Cantor Quietly Acknowledges Failing to Report ALEC Gift

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--by Nick Surgey of Common Cause; originally posted on CommonBlog.

In February, Common Cause wrote to House Majority Leader Eric Cantor, asking for an explanation about an apparently unreported $1,350 gift from the American Legislative Exchange Council (ALEC) in 2009. Cantor's office immediately responded, claiming our inquiry was without foundation, but last week his office quietly amended his financial disclosures to include the gift from ALEC.

At that time, I wrote about Cantor's failure to disclose:

ALEC, the so-called "free market, small government" lobby group underwritten by some of the nation's largest corporations, reported in its tax filings for 2008 and 2009, making "cash grants" to the recipients of several annual awards. Common Cause has identified 22 legislators who received ALEC awards in those two years, including Rep. Cantor, who ALEC records indicate received $1,350 in 2009 as part of their Thomas Jefferson Freedom Award.

Cantor responded within hours, saying no cash changed hands, but that he received a bust of Thomas Jefferson from ALEC, pictured above. But, under House Ethics Rules this type of award can only be received by a Member of Congress if it is disclosed, which Cantor did not do. This appears to be a clear ethics violation, and we have asked the Office of Congressional Ethics to investigate. Prompted by Common Cause, Cantor has now very quietly amended his 2009 Financial Disclosure Report to include the ALEC gift. He also amended his 2010 report to include another bust given to him by the Associated Builders and Contractors trade group. We had no idea about this second award, but now we do.

Cantor's relationship with ALEC really does matter. They are a highly prominent lobby group, with a clear and unambiguous agenda to advance their corporate funder's interests, which includes advocating for Congressional action. So they actively seek the ear of leading politicians like Cantor, hoping that he will go to bat for them (and their corporate clients) in Congress. Of course Cantor knows why ALEC courts him, and although I am positive he would say he listens to all sides before making policy decisions, ultimately only an informed electorate can decide how much influence ALEC has on elected officials -- which is why these public disclosures are so important!

So what about ALEC's role in this? They too responded to our questions, saying they were just complying with IRS requirements to report the cash value of a plaque or a bust. "Nothing to see here..." But this response raises more questions, of which here are just two:

1. Why didn't ALEC disclose to the IRS the value of their awards prior to 2007, and why did they report no awards for 2010? ALEC has been handing out decorative (and apparently highly-valuable) busts and other awards to legislators for decades, including to former Vice-President Dick Cheney in 2003 and to former President George Bush in 2005. ALEC only began reporting these awards to the IRS in 2007, before abruptly stopping again for their 2010 IRS tax filing. Texas Gov. Rick Perry received an identical Jefferson bust in 2010, but this was not recorded in the tax filings. This makes little sense, and should be explained to the IRS.
2. Why did ALEC report a non-cash award as "cash"? ALEC has still not explained why they reported these awards as cash, but perhaps their error shouldn't come as too big a surprise. In July 2011, Common Cause wrote to the IRS, asking for an investigation of ALEC for failing to report extensive lobbying on behalf of their corporate funders, and for operating for private interests. The government (we the people) allows 501c3 nonprofits to operate tax free, and for donors to receive a tax deduction, precisely because they are operating in our interest. Can anyone really say that is true for ALEC?