Terrance Heath

As Corporations Abandon ALEC, States Are Stuck With It

Filed By Terrance Heath | October 07, 2014 1:30 PM | comments

Filed in: Politics
Tags: ALEC, conservative governance, epic fail, income inequality, Kansas, Sam Brownback, Scott Walker, voter ID, Wisconsin

climate-change-denialism.jpgGoogle Executive Chairman Eric Schmidt made news last week when he told NPR's Diane Rehm that Google was dropping its membership in the American Legislative Exchange Council (ALEC) because of the organization's environmental policies -- especially its climate denialism:

"Everyone understands climate change is occurring. And the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place. And so we should not be aligned with such people. They're just literally lying."

It started a stampede of Silicon Valley companies either distancing themselves from ALEC or leaving altogether.

  • Microsoft announced last month that it was leaving ALEC. Both Microsoft and Google had been on ALEC's task force for communication and technology.
  • Facebook announced on Tuesday that it is "not likely to renew" its membership in ALEC.
  • Last Wednesday, Yelp issued a statement that it had allowed its membership in ALEC to expire several months ago.
  • Hours later, Yahoo announced that it had dropped its membership and " will no longer participate in the ALEC Task Force on Communications and Technology."

Last week's exodus from ALEC didn't just happen. Schmidt's statement came after a coalition of progressive organizations signed a letter Google to to end its affiliation with ALEC. The letter was addressed to Google's senior executives, including Schmidt.

Persuading Google to abandon ALEC is the latest victory in the progressive campaign to expose how ALEC works, who its members are, and the harm it does.

In 2011, the campaign linked ALEC to Wisconsin governor Scott Walker's anti-worker agenda. Following the death of Trayvon Martin, the campaign exposed ALEC's involvement in drafting "Stand Your Ground" laws. Such exposure gave activists leverage to pressure corporations and lawmakers to leave ALEC.

It all began in July 2011, when the Center for Media and Democracy published 800 documents related to ALEC on its "ALEC Exposed" website. Its key findings were:

  • ALEC brought corporations and state legislators to work together as equals to draft model legislation.
  • ALEC drafted model legislation that made polluting easier, voting harder, and wages lower.
  • The anti-collective bargaining laws in Wisconsin and Ohio began as ALEC model bills.

Since then, over 80 corporations -- including some Fortune 500 companies -- have dumped ALEC.

Exposing ALEC includes revealing how its agenda devastates state economies.


alec-crushes-democracy.jpgWhat's the matter with Kansas today is that income tax cuts have decimated the state's budget. It's been all over the news that Kansas is so broke that it's been reduced to auctioning off sex toys. But the media hasn't reported much about ALEC's role in Kansas's budgetary mess.

A number of Kansas lawmakers had close ties to ALEC. So, naturally, ALEC hatched a "simple and dangerous plan" to:

  • Hand out huge tax breaks to corporations and the well-to-do.
  • Shift the tax burden to the middle class and working families through higher sales taxes rates, ending tax breaks working families count on, and taxing working people's wages more heavily than wealthy people's investment income.
  • Slash funding for public services, then pass laws that will tie the hands of future state legislatures from raising the revenues for the public services Americans value and want, such as education, health care, public safety, and road and bridge maintenance.

Governor Sam Brownback called it a "real live experiment" in conservative governance. With ALEC's own Arthur Laffer, author of the famously debunked "Laffer curve," playing Igor to Brownback's mad scientist, the Kansas experiment went into effect. Brownback signed into law a $1.1 billion income tax cut package that benefited the wealthy and increased taxes on the poor by 20 percent. A sales tax increase disproportionately impacted middle- and working-class families, who spend more of their income on goods and services.

The experiment left Kansas a "smoking ruin." The income tax cuts cost the state 8 percent of its revenue and left it with a $333 million budgetary shortfall. The state's economic growth is projected to fall far behind the nation's. Brownback sold the tax cuts as a "shot of adrenaline" for the state's economy, but it turned out to be more like a shot of cyanide.


As in Kansas, Wisconsin lawmakers had close ties to ALEC -- including Governor Scott Walker, who was an active member as a state legislator from 1993 to 2002. The ALEC Exposed report, "Wisconsin: The Hijacking of a State," found that 32 bills reflecting ALEC's model legislation were introduced during Wisconsin's 2011-2012 legislative session, including:

  • Wisconsin's Omnibus Tort Act, which made it harder for residents to sue companies whose products result in injury or death.
  • Wisconsin's Voter ID law, aimed at keeping minorities and other traditionally Democratic groups from voting, and paid for by raiding money set aside for public funding of elections.
  • A "Budget Repair Bill," which attempted to cripple public employee unions by prohibiting collective bargaining.
  • A Living Wage Mandate Preemption Act that would repeal local living wage ordinances, and prohibit localities from enacting them in the future.
  • A huge tax break for tobacco giant Phillip Morris.

At the start of his term, Walker promised to create 250,000 jobs. Instead, he has presided over the loss of jobs, and Wisconsin now ranks dead last in job growth.

Corporations that continue to support ALEC risk damage to their brands. States that enact ALEC's economic agenda risk damage to their economies.

"ALEC Crushes Democracy" image via Teamster Nation.

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