Shining a Light on ALEC

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State Sen. Daniel Squadron and NY lawmakers seek disclosure
For most of its nearly 40-year history, the conservative think tank known as the American Legislative Exchange Council, or ALEC, has had substantial influence on the shaping and introduction of legislation in New York and across the nation.

And until fairly recently, the group has managed to maintain a relatively low national profile.

But, a series of highly controversial bills, including Arizona’s stringent immigration law and Florida’s “Stand your ground” legislation, has led to new scrutiny from watchdog organizations and politicians alike.

Most notably is the recent call from NY state Sen. Dan Squadron, the ranking member of the Senate Investigations and Government Operations Committee (IGO), for legislators in the state and across the country to disclose their ties to ALEC and more specifically, notify the public when the organization has helped them to shape and/or introduce new bills.
“ALEC has clearly far-reaching and deep influence in American legislation, so much so that it’s shocking,” Squadron said in an interview. “The more you peel the onion—by any name, lobbying still stinks, and we’ve got to push back against it.”

At the heart of Squadron’s and other groups’ complaints about ALEC are the facts that the think tank claims it does not engage in lobbying while continuing to be registered as a charitable organization. Lobbying is legal and regulated, but ALEC is registered as a 501c3 group. And, critics say, it does in fact engage in lobbying.

“A 501c3 can do a small amount of lobbying so long as they report it,” said Brendan Fischer, staff counsel with the Center for Media and Democracy (CMD), an investigative reporting and watchdog group. “But, ALEC has repeatedly claimed to the IRS that it engages in no lobbying.”

“[T]he organization’s mission to support free-market, limited-government policies stands as strong as ever,” noted ALEC spokesperson and editor-in-chief of ALEC internal publications Kaitlyn Buss in an emailed statement. “In response to the lobbying complaint, ALEC does not lobby,” she added.

Bruce Berg, a political science professor at Fordham University, said that the benefit for a legislator to work with ALEC is fairly simple to see.

“If I am a conservative legislator, I will be able to take credit for introducing conservative legislation,” Berg said. “It’s win-win. The legislator gets to claim credit for having done something positive, and ALEC gets its legislation introduced.”

Further, Fischer said that there are other tangible advantages for legislators to work with ALEC. “State legislators often lack resources—in many states, legislators have just one staff assistant, and in some cases share staffers with other legislators—and may lack background knowledge on certain issues, so ALEC provides a simple way to help,” Fischer said.

Speaking on condition of anonymity, several political insiders admitted that the larger issue with ALEC is the fact that the group has created a way for special interests to skirt state lobbying laws.

“ALEC is a conduit for corporate influence that disguises itself as a nonpartisan charity,” Fischer said. “Corporations pay thousands or tens of thousands of dollars in ALEC membership dues to buy access to state legislators, and then push corporate-drafted ‘model legislation’ that tends to benefit the corporate bottom line.”

Fischer also added that ALEC’s corporate members also pay for legislators’ flights and hotel rooms at ALEC meetings, which further entices legislators to join ALEC, thereby allowing special interests to influence lawmakers to introduce ALEC model bills.

But, the group maintains that with its free-market and limited-government focus, it merely brings together state legislators and private sector, or corporate leaders, in order to pass business-friendly laws. It has repeatedly denied all charges of lobbying and has reaffirmed its nonpartisan nature.

ALEC’s state legislator members pay a modest yearly fee of about $50 for membership, while the group’s corporate members such as ExxonMobil, GlaxoSmithKline, State Farm Insurance and Pfizer Inc. pay upward of $10,000 for membership, according to CMD. The group also estimates that corporate members make up nearly 98 percent of ALEC’s $7 million annual budget.

The organization says that each year “close to 1,000 bills, based at least in part on ALEC model legislation, are introduced in the states,” with an average of 20 percent becoming law.
Concerned over the seemingly stealthy nature of ALEC’s activism in New York, Squadron convened a public forum on the group’s efforts back in June that was attended by several prominent New York lawmakers and included testimony from a variety of activists and watchdog groups.

“When an organization is funded by corporate groups which are themselves lobbyists, it leads to real questions about their influence on government and their influence on legislators,” Squadron said.

Among the 39 ALEC-inspired model bills introduced in New York in 2010, Squadron said that three in particular were especially troubling.

The bills include the controversial “Stand your ground” legislation at the center of the Trayvon Martin shooting in Florida in February, which grants legal immunity to shooters claiming self-defense; legislation prohibiting regulation of Voice Over Internet Protocol services, which would make it difficult for municipalities to provide low-cost Internet access to residents; and a Voter ID bill which, Squadron said, has been “thrown out by courts across the nation” as amounting to voter suppression.

Susan Lerner, executive director of Common Cause NY, a nonprofit good government group, said at the forum, “Lawmakers who introduce legislation, proposed or inspired by an organization, should be required to disclose that fact to the public. … New Yorkers should know who their legislators work with.”

Squadron added that the point of lobby laws is to keep the public informed about who is pushing for laws that may affect them. “Issues of transparency and process matter, as that’s the way we can ensure that government is passing policies that improve the state instead of just passing policies that line the pockets of corporations,” he said.

In response to comments from both Common Cause and CMD, ALEC’s Buss added: “It is unfortunate that these same extremist groups are still attacking ALEC.”

Moreover, Alexis Grenell, a spokesperson for Common Cause, said the group filed a complaint in April with the IRS against ALEC on the grounds that they are in violation of their 501c3 status. The complaint was centered on the IRS’ “Whistleblower” protocol and included thousands of documents that Common Cause says illustrate lobbying by ALEC.
Grenell added that shortly after that complaint, they notified Attorney General Eric Schneiderman to investigate ALEC locally, “since all registered charities must submit tax information to the AG’s office.”

Responding to challenges to ALEC’s charitable organization status, Alan P. Dye, legal counsel to ALEC, issued a written statement on the group’s website.

“The attacks on the American Legislative Exchange Council are based on patently false claims being made by liberal front groups that differ with ALEC on philosophical terms,” Dye wrote.

In his statement, Dye also characterized Common Cause as “a partisan front group masquerading as an ethics watchdog.”

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