Possible legislative fix for ALEC problem moves forward in Arizona
Beau Hodai, DBA Press/In These Times, January, 2012
A call for accountability
With the 2012 legislative season and yet another episode of the Great American Campaign Circus dawning over the face of the nation, Arizona may find itself the proving grounds for possible reform in the age of ‘pay-to-play’ politics.
Arizona Representative Steve Farley (D-Tucson) has announced that he will introduce a bill, the “ALEC Accountability Act of 2012,” aimed squarely at the less-than-transparent functions of the American Legislative Exchange Council (ALEC), an organization that works to advance legislation authored by corporate interests at the state level through the use of a well-lubricated and well-hidden special interest cash distribution network.
This network, known as the ALEC “scholarship fund,” annually holds more than $1 million in special interest funds to be distributed to state lawmakers for attendance at various functions (commonly referred to as “junkets”). At these functions lawmakers are literally wined and dined by lobbyists seeking to advance the legislative agendas of their corporate clients.
To Farley and proponents of the bill, the problem is absolutely clear. In a nutshell: ALEC is a lobbyist organization that operates entirely out of public view. The ALEC “scholarship fund” is a “giant slush fund,” the way Farley sees it.
“If voters knew that [their lawmaker] was receiving a huge donation from BP, for example, then they might be less likely to vote for them,” said Farley. “They would understand that their best interests were not necessarily being looked after.”
“We should be as transparent as possible. We have to be totally accountable to the people who elected us. And, if we can justify why we’re there [at extra-legislative conferences] and what we’re getting out of it– fine. But, we can’t hide this stuff. We can’t pretend that [legislation] was our idea when it came from ALEC and from a multinational corporation that had it’s own interests in mind– not the interests of the people of Arizona.”
ALEC, a 501(c) (3) not-for-profit that insists it does not engage in lobbying activity, refuses to publicly disclose the identities of its donor/member corporations. There currently is no requirement– in Arizona or in any other state– for either organizational or lawmaker disclosure of “scholarship fund” donor identities.
The ALEC Accountability Act seeks accomplish its objective through three points:
1.) Amend Arizona law to incorporate any organization/entity/individual that works to advocate “model legislation” under existing regulations that govern lobbyists. As such, the act would not only increase transparency– as those working at ALEC’s behest (from out-of-state ALEC employees promoting legislation, to other ALEC-member lobbyists) would have to register as lobbyists and file lobbying activity reports with the office of the Arizona Secretary of State– but would also significantly limit the ability of the organization to wine and dine lawmakers, due to lobbyist gifting restrictions.
2.) Require organizations that distribute “scholarship funds” for lawmaker attendance at conferences to disclose certain information to the Secretary of State within 90 days of each disbursement. Such information disclosed would include: the names of legislators, legislative staff and other state officials who received the funds; the total amount of funds granted to each person, as well as what costs such funds covered; the source of funds distributed (i.e. the names of the corporations/entities/individuals paying into the fund).
It should be noted here that these reporting requirements do not apply solely to ALEC. Other legislative membership organizations such as the National Conference of State Legislatures (NCSL) and the Council of State Governments (CSG) would also have to file the same reports. However, as neither NCSL or CSG advance “model legislation,” they would not have to register as lobbying entities.
3.) Require all lawmakers who receive “scholarship funds” from any organization to report such funds on their annual statements of financial disclosure, even if the value of the “scholarship” is below the current gift reporting threshold.
It is important to note that if ALEC were forced by state law to register as an organization dedicated to lobbying activity, this standing would jeopardize the organization’s federal 501 (c) (3) tax-exempt-not-for-profit status– as such entities are strictly limited in the amount of lobbying they may engage in.
An uphill battle: the ALEC lobbyist network in Arizona
Farley acknowledges that the bill will likely face substantial opposition in the coming session; he acknowledges that certain well-connected lobbyists engaged in the “pay-to-play” system will likely be very reluctant to support any bill that jeopardizes the system of influence established under the ALEC banner in the state. A lobbyists’ influence, after all, is his one true marketable attribute.
In addition, it is important to note that the GOP-dominated Arizona Legislature is something of a testing ground for ALEC model legislation– Arizona is, as Farley puts it, an ALEC “model state.”
As such, Arizona’s House leadership is thoroughly imbued with ALEC influence; House Speaker Andy Tobin is a loyal ALEC member of long standing, as is House Majority Leader Steve Court. ALEC’s Arizona public sector chair is House Majority Whip Debbie Lesko. And, should the bill ever make it out of the House, it will face a senate under the leadership of Arizona Senate President, and ALEC member, Steve Pierce.
And, there is a clear ring of probability to Farley’s anticipation of private sector resistance to the bill.
Consider this: records obtained by DBA Press/In These Times from the office of Rep. Lesko show that from December 31, 2009 through January 4, 2011, more than 30 ALEC private sector members contributed a total of $98,040 (including $5,000 from the New Mexico ALEC “scholarship fund”– also derived from corporate coffers). During this period, all but $469.76 of that amount was distributed to 43 Arizona ALEC member lawmakers (and one legislative assistant) for the purpose of lawmaker travel to plush resorts in San Diego, St. Louis and Washington, D.C.
Among the names of the more than 30 corporate donors who made this honeymooning possible were a veritable who’s who of the Phoenix lobby set.
Such ALEC donor lobby firms present were: Veridus (which represents such ALEC member corporations as DIAGEO and Tucson Electric Power), Copper State Consulting Group (which represents such ALEC member corporations as Freeport-McMoran Copper and Gold, Inc.), Triadvocates (which represents such ALEC member corporations as Dish Network and Verizon), Isaacson & Moore (which represents such ALEC members as the Arizona Optometric Association, Maximus and Pfizer), R & R Partners (which represents ALEC member corporation Reed Elsevier).
But, by no means are ALEC member expenditures limited to attendance at “scholarship”-funded events such as conferences. Often, accompanying the regular fanfare of such conferences, special nights-out and banquettes are hosted for the benefit of state delegations of lawmakers.
For example, during the ALEC August, 2010 Annual Meeting in San Diego, an “Arizona Night” was held for attending Arizona lawmakers. This evening called for its own set of donor private sector members and attendees.
Among the donor list for this ALEC event were such notable Phoenix lobby firms as: the Law Offices of John K. Mangum (who represents such ALEC member corporations as Cash America and Altria Client Services), Kutak Rock (which at that time represented ALEC member AstraZeneca), Policy Development Group (“PDG,” which represents Corrections Corporation of America (CCA), among other clients. In early 2011, CCA claimed to have discontinued participation in ALEC at some undisclosed time in 2010), Low & Cohen (which primarily lobbies on behalf of several insurance providers and financial institutions. It is not clear which of this firm’s clients are ALEC members), and FirstStrategic Communication and Public Affairs (which represents such ALEC member corporations as ALEC Arizona Private Sector Chair, Salt River Project (SRP), and Apollo Group).
Perhaps the most notable presence in this litany of ALEC donors for the San Diego “Arizona Night” is that of HighGround Public Affairs Consultants– the lobby firm directed and founded by Arizona Governor Jan Brewer’s longtime campaign manager, Chuck Coughlin. It is worth noting here that, in addition to stewarding the political career of Gov. Brewer, HighGround also managed recent campaigns for ALEC members Rep. Steven Urie and Sen. Rich Crandall.
While HighGround is without a doubt one of the most influential lobbying firms operating in Phoenix, representing such notable ALEC member corporations as SRP, Accenture and (purported former ALEC-member) CCA, there is virtually no paper trail detailing the either firm’s, or Coughlin’s, lobbying activities in the state.
According to records maintained by the office of the Arizona Secretary of State, the sole lobby report Coughlin has bothered to file with the state since the firm’s inception in 1996 illustrates what seems to be a long history with ALEC. According to the report, HighGround expended $684.97 on a dinner for ALEC member lawmakers in Washington, D.C. on December 14, 2003.
As evidenced by records obtained from Lesko’s office illustrating Coughlin’s involvement with ALEC, the lack of HighGround lobby report filings with the office of the Arizona Secretary of State is not due to inactivity. Rather, Coughlin, for some reason or other, simply has not filed any lobby activity reports with the SoS since 2003. It is worth noting here that Coughlin managed both of Brewer’s successful campaigns for for the office of Arizona Secretary of State, a position the current governor assumed in 2003 and which she held until former Arizona Governor Janet Napolitano left office to assume directorship of the U.S. Department of Homeland Security in 2009.
Coughlin could not be reached for comment.
And, as for the incredibly friendly relationship cultivated between ALEC lobbyists and state lawmakers, consider this: on January 26, 2011, ALEC Arizona Private Sector Chair and top SRP lobbyist Russell Smoldon chauffeured ALEC member lawmakers off to an ALEC dinner in Santa Fe after the lawmakers had been whisked from Phoenix to New Mexico in a plane owned by SRP.
When was the last time you flew your representative off to dinner in your private jet?
Smoldon could not be reached for comment.
Given the strength of anticipated opposition to the ALEC Accountability Act, Farley encourages members of the public to contact lawmakers and make their support for this reform known.
“They should send more emails than ALEC does,” said Farley. “They should send them to those people [lawmakers] and tell them directly: we are watching you and we want you to be accountable. We want to know who’s wining and dining you. We want to know what they want from you, and we want to know what you have done for them.”
* Note: while In These Times did manage to extract partial records detailing ALEC operations in the state of Arizona from the office of Rep. Lesko, this should not be interpreted by the reader as being the result of any functioning system of public disclosure; records delivered by the office of Rep. Lesko on December 12 were returned as the product of a series of public records requests initiated on September 1, 2011.
** Full disclosure: the “ALEC Accountability Act of 2012″ is based partly on reporting and research conducted by Hodai for In These Times and DBA Press.