ALEC begins their 3 day nationwide meeting today, Wednesday the 4th. All of the big deals in the GOP will be there — including former VP candidate Rep. Paul Ryan (R-WI) and Senator Ted Shutdown Cruz (R-TX).
The American Legislative Exchange Council (ALEC), which claims it does not lobby even though it creates model legislation that its Republican legislative members like John Boehner and Paul Ryan then implement, is concerned about being investigated by the IRS for their charitable tax status claims, according to internal documents from ALEC published by The Guardian.
The documents seen by the Guardian show that Alec is hoping to avoid legal, tax and ethical challenges by creating a separate sister organisation it calls the “Jeffersonian Project”. The new body would be categorised as a 501(c)(4) social welfare organisation, a designation that would allow Alec to be far more overt in its lobbying activities than its current charitable status as a 501(c)(3).
After losing corporate donors who expressed a need to contribute to a tax exempt organization and concern over ALEC’s status, ALEC (with its 501(c)(3) charitable status) has set up a new 501(c)(4) entity, the “Jeffersonian Project”. It will be able to lobby to its hearts content.
In the document, they list benefits of setting up the Jeffersonian Project as removing questions of ethical violations and providing further legal protection. They also clearly lay out how they will use the Jeffersonian Project to further their policy goals: “All ALEC Policy briefs can be sent out as Issue Alerts by the Jeffersonian Project, which can include legislative bill numbers and Support or Oppose positions.”
They continue proving that they are a lobbying group with this, “ALEC can again freely provide testimony on pending legislation.” “Lessens restrictions on our Public Affairs Department by allowing increased communications to the public.”
Included in the documents is a letter from their legal counsel advising that the main activities of the Jeffersonian Project must be devoted to the promotion of social welfare. They lay out that ALEC does not wish to be “perceived” as a lobbying group, and they do not wish to register as a lobbying group in any state. So for states with tougher standards, they will use the Project.
How could that be, when ALEC’s policy goals include “privatise public education, cut taxes, reduce public employee compensation and workplace rights, oppose Obamacare and resist state action to reduce global warming gas emissions”, per The Guardian.
ALEC Exposed explains, “Through the corporate-funded American Legislative Exchange Council, global corporations and state politicians vote behind closed doors to try to rewrite state laws that govern your rights. These so-called “model bills” reach into almost every area of American life and often directly benefit huge corporations.”
ALEC has gotten away with claiming it’s a charity for years.
“Secondly, it is possible that at some point the Internal Revenue Service will audit ALEC. Though we do not believe that any activity carried on by ALEC is lobbying, the IRS could disagree.” So they advise transferring that activity to the Jeffersonian Project.
The documents were prepared for ALEC’s board meeting on August 6th, 2013 in Chicago, Illinois. They show that ALEC has been losing corporate members after the Trayvon Martin Stand Your Ground controversy due to their backing of Stand Your Ground laws, and falling short of funding goals.
Republican leadership like John Boehner and Eric Cantor as well as governors like Scott Walker and John Kasich are also members of ALEC.
The Treasury is currently seeking initial comments on other aspects of the qualification requirements for tax exempt organizations, including “what proportion of a 501(c)(4) organization’s activities must promote social welfare.” Under the proposed guidelines, candidate-related political activity includes communications, grants and contributions, and activities closely related to elections or candidates.
Clearly the Treasury needs to add lobbying and creating model legislation to that list, just in case anyone is unclear as to what drafting model legislation that is then implemented by Republicans around the country actually is. To lobby is to attempt to influence a policy or politician on an issue. ALEC is insisting that their Republican chairs sign a pledge to put ALEC’s interests first.
These same Republicans have been implementing model legislation drafted by corporations. Maybe they aren’t lobbying, but rather skipping lobbying all together and just co-opting legislators and governors and using them as corporate puppets. But one thing is for sure – what ALEC does is the opposite of social welfare. As usual, it’s corporate welfare, brought to you by the GOP.
ALEC thinks it can hide its lobbying under what they had hoped would be a shadowy connection to the Jeffersonian Project. But as Shakespeare pointed out long ago, “A rose by any other name would smell as sweet.”
Image: Progress Illinois
Ms. Jones is the co-founder/ editor-in-chief of PoliticusUSA and a member of the White House press pool.
Sarah hosts Politicus News and co-hosts Politicus Radio. Her analysis has been featured on several national radio, television news programs and talk shows, and print outlets including Stateside with David Shuster, as well as The Washington Post, The Atlantic Wire, CNN, MSNBC, The Week, The Hollywood Reporter, and more.
Sarah is a member of the Society of Professional Journalists.