From DKos: "ALEC Lied On its 2009 Tax Return"

[highplainsdem]

http://www.dailykos.com/story/2011/03/29/961343/-ALEC-Lied-On-its-2009-Tax-Return

Tue Mar 29, 2011 at 05:05 PM EDT
ALEC Lied On its 2009 Tax Return
by northdecoder


ALEC -- the American Legislative Exchange Council -- lied on its 2009 tax return. (Its 2009 return just became readily available to the public a few weeks ago.) Check out the tax return and other evidence after the jump...

-snipping paragraphs about ALEC checking "No" when answering the question, "Did the organization engage in lobbying activities?"-

So... if ALEC did not lobby at all in 2009, can somebody -- ANYBODY? -- explain the front page of ALEC's written testimony "in support of house bill 1384" before a committee of the North Dakota legislature in January of 2009? Here's that written testimony... (Click here)

Isn't that -- by definition -- "lobbying"?!? Isn't advocating for passage of legislation before a committee of legislators considering that legislation, by definition, "lobbying"?!?

In case that isn't clear enough, ALEC's two lobbyists even registered with the North Dakota Secretary of State's Office as a lobbyist for ALEC. That kind of makes it hard to claim ALEC didn't lobby in 2009.

-snip-

This seems to be not only a lie on the specific tax return, but something that completely invalidates ALEC's claim to be a 501(c)(3) organization.

Though much of what ALEC has already done violates the IRS rules on the very limited lobbying a 501(c)(3) can do:

http://www.irs.gov/charities/article/0,,id=163392,00.html

An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.

Organizations may, however, involve themselves in issues of public policy without the activity being considered as lobbying. For example, organizations may conduct educational meetings, prepare and distribute educational materials, or otherwise consider public policy issues in an educational manner without jeopardizing their tax-exempt status.

If you check my long compilation topic on the American Legislative Exchange Council, you'll see that ALEC exists ONLY to influence legislation.

[leveymg]

1. Please tell us more about what ALEC has done and what (who) it lobbies for. Thnx

[notadmblnd]

3. Well ALEC has made recomendations to the GOP governors

At the link there is even a statement which says that as a paying member, you can have access to their "MODEL LEGISLATION." So, they have all this preprinted legislation and all the GOP has to do (instead of earning their money by doing what they're paid to do, which is legislate) is print it off and submit it as a bill in congress.

If that's not lobbying and promoting legislation, I don't know what is?:shrug:

Recommendation: Adopt a state hiring freeze encompassing
all departments.

Recommendation: Everything should be on the table,
including changes in benefits and increased employee
contribution rates, as well as employer contribution
rates. Most importantly, states should consider replacing
their defined-benefit plans with defined-contribution
(401k style) plans for new employees.

Recommendation: Freeze defined-benefit OPEB
plans, and replace them with defined-contribution plans
for new employees. One approach is to offer optional
participation in Health Savings Accounts (HSA) for state
workers. Indiana’s experience has been highly successful,
with 70 percent of state workers choosing the HSA
plans—with Indiana’s taxpayers saving millions in the
process.

Recommendation: Create a tracking system whereby
any position that is vacant for more than six months
is eliminated.

Recommendation: Policymakers should delay automatic
pay increases for state employees until the rising
costs of government are brought under control.
Recommendation: Lawmakers can improve the
performance of state agencies by implementing activity-
based costing.

Recommendation: States should create a permanent
sunset review commission to recommend ways the
state can cut costs, reduce waste, and improve efficiency
and service levels.

Recommendation: The state auditor (or similar position)
should be given the authority to conduct regular,
comprehensive performance audits of state agencies.

Recommendation: States should give authority to
independent firms to conduct regular, comprehensive
recovery audits of state agencies.

Recommendation: Increase the use of privatization
and competitive contracting to execute tasks to lower
costs and improve the quality of service provided.
Recommendation: Pass legislation creating a Florida-
style “center of excellence” on privatization and competitive
contracting.

Recommendation: States should prepare comprehensive
asset inventories—updated continually on an
ongoing basis to ensure currency and accuracy—and
commission a review to categorize all state-owned property
and identify asset divestiture and realignment opportunities.

Recommendation: Develop a program (or programs)
for state employees to allow them to be rewarded
for savings generated by new innovations or re-engineering
of existing business practices.

Link (.pdf file): http://www.alec.org/am/pdf/tax/Budget_toolkit.pdf

[drm604]

2. They'll probably just end up paying a fine, if anything.

Sorry for being cynical.

[starroute]

4. This goes back to the origins of ALEC in the 1970s

I'm going to repost some stuff I put up a week ago that didn't get any notice then. The short version is that ALEC was founded in the 1970s as a research clearing-house, put together by a Republican activist on behalf of conservative state legislators. But it quickly became the target of a hostile takeover by the Heritage Foundation -- using Scaife funding -- which was eager to acquire a non-profit, not only to lobby for legislation but also as a means of essentially money-laundering tax-deductible donations into campaign activities.

Alan Crawford's Thunder on the Right, published in 1980, detailed many of the sordid details of the rise of movement conservatism from the perspective of a disillusioned insider. According to Crawford, even though ALEC had assured the IRS it "would make no attempt whatsoever to oppose or support pending legislation other than providing research material to member legislators as regards model legislation," in 1978 it sent out materials urging state legislators to reject the Washington, DC voting rights amendment.

Crawford also had this to say about the Heritage coup:

When Mrs. Bartnett began to solicit funds, a representative of the Heritage Foundation independently contacted Richard Larry, an employee of the Sarah Scaife Family Charitable Trusts. ... Obtaining the needed funds from the Scaife Foundation, the new group dismissed Mrs. Bartlett from her position (she subsequently sued the organization, which settled out of court), and moved it to Washington, D.C., from Chicago, and added to its board Weyrich, Frank Walton of the Heritage Foundation, and Edwin Feulner. Mrs. Bartnett asked Weyrich, "'why Scaife wanted to invest $80,000 in ALEC' and he told me: 'Juanita, ALEC is the only state legislative organization in the country--of our persuasion--which has a 501-C-3.' ... He assured me that he was not trying to 'buy' the state legislators, but the possibility of some campaign funding for them was there." ...

The Weyrich faction prevailed, and the organization, funded by the Scaife Foundation, moved to Washington where it became an adjunct of the growing New Right network. "They really wanted to get rid of me because I knew what they were trying to do with the organization and they knew I would have no part of it," Bartnett told me. She concluded, from examining records of telephone calls and methods of payment within the organization, that they wanted to use the tax exemption status as a shelter under which to conduct political activity. "They were trying, when they fired me, to turn the organization into an arm of the Reagan campaign, by funneling tax deductible contributions through ALEC to be used to finance pro-Reagan activities."

One thing you can always count on from conservatives is that they don't change their M.O. very much over the years. So if ALEC is still lobbying and lying about it to the IRS, it seems very likely that they're also illegally funneling tax-deductible contributions into campaign activities.

I might also add that this would be typical of the Heritage Foundation in general. Somewhere I have notes on the office they set up in Hong Kong in the late 90's to promote business opportunities after that city's reunification with China -- and how they had to distance themselves from it because they're a non-profit and aren't supposed to be doing that sort of thing.

Heritage and the associated groups don't merely get money from right-wing foundations in order to promote conservative ideas. They are also a highly efficient conduit for channeling the money of wealthy funders to purely political ends -- and this is a long-running scandal that nobody has ever quite had the resources to tackle.

And, oh yes -- as I noted on another thread, it was also Heritage that first came up with the idea of "defunding the left," which originated in a position paper it prepared for the incoming Reagan administration in 1981. These people think in dollar signs, and cutting off funds from progressive groups, while securing maximum freedom to obtain and apply funds themselves, is at the heart of what they do.

[drm604]

5. You seem knowledgeable.

What can be done about this?

[starroute]

6. I know some of the dirt -- what to do about it is another question

I got interested in this stuff when the Jack Abramoff scandal started coming out in 2004-05, and I gradually became aware that Abramoff was unusual only in that he got too greedy and was caught with his hand in the cookie jar.

What I've been realizing over the last few years is that it's *all* criminal in nature -- essentially modeled on the methods of the Mafia -- but nobody ever talks about it.

Abramoff's old pal Grover Norquest, for example, has consistently used his Americans for Tax Reform to move money around in ways that violate campaign finance laws -- and he's been called on it from time to time, but never in a way that seems to stick.

The Chamber of Commerce has also regularly served as a front for moving corporate donations into campaigns without revealing their sources.

But the Heritage Foundation and related groups are the most subtle of all and they never get caught. Here's something from 1997 that captures the situation pretty well:

http://www.publiceye.org/ifas/fw/9701/funding.html

Ever wonder why right wing groups can afford their own radio and television shows? Or how they pay for issue advertising? Or how former Reagan and Bush administration officials manage to have a Sunday-morning talk show afterlife years after their presidents leave town? The answer is simple: money.

Right wing money comes from a number of sources, but one of the biggest and most reliable is right wing foundations, which pour millions of dollars each year into national and regional think tanks, universities, journals, magazines and student publications, cable television networks and radio programs. To be sure, progressive groups get grant monies from a variety of foundations sympathetic to their work. But several things distinguish the right wing funding stream: first, its size; second, its highly political nature; third, the comprehensive approach applied to funding decisions. . . .

The Washington-based Heritage Foundation illustrates how right wing foundation money is used to support plainly political activity. Heritage served as the intellectual mother-ship of the Reagan administration. Its "Mandate for Leadership" series was a virtual blueprint for conservative policy during the Reagan years — Heritage even brags of it. But here's the rub: because foundation money is tax-free, it's illegal for foundations to support lobbying activities. So Heritage always includes a stock disclaim er in its various publications that asserts that its work is not intended to advocate for or against specific policy proposals — a thin fig leaf, but apparently enough to keep the IRS off its back.

As far as what might be done -- lobbying ought to be their Achilles hell. Abramoff was a lobbyist, after all. But even though lobbying often amounts to little more than legalized bribery, as long as there's no specific quid pro quo, you can't prosecute anybody for it.

You could possibly go after the tax status question, though. The IRS clearly doesn't have the political will to do anything about it -- but anybody who can read a 990 can spot discrepancies between what they say and what they actually do.

And groups like Heritage that have overseas affiliations are also vulnerable on that account. (It's no coincidence that there's an ongoing attempt to repeal the restrictions on non-US citizens donating to US campaigns.)

I guess the most useful advise is still what Deep Throat told Bob Woodward -- "follow the money." And not just the funding sources -- which is mostly the same old billionaires -- but where it goes and what it's used for.


On edit: I just recalled that one of the other threads I have open but haven't read yet is about the GOP trying to strip AARP of its tax-exempt status. Which is ridiculous, of course -- but it does highlight the old rule that whatever the right accuses the left of doing is almost certainly something it's already doing itself.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4794027

[Kaleko]

9. Very, very interesting.

Thank you for posting.

[annm4peace]

8. I suggest you read the info on A.L.E.C and ask your State Rep and Senator if they a member

Then go to your State Leg website and see what bills your Senator or Rep authored and see how they line up with the bills on the A.L.E.C website. You can't get into the actual "templates" unless you are a "member" but you can see the headings.

You can print off their "books". Also check out who are the board of directors and their "advisers".

Also email your local papers and ask them to do some real investigation and publish the list of A.L.E.C members in your State Legislature and ask them what bills they have authored that they got off of A.L.E.C.

[Angry Dragon]

7. K&R