The mass exodus from the American Legislative Exchange Council (ALEC) continued today, as an additional 13 members of the state legislature cut ties with the corporate bill factory. Progress Texas reports:
As we have written many times before, the American Legislative Exchange Council (ALEC) is a corporate bill factory for model laws. The organization arranges for corporate lobbyists and conservative legislators to hold joint secret meetings to craft cookie-cutter bills that increase the profits of private companies at the public’s expense. Following public pressure from Progress Texas and its membership, 25 legislators have dropped - including every Democrat. A majority of the Texas Legislature – 96 of 181 members – is now no longer a part of ALEC.
32 corporations from across the country have also left ALEC. A complete list can be found here.
The PFAW Foundation has been key in exposing ALEC’s efforts at influencing governmental agendas at the local, state, and federal level.
The St. Louis based pharmacy benefits manager Express-Scripts told the Center for Media and Democracy today that it had terminated its relationship with ALEC. The move was confirmed by Express Scripts head of Communications David Whitrap.
The disclosure comes at the end of a busy week for corporate defections from ALEC. On Tuesday, Express-Scripts competitor CVS announced it was cutting ties, along with four other corporations, including Hewlett-Packard Co., Best Buy, and MillerCoors LLC. In a statement, PFAW Foundation President Michael Keegan applauded the news:
The decision by these five companies to leave ALEC is an important step to do right by their customers. Their competitors who have yet to quit should know that the American people won’t forget who continues to underwrite ALEC’s agenda at our expense. Fortunately, more and more corporations, nonprofits and organizations are withdrawing their memberships. As a result, ALEC’s ability to push its dangerous agenda through our statehouses diminishes every day.
As more companies follow their competitors out of ALEC, the campaign to get corporations to ditch ALEC gains even more momentum. Those who stay with the organization will have to justify their support of an extreme anti-consumer agenda to their customers.
PFAW Foundation has taken an active role in exposing ALEC’s stealth role in promoting conservative legislation at the local, state, and federal level.
A comprehensive list of the corporations who have cut ties with ALEC can he found here.
Yesterday, the Supreme Court issued an 8-1 opinion in CompuCredit v. Greenwood, written by Justice Scalia, that will bring cheer to powerful corporations that break the law and leave everyday consumers feeling shell-shocked. It turns out that a congressional requirement that companies tell consumers that they have the "right to sue" really doesn't mean much.
CompuCredit is a "credit-repair company" that marketed a subprime credit card to vulnerable consumers with bad credit. It told them that no deposit was required and that they would get $300 in credit upon issuance of the card. However, in small print separate from the "no deposit" promise, it disclosed that it would charge $185 in fees immediately and $257 in fees over the first year. The customers filed a class action lawsuit on behalf of others who were taken in, saying that CompuCredit violated the federal Credit Repair Organization Act (CROA).
However, CompuCredit had required its customers, as a condition of getting the credit card, to sign away their right to sue in a court of law or to engage in any type of class action, forcing them to agree to one-on-one binding arbitration instead. So the company demanded that the class action suit be thrown out of court, citing an obscure but devastatingly important federal law called the Federal Arbitration Act, which generally requires courts to enforce contracts requiring arbitration agreements unless a specific federal statute says otherwise.
The question was whether CompuCredit had the right to make its customers sign a contract agreeing to arbitration. CROA requires credit providers to specifically tell customers in writing that "you have a right to sue," a requirement that CompuCredit had met. In addition, CROA specifically prohibits any contractual provisions that waive a customer's rights under the statute. So the customers argue that their agreement to forego their right to sue in court is void.
In order to rule for the large company that cheated its vulnerable customers, the six-Justice majority opinion had to turn logic on its head. The five conservatives, joined by Justice Breyer, explained with a straight face that:
[The phrase "right to sue"] is a colloquial method of communicating to consumers that they have the legal right, enforceable in court, to recover damages from credit repair organizations that violate the CROA. We think most consumers would understand it this way, without regard to whether the suit in court has to be preceded by an arbitration proceeding.
Yes, it turns out that everyday people interpret the "right to sue" as including private arbitration. If this bizarre supposition didn't hurt so many innocent people, it would be laughable. At least Justices Sotomayor and Kagan, in their concurrence, recognized that the people the statute was designed to protect might interpret "right to sue" to mean "right to sue in court." Unfortunately, even they felt it was a close call as to whether that's what Congress intended.
Only Justice Ginsburg got this one right. As she wrote in her dissent:
The "right to sue," the [majority] explains, merely connotes the vindication of legal rights, whether in court or before an arbitrator. That reading may be comprehensible to one trained to "think like a lawyer." But Congress enacted the CROA with vulnerable consumers in mind—consumers likely to read the words "right to sue" to mean the right to litigate in court, not the obligation to submit disputes to binding arbitration.
Congress wrote this law for the 99%. Yesterday, the Corporate Court rewrote it for the 1%.
The Republican National Committee filed an amicus brief in the 4th Circuit Court of Appeals today challenging the century-old federal ban on direct corporate contributions to candidates for office. If successful, the challenge would further weaken the clean elections laws that were decimated by the Supreme Court’s decision in Citizens United v. FEC. Citizens United struck down laws setting limits on the amount corporations could spend to influence elections via outside advocacy, but maintained the ban on direct corporate contributions.
It’s remarkable that the Republican Party is openly supporting a move that would amount to legalized pay-for-play by corporate donors. Under the weakened post-Citizens United rules, secretive groups that channel corporate money to influence elections have already gained enormous influence. Allowing corporations to contribute directly to campaigns would make the ties that bind wealthy corporations with elected officials even stronger.
Late Friday, the Montana Supreme Court ended 2011 with a 5-2 opinion upholding the state's prohibition on corporate spending on independent expenditures to support or defeat a candidate. Although Citizens United struck down the federal law in that area, the Montana Supreme Court found that the state, by presenting a strong evidentiary record, had demonstrated that its law survives the strict scrutiny mandated by Citizens United.
As notable as this decision is, what is particularly striking is the dissent's scathing criticism of the Roberts Court's most notorious ruling to date. Judge James Nelson disagreed with the majority that Montana's law could be distinguished from Citizens United. However, he took the opportunity to discuss the severe flaws of the Citizens United decision and the damage it is doing to our country. Below are a couple of choice excerpts (with internal citations removed):
While, as a member of this Court, I am bound to follow Citizens United, I do not have to agree with the Supreme Court's decision. And, to be absolutely clear, I do not agree with it. For starters, the notion that corporations are disadvantaged in the political realm is unbelievable. Indeed, it has astounded most Americans. The truth is that corporations wield inordinate power in Congress and in state legislatures. It is hard to tell where government ends and corporate America begins; the transition is seamless and overlapping. In my view, Citizens United has turned the First Amendment's "open marketplace" of ideas into an auction house for [Milton] Friedmanian corporatists.
I am compelled to say something about corporate "personhood. " While I recognize that this doctrine is firmly entrenched in the law, I find the entire concept offensive. Corporations are artificial creatures of law. As such, they should enjoy only those powers—not constitutional rights, but legislatively-conferred powers—that are concomitant with their legitimate function, that being limited-liability investment vehicles for business. Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people—human beings—to share fundamental, natural rights with soulless creations of government. Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons.
That even the judges who enforce the Roberts Court’s dirty work are compelled to speak out against it shows how deeply unpopular and wrong Citizens United is.
The exposure of ALEC continues, this time in Virginia. ProgressVA has released a new report exposing the many ties between its conservative, corporate-friendly elected officials and the secretive corporate-sponsored American Legislative Exchange Council (ALEC). As reported in the Washington Post:
In recent years, Virginia legislators have proposed bills that would legalize the use of deadly force in defending your home, call for companies that hire illegal immigrants to be shut down and give businesses tax credits to fund private school tuition for needy students.
All of those bills — and more than 50 others — have been pushed by a conservative group that ghostwrites bills for legislators across the nation, according to a study set to be released in the coming days.
In many instances, the bills are identical to model legislation written by the American Legislative Exchange Council, a pro-business, free-market group whose members include legislators as well as private companies, which pay thousands of dollars to have a seat at the table.
"The American Legislative Exchange Council, a secretive organization funded by big corporations, has been writing bills that Virginia legislators are passing off as their own work on everything from education to health care to voting rights," said Anna Scholl, executive director of ProgressVA.
As People For the American Way Foundation demonstrated in a detailed report earlier this year, ALEC is the voice of corporate special interests in state legislatures. Last month, PFAW Foundation and Common Cause released an exposé detailing how Arizona lawmakers are working hand-in-hand with corporate leaders who make up ALEC's membership to deregulate specific industries, privatize education and dismantle unions.
With today's new release from ProgressVA, Americans get a sobering look at how powerful corporate interests, working through ALEC, pull the strings in yet another state to turn their agenda laws that harm the 99%.
In an ad earlier this month, Mitt Romney accused President Obama of failing to create any job during his stints as a community organizer and law professor. Romney, the ad claims, “created thousands of jobs” in his career at the private equity firm Bain Capital.
The picture, of course, is murkier. As the New York Times and others have found, the corporate takeovers that Romney oversaw in his role at Bain Capital often created great amounts of wealth for investors while resulting in the large numbers of layoffs. In one takeover the Times examined, Romney’s handiwork led a company’s sales to double while it transferred thousands of jobs overseas. In another, investigated by the Los Angeles Times, Bain partners raked in about $50 million from a company that soon went bankrupt, costing 700 people their jobs.
One of Romney’s colleagues during this time told the LA Times, "I never thought of what I do for a living as job creation. The primary goal of private equity is to create wealth for your investors."
It turns out that Romney (who once joked that he was “unemployed” on the campaign trail) is still reaping some pretty sweet benefits from Bain’s work restructuring companies. A new report from the New York Times finds that when Romney left Bain in 1999, he cut a deal to continue receiving “share of some of Bain’s profits”:
While Bain’s deals typically yielded enormous profits for its investors and partners, several have led to serious financial problems — and sizable layoffs — at companies it acquired.
The 2000 purchase of KB Toys, then one of the country’s largest toy retailers, became one of the most contentious.
As in most Bain deals, the partnership put up a small fraction of the money — in this case $18 million — and borrowed the rest of the $302 million purchase price. Just 16 months later, the toy company borrowed more to pay Bain and its investors an $85 million dividend.
That gave Mr. Romney and the other partners a quick 370 percent return on their money. But it also left the toy company with a heavy debt burden. Before long, the company began closing stores around the country and laid off 3,400 workers. It filed for bankruptcy protection in 2004.
Two more recent deals have also led to spiraling debt loads and layoffs. Since Bain and another private equity firm led a buyout in 2008 of Clear Channel Communications, the company has struggled under nearly $20 billion in debt and has cut 2,500 jobs.
Sensata Technologies, a European company that makes sensors and controls used by the auto and aerospace industries, prospered after a Bain-led buyout in 2006, but the firm also laid off several hundred American workers. Most of the jobs were moved overseas, and the federal Labor Department spent at least $780,000 to retrain some people who lost their jobs.
In itself, there’s no problem with Romney receiving investment income from his old company. But he is running ads claiming that he is a job creator, even as he brings in income from deals that may result in massive layoffs. And he’s claiming to be a champion of the middle class while pushing a tax policy that benefits people like him who bring in millions of dollars a year in investment income at the expense of those working paycheck to paycheck.
This summer, Romney defended massive corporate tax breaks, insisting, “Corporations are people.” He, apparently, is one of those people.
See the ad we ran in New Hampshire, highlighting his remark:
Thanks to the Supreme Court’s decision in Citizens United v. FEC which granted corporations the same rights as people to spend unlimited, undisclosed money to influence elections, the 2012 election cycle promises to bring the biggest flood of political spending from outside groups we’ve ever seen. Such outsized influence by a few corporations and special interest groups is a staggering reflection on the state of our democracy, and it’s clear that corporations are well on their way to becoming our elected officials’ primary constituency. If this pattern continues unabated, American citizens will be left in the dust.
A recent story by the Washington Post examines two studies showing that although special interests are likely to continue flooding the electoral process with political donations, many are beginning to realize that avoiding political spending altogether is good for government and good for business.
Americans are taking back our democracy by showing corporations that staying out of the political process is in their best interest after all. Under pressure from customers and shareholders, corporations are realizing that when they engage in political spending, they become a symbol of what they support – and the public-relations impact isn’t always positive.
When Target gave money in July to a pro-business group in Minnesota, the company thought it was helping its bottom line by backing candidates in its home state who support lower taxes. Instead, the retailer has found itself in a fight with liberal and gay rights groups that has escalated into calls for a nationwide boycott and protests at the company's headquarters and stores.
The potential for a consumer backlash has caused corporations to reevaluate the benefit of interfering in the political process, and some are banning it outright. The threat of a shareholder backlash looms large as well, and shareholders are beginning to demand disclosure of where their investments ultimately end up. The Corporate Reform Coalition, along with PFAW, has been a strong supporter of the Shareholder Protection Act, which would require corporations to disclose their political donations to their shareholders, preventing a company’s investors from indirectly contributing to a candidate without their knowledge.
Citizens United may have opened the door to a corporate takeover of our democracy, but through public pressure, reform such as the Shareholder Protection Act and ultimately a constitutional amendment enabling the government to limit corporate influence in elections, we can ensure that the American people retain the loudest voice in our democracy.
A year and a half after the Supreme Court’s decision in Citizens United, many Americans are upset about the increased corporate power in elections, but are often at a loss about what to do about it. People For will be hosting a panel at Netroots Nation this weekend exploring ways progressives can harness the energy of those who are fed up with unchecked corporate power:
After Citizens United: Combating Corporate Power in Elections
Thursday, June 16th 3:00 PM - 4:15 PM
Panel, L100 I
The Supreme Court's decision in Citizens United vs. FEC handed corporate interests enormous unchecked power in the democratic process. Last November, in the first election since the decision, we saw its real results: outside groups, many of whom kept their donors secret, poured unprecedented amounts of money into campaigns to elect pro-corporate members of Congress. Now, as the GOP House majority attempts to pass radical deregulation and slash social services, corporate interests are seeing a powerful return on their investments. This panel will explore ways that progressives can harness the widespread anger about Citizens United to create strong state- and local-level movements, find solutions at the federal level and prevent corporations from buying the 2012 elections.
The panelists include former Mother Jones publisher Jay Harris, journalist Laura Flanders, United Steelworkers president Leo Gerard, The Nation correspondent John Nichols and Huffington Post reporter Amanda Terkel.
For background on the post-Citizens United elections economy, take a look at our report, Citizens Blindsided: Secret Corporate Money in the 2010 Elections and America’s New Shadow Democracy.
And if you’re in Minneapolis for the conference, stop by our booth in the exhibit hall to say hello and pick up some PFAW swag.
The Daily Show’s Jon Stewart took Republicans to task for baselessly holding “parasitic” workers and “greedy” labor unions for the country’s economic and budget problems, while staying silent when many of the country’s largest corporations “pay no federal taxes” at all as a result of off-shore schemes and corporate tax breaks and loopholes.
Stewart also points out that the Supreme Court in Citizens United granted corporations the same political rights as people, defenders of corporations are fine when business giants like General Electric pay no taxes at all while cutting American jobs. “I know the Supreme Court ruled that corporations are people, but what I didn’t realize is that those people are assholes.”
People For the American Way has launched a petition telling members of Congress that “cuts to social security and vital programs that help students, poor children and the unemployed should not be part of the deficit discussion before tax fairness and making corporations pay their fair share.” You can also join our Facebook page, “I pay more taxes than G.E.”