Yelp, Another Internet Mainstay, Leaves ALEC

Internet powerhouse Yelp, which specializes in helping consumers find products and services in their communities, confirmed Wednesday that it has found its way out of the American Legislative Exchange Council (ALEC). 

“Yelp is not a member of ALEC,” said Luther Lowe, the company’s public policy director. The firm’s membership in the lobbying organization expired and Yelp decided to sever connections with ALEC several months ago, he added. 

Yelp’s departure is the third major withdrawal from ALEC to be announced or confirmed this week. Each of the firms involved, Google, Facebook and now Yelp, is a major force online. Founded in 2004, Yelp reported revenues of nearly $233 million in 2013 and a monthly average of 138 million users in the second quarter of 2014. 

“Yelp’s departure confirms what we’ve known for some time: it’s not good business to be involved with ALEC,” said Arn Pearson, Common Cause’s vice president for policy and litigation. “State legislators and the officers and directors of every company involved with this organization need to take a hard look at their participation; their involvement is in neither their shareholders’ interest, nor the public interest.”

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. 

Since its founding in the 1970s, ALEC has secured the passage of hundreds of “model” state laws that put corporate interests ahead of the public interest. It is the force behind state laws weakening clean air and clean water regulations, undermining workers’ rights, privatizing public schools and prisons and restricting voting rights, among others. ALEC’s corporate members typically write the legislation and give it the group’s stamp of approval in closed door meetings at which corporate representatives and state lawmakers vote as equals; ALEC then lobbies behind the scenes to pass the bills in the states. 

Since 2011, when Common Cause and an alliance of other organizations began drawing public attention to ALEC’s work, around 90 corporations have severed ties with ALEC.