Common Cause demands baseless IRS investigation of ALEC

July 15, 2011   •  By Sean Parnell
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Self-anointed ‘good government’ and ‘reform’ group Common Cause has launched yet another witch hunt against those who dare to hold different views than them, this time demanding that the IRS investigate and punish the American Legislative Exchange Council (ALEC). Like their failed crusade against Supreme Court Justices Antonin Scalia and Clarence Thomas for allegedly being involved in a plot with wealthy libertarian brothers Charles and David Koch in the Citizens United case (which, among other things, would have required both Justices to have access to Hermione Granger’s nifty Time Turner in order to conquer the Gregorian calendar), there’s little reason for Common Cause to be taken any more seriously on this than reports of Crumple-Horned Snorkacks.*

ALEC is an association of state legislators from around the country who share a favorable view towards free markets, limited government, and conservative values. ALEC is funded primarily by foundations and businesses that pay membership dues or donate to the group, usually making them “private sector” members. The focus of ALEC is developing public policies, typically in the form of model legislation, that advance the views of the members.

A quick note, the Center for Competitive Politics is a member of ALEC, and I’m the private sector chair of the committee that deals with campaign finance and election law matters. Although we don’t really have an interest or take sides in most of what ALEC does, it is an opportunity for us to meet with and share our views on the First Amendment and campaign finance issues with state legislators from around the country who are mostly, but not always, sympathetic to our perspectives.

Back to the main story. There is an awful lot of hysteria, hyperbole, conspiracy theory, and of course a Koch brothers connection in the complaint by Common Cause, but the basis of their demand for an IRS investigation of ALEC is explained in a Los Angeles Times story this morning:

Common Cause accuses conservative group of lobbying, seeks IRS probe

The government watchdog group Common Cause has asked the Internal Revenue Service to investigate the tax status of the nonprofit American Legislative Exchange Council, or ALEC, an association of conservative state legislators and private sector officials that churns out hundreds of bills and resolutions annually to pare back regulation and promote business…

In a letter to the IRS, Common Cause argued that a review would help determine if ALEC’s tax-exempt, 501(c)(3) status should be revoked due to “excess lobbying or, alternatively, because ALEC appears to operate primarily to further private business interests and not to advance a charitable purpose.”

The letter from Common Cause to the IRS goes into further detail, but the horcrux of their complaint is that developing model legislation is lobbying, ALEC claims it does no lobbying, as a 501(c)3 organization ALEC is not permitted to have lobbying as a substantial portion of their activities, therefore ALEC is violating its tax status and filing false returns with the IRS.

Apparently Common Cause was hit with a Confundus Charm, because their argument simply doesn’t make sense. At the most basic level, they seemingly don’t understand that model legislation put together by a nonprofit organization is not real legislation. It’s simply policy ideas, put into a form that can be easily understood and used by legislators.

Model legislation is something that a lot of groups put together. Simply looking around the internet shows the following groups that have put out model legislation:

The Innocence Project (focused on wrongful convictions)

Prisoners of the Census (gerrymandering related to how prisoners are counted)

National Conference of State Legislatures (multiple subjects, this one on sales taxes)

Progressive States Network (multiple subjects, this one on green building)

The last two organizations with model legislation are particularly interesting given the attack on ALEC.

The National Conference of State Legislatures (NCSL) is similar to ALEC in that its membership is composed of state legislators (technically it’s the legislature as a whole that is the member, not individual legislators, but this seems a pretty minor distinction), and they also receive foundation and corporate support. NCSL reports no lobbying on their 990 form either.

More intriguing than NCSL, which purports to be not just nonpartisan but non-ideological (and generally succeeds, in my opinion), is the case of Progressive States Network (PSN). As the name suggests, this is a group formed around a specific ideological agenda favoring progressive or left-leaning causes, making it in many ways a counterpart to the conservative ALEC. And like ALEC and NCSL, PSN reports no lobbying on its 990 form.

In fact, the description PSN provides of its work is strikingly similar to what Common Cause alleges is so problematic about ALEC:

Progressive States Network… provides coordinated research and strategic advocacy tools to state legislators and their staffs, empowering these decision-makers with everything they need to engineer forward-thinking change…

A significant part of Progressive States efforts revolve around supporting state legislative campaigns. The organization offers legislators and their staff members with the technical and messaging support necessary to embrace progressive policy and draft legislation around it… Progressive States also accumulates research to support new laws in these areas and drafts sample bills that will be palatable to a majority of voters in every district…

…Our board consists of labor organizations, grassroots and “netroots” groups, and key policy centers…

Finally, Progressive States acts as a “war room” to equip legislators with the information they need to advocate good policy. Organization experts put together best-practice guidebooks and serve as surrogates for legislative staff members who need talking points and need them fast…

In short, by supporting state legislators and other groups in their efforts to spark progressive actions and get good ideas passed into law, Progressive States proves that state policy matters, and that good policy leads to good politics for all.

Aside from the fact that they have radically different views on what constitutes good public policy, and one gets most of their funding from businesses and right-leaning donors while the other gets most of their funding from unions and left-leaning donors, ALEC and PSN are virtually indistinguishable.

Or so one would think. Apparently in the minds of those at Common Cause, because ALEC advocates for policies that might be of some benefit to the business community (among others), the laws on what constitutes lobbying and acceptable activity for a 501(c)3 are different than for a group like PSN that advocates for policies that might be of some benefit to unions (among others).

In yet another revealing exchange of Tweets between myself and Common Cause,** the double standard is obvious:

  • @Nikki4CC Nikki Willoughby C’mon @seanparnellCCP Profit-focused corporations and public interest nonprofits the same? Please. You know better.  13 Jul
  • seanparnellCCP @Nikki4CC From a First Amendment perspective, they’re the same. The fact that U don’t like one of them doesn’t mean you get to silence them  13 Jul

So. Businesses that pursue profits, and the nonprofit organizations they support and work with, are supposed to be held to one legal standard and definition of lobbying, while groups that share the views of Common Cause are given a free pass to engage in the same behavior as business interests.  Got that?

Once upon a time, it might have been reasonable to believe that so-called ‘reform’ and ‘good government’ groups were really about, well, reform and good government. Common Cause is making it increasingly clear that their ‘reform’ and ‘good government’ euphemisms are little more than code words for harassing and silencing political voices they disagree with, and making it easier for their own ideological agenda to be enacted.

Back to the substance of the complaint. The letter from Common Cause to the IRS lists five specific instances, supposedly supported by attached documentation, that they claim constitute illegal lobbying by ALEC:

A public records request made by Common Cause to the Ohio Senate provided many more examples of ALEC communicating with legislators in support of its legislative agenda. These documents represent one example of such conmunications [sic], between the organization and a single one of its legislator members. They represent, therefore, the tip of the iceberg, not the total sum of the organization’s lobbying communications. The documents include:

  • Civil Justice Task Force Public Sector Member Survey January 2010. In addition to gathering general issue information, this document specifically offers a list of resources designed to help promote legislation the member may be working on. (Exhibit 5)
  • E-mail March 5, 2010. From ALEC staff member to state Senator Seitz, encouraging him to introduce a specific bill endorsed by ALEC and offering “support” should he do so. (Exhibit 6)
  • E-mail March 29, 2009. Between ALEC staff member and task force co-chair, indicating that agenda for upcoming task force meeting would include discussion of specific legislative proposals. (Exhibit 7)
  • E-mail May 21, 2009. Exchange between ALEC staff member and state Senator. The staffer urges consideration of specific revisions to Ohio Code proposed by Ohio Chamber of Commerce. (Exhibit 8)
  • E-mail July 6, 2009. Asking ALEC members to sign on to a letter opposing specific aspects of then-pending federal health care reform legislation. The letter was addressed to Senator Robert Byrd and copied to multiple other Congressional leaders. (Exhibit 9)

But a review of the supposedly supporting documents show little evidence of lobbying. If the first complaint is to be taken seriously, it would mean that the simple act of asking a state legislator if they have any information they’d like to receive constitutes illegal lobbying by ALEC.

The claims of improper lobbying get even more farcical from there. Simply discussing with an ALEC member whether a discussion of legislation should be put on an ALEC meeting agenda now constitutes lobbying? Seriously?

As with so much coming out of Common Cause recently, there is not much smoke, even less fire, just a lot of vapor and histrionics over the fact that there are people and organizations out there that don’t share the ideological views of Common Cause, and even worse (in their mind) these people and groups are able to talk with each other, meet, and even donate to support their own views.

Common Cause and many of their so-called ‘reform’ allies have apparently concluded that, just as was the case between Harry and Tom, when it comes to their own ideological preferences versus those of ALEC and likeminded groups, either must die at the hand of the other for neither can live while the other survives. Going after the tax-exempt status of opposing organizations, launching hysterical campaigns against sitting Supreme Court Justices, pushing intrusive ‘disclosure’ measures in order to build Enemies Lists, and organizing protests to harass and intimidate donors to opposition groups are just a few of the things Common Cause is doing these days in an effort to stamp out opposition to their agenda.


*Yes, I am going to the final Harry Potter movie tonight. Why do you ask?

**This post has been edited to remove several Tweets from a Common Cause intern who does not speak for the organization

Sean Parnell

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