, he could show that capitalism just didn't have to suck so much.
- [06:00]
Ralph Nader
Well, actually more than that, he did not want to go public and sell shares. So until recently, which we'll discuss, he owned the company and he treated his workers very well. So let's start with the way he treats his workers, especially when one of his books, sort of like autobiographical books, was titled Let My People Go Surfing.
- [06:21]
David Gelles
Absolutely. The case that in many ways Patagonia has been a place that, that has prided itself on taking good care of its workers. There was always this flexible policy about coming and going as you please in order to catch the next wave. They always were trying to experiment with shorter work weeks so people could take trips to the mountains to go skiing and climbing. And I think just as importantly as that, maybe even more importantly, is the company's long standing commitment to childcare, which is really a function of, of Yvonne's wife, Melinda, who since the 1970s has been prioritizing benefits for working mothers. And that's something that continues to this day. And a place where Patagonia has had a real legacy in showing the way for other corporations. So on all those fronts, and in terms of giving workers volunteer opportunities, allowing them to work on environmental activism, in many of these ways, Patagonia has really been an exemplary employer. They always paid people pretty well, though it was never the reason most people went to go work at Patagonia. But I think it's important to note that Patagonia never gave its employees equity. And so when you think about the modern economy and what motivates a lot of workers in for profit industries to choose their employer and to move up the ranks, a lot of that. Let's just not be naive here. It has to do with giving, getting rich and maybe acquiring shares in a company that's simply never been something that Patagonia prioritized for its own workers. And as such, it is true that in my report and I spoke to, you know, more than 100 people that worked at the company over the years, there are those who were frustrated. They were frustrated that even Patagonia grew to be a billion dollar company. They didn't get a piece of the pie. Now, you can say that's right or wrong, but I think it's important when we try to understand a holistic picture of what it's like to work at Patagonia, that we not just whitewash all the frustrations that some employees have had. I'll add to that that Patagonia is obviously a successful company at this point. However, Chouinard himself was never an exemplary manager. He had a temper. He could change his mind and a dime. He cycled through executives and, and that kind of erratic management behavior. It worked out okay for Patagonia in the end, but I don't think anyone would point to it as a model for how to run a business.
- [08:55]
Ralph Nader
Well, we're going to get to the replicability possibility to this model in a few minutes, but tell our listeners what Patagonia produces and how many years Chouinard spent trying to refine climbing equipment and make it more popular and safe for climbers all over the world. Tell us what they produce and then how do they monitor their suppliers in the Far east they import like most clothing manufacturers, but they really hold the suppliers the high standards of behavior in Asian countries.
- [09:31]
David Gelles
That's right. And there's really a through line from those early days of trying to refine the climbing gear or all the way until the way Patagonia deals with its suppliers and even its second and third tier suppliers today. So back in the late 50s, early 60s, Chouinard was making really rudimentary pieces of climbing gear, things called pitons, which you would hammer or screw into a wall and then affix a carabiner and then your rope to it and it would secure you to the wall. These are the anchor points that you would use when you're doing a big multi pitch ascent up a wall like El Capitan. But what Chouinard noticed as the sport became more popular and as he was selling more and more of these pitons is that he was actually damaging the walls. All these holes that were being hammered and drilled into these granite faces that had been there for eons were suddenly getting defaced by the climbers and he felt some personal responsibility. So he immediately resolved to phase out pitons even though they were like 90 plus percent of his business. Real remarkable conviction that he said. Even though I don't know what I'm going to do next, I'm not going to keep selling these things because they're hurting the thing that I love the most. Well, he found out other alternatives, things like chalks and stoppers. I won't bore you with the details, but these are other ways of securing a rope to the wall without actually drilling into it, hammering into it. So you fast forward and that same commitment. How do we make a really high quality product without doing damage, without those negative externalities that I'm sure, you know, many of your readers are familiar with. From a conceptual of view, how do we do the thing we need to do as a business? How does the product fulfill its mission without harming the people, the planet, the communities that we're operating in. And in the case of clothing today, that same principle is at work. What it looks like, it goes all the way from the actual fabrics and materials they use, making sure that there aren't harmful chemicals to the best of their abilities in some of these clothing. But all the way, as you said, Ralph, and down to the suppliers. I visited Patagonia factories and listen, they are doing real high standard quality control work. And before they even agree to let a company manufacture for them, they send a team of employees out to inspect that factory. Not just for quality. Are they going to make the gear right? But are the working conditions right? Is the environmental story of that factory good? Are they working with renewable energy or do they have a path to sort of go green? All these things are sort of non starters. Patagonia won't even consider doing business with you unless you are meeting really quite high standards on all these social, ethical, environmental benchmarks. And that is what this consistency, this consistency to the same set of values and principles looks like over 50 years. The same thing that he was doing back in the 60s, the company is still doing, doing today in its own way. And those are the stories that I tell on Dirtbag Billionaire.
- [12:34]
Ralph Nader
Tell our listeners who don't know much about Patagonia's catalog, what they actually sell.
- [12:39]
David Gelles
Oh, well, Patagonia is now a billion dollar plus revenue company. And mostly what they sell is outdoor gear. Everything from rain shells and ski kits to waterproof backpacks to durable hiking pants. They got plenty of business doing T shirts, rash guards. They sell swimsuits. This is gear that is designed to keep people warm and comfortable in the outdoors and critically, to last a long time. Patagonia puts enormous pride on the idea that if you buy one of its products, it will last just about forever. And if it ever totally wears out, you can bring it into a store and they'll just give you a new one for free. It's sort of an unconventional business model, but it seems to be working for them.
- [13:24]
Ralph Nader
Includes jackets, hats and fleece vests. That's right. In fact, didn't they once put an ad out saying, don't buy our products, try to repair them first?
- [13:36]
David Gelles
That's exactly right. This was 2015 and the company took out a full page ad in the New York Times that just said, don't buy this jacket. And it had a picture of one of their newest jackets on it. Now, of course, below that there was some fine print explaining the rationale, which is just that in Chouinard's mind, in the company's mind. It's much better to repair something than to acquire a brand new one just because you want a new style or a new season. It's much better to buy something used if possible, than spend your money on something that's brand new. This is all a part of the story of keeping things out of the landfill, of trying to work with less, of not being so slavishly devoted to consumer culture. Now, you can imagine what happens when you put a ad in the New York Times that says, don't buy this jacket. Everyone went and bought the jacket. And so Patagonia definitely got some criticism for being a little hypocritical. And even before they put that ad out, there was a lot of discussion internally and within the board about whether or not they could even say something like that with a straight face. Wasn't it just inherently hypocritical? They asked themselves to do that. We're in the business of selling stuff. Can we really say something like that? Make a statement like that with a straight face? Well, they ultimately decided to, and they really tried to lean into the messaging. But beyond the sort of brilliance of that marketing ad, because it was a pivotal moment in the company's history, I think the tension inherent in the ad and the tension that underlied a lot of the conversations that. That the executives had before they ran the ad really captures the tension at the heart of the company. You know, there's a paradox that runs through the pages of Dirtbag Billionaire, and it's never fully resolved. And it's this. You know, it's the fact that Chouinard is an environmentalist who wants to reduce the impact of mankind on planet Earth, and yet he runs a big, complicated clothing company that is taking a toll on the environment that he's trying to protect. He runs a company that in theory, he says, and in practice is largely doing the work of funding grassroots activists and environmental conservation. But he's doing it by participating in the very capitalist system that is responsible for so much of the damage to our natural world. And the list goes on. These contradictions are what really has animated Chouinard and. And his executive team for all these years. They understand their own perfections, but unlike most, they are willing to really examine their own failings, to look it square in the eye, straight in the mirror, and try to figure out how to make things better. And that, to me, of all the reporting I did, was one of the most remarkable things about this story.
- [16:24]
Ralph Nader
And it was very, very exhausting for Chouinard and The company. Just two examples in your book. One is when they decided to convert from the use of regular cotton to organic cotton and how difficult it was to develop farmers who would use organic cotton. I mean, it was tremendously tumultuous for the company. And then they also decided, as you point out in your book on page 153, that, I mean, who would ever think of this, they decided that they're going to stop using anti odor technologies and in their clothing. Anti odor fabrics were popular at the time. A sort of built in deodorant for activewear. But the more the Patagonia team, and I'm quoting, learned about what is in the anti odor chemicals, the worse it all smelled. The treatment contains several toxins and carcinogens. Years later, when the company began using the technology, again, the anti odor chemicals were natural, this time made from crushed crab shells. End quote. I mean, they didn't have to do that.
- [17:31]
David Gelles
No, they didn't. And again, that's just a great example of what I just described. This willingness to examine their own imperfections and use their frustration with their own failings as inspiration to make it better. That work of constant self improvement is inherent in the crab story. It's inherent in the story around the transition away from conventional cotton. And it's true today in their efforts to rid their products of pfas, these forever chemicals that are everywhere. So that, you know, I think you identified it, Ralph. These are the little moments that make the big story, you know, resonant. Not just resonant, but legit. You know, this isn't a company that's been greenwashing for 50 years. It's a company that's been doing the little work, right, Product by product, crab shell by crab shell, to figure out how to make more responsible sort of company.
- [18:32]
Ralph Nader
What really is also amazing is he was not a hard driving executive. He spent a lot of time in his place in Wyoming, spent a lot of time rock climbing. He urged his employees to go surfing during their lunch hour because their company headquarters was right on the Pacific coast. That was another facet of his management philosophy. He was sort of a D manager, except for standards and objectives. He was merciless in terms of standards and objectives.
- [19:01]
David Gelles
He never graduated from college, but he liked to say he had an mba, not a Master's of Business Administration, but what he called management by absence.
- [19:13]
Ralph Nader
Yeah, I'm sure you heard his comments on MBA graduates. The question is how replicable is this model? And this is where we get to what he did in 2022 that you do it a lot of pages to Instead of selling the company, he had an offer for $6 billion billion. Instead of just trying to find some corporate ownership model to perpetuate the corporate values, tell our listeners the arrangement that he managed to secure so that Patagonia is managed in the image of Yvonne Chouinard and his family's environmental and corporate responsible goals.
- [19:54]
David Gelles
Yeah, I'll try to do it without putting people to sleep here because it gets a little wonky with terms and the corporate governance. But here's the basic deal. Three years ago, Ivan Chouinard and his immediate family, his wife and two children, they together owned 100% of the Patagonia equity. The shares of the company. It was a private company, wasn't publicly traded. There were no other investors, just the four of them. What they decided to do was give the whole thing away but do a way where they would honestly not benefit financially. But here's how it happened. There were two classes of Patagonia stock, voting shares and non voting shares. This is typical when you have a company. What they did is they took the non voting shares, which was 2% of the overall equity. They put those non voting shares in a new entity known as a purpose Trust. In California that was a taxable event. So they paid $17.5 million in taxes for the privilege of donating those shares to to the trust. Once those shares are in the trust, they're there forever. That's an irrevocable gift. They don't get to take them out again. And there's a board which is made up of Chouinard and his close friends and family that essentially oversees that trust. The trust, because it owns the voting shares of the corporation, also serves as sort of an additional board layer of governance for the company itself. So what they did with the other 98% of the Patagonia equity, the non voting chairs were was place those donate them irrevocably again to a 5014 nonprofit organization. Now that's important that it was a 501C4 and not a 501C3 as many people may be familiar with for a couple reasons. Number one, 501C4s can do political giving. So that is important. And already the money that is going to that 501C4 has been politically active. But equally importantly I think is the fact that by giving to a 501C4 the family did not generate any great tax benefit for themselves. Had they given to a traditional 501C3 they could have had A tax benefit in the hundreds of millions or even billions of dollars. Which is to say that they would never have to pay another dime in taxes for the rest of all their lives, but they chose not to. A, they didn't care about having a tax credit with the federal government because they didn't plan on making hundreds of millions of dollars in profits in the course of their life. But number two, they wanted to be able to give politically. So now here's how it works. The Patagonia Purpose Trust instructs Patagonia, which is still a for profit C corporation headquartered in California, to distribute all of the profits that are not reinvested in the company to the 501C4, which is known as the Hold Fast collective. And the 501C4 distributes those monies on an ongoing basis to causes like conservation and environmental activism. The same sort of grassroots giving that Chouinard's been supporting his whole life, just at a much grander scale right now. And so this complicated structure achieved a bunch of critical goals. Number one, sort of preserved Patagonia as an ongoing concern. Number two, it didn't jeopardize the future of Patagonia's ownership model. Number three, it rid Chinard of his own fortune. He was listed on the Forbes list of billionaires and it drove him crazy. He said, get me off that list. And that was one of the things that led to this very remarkable transaction. And number four, and most importantly, it allowed more money than ever being generated from Patagonia to go toward the environmental causes that Chouinard and his family care the most about. I'm out of breath, but I think I got it all there.
- [23:50]
Ralph Nader
That's very, very good summary, the best I've heard. But we're used to those kinds of qualities from David Gallus, who I first started conversing with when he started covering the early stories of Boeing 737 Max crashes in Indonesia and Ethiopia. The latter taking the life of our wonderful grand niece, Samuel Rose Stumo. And David, what are your views on how replicable this is? Does this depend on a rare idiosyncratic family like the Chouinards? With iron determination, refusal to be tempted by temptation, sticking to their principles and, and making more and more sales and profits in a private corporation. But when I was writing my book, the rebellious CEO of corporate executives who got it right, it's very difficult to see how they replicated themselves. It was very difficult once they retired to replicate their model. Give us some thoughts on that.
- [24:54]
David Gelles
Yeah, listen. No one can replicate Chouinard's life. And no company can snap its fingers and suddenly become Patagonia. But I think there's a lot for everyone to learn from the examples that both Chouinard and the company set. And when it comes to the company, I would just say that that work of self interrogation, that commitment to trying to understand where a company might be falling short and then trying really hard in a really honest and committed way to try to remedy those deficiencies, at the end of the day, that's so much of what paved the way for this company to be remarkable. You know, all the things we've been talking about, all the examples we've been using, they have been inspired by that relentless focus on improving quality and also the relentless focus on a very simple product. Right. This is a company that could have expanded in lots of ways over the years. They are still focused on really making a very simple number of products. And that alone after 50 years is rather remarkable as well. So I think it's that it's the self interrogation, it's the focus on quality, and it's that sense of accountability. Right. Recognizing where a company is having a negative impact and really being responsible to oneself to address it. Every company can do more of that.
- [26:22]
Ralph Nader
Well, you know, we're not doing justice fully at all. In this interview to David Gellis book, Dirt Bag, Billionaire How Von Chouinard Built Patagonia, Made a Fortune and Gave It All Away. David Gellis has been a New York Times bestseller for a number of his books, but not ignore his advocacy work. For example, under the first Trump administration, he sued RA with a lot of other outdoor recreation companies, the Trump administration, to protect the public lands. He was a ferocious supporter of maintaining the public lands and access to parks and forests and fresh air and the natural world. And he also put ads in the New York Times reflecting the lawsuit. One aspect he did, which I think has been suspended, Patagonia had a big van that went around the country in town after town providing free advice on how to repair clothing, including Patagonia Clothing. Has that been suspended or is it still underway?
- [27:23]
David Gelles
I don't know if the van is stood out there, but the program is very much alive. That's what's known as worn wear, which is their commitment to repair anything that they can for free. And so if you bring really beat up clothing into a Patagonia store, they'll patch it up, they'll sew it back together, and they'll send you on your way if you want. So that is very much alive.
- [27:44]
Ralph Nader
And listeners probably want to know what he's doing now. What is his family doing now then? How old is he?
- [27:51]
David Gelles
Well, ivan is now 86. He'll be 87 in just a couple months. He is exceedingly private and his family is even more reclusive than he is, frankly, so they do not want to be public figures. Even the project of writing this book was at times fraught because he's not comfortable with attention, period. So he can usually be found fishing. I think I can report without betraying too much confidence that he just got back from a month long camping trip in Labrador, but that's sort of what he does, you know, he's still incredibly vital. I was privileged to spend a good amount of time with him for the reporting of this book, but just about every day I think I can actually say this with certainty, unless it was a travel day. Every single day I was with him, we. We were waist deep in a river somewhere in the world, fishing.
- [28:39]
Ralph Nader
You're going to get interviewed for this book. What if the media wants to interview Yvonne Chouinard? Is he available?
- [28:46]
David Gelles
They've got to track him down.
- [28:49]
Ralph Nader
And some wild country in Patagonia, climbing a sheer cliff, as he did. Tell people where you got the word dirtbag for your book. Dirt bag Billionaire.
- [29:00]
David Gelles
Yeah, well, to the uninitiated, dirtbag might seem like an insult, but for Chouinard and his ilk, being a dirtbag is basically the highest compliment. A dirtbag is someone in the climbing community, in the skiing community, who is so unenamored with material possessions that they are content to sleep in the dirt. These are really the esthetics of the sporting world. People who just don't care about money because they are so devoted to, to climbing the next mountain, to skiing the next line, to surfing the next wave, that they forsake material possessions in order to be closer to nature. And so to Chouinard, being a dirtbag is something he always identified as, and he still does at a certain level. The great insult in his mind is being called a billionaire.
- [29:55]
Ralph Nader
What a contrast. He named the company after the wild lands and the beautiful nature of Patagonia in southern Argentina, and held true to its integrity. Where Jeff Bezos took the name Amazon from the Amazon rainforest in South America. And we know what he did with that in his business. Well, in these grim, tumultuous times of Trump's fascist dictatorship, dismantling everything he can touch that might challenge him, including renewable energy and environmental protection and protecting the budgets and staff of the national parks and national forests, do you think The American people are ready for a great story about a corporate performance.
- [30:41]
David Gelles
I know they are, Ralph, for a bunch of reasons. Number one, people have been supporting Patagonia for 50 years, and there's no mistaking what this company is all about. So, you know, if even a small subset of the people that buy Patagonia clothes are able to hear about this book and engage with this story, that'll be a massive success. Because at the end of the day, I wrote this story to try to change the narrative. So I'm confident that this story is going to get out there and that people are going to be having conversations about what the role and responsibility of business is. I also know that in these dark times, as you noted, people want stories of good news. And especially at a moment when billionaires have perhaps rightly lost the trust of the American public, at a moment when corporations more often than not, seem to be working against the common welfare rather than for it. These sort of counterpoints, these examples that show it doesn't have to suck so bad, I think are ones that really have the opportunity to break through.
- [31:44]
Ralph Nader
Well said. Let's go to Steve.
- [31:47]
Steve Scrovan
David, I have a sense that you're writing about Yvon Chouinard, who was a bit of a palate cleanser from writing about Jack Welch in your previous this great book, the man who Broke Capitalism. Can you do a little compare and contrast? Because I imagine this must have occurred to you as you were analyzing and interviewing the Patagonia company.
- [32:06]
David Gelles
Yeah, well, there's no question that in many ways the Chouinard story is the other side of the coin, Right? I mean, Jack Welch was the avatar in my telling for everything that's wrong with corporate America. Chouinard, again, not nearly as influential, I don't think you can say. On an individual level, though, I make the case in the book that Patagonia has actually had quite an impact on the overall American business culture, but no doubt represents that other side of the spectrum, what it would be like if companies and businesses really took care of their people and the planet. And so, listen, on an individual level, the comparison breaks down very quickly. You could make the case that both Jack Welch and Yvon Genard cared a lot about quality, but the ways in which they went about it and everything else, it just doesn't lend itself to an easy apples to apples comparison. What I like to say is, you know, listen, GE fell apart, right? Like the GE that I write about in the man who Broke Capitalism doesn't even exist anymore because of what Jack Welch did. But Patagonia is still going strong 50 years later. It's never going to be as big as ge. But that commitment to the values, to the product, to the ideals, is unwavering. And I think that's what makes it such a remarkable story.
- [33:25]
Ralph Nader
And millions of business school students, undergraduate and graduate, should read this book because they're graduating with a framework of CEO performance that is extremely monetized, narrow, and in many ways destructive. And they need another framework of how to operate a business successfully, profitably, and advance the values of humanity and posterity.
- [33:52]
David Feldman
Hannah David, talking about the good deeds.
- [33:57]
David Gelles
Done by a CEO and their company brings to mind effective altruism in Silicon Valley.
- [34:03]
David Feldman
You covered the tech industry for a number of years.
- [34:05]
David Gelles
Could you clarify the difference or crossover between what we see from Patagonia and.
- [34:12]
David Feldman
Yvon Chouinard with Silicon Valley's effective altruism?
- [34:16]
David Gelles
You guys are getting me off guard here. I'm loosely familiar with effective altruism, but I really, it's truly nothing. I've never written an article about it. I've never used the term in reporting, so I'd be really cautious about trying to make a clear compare and contrast statement here. I think what I can say is that Chouinard never brought sort of a conventional quantitative mind to his giving. You can make the case that there would be much more effective ways to spend the hundreds of millions of dollars that he and the company have, rather than buying up plots of land and funding grassroots activists. But again, you talk about that values and that consistency. His first effort as an activist came in 1973 when he funded a campaign to block the development of the Ventura River. And that model, you know, funding small grassroots activists on the front lines who are just getting in the way of the continued development of the natural world. That captured his imagination back then, and it's still the model that he follows today when considering what makes for effective giving. So when they started the Holdfast Collective, giving away, you know, a ton of money, $100 million or more a year with Patagonia's profits. A couple of years ago, I said, what are you going to be spending it on? And the answer was the same, right? Frontlines, grassroots environmental activists, relatively small grants, unrestricted giving, and then some large scale conservation projects, especially in ones that would get in the way of major development projects. And so we've already seen in recent years, even just this year, Patagonia put up a bunch of the money to stop a titanium mine from being built in Georgia on the banks of the Okefenokee Swamp. They put up a bunch of money a couple years ago to buy land that effectively put to rest the pebble mine project up in Alaska. And so those are the kind, you know, to Chouinard, that's effective altruism, whatever else that Silicon Valley might be thinking about these days.
- [36:20]
Ralph Nader
I'm glad you made that very important point because his grant criteria are to smaller groups that really are focused and believe to know and not to do is not to know. They are people hands on and they're very rigorous with their grants. None of them are very big, but the leverage is quite extraordinary. I'm glad you elaborated that in your book. Well, we're out of time. The book is Dirt Bag Billionaire How Yvonne Chouinard Built Patagonia, Made a Fortune and Gave It All Away and what It Meant to the Planet. So good luck to you on your tour, David, and many thanks for doing what nobody has been able to do, which is to raise the public profile of a very reclusive but very creative and dynamic entrepreneur, Yvonne Chouinard.
- [37:10]
David Gelles
Thank you, Ralph.
- [37:11]
Steve Scrovan
We've been speaking with David Gellis. We will link to dirtbag billionaire@ralphnaderradiohour.com up next, the Trump administration is sticking its grubby little fingers into the irs. But before we get to that, we'll check in with our corporate crime reporter, Russell Mokhiber.
- [37:26]
David Feldman
From the National Press building in Washington, D.C. this is your Corporate Crime Reporter Morning minute for Friday, September 19th, 2025. I'm Russell Mulcyber. Flawed corporate culture has been at the root of the largest corporate debacles in recent years, such as Wells Fargo's fraudulent accounts, Volkswagen's emissions cheating and Boeing 737 crashes. In these larger corporate crime cases, the corporations boast a well funded compliance program, a well constituted board of directors and well crafted codes of ethics. What's missing is an actual ethical corporate culture that emphasizes high integrity as much as it does high performance. All the observable markers of corporate governance matter little. That's the take of Roy Shapiro and Jennifer Hill in a recent Law Review article titled Accountability for Flawed Corporate Culture. For the Corporate Crime Reporter, I'm Russell Mulcider.
- [38:19]
Steve Scrovan
Thank you, Russell. Welcome back to the Ralph Nader Radio Hour. I'm Steve Scrovan along with David Feldman, Hannah and Ralph. As the Trump administration executes Project 2025's blueprint for dismantling America's administrative state, the Internal Revenue Service may be its most significant victim.
- [38:36]
David Feldman
David John Koskinen served as the IRS commissioner from 2013 to 2017. Welcome back to the Ralph Nader Radio Hour. John Koskinen, thanks, David. Delighted to be here. Thanks so much for having me.
- [38:52]
Ralph Nader
Thank you, John. JOHN we're going to focus on the savage disabling of the Internal Revenue Service by what has to be called a vengeful, irrational Trump administration. They're in the process of firing about 25,000 IRS workers out of a total of 90,000. And as you know, this budget has been under pressure since 2011 when the GOP began defying the need to prevent tax evasion and other in other ways. The super rich and the big corporations have escaped paying their fair share of taxes under the existing tax code. And ever since then, the budget for IRS has been less than the budget for building one aircraft carrier. You've been outspoken with six other former IRS commissioners under both Republican and Democrat administrations who are on the same page with you. Can you give a description of what's going on and what the consequences are going to be in the next tax filing season?
- [39:56]
David Feldman
Well, you're right. Other former commissioners and I communicate with each other. We all know each other. Some are basically served under Republican administration, some under Democratic. And the reason we all share the same perspective about this is that, as I've always said, there's not a Democratic or Republican way to administer the tax code. It's a management challenge. And so my four years there, I met regularly with senior leaders and 20,000 IRS employees. I never knew what anybody's political beliefs were or what their party was because it was irrelevant to what we were doing. So all of us, Republicans and Democrats, are concerned that intentionally or otherwise, but it clearly is beginning to look more and more intentionally. An administration that says it's worried about the deficit, worried about the debt, is undermining the ability of the government to collect taxes owed. The IRS collects 95 to 98% of the money the government receives over $5 trillion a year. And when you hamstring it by cutting its employees, pushing out many senior leaders, what you do and then passing a big beautiful bill with more tax changes that have to go into effect for this next filing season and make it very difficult for the employees and especially when you're demeaning and demoralizing public service employees across the government. So I think there is going to be a real challenge with the next firing season. And if it has problems, first response of the administration will be to blame the employees. And that's the last place we need to look. The employees are dedicated public service servants. On amazed, the number that are still there and put up with everything that's going on. But they're going to do their best, as they always do, and they'll be focused on trying to be fair to taxpayers, provide good taxpayer service and collect as much of the taxes owed as they can. But you know, 25% over, 25% of the employees out, willy nilly not paying any attention to whether they're senior managers or probationary employees, you're headed for difficulty.
- [41:55]
Ralph Nader
Talk about what these super rich and corporations get away with. Talk about how cutting the budget and laying off skilled auditors and accountants aid in a bet, massive tax evasion by the super rich and the multinational corporations.
- [42:14]
David Feldman
Well, it's a great challenge. The IRS was just beginning under the Inflation Reduction act, as it was called. They were given $80 billion over 10 years to reform and modernize its IT to provide better taxpayer service and to collect taxes owed. And so the Congress, Republican Congress has taken 40 billion of that away already. The annual budget for this year, as you notice proposal from The Congress is $1 billion less than what the Trump administration proposed. And so what that means is the likelihood of large, complicated returns in volume being audited just drops significantly. And so they could see what people are in effect getting away with when they're pushing the envelope. So you can be confident that as we go into the next filing season, as it's increasingly difficult to audit these complicated returns, there are people out there paying close attention saying, okay, you can push the envelope over here because they just don't have the time or the manpower to get to that. So the estimate is probably $500 billion a year is what's called the tax gap. And that's money that's just left on the table. And so when you're looking again, if you're worried about the deficit, you're worried about the debt, or you're worried about the fairness of the tax system, then it seems to be the last thing you ought to do is start cutting revenue. And agents and revenue officers, you need more of them to make sure that the system is fair.
- [43:35]
Ralph Nader
We're talking with John Koskinen, former IRS commissioner, explains. The commissioner, how can corporations make billions of dollars in US Based profits like General Electric did, and super wealthy bringing in multimillions of dollars in terms of personal revenue end up paying no tax or virtually virtually no tax under the present tax code that taxes corporations at 21% and individuals at about 37%. That's inequality that we can talk about later. Go ahead.
- [44:12]
David Feldman
The tax code has a lot of incentives and Some would say gimmicks, for instance, in investments. It's a question of how many years you make an investment, how many years do you write it off, you know, amortize it over 20 or 15 or 20 years. Obviously it's a smaller deduction. One of the things that big businesses always lobby for to be able to increase the rate at which the amortizer write off that expense. So if you made a big investment, which is great for the company, great for the economy, but if you can write it all off in the next year, you've sheltered, in effect, profits to that extent. And there are a whole series of those kinds of incentives, as they were for research and construction and investment, that are accelerated into deductions that allow people to make money, but at the same time not have it deducted. Another thing Wall street keeps getting away with is what's called carried interest and a lot of hedge funds and people doing investments and a share that a 20%, 20 or 10 or 15% carried interest. So they get that kind of profit and that is should be income. I mean, you earned that because you've been working on the company. But over the years, they've succeeded in getting that treated as a capital gain. So taxed at 20% rather than 35 or 37%. So and their incentives, their tax incentives for oil and gas, there are agricultural tax incentives, there percent incentives that have been built in over time and may have made more sense when they were made, but lobbyists and corporations are very good at making sure that they always stay. You never hear too often of tax advantages taken out of the code. What everybody argues about is new ones being put into the code.
- [45:47]
Ralph Nader
So that's how critical listeners it is when Trump pushes out key people who have experience and skill, who could make a lot more money in the corporate sector but believe in the public service.
- [46:00]
David Feldman
Make a very important point that these are very skilled people and technical people. A lot of them come out of law firms, tax firms, preparers and accounting firms. They have a tremendous amount of skill and background. And then they get training while they're in the irs. And after a couple of years, they can do almost anything as they go forward. And they could make a lot more money in the private sector. Any one of them could walk out tomorrow morning. And in fact, that's why 17,000 accepted the offer of being on paid administrative leave until this fall and then leaving, because they've been there a long time, they have pensions and they know that they have great skill. And so again, what I think people don't understand is they tend to think, well, people work for the government, the irs, they're kind of brown baggers that come in. They go through the motions. These are very skilled people who in effect, have given up the opportunity to make two or three times more money in the private sector because they believe in public service.
- [46:55]
Ralph Nader
You said in one of your interviews, quote, I get asked at a hearing, why wasn't I willing to share information about undocumented immigrants who pay about $70 billion a year on taxes. And they do because they actually, if they have a chance to become citizens, the first question they're asked is, quote, have you paid your taxes? Want to elaborate on that?
- [47:17]
David Feldman
Well, that's right. That was a Senate hearing and it was, I was asked, well, you know, undocumented immigrants say, you've got this information, why don't you just give it to Homeland Security and help them? And I said, our job is to collect taxes. Their job is to monitor immigration. And people file information with the IRS because it's protected. It's a criminal violation to share it even to look at it, if you don't have a reason to look at it. And you work for the IRS. And as you know, they pay now almost exactly $70 billion a year. I'm not sure how much they're going to pay going forward because this administration has forced the IRS to share at least some information about undocumented immigrants. And with all of the ICE raids, I'm just going to be very interested to see how many of those people are still in the country and be willing to continue to pay taxes. So I think all of this attempted information sharing by the administration, by Homeland Security, even from the treasury, is dangerous. It's threatening. And in fact, a lot of the seniors, half a dozen of the senior people that the IRS have been forced out because they refuse to violate the law. And as a section of the criminal code said, it's a violation to share information even with somebody else in the government, except in very specific cases. And if you're involved in a criminal investigation, historically, the IRS works with the Department of Justice. And somebody from Homeland Security asked for information on something like 700,000 taxpayers. And the response was, I don't think you got 700,000 criminal investigations going on. And more recently, they asked for information on 50,000. And again, the response was, you can't be doing 50,000 criminal investigations. Both the people who responded that way were in fact, pushed out of the irs. And so what's really troubling is not only the senior People who are well and are being pushed out. But the signal that's being sent to IRS executives and managers and employees, which is for the first time really probably since the Nixon enemies list. First time IRS employees are operating under the assumption if you don't do what you're told by people outside the agency, you're subject to being pushed aside or asked to leave. And that's just a dangerous situation for the average taxpayer and for the tax system generally.
- [49:26]
Ralph Nader
Well, Elon Musk and his illegal doge, with Trump's support, was going for taxpayer information. They went into the irs, got ready to download personal information about millions of taxpayers. What's the status of that? Is it being held up in the courts?
- [49:43]
David Feldman
Well, and IRS employees have refused to give them the data. Now, I understand that Social Security, they've actually downloaded all information which covers all of us. The IRS is say every year I used to take and everybody else did, you had a half hour video about why under section 6103 of the Criminal code, you could not look at a tax file even if it was your brother or your sister in law or your uncle and you were trying to be helpful, unless you had a tax enforcement tax audit reason. And they had little vignettes of people who were trying to be helpful. And then they, you could get punished internally, you could be fired, you could be criminally prosecuted. So it's part and parcel, and taxpayers rely on that, that the employees at the IRS take very seriously the confidentiality of taxpayer information. So it was just totally crazy when Doge and Musk, and they're continuing at it, are trying to reach into as much taxpayer information as they can get their hands on.
- [50:37]
Ralph Nader
Well, before we get your opinion on what Congress should do, I want to quote one of your successor IRS commissioners, Daniel Wurfro, who said, how do you bring in the talent when the message you sent to public servants is that this is more of an unstable job platform, that it could be that you get an email and have to vacate within an hour. I think there'll be some post trauma to these layoffs, not just at the irs, but broader. And it'll be harder for someone like me, who's a fierce advocate for public servants to go into a high school auditorium or a community college or a college and say, quote, consider public service as your career, end quote. Do you share that concern?
- [51:19]
David Feldman
Totally. I think that Mr. Bott, the OMB director, came in. He was an OMB director in the first term. He's one of the major people behind the 2025 plan that has this systemic approach to totally changing the way we think of the government has said, well, you know, we ought to make sure that the employees are traumatized, so, you know, in effect, they're paying attention and do what we tell them. And I thought, well, that is not quite the management strategy I've ever seen effectively in the private sector or the public sector. But all of this attack on public employees and all of the, as Debbie said, I know personally, people who have been given literally two or three hours take all their stuff after 15 or 20 years in the government and get out. And so, you know, I live in Washington, and Washington's got a lot of federal employees, and it's across the board. And Danny's exactly right. You know, college students, public policy, graduate students all pay attention.
- [52:11]
Ralph Nader
You know, they're.
- [52:11]
David Feldman
They all on the news just the way everyone else. And what used to look like I could go into a public service job, I could help people in need one way or the other, and I would have a stable career and it would be a good way to spend my time in my life. And that's really now threatened. And it's going to take a long time before people can come back to that position. When I first joined the government, I spent 20 years in the private sector turning around large, failed enterprises and joined the Clinton White House at omb. And I told all my friends in the private sector, and most of them had never been in the government. And some of them had the same view of, well, you know, what are government employees? And there are 500, 550 people at OMB. And I said, without exaggeration, I would have hired in the private sector. The first 10 people I met at OMB, they were PhD physicists, they were economists. They were people who knew more stuff than I did. And I never have been dissuaded from that. My experience in the irs, I did town halls. I met as a count because I'm a numbers guy. I met 20,000 IRS employees in town halls and lunches. And these were all dedicated people. In fact, if you'd only been at the IRS 10 or 12 years, you were a new guy on the block. These were people who dedicated their lives, the public service, the application of the tax code to helping taxpayers. Half the time the IRS spends helping taxpayers be compliant. As I used to say, if you're trying to be compliant, we'll do whatever we can to help you. We have offers in compromise, we have settlements. But if you're trying to push the envelope or not file, I'M happy to chase you to the end of the earth. And the paying taxpayers need to know. Ralph, the point you make that large corporations, rich people aren't getting away with things of not paying and putting a greater burden on the average taxpayer.
- [53:53]
Ralph Nader
Well said. You've testified recently before Congress. I think it took a shadow hearing by the minority Democrats to invite you and other IRS commissioners to testify following a excellent op ed that you had in a major newspaper about the threat to the IRS and how it's going to affect taxpayers and aid and abette tax evasion by the super rich and large corporations. A two part question. What would you want Congress to do right now in terms of what you called a major crisis in the federal government, especially with the irs? And second, the tax code is far too complicated. It's so complicated, it's difficult to enforce. It's so complicated it gives knowledgeable rascals, accountants and tax lawyers opportunities to get big retainers by facilitating tax evasion by their wealthy clients. What would be an ideal tax code for you? Just in brief description. First, the emergency is an emergency.
- [54:55]
David Feldman
First thing that Congress has to do, and again, it's not supporting Republicans or Democrats. It's got to adequately fund the agency. Their budget is being considered right now to say that the IRS is totally underfunded in that budget. So the first and most important thing that Congress can do is fund the agency. To your second question, if you just had a simplified tax code, you know, people talk about a flat tax, which doesn't have to be unprogressive. You could have a flat tax with rates of 14, 17 and 22. And what people would do is say, here's my income, here's the rate, here's my payment. I think the vast majority of people would be delighted with a system that, that looks something like that.
- [55:35]
Ralph Nader
Well, we're out of time. But one last question. What are the seven former IRS commissioners planning to do in the next few weeks? Because you've been outspoken, you've gotten media coverage, you've informed the public, you've tried to inform the Congress. What else do you have on your action platform?
- [55:54]
David Feldman
Well, we communicate with each other and share articles, interviews, podcasts, just to let each other know what's going on and who's saying what to whom. And we've all agreed that the most important thing we can do is just be as visible as possible and as straightforward and candid as we can. In the with the press and the public, we have some credibility. Having served over over time. Everybody except for Danny served the full terms. And so, you know, we can sound the warning. We can bring information at the hook or but, you know, I think that's all we can do other than support people who are filing these lawsuits trying to draw a line in the sand as to what's permissible and what's not.
- [56:35]
Ralph Nader
Well, you set a good example. We're always waiting for other former Republican and Democrat heads of EPA or FDA or Auto safety Agency or OSHA to get together the same way because the press is attracted when former heads of these agencies under both Republican Democrat administrations speak and stand together. So I hope your example spreads. Thank you very much, John.
- [57:04]
David Feldman
Thanks for having me. It's always a pleasure chatting and kibitzing with you.
- [57:08]
Ralph Nader
Likewise.
- [57:10]
Steve Scrovan
I want to thank our guests again, David Gellis and John Koskinen. For those of you listening on the radio, that's our show. For you podcast listeners, stay tuned for some bonus material we call the Wrap up featuring Francesco de Santis with in case you haven't heard, a transcript of this program will appear on the Ralph Nader Radio Hour substack site soon after the episode is posted.
- [57:29]
David Feldman
The producers of the Ralph Nader Radio Hour are Jimmy Lee Wirt, Hannah Feldman, and Matthew Marin. Our executive producer, Alan Minsky.
- [57:37]
Steve Scrovan
Our theme music, Stand Up, Rise up, was written and performed by Kemp Harris. Our proofreader is Elizabeth Solomon.
- [57:43]
David Feldman
Join us next week on the Ralph Nader Radio Hour when we're going to.
- [57:46]
Steve Scrovan
Devote the entire program to to you.
- [57:49]
David Feldman
Listener questions and comments.
- [57:52]
Ralph Nader
Thank you, Ralph thank you everybody.
- [57:58]
David Feldman
This is John Crumshow with a special.
- [58:00]
David Gelles
Politics or Pedagogy education report on kpfk.
- [58:03]
David Feldman
You hear more than a sound bite. That's education.
- [58:06]
David Gelles
That's our mission.
- [58:07]
David Feldman
We're back one more time with Alex Kenna. She is a lawyer, a mystery writer, and someone who has created a website that will help people who want to become mystery writers. Welcome to Politics or Pedagogy.
- [58:23]
Alex Kenna
Thank you for having me. My website it's just alexkenna.com and a while back I collected query letters from a bunch of writers whose book was either either landed an agent or ended up being published. One of the hardest things to do for writers who are trying to get over that hurdle to publishing is to figure out the best way to publish, pitch an agent and how to present their work. So I asked a bunch of writers if they would share their query letter as examples so that people could see what is it that communicates that best. That's that's something that you might want to check out if you have a book in you, and you're just not sure how to kind of get over that hurdle. One, I think, letter in particular, the writer, Jamal Mayfield, who's an amazing crime fiction author. His Corey letter. When I posted it, it got like, over a hundred hits. And everybody was sharing it because it's a beautiful letter that, you know, you can totally understand how an agent would read that and think, I have to get this book.
- [59:17]
David Feldman
Will you let us know exactly what a query letter is?
- [59:21]
Alex Kenna
So when you're pitching an agent and trying to sell a book, usually you submit, the agent will tell you what they want. But usually it's a letter basically just introducing the book and a sample of the book, usually a first chapter or a certain, you know, number of words. And the agents get thousands of these submissions. It's just one after the other. And there's, you know, what's known as the slush pile is essentially just all of the random letters that are coming in, and something really has to stand out for it to get pulled out of the slush pile for an agent to say, wow, this grabbed my attention. I want more. So the query letter is the first thing that it is.