Once-mighty wind farm foe falls into debt; Economy, lengthy battle sap fund-raising haul 

After its founding, the Alliance to Protect Nantucket Sound was a nonprofit powerhouse spearheading opposition to the nation’s first offshore wind farm, pressing its case against Cape Wind with state and federal officials and waging a high-profile public relations campaign.

Raising an average of $3.6 million a year in 2003, 2004, and 2005, the organization aired television ads, paid a public relations firm, and staged a $1.5 million lobbying drive to try to persuade Congress to kill the controversial plan, which has become central to a national debate over the future of clean energy.

But last year, after losing the fight in Washington and focusing its attention on a crucial battle before state regulators, the alliance was falling into debt, raising only $1.4 million – a 50 percent drop compared with 2008 and its lowest yearly fund-raising total since 2002, the year the group was founded. By December, according to recently released tax returns, the organization’s balance sheet showed more than $500,000 in red ink.

While officials with the alliance have vowed to fight on, a steady erosion of funds raised by the group over a three-year period beginning in 2007 raises questions about its ability to continue its crusade against a plan by Cape Wind to erect 130 turbines, each 440 feet high, over 24 square miles in Nantucket Sound, with construction expected to begin as early as next year.

Alliance officials attribute the group’s fund-raising woes to the duration of the bitter fight over the wind farm, which has spanned nearly a decade, and to the troubled national and state economies. “Many of our donors did not anticipate the battle would go on so long, and the economy has been particularly tough,’’ said Audra Parker, alliance president, adding that many other charities have seen their fund-raising efforts suffer since the 2008 recession.

But Parker also noted that the alliance slashed spending by nearly half last year – from $3.2 million to $1.7 million – and pledged that the organization will continue to fight the Cape Wind proposal in state and federal courts.

“We are managing the organization to be in business for the long term and ultimately stop not only the destruction of the sound, but the exorbitant burden that would be put on Massachusetts ratepayers,’’ she said.

Christy Mihos, a cochairman of the alliance, also said he feels certain the organization will raise enough money.

The funds, he said, will come in part from new donors who have stepped forward since the federal government signed off on the project and from others who have only recently come to understand the cost of Cape Wind electricity.

Cape Wind is expected to add less than $2 a month to the bills received by National Grid residential customers, because electricity from the company’s turbines will make up only a small portion of the utility’s power supply. But on a strict comparative basis, the cost of Cape Wind electricity will be double the current cost of power from fossil fuels.

Still, the organization’s tax returns show that fund-raising has been especially difficult. Last year, for example, the group claimed a $3,500 loss from two cocktail fund-raising events, which generated $10,600 in donations but cost more than $14,000 to hold.

Alliance officials say the group has a donor base of 5,000 individuals across Massachusetts. Nevertheless, the organization’s tax records show that, during a year when donations plummeted, the group relied on just nine deep-pocketed donors for about $1 million in contributions – nearly 70 percent of its total fund-raising. The Internal Revenue Service requires all nonprofit groups to publicly disclose their returns, but does not require organizations such as the alliance to release the names of their donors. Parker said it is not unusual for a nonprofit group to rely on a handful of donors for most of its funding.

Mark Rodgers, a spokesman for Cape Wind, said that the more people know about the wind farm, the more support it will have. “We believe that as the facts about Cape Wind become better known, there will be fewer people opposing the project, and fewer people writing large checks’’ to the alliance, he said.

If the alliance is to continue its campaign, it is certain to face large legal bills.

The group is planning to file an appeal with the state Supreme Judicial Court to thwart Monday’s decision by the Department of Public Utilities approving a power-selling deal for Cape Wind. It is also a party in several federal lawsuits against government agencies that have signed off on the proposal.

Indeed, the group’s emphasis on court action is already evident in its tax returns, which show that legal expenses, totaling nearly $500,000, accounted for the group’s largest bills last year.

Meanwhile, the alliance’s 2009 tax records show that William I. Koch, the fossil fuel magnate and the group’s other cochairman, paid $100,000 to cover the salary of the group’s former president, Glenn G. Wattley, who held the post until September of last year.

Although Koch is no longer paying any of the president’s salary, according to Parker, his largesse in this instance is not the first time he has used personal funds or money from his company to influence the debate over the Cape Wind proposal.

As the Globe recently reported, Koch contributed $100,000 to the Republican Governors Association earlier this year, in part to support the gubernatorial campaign waged by Republican Charles D. Baker, who opposed Cape Wind. The Globe also reported that Koch’s company, Oxbow Group, paid $1 million to a Washington lobbying firm that worked against the Cape Wind proposal from 2005 to 2007, when the project was seeking federal approval and then-Senator Edward M. Kennedy was seeking to block it.

In addition, campaign finance records show that Koch contributed $4,800, the legal maximum, to the campaign waged by state Senator Robert O’Leary, a Cape Wind opponent who was defeated by William R. Keating in the Democratic primary in the 10th Congressional District, which includes Cape Cod.

After the primary, records show, Koch gave $10,000 to the Massachusetts Republican State Congressional Committee, which supported Jeffrey Perry, a Cape Wind foe who lost to Keating.

Brad Goldstein, the director of corporate affairs at Oxbow, a $4 billion fossil fuel company that Koch owns and operates from his Florida home, said Koch could not remember making the donations to O’Leary and the state congressional committee. Koch is a prodigious contributor to political candidates – Republicans and Democrats alike – particularly in states where Oxbow operates its mines, refineries, and shipping facilities. The company does not conduct business in Massachusetts.

But Goldstein also said Koch is well known for his opposition to Cape Wind, which is based on his sailing interests – he owns an Osterville summer home and won the 1992 America’s Cup race – and his belief that the wind farm is a bad deal for ratepayers.

“He’s always opposed this project and has been officially upfront about that,’’ he said.