Will Wisconsin Follow Minnesota's Lead and Ban ALEC "Scholarships?"

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Minnesota's ethics board has long banned the American Legislative Exchange Council (ALEC) "scholarship" scheme that allows corporations to fund legislator travel, providing further evidence that the practice should be banned in Wisconsin and other states. Recently obtained documents also show that corporations pay upwards of $80,000 to sponsor issue-focused ALEC "academies," which legislators attend on the corporate dime.

CMD Seeks to Ban Corporate-Funded Gifts in Wisconsin, Like Minnesota Did in 1997

As CMD has documented in its report Buying Influence (released jointly with Common Cause and DBA Press), ALEC's corporate members bankroll legislators' travel expenses and hotel costs so they may attend ALEC meetings, where the elected officials are handed "model" bills that in many cases benefit those same corporations.

Wisconsin has some of the strongest ethics and lobbying laws in the country -- legislators cannot accept even a cup of coffee from lobbyists or others who have an interest in the outcome of legislation -- and corporate-funded gifts of flights and hotel rooms would appear to violate the state's gift ban. Despite this, Wisconsin is one of the top five states in the nation in terms of the amount of money paid by corporations to fund lawmaker trips, putting it in the company of South Carolina, Georgia, and Mississippi.

For years, ALEC has helped corporations maneuver around laws in Wisconsin and elsewhere designed to govern special interest influence by calling the gifts a "scholarship" and filtering the spending through a bank account held by ALEC.

Wisconsin's neighbor Minnesota has a gift ban similar to that of the Dairy State, and in 1997, Minnesota's Campaign Finance and Disclosure Board prohibited the corporate-sponsored gifts. "The fact that the corporate money is passed through ALEC, a conduit for the gift, does not isolate the corporations from their status as givers," the Board wrote.

In March, the Center for Media and Democracy (CMD) filed a complaint with Wisconsin's Government Accountability Board alleging the ALEC "scholarships" violate Wisconsin's ban on legislators receiving gifts from corporations that employ lobbyists in the state.

The Minnesota opinion was not discovered until recently, and CMD filed a supplemental letter with Wisconsin's GAB on December 6 bringing the issue to their attention.

ALEC Task Force Scholarships Helps Corporations Provide Gifts to Legislators

Also included in CMD's December 6 letter was a description of an ALEC task force scholarship scheme that operates parallel to the state scholarship program that was the basis for CMD's earlier complaints.

Through the State Scholarships, corporations fund gifts of travel, hotel rooms, and meals for legislators by paying into a state "scholarship fund" used expressly for these expenses. ALEC Task Force Scholarships operate in a similar manner, with corporate members of ALEC Task Forces paying into the task force operating budget, which is then used to fund travel expenses and hotel rooms for legislators who are members of that task force. Corporations pay between $2,500 and $10,000 for a seat on a task force, on top of the dues they pay for ALEC membership, which can cost up to $25,000. Legislators pay nothing to sit on a task force.

This year, Task Force Scholarships paid each legislative task force member $350 in travel expenses and two nights hotel for their travel to ALEC's annual Spring Task Force Summit, held at the Westin in Charlotte, North Carolina. Hotel rooms at the Westin Charlotte average between $200 and $300 per night.

Legislators attending the Charlotte meeting convened in ALEC Task Forces and considered model legislation to expand online education, for example, in a task force led by a lobbyist for online school corporation Connections Academy, and sat along with lobbyists for State Farm who proposed model legislation governing the insurance industry.

ALEC member legislators knew the corporate members sitting next to them in these task force meetings -- and voting as equals to approve these legislative proposals -- paid for their trip, creating a powerful opportunity for improper influence.

Corporations Pay $80K to Sponsor "ALEC Academies" and Fund Legislators' Travel

But the funding mechanism for legislators attending ALEC Task Force "Academies" is even more direct. According to ALEC's internal documents, a single corporation can pay $80,000 to sponsor an ALEC academy, such as the K-12 Education Reform Academy held earlier this year. Invitations to the "Academies" appear only to be open to legislative members of the ALEC Task Forces.

"You are cordially invited to attend ALEC's K-12 Education Reform Academy, February 3-4, 2012 at the Ritz-Carlton in Amelia Island, Fla.," read an email sent to legislative members of ALEC's Education Task Force last year. "For invited legislators like you, ALEC will cover your room for up to two nights at the host hotel. ALEC will also reimburse up to $500 for travel expenses."

Scholarships Create Appearance of Impermissible Quid Pro Quo

All legislators who are ALEC Task Force members are eligible for generous offers of flights and hotel rooms from the Task Force Scholarship Fund, paid for by the task force's corporate members.

How do legislators earn the privilege of task force membership?

According to ALEC's Task Force Operating Procedures, "A preference will be given to legislators who sponsor ALEC Task Force model legislation in the state legislature."

CMD wrote in its December 6 letter to the GAB:

"Accordingly, Wisconsin legislators are appointed to task forces because they introduce ALEC Task Force bills -- which tend to benefit the task force's corporate members -- and the task force's corporate members then pay for gifts of flights and fancy hotel rooms worth hundreds, and cumulatively thousands, of dollars for those same legislators. Those flights and hotel rooms make it possible for legislators to attend additional ALEC Task Force meetings so they may be lobbied to introduce more task force model legislation. Such transactions reek of a quid pro quo."

This article has been updated