iPhone app iPad app Android phone app Android tablet app More

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors
Bob Edgar

GET UPDATES FROM Bob Edgar
 

ALEC Running Tax Scam for Big Companies

Posted: 04/23/2012 2:04 pm

Once upon a time, an American business that was part of a scheme to systematically and secretly lobby state legislators to win passage of laws tailored to fattening its profits at the expense of the public good would have been shunned by customers and marginalized in the marketplace.

Today, mega-companies like Walmart, Koch Industries, Pfizer, and State Farm Insurance are openly if quietly engaged in just such an effort. They call it the American Legislative Exchange Council, or ALEC, dress it up with rhetoric about their devotion to free speech and free markets, and whine like spoiled children when someone dares to tell the truth about what it's up to.

For about a year now, Common Cause and other watchdog groups have been taking a hard look at ALEC. The more we've learned, the more unsettled we've become. And in recent days, I'm pleased to say, the press and public have been taking notice.

Today, Common Cause is announcing a whistleblower complaint against ALEC filed with the Internal Revenue Service. We are submitting several thousand pages of ALEC's internal records that we believe demonstrate beyond debate that ALEC for years has evaded federal taxes by masquerading as a charity and that it has lied to the IRS and the American public about its activities.

We're asking the IRS to end this charade, cancel ALEC's tax exemption, collect years of unpaid taxes and "impose necessary penalties."

The complaint includes ALEC memos, emails, "issue alerts," "talking points" and draft press releases, along with legislation drafted by ALEC-member corporations and then passed through ALEC task forces, committees in which elected state legislators and corporate executives vote as equals. The lawmakers go home to introduce that legislation without disclosing its ALEC lineage and accept ALEC's backroom coaching to guide it to passage.

ALEC's "issue alerts" keep legislators up to date on the progress of ALEC-backed legislation, suggesting arguments that can be made in hearings and during floor debate. The "talking points" offer answers to questions lawmakers can expect to hear from reporters and their colleagues about specific ALEC bills and the organization.

"ALEC boasts about how frequently its bills are introduced in state legislatures to show its influence over the legislative process," the complaint notes. In one annual scorecard, ALEC Executive Director Samuel Brunelli told corporate backers that with a success rate higher than 20 percent, "ALEC is a good investment. Nowhere else can you get a return that high."

Up to now, most press and public attention has focused on ALEC support for legislation like the Florida "Stand Your Ground" gun law at the center of the Trayvon Martin case and a slew of voter identification requirements that would turn hundreds of thousands of students, elderly, disabled and minority voters away from the polls.

Those bills, and ALEC's other legislation, merit scrutiny; many are clearly crafted to protect business interests regardless of the cost to the public. As the New York Times reported Sunday, ALEC has even tried to keep states from penalizing contractors that attempt to defraud the taxpayers.

But Common Cause's tax filing focuses on a less-noticed but perhaps more fundamental problem with ALEC -- its attack on democratic values. ALEC practices stealth advocacy, investing millions of dollars to entertain and lobby elected officials at swank resorts; it writes bills for them, refines that legislation through task forces where its business members wield a veto power, then stays carefully in the background while shepherding the finished "model" bills to passage. Their mission accomplished, ALEC's business members reward their legislative allies with campaign contributions -- nearly $400 million from 2000-10 -- to keep the party going.

ALEC does all this, and then has the audacity to call itself a charity and ask the rest of us to support its work with a tax exemption. That's just wrong.

One final point -- ALEC's leaders have accused Common Cause and other ALEC critics of attacking free speech; they say we want to deny business a seat at the table where public policy is made.

Nonsense. Our entire effort has been and will remain focused on bringing ALEC into the open, so that EVERYONE can see and hear and evaluate its agenda, so that it will no longer be able to sweet-talk our elected officials behind closed doors to work its will. The companies leaving ALEC have done so not because their speech was muzzled but because it was amplified.

 

Follow Bob Edgar on Twitter: www.twitter.com/BobEdgarCC

FOLLOW POLITICS
Once upon a time, an American business that was part of a scheme to systematically and secretly lobby state legislators to win passage of laws tailored to fattening its profits at the expense of the p...
Once upon a time, an American business that was part of a scheme to systematically and secretly lobby state legislators to win passage of laws tailored to fattening its profits at the expense of the p...
 
 
  • Comments
  • 86
  • Pending Comments
  • 0
  • View FAQ
Comments are closed for this entry
View All
Favorites
Recency  | 
Popularity
Page: 1 2 3  Next ›  Last »  (3 total)
HUFFPOST SUPER USER
mvy
08:45 PM on 04/24/2012
Most Americans don't care whether their presidential candidate wins or loses in their state. . . they care whether he/she wins the White House. Voters want to know, that even if they were on the losing side, their vote actually was directly and equally counted and mattered to their candidate. Most Americans think it's wrong for the candidate with the most popular votes to lose. We don't allow this in any other election.

But on September 7, 2007, ALEC’s National Board Members gave final approval to a resolution, passed by its members, in support of the current Electoral College system used to elect the President of the United States.
http://www.alec.org/docs/Electoral_College_PR.pdf

ALEC’s First Vice Chairman, State Sen. Steve Faris (AR), said “I am proud ALEC has endorsed this resolution and is committed to oppose all national popular vote legislation."

The National Popular Vote bill would guarantee the Presidency to the candidate who receives the most popular votes in the country.

Every vote, everywhere, would be politically relevant and equal in presidential elections.

When the bill is enacted by states possessing a majority of the electoral votes– enough electoral votes to elect a President (270 of 538), all the electoral votes from the enacting states would be awarded to the candidate who receives the most popular votes in the country.

The bill uses the power given to each state in the Constitution to change how they award their electoral votes.

NationalPopularVote
photo
HUFFPOST SUPER USER
hswanson2
Could you work if farmers didn't
07:10 PM on 04/24/2012
So what are the chances the IRS bites - any tax lawyers out there?
djrizzo1
I can't comment on WorldNetDaily anymore.
01:09 PM on 04/24/2012
Hate to steal from Bill Maher, but what if we go 'New Rule' on EVERYONE?

New RULE:

ALL legislation, State or Federal, must identify ALL lobbying groups involved in getting the legislation written, getting the legislation passed, including a listing of ALL corporations involved.

I, for one, would love to see exactly WHY certain bills are passed.
01:09 PM on 04/24/2012
time to tax them all! tax:

ALEC
The Heartland Institute
Discovery Institute
Any and all churches or religious groups that politicize, for example:

http://www.change.org/petitions/catholics-called-to-witness-i-want-their-status-as-a-tax-exempt-organization-removed
12:15 PM on 04/24/2012
Shouldn't groups like ALEC, once exposed, be added to a list of other anti American groups?
photo
HUFFPOST SUPER USER
laurieanichols
je pense donc, je suis
10:19 AM on 04/24/2012
If Goldman Sachs is the vampire squid in the economic realm than ALEC is the vampire squid in our political realm. I wasn't aware that ALEC had the audacity to call themselves non-profit. They extract membership fees from the politicians who join their organization and they charge the corporations, those left who are still members, for their services. They provide instant legislation all catered to the right wing cause such as immigration, abortion and tax issues. It is high time that a spotlight be directed in their direction so that all their activities are seen in the clear light of day.
photo
HUFFPOST SUPER USER
Akla
Leave No Trace, Just a Good Impression
09:58 AM on 04/24/2012
As an education policy analyst for a state DOE, I became aware of efforts by ALEC to undermine education in the 90's. Unfortunately, they have made great strides with charters and vouchers (in some states) and are now focusing on getting their corporate hands on higher ed money. They must be stopped.
09:51 AM on 04/24/2012
Shine a light on them...they'll run for cover.
djrizzo1
I can't comment on WorldNetDaily anymore.
01:01 PM on 04/24/2012
Yes, shine the light, but here is what happens way too often. The Liberals (us) only go so far, then we quit. Maybe it's adult attention deficit disorder.
We need to keep shining the light, over and over again, no matter what 'shiny' new things comes up, we cant let ALEC off the hook.
This user has chosen to opt out of the Badges program
09:50 AM on 04/24/2012
Here's an example of ALEC's influence on Congress...

http://www.commondreams.org/view/2012/04/23-4
ALEC's Vision of Pre-Empting EPA Coal Ash Regs Passes the House | Common Dreams

"The U.S. House of Representatives passed an amendment on April 18 to the Surface Transportation Extension Act of 2012 (HR 4348) that would effectively pre-empt the Environmental Protection Agency (EPA) from regulating coal ash, the waste from coal burning plants. About 140 million tons of coal ash are produced by power plants in the United States each year. There are about 1,000 active coal ash storage sites across the country..."
photo
Democrat in the South
Empathy, the most important word
09:49 AM on 04/24/2012
In other words, the watch dogs turned on the lights and the cockaroaches are running everywhere.
09:35 AM on 04/24/2012
Great article. Thank you.
photo
HUFFPOST PUNDIT
den1953
The National Inquire of Politics the GOP!
08:49 AM on 04/24/2012
How cute a three card montie game set up for Corporate America and name it non profit, kinda like a off shore tax shelter but only closer to the states, those Koch brothers are clever rascals when it comes to cheating the American tax payers!
pssdov
No act of kindness goes unnoticed
08:33 AM on 04/24/2012
Great article. This cuts right to the heart of the GOP agenda and the souless greed that is corporate America today. Turn the spotlight on ALEC and the super PACS and never turn it off. Somehow, I know that Romney has some affiliation with ALEC, and I hope it comes out.
-swift
Can you put your country before your party?
10:37 AM on 04/24/2012
Don't be blinded. It's not just a Republican thing. This runs all through our government. The only true cure is publicly funded elections. But we're a ways away from that.
12:34 PM on 04/24/2012
I would fav you 10 times if I could.
pssdov
No act of kindness goes unnoticed
06:13 PM on 04/24/2012
Agree with you totally, it's just that the GOP seems to barely conceal it, and I'm frightened. Not stupid enough to think that Dems aren't just as capable of this kind of stuff, they are.
photo
HUFFPOST SUPER USER
YunekFlava
Prove it...with the truth.
07:14 AM on 04/24/2012
This is what the politicans need to be investigating. We need a bipartisan "peoples congress" to rival the US congress so we can make public what politican is pocketing laundered money stolen from the people.
This user has chosen to opt out of the Badges program
09:58 AM on 04/24/2012
Politicians investigating themselves ?

Guess what the outcome would be ?
photo
chuckgoodcat
retired / disabled
06:19 AM on 04/24/2012
Expose everything , from members names to legislators who work with alec by name all of them . Link specific names to legislation specific legislation . sunlight is the best disinfectant
photo
HUFFPOST SUPER USER
YunekFlava
Prove it...with the truth.
07:16 AM on 04/24/2012
I so agree! Do it before the election. Democrats or Repubs need to be exposed! "Let's clean House".
photo
TexasbyMigration
When in doubt, Google it!
01:10 PM on 04/24/2012
Absolutely! I don't think there has ever been a time when politicians weren't corrupt and serving everyone but the people who elected them, but it's time to get ALEC out of the picture. Maybe with enough exposure and pressure from the public, they will be forced to act.