Why Are McDonald's, Coca-Cola, and Intuit Fleeing ALEC?

Photograph by Tim Rue/Bloomberg

The American Legislative Exchange Council describes itself as a nonpartisan champion of free markets. But if you spend some time at an ALEC conference (Bloomberg Businessweek did, for an article last year) you will be hard-pressed to find many Democrats. And when the entire conference meets for lunch, you will hear from the podium nothing that would seem out of place in a press release from Eric Cantor’s office. Last year in New Orleans, for example, Bobby Jindal, governor of Louisana, told an ALEC annual meeting, “Defeating the president is crucial to defending our economy,” and “Obama has been a disaster.” I didn’t hear anyone boo. What I did hear was the sound of fevered applause when the conference played a videotaped greeting from Ronald Reagan.

I’m not saying it’s wrong to feverishly applaud Ronald Reagan. I am saying that only in the most thinly defensible, legalistic sense can ALEC call itself “nonpartisan.” And the council doesn’t really support free markets, either. It supports the companies that fund it. This is an important distinction, because the corporations that donate to ALEC aren’t doing so to protect markets. They’re protecting favored tax treatments and pushing regulations that lock in their market positions. As best as we were able to determine in reporting our piece last year, corporations propose bills at the state level and then push them up to ALEC, which has both corporate and legislative members. ALEC pushes the legislative members to the foreground, stamps the bills as “model legislation,” and then the corporations push them back out to other state legislatures. This may not be the case with all ALEC legislation, but it certainly was with the bill we followed.

So ALEC is not what it says it is. That’s not extraordinary: Few advocacy groups are what they say they are. In ALEC’s case, however, the fingers-crossed-behind-its-back description of itself is definitional. If the American Legislative Exchange Council operated with complete openness, it couldn’t operate at all. ALEC has attracted a wide and wealthy range of supporters precisely because it does its real work in a black box. Membership lists are secret. The origins of the model bills are secret. Deliberations and votes on model bills are secret. The model bills themselves are secret. The council has designed its entire structure to disguise industry-backed legislation as grassroots work from state legislators. If this becomes clear to everyone, there’s no reason for corporations to use it. And that is exactly what has been happening.

Since last year, the National Urban League, Common Cause, and ColorOfChange have been pressuring companies to drop their membership in ALEC. The council’s library of model bills includes legislation that tightens voter identification requirements, making it harder for students, the elderly, and the poor to vote. Since the death of Trayvon Martin last month, minority advocacy groups have made another complaint against ALEC: In 2005, the council turned Florida’s Castle Doctrine bill into model legislation (PDF). The doctrine allows the use of deadly force in a public place if someone “believes it is necessary to prevent death or great bodily harm,” and removes the duty to flee a confrontation.

This week, ColorOfChange announced that Coca-Cola, McDonald’s, and the personal financial software maker Intuit, among several other brand-name companies, have declined to renew their memberships with ALEC. McDonald’s confirmed for Bloomberg Businessweek that it left ALEC in March, and elaborated only that it was a “business decision.” Intuit confirmed as well, but explained that the decision had come out of its normal budgeting process in 2011. Coca-Cola has yet to respond to a request for comment.

ALEC maintains that it is the victim of “a coordinated and well-funded intimidation campaign.” It is. But the campaign wouldn’t have worked without a single act last year that didn’t catch nearly as much attention. In July 2011, the Center for Media and Democracy, a progressive activist group, published ALEC’s full catalog of legislation. Coca-Cola and McDonald’s were then no longer just members of a nonpartisan organization that championed free markets; they ran the reputational risk of endorsing everything that ALEC does.

It’s hard to come up with a reason the council keeps its model legislation secret other than to avoid embarrassing incongruities for its corporate members. If the council’s model bills promote free markets, why not proudly display them? If private and public members working together produce better solutions, why not open up their deliberations to the public, or at least reveal their names? The simplest answer is the most likely: Some of what ALEC does looks bad for its members. McDonald’s, in its response to an e-mail about ALEC, wasn’t obfuscating. Dumping the council was, in fact, a “business decision.”

What’s happening to ALEC this week provides a valuable lesson for those who would limit the influence of money in politics. It’s difficult—and evidently unconstitutional—to keep people and corporations from speaking through money. But people and corporations do respond to embarrassment. Embarrassment is impossible without disclosure. ALEC should be free to advocate for whatever it likes, and people should be free to support the candidate who pleases them. In ALEC’s case, it’s been interesting to watch embarrassment do its work once disclosure showed up. It might be a rule for campaign and super PAC contributions as well: You can do whatever you like, as long as you cop to it.

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