Watchdogs Shed More Light on ALEC on Eve of Group’s DC Summit

FOR IMMEDIATE RELEASE: November 27, 2012
CONTACT: Sara Jerving, Center for Media and Democracy, (608) 260-9713; Mary Boyle, Common Cause, (202) 736-5770

The American Legislative Exchange Council (ALEC) convenes its annual policy summit this Wednesday in Washington, DC. The three day meeting at the Grand Hyatt Washington hotel caps a year of intense controversy surrounding the organization's political agenda and tax-exempt status. The Center for Media and Democracy (CMD) and Common Cause have obtained new documents and produced reports that shed more light on the inner workings of ALEC and offer you valuable resources as you prepare for coverage of the ALEC conference.

• ALEC continues to insist that it does no lobbying, even as it brings hundreds of legislators to DC to sit with corporate lobbyists and executives to craft legislation. ALEC's most recent IRS Form 990, for 2011, indicates that while classified as a charity and enjoying the tax-exempt status that accompanies that designation, ALEC spent nearly $5 million on closed-to-the-public conferences with state legislators and "task forces" geared to advancing hundreds of corporate-drafted "model" bills. Other public records obtained by Common Cause show that PhRMA, the trade association representing drug manufacturers, contributed $264,500 to ALEC in 2011, more than twice as much as ALEC collected in dues from all of its nearly 2,000 legislator members that year.
• New open records requests shine light on ALEC's lobbying agenda for 2013. More than 1,100 pages of new ALEC task force documents, obtained through state freedom of information requests, demonstrate how ALEC's corporate members develop and drive its legislative agenda and work in tandem with legislators to secure passage of ALEC-backed bills. These agenda, draft legislation, meeting minutes and other materials strengthen Common Cause's case that ALEC is a lobby masquerading as a charity. Common Cause is pressing a tax "whistleblower" complaint with the IRS seeking to revoke ALEC's tax exemption.
• Drug companies, big tobacco, telecomm giants and other corporate interests will use a dubious "scholarship" scheme to quietly pay travel and hotel expenses for many of the state legislators gathering in DC this week. "Buying Influence," an October 2012 report by CMD and Common Cause documents how ALEC's corporate backers have funneled an estimated $4 million into "scholarships" since 2006 to pay for the travel and hotel expenses of state legislators attending ALEC meetings with corporate lobbyists like the conference opening on Wednesday in Washington. ALEC's public disclosure of its role in financing the trips has been spotty, and by paying for the junkets through ALEC, the companies can take advantage of its tax exemption to claim the expense as a tax deduction, effectively shifting the cost to taxpayers.
• ALEC and some of its members have taken new steps to hide their activities and intimidate watchdogs. While doing their ALEC task force work in private, some ALEC-member legislators also appear to have shifted their ALEC correspondence to personal email accounts in an effort to avoid public scrutiny; five Wisconsin legislators agreed in October to an out-of-court settlement requiring them to release ALEC-related emails held in their personal accounts. Although ALEC claims it is the largest voluntary group of legislators in the country, it has not behaved in a manner consistent with the public interest obligations of elected officials: for example, ALEC has used a public relations firm to investigate public interest groups asking questions about ALEC's activities. And last week, a notice posted by ALEC asserted that unauthorized downloads of bills legislators are provided could trigger "civil liability and criminal prosecution."
• Many legislators will shy away from ALEC's controversial agenda and improper lobbying activity this year. Since the launch of ALECexposed in 2011, over 70 legislators have indicated that they have left ALEC; in the 2012 election, at least 117 ALEC members lost their seats.

Hundreds of state lawmakers from across the U.S. are expected to attend the three-day ALEC conference. They will sit and vote as equals with corporate representatives on ALEC task forces -- in meetings closed to the public and press -- to advance a slate of bills drafted to advance business interests in the 2013 legislative sessions. ALEC bills and resolutions can affect both federal and state laws.

Though it strives to influence public policy, a penchant for secrecy marks ALEC's activities. ALEC's legislative leaders in each state have a "duty" under its public bylaws to get ALEC bills introduced and enacted. ALEC also urges the introduction and adoption of model bills, and corporate lobbyists typically don't publicly report their work at ALEC meetings on behalf of ALEC model bills as lobbying.

In addition to the exodus of lawmakers, more than 40 companies, including General Motors, General Electric, Amazon.com and Bank of America, severed ties with ALEC this year. Their moves came as journalists and groups including CMD and Common Cause connected the dots between ALEC and state laws restricting voting rights, privatizing public schools and prisons, and weakening clean air and clean water regulations. ALEC came under particularly intense scrutiny for its national drive to promote the "Stand Your Ground" gun law that for weeks shielded the killer of Florida teenager Trayvon Martin from prosecution.