The American Legislative Exchange Council, the corporate-funded group that generates nearly a thousand pro-business model bills per year and feeds them to state legislatures nationwide, is holding its annual policy summit in the nation’s capital this week to meet with new state lawmakers and “prepare the next generation of political leadership.” This coincides with the release of a report showing that ALEC’s economic prescriptions are not good for the economy.
Each year, ALEC ranks the states on how tightly they adhere to the group’s policy recommendations—from personal and corporate tax rates, to public sector employment levels, to right-to-work laws—as a predictor of their economic growth. The study released Wednesday, by the Iowa Policy Project and Good Jobs First, two policy groups that promote economic growth at the state level, introduces those rankings to reality. It concludes: “A hard look at the actual data finds that the ALEC…recommendations not only fail to predict positive results for state economies—the policies they endorse actually forecast worse state outcomes for job creation and paychecks.” (Though the report is careful to maintain that though ALEC policies are correlated with less prosperous state economies, that doesn’t necessarily mean the policies caused economic decline.)
Instead of boosting states’ fortunes, the report finds that ALEC’s preferred policies seem to provide “a recipe for economic inequality, wage suppression, and stagnant incomes, and for depriving state and local governments of the revenue needed to maintain the public infrastructure and education systems that are the true foundations of long term economic growth and shared prosperity.”
United States of ALEC
Bill Moyers & Co.
September 28, 2012
How corporations and state legislators are colluding to write laws and remake America, one statehouse at a time.
United States of ALEC (by BillMoyers.com)
Global pharmaceutical maker Merck & Co. said today it is leaving the controversial American Legislative Exchange Council — which drafts model bills that are replicated in state legislatures across the country — because of “budget constraints and policy priorities.”
After generating months of controversy for its championing of right-wing policies in state houses, the American Legislative Exchange Council is turning to the federal level. On Friday, the Heritage Foundation will host a policy gathering for both current ALEC members and the Republican Study Committee — a group of staunchly conservative House Republicans — in hopes of beginning a partnership between the two organizations.
A senior GOP aide told Roll Call that the meeting could be the first of many aimed at exploring how conservatives at the federal and state levels could work together to further their policy aims. At least 18 state representatives and six House members are expected to attend, including RSC Chairman and former ALEC member Rep. Jim Jordan (R-Ohio).
The partnership comes as corporations have rapidly abandoned ALEC. The group, which represents corporate interests in state houses by drafting model legislation, drew fire for its role in promoting the Stand Your Ground laws, which may shield George Zimmerman from jail time for the fatal shooting of the 17-year-old Trayvon Martin in February.
ALEC was also at the front of pushing controversial voter ID laws. Since it began lobbying for its own voter photo-ID bill in 2009, state legislators have introduced 33 similar bills. Seventeen U.S. states currently have either strict photo-ID laws or provisionally require some form of photo verification — which a newly released study argues could disenfranchise up to 700,000 voters in those races.
Recently, advocacy groups like Color of Change have led campaigns to force big-name corporations to drop their ALEC ties. Thus far, 38 companies and 70 state lawmakers have heeded the call.
In addition to voter ID and Stand Your Ground, ALEC has focused on environmental deregulation, tort reforms, privatization and overturning of the Affordable Care Act. It argues that these policies help return power to the state governments.
The RSC shares a similar political vision. According to its site, the RSC and its members are “dedicated to a limited and Constitutional role for the federal government, a strong national defense, the protection of individual and property rights, and the preservation of traditional family values.”
Two more large American companies, headquartered in the Midwest, have responded to their customers and cut ties with the American Legislative Exchange Council (ALEC): General Motors (GM) and Walgreens. This brings the total to 30 corporations and four non-profits — 34 total private sector members — that have cut ties to the right-wing corporate bill mill.
Although the full extent of GM’s ALEC membership is not known, it was a member in 1992. In 2011, it paid for a seat on both ALEC’s Commerce, Insurance and Economic Development Task Force and its Energy, Environment and Agriculture Task Force. The commerce task force is the primary source of anti-worker and anti-consumer legislation such as the “Paycheck Protection” and “Right to Work” Acts and other “model” bills that limit workers’ rights and drain labor unions of resources for protecting employees, undermine consumer protections, favor the Wall Street financial agenda, and limit the ability to cap exorbitant interest rates on credit cards and big bank fees.
One of Walgreens’ major competitors, CVS Caremark, announced earlier this month that it had discontinued its ALEC membership, as CMD has reported. Like CVS, Walgreens was a member of ALEC’s Health and Human Services Task Force, which works to privatize Medicare, deregulate health insurers, protect negligent doctors, and cut holes in the safety net. These anti-patient “model” bills erode the rights and health of Americans. Walgreens was also a “Trustee” level sponsor of ALEC’s 2011 annual meeting. It is not known whether or not Walgreens has already funded ALEC’s 2012 annual meeting, where corporations and state legislators are meeting behind closed doors this week in Salt Lake City, Utah.
The Rush to Dump ALEC
Corporations that have publicly cut ties to ALEC in recent weeks include EnergySolutions, Connections Education, Express Scripts/Medco, Best Buy, Hewlett-Packard, MillerCoors, CVS Caremark, John Deere, Dell, Johnson & Johnson, Wal-Mart, Medtronic, Amazon.com, Scantron Corporation, Kaplan Higher Education, Procter & Gamble, YUM! Brands, Blue Cross Blue Shield, American Traffic Solutions, Reed Elsevier, Arizona Public Service, Mars, Wendy’s, McDonald’s, Intuit, Kraft Foods, PepsiCo, and Coca-Cola. The addition of GM and Walgreens brings the total to 30. Four non-profits — Lumina Foundation for Education, the National Association of Charter School Authorizers (NACSA), the National Board for Professional Teaching Standards (NBPTS), and the Gates Foundation — and 56 state legislators have also cut ties with ALEC.
ALEC Rock (by PRWatch)
The former head of the IRS’ Exempt Organizations division has asked the agency to revoke the tax-exempt status of the conservative nonprofit ALEC.
Marcus Owens, a lawyer at Caplin & Drysdale, who for a decade directed the division responsible for approving organizations’ charity status, accused the American Legislative Exchange Council of illegally lobbying state lawmakers among other violations of tax law in a letter to the IRS earlier this month, Roll Call has learned.
"ALEC has deliberately and repeatedly failed to comply with some of the most fundamental federal tax requirements applicable to public charities,” he wrote. "The information in this submission also suggests, quite strongly, that the conduct of ALEC and certain of its representatives violates other civil and criminal tax laws and may violate other federal and state criminal statutes as well."
Five corporations recently announced they were no longer members of the American Legislative Exchange Council after being confronted by liberal and progressive groups.
John Deere, CVS Caremark, MillerCoors, HP, and Best Buy all said they would stop funding the organization, which drafts model legislation for state lawmakers and describes itself as “policy making program that unites members of the public and private sectors in a dynamic partnership.”
ALEC received little scrutiny until recently, when organizations like ColorOfChange, Common Cause, People for the American Way, Progress Now, the Center for Media and Democracy, CREDO Action and the Progressive Change Campaign Committee began a campaign targeting the organization’s corporate sponsors — who pay tens of thousands of dollars every year to be members.
A complaint to the IRS accuses the group of lobbying and operating to benefit its corporate members.
A prominent tax attorney has accused an organization of state lawmakers and corporations officials with improperly claiming nonprofit status, alleging the group’s role is to benefit businesses, the Republican Party, and legislators, not the public.
The American Legislative Exchange Council (ALEC) ”elevates commercial gain for a few over the well-being of society’s less fortunate,” says a complaint penned by Marcus Owens, the former chief of the Internal Revenue Service’s nonprofit corporations division, on behalf of Clergy VOICE, a group of ministers from progressive churches in Ohio. (Read the full complaint below.)
ALEC has attracted attention recently for its model “Stand Your Ground” and voter ID laws, which led major corporate backers like Coca-Cola and Kraft Foods to drop their membership in the face of a threatened boycott by activists. The Florida gun law became a hot topic following the slaying of Trayvon Martin, an unarmed teen, by a neighborhood watch volunteer in February.
Until recently, ALEC has enjoyed a low profile, despite its substantial influence over legislation in the nation’s statehouses. The group claims on its website that it has helped craft close to 1,000 bills introduced by state lawmakers and that “an average of 20 percent become law.”
In its complaint, Clergy VOICE says ALEC has “deliberately and repeatedly failed to comply with some of the most fundamental federal tax requirements applicable to public charities” and that evidence “quite strongly” suggests that the group is violating civil and criminal tax laws.
The clergy’s complaint goes beyond allegations of improper lobbying, claiming that ALEC exists for the “private benefit” of its members rather than for charitable, educational, or other exempt purposes that serve the public interest and deserve special tax treatment.
The state has named a budget commission to grapple with Woonsocket’s money woes. Ultimately, though, a receiver may have to be appointed — which is to say, a person not beholden to the voters, who would nonetheless have the power to abrogate union contracts and do whatever else he or she deems necessary to erase the deficit. Incredibly, the two Woonsocket legislators have pushed for a receiver, despite the pain that it would likely bring their city.
Or maybe it’s not so incredible. It turns out that one of them, Jon Brien, is also on the national board of the American Legislative Exchange Council, or ALEC. Although ALEC is probably best known for its support of the Stand Your Ground law in Florida, the conservative group has a very clear agenda for dealing with state budgets. It wants to shrink them. Although Brien has denied that he is applying the ALEC philosophy to his small city, it looks, in fact, as if that’s exactly what he is doing. It’s not pretty.
This just makes me sick. So what happens when all these teachers and firefighters get too old to work and have no pensions? They will then need the Republican health care plan - get sick and die fast.