CMD Documents ALEC’s Contradictory Claims to Wisconsin Ethics Board

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On April 11, the Center for Media and Democracy filed a letter with the Wisconsin Government Accountability Board documenting how the American Legislative Exchange Council, or ALEC, provided the ethics board erroneous information about corporate-funded gifts to ALEC legislative members. This letter supplements the complaint CMD filed last month.

It was recently disclosed that in 2010, ALEC asked the Government Accountability Board (GAB) to sanction the corporate-funded gifts that pay for legislators to attend ALEC meetings, but offered a description of this so-called "scholarship" program that is contradicted by ALEC's own bylaws, by ALEC's filings with the IRS, and by other documents. The GAB oversees compliance with the state's ethics and lobbying laws.

ALEC only released the 2010 correspondence after CMD filed a complaint with the GAB on March 23 showing that ALEC corporations are funding lawmakers' out-of-state travel expenses to resorts, where they attend ALEC meetings and rub shoulders with corporate lobbyists. The complaint also highlighted how ALEC's corporate members offer legislators gifts like entertainment and invitations to exclusive parties at ALEC meetings. CMD believes all of these gifts violate Wisconsin ethics and lobbying laws.

The GAB did not acknowledge or release ALEC's 2010 letter prior to CMD filing its complaint. However, now that the 2010 letter is public, it appears that ALEC made a variety of claims to the GAB in the letter which are contradicted by other evidence, such as:

• A statement that "[d]ecisions on how scholarships are awarded and in what amounts are made by ALEC staff." But in its 2010 filing with the IRS, ALEC declared "the State Chair retains the exclusive right to determine the expenditures" from the scholarship fund. The "State Chairs" are appointed Wisconsin legislators (currently Representatives Robin Vos and Scott Suder, and previously state Senator Scott Fitzgerald).
• Implying that the "scholarships" are disbursed from ALEC itself. But ALEC declared in its 2010 IRS filing that the scholarship funds "are not considered revenue and expenses of ALEC" and that the organization gives no scholarships -- instead, ALEC just holds an account that allows businesses employing lobbyists in the state to make deposits that are filtered to Wisconsin legislators. It makes little sense to prohibit corporate principals and lobbyists from offering anything of value to public officials, but to allow such giving if it is filtered through a trust account as part of the ALEC "scholarship fund." This shell game appears to violate Wisconsin ethics and lobbying laws prohibiting elected officials from accepting anything of value from lobbyists or corporations that employ lobbyists in the state.
• An assertion that, while lobbyists help raise money for the scholarship fund, "Wisconsin state legislators however, are not involved in these fundraising efforts." But according to ALEC's bylaws, the "Duties" of the State Chairs -- who are legislators -- include "working with the Private Enterprise Chairman [a lobbyist] to raise and oversee expenditures of legislative scholarship funds." Additionally, documents from 2010 obtained through open records requests to Senator Scott Fitzgerald (who was then the ALEC State Chair in Wisconsin) further suggests that legislators are involved with the fundraising process; those documents show that the ALEC legislative chair for the state and the ALEC corporate co-chair for the state are given information about which corporations are providing gifts to legislators via the scholarship fund. Further, information provided by Wisconsin Representative Mark Pocan shows that legislators attending ALEC conferences are bombarded with information about the corporations underwriting the events. This spending and fundraising could reasonably be expected to influence a legislator's judgment, or viewed as a reward for their official actions in support of the ALEC agenda, which violates Wisconsin ethics and lobbying laws.

ALEC's misrepresentations to the GAB further emphasize the need for the GAB to closely scrutinize how the organization allows lobbying principals in the state to give free, corporate-funded trips to ALEC conferences, where corporate lobbyists vote with legislators on 'model' bills and special interests underwrite receptions for legislators.

Additionally, in ALEC's March 28, 2012 response to CMD's original complaint, the organization asserted that CMD filed the complaint "on the grounds that" PhRMA told the IRS in 2010 that it gave $356,075 to the ALEC scholarship fund in Wisconsin. This too is a misrepresentation -- CMD's original complaint alleges multiple violations of Wisconsin ethics and lobbying laws based on evidence uncovered through Open Records requests, ALEC's own IRS filings and bylaws, and other evidence. The complaint was not premised on the $356,075 PhRMA contribution. However, the lack of clarity surrounding PhRMA's giving is indicative of the secrecy and obfuscation that taints the ALEC scholarship process, not to mention ALEC itself.

In addition to the scholarships, CMD discussed in its March 23 complaint how corporate interests offer state legislators free baseball tickets, invitations to receptions, and other gifts at ALEC meetings, in violation of the plain language of Wisconsin ethics and lobbying statutes. ALEC did not dispute these gifts in its public response to our original complaint, and did not mention these gifts in its 2010 correspondence with the GAB.

CMD believes it is decidedly un-principled to evade Wisconsin's clean government laws and to create an environment where elected officials are more responsive to deep-pocketed special interests than the people who elected them. CMD has also requested that the GAB make its determinations about these matters public to advance the interests of Wisconsin citizens in clean and transparent government.

CMD's supplemental letter to the Government Accountability Board can be viewed here, under the title "April 11 Supplementary letter."