The company’s decision comes on the heels of a shareholder resolution filed by the Congregation asking Northrop Grumman to review its lobbying at federal, state and local levels. The Congregation holds Northrop Grumman stock as part of its Socially Responsible Investment Portfolio.
More than 100 companies have left ALEC in recent years. The organization of corporate representatives and state legislators calls itself a charity but works as a lobby for its corporate members. It operates largely in secret, pushing “model” state legislation that — among other things — undermines public education, weakens clean air and clean water protections, and makes it more difficult for citizens to register and vote.
Northrop Grumman’s decision to leave ALEC demonstrates how individuals and groups like the Congregation of Sisters of St. Agnes can use their shareholder rights to bring about positive change and transparency in large corporations.
Common Cause is pursuing a tax “whistleblower” complaint against ALEC with the Internal Revenue Service, accusing the organization of corporations and state legislators of masquerading as a charity while functioning as a corporate lobby. ALEC’s non-profit tax status allows its corporate supporters to deduct their contributions to the organization on their corporate tax returns, in effect providing a tax subsidy for ALEC’s lobbying.