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Mandatory Compliance With The Regulatory State Is A Lucrative Business Model For A New California NGO

Landbell USA secured mandatory payments totaling tens of millions of dollars a year as its corporate revenue, then promised to hire some people and form the organization.

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First get paid, then start creating your company. If you’ve ever built a business the old-fashioned way, you’ll want to pay close attention to the way a for-profit German corporation built a lucrative California nonprofit organization with a government-guaranteed revenue stream.

As The Federalist reported last week, companies that make or distribute any form of textiles in California are required to start making payments this year to a nongovernmental organization (NGO) that has been designated by the state as the official “producer responsibility organization” (PRO), which will develop a statewide textile recycling plan. Under the terms of the Responsible Textile Recovery Act of 2024, mandatory payments to the NGO in 2026 start at $1,000, then shift to an “eco-modulated” future sum that has yet to be determined.

The purpose of all that effort is to divert textiles from the landfill, creating a new culture of readaptation in which Californians supposedly learn to repair and repurpose their old fabric and keep using it. As the tagline for an upcoming consumer awareness campaign says:

To see how all of that works in practice, read the extraordinary proposal submitted to the state by a very new nonprofit corporation called Landbell USA. You can find that 235-page document here, on the website of the California Department of Resources Recycling and Recovery, which calls itself CalRecycle.

In that document, you’ll find these paragraphs on page 33. (The page numbers for the PDF file don’t match the page numbers at the bottom of the pages, so I’ll use the number from the bottom of the page for everything that follows.)

First paragraph: Remember that every company subject to the new regulatory requirements owes a mandatory $1,000 payment this year, so “35,000-40,000” companies making payments to the PRO implies $35 million to $40 million in first-year revenue, backed by steep penalties for noncompliance. (On page 133, Landbell USA predicts that........

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