CMD and Common Cause Texas File Complaint Against ALEC and ALEC Legislators for Illegal Campaign Scheme

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The Center for Media and Democracy (CMD) and Common Cause Texas filed a campaign finance complaint with the Texas Ethics Commission today against the American Legislative Exchange Council (ALEC), Sen. Kelly Hancock, Rep. Tan Parker, and Rep. Phil King for illegally giving and receiving valuable campaign software linked to the Republican National Committee (RNC).

The full complaint can be viewed here.

By making the sophisticated partisan voter management and campaign software to its 2,000-plus members across the country, ALEC illegally provided in-kind campaign contributions worth more than $6 million in the 2020 election cycle, in violation of its 501(c)(3) charitable tax-status, the Center for Media and Democracy (CMD) charged in a separate submission to the IRS Whistleblower Office on July 20.

The software, dubbed “ALEC CARE” and valued by ALEC at $3,000 per legislator, is owned and operated by VoterGravity, a Republican voter data company conceived and run by Ned Ryun. Ryun is the founder and president of a right-wing candidate training operation, American Majority, and its voter mobilization affiliate, American Majority Action, which are closely allied with the Tea Party. American Majority Action’s latest available IRS filing shows that it owns 84 percent of Voter Gravity, and both list a post office box in Purcellville, Virginia as their address.

“As a benefit of their membership in ALEC, ALEC gave, and Sen. Hancock, Rep. Parker, and Rep. King received, free sophisticated voter management and campaign software for the 2020 election cycle worth thousands of dollars, despite ALEC’s status as a 501(c)(3) tax-exempt corporation barred from engaging in electoral activity under federal law and in violation of Texas Elec. Code §§ 253.094 and 254.031,” the complaint states.

The complaint asks the Commission to investigate the scheme and use its subpoena powers to determine the full list of ALEC state legislators receiving the voter software and whether the software was used by legislative staff on state time or in state offices.

CMD and Common Cause are also filing campaign finance complaints with the appropriate oversight agencies in 14 other states.

“It is crystal clear from CMD’s investigation and internal ALEC sources that the CARE program provided by ALEC is just a repackaging of VoterGravity’s highly partisan campaign software, designed to help Republicans win and retain elected office,” said Arn Pearson, CMD’s executive director. “ALEC CARE is a brazen scheme to help ALEC’s overwhelmingly Republican members win reelection.”

“The people of Texas deserve to know who is trying to influence our elections and our representatives,” said Stephanie Gómez, Associate Director of Common Cause Texas. “Without tougher transparency and disclosure laws, illegal and partisan power grabs like ALEC’s will continue to undermine our democracy. We strongly urge the state legislature to usher in stronger transparency and disclosure laws so our government is accountable to the people of Texas, not special interests.” 

“ALEC has abused its tax-exempt status for a decade or more,” said Eric Havian, a prominent whistleblower attorney at Constantine Cannon who filed the IRS claim on CMD’s behalf. “I can only hope that we have not become too accustomed to fraud in plain sight, and that the IRS will finally take action to stop taxpayers from subsidizing ALEC’s partisan electioneering and lobbying.”

Marcus Owens, former Director of the Exempt Organizations Division of the Internal Revenue Service, told CMD, “The fact that ALEC’s constituent management program typically costs ‘thousands of dollars,’ but it is being provided free of charge to selected legislators, would constitute a contribution to the legislator.”

“The fact that there may well be sub rosa links between databases created by the management program and organizations engaged in partisan political activity suggests another potential electioneering event,” Owens said.

ALEC’s disclaimers and transparent repackaging of a powerful campaign tool as “constituent communications” do nothing to reduce its campaign value. The RNC-integrated software comes fully loaded with all campaign data and functions, and data entered by ALEC members get added to the RNC’s database, thereby directly benefiting the Republican Party. ALEC’s promotional pitch that, “With the opportunities afforded by CARE, our members can be ahead of their colleagues,” is just coded language for what VoterGravity says to its users at its demo page: “Ready to win?”

ALEC has abused its non-profit status for many years. Common Cause filed a separate whistleblower submission to the IRS in collaboration with CMD in 2012—and supplemented in 2013, 2015, and 2016—detailing ALEC’s extensive underreporting of lobbying activity and activities to promote the private interests of its corporate sponsors, including ExxonMobil, in violation of its 501(c)(3) status.