ALEC Charged with Tax Fraud For Secretive Financed Junkets for Legislators

Lisa Graves: ALEC is running a secretive, multi-million dollar slush fund for state lawmakers, looking to influence legislation on ‘right-to-work’, ‘stand your ground’ laws, and voter ID laws

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Story Transcript

JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore. And welcome to our ongoing series about uncovering ALEC.

The corporate-funded American legislative exchange Council is celebrating its 40th anniversary this week at their annual meeting. Now there are new charges by two government watchdog groups that ALEC is running a secretive multimillion-dollar slush fund that finances lavish trips for state legislators and has misled the IRS about the fund’s activity.

Most of the money in the scholarship fund comes from telecom, pharmaceutical, and the oil and gas industry giants. Here’s a list of the top ten corporate donors to the ALEC scholarship fund, with PhRMA and AT&T at the very top of that list.

Now joining us to discuss all this is the executive director of one of the watchdog groups that is charging ALEC. Lisa Graves is the executive director of the Center for Media and Democracy, the publisher of PRWatch.org, ALECExposed.org, and SourceWatch.org. She previously served as a senior adviser in all three branches of the federal government, including as deputy assistant attorney general in the U.S. Department of Justice’s Office of Legal Policy.

Thank you for joining us, Lisa.

LISA GRAVES, EXEC. DIR., CENTER FOR MEDIA AND DEMOCRACY: Thank you so much for having me.

DESVARIEUX: So, Lisa, what’s really at stake here if we have a 501(c)(3) organization like ALEC giving out these scholarships to state legislators? And if you could, please just specify which states here are receiving the most funds.

GRAVES: Well, we uncovered this as part of an open records request that the Center for Media and Democracy was working on with the DBA Press, which is [boUhoUdaIz] investigative work. And what we discovered was an actual national spreadsheet covering three full years of all the money coming into this fund and all the money going out to legislators. That spreadsheet has never been made public by ALEC before. It’s really unbelievable.

When we calculated how much money ALEC most likely spent, based on those documents and other documents, since 2006, it spent over $4 million, in our estimation, on trips for lawmakers. But during most of that period, ALEC told the IRS that it spent zero, zero on trips for state, federal, or local elected officials, zero, blank. And so, you know, that’s one of the reasons why we filed this supplemental complaint to the IRS to ask them to investigate ALEC.

We know from our investigation that ALEC tells legislators that this money is a tax write-off for those corporations. We know that the ALEC legislators are often asked to thank these corporations for funding their trips.

And so it really is quite a scam, in my opinion. What you have here is influence peddling. That’s one way to describe it. I actually describe it as sort of institutionalized corruption. And what it means is that corporations are basically paying the lawmakers’ travel, their airfare, their hotel, for the conference where these legislators meet to actually vote behind closed doors with these same lobbyists, many of the same lobbyists, on model legislation on bills to change our rights. And the corporations get a tax write-off for what is basically lobbying, and ALEC gets to wash this money for them, to wash it, basically, through their accounts. And the public is left in the dark. They have no idea that this corporation that wants to change the law in your state just paid for an all-expense paid trip for a legislator, not just to go on a trip, but to actually schmooze and booze and wine and dine, be wined and dined by these same corporations, all off the books, basically, in most states.

DESVARIEUX: Okay. Let’s switch gears a little bit and talk specifically about bills that ALEC tries to influence and sort of their role behind bills that have already passed. Let’s talk specifically about the right to work. What has been ALEC’s position on this? And what kind of role have they played in pushing this states right-to-work legislation?

GRAVES: Well, ALEC is a group that describes itself as a voluntary membership organization for legislators, but it’s largely bankrolled by some of the biggest corporations in America and in the world, and many of those corporations have a deep hostility to the rights of workers. So for many years, one of the wish lists on ALEC’s agenda and for some of these corporations, as well as some of the private foundations that support ALEC, including some of the Koch (K-O-C-H) family philanthropies, is to undermine workers’ rights, to undermine the rights of unions.

And so the so-called right-to-work legislation, which some people call the right to work for less, basically makes it very difficult for unions to operate in a state. These laws were initially put forward in the dark days of the McCarthy era in the 1950s, particularly aimed at the South, where a number of African-American workers were organizing, were attempting to have unions, to have representation [incompr.] negotiate fairly with employers. There was a long period in which those laws were in disfavor. Most of the northern states did not have them. But ALEC, on the heels of the Republican takeover of many statehouses in the 2010 election, they basically managed to cram through this right-to-work legislation in big blue states like Michigan, Ohio, Indiana.

And so this right-to-work legislation is really designed to undercut the power of unions, both on behalf of their members and also in the political arena.

DESVARIEUX: Okay. So before ALEC really took this on as one of their main priorities, how many right-to-work states existed? And how many are we at right now, just to give us a sense?

GRAVES: My recollection is that it was far fewer than half of the states were right-to-work states, and most of those states that had adopted right-to-work policies were in the Deep South in the 1950s, perhaps early ’60s. And then there was a long period in which there really were not that many states who were adopting these very pernicious laws designed to hurt unions. And then about ten years ago there was a little bit of a resurgence. There was an effort in sort of the Midwest to push it through, like Oklahoma. And then now there’s been an array of them that have passed, as I said, in Ohio, Ohio and Indiana and Michigan, really substantial union states with longstanding traditions of protecting the rights of workers in both the public sector and the private sector. And so I don’t know whether we’re at half the states now, but ALEC’s goal is to have every single state in the union be a so-called right-to-work state.

DESVARIEUX: And ALEC’s role in passing and pushing for specific legislation even goes towards gun laws, and specifically the stand-your-ground law. You know, we’ve been talking a lot about this here on The Real News, and of course in the mass media, after the fatal shooting of Trayvon Martin. Can you talk to us a little bit about what was ALEC’s role in pushing stand-your-ground laws?

GRAVES: Sure. Back in 2004, 2005, the NRA decided to create and concoct this notion of a stand your ground in the public arena, basically that someone could be in the middle of a fight and would not have any duty to retreat, but could shoot to kill someone if they felt their life wer threatened, without sort of regard to whether the person with the gun was the provocateur of the entire incident. And so the NRA pushed this law through in a Florida. It was pushed through, spearheaded by two ALEC legislators. Jeb Bush signed that bill into law in Florida in 2005.

And then the NRA took that bill to a secret closed-door meeting of ALEC. At that meeting, corporate lobbyists and legislators voted as equals unanimously to make that bill a national model. That meeting was of a task force called the Criminal Justice Tax Force that was cochaired by Walmart, the biggest retailer of ammunition in the country, if not the world, and the biggest seller of long guns in the United States. That bill, after being adopted by ALEC, was pushed out as a priority in state legislatures across the country. It was adopted by 24 states almost intact, with the three main provisions intact, and in another ten states with part of the provisions intact.

And it’s really a pernicious law. It gives a person who kills another criminal immunity, immunity from criminal suit if they seek it and they meet the test of that law. It provides for civil immunity and would impose on the victim’s family to pay the killer’s attorneys fees and the killer’s lost wages if the grant of civil immunity is given in a case. And it also changes the underlying law of homicide in every state in which it’s passed. Those changes of the law mean that juries like the jury in Florida are instructed that the shooter had a right to stand his ground, had no duty to retreat. And those jury instructions are silent about the rights of the victim. They don’t discard the rights of the victim to stand his ground if accosted by someone with a gun like Mr. Zimmerman.

DESVARIEUX: And the stand-your-ground laws does have a impact specifically on the African-American community. There have been studies that have showed a disparate impact on African-American communities. Can you talk a little bit about this legacy and ALEC’s legislation and how it adversely affects the African-American community?

GRAVES: Well, academics have been studying the effect of these laws, which have been moving across the country since 2005. And the independent studies of the effect of these laws shows that if an African-American is the victim of a shooter and the shooter is white, that it’s more likely than if the races were the same for the white killer to get off, to be exonerated, in essence, or to never be charged in the first place. There is most definitely a racially disparate impact of these laws.

Now, ALEC has tried to distance itself from this legacy by ending the task force in which that bill was approved. But ALEC has done nothing to get these laws repealed.

And these laws most certainly, at least by any reputable study, do bear heavily on the African-American community, in part because of, you know, the inherent racial biases, I think, that are present in juries. But as we saw in Florida, jurors, even jurors who wanted to hold George Zimmerman accountable, felt that their hands were tied by the terms of this law to find George Zimmerman not guilty.

ALEC’s legacy in this regard, in terms of the impact on African-Americans, isn’t confined to gun policy. ALEC has also been the instrument for pushing through, in state after state, efforts to restrict the voting ID rules in states to make it harder for Americans to vote. And the academics who’ve studied the impact of those laws have also found that they bear a disproportionate impact on African-American communities, particularly people who live in cities, where there’s a lot more racial diversity in this country, and people who live in cities who don’t drive, who may use mass transit, subways or buses, and so don’t have a drivers license but have other forms of ID that have traditionally been permitted to be used at the polling booth. And this is in the face of documentation that there is no demonstrable, statistically significant threat or reality of voter fraud in this country.

And so it really is, I think, a very pernicious agenda. But those aren’t the only two ways in which ALEC policies have adversely affected African Americans and people of color over the years.

DESVARIEUX: Okay. Well, thank you so much for joining us, Lisa.

GRAVES: Thank you for having me on.

DESVARIEUX: And thank you for joining us on The Real News Network.

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