Wisconsin Ethics Board Fails to Curb ALEC Shell Game

In theory, Wisconsin has some of the strongest ethics and lobbying laws in the country -- legislators cannot accept even a cup of coffee from lobbyists or others who have an interest in the outcome of legislation -- but these laws are meaningless if the state ethics board does not take action to enforce them.

Last week, Wisconsin's Government Accountability Board issued an ill-conceived decision in response to the Center for Media and Democracy's complaint about an American Legislative Exchange Council "scholarship" program that allows corporate lobbyists to provide gifts of travel and perks to state legislators. The GAB agreed that some Wisconsin politicians had improperly attended corporate-sponsored events and failed to properly disclose receipt of ALEC "scholarships," but failed to recognize that the corporate-funded "scholarships" themselves are improper and should be barred.

First some background. ALEC is a group of lobbyists and state lawmakers who churn out cookie-cutter "model bills." Unlike other groups of elected officials, ALEC, which has a $7 million budget, is largely corporate-funded. Its "scholarships" are not given to politicians because of some academic achievement or other accomplishment. Rather the funds allow lobbyists to export politicians to swank resorts so they can be handed ALEC bills, inculcated on corporate talking points, and enjoy parties and perks. Politicians learn things like "CO2 is good for you" and that renewable energy standards are bad. Firms like Koch Industries and Exxon Mobil underwrite the proceedings. The IRS is currently investigating charges that ALEC itself is a lobbying outfit, operating in violation of its "charitable" status.

Forty-six state legislators in Wisconsin are ALEC members, including the leadership of both houses. Last session, CMD documented how 32 bills reflecting the group's "model" legislation were introduced, and 21 were signed into law. This explosion of activity explains why Wisconsin is now one of the top five recipients of ALEC scholarships.

In our complaint, CMD argued that these "scholarships" should be banned under Wisconsin's ethics code because they are improper gifts to legislators funded by corporate lobbyists. The gifts don't benefit the state and do create an environment for improper influence.

But the GAB stood by a 2010 decision that the gifts were permissible because the corporate donations were given to "ALEC" and not earmarked for particular legislators. They accepted assurances by lawyers that only ALEC staff make scholarship decisions and that ALEC "for the most part" has been accepting GAB's guidance on earmarking. This despite the fact that ALEC's sworn statements to the IRS directly contradict these assertions. For years, the group has told the IRS that the scholarship funds "are not considered revenue and expenses of ALEC."

As Minnesota's ethics board found in 1997, when it banned ALEC scholarships as gifts, "The fact that the corporate money is passed through ALEC, a conduit for the gift, does not isolate the corporations from their status as givers."

The public can see through the shell game and the GAB hairsplitting. When the drug lobby PhRMA throws $350,000 into the ALEC scholarship slush fund, they do so to advance ALEC anti-consumer bills like the one introduced by Sen. Rich Zipperer to exempt drug manufacturers from liability.

The GAB's failure to limit these gifts is not in keeping with Wisconsin's tradition of clean and transparent government.

You can find CMD's complaint here, and the ethic's board response here.

This article originally appeared in The Capital Times.

PDF icon GAB_letter_ALEC.pdf916.36 KB


When media report on inept or corrupt government agencies or corporations, why not name names, so that readers know specifically who the members of those agencies or corporations are. Personal embarrassment may be a stronger motivator than the remote threat of legal action is.