Throughout the recent debate over the role the American Legislative Exchange Council plays in state legislatures on education and other issues, there had been no focus on any accusations that the group ran afoul of the law. But Common Cause, one of the groups most vocal about its concerns regarding ALEC, has filed an official Internal Revenue Service tax complaint regarding ALEC’s activities.
The essence of the complaint was captured by Doug Clopp’s comments in my story when he said ALEC had been acting as a lobbying arm for corporations (turning legislators into “super-lobbyists”) without disclosing this fact to the IRS.
ALEC says its primary purpose is to provide research to its members and educate legislators on issues, and calls itself a nonpartisan think tank on its website. This would allow ALEC to be classified as a tax-exempt nonprofit organization under the federal tax code.
But Common Cause alleges that ALEC’s “primary purpose” is lobbying, which does not comport with its official tax-exempt status. The group says ALEC is “massively underreporting” these lobbying activities and benefiting its corporate members, while improperly getting a tax break to do so. (Nonprofits like ALEC are allowed to lobby, but on a limited basis.)
“I know what lobbying is. I’ve been lobbied a good portion of my life. This is lobbying,” said Bob Edgar, president of Common Cause, in a conference call with reporters Monday. (Edgar is a former congressman from Pennsylvania.)
The tactic of complaining about a group’s tax-exempt status is not new. One example on the other side of the liberal-conservative divide is a 2003 complaint from Public Interest Watch alleging that the environmental group Greenpeace was violating its tax-exempt status through some of its activities.
One more local bit of ALEC news comes from Tennessee. A bill introduced in the state legislature by House Democratic Leader Rep. Craig Fitzhugh, the “Influence Disclosure Act,” would have required lawmakers to disclose the source of proposed legislation that is a “model bill or is substantially similar to model legislation” from any organization of state government officials. The bill, according to the Chattanooga Times Free Press, was killed in a subcommittee in the House, which is controlled by Republicans.
Commenting on the bill, GOP Rep. Curry Todd, who is a national board member of ALEC, made it clear he caught a whiff of rat: “I know what it’s getting back at. It’s getting back at ALEC.”
As an aside, it should be pointed out that Tennessee has produced interesting education news at a steady clip recently, from the way evolution can be taught, to the number of foreign workers at charter schools, the reporting requirements of charter schools, even to how low students may let their pants droop before getting censured.
A version of this news article first appeared in the State EdWatch blog.