JPMorgan Chase’s CEO, William Harrison, appeared to retreat on a major element of his company’s capitulation to the radical environmental movement at the company’s annual shareholder meeting last week.

In April, after about a year of being pressured by the eco-activist group Rainforest Action Network, JPMorgan Chase announced its adoption of environmental policies restricting the bank’s ability to provide financial services for energy and land-use projects.

Going beyond Rainforest Action Network’s demands, JPMorgan Chase also announced it would form a coalition of financial-services companies to lobby for a national global-warming policy, including restrictions on emissions of greenhouse gases.

In response to questions at the shareholder meeting, however, Mr. Harrison surprisingly stated JPMorgan Chase had not actually committed to lobbying on global warming, stunning some in the audience. He also denied the bank caved in to Rainforest Action Network. Instead, Mr. Harrison said that the bank had been on track to develop an environmental policy for some time.

But the track to which Mr. Harrison referred began in 2000 when social activist shareholders filed their first shareholder resolution urging the adoption of a restrictive environmental policy, which garnered only 6.4% support. The same shareholders filed a similar resolution in 2003.

At this point, JPMorgan Chase became “responsive to our concerns,” as one of the activists recently recounted to InstitutionalShareowner.com. In exchange for withdrawing the 2003 resolution, JPMorgan Chase agreed to establish an office of environmental affairs, which continued to be “responsive” to the activists.

That capitulation apparently wasn’t enough for an outfit called the As You Sow Foundation, which filed a 2005 shareholder resolution with JPMorgan Chase on global warming – a resolution that mysteriously didn’t appear on JPMorgan Chase’s 2005 proxy statement and wasn’t voted on at the shareholder meeting.

What happened to the resolution? We may never know for sure, but it seems as if As You Sow may have withdrawn the resolution in exchange for JPMorgan Chase adopting the new environmental policy announced in April. In an article Rainforest Action Network published about JPMorgan Chase’s capitulation, an As You Sow spokesman hinted that is precisely what happened.

“It’s important to remember that the CEOs want to use their annual shareholder meetings to show off how well the company is doing. A company can cut a deal with shareholders, see a resolution withdrawn before the meeting and avoid PR disasters,” said the As You Sow spokesman.

So what exactly is the As You Sow Foundation? Precisely who is JPMorgan Chase appeasing at the potential expense of its shareholders, employees, and customers?

As You Sow is a not-for-profit organization that acquires funds – about 80% of its $1.1 million annual budget in 2003 – through the so-called “bounty hunter” provisions of California’s infamous consumer products warning law known as Proposition 65.

In what amounts to legalized extortion, As You Sow accuses businesses of violating Proposition 65 and then settles out of court. The proceeds either are used to buy stock in companies like JPMorgan Chase so that As You Sow can harass them as a shareholder, or are recycled into other anti-business activist groups, including the Rainforest Action Network, which has taken most of the public credit for JPMorgan Chase’s capitulation, and the Ruckus Society, which is perhaps best-known for its organization of, and participation in the violent ransacking of Seattle’s commercial district during the 1999 Word Trade Organization meeting.

One of the Ruckus Society’s founders co-founded both the Rainforest Action Network and Earth First! The latter group later spun off into the Earth Liberation Front, classified by the FBI as a domestic terrorist group. Earth First’s “Eco-F*cker Hit List” reportedly inspired two fatal mail bombings by Unabomber Ted Kaczynski.

Mr. Harrison owes further explanation to his shareholders. He can’t credibly deny succumbing to activist pressure. The critical question becomes, how much did Mr. Harrison know about the Rainforest Action Network, As You Sow, the Ruckus Society, and other pressure groups before dealing with them? Did Mr. Harrison do any due diligence?

Shareholders like As You Sow aren’t bona-fide investors in the sense that they invest for financial returns. They’re pretend shareholders investing for the sole purpose of pressuring companies to implement social and political agendas, which, as in the case of As You Sow and its cronies, can be pretty frightening.

Mr. Milloy publishes CSRwatch.com and is an adjunct scholar at the Competitive Enterprise Institute.