ALEC’s ‘scholarships’ for state legislators under fire as national conference opens

With a Connecticut legislator presiding, the political lightning rod known as ALEC opened its annual conference in Chicago Wednesday, promoting a business agenda and drawing fierce protests from labor and questions about its scholarships for lawmakers.

State law allows the seven state House Republicans registered to attend the American Legislative Exchange Council conference to accept business-funded scholarships to offset their travel costs, a longstanding national practice challenged in a complaint to the IRS by the national leadership of Common Cause.

“We want to make sure that these are permissible gifts,” said Cheri Quickmire, executive director of Common Cause in Connecticut. 

Corporations and others barred from contributing to legislative campaigns are permitted to give to the scholarship funds, as long as their donations are not earmarked for individual lawmakers or events, according to a state ethics official.

Legislators may “accept ‘necessary expenses’ ‘for an article, appearance or speech, or for participation at an event, in the public official’s…official capacity,’ ”  according to an advisory opinion by the Office of State Ethics in 2004.

“The issue for us is earmarking,” said Carol Carson, the executive director of the office.

In a recent report entitled “Buying Influence,” Common Cause and the Center for Democracy in Media say the scholarships are a “slush fund,” barred by gift bans in some states and explicitly allowed in others.

House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, one of the attendees, said the role of corporations and corporate lobbyists at ALEC is typical at other lower-profile conferences, including those considered to be non-ideological.

“The whole notion of having a captive audience of legislators to lobby is true of every conference I’ve gone to,” said Cafero, a state legislator for two decades.

He spoke by telephone after leaving a luncheon on Wednesday, the first day of a three-day conference. In the background, a protester could be heard calling him and other conference attendees “fascists.” ALEC raises the ire of the left with its joint legislator-business task forces that promote “model legislation.”

This year’s conference is a first for Cafero, who is attending in part as a gesture of support to a member of his caucus, Rep. John E. Piscopo of Thomaston, who is serving a term as the national president of ALEC.

“We’re very proud of him,” Cafero said.

Despite Piscopo’s prominent role, ALEC-backed legislation has not advanced in Connecticut, where Democrats control both houses of the General Assembly, and organized labor often speaks with the loudest voice at the State Capitol.

In addition to Piscopo and Cafero, the other House GOP members registered to attend are Laura Hoydick of Stratford, Themis Klarides of Derby, Jason Perillo of Shelton, Rosa Rebimbas of Naugatuck and Sean Williams of Watertown.

“I am intrigued by the organization, frankly, and their focus on economic issues and economic freedom, smaller government and lower taxes,” Williams said.

Cafero said the attendees pay for their own travel, then can seek reimbursement from ALEC through state scholarship funds at the disposal of the organization’s state chairs.

He said other organizations have similar policies, such as Women in Government, which met last month in Boston without the clamor surrounding ALEC, a group open to legislators who believe in “the preservation of individual liberty, basic American values and institutions, productive free enterprise, and limited representative government.”

The scholarship practice has been reviewed and endorsed by Connecticut’s Office of State Ethics in an advising opinion in 2011 and again this June in a teleconference with lawyers for ALEC, according to documents released Wednesday.

But Common Cause contends in a complaint filed with the IRS that the business-funded scholarships are a form of lobbying, since they bring state legislators to conferences to jointly pursue a pro-business agenda.

ALEC says in its annual tax returns that the scholarships are the sole province of state chairs:

“The amounts received and disbursed by ALEC for such purposes are not considered revenue and expenses of ALEC as ALEC does not select the individuals and the State Chair retains the exclusive right to determine the expenditures.”

It was unclear Wednesday who is currently the state chair for Connecticut, how much money was in its ALEC scholarship fund or who raised the money.

ALEC’s website lists state Sen. Kevin Witkos, R-Canton, as state chairman, but he resigned in May, according to his press spokesman. Witkos could not be reached for comment, and Piscopo did not respond to a request for an interview.

John Emra of AT&T, who is ALEC’s corporate co-chairman for Connecticut, said he was unaware of who financed ALEC scholarships in the state. Emra recently was promoted from chief lobbyist to president of AT&T’s subsidiary in the state.

Emra planned to arrive in Chicago Thursday and stay overnight.

“You get some face time with legislators,” Emra said. “It’s about relationship building.”

According to the report by Common Cause and the Center for Media and Democracy, AT&T executives also are ALEC’s private-sector chairs in Arkansas, California, Louisiana, Mississippi and Texas. AT&T has been seeking state legislation that would deregulate its land-line business.

The report says ALEC spent more than $600,000 annually on legislative scholarships in 2006, 2007 and 2008, based on data it obtained for those years.

Dale Eisman, a spokesman for Common Cause, declined Wednesday to identify the source of the data. A spokesman for ALEC did not respond to a request for an interview.

Over those three years, according to the report, $79,500 was raised for Connecticut scholarships, and the state’s legislators received $61,697.

Over four weeks in May and June of 2011, Jennifer Macierowski, the legal counsel for the state Senate Republicans, submitted a series of proposed ALEC scholarship fundraising letters to the Office of State Ethics for vetting.

The first draft sought donations for Connecticut legislators to attend ALEC’s conferences. It also suggested donors would have an opportunity to mingle with legislators.

“Private sector organizations who participate in the scholarship fund are invited to attend ALEC hosted receptions,” the 2011 letter said. “This year a reception will be held at the Annual Meeting in New Orleans, LA on Friday August 5th at a restaurant TBD. Additionally there is a high likelihood for an additional reception at the December Summit Meeting in Washington, DC. These events are well attended by the Connecticut legislators.”

Ethics offcials rejected the first version, as Macierowski related in an email to Emra and Laura Elliott, then ALEC’s director of state programs:

“As I discussed with John on the phone, the CT Office of State Ethics (OSE) felt that the original fundraising letter would raise problems under the gift ban because it drew a direct link between contributions to the fund and the payment of travel expenses for CT legislators. I have redrafted the letter in a more generic way that will hopefully still be useful for your purposes, but pass muster with OSE. 

“Please let me know what you think.  If it looks good to you, I will forward it to the OSE for their review.”

She also informed them that ethics would support an amendment to the gift ban that would make clear such donations were allowed.

“However, no ethics bills moved in the last week of the session, so we were not able to get that fix this year.  It may be possible in the future, but until then we need to be careful about the way the fundraising is presented to potential donors in order to avoid the appearance of a “quid pro quo.”

Emra said he thinks that, ultimately, the solicitation letter never was sent to potential donors.

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