Two reports on the tentacles of the Kochtopus and ALEC

Posted by AzBlueMeanie:

When you are a multi-billionaire, what's a few hundred million dollars to corrupt governments so you can make a few billion dollars more? You gotta spend money to make money, right?

Karoli at croosandliars.com reports on the Kochtopus in Wisconsin. Wisconsin Recall Update:

Wisconsin has open primaries, so Koch & Co have put up fake Dems so that Republicans can come and vote for them in order to knock out the real Democrat. Nice, huh?

Here's what you need to know about the groups orchestrating this. They're ones you know, ones I've written about before.

The group behind the fakery is a group called The Patriot Group. The Patriot Group is sponsored by Patriot Advisors, LLC. Patriot Advisors, LLC has two officers: Denis Calabrese and Tim Dunn. Denis Calabrese is someone I've written before, in the context of American Majority. He is a director of the Sam Adams Alliance, which created and sponsored American Majority. Calabrese is Dick Armey's former chief of staff. The flyer put out (pictured above) encouraging Republicans to cast votes for fake Democrats quotes the Wisconsin Reporter, which is funded by the Franklin Center for Government and Public Integrity. The Franklin Center is another Sam Adams Alliance project.

Back to American Majority, since that is the "activist arm" of this cabal. TheAwl has a must-read article about how the Kochs and lying Republicans got themselves elected in Wisconsin. It's long, but worth every second you spend to read it. Inside that article they expose the cult of American Majority, which is structured like Amway. In particular, note how the "New Leaders Project" is structured:

The mechanics program is a bit like a franchise. American Majority "mechanics will receive 75% of the net from their trainings" and the 2010 program required mechanics to perform at least one training per month, for a minimum of 30 trainees through the end of 2010. At $20 per person, that's a minimum take for the mechanic of $450 per month. I attempted to attend the $20 per head training in Madison on March 5th but it was booked solid.

The mechanics program was put together and began recruiting in February, 2010. Formal training took place March 24th to 26th, with American Majority flying recruits to Washington D.C., covering all travel and board.

And then the Sauk County Tea Party was founded on June 17, 2010.

Later in 2010, the Sauk County Tea Party began linking to and endorsing strategy meetings with American Majority. In mid-December of 2010, the group took part in a strategy call with co-founder Ned Ryun to discuss the New Leaders Project.

The New Leaders Project

American Majority received grants via donor-advised funds like Donors Capital and the Vanguard Donor-Advised funds in 2009. Franklin Center also received 1.4 million in 2009. We don't have 2010 reports yet, but assume there were similar amounts given back then. Donor-advised funds are an effective way to disguise the source of funding. From the 2009 American Majority 990, this note regarding contributions and/or assets not included on balance sheet:

Organization is acting as intermediary for a new organization in formative stages. New organization has a common major donor and American Majority exercises oversight and control of funds during start up phase.

Anyone want to take a guess as to who the "common major donor" might be?

It isn't enough that these evil schemers want to sully elections by running bogus candidates as Democrats in order to screw up elections. They're willing to pay "activists" in a multi-level marketing scheme to "train" others just like them.

These are the forces at work in Wisconsin, along with the John Birch Society, Freedomworks and Americans for Prosperity [also Koch brothers entitites; their father was a cofounder of the JBS]. The names are interchangeable, but the goal is the same: Oligarchy.

In These Times has a lengthy investigative report out this week on the Kochtopus. Publicopoly Exposed– How ALEC, the Koch brothers and their corporate allies plan to privatize government. (excerpts):

On February 25, 2011, Florida State Representative Chris Dorworth (R-Lake Mary) introduced HB 1021. The bill sought to curtail the political power of unions by prohibiting public employers from deducting any amount from an employee’s pay for use by an employee organization (i.e., union dues) or for any political activity (i.e., the portion of union dues used for lobbying or for supporting candidates for office).

[Dubbed the "paycheck protection act" by anti-union forces. A nearly identical bill passed in the Arizona legislature.]

In effect, this bill defunds public-sector unions—like AFSCME, SEIU, the American Federation of Teachers and the National Education Association—by making the collection of member dues an onerous, costly task. With public-sector unions denatured, they would no longer be able to stand in the way of radical free marketeers who plan to profit from the privatization of public services.

Given the similarities between HB 1021 and a rash of like-minded bills in states across the country, including Wisconsin, on March 30 a public records request was sent to Dorworth’s office seeking copies of all documents pertaining to the writing of HB 1021, including copies of any pieces of model legislation the American Legislative Exchange Council (ALEC) may have provided.

After being advised by the Forida House' Speaker's office that "Mr. Dorworth’s legislative offices did not receive any materials from ALEC relating to this bill or any ‘model legislation’ from other states”:

[T]wo weeks later Dorworth’s office delivered 87 pages of documents, mostly bill drafts and emails, detailing the evolution of what was to become HB 1021. Buried at the bottom of the stack was an 11-page bundle of neatly typed material, labeled “Paycheck Protection,” which consisted of three pieces of model legislation, with the words “Copyright, ALEC” at the end of each.

Mr. Dorworth went with the Sargeant Shultz defense: "I know nothing!"

When legislative sessions began in January, the American news-consuming public was shocked by the tenacity of this new breed of Grand Old Partier as it set to the task of breaking public employee unions, dismantling state government and privatizing civic services.

* * *

When on February 23 the Buffalo Beast published recordings and transcripts of a prank call to Walker from a Beast reporter posing as billionaire GOP donor David Koch, it became apparent how intimately involved brothers David and Charles Koch were in Walker’s efforts to break public sector unions.

Subsequently, bloggers and editorialists began batting around possible scenarios involving myriad right-wing public policy foundations funded by the Koch brothers and proceeds of Wichita, Kan.-based Koch Industries (and other Koch-controlled corporations). During such speculation, one name arose as the favorite villain behind the multitude of bills aimed squarely at public employee unions. That name was ALEC (see sidebar detailing the organization’s Koch connections).

An exhaustive analysis of thousands of pages of documents obtained through public records requests from six states, as well as tax filings, lobby reports, legislative drafts and court records, reveal that these suddenly popular anti-public employee bills, while taking different forms from state to state, were indeed disseminated as “model legislation” by ALEC.

Not coincidentally, bills similar to those in Florida and Wisconsin have been introduced in Arizona, California, Illinois, Iowa, Indiana, Kansas, Maine, Maryland, Michigan, Minnesota, Missouri, North Carolina, New Hampshire, New Jersey, New Mexico, Ohio, Oklahoma, Rhode Island, Tennessee, Texas, Utah and Vermont.

The purported goal of this nationwide movement has been to reduce the budgetary burden posed by public employee salaries by limiting the right of public employees to collectively bargain for pay and other benefits. These restrictions, along with “paycheck protection” laws, curtail the political power of public employee unions by cutting off funds for political campaign and lobbying expenditures. These measures would effectively thwart attempts by public employee unions to resist privatization of government functions and to support candidates opposing elected officials who vote for corporate giveaways of public resources.

* * *

The three pieces of model legislation contained in the ALEC “Paycheck Protection” bundle (archived at dbapress.com here) provided by Rep. Dorworth’s office were titled “Employee Rights Reform Act,” “Labor Organization Deductions Act” and “Political Funding Reform Act.”

* * *

Public records requests demonstrate a clear tradition of ALEC model legislation being passed from ALEC-member corporate lobbyists through the offices of ALEC’s elected public-sector chairs to other lawmakers. In essence, ALEC has created a web of lawmakers and public employees who act as lobbyists/agents on their behalf and on behalf of their corporate and special interest members.

It is important to note that ALEC, as a 501 (c) (3) entity, is strictly prohibited by federal tax code from taking part in the formation of legislation. In the past year, ALEC has vociferously insisted (since falling under increased scrutiny as a result of the July 2010 In These Times cover story, “Corporate Con Game,” which documented ALEC’s role in disseminating model legislation based on Arizona’s SB 1070), that it simply passes model legislation along to lawmakers. As such, ALEC claims it is not engaged in the crafting of actual legislation, nor is it engaged in lobbying.

Despite such protestations, ALEC is a conduit, an intermediary between Corporate America and the Republican Party—a legislative roach motel controlled by corporations, special interest groups and right-wing think tanks through which lawmakers (whose election campaigns are often funded by the same corporations and interest groups) gather model laws to take home and introduce in state legislatures.

Taken together, ALEC’s efforts to shape legislation, beguile lawmakers and privatize government services have one clear goal: to eliminate the public sector altogether.

* * *

ALEC annually spends more than $1 million for corporate lobbyists to meet state lawmakers at lavish retreats—lawmakers who will return home and try to shepherd ALEC’s corporate-sponsored “model legislation” into law.

However, through an accounting sleight of hand, ALEC hides the identity of the corporations that are paying for the lawmakers’ junkets and backing the group’s model legislation.

* * *

In 2009 alone, ALEC tax returns show that the group spent a combined $2,620,343 on organizing conferences and a membership services program that manages “the recruitment and retention of ALEC state legislator members” and “provides assistance to ALEC state chairs in raising state scholarship funds, tracking the expenditures of these funds, and ensuring that members of ALEC leadership are operating in accordance with ALEC policies and procedures.” In 2009, ALEC held $1,042,629 as “scholarship” funds to reimburse lawmakers attending ALEC functions. That’s listed on the tax returns not as an expenditure, but as a liability. Through this accounting trick, ALEC retains its tax-exempt status while simultaneously wining and dining thousands of the nation’s state lawmakers—who then go on to introduce ALEC’s legislation. In each state, ALEC has both a “public sector” and “private sector” chair.

* * *

Case study: Arizona

Documents released following a public records request to the office of then-Arizona Senate President Bob Burns (R-Peoria) indicate that in 2009 and 2010, Arizona ALEC lawmakers requested more than $60,000 in reimbursement for travel, lodging and registration fees from ALEC’s scholarship fund for their time at ALEC functions—including the December 2009 event at which State Senator Russell Pearce (R-Mesa) submitted his draft of SB 1070 for approval as a piece of ALEC model legislation, the law known as “breathing while Brown” to its critics. (See “Corporate Con Game: How the private prison industry helped shape Arizona’s anti-immigrant law,” In These Times, July 2010.)

Records indicate that Burns approved all of these requests. Disbursements ranged from around $1,000 to $3,000. This is a considerable sum, given that an Arizona legislator earns $24,000 per year and that the maximum allowable contribution from an individual or political action committee to legislative candidates in the state is $424.

But because the monies raised for the ALEC scholarship fund are donated by member corporations and their representatives, and because the identity of these donors is impossible to determine, ALEC may be operating in direct opposition to a provision of Arizona’s “gifting” law.

Arizona Revised Statutes (ARS), title 41-1232.03, section (I), states: “A person or organization shall not make a gift to or an expenditure on behalf of a member or employee of the legislature through another person or organization for the purpose of disguising the identity of the person making the gift or expenditure.” In addition, Arizona law requires lawmakers to disclose all “gifts” over $500.

Yet ALEC does not give “gifts,” according to ALEC Senior Director of Public Affairs Raegan Weber, based in Washington, D.C. “It’s not a ‘gift,’ ” she says. “It’s a ‘scholarship.’ We don’t give gifts. A gift is something given out of kindness. I’m gonna give you this. A scholarship has specific specifications which must be met.”

According to Weber, the scholarship funds do not come from ALEC. Rather, Weber says that all funds are raised in each state by either the state’s public or private sector chairs, independent of ALEC. After being raised, the funds are simply given to ALEC for the group to hold until each state’s public sector chairs request a disbursement, she says.

On Nov. 8, 2010, the Tucson chapter of the American Friends Service Committee (AFSC), a Quaker social justice organization, called on the Arizona Secretary of State and the Arizona Attorney General to investigate what it describes as ALEC’s “influence peddling.”

“Any rational person can look at what these corporations are doing through ALEC and on their own and know that essentially for-profit corporations are writing legislation in Arizona,” said Caroline Isaacs, AFSC program director. “The spirit of the law—which I think most of us believe is there to prevent money from buying undue influence in politics—is clearly being violated.”

When asked to provide a list of specific donors to the Arizona ALEC scholarship fund, Russell Smoldon, the ALEC Arizona “private sector” chair, utility lobbyist and a member of the ALEC Private Enterprise Board task force that raises those funds, declined to do so. “No. I don’t want to start scaring people off. I have a hard enough time raising money.”

Arizona's political reporters who have been digging into the Fiesta Bowl Scandal should be digging into this ALEC story as well because it falls into the same ambit of questionable ethics and political corruption. Some aspects of the ALEC "scholarships" were reported in the Fiesta Bowl Scandal coverage earlier this year, but not in depth or with the same emphasis that the In These Times investigative report goes into. I recommend reporters follow up on this reporting with some FOIA requests of your own. As I have said before, the lobbying scandal at the Arizona Legislature is the biggest news story not being reported by Arizona's political media. Apparently they have all forgotten the AZ-Scam Scandal and no one wants to earn a Pulitzer Prize.