Washington — Connecticut corporations are staying loyal to an influential, politically active business group even after controversy over the organization has provoked a mass defection by other companies, including Coca-Cola, Wal-Mart, McDonald’s and Amazon.com.
The American Legislative Exchange Council has for nearly 40 years provided the nation’s corporations with “model” legislation that would further their goals. For a sometimes hefty membership fee, ALEC also gives corporations access to hundreds of state lawmakers, mostly Republicans. It is co-chaired by John Piscopo, R-Thomaston, a Republican leader in Connecticut’s General Assembly.
The organization did not attract much attention outside of state capitals and corporate circles until last year when an IRS tax whistleblower complaint challenged its status as a tax-exempt organization. The suit resulted in the disclosure of information about the group’s membership, relationship with lawmakers and hundreds of model bills the organization has drafted.
Most of the model legislation ALEC develops is aimed at fulfilling corporate wish lists — less regulation, fewer taxes and tort reform.
But ALEC also drafted anti-immigrant and voter suppression bills. As part of its proposed gun- rights legislation, it promoted the “stand your ground law” that some have blamed for the February shooting death of an unarmed black man, Trayvon Martin, in Florida.
The disclosure of ALEC’s involvement in those issues increased pressure on major corporations to abandon it, and 25 have left since late last year.
When Wal-Mart ended its relationship with ALEC in May, it said, “We feel that the divide between these activities and our purpose as a business has become too wide.” Just this week Hewlett Packard, MillerCoors, CVS, Best Buy and John Deere said they are discontinuing their relationships with the organization.
But Connecticut-based companies, including General Electric, Purdue Pharmaceuticals, the U.S. Smokeless Tobacco Co., Diageo North America and the U. S. division of German drug company Boehringer Ingelheim continue to be members.
Diageo spokeswoman Rachel Rosenblatt said the liquor company, headquartered in Norwalk, has no comment on its relationship with ALEC. Diageo is not a rank-and-file member. It is on the organization’s “Private Enterprise” board and must pay yearly dues of at least $25,000.
GE spokesman Andrew Williams said the Stamford-based company belongs to ALEC because “engagement with groups like this helps GE meet and develop relationships with other member companies and state legislative leaders.”
Williams also said GE’s engagement with ALEC focuses on fiscal, legal and environmental policy issues. “We have not been involved with ALEC on social responsibility issues,” he said.
Purdue Pharmaceuticals, U.S. Smokeless Tobacco and Boehringer Ingelheim did not respond to requests for comment.
Piscopo has been a member of ALEC for 24 years and became its vice chairman in December. “It’s a shame that out of hundreds of bills, a few have drawn criticism,” he said.
He said ALEC will refocus on its core mission and hopes to lure back corporations who have quit the group.
“We are shifting gears so we concentrate mainly on economic issues and stay away from social issues,” Piscopo said.
He said ALEC provides “common-sense solutions” to our problems and allows state lawmakers to “compare notes on what other legislators are doing.”
Lawmakers can also mingle with corporate officers at ALEC events, such as its annual meeting, to be held this year at the end of the month in Salt Lake City, Utah.
Witkos and Hovey did not respond to repeated requests for comment.
ALEC has another problem besides losing sponsors.
The government watchdog group Common Cause, which has criticized ALEC for “an extremist agenda,” has lodged a complaint with the IRS about the group, alleging it is violating restrictions on its tax-exempt nonprofit status by lobbying.
“ALEC is a corporate lobby front group masquerading as a public charity,” said Common Cause President Bob Edgar.
Common Cause’s complaint to the IRS said, “ALEC’s primary, if not sole objective is to ‘influence legislation….disseminate model legislation and promote the introduction of companion bills in Congress and state legislatures’…Notwithstanding these claims, however, ALEC has reported for years to the IRS that it has not spent a single penny on lobbying or attempting to influence legislation. These tax returns are patently false.”
Common Cause has also asked the attorneys general of more than 40 states, including Connecticut, to investigate whether ALEC is violating its nonprofit status.
In addition, Common Cause, and other groups including the Center for American Progress and the Center for Media & Democracy — which hosts an “ALEC Exposed” website — are putting pressure on ALEC’s corporate members.
“Firms that remain in ALEC, despite its involvement in a scheme to defraud the IRS and its advocacy of legislation that puts private profit ahead of the public interest, have some explaining to do,” Edgar said.
Piscopo said the attacks by “left-wing groups funded by [liberal billionaire] George Soros” are baseless.