Photographer: Matthew Staver/Bloomberg


Koch-Backed Business Group Splinters in Climate-Change Dispute

Updated on
  • Activist groups fill void as companies drop ALEC membership
  • Climate change, repeal of 17th amendment considered by group

A business-backed group that rose to prominence by prodding state legislatures to cut taxes, environmental regulations and gun restrictions, now finds itself at a crossroads amid declining membership and a bitter dispute over climate change.

The battle at the American Legislative Exchange Council erupted at the group’s winter meeting in Nashville, Tennessee, this week as members scrapped a measure declaring that climate change is not a risk after opposition from Exxon Mobil Corp. and Chevron Corp.

"It was corporate blackmail," said Steve Milloy, a policy adviser for the Heartland Institute, a group critical of climate science. "They basically said, ‘We’re going to leave.’ "

The dispute over the climate provisions highlights the internal discord for the Arlington, Virginia-based group, which gained fame fighting President Barack Obama’s regulatory agenda. Over the past five years, more than 100 businesses left the organization, illustrating corporate concerns that the group may be going too far.

ALEC, which has been funded by companies like Koch Industries Inc. and coal giant Peabody Energy Corp., has 2,000 mostly Republican state legislator members, which it pairs with representatives from corporations and free-market interest groups. In recent years it debated model measures for state legislatures that take aim at state renewable energy requirements, set stricter voter identification requirements and would have U.S. senators appointed by state legislatures, not elected.

Read More: Coal-Funded ALEC Prods Trump to Say Climate Change Not a Risk

But those debates have been contentious, and turned the group into a bogeyman for consumer and environmental groups concerned about how corporate priorities can be pushed into the agenda of states nationwide. And that pressure has led to some internal woes.

Over the past five years ALEC has shed more than 100 members including Ford Motor Co. and Expedia Inc., largely over its position against climate rules, renewable energy and other issues that don’t jive with corporations’ publicly stated sustainability goals.

"Companies will come and go, and we’ve added companies too," Jason Saine, a North Carolina House member who is ALEC’s incoming chairman, said in an interview. "We’re healthy and the organization is growing. ALEC has matured over the years and learned how to have these discussions in a mature way, so we can talk about them."

Despite the high-profile company departures, ALEC says that it has about 300 corporations and other private members, such as trade groups and lobbyists, that are part of the group. It’s overall revenues have increased in recent years, from $8.4 million in 2012 to $8.9 million in 2015, the most recent year available, according to its tax returns.

Read More: States Move to Roll Back Environmental Rules in Trump’s Wake

Nick Surgey, director of Documented, a watchdog group that investigates the link between corporations and public policy, says the corporate defections have led to free-market activist groups with harder-edged views moving in to fill the void at ALEC.

"That vacuum is being filled by a radical agenda and these really extreme ideas are coming to the forefront," Surgey said.

As 1,000 attendees munched on beef short ribs and deviled eggs with okra at the Omni Hotel Nashville, a top topic of discussion was the climate measure, meant to encourage states to prod the Environmental Protection Agency to rescind its determination under Obama that climate change is a risk to human health and welfare and therefore requires regulation.

Exxon, Chevron and Honeywell International Inc. objected, telling the group it would lead to protracted litigation and create business uncertainty. 

Read More: Tesla Hosts ALEC, LCV Woos Ivanka

Indiana State Representative Dave Frizzell, a former national chairman of ALEC, said he told those assembled in the closed-door session that if the measure was approved it would result in a corporate exodus similar to what occurred after the group was linked to "stand your ground" gun legislation following the shooting of the unarmed black teenager Trayvon Martin in Florida in 2012. A score of companies, including McDonald’s Corp., The Coca-Cola Co. and Kraft Foods Group Inc., cut ties with the organization after that.

Since then ALEC has tried to "narrow our focus to main issues and policy," Frizzell said after joining the ballroom in prayer before a breakfast of scrambled eggs and biscuits. "We felt that’s something we don’t need to be dealing with."

The climate measure was backed by the Heartland Institute, an Illinois-based global warming skepticism group that has linked global warming to the beliefs of unabomber Ted Kaczynski, as well as groups like the Competitive Enterprise Institute and the right-wing advocacy organization the James Madison Institute.

Lose Funding

"ALEC’s primary allegiance, and the allegiance of its public sector members, must be to consumers and not to the producers of particular goods and services," they wrote in a letter to members of ALEC’s Energy, Environment, and Agriculture Task Force.

Myron Ebell, a director for the Competitive Enterprise Institute and long-time critic of climate science, said he canceled his flight to the meeting after he got word the endangerment resolution had been withdrawn.

"I believe that an overwhelming number of the legislative members of the task force were going to vote for it during the full task force meeting, but ALEC got some board members to show up and say this is divisive and we will lose funding," he said in a phone interview from Washington. "Losing funding is a rather sensitive issue at ALEC."

Internal Debate

In addition to model legislation mirroring Trump’s executive order requiring two regulations be repealed for every new one, ALEC also is considering a resolution recommending that Congress repeal the 17th amendment, adopted over 100 years ago to allow citizens to directly elect their U.S. senators instead of state legislators.

"The 17th Amendment has had many unintended consequences including runaway federal deficits, unfunded mandates, overreach by federal agencies and excessive and burdensome impositions by the federal government upon the States," the model bill states.

ALEC declined to identify which member was backing the resolution.

"It’s a new radically reactionary proposal that came up in this new period of Trump-dom," said Lisa Graves, a former Justice Department attorney who launched the Center for Media and Democracy’s "ALEC Exposed" program in 2011. "This certainly seems to be evidence of them feeling emboldened to embrace an extreme counter-democratic measure."

In the internal debate over the climate measure, a representative for Pfizer Inc. stood up and said the pharmaceutical company was based on science, and United Parcel Service Inc.’s representative weighed in, saying global warming was real, Milloy said. Ken Freeman, Exxon’s U.S. government relations manager simply said, "I am opposed to this," and walked away, Milloy said.

"UPS, and many others, made it clear that we do not support the resolution and that it conflicted with our corporate vision of responsible environmental actions," Kara Ross, a company spokeswoman, said in an email. "We worked to defeat the proposal and demonstrated how expressing corporate members’ views were key in leading to the withdraw of the resolution."

"What’s so interesting to me about this endangerment vote particularly is that its so reflective of this bigger conflict," said David Pomerantz, executive director of the Energy and Policy Institute. "You have these ideologues, these Heartland Institute types who aren’t really marching to the beat of the same drum, who are really zealots."

"My feeling is this is being driven by the fact they need to stay relevant in the Trump era," he said.

(Updates with UPS comment in 25th paragraph.)
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