esperanzas: Coffee Party Nation | Money is not a problem for ALEC

Coffee Party Nation | Money is not a problem for ALEC | Coffee Party

Tue, 11/01/2011 - 1:02pm — Coffee Party Nation

Ron Rabatsky is a graduate of the University of Southern California School of Business. He spent many years developing new products for a number of different clients at factories throughout Asia. He resides in Waxhaw, NC with his wife Barbara and his dog, Mason. This is the second in a series of articles Ron will be writing about the American Legislative Exchange Council (ALEC).

by Ron Rabatsky

The Occupy Movement, as exemplified by Occupy Wall Street and emulated in so many cities worldwide, shows me one thing — people are no longer satisfied to live a no-longer-livable life. Expressing the entire 99% concept and the way it frames the lives of so many was a major accomplishment. Perhaps you remember George Carlin ranting about why “Nobody Cares About You.” If not, please go to the footnote (1) and watch it on YouTube. You’ll swear it was written last night.

Or perhaps you are old enough to remember William Holden in Network: “I’m a human being, god damn it, my life has value. So get up out of your chairs and go to the window, open it, then stick your head out and yell ‘I’m mad as hell and I’m not going to take this anymore!’” (2)

Okay, what exactly is ALEC? On their web site ALEC defines its mission. It is:

to advance the Jeffersonian principles of free markets, limited government, federalism, and individual liberty, through a nonpartisan public-private partnership of America's state legislators, members of the private sector, the federal government, and general public.
to promote these principles by developing policies that ensure the powers of government are derived from, and assigned to, first the People, then the States, and finally, the Federal Government.
to enlist state legislators from all parties and members of the private sector who share ALEC's mission.
to conduct a policy making program that unites members of the public and private sectors in a dynamic partnership to support research, policy development, and dissemination activities.
to prepare the next generation of political leadership through educational programs that promote the principles of Jeffersonian democracy, which are necessary for a free society. (3)

ALEC in the spotlight Whew! That’s a fancy way to saying that ALEC is a lobbying group. After all, what do they do? They enable the salesman – the corporations – to get together with the buyers – the legislators – so that the corporations can try to sell the legislators on enacting special legislation to enrich their own coffers at the expense of the public. It encourages legislators to vote a certain way on legislation in the chambers before them. How else would you define what a lobbyist does? How many honest lobbyists does it take to screw in a light bulb? Nobody knows — they can’t find the honest lobbyist. And by the way, if your children are reading Texas’ new history books, they might have to ask, “Gee Dad, who is that up there on that mountain next to George Washington?” Or say to their teacher after reading this article, “What kind of principles of free markets? Jeffersonian?" (4)

Despite activities that most people would define as classic lobbying, ALEC officials insist the organization is not a lobbying group, since it doesn't directly hand legislation to a lawmaker. Instead, ALEC defines itself as a charity, a status it justifies because its purpose is to educate lawmakers. This tax-exempt status, among other things, allows their members to deduct all their assorted payments to ALEC. That includes “donations to scholarship funds”, which can be used to pay for transportation, hotel and meals for lawmakers attending ALEC meetings.

This is certainly not what I would think of as charity. Isn’t being somehow needy a criterion for charity? It certainly appears like an end-run around the disclosure and transparency expected of a charity. Common Cause is trying to pursue this via an IRS complaint, which was filed on July 14, 2011. But while there is a lot of noise made of this issue, nobody goes to court to challenge ALEC's 501c(3) status.

As ALEC Exposed points out, in fact 20 of the 22 corporate representatives on ALEC’s “Private Enterprise Board” are lobbyists, representing major firms such as Koch Industries, Bayer, GlaxoSmithKline, Wal-Mart and Johnson & Johnson. ALEC makes old-fashioned lobbying obsolete. Once legislators return to their states with corporate-sponsored ALEC legislation in hand, the legislators themselves become “super-lobbyists” for ALEC’s corporate agenda, cutting out the middleman. (5)

ALEC’s membership is considerable. It includes:

Between 250 and 300 of America’s largest corporations. (6) ALEC does not release this information directly, but from their web site we can identify Altria, American Bail Coalition, AT&T, Bayer, Coca-Cola, Diageo. ExxonMobil, GlaxoKlineSmith, Intuit, Johnson&Johnson, Koch Companies, Kraft Foods, Peabody Energy, Pfizer, PhRMA, Reynolds American, Salt River project, State Farm Insurance, UPS, and Wal-Mart.
Perhaps as many as 2000 state legislators, which would be one out of every three state legislators nation-wide. (7)
91 (alumni) members of the U.S. House of Representatives. (8)
9 (alumni) members of the U.S. Senate. (9)
International relationships such as the Atlantic Bridge with England. (10).
Trade Groups (11).
Think Tanks and other Non-Profits (12).
Law Firms, most notably Shook, Hardy, and Bacon, the corporate chair of the Civil Justice Task Force, and lobbyists for ALEC. (13)

ALEC claims the value of legislative or “public” membership is that “ALEC serves as the “state legislators’ think tank.” ALEC’s policy staff provides research, policy analysis, scholarly articles, reference materials, legislative bill tracking, and expert testimony on a wide spectrum of issues. ALEC Model Legislation: the centerpiece of Task Force projects is ALEC model legislation. ALEC is the only state legislative organization that adopts policies and creates model legislation for its members to use in their states. ALEC writes and introduces nearly 1,000 pieces of model legislation annually. To that end, the legislators are given Issue Analyses of topical issues, which provide perfect preparation for talking points and media briefings on a state-by-state basis. ALEC Academies and State Issue Seminars are conducted throughout the year, where issue-specific seminars are held in 20 to 30 state capitols. ALEC Academies are special two-day intensive programs on specific issues, featuring national experts as faculty. (14) The nominal cost for a public membership is $50.

ALEC Influence The value of a corporate or “private” membership is that, by paying hefty dues and sponsorship fees, you have the ability to steer legislation to your financial advantage. In their luxury vacation surroundings, the corporate members get to sit with a group of state legislators and pitch their ideas for legislation that would help them — directly to a receptive audience. ALEC is an enabler, serving as the means for corporations to advise, lobby and sway legislators. Corporations are able to participate in ALEC ventures, forums and legislative advocacy work, and also underwrite conferences, task forces and meetings with politicians. Got to love that 501c(3) status! Corporations use ALEC to formulate model legislation that they present and promote to elected officials who are ALEC members, and who sometimes hold leadership roles in the organization. Membership fees run from $7,000 to $25,000 (15), and if a corporation participates in any of the nine task forces, additional fees apply — from $2,500 to $100,000 each year, per seat. (16)

The clout of corporations and corporate-backed groups at ALEC is unmistakable: Victor E. Schwartz, a Shook Hardy partner and head of its Public Policy Group, chairs ALEC’s Civil Justice Task Force; Tom Moskitis, the American Gas Association’s Director of External Affairs, chairs the Energy, Environment and Agriculture Task Force; Bob Williams, founder and senior fellow of the corporate-funded Evergreen Freedom Foundation, chairs the Tax and Fiscal Policy Task Force; Bartlett Cleland, director of the corporate-financed Institute for Policy Innovation, chairs the Telecommunications and Information Technology Task Force; and Emory Wilkerson, associate general counsel for State Farm Insurance, chairs the Commerce, Insurance and Economic Development Task Force. (17) Of course in every case there is a legislative member as co-chair.

ALEC Nine (or is it ten?) National Task Forces are what goes on behind ALEC’s closed doors. The virtual absence of transparency is because this is where the public and private, legislative and corporate, members meet to develop legislation. That legislation is to further the interests of specific corporations in any given state. Each public member belongs to one of the task forces. They are all supposed to vote on each model legislation proposal. When questioned about the propriety of this, Noble Ellington, the National Chairman of ALEC and a Louisiana State Representative, said two very important things about ALEC on NPR on 7/12/11: (18)

First, he said, "While we may be discussing it, it may not be transparent, but before it's passed, legislators have to say, 'We approve this model legislation.’ Not the corporations. They don't have a vote. Legislators say [what is introduced]. ... And then the legislators can introduce that legislation in [their] state. It goes through a committee, the public has input, they have an opportunity to talk to their legislators about the legislation — so I don't see how you can get more transparent than that."

Well, Mr. Ellington, ALEC’s process is not transparent because the public does not get to see it. But Mr. Ellington exposes a lot about "ALEC-think" in the second thing he said to the NPR moderator Terri Gross, "I work for the taxpaying public, so don't assume that they're not [at the table] because they are. And we represent the public and we are the ones who decide. So the taxpaying public is represented there at the table because I'm there."

More of this interview is very revealing.

GROSS: “Can you give some examples of legislation that was introduced and passed recently in state legislatures that is based on model legislation drafted by ALEC members, corporations and legislators in cooperation together?“

Mr. ELLINGTON: “Well, they may start out in cooperation together. The corporations and the ALEC members, they may start out together, but only, only legislative members approve model legislation, not the private sector advisory board. They don't approve the legislation; just the public sector members do that. And yes - and I'll give you Louisiana, this year, working with the Pew Foundation, we introduced some legislation working on prison reform, trying to stop recidivism and make the time that the prisoners have to serve, attempt to shorten that, for two reasons. One, for them, being the inmates; and the other being for the cost to the state.”

GROSS: “Why give corporations such a big say in drafting legislation?”

Mr. ELLINGTON: “Well, partly because they're one of the ones who will be affected by it. And you say a big say, but as I expressed to you earlier, and I think it needs to be made perfectly clear, that they have, they do not have the final say about model legislation. It is done with work with taskforces, which is both public and private sector working together. But before it ever becomes model legislation or ALEC policy, it has to go through the public sector board, not the private sector. So only the public sector had the final say as to whether or not something becomes model legislation.”

You can hear the entire show at here.

Every member is part of a task force. Each task force has both a legislative and corporate chair. ALEC is essentially the enabler here. State lawmakers from across the country, along with representatives of concerned corporate members, draft model legislation proposals. Each private member brings whatever resources are necessary to conduct business at these meetings. There are nine (or is there a 10^th?) task forces: Civil Justice; Commerce, Insurance, and Economic Development; Education; Energy, Environment and Agriculture; Health and Human Services; International Relations (think of the Atlantic Bridge scandal); Public Safety and Elections; Tax and Fiscal Policy, Telecommunications and Information Technology. (19)

Money changing hands Their funding comes not only from their corporate members, but also from a number of members of what we now call the “1%” — the people who stand to gain the most from ALEC. At meetings, the legislative members receive an all-expenses-paid trip that provides many part-time legislators withvacations that they could not afford on their own, along with the opportunity to rub shoulders with wealthy captains of industry who are prospective major out-of-state donors to their political campaigns. For a few hours of work on a task force and a couple of indoctrination sessions from ALEC experts, part-time legislators can bring the whole family to ALEC’s annual convention, work for a few hours, then stay in luxurious hotels, attend parties, and raise funds for their campaign coffers, all heavily subsidized by the corporate till.

But to spend as much as they do, ALEC must have an overall objective which is not entirely clear, beyond just making money for corporate America. There is lot of speculation – well researched and documented speculation – but ALEC does not talk. Sources of ALEC income include the foundations controlled by the billionaire Koch brothers, which gave ALEC over $200,000 in 2009. Charles G. Koch’s own Foundation kicked in an additional $75,000. That $200K is before the undisclosed amount of membership "dues" paid by Koch Industries, which is run by Charles and David Koch. There is no public disclosure of annual gifts the company gives to take part in the one-stop-shopping opportunities that ALEC conventions provide, opportunities to meet with legislators from every state and submit their wish list.

In 2009, Koch corporate and foundation gifts likely amounted to about three times more income for ALEC than the dues from all of its legislative members combined. Research from Greenpeace and the Center for Media and Democracy (CMD) documents that the Koch foundations have given ALEC at least $600,000 in the past decade or so, and Koch Industries has donated an untold amount. The Kochs also bailed out ALEC with a loan of nearly half a million dollars in the late 1990s. Koch Industries has chaired ALEC's corporate board and has had a seat on its general board for over a decade. Another subsidy unaccounted for by ALEC is the money that corporations like Koch Industries have spent on things like having the head of their lobbying arms involved in ALEC's leadership, as well as whatever amount of time the companies spend crafting ALEC "model" legislation.

The Charles G. Koch Foundation also funds Koch interns and fellows who have worked for ALEC, and Koch Foundation "experts" have also provided their own help, such as analysis attacking the pay of state public employees. ALEC's Board of "Scholars" includes people who also receive Koch funding or work for Koch-funded groups like Heritage Foundation, CATO Institute, and Mackinac Center. Beyond all that, the Kochs have created an infrastructure to support their agenda by funding other groups like Americans for Prosperity (founded by David Koch), which pushes legislative proposals echoing the ALEC agenda on climate, and Americans for Tax Reform mirroring ALEC’s Tax initiatives.

Other right-wing foundations have also supported ALEC, far beyond the "dues" paid by any legislator. For example, the Castle Rock Foundation, which is run by right-wing beer heir Peter Coors, gave $50,000 last year and in prior years. The right-wing John M. Olin foundation has also been a donor to ALEC. Another of the big right-wing foundations, the Lynde and Harry Bradley Foundation, has been a funder, and gave ALEC $50,000 in 2009 to fund "budget reform" work, as just one example. Similarly, right-winger Richard Scaife has given ALEC over half a million dollars over the past decade or so, through his Allegheny Foundation. Some of the organizations that support ALEC, like Scaife's, are also deeply invested in the profits of the corporations that sit on ALEC's board. The Allegheny Foundation has held over $11 million of ALEC board member Altria's stock, along with major stock holdings in other ALEC corporate board members like Kraft, Coca Cola, AT&T, GlaxoSmithKline, Johnson & Johnson, andExxon.(20)

It is largely because of the involvement of all of these same members of the 1% in many other conservative organizations that rumors of grand conspiracies flow.

Endnotes:

(1)http://www.youtube.com/watch?v=Yi6XV8yBFoU&feature=related

(2) http://www.youtube.com/watch?v=WINDtlPXmmE&feature=related

(3) http://www.alec.org/AM/Template.cfm?Section=Our_Mission&Template=/CM/HTMLDisplay.cfm&ContentID=15824

(4) http://www.nytimes.com/2010/03/13/education/13texas.html

(5) http://www.alecexposed.org/wiki/What_is_ALEC%3F

(6) http://www.alec.org/AM/Template.cfm?Section=Private_Enterprise_Board&Template=/CM/HTMLDisplay.cfm&ContentID=15992
and
http://www.alec.org/AM/Template.cfm?Section=Task_Force_Chairs&Template=/CM/HTMLDisplay.cfm&ContentID=15625

(7) http://www.sourcewatch.org/index.php?title=ALEC_Politicians#Legislators_with_ALEC_Ties

(8) http://www.alec.org/AM/Template.cfm?Section=house_of_representatives

(9) http://www.alec.org/AM/Template.cfm?Section=senate

(10) http://www.guardian.co.uk/politics/2011/oct/07/adam-werritty-charity-liam-fox

(11) http://sourcewatch.org/index.php?title=ALEC_Trade_Groups