{"id":2633318,"date":"2026-07-21T18:43:04","date_gmt":"2026-07-21T22:43:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mandatory-compliance-with-the-regulatory-state-is-a-lucrative-business-model-for-a-new-california-ngo\/"},"modified":"2026-07-21T18:55:41","modified_gmt":"2026-07-21T22:55:41","slug":"mandatory-compliance-with-the-regulatory-state-is-a-lucrative-business-model-for-a-new-california-ngo","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/mandatory-compliance-with-the-regulatory-state-is-a-lucrative-business-model-for-a-new-california-ngo\/","title":{"rendered":"Regulatory State Compliance Is Lucrative Business In California"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fmandatory-compliance-with-the-regulatory-state-is-a-lucrative-business-model-for-a-new-california-ngo%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2633318&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The article explains how a German for-profit corporation, Landbell Group, strategically established a nonprofit US subsidiary, Landbell USA, to participate in California&#8217;s new textile recycling law. The law mandates textile companies to pay a $1,000 fee annually to a designated nonprofit institution (PRO) to fund recycling efforts aimed at reducing landfill waste. Landbell USA, despite being a nonprofit, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/taliban-names-fbi-wanted-alleged-terror-leader-as-afghan-interior-minister\/\" title=\"Taliban Names FBI-Wanted Alleged Terror Leader As Afghan Interior Minister\">maintains close ties<\/a> to its for-profit parent and seems to blur the lines between the two entities, which is legally contentious because California law prohibits for-profit involvement in its PROs. <\/p>\n<p>Landbell USA&#8217;s formation involved creating a nonprofit quickly, operating out of a PO box and a condominium, and incorporating in Delaware just before applying for the California designation. Its leadership includes international executives,with some based overseas,and the company operates from minimal physical addresses. This setup has prompted a lawsuit from the american apparel &#038; Footwear Association, which seeks to block Landbell USA&#8217;s recognition as California\u2019s PRO, citing concerns over legality and openness.<\/p>\n<p>The article highlights the potential for businesses to profit from regulatory schemes before establishing actual operational presence and raises questions about accountability and legal compliance in such arrangements. Efforts by The Federalist to obtain further details have gone unanswered, underscoring the opaque nature of the involved entities.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>First get paid, then start creating your company. If you\u2019ve ever built a business the old-fashioned way, you\u2019ll 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.<\/p>\n<p>As The Federalist <a href=\"https:\/\/thefederalist.com\/2026\/07\/17\/california-is-crazier-than-you-thought\/\" target=\"_blank\" rel=\"noreferrer noopener\">reported last week<\/a>, 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 \u201cproducer responsibility organization\u201d (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 \u201ceco-modulated\u201d future sum that has yet to be determined.<\/p>\n<p>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:<\/p>\n<figure><figcaption>\n<div>\n<p>         <span>Image Credit<\/span>Screenshot       <\/p>\n<\/div>\n<\/figcaption><\/figure>\n<p>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 <a href=\"https:\/\/www2.calrecycle.ca.gov\/PublicNotices\/Details\/6998\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>, on the website of the California Department of Resources Recycling and Recovery, which calls itself CalRecycle.<\/p>\n<p>In that document, you\u2019ll find these paragraphs on page 33. (The page numbers for the PDF file don\u2019t match the page numbers at the bottom of the pages, so I\u2019ll use the number from the bottom of the page for everything that follows.)<\/p>\n<figure><figcaption>\n<div>\n<p>         <span>Image Credit<\/span>Screenshot       <\/p>\n<\/div>\n<\/figcaption><\/figure>\n<p>First paragraph: Remember that every company subject to the new regulatory requirements owes a mandatory $1,000 payment this year, so \u201c35,000-40,000\u201d 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 initial noncompliance will limit revenue for the first two years to a little under $20 million.)<\/p>\n<p>Second paragraph: Preliminary staffing will require the hiring of senior managers, after which \u201can organization can be formed underneath these three leaders.\u201d <\/p>\n<p>So Landbell USA secured mandatory payments totaling tens of millions of dollars a year as its corporate revenue, <em>then<\/em> promised to hire some people and form the organization.<\/p>\n<p>It gets more complicated from there.<\/p>\n<p>The <a href=\"https:\/\/landbell-group.com\/about-us\/\" target=\"_blank\" rel=\"noreferrer noopener\">Landbell Group<\/a> is a for-profit German corporation that formed Landbell USA to compete for the California PRO designation. California\u2019s textile recycling law requires that the state\u2019s designated PRO be a nonprofit corporation, which the Landbell Group is not, so the German Landbell couldn\u2019t just compete for the California role; it had to form a new entity. The creation of the new U.S.-based nonprofit happened in a rush. And it\u2019s still not entirely clear just how much Landbell USA, the nonprofit corporation that promised in its application to one day hire some people, <em>exists<\/em>.<\/p>\n<p>Look at the <a href=\"https:\/\/landbellusa.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">website<\/a> for Landbell USA, and scroll to the bottom, where you\u2019ll find this:<\/p>\n<figure><figcaption>\n<div>\n<p>         <span>Image Credit<\/span>Screenshot       <\/p>\n<\/div>\n<\/figcaption><\/figure>\n<p>If you search for 224 W. 35th St. Ste 500 in New York City, you\u2019ll find a bunch of businesses using it as their address. That\u2019s because it\u2019s a <a href=\"https:\/\/www.postscanmail.com\/postscan-mail-shipping-center\/new-york.html\" target=\"_blank\" rel=\"noreferrer noopener\">shipping center<\/a> with post office boxes, which you could already tell by the presence of \u201c#811\u201d inside a suite. Meanwhile, you can see for yourself the address Landbell USA used in its application to the State of California for the PRO designation: It\u2019s a <a href=\"https:\/\/www.zillow.com\/homedetails\/7497-Altiva-Pl-Carlsbad-CA-92009\/16655886_zpid\/\" target=\"_blank\" rel=\"noreferrer noopener\">condominium<\/a> in the San Diego suburb of Carlsbad. With up to $40 million in government-mandated revenue and a plan to hire some staff at some point, Landbell USA operates out of a PO box and a condo.<\/p>\n<p>Filing for nonprofit status with the IRS, Landbell USA listed the addresses of its actual offices and corporate officers:<\/p>\n<figure><figcaption>\n<div>\n<p>         <span>Image Credit<\/span>Screenshot       <\/p>\n<\/div>\n<\/figcaption><\/figure>\n<p>Landbell USA President John Hayes, who works from an office in Dublin, is the head of North American \u201ccompliance solutions\u201d for <a href=\"https:\/\/h2compliance.com\/about-us\/\" target=\"_blank\" rel=\"noreferrer noopener\">H2 Compliance<\/a>, a <a href=\"https:\/\/landbell-group.com\/newsroom\/from-a-humble-beginning-to-a-global-community\/\" target=\"_blank\" rel=\"noreferrer noopener\">subsidiary<\/a> of the German-based Landbell Group. (The Virginia address at the top is a <a href=\"https:\/\/www.rosslynva.org\/venue\/spaces-arlington-the-artisphere\" target=\"_blank\" rel=\"noreferrer noopener\">rented workspace<\/a>.) A California business effort will be led by an Irish executive from his office in Dublin, working under the umbrella of a German company, though H2 Compliance has now also created a <a href=\"https:\/\/h2compliance.com\/h2-compliance-announces-new-subsidiary-in-the-usa\/\" target=\"_blank\" rel=\"noreferrer noopener\">U.S.-based corporation<\/a>.<\/p>\n<p>You can see the scramble for eligibility in the paper trail. The application to the state of California from Landbell USA is dated Dec. 23, 2025, but Landbell USA incorporated in Delaware on Oct. 31 of the same year, and first filed notice of its intent to do business in California <em>after<\/em> it applied to the state for the PRO designation:<\/p>\n<figure><figcaption>\n<div>\n<p>         <span>Image Credit<\/span>Screenshot       <\/p>\n<\/div>\n<\/figcaption><\/figure>\n<p>CalRecycle <a href=\"https:\/\/content.govdelivery.com\/accounts\/CALRECYCLE\/bulletins\/40b63d2\" target=\"_blank\" rel=\"noreferrer noopener\">chose<\/a> Landbell USA as the state\u2019s textile PRO that same month. <\/p>\n<p>You may have noticed, looking at the screenshots from Landbell USA, how often and how casually they refer to their role as a part of the Landbell Group. The organization\u2019s website declares that relationship, and its proposal to the state says that Landbell USA \u201chas discussed the operational planning and staffing with some of our larger Landbell Group PRO affiliates.\u201d But California\u2019s textile recycling law forbids the participation of for-profit corporations as or with the state\u2019s PRO, though the exact nature of the limits on cooperation with the for-profit entity is a contested question. The California nonprofit Landbell USA keeps saying that it\u2019s an arm of the for-profit Landbell Group, and Landbell USA marketing videos appear on the Landbell Group\u2019s YouTube channel.<\/p>\n<figure>\n<p><span><\/p>\n<p><iframe loading=\"lazy\" title=\"Landbell USA: Powering Textile Recycling in the U.S.\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/MEcfPvQJDsY?feature=oembed&#038;enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><\/span> <\/p>\n<\/figure>\n<p>That blurring of lines between the for-profit German corporation and the nonprofit American corporation that operates out of a PO box has led to a <a href=\"https:\/\/www.khlaw.com\/sites\/default\/files\/2026-06\/memo%20iso%20PI%20motion%20(AAFA%20v%20CalRecycle).pdf\" target=\"_blank\" rel=\"noreferrer noopener\">lawsuit<\/a> against both the state and Landbell USA from a textile industry trade group, the American Apparel &#038; Footwear Association, which has asked a Superior Court judge in Sacramento to block the designation of Landbell USA as California\u2019s textile PRO. A hearing is scheduled in that case in August.<\/p>\n<p>The Federalist sent a long series of questions to CalRecycle, Landbell USA, and the lawyers for the American Apparel &#038; Footwear Association. Most simply, we asked both CalRecycle and Landbell USA to provide the address of Landbell USA\u2019s California business office, since we can\u2019t find an office address for the company other than the condo and the PO box. We also asked Landbell USA and CalRecycle for Landbell USA\u2019s current staffing numbers. <\/p>\n<p>Landbell USA has not responded to our questions, and neither did the lawyers who are suing them. <\/p>\n<p>CalRecycle, the state agency overseeing the implementation of the textile recycling law, responded to a series of email messages with a short message from Acting Communications Director Lance Krug on Tuesday morning saying that the agency could not respond immediately. Email messages to the agency director and regular communications director produced automated \u201cout of the office\u201d responses. The Federalist will update this story if CalRecycle or Landbell USA eventually provide responses.<\/p>\n<p>Meanwhile, if you\u2019re an entrepreneur, consider this new business model: In the regulatory compliance industry, it appears that you can lock in a regular source of eight-figure annual revenue before you have an office or a staff. <\/p>\n<hr>\n<p>      Chris Bray is a senior correspondent at The Federalist and a former infantry sergeant in the U.S. Army. He has a history PhD from the University of California Los Angeles, not that it did him any good. He also posts on Substack, at &#8220;Tell Me How This Ends,&#8221; <a href=\"https:\/\/chrisbray.substack.com\/\">here<\/a>.<\/p>\n<\/p><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Get Paid First: How a German Firm Built a Lucrative California Nonprofit<\/p>\n","protected":false},"author":2086,"featured_media":2633319,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2026\/07\/landbell-scaled.jpg","fifu_image_alt":"","footnotes":""},"categories":[33651],"tags":[59497,83001,78978],"class_list":["post-2633318","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-western-journal","tag-california-business","tag-legal-regulations","tag-regulatory-compliance"],"fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2026\/07\/landbell-scaled.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2633318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2086"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2633318"}],"version-history":[{"count":3,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2633318\/revisions"}],"predecessor-version":[{"id":2633327,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2633318\/revisions\/2633327"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2633319"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2633318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2633318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2633318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}