A major component of the American Legislative Exchange Council’s agenda is shielding corporations from liability by removing consumer protections and limiting the people’s ability to seek justice in a court of law. At their meeting last week in Charlotte, N.C., ALEC’s Civil Justice Task Force considered legislation that would hamstring some of the mosteffective consumer advocates: state attorneys general.
Common Cause recently released some 4,000 of ALEC’s internal documents, including task force agendas, participants and model legislation. The documents revealed ALEC’s “Attorney General Authority Act” under consideration at the task force meeting, which seeks to limit state AGs from bringing suits against corporations. ALEC’s explanation of the bill reads in part:
Just as a private attorney cannot bring a suit on behalf of a client without the client agreeing and authorizing such action, and then only within the guidelines allowed by the client, so it should be with the attorney general. Rather than an attorney general deciding on his or her own what authority the office may have to bring a lawsuit, the authority should be defined by the state as reflected by the specific decisions of the legislature via statute. The legislature, not the attorney general, is best positioned to balance the competing concerns that go into the decision of whether to allow a cause of action and under what circumstances.
Put simply: this act would prohibit the attorney general from bringing a suit in the public’s interest unless the state legislature specifically authorizes it.
As the Minnesota Post astutely points out, a legislature that enacts such a provision to protect corporations is unlikely to subsequently grant the attorney general the authority to prosecute them. The consequences are significant: "This legislation would have prevented [an attorney general] from suing tobacco manufacturers in the ‘90s for tobacco-related health costs associated with the Medicaid program,” said Mike Dean, head of Common Cause of Minnesota. “It is easy to see why corporations would want to stop these types of lawsuits because tobacco manufacturer were forced to pay $6.1 billion in a settlement to the state of Minnesota."
This law doesn't just help ALEC-member corporations, it helps ALEC. After recently filing a whistleblower complaint with the IRS alleging that ALEC abused its tax-exempt status by failing to report lobbying activities, Common Cause is calling on state attorney generals to investigate ALEC for tax fraud in all 50 states. What better way to derail investigations into ALEC than by advocating for legislation that removes the attorney general’s ability to investigate ALEC?
Fresh off of filing a major complaint with the IRS alleging that the American Legislative Exchange Council abused their tax-exempt status by acting primarily as a lobbying organization, the good-government group Common Cause is now pressing for state-level investigations. Yesterday, Common Cause asked New Jersey Attorney General Jeffrey Chiesa to investigate whether ALEC’s activities are in violation of state law.
Nine companies based in New Jersey, including Honeywell, Johnson & Johnson and Merck are ALEC members, and an investigation by the Star-Ledger found that a close resemblance between ALEC model bills and several pieces of legislation and executive actions pushed by the Christie Administration. The investigation also noted that ALEC member corporations and their executives have given at least $200,000 to New Jersey officials who are responsible for advancing these bills.
ALEC claims that it only “provides a constructive forum for state legislators and private sector leaders to discuss and exchange practical, state-level policy issues,” and “does not lobby state legislatures.” But it’s difficult to understand how an organization that pays for state legislators to go to exclusive resorts, where they discuss and vote as equals with corporations on model legislation, can be considered anything but a lobbying front. One thing is clear: ALEC certainly is not the “charity” they claim they are on their tax returns.
The American Legislative Exchange Council’s influence over state legislative bodies is well documented. We’ve seen countless examples of corporate lobbyist-drafted model legislation, developed at exclusive retreats at fancy resorts out of the public’s eye, make its way to the statehouse floor, bringing disastrous results to working families, public education, the environment, voting rights and much more.
Last week, Common Cause released a bounty of ALEC’s internal documents as part of an official complaint to the IRS, claiming that ALEC has abused its tax status as a 501c3 organization. As a result, a new window was been opened into the processes responsible for creating these pro-special interest bills, revealing just how much power ALEC’s corporate members enjoy.
One such document, the minutes from ALEC’s 2011 Telecommunications & Information Technology Task Force meeting in New Orleans, reveals how the private sector (ALEC-speak for “corporations”) has equal – and often greater – policy-making power than elected officials through their influence in developing model legislation that can become law. The document describes how the U.S. Chamber of Commerce offered a resolution regarding federal efforts to curtail internet sites that sell counterfeit products, and after discussion amongst the public and private sector members, the resolution was defeated:
The Task Force then proceeded with a vote on the motion to amend by Mr. Castleberry, which was adopted by the private sector 8-1 in favor and by the public sector 19-3 in favor. On final passage of the resolution as amended, the public sector voted 17-1 in favor of the resolution, but the private sector voted 8-8 in favor; thus, the resolution failed on final passage because it failed to achieve a majority of support from the private sector.
In this case, the will of 94% of our elected representatives participating in the discussion was trumped by just half of the task force’s corporate members. To put it simply: unelected corporations are voting as equals with elected officials on model bills that become our laws.
This is how ALEC accomplishes its stated mission to “advance the fundamental principles of free-market enterprise”: by helping free market enterprises literally vote on public policy.
[H/T Republic Report]
It’s been a rough start to the week over at the American Legislative Exchange Council.
Common Cause has submitted a formal whistleblower complaint against ALEC to the IRS this morning, alleging that the organization has flouted federal tax laws by portraying themselves as a tax-exempt charity and misusing their 501c3 status by acting primarily as a lobbying organization, according to a press release.
501c3 organizations have very strict limitations on lobbying, and ALEC consistently states on its tax returns that it does not engage in lobbying. But it’s hard to see how an organization that helps facilitate meetings between corporate representatives and state legislators, produces model legislation and coaches state legislators on how to advocate for and defend such legislation can be considered anything BUT lobbying.
Corporations provide the vast majority of ALEC’s funding. But since their membership dues are written up as donations to a “charitable” organization, they can deduct the dues from their taxes – leaving the American taxpayers to make up the difference, says Common Cause president Bob Edgar. “Corporations that have been funding this organization have, in fact, been lobbying and getting a tax break. The taxpayers of the United States have been paying for a lobbying operation because these corporations can take this off on their taxes.”
The 4,000 pages of internal ALEC documents submitted to the IRS make the case that ALEC is an active lobbying organization, and by law, the IRS is required to launch an investigation.
As if that isn’t headache enough, a thirteenth company, Procter & Gamble, has ended its membership in ALEC. As a P&G spokesperson told Color of Change, the company “made the determination that ALEC does not help P&G compete for consumers’ loyalty and support.”
The pressure is now on Johnson & Johnson, one of the companies still connected to ALEC and a target of a petition drive to get ALEC-member corporations to leave the organization, to explain how ALEC’s extreme agenda benefits their consumers when their major competitor P&G concluded it did not.