The Honorable Gary King
Attorney General of New Mexico
408 Galisteo Street, Villagra Building
Santa Fe NM 87501
Dear Attorney General King:
I’m writing on behalf of Common Cause to ask you to investigate the activities of the American Legislative Exchange Council (ALEC) in New Mexico to ensure that the organization is in compliance with state tax and lobbying laws.
Founded in 1973, ALEC is an organization of nearly 2,000 state legislators, including a number of members of the New Mexico legislature, and more than 140 corporations, ALEC is registered in New Mexico as a charitable organization and at the federal level enjoys tax-exempt status under section 501 (c)(3) of the Internal Revenue Code.
Common Cause has discovered compelling evidence that ALEC is a corporate lobby masquerading as a charity. ALEC’s compliance with state tax, gift, solicitation and lobbying laws should be reviewed by your office and/or appropriate state regulatory authorities.
ALEC’s primary purpose appears to be providing a vehicle for its corporate members to lobby state legislators and to deduct the cost of that activity as charitable contributions. Each year, about 1,000 pieces of ALEC-backed legislation are introduced in statehouses across America. ALEC regularly communicates with legislators through emails, “issue alerts,” press releases, “talking points” and other materials to express its views and help ALEC-member legislators argue on behalf of ALEC’s legislation and/or in opposition to bills outside ALEC’s portfolio. ALEC’s by-laws declare that its mission is to "formulate legislative action programs" and to "disseminate model legislation and promote the introduction of companion bills in Congress and state legislatures." ALEC also carefully tracks the progress of its legislation in statehouses across America, producing scorecards to measure its effectiveness in getting its bills enacted.
While these activities meet any reasonable definition of lobbying, ALEC insists that it does not lobby.
Moreover, ALEC’s lobbying tactics raise serious questions about its compliance with New Mexico’s gift regulations. ALEC gives legislator members “ALEC Scholarships” to cover their costs for accommodations, transportation and other expenses to attend its national conferences, often held at luxury resorts. Some of the funds for these scholarships come directly from other lobbying and corporate members but are funneled through ALEC. For example, according to the tax filings of PhRMA, the pharmaceutical lobbying group, it provided $365,075 to the ALEC scholarship fund in 2010 to pay for these “scholarships.” Legislators’ families are also invited to attend, and ALEC spends hundreds of thousands of dollars subsidizing childcare for its members’ children during its seminars and other gatherings.
In a complaint submitted April 21 to the Internal Revenue Service’s Tax Whistleblower Office, Common Cause seeks an investigation of ALEC’s lobbying activity, the collection of unpaid taxes and the assessment of appropriate penalties. In support of our submission, Common Cause has provided the IRS with more than 4,000 pages of ALEC materials documenting the organization’s lobbying.
As attorney general, you’re charged with responsibility for ensuring that New Mexico laws are properly applied and enforced. In view of the overwhelming evidence that ALEC is engaged in lobbying, I urge you to review its compliance with all applicable state laws or to refer this matter to the appropriate state regulatory authorities for their action.
Thank you for your attention to this matter.
Executive Director, Common Cause New Mexico
Cc: Governor Susana Martinez
Secretary of State Dianna Duran