Legislators Solicit Corporate Cash to Attend ALEC Utah Meeting

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A letter from a Louisiana state representative asking a corporate representative for money is another example of the American Legislative Exchange Council (ALEC) "scholarship" program at work, and how it creates an overly cozy relationship between corporations and legislators that allows for improper influence. The "scholarship" program has allowed corporations to do what lobbying laws in most states prohibit -- give legislators expensive gifts of flights through ALEC which can buy increased influence over public policy.

The Louisiana Tri-Parish Times revealed that Republican Rep. Joe Harrison, the ALEC Public Sector State Chair for Louisiana, sent out letters, on state letterhead, asking corporations for $1,000 donations to send "over thirty Louisiana legislators" to the ALEC conference being held July 25-28 in Salt Lake City, Utah. Topics under discussion would be important "to the entire lobbying community" said Harrison and he asked that the funds be sent to his state office.

Through ALEC "scholarships," corporations can funnel gifts to ALEC politicians in the form of flights, hotel rooms, and other perks so they can attend ALEC conferences, which are often held at fancy resorts and look a lot like a vacation. Once at the conference, corporations and legislators vote as equals to approve ALEC "model" bills which in many cases benefit the same corporations that funded the legislators' travel costs. ALEC politicians then bring those bills back to their state and introduce them in their own name, in many cases without revealing to the public that corporations had pre-voted on the bills and without disclosing that those same corporations had given the legislators gifts of flights and hotel rooms -- which some might call a bribe.

The $1,000 corporate donations solicited by Harrison will allow public servants in his state to fly to Utah and stay at Salt Lake City's swanky Grand American Hotel and indulge in a host of other events set up by corporate sponsors at the conference, such as a shooting event hosted by the National Rifle Association. Louisiana legislators make only $16,800 per year (and they get only $6,000 per year in expense allowance), so for many Louisiana politicians the trip would otherwise be unaffordable.

As CMD has reported:

In most states, ethics laws prohibit companies or organizations with an interest in the outcome of legislation from offering gifts above a certain value to legislators (or their families). Additionally, lobby laws in many states prohibit corporations that employ lobbyists from offering anything of significant value to elected officials. ALEC member corporations covering hundreds or thousands of dollars worth of plane tickets for lawmakers and hotels for them and their families raises serious concerns about such gifts under many states' ethics and lobbying laws. But by calling this spending a "scholarship" and filtering it through a bank account designated as the "ALEC scholarship fund," corporations have, so far, been maneuvering around laws designed to limit improper influence.

"The Definition of a Bribe?"

Watchdog groups like the Center for Media and Democracy, DBA Press, Common Cause, People for the American Way, Progress Now, and others have compiled a mounting list of evidence to argue that these gifts constitute improper influence over legislators.

For example, open records requests submitted by DBA Press have revealed long lists of corporate donors to the Ohio ALEC scholarship fund, such as $1,000 from an Eli Lilly lobbyist and $10,000 from a Time Warner Cable lobbyist. And an examination of IRS filings show the Pharmaceutical Research and Manufacturers of America (PhRMA) reporting a whopping $365,075 contribution to the Wisconsin ALEC scholarship fund.

In March, CMD filed a complaint with the Wisconsin Government Accountability Board alleging the scholarship scheme violates the state's ethics and lobbying laws. In the complaint, CMD argued, "It makes little sense to prohibit corporate principles and lobbyists from offering anything of value to public officials, but to allow such giving if it is filtered through a segregated ALEC 'scholarship fund.'" ALEC claimed only a couple thousand from PhRMA went to fund Wisconsin legislative travel and the rest was for legislators in other states.

This month, the former chief of the IRS' nonprofit division, Marcus Owens, filed a complaint with the IRS on behalf of Clergy VOICE, a group of Christian ministers in Ohio, alleging that ALEC is violating the terms of its charitable status and intentionally misleading the IRS, in part because of the scholarship scheme.

As CMD reported, Owens and Clergy VOICE alleged that the gifts of flights and hotel rooms provide a "private benefit" to state legislators, in violation of ALEC's 501(c)(3) status, and more importantly, ALEC repeatedly told the IRS that it provides no scholarships and funds no travel or entertainment expenses for elected officials.

"They have to hide the fact they are making payments to state legislators," Owens told CMD. If the scheme was made public, "it would taint their efforts at the state level. People would know Exxon Mobil or someone else is funneling money to legislators," he said, as "inducement to act in a certain way."

"That's the definition of a bribe."

For more information on ALEC's "scholarship" program, read CMD's special report "ALEC's 'Scholarship' Scheme Helps Corporations Fund Legislator Trips."