Monday, August 5, 2013

ALEC charged with tax fraud for political junkets

ALEC, the corporate escort service for state lawmakers, was charged today with tax fraud. The Center for Media and Democracy and Common Cause say the anti-worker organization is lying about the extravagant vacations it funds for elected officials.

In a letter to the IRS, the two watchdog groups say ALEC since 2006 has spent $4 million on lawmakers' vacations disguised as "scholarships." Elected officials' meals, airfare and accommodations are paid for by ALEC, and they stay at luxury hotels like the Ritz-Carlton and Hyatt Regency in vacation spots like New Orleans and San Diego. About 300 state lawmakers a year receive travel funding from ALEC, and at least 20 have gotten as much as $7,000.

Here's how Common Cause and the Center for Media and Democracy explain their charges:
The American Legislative Exchange Council (ALEC) is running a secretive, multi-million dollar slush fund that finances lavish trips for state legislators and has misled the Internal Revenue Service about the fund’s activity... 
 the “scholarship fund” scheme also raises serious questions about ALEC’s compliance with state gift and disclosure laws, and the ethics of lawmakers who accept ALEC’s travel payments. 
The watchdogs said that by funneling money through ALEC, that group’s corporate sponsors are able to take a federal tax deduction for the cost of wining, dining and housing lawmakers and their families at resorts and events like ALEC’s 40th anniversary meeting this week at Chicago’s posh Palmer House Hilton (August 7-9).  Meanwhile, ALEC conceals the sources of the funds from the public and hides the amount of spending from the IRS by claiming that it only holds the funds in “trust,” while writing lawmakers’ checks to cover their trips. 
Common Cause and CMD laid out details of the fund’s operation in an IRS tax whistleblower complaint and letter to the IRS Commissioner.
ALEC will be celebrating its 40th birthday on Aug. 7-9 in Chicago, but there'll be a crowd on hand to blow out the candles. The Center for Media and Democracy tells us:
ALEC will be greeted in the Windy City by a broad coalition of good government groups, labor unions, as well as civil rights and religious groups, who will rally to say that 40 years of ALEC is nothing to celebrate. 
ALEC's 40th, like their previous meetings, will consist of closed-door meetings where corporate lobbyists and state legislators sit together on task forces and pass "model" bills, which the legislators then bring back and introduce in their home states with no disclosure. The state legislators in attendance will also be wined and dined at corporate-sponsored events and taken to fancy dinners with special interest lobbyists.
Appearing as a special guest will be Jeb Bush, champion of the movement to outsource public education. (That worked out real well in Indiana.)

If you're in Chicago on Aug. 8 and ready to rally, check out this Facebook page.