| Chapter Four --
The Deep Pockets
ALEC’s self-described mission is “to advance the Jeffersonian principles
of free markets, limited government, federalism, and individual liberty
among America’s state legislators.” The emphasis, of course, is on limited
government — except in those cases where government intervention of one
kind or another can be fashioned to promote corporate interests.
ALEC pursues this mission chiefly by generating and promoting hundreds
of “model” bills, resolutions, and policy statements every year. During
the 1999-2000 legislative cycle, for example, ALEC claims that its member
legislators introduced more than 3,100 pieces of legislation based on its
“model” bills and resolutions and that more than 450 of them were enacted.(14)
ALEC also provides its members with dozens of studies, research reports,
and position papers on topics related to its policy objectives.
As noted previously, however, ALEC isn’t really a membership association
of state legislators; the dues paid by state lawmakers (or paid by state
legislatures on their behalf) constitute only a negligible portion of its
total revenues. Year in and year out, virtually all of ALEC’s revenues
come from corporations and their affiliate foundations, trade and professional
associations, and a relative handful of ultraconservative foundations.
An examination of ALEC’s tax returns shows that more than 95 percent of
its revenue typically comes in the form of “contributions, gifts, grants,
and similar amounts” received from corporations and charitable foundations
as well as other money received in connection with its conferences and
seminars, as membership fees for its task forces, and as revenue from the
sale of its publications. A breakdown:
| Year |
Non-Dues
Support |
Total
Revenue |
Percent |
| 2000 |
$5,566,035 |
$5,685,299 |
97.9 |
| 1999 |
$5,659,785 |
$5,768,265 |
98.1 |
| 1998 |
$5,948,946 |
$6,071,098 |
98.0 |
| 1997 |
$5,554,976 |
$5,659,971 |
98.1 |
| 1996 |
$5,271,627 |
$5,346,268 |
98.6 |
| 1995 |
$4,817,647 |
$4,871,861 |
98.9 |
| 1994 |
$4,279,306 |
$4,337,009 |
98.7 |
Over the years, ALEC has taken in more than $1.3 million from foundations
controlled by ultraconservative philanthropist Richard Scaife, along with
sizable amounts from the Coors-related Castle Rock Foundation, the Charles
G. Koch Charitable Foundation, the Lynde and Harry Bradley Foundation,
and the John M. Olin Foundation.(15) In addition, ALEC reportedly
has more than three hundred corporate sponsors that pay annual membership
fees ranging from $5,000 to $50,000 to be part of the action, plus additional
fees of $1,500 to $5,000 a year to participate in ALEC’s various task forces.
ALEC’s basic corporate membership categories, along with the associated
benefits (drawn verbatim from the organization’s literature), are as follows:(16)
Jefferson Club ($50,000)
-
All publications
-
Seven contacts on mailing list
-
Eligibility to participate on ALEC Task Forces (subject to applicable Task
Force Dues)
-
Discount on exhibit booth at conferences
-
VIP photo opportunities at ALEC meetings
-
Discount advertising rates in ALEC publications
-
Special recognition at all conference events
-
One head-table seating at Annual Meeting
-
Reserved-table seating for ten people at ALEC meetings under organization’s
name
Madison Club ($25,000)
-
All publications
-
Five contacts on mailing list
-
Eligibility to participate on ALEC Task Forces (subject to applicable Task
Force Dues)
-
Discount on exhibit booth at conferences
-
VIP photo opportunities at ALEC meetings
-
Discount advertising rates in ALEC publications
Washington Club ($10,000)
-
All publications
-
Three contacts on mailing list
-
Eligibility to participate on ALEC Task Forces (subject to applicable Task
Force Dues)
-
Member discount registration at ALEC Annual Meeting
-
Discount advertising rates in ALEC publications
Membership ($5,000)
-
All publications
-
Three contacts on mailing list
-
Eligibility to participate on ALEC Task Forces (subject to applicable Task
Force Dues)
-
Member discount registration at ALEC Annual Meeting
Discount advertising rates in ALEC publications
ALEC maintains nine standing task forces on which state legislators
and industry representatives sit to craft model legislation and to set
the organization’s agenda in specific policy areas. This is the purest
incarnation of ALEC’s “pay-toplay” system: Corporations and trade associations
must pay fees to be task force members. Each of these task forces is co-chaired
by a state legislator and a private-sector representative. (“Legislators
welcome their private-sector counterparts to the table as equals,” an ALEC
publication notes, “working in unison to solve the challenges facing the
nation.”) The nine task forces and their applicable annual fees (which
are in addition to ALEC’s basic membership fees) are:
Civil Justice ($2,500)
Commerce and Economic Development ($2,500)
Criminal Justice ($2,000)
Education ($1,500)
Energy, Environment, Natural Resources, and
Agriculture ($2,000)
Health and Human Services ($2,000)
Tax and Fiscal Policy ($2,500)
Telecommunications and Information
Technology ($5,000)
Trade and Transportation ($1,500)
A password-protected, “members-only” area of ALEC’s website includes more
than 200 pieces of model legislation within these nine broad topic areas.
ALEC’s credo is that business “can, should, and must be an ally of legislators,”
its literature says. Its cornerstone, the literature adds, “is the forum
it provides for the private sector to work in a one-on-one relationship
with state legislators.”
ALEC’s corporate leaders became concerned in the mid-1990s about the
issue of “buying access,” as Les Goldberg of American Express Company put
it at one ALEC meeting in 1997. The minutes of the meeting go on to note
that Duane Parde, then ALEC’s executive director, said the organization
was “steering clear of that charge” in part by “fundraising for general,
rather than specific, support,” and by changing the operating procedures
of ALEC’s task forces “to limit exposure in that area.”
Consequently, ALEC’s most recent tax return shows a change in accounting
procedures to reflect no revenue from its task forces, down from $300,895
in 1999 and multimillion-dollar amounts in previous years. ALEC is not
required by law to disclose how much individual corporations and trade
associations have donated. But a review of ALEC’s publications, tax returns
and news accounts show that ALEC’s major benefactors have included:
Alcoholic Beverages
Coors Brewing Company
Distilled Spirits Council of the United States
Miller Brewing Company
Joseph E. Seagram & Sons, Inc.
Seagram North America
Automobiles
Avis Rent a Car
DaimlerChrysler Corporation
Ford Motor Company
General Motors Corporation
Banks/Financial Services
American General Financial Group
American Express Company
Bank of America
Community Financial Services Corporation
Credit Card Coalition
Credit Union National Association, Inc.
Fidelity Investments
Harris Trust & Savings Bank
Household International
LaSalle National Bank
J.P. Morgan & Company
Non-Bank Funds Transmitters Group
Criminal Justice
American Bail Corporation
Corrections Corporation of America
National Association of Bail Insurance Companies
Wackenhut Corrections
Energy Producers/Oil
American Petroleum Institute
Amoco Corporation
ARCO
BP America, Inc.
Caltex Petroleum
Chevron Corporation
ExxonMobil Corporation
Mobil Oil Corporation
Phillips Petroleum Company
Energy Producers/Other
American Electric Power Association
American Gas Association
Center for Energy and Economic Development
Commonwealth Edison Company
Consolidated Edison Company of New York, Inc.
Edison Electric Institute
Enron Corporation
Independent Power Producers of New York
Koch Industries, Inc.
Mid-American Energy Company
Natural Gas Supply Association
PG&E Corporation/PG&E National Energy Group
U.S. Generating Company
Health Care
American Physical Therapy Association
Baxter Healthcare Corporation
Insurance
Alliance of American Insurers
Allstate Insurance Company
American Council of Life Insurance
American Insurance Association
Blue Cross and Blue Shield Corporation
Coalition for Asbestos Justice. (This organization
was formed in October 2000 to “explore new
judicial approaches to asbestos litigation.” Its
members include ACE-USA, Chubb & Son,
CNA service mark companies, Fireman’s
Fund Insurance Company, Hartford
Financial Services Group, Inc., Kemper
Insurance Companies, Liberty Mutual
Insurance Group, and St. Paul Fire and
Marine Insurance Company. Counsel to the
coalition is Victor E. Schwartz of the law
firm of Crowell & Moring in Washington,
D.C., a longtime ALEC ally.)
Fortis Health
GEICO
Golden Rule Insurance Company
Guarantee Trust Life Insurance
MEGA Life and Health Insurance Company
National Association of Independent Insurers
Nationwide Insurance/National Financial
State Farm Insurance Companies
Wausau Insurance Companies
Zurich Insurance
Law/Lobbying
Skelding, Labasky, Corry, Hauser, Metz & Daws
Wilson, Elser, Moskowitz, Edelman & Dicker
Manufacturing
American Plastics Council
Archer Daniels Midland Corporation
AutoZone, Inc. (aftermarket automotive parts)
Cargill, Inc.
Caterpillar, Inc.
Chlorine Chemistry Council
Deere & Company
Fruit of the Loom
Grocery Manufacturers of America
Inland Steel Industries, Inc.
International Game Technology
International Paper
Johnson & Johnson
Keystone Automotive Industries
Motorola, Inc.
Procter & Gamble
Sara Lee Corporation
Media
American Lawyer Media, Inc.
R.R. Donnelly & Sons Company
Primedia, Inc.
The Washington Times
Pharmaceuticals
Abbott Laboratories
Aventis Pharmaceuticals, Inc.
Bayer Corporation
Eli Lilly & Company
GlaxoSmithKline
Glaxo Wellcome, Inc.
Hoffman-LaRoche, Inc.
Merck & Company, Inc.
Pfizer, Inc.
Pharmaceutical Research and Manufacturers of
America (PhRMA)
Pharmacia Corporation
Rhone-Poulenc Rorer, Inc.
Schering-Plough Corporation
Smith, Kline & French
WYETH, a division of American Home
Products Corporation
Restaurants
McDonald’s Corporation
Wendy’s International, Inc.
Technology
America Online
Americans for Technology Leadership
Intel Corporation
KeySpan
Microsoft Corporation
TechCentralStation.com
Telecommunications
AT&T
Ameritech
BellSouth Telecommunications, Inc.
GTE Corporation
MCI
National Cable and Telecommunications Association
SBC Communications, Inc.
Sprint
UST Public Affairs, Inc.
Verizon Communications, Inc.
Tobacco
Cigar Association of America, Inc.
Lorillard Tobacco Company
Philip Morris Management Corporation
R.J. Reynolds Tobacco Company
Smokeless Tobacco Council
Transportation
Air Transport Association of America
American Trucking Association
The Boeing Company
United Airlines
United Parcel Service
Other
Amway Corporation
Cabot Sedgewick
Cendant Corporation
Corrections Corporation of America
Dresser Industries
Federated Department Stores
International Gold Corporation
Mary Kay Cosmetics
Microsoft Corporation
Newmont Mining Corporation
Quaker Oats
Sears, Roebuck & Company
Service Corporation International
Taxpayers Network, Inc.
Turner Construction
Wal-Mart Stores, Inc.
Organizations/Foundations
Adolph Coors Foundation
Ameritech Foundation
Bell & Howell Foundation
Carthage Foundation
Charles G. Koch Charitable Foundation
ELW Foundation
Grocery Manufacturers of America
Heartland Institute of Chicago
The Heritage Foundation
Iowans for Tax Relief
Lynde and Harry Bradley Foundation of Milwaukee
National Pork Producers Association
National Rifle Association
Olin Foundation
Roe Foundation
Scaiffe Foundation
Shell Oil Company Foundation
Smith Richardson Foundation
Steel Recycling Institute
Tax Education Support Organization
Texas Educational Foundation
UPS Foundation
15. Mediatransparency.org
16. American Legislative Exchange Council 2001 brochure,
“Corporate Edition” |
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