Lisa Graves and John Nichols expose
ALEC on Ed Shultz
With ALEC Exposed, Common Cause Demands an IRS Audit of Corporate-Funded Group's Gaming of State Lawmaking
The American Legislative Exchange Council has since 1973 operated in relative secrecy, avoiding scrutiny from the media and watchdog groups as it has sought to impose a one-size-fits-all corporate agenda on all fifty states.
Specifically, Common Cause is arguing that, while ALEC has claimed in repeated IRS filings that it does no lobbying, its bylaws state that its goals include the dissemination of model legislation and the promotion of that legislation in Congress and state legislatures. The nonpartisan watchdog group notes that ALEC’s 2009 tax return reported an expenditures of more than $2.6 million for the work of the council’s corporate/legislator task forces and an additional $1.9 million for a series of annual conferences at which bills are drafted and presented to legislators.
A letter from Common Cause’s lawyers to the IRS outlines concerns that ALEC—which has more than 2,000 conservative legislators, along with more than 300 corporations and conservative foundations—may have filed false tax returns. The letter raises detailed questions about whether ALEC, which operates under Section 501(c)(3) of the Internal Revenue Code (a section that places strict limits lobbying activity) has engaged in activities that put its tax-exempt, charitable status at risk. Corporations, which peovide major funding for ALEC currently take advantage of those tax benefits to deduct contributions to ALEC from their taxable income.
Referencing revelations regarding the extent of ALEC’s activities in the state—more than 850 pieces of “model legislation” are included in the ALEX Exposed archive, along with details of the linking of corporate representatives and legislators on ALEX task forces—as well as tax returns, ALEC publications and correspondence exchanged by legislators and ALEC and obtained by Common Cause through freedom of information requests, the letter to the IRS argues that “it seems incontrovertible that ALEC is substantially and indeed primarily engaged in attempting to influence legislation. All of its efforts are geared toward developing and promoting favored state legislation. These proposals are generated in a private process where the business interests of its corporate members are highlighted, then shared only with the organization’s legislator members so they can take the proposals back to their states and introduce them as their own idea.”
“By claiming to be a charity and calling participating legislators `members,’ ALEC attempts to evade disclosure of its lobbying, allows corporate members to deduct their payments as charitable contributions rather than non-deductible lobbying expenses, and does an end-run around state ethics laws intended to restrict the ability of businesses to buy access to legislators in order to promote their policy agendas,” explains the Common Cause request. “The IRS should stop allowing the continuation of this charade.”
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