Explore Harvard's Nieman network Nieman Fellowships Nieman Lab Nieman Reports Nieman Storyboard

How much of your state’s legislation is being drafted by industry?

ASK THIS | November 30, 2007

The American Legislative Council, or ALEC, lets corporations cultivate legislators and win support for industry-written bills while not technically breaking lobbying rules – and paying no taxes. (First of two articles)

By Bruce Kushnick

Q. The American Legislative Council, or ALEC, is a corporate-funded group that gives large donations and other perks to legislators in states across the country. It writes industry-serving bills that those legislators introduce and get enacted. How many legislators in your state are or were members of ALEC?

Q. How many ALEC-drafted bills, if any, were introduced by legislators in your state? How many were enacted?

Q. ALEC is a tax exempt 501(c)(3) group. Should it be?

In previous articles I discussed Astroturf groups (fake grassroots organizations), co-opted groups (activists that bend to serve donors), and think tanks whose research is aimed at serving the special interests that fund them.

This cast of characters churns out corporate-friendly data. But the real action takes place when laws are passed based on this one-two sucker punch of skewed data and high-priced, propaganda-style marketing — a process to which the public is not invited. The drafting of proposed legislation is often a done deal before the public knows it has begun, much less has a chance for input.

Instead of citizen or grass roots participation there is ALEC, the American Legislative Exchange Council, a corporate-sponsored group that brings together big business and state legislators in an elite environment of favor and privilege. Activist groups have been exposing the mind-bending tactics and activities of ALEC for years but the mainstream press seems to have almost totally ignored it.

In 2002, a Washington writer, Bill Hogan, wrote in Defenders Magazine, a publication of  the group Defenders of Wildlife, that “the tie that binds is money, and the roster of ALEC’s biggest underwriters leaves little doubt as to what the organization is all about: American Express Company, BellSouth Corporation, the Chlorine Chemistry Council, Coors Brewing Company, GlaxoSmithKline, Golden Rule Insurance Company, Intuit, Koch Industries, Nationwide Insurance, PG&E National Energy Group, Pfizer, Pharmaceutical Research & Manufacturers of America, Philip Morris Management Corporation, Procter & Gamble Company, R.J. Reynolds Tobacco Company, Seagram/North America, United Parcel Service and Verizon Communications.

“In truth,” Hogan wrote, “ALEC is a tax-exempt organization set up to help hundreds of big corporations and trade associations advance their legislative agendas in state capitals from coast to coast.”

Hogan noted that ALEC lavishes spending on state legislators who choose to join — about 2,400 in all, by ALEC’s count. Perks for “legislator members” include taxpayer-financed junkets to prime tourist destinations in the United States, free or heavily subsidized vacations for their spouses and children, and other benefits that range from no-cost child care and medical tests to free Broadway theater tickets and dinners at expensive restaurants. Most legislator members can even pass along the nominal membership fee ($50 in 2007) to taxpayers in their states, Hogan wrote. In addition, legislators get enhanced campaign contributions and grants to pet projects they may have.

The cost of membership for corporations ranges from $5,000 to $50,000 a year. In exchange, they get guaranteed face time with state legislators from around the country and a chance to introduce those lawmakers to so-called “model legislation” crafted by industry. Legislators receive the benefit of seeming like they’re actually doing something when they return to their home states and introduce, as their own, so-called “model legislation” written by ALEC’s corporate members.

The ALEC-inspired bills are then supported by heavily financed campaigns in target states, reinforced by relevant industry-backed Astroturf groups, co-opted organizations, bogus think tanks, and PR and lobbying firms. The public and unsuspecting home state officials are frequently so overwhelmed with this propaganda blitz that ALEC has been able to claim numerous legislative victories for their ultimate clients, the corporations and industries whose fundamental goal is complete de-regulation of their businesses.

Much of what has been written about ALEC goes back six or seven years, as that’s when activist groups, including one known as Alecwatch, seem to have been most focused on it. At about that time, ALEC reported that “during the 1999-2000 legislative cycle, ALEC legislators introduced more than 3100 pieces of legislation based on our models, and more than 450 of these were enacted. . . . In the legislative Sessions of 2000, there were more than 2150 introductions promoting ALEC Policy”.

In the past year, there have been pieces on ALEC in the Arizona Republic and the San Francisco Chronicle. The Republic article, in December 2006, said, among other things, “It is the group's connections to corporate America and its strategy of developing industry-approved model legislation for its members around the country that distinguish it from other legislative groups.” The Chronicle quoted critics as saying that ALEC’s practices are “similar to that made famous by jailed lobbyist Jack Abramoff…just a vehicle to circumvent rules that limit the value of gifts that companies can give directly to California lawmakers.”

ALEC wields major clout to rival the most influential of power-brokers. It boasts 2,400 legislator members throughout the 50 states, plus 96 alumni members who now serve in the U.S. Congress. According to Common Cause, "Whether the issue is the environment, education or telecommunications, ALEC's modus operandi is the same.  ALEC brings state lawmakers and their private sector counterparts to the table as equals".

In telecommunications and broadband (my main interests)  ALEC’s private sector members include AT&T, BellSouth, the National Cable and Telecommunications Association, SBC Communications (now merged with AT&T), Sprint, Verizon Communications and more. Other prominent industry members of ALEC include Amoco, Chevron, Texaco, R.J. Reynolds, the American Nuclear Energy Council, the Chlorine Chemistry Council, the American Petroleum Institute, and the Pharmaceutical Research & Manufacturers of America. This article concentrates on ALEC’s telecommunications influence.

According to a joint report by the Defenders of Wildlife and the Natural Resources Defense Council (Corporate America’s Trojan Horse in the States): “Close scrutiny reveals that ALEC is little more than a screen for hundreds of big corporations and trade associations to advance their legislative agendas in state capitals from coast to coast.”

Here’s a list of  “model” telecommunication bills, sponsored by corporate members of ALEC and available to legislator members. Included are:

These bills have been showing up in states to block municipalities from offering broadband, to give AT&T and Verizon statewide cable franchises with no restrictions, to wipe out public accountability and gut consumer protections. They would block competitors and eliminate as many regulations as they can get away with. For example, Muniwireless.com did a feature article in December 2004 on ALEC and its direct attack on municipalities that want to offer broadband. The bill, the article said, would “make it easier for state legislatures to pass anti-municipal broadband laws.”

ALEC, in addition to being well-funded, is tied to other corporate-serving think tanks. The Summer 2007 meeting of ALEC was co-sponsored by the Heritage Foundation, which is itself funded in part by AT&T and Verizon.

Astoundingly, despite its activities in creating and promoting legislation and its base of multi-billion dollar industries, ALEC is registered as a nonprofit 501(c)(3) organization. As such, not only does it reap the significant benefits of tax exemption, but its corporate sponsors get to write off their yearly membership fees as “charitable contributions.” In other words, even as it increasingly influences public policy affecting its corporate sponsors by locking out the public, ALEC takes public money through its tax exempt status. It’s like shooting someone and making the victim pay for the bullet!

One Internal Revenue Service requirement for exempt status as a 501(c)(3) is that a group “may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities.”

ALEC has images of the Jefferson Memorial in its logo. According to its Web site, “The mission of the American Legislative Exchange Council is to advance the Jeffersonian principles of free markets, limited government, federalism and individual liberty among America's state legislators."

But Jefferson's ideal -- what he wrote into the Declaration of Independence and a sentiment he often uttered -- was that "Governments are instituted among men, deriving their just powers from the consent of the governed."

ALEC is a private association; it excludes the people and those representing the public interest from meaningful participation. ALEC is Jeffersonian in name only. It dubbed its anti-competition cable deregulation bill the "Video Competition Act," and marketed it as pro-competition, with the implication that it would result in lower costs. In fact, in states where such legislation has passed (e.g., Texas and Virginia), the opposite has happened. It's like the West India Tea Company writing tax legislation.

Jefferson must be churning in his grave.

Cynthia Laitman, PHD, founder of Teletruth Wisconsin, assisted in this article.

Next: ALEC in Wisconsin


Posted by Jack Simmons
09/02/2008, 11:54 AM

How can I find out how ALEC influences government in the state of Georgia and what politicians they support.
Jack Simmons
Toccoa Geprgia
706 599 3309

Stateline.org on ALEC
A June 2005 piece on ALEC initiatives

And Stateline on CPA
A story on CPA, a group that promotes a more liberal agenda. Stateline paired it with its story on ALEC.

The NiemanWatchdog.org website is no longer being updated. Watchdog stories have a new home in Nieman Reports.