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.
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.