Walmart Makes the Right Decision in Leaving ALEC

The departure of Walmart, the world’s largest private employer, from the American Legislative Exchange Council, is good news for the retail giant’s customers, shareholders and for American democracy, Common Cause said today.

“Like Amazon last week and more than a dozen other major firms earlier this spring, Walmart has sensibly reconsidered its involvement in a lobbying organization that is masquerading as a charity while running a tax scam, co-opting thousands of state legislators, and promoting hundreds of bills drafted to boost private profit ahead of the public interest in statehouses across the country,” said Common Cause President Bob Edgar.

“We expect the ALEC exodus to continue, as more companies take a fresh look at ALEC and its agenda and continue to hear from their customers and shareholders,” Edgar said.

Walmart and other contributors to ALEC’s $7 million annual budget, most of which comes from corporations and corporate-backed foundations, get a tax deduction for their annual donations to the group. Because most of ALEC’s work involves lobbying state legislatures for the passage of ALEC-endorsed “model” bills, Common Cause has filed a “tax whistleblower” complaint charging ALEC with violating tax laws that limit lobbying by tax-exempt groups.

The complaint, backed by more than 4,000 pages of ALEC emails, “issue alerts,” “talking points,” and other documents detailing ALEC’s lobbying efforts, seeks an IRS ruling revoking ALEC’s tax exemption and assessing back taxes and penalties.

“ALEC and its corporate backers have built an extremely successful lobbying shop under false pretenses,” Edgar said. “They wine and dine and write legislation for our elected officials behind closed doors at posh resorts and guide that legislation into law in the statehouses. Then they call themselves a charity and ask the taxpayers to subsidize their work by bestowing a tax-exemption,” Edgar said. “Walmart has made a smart decision to end its involvement in this charade.”