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Where are laws really made? Probably not where you think. The American Legislative Exchange Council, also known as ALEC, in which corporate lobbyists and state legislators vote as equals on ‘model bills’ to change our rights that often benefit the corporations’ bottom line at public expense. ALEC is a pay-to-play operation where corporations buy a seat and a vote on ‘task forces’ to advance their legislative wish lists and can get a tax break for donations, effectively passing these lobbying costs on to taxpayers.
More than 98% of ALEC’s revenues come from sources other than legislative dues, such as corporations, corporate trade groups, and corporate foundations. Each corporate member pays an annual fee of between $7,000 and $25,000 a year, and if a corporation participates in any of the nine task forces, additional fees apply, from $2,500 to $10,000 each year. ALEC also receives direct grants from corporations, such as $1.4 million from ExxonMobil from 1998-2009. It has also received grants from some of the biggest foundations funded by corporate CEOs in the country, such as: the Koch family Charles G. Koch Foundation, the Koch-managed Claude R. Lambe Foundation, the Scaife family Allegheny Foundation, the Coors family Castle Rock Foundation, to name a few. Less than 2% of ALEC’s funding comes from “Membership Dues” of $50 per year paid by state legislators, a steeply discounted price that may run afoul of state gift bans.
ALEC’s operating model raises many ethical and legal concerns. Each state has a different set of ethics laws or rules. The presence of lobbyists alone may cause ethics problems for some state legislators. Wisconsin, for instance, generally requires legislators who go to events with registered lobbyists to pay on their own dime, yet in many states, legislators use public funds to attend ALEC meetings. According to one study, done by ALECwatch.org, $3 million in public funds was spent to attend ALEC meetings in one year. Some legislators use their personal funds and are reimbursed by ALEC. Such “scholarships” may be disclosed if gifts are required to be reported. But should the legislators be allowed to accept this money when lobbyists are present at the meeting? Still other legislators use their campaign funds to go and are again reimbursed by ALEC; in some states, campaign funds are only allowed to be used to attend campaign events.
In short, many state ethics codes might consider the free vacation, steeply discounted membership fees, free day care or travel scholarships to be “gifts” that should be disallowed or disclosed.