This seventh segment looks at how ALEC formed in the early 70s, how it extracts commitments from legislators to uphold ALEC principles and how it is dealing with challenges to its lobbying efforts. Those challenges include questions about its tax status, its loss of financially critical members in the wake of the killing of Trayvon Martin and its efforts remake itself by reaching down into sub-state governments as well as reaching up into the US Constitution itself.
- 7. Past, Present, and Future 20:27
DM – Since February a team of five reporters has been investigating the American Legislative Exchange Council or ALEC. We were able to do that thanks to the efforts of Jenka Sodeberg, KBOO’s news director who got a grant from the Fund for Investigative Journalism to look at the effects of ALEC on the Oregon legislature. This is among the last of those reports. Many well-known lawmakers and lawmakers-to-be including Representatives John Huffman and Kim Thatcher, ALEC’s Oregon legislative chair Gene Whisnant, gubernatorial candidate Dennis Richardson and others acknowledged their connection to and support of ALEC’s mission. And records maintained by the Secretary of State and the Oregon legislature show that they and their colleagues received many campaign contributions from ALEC supporting companies as well as voted for the passage of many pieces of ALEC model legislation. But how come most people had never heard of his public policy juggernaut before the shooting of Trayvon Martin in 2012?
DM – ALEC was created in the early 70s by the losers of the political battles of the 60s. those conservatives wanted Barry Goldwater
“Extremism in the defense of liberty is no vice.”
DM – And Ronald Reagan
“Government is not the solution to our problem, government is the problem”.
DM – And when they backed Republican Richard Nixon in the early 70s,
“People have got to know whether or not their president’s a crook. Well, I’m not a crook”.
DM – He not only ended up creating several government agencies including the Environmental Protection Agency, but he was eventually toppled by Watergate. Not exactly the best decade for conservative ideology. So after those humiliations and with the help of then multimillionaires Charles and David Koch, conservatives got smart. In 1973, a host of now well-known political names, Tommy Thompson, Henry Hyde, John Casik and Jesse Helms helped form ALEC.
DM – By the early 80s, those same conservatives on behalf of a Reagan federalism task force were regularly speaking their congressional colleagues in hearings on ALEC interests like tax policy. Before the end of the decade, Reagan’s task force morphed and cabinet level task forces on those and other social policy issues began to sprout. By the 1990s, those task forces had morphed again into what ALEC calls “freestanding think tanks” on every aspect of American life.
DM – Today ALEC has proved to be a formidable force in public policy. Membership fee for businesses is high. In 2014, a corporate membership can cost as much as $25,000. But after businesses are on board, ALEC appeals to the two weak spots of many politicians; ego and money. Legislators can join ALEC for just $50 a year and in exchange for the chance to rub elbows with very powerful CEOs three times a year at lavish, all expense paid conferences for them and their families, legislators sit in closed-door meetings with those same CEOs and agree to take business benefiting draft legislation back to their state capitals to be made into real law. Real law, like the high-profile “Stand your Ground” which precipitated the killing of Trayvon Martin. And Arizona’s SB 1070, the so-called “Show me your Papers” law.
“They have three key areas where they work. Number one, in suppressing the vote.”
DM – That’s John Nichols. He’s been covering ALEC for the Nation magazine. He was talking about ALEC to the watchdog ALEC Exposed in 2011.
“They push model voter ID legislation that would make it harder for millions, in fact tens of millions of Americans to cast ballots. Two, they are very critical of initiatives and referendums, particularly those passed by citizens to say raise the minimum-wage, create a living wage. Finally and this is perhaps their key area of work in recent years, they are the most aggressive promoters of clearing away barriers for corporations and wealthy people to spend whatever they want to win elections.”
DM – ALEC calls itself bipartisan and in fact many Democrats do vote in favor of ALEC legislation although that’s not something they highly publicize. Of the more than 40 ALEC bills introduced into the Oregon legislature since 2011, 33 Oregon Democrats have voted in support of them.
DM – ALEC has had unparalleled success with getting legislators to support and pass it’s model bills. It does that in part through a PR effort to deflect criticism of its lobbying work by claiming that it is no different from other organizations like the National Council of State Legislators. ALEC’s legislative chair for Oregon, Gene Whisnant defended what he calls similarities between ALEC and NCSL in a conversation KBOO reporters Mike Klepfer and Yana Maximova but during ALEC’s spring conference in Kansas City this year.
MK – “So, would you say ALEC is essentially just a free-market version of NCSL?
GW – Yeah, and it’s conservative members, more conservative members come here and share and exchange ideas what’s been successful, what didn’t work, what may work, and then I have to consider will that, is that worth my time and effort to push it in Oregon. It’s a good it’s no different from NCSL except you’ve got more conservatives.
MK – Right
GW – And the connection with the private is no different than everyday in Salem.”
DM – But in fact, there are key differences. For one ALEC’s has corporate leaders and members who vote on bills behind closed doors while NCSL does not. Also almost all of ALEC’s legislative leaders are Republican while NCSL’s leadership is strictly bipartisan.
“The difference that between ALEC and NCSL is not only does NCSL actually do a lot more than the way of collecting information is as a resource for the public,
DM – Rick Henderson is the editor of the magazine Carolina Journal. The publication has done a number of reports about ALEC.
“But NCSL’s position largely is that if there’s a dispute about whether power should be wielded at the federal or state level, NCSL defers to the state level but also NCSL wants the states to have plenty of power. It’s not a limited government organization, it still likes for their, for state legislatures to be very very active people’s lives. And an interesting distinction between the two groups is that ALEC is entirely funded by either dues for members or from corporate contributions while NCSL gets about two thirds of its budget from taxpayers.”
DM – KBOO reached out several times to NCSL spokespeople over the course of this reporting effort. No one from NCSL had responded to KBOO by airtime. But regardless of that, NCSL’s strength lies in the fact it has been historically much more open about its work and membership than has been ALEC and that makes it completely different from ALEC no matter how much ALEC claims that they’re the same.
DM – But ALEC is definitely different from NCSL in the commitments it extracts from legislators to do its work. According to a 2013 interview between Lauren Windsor and Representative John Adams, ALEC’s Ohio legislative chairman, the main responsibility of ALEC state chairs is to recruit new ALEC members and get current members to reenlist.
“I do my job, seeing to it that members of our caucus are aware of ALEC, to recruit members as they come in and reenlist those members because its just a two year membership. And I couldn’t do that alone without my legislative aide coordinating everything. It doesn’t take away from the duties of what I need to do as a legislator and it doesn’t take away from his duties to see to it that the constituent’s needs are met”.
DM – Adams says ALEC’s needs don’t supersede his responsibility as a government servant. But the Guardian of London reported last year that among the trove of documents it obtained was a draft agreement prepared by ALEC that proposed that each of its 50 state legislative chairs should be required to put the interests of ALEC first. Gene Whisnant is ALEC’s state chair for Oregon. KBOO reached out to Mr. Whisnant’s office for comment on this agreement. By airtime we had not received a response. Because ALEC’s main focus is what it calls a free market, limits government regulation, free environment, it and its task forces have created model legislation that it says puts more power into the hands of the citizen. Whether it was Arizona’s SB 1070 which gave the state the power to detain the undocumented to the colloquially titled Monsanto Protection Act here in Oregon that prevented local governments from disallowing chemical companies from planting genetically modified seed. Although those bills have led to huge profits for gun manufacturers, commercial prisons and agrifirms, it’s not entirely clear how those policies have helped small business or the working class. In 2009 Wikipedia and Common Cause identified more than 200 of America’s largest corporations as members of ALEC. After George Zimmerman shot Trayvon Martin, dozens of ALEC corporate members dropped their memberships. Then in 2013, the social justice organization “Color of Change” outed many of the remaining members in a letter writing campaign. KBOO talked with a spokesperson for Color of Change in 2012.
“When we first started this campaign towards the end of last year, most people didn’t really know what ALEC was or what it did. And at the same time I think many of the corporations that had been supporting ALEC had gotten involved to advance their own business interests through ALEC but weren’t necessarily supportive or even aware of the full range of policies that ALEC supported. And so we began reaching out to companies to make sure they knew what they were supporting through ALEC and to give them a chance to reconsider their relationship and act before calling them out publicly.
DM – The exodus of corporate backers led ALEC to create the Prodigal Son project. According to the book of Luke, Chapter 15 and beginning at verse 11, the story goes that a father gives two of his sons an inheritance. The younger son wastes his fortune and ends up essentially homeless. But his father rather than admonishing his irresponsible child, welcomes him back. ALEC is comparing the companies that left it to the foolish younger son. But they may not be so foolish. Last week, Common Cause reported that more than 90 companies have left ALEC since 2011. And big names continue to fall away. On August 19, 2014 CNET reported that Microsoft was ending its relationship with ALEC. According to Common Cause Microsoft’s announcement was sent to the Sustainability Group, a Boston based socially responsible investment firm that had questioned Microsoft’s ALEC membership. Microsoft is proponent of renewable energy. ALEC is not. KBOO contacted ALEC to request comment on Microsoft’s departure. ALEC’s Chief of Public Affairs, William Meiering, referred KBOO to a link to a Bloomberg article that explained Microsoft’s departure. But Mr. Meierling also said in his email that, “There is no such thing as the Prodigal Son project. Ed Pilkington, the person who originally reported on the release of the ALEC board report accurately reported that the project does not exist. Nearly every substantial article reported it incorrectly”. Ed Pilkington is chief correspondent for London’s the Guardian newspaper and lead reporter on ALEC.
DM – So Mr. Pilkington, does the Prodigal Son Project exist or is it according to Mr. Meierling, not something that exists?
EP – Well, all I can say is that we obtained documents, ALEC’s own documents. These are not documents that we invented. They are documents that were produced by internal ALEC employees. And one key document that we obtained and published last December was one in which the organization listed 40 major companies including companies such as Coca-Cola that had been a major source of their funding in the past but had broken off ties with ALEC in recent months. And listed it made it clear that it wanted to get those companies back as members. And at the very top of that document, the name of the document is put in clear print, the Prodigal Son Project. Now, whether that was an official project or whether it was just some snappy title one of the ALEC officials came up with, I don’t know. But I think the significance of this remains, which is that ALEC was clearly so concerned about the loss of these major backers that it was prepared to put a list together of them under the title of the Prodigal Son project signifying to me that they had some financial and internal problems which they were seeking to address.”
DM – In addition, the Guardian reports that ALEC has lost more than 400 of its 1800 total legislative members since 2011.
“You know, in an wake of the Trayvon Martin furor, many of those big donors dropped off. What we don’t really know is whether they’ve managed to fill that hole and whether the Prodigal Son Project has worked, whether corporations have come back onboard. There doesn’t seem to be much evidence that they have come back onboard so when I think I think it’s fair to assume that ALEC is still in some degree of difficulty.
DM – Charities and nonprofits organized under section 501(c)(3) of the tax code are tax exempt but ALEc’s charitable status lets its corporate members write off their ALEC membership dues and costs as tax-deductible charitable contributions. ALEC faced a host of challenges that status. So much so that ALEC seems to be getting ready for an IRS audit according to a December 2012 article in Bloomberg by Jonathan Sallet. To head off the audit, internal ALEC documents show the organization has been discussing forming a nonprofit organized under section 501(c) four of the tax code. According to former ALEC Executive Director Ron Scheberle, this initiative, officially known as ALEC Now and unofficially known as the Jeffersonian Project will allow ALEC to continue operating and takeover activity illegal for a 501(c)(3) charity. Again Ed Pilkington.
“One of the big criticisms that ALEC faced was that it was blurring the lines between the public service and voluntary work and political work. And yes, that’s where the tax thing comes in because they were benefiting from tax write-offs essentially as a charitable organization. And yet, the work they were doing was fundamentally political because it’s designed to influence the policies and legislation of state politicians on behalf of big business in America. And you can’t get much more political than that.”
DM – And that effort to change its tax status appears to be part of something even larger. Jessica Mason reported for PR watch in July that the Jeffersonian project is actually part of an ALEC effort to amend the U.S. Constitution. Mason says that ALEC is pushing for a Constitutional Convention so states can introduce a balanced budget amendment. By changing its tax status, ALEC can more directly lobby its members and state legislatures to support resolutions for balanced budget amendments in their respective states, such as House Joint Resolution 8 that was recently introduced in Utah. It would be under less scrutiny is a 501(c)4 to do such lobbying than it currently is as a 501(c)(3). Article 5 of the U.S. Constitution says that two thirds of the states can trigger a convention to propose amendments which then must be ratified by three quarters of the states. So far she says 24 out of the 34 necessary states have called for a Constitutional Convention to create a balanced budget amendment. In the past seven months, 12 states have proposed to such resolutions in most cases sponsored by ALEC members and six of those measures have passed. But there are two problems with this plan. First a balanced budget amendment would prevent the government from deficit spending for crises such as recessions and natural disasters. It would drastically cut the government’s ability to collect taxes and payout retirement benefits. Secondly and more important, a Constitutional Convention has never been triggered under Article 5, nor has one been held since 1787. And there is nothing that dictates that Constitutional Conventions must be issue specific. That means there is no limitation on what could be changed, meaning we have no idea how different our country could look with the direct influence of corporations that didn’t exist 228 years ago. Finally ALEC website says ALEC was formed because a nonpartisan group of conservative state lawmakers believed among other things that government closest to the people was fundamentally more effective, more just and a better guarantor of freedom. The ALEC philosophy is apparently about to be applied to the next layers of government below the states. The American City County Exchange is the ALEC model drilling down to city councils and county commissioners. Right now, municipalities are fighting states against laws passed by state legislatures that communities object to. The fight in Southern Oregon against GMO crops was an ALEC story KBOO featured in its second report. The ACCE’s mission will likely be to blunt that local opposition to states by seducing local government leaders and their families with the same trips, spas and meals that have attracted state colleagues while in the background supporting PACs that donate to the campaigns of those local lawmakers. And one resource the ACCE like ALEC may draw on is Oregon’s Cascade Policy Institute. In November 2013, the Oregonian reported that the Center for Media and Democracy discovered $1.4 million in donations to the Cascade Policy Institute which came from Virginia-based Donors Trust between 2008 and 2011. Donors Trust, in turn, received nearly $5 million during roughly the same from Charles and David Koch. ALEC has worked with the Cascade Policy Institute for research assistance supporting state focused model legislation. Its former director, Todd Winn is currently the director of ALEC’s Energy Environment and Agriculture task force.
DM – So it’s reasonable to assume that ACCE may turn to the Cascade Policy Institute for the same kind of help at the village, town, city and county levels. And when they do, how will the Association of Oregon Counties or the League of Oregon Cities, groups that are intimately involved with the lives of every Oregonian through the laws they help write, how will they react when ACCE starts to woo? Kevin Toon, who’s the Communications Director for the League of Oregon Cities told me that he was told by LOC’s Legislative Director Craig Honeyman that the League of Oregon Cities haven’t heard of ACCE and has no plans interact with ACCE. Meanwhile Laura Cleland, the Communications Director for the Association of Oregon Counties told me by email that, “We have not had any direct contact with ACCE or ALEC and have only heard third hand through questions such as yours that there may be an effort such as you describe. We are not aware of any county commissioners who are working with ACCE”. It should be noted that many of the legislators who support ALEC model legislation aren’t doing it just for the food or the trips or the accommodations. To believe that would be to underestimate professional, savvy and career politicians who simply have a view of the role of government isn’t the same as what a significant part of the population believes. These people aren’t evil. They just think differently. But without question, they are working hard on a version of America that other part of the population simply won’t stomach. And underestimating them is something that part of the population simply can’t afford. You can hear all of KBOO’s reports on the American Legislative Exchange Council at KBOO.org. The KBOO news director is Jenka Sodeberg. I’m Don Merrill.
Last update on October 23, 2014 reflects most recent changes.