ALEC, the American Legislative Exchange Council, and ALEC members are on the run in Arizona. As more Arizonans learn about the tactics and operating procedures of the obscure network, the organization and its corporate funders are scrambling to come up with ways to justify their unjustifiable agenda.
ALEC had operated in relative obscurity for decades since its inception in 1973. However in the past year, with the launching of the ALEC-Exposed project, and some diligent investigative reporting from journalists and good government organizations alike, the veil has been removed, and ALEC has been on the run since – in recent months, thirteen companies have withdrawn financial support from the organization and 28 state legislators have renounced their membership.
In response to these developments, the Arizona ALEC network has revealed just how entrenched it is with its corporate funders. A leaked email provided to PFAW Foundation shows that ALEC legislators held an event yesterday morning to discuss ALEC PR strategy – and that the event was being actively promoted by none other than Russel Smolden, head lobbyist of the Salt River Project, a public utility corporation that sits on ALEC’s Private Enterprise Board:
Debbie Lesko and other ALEC legislative members both present and past would like to invite you to a meeting thisThurs. (April 26th), 11:00am at AGC to get the latest update on the fight that ALEC is waging in the media against its detractors. We would really appreciate your attendance
Russell D. Smoldon
Senior Director Government Relations
The ALEC agenda is out of the shadows, and its affiliates have been scrambling to come up with talking points to sugarcoat their policies. Unfortunately, no amount of obfuscation can conceal the truth. The ALEC agenda is harmful to everyday citizens because it rewards the corporations who fund the network – nearly 98 percent of it. When ALEC legislators and ALEC corporate lobbyists like Russell Smoldon agree to meet behind closed-doors like they did yesterday morning, their attempts to assuage their image crisis only tarnish their reputations further, for what could they could they possibly be discussing that requires confidentiality?
The following photos are of lobbyists arriving at and leaving from the closed-door ALEC-PR strategy meeting:
[Russel Smoldon (on the right) – author of leaked email, head lobbyist for the Salt River Project.]
[Joe Abate – lobbyist representing PHRMA, among other clients.]
[Spencer Kamps – lobbyist for Home Builders Associations of Central AZ.]
[Marty Schulz – former registered lobbyist for Pinnacle West, now works at the Denver, CO-based firm, Brownstein Hyatt Farber Schreck.]
Click here to view PFAW Foundation’s press release on this development.
Endnote: In November of 2011 and April of 2012, PFAW Foundation released two reports, in conjunction with Common Cause, Progress Now and the Center for Media and Democracy, documenting the enormous influence that ALEC has in Arizona. The reports evidence how ALEC legislators have introduced and passed ALEC model legislation that has damaged communities and harmed the state – from attacks on public education to privatizing prisons to reducing consumer protections, the corporate-backed ALEC agenda has transformed Arizona into an ALEC model state, one that Arizonans, as evidenced by the recall of ALEC member and former Senate President Russell Pearce, are rejecting in force.
Following the release of the second report, Arizona Public Service Company (APS), Arizona’s largest utility in the state, announced it was severing ties with ALEC.
And for more information on State Representative Debbie Lesko - who was one of the hosts of the ALEC PR strategy meeting - and her ties with ALEC-sponsor SRP, please check out CMD's post on the connection.
It’s been a rough start to the week over at the American Legislative Exchange Council.
Common Cause has submitted a formal whistleblower complaint against ALEC to the IRS this morning, alleging that the organization has flouted federal tax laws by portraying themselves as a tax-exempt charity and misusing their 501c3 status by acting primarily as a lobbying organization, according to a press release.
501c3 organizations have very strict limitations on lobbying, and ALEC consistently states on its tax returns that it does not engage in lobbying. But it’s hard to see how an organization that helps facilitate meetings between corporate representatives and state legislators, produces model legislation and coaches state legislators on how to advocate for and defend such legislation can be considered anything BUT lobbying.
Corporations provide the vast majority of ALEC’s funding. But since their membership dues are written up as donations to a “charitable” organization, they can deduct the dues from their taxes – leaving the American taxpayers to make up the difference, says Common Cause president Bob Edgar. “Corporations that have been funding this organization have, in fact, been lobbying and getting a tax break. The taxpayers of the United States have been paying for a lobbying operation because these corporations can take this off on their taxes.”
The 4,000 pages of internal ALEC documents submitted to the IRS make the case that ALEC is an active lobbying organization, and by law, the IRS is required to launch an investigation.
As if that isn’t headache enough, a thirteenth company, Procter & Gamble, has ended its membership in ALEC. As a P&G spokesperson told Color of Change, the company “made the determination that ALEC does not help P&G compete for consumers’ loyalty and support.”
The pressure is now on Johnson & Johnson, one of the companies still connected to ALEC and a target of a petition drive to get ALEC-member corporations to leave the organization, to explain how ALEC’s extreme agenda benefits their consumers when their major competitor P&G concluded it did not.
Facing unprecedented public scrutiny and the beginnings of a mass corporate exodus, the American Legislative Exchange Council is on defense. This morning, the organization issued a statement explaining that they are a “pro-growth, pro-jobs” policy organization, and really can’t see what all the fuss is about. Here’s a snippet:
"For years, ALEC has partnered with legislators to research and develop better, more effective public policies – legislation that creates a more transparent, accountable government, policies that place a priority on free enterprise and consumer choice, and tax policies that are fair, simple and that spur the kind of competiveness that puts Americans back to work.
"At a time when job creation, real solutions and improved dialogue among political leaders is needed most, ALEC’s mission has never been more important. This is why we are redoubling our commitment to these essential priorities. We are not and will not be defined by ideological special interests who would like to eliminate discourse that leads to economic vitality, jobs and fiscal stability for the states."
Unfortunately for ALEC, these defenses simply don’t hold water. If ALEC’s idea of “discourse” means putting corporate lawyers together with state lawmakers at secret conferences to draft pro-corporate legislation; and “economic vitality” and “jobs” means suppressing the vote, locking up immigrants, busting unions and wrecking the environment – all measures designed to funnel money into the coffers of ALEC’s corporate members regardless of the damage to others – then there’s a lot more fuss headed their way. Here’s part of PFAW Foundation president Michael Keegan’s response:
“ALEC’s statement would have us believe that their policies promote ‘economic vitality,’ but it is difficult to see how policies that disenfranchise thousands of voters, create irrational gun laws like ‘Shoot First,’ promote fast tracks to prison for immigrants and endanger our health and safety by gutting environmental protections make any American better off. The true economic consequences of the ALEC agenda – which includes privatizing public resources such as schools and prisons, dismantling unions and stacking the deck against average people who try to seek justice in a court of law – is that wealthy special interests get even richer while the rest of us are left in the dust. ALEC believes in job creation – unless job elimination is better for the bottom line of a few corporations."
The full statement is available here.
State Farm, Johnson & Johnson, McDonald’s targeted by coalition
Washington, D.C -- A coalition of civil rights and government watchdog groups with members in all 50 states elevated the ongoing campaign to pressure corporations to withdraw from the American Legislative Exchange Council (ALEC) by calling today on three prominent companies to join the list of firms departing ALEC.
Color of Change, Common Cause, People for the American Way Foundation, Progress Now, the Center for Media and Democracy, and CREDO said their members will be petitioning State Farm Insurance, Johnson & Johnson, McDonald’s – all of whom play a prominent leadership role in ALEC to leave the organization immediately.
“Corporate membership in ALEC isn’t just destructive to democracy, it’s also bad for business. Corporations that currently support ALEC have a choice to make: they can continue to underwrite reckless assaults on our rights and wellbeing, or they can stand up for their customers by leaving ALEC immediately,” said Michael Keegan, President of People for the American Way Foundation.
“It’s increasingly clear that ALEC applies the economic clout of some of our country’s largest corporations on behalf of public policies that limit voting rights, undermine our public schools, assault collective bargaining and weaken laws protecting our environment,” said Bob Edgar, president of Common Cause. “This is neither good business nor responsible corporate citizenship.”
Many Americans have learned about ALEC in recent weeks through news stories detailing its role in the proliferation of “Stand Your Ground” laws similar to the Florida statute at issue in the death of 17-year-old Trayvon Martin.
"Major corporations like Pepsi, Coca-Cola, and Kraft understand that supporting voter suppression efforts and dangerous 'Stand Your Ground' legislation puts their brands at great risk in the Black community," said Rashad Robinson, Executive Director of ColorOfChange.org. "We hope that McDonald's, Johnson and Johnson, and State Farm also get that message. Today, our members are flooding these companies with phone calls to demand that they stop supporting ALEC."
"The funding of these and other corporations makes ALEC's operations and agenda possible, including closed door meetings where corporate and special interest lobbyists actually vote as equals with elected officials on 'model' bills to change gun laws and make it more difficult for American citizens to vote," said Lisa Graves, Executive Director of the Center for Media and Democracy/ALECexposed.org, adding "The American people have a right to know about this corporate bill mill and a right to hold the corporations and politicians to account."
“ALEC’s companies and lobbyists wine-and-dine our elected officials at expense-paid ‘seminars,’ write legislation for them and then fade quietly into the background as that legislation is introduced and passed in statehouses across the country,” said Anna Scholl of Progress Virginia. “People we elect to represent all of us end up representing just a few, driven by their pursuit of profit and/or a radical ideological agenda.” Progress Virginia recently released a report detailing ALEC’s undue influence in the Commonwealth.
"If you're a consumer who believes in civil rights you don't want to give your money to companies that fund the organization leading the attack on voting rights," said Becky Bond, Political Director of CREDO Action. "Our members are prepared to hold companies accountable if they continue funding ALEC."
Coca-Cola, Kraft Foods, PepsiCo and Intuit confirmed last week that they’ve already withdrawn from ALEC. On Monday, the Bill and Melinda Gates Foundation announced that they will no longer be making grants to ALEC.
People For the American Way Foundation is dedicated to making the promise of America real for every American: Equality. Freedom of speech. Freedom of religion. The right to seek justice in a court of law. The right to cast a vote that counts. The American Way.