Common Cause

ALEC Double Whammy: Whistleblower Complaint and Another Corporate Departure

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.

PFAW Foundation

Capitol Hill Summit: Overturn Citizens United!

PFAW joined members of Congress, state and local officials, advocacy organizations and concerned citizens for a Capitol Hill summit to amplify the call for a constitutional amendment to overturn Citizens United, the 2010 Supreme Court decision that helped usher in unprecedented levels of corporate spending to influence our elections.

The speakers recounted the toll that Citizens United has taken on our democracy, as their colleagues must contend with the outsized influence that wealthy special interests hold over the political system, and how it is absolutely imperative for Congress to have the authority to regulate campaign contributions and require disclosure. While there are many approaches under consideration, it was clear to all that amending the Constitution is a necessary step to restore our democracy. So far, 13 constitutional amendments have been introduced in the current session.

It’s a long road to ratification, but there is a rapidly growing grassroots movement taking hold across the country to get this done. State Representatives and City Councilmen took to the podium to share their constituents’ enthusiasm for a constitutional amendment, and many states and cities across the country have already adopted resolutions calling for such an amendment.

The summit concluded with a call for public officials to sign the Declaration for Democracy, a simple statement of support for amending the Constitution “to protect the integrity of our elections and limit the corrosive influence of money in our democratic process.”

Here is a video and photos of the event.

 

 

 

PFAW’s Marge Baker opens the Summit as members of Congress, local and state officials and activists look on. “We the people means all the people, not just the powerful and privileged.”

PFAW’s Diallo Brooks introduces several local government officials as Representative Keith Ellison (D-MN) signs the Declaration for Democracy.

Maryland State Senator and PFAW Senior Fellow Jamie Raskin describes the Supreme Court’s flawed logic in the Citizens United decision. Quoting Justice White: “The state need not let its own creature [corporations] devour it.”

Rep. Keith Ellison watches as PFAW’s Marge Baker signs the Declaration.

The Declaration for Democracy: “I declare my support for amending the Constitution of the United States to restore the rights of the American people, undermined by Citizens United and related cases, to protect the integrity of our elections and limit the corrosive influence of money in our democratic process.”

PFAW

Voter suppression’s on the menu in Michigan

Last month we reported on the citizenship question that came up during Michigan’s primary. But that’s just the tip of the iceberg for voter suppression in the Great Lakes State.
PFAW Foundation

Michigan Primary raises citizenship question

“Are you a citizen?” was the question posed by the Michigan Primary even before voters were asked to decide between President Obama or Santorum and Romney.
PFAW Foundation

ALEC Gives Cash to Congressmen?

The American Legislative Exchange Council (ALEC) strategy of corporations enact favorable legislation at the state level across the country by wining and dining state legislators at fancy conferences and then presenting them with model bills to shepherd into law is well documented. Apparently, ALEC also sees value in currying favor at the federal level as well.

Common Cause’s Nick Surgey reports that ALEC gave a cash award of $1,350 to Rep. Eric Cantor (R-VA) in 2009 as part of their Thomas Jefferson Freedom Award, according to an investigation of ALEC’s tax filings. This presents a potential breach of ethics because House members are prohibited by law from receiving any cash gift.

While ALEC’s main focus is on pro-corporate state legislation, common cause notes that ALEC’s influence extends far into the realm of the federal government:

Although ALEC’s primary focus is in promoting corporate-friendly state legislation, the group also has a clear federal agenda. A 2005 ALEC document obtained by Common Cause outlines 42 distinct ALEC model bills that attempt to influence federal policy. Those bills include resolutions calling for lower corporate taxes and supporting construction of the controversial Keystone XL pipeline. In effect, corporations working through ALEC are using state legislators to lobby Congress on their behalf. ALEC boasts of the 91 “ALEC alumni” currently serving in the US House, including both Eric Cantor (R-VA) and House Speaker John Boehner (R-OH).

As Rep. Cantor graciously accepts his award in this 2009 video, it’s not difficult to imagine how flattery and cash gifts can go a long way in winning the favor of powerful people.

 

Rep. Cantor’s office subsequently released a statement denying that he took the cash and that the engraved bust he received was legal. This still doesn’t explain, as Common Cause notes, why ALEC considered the bust to be a cash gift on their tax filings, unless the value of the bust was high enough that disclosure was required.

Regardless, it smells fishy.

PFAW Foundation