Thursday, July 14, 2011

Is ALEC An Action Organization Disguised as a Charity?

From the Los Angeles Times:

The government watchdog group, Common Cause, has asked the Internal Revenue Service to investigate the tax status of the non-profit American Legislative Exchange Council, or ALEC, an association of conservative state legislators and private sector officials that churns out hundreds of bills and resolutions annually to pare back regulation and promote business.
 
Over the last few years, Washington-based ALEC has helped legislators around the country to introduce measures, often taken verbatim from the group's website, that would dismantle regional climate change initiatives, rebuke the Environmental Protection Agency, repeal health care reform and curtail labor's power, among other things.

In a letter to the IRS, Common Cause argued that a review would help determine if ALEC's tax-exempt, 501(c)(3) status should be revoked due to "excess lobbying or, alternatively, because ALEC appears to operate primarily to further private business interests and not to advance a charitable purpose."  ALEC has said more than 1000 bills are introduced annually around the country based on the group's templates. Common Cause contends that such activity violates tax code provisions that bar non-profits from "carrying on propaganda, or other attempting, to influence legislation."

According to Common Cause's complaint letter:

According to ALEC’s own tax returns, its largest program area in terms of expenditures is the  operation of its task forces. In turn, the primary function of these task forces is development and dissemination of model bills, with the intent that they be introduced and passed in as many state legislatures as possible.  The organization’s second largest area of expenditures is for meetings held several times a year.  These are opportunities for “private sector” members (corporate representatives) to interact with legislators and advocate for favored policies. The agendas include discussions of specific legislation and specific legislative proposals supported by the organization. Indeed, in many cases the proposals were developed by ALEC itself as its own model bill.  Under the default statutory test, 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 ideas.4 Its governing documents state that promotion of introduction of bills at the Federal and state levels and formulation of legislative action programs are two of the seven means by which ALEC pursues its purposes.

 

There is an informative YouTube Video discussing the issue linked to Common Cause's website.  For its part ALEC has yet to respond to the complaint.

dkj 

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Comments

Not only has ALEC not responded, but none of the lawmakers or corporations that belong have stood up for this organization that is clearly a lobbying group that helps pass business friendly legislation at the expense of the public interest. Citizens have a right to know if our legislators belong to this group, and we're crowdsourcing the research to uncover this information: http://bit.ly/helpexposealec.

Posted by: Nikki @ Common Cause | Jul 18, 2011 7:22:15 AM

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