Fact check on ALEC’s claims that it is not taxpayer funded

Posted by Jay Riestenberg on April 15, 2016


It’s bad enough that the American Legislative Exchange Council (ALEC) masquerades as a charity to avoid paying taxes while it lobbies for state laws that benefit its corporate members. But as the rest of us write our annual checks to Uncle Sam this weekend, there’s news that Tennessee has joined a list of states that actually pay ALEC to help support its lobbying.

The Nashville Tennessean newspaper reports that Volunteer State lawmakers have approved a budget that includes a $100,000 taxpayer grant to help subsidize an ALEC conference to be held in Nashville.

This little rip-off is standard operating procedure for ALEC, which does most of its lobbying at resort hotels, where it entertains state legislators and pushes its business-friendly agenda away from the prying eyes of the public and press.

Responding to a July 2015 investigative story by Atlanta’s WXIA television station, ALEC claimed that it is “not taxpayer-funded” as a way to different itself from other state-level policy groups. The fact is, though, that ALEC routinely receives and benefits from taxpayer dollars. Here’s how: 

Taxpayers Fund ALEC Meetings, Pay for Legislators’ Dues and Travel to ALEC Conferences

When ALEC held a conference in Philadelphia in 2007, Pennsylvania lawmakers slipped a $50,000 line-item into the state budget for ALEC’s meeting. According to Salon, that included “$30,450 for roasted chicken breast, $4,000 for Philly cheese-steaks and $3,000 for cheesecake lollipops — all of it paid for by Pennsylvania taxpayers.” 

Taxpayers also regularly foot the bill for politicians’ ALEC membership dues and travel. In states including South Dakota, Pennsylvania, Wisconsin, Tennessee, and Kansas, lawmakers have dipped into the public treasury to cover the cost of their ALEC memberships. Taxpayers also often fund legislators’ travel to ALEC conferences, which are frequently held in vacation-like luxury hotels and resorts. 

Corporations Get a Tax Break for Funding ALEC

ALEC’s corporate funders, which include Koch Industries, Exxon Mobil, Pfizer, AT&T, UPS, Comcast, Chevron, Expedia, and Verizon, are eligible for a tax-write off for their funding of ALEC. Why? Because ALEC is registered with the IRS as a tax-exempt charity, or a 501(c)(3). In 2012, Common Cause filed a whistleblower complaint challenging ALEC’s tax status, and together with the Center for Media and Democracy, we have filed supplemental evidence in 2013 and 2015. Should the IRS rule that ALEC is violation of its tax status, the corporations that took a tax write-off may have to pay back taxes for their funding of ALEC.

 

Tell the IRS to investigate ALEC and hold its corporate funders accountable


Office: Common Cause National

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