The folks who call the shots at the American Legislative Exchange Council (ALEC) apparently are preparing a damage control defense on Common Cause’s complaint that ALEC is a lobby masquerading as a charity.
After insisting for more than a year now that ALEC does no lobbying and that the donations that finance its work are tax deductible, the organization’s corporate bosses are at least exploring the creation of a subsidiary, ALEC NOW, that would be able to operate legally as a lobby and would be funded by taxable contributions.
Bloomberg News reported Thursday that ALEC’s executive director advised his board last August that the Internal Revenue Service might “look favorably” on the group if it voluntarily created ALEC NOW ahead of a possible tax audit.
And though he continued to insist that ALEC will not lobby or engage in political activities, Executive Director Ron Scheberle also acknowledged that the IRS might suggest that the group transfer some operations to the new subsidiary.
“It looks like ALEC is covering its tracks,” said Doug Clopp, who along with staff counsel Nick Surgey has spearheaded Common Cause’s work to expose ALEC. “These folks are not a charity, they’re not the soup kitchen, they’re not the YMCA. They are, and always have been aware that their activities are straight-up lobbying.”
Common Cause has backed up that claim with more than 4,000 pages of ALEC’s own records, including “issue alerts,” legislative scorecards, press releases, and talking points written for state legislators by ALEC staffers. The materials demonstrate that ALEC not only lobbies but that it does so aggressively.
Kaitlyn Buss, an ALEC spokeswoman, said no subsidiary has been created and ALEC has no plans to operate one “in the near future.” That leaves the group with plenty of room to move ahead if the IRS comes calling on Common Cause’s complaint.