How ALEC Serves As A 'Dating Service' For Politicians And Corporations Leaked internal documents reveal new insights into the goals and finances of the American Legislative Exchange Council. ALEC brings together state legislators and representatives of corporations to develop model bills that lawmakers try to pass in their state legislatures.

How ALEC Serves As A 'Dating Service' For Politicians And Corporations

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This is FRESH AIR. I'm Dave Davies in for Terry Gross. New insights into the goals and finances of the secretive group ALEC are revealed in a batch of internal documents that were recently leaked to the British newspaper The Guardian. ALEC is an acronym for the American Legislative Exchange Council, a group that brings together state legislators and representatives of corporations.

Together they develop model bills that the lawmakers introduce and try to pass in their state legislatures. Through these model bills, ALEC has worked to privatize public education, cut taxes, reduce public employee compensation, oppose Obamacare and resist state regulations to reduce global warming gas emissions. Our guest, Ed Pilkington, broke the story of those documents last week.

He's the chief correspondent for The Guardian U.S., which is the American website edition of The Guardian. He's The Guardian's former national and foreign editor. He spoke with Terry Gross yesterday.


Ed Pilkington, welcome to FRESH AIR. Before we talk about the documents that were leaked to you, let's just talk a little bit in general, how would you describe what ALEC is?

ED PILKINGTON: ALEC is sort of almost a dating service between politicians at state level, local elected politicians, and many of America's biggest companies and it brings them together much as a dating service would do. And it sits them in rooms behind closed doors where three times a year they come together to think about what should be the next wave of state-based legislation.

And they have presentations from the companies that say what they would like to see done legislatively in states right across America, and then they have a vote and the legislators begin. Hundreds of state legislators across America belong to ALEC and come to these meetings. They begin having a vote on what they'd like to do in the next state assembly session.

And after the legislators have voted, the companies get to vote and essentially they have a veto. If they don't vote by at least 50 percent to approve a piece of legislation going forward, it doesn't happen. If they think they do approve of it, it goes ahead and becomes a model bill, which is like a blueprint for a piece of legislation that ALEC wants to see spread across America, and that's what happens.

Legislators pick up the model bill, they return to their state assemblies, they put it before their colleagues or their elected MP - politicians, and quite often it becomes law. And so ALEC is like an incubator of predominantly conservative legislation; the vast majority of the model bills are conservative in their sort of inception.

GROSS: So these model bills are basically made in partnership between corporations and legislators?

PILKINGTON: Yes, and that's what's special about ALEC. I don't think anyone in America would have any trouble with the idea of corporations making clear what they wanted done by politicians. I mean, that's a very important part of the democratic process, bearing in mind that the corporations we're talking about are among the largest employers in the country. So it's important that they should be able to transmit and communicate their views into the political process.

What's special about ALEC, and I think what some people have difficulty with in terms of dealing with is that they give corporations actually a vote, and I mean that literally, in those closed-door sessions. The corporations will have an equal vote to elected politicians at state level and they have this veto which, you know, goes beyond airing what corporations would like to see done by state assemblies and actually gives them a sort of direct plug-in to the system.

GROSS: So what's the breakdown of the vote? That fifty percent of the corporations have to...

PILKINGTON: It's actually on both sides.

GROSS: Fifty percent of each side.

PILKINGTON: Of both sides and legislators go first, then corporations and more than 50 percent of both sides have to approve for it to go ahead.

GROSS: So does that mean that the corporations are getting a disproportionate amount of vote because there's fewer corporate representatives at these meetings than there are state legislators?

PILKINGTON: Yes, and it's even more pronounced than that. I mean, essentially they're getting an equal vote because - it's a sort of veto. Unless both sides approve by the majority that something should be turned into a model bill, it will not go ahead. And if you look at the membership figures, it's something like 1,800 on the public side, 1,800 state legislators belong to ALEC. And on the other side, there's something like 220 or so corporations belong to ALEC, so yes it is a, you know, it's a great inflation of their influence, that they get an equal vote.

GROSS: What are some of the model bills that ALEC has put forward in the past that have had the most traction?

PILKINGTON: Well, the most controversial has been the Stand Your Ground law and I'm sure we'll come on to talk about this because it's very pertinent to the documents The Guardian obtained last week. In 2005, Florida introduced the country's very first Stand Your Ground law, which gave homeowners the right to self-defense beyond the actual home.

And what ALEC did, it saw that bill, it liked that bill; in discussions between state legislators, and corporations in their thrice annual meetings, they liked it too, and they adopted it into a model bill. And it was ALEC that helped spread Stand Your Ground right across the country. There are now something like 26 states who have it on their books in some degree or other, modeled upon ALEC's work.

And when Trayvon Martin was killed in February 2012 by George Zimmerman, who was later acquitted for second-degree murder, ALEC became embroiled in that controversy. And that has had a real impact on ALEC going forward in terms of its reputation, its dealing with big corporations.

But there are many, many other areas of - it's sort of any area of really frontline controversial, ideologically conservative legislation that you see spreading in states across America. You're likely to find ALEC somewhere behind it. And I'm talking about the fight against Obamacare at state level, the attempt to keep back Medicaid, attempts to reduce the pension entitlements of public employees and keep low the minimum wage.

And in education, the spread of voucher systems which are used to sort of forward home education and private education and, to some degree, undermine public schools.

GROSS: Now, the documents that were leaked to you, were these all planning documents from ALEC?

PILKINGTON: They're internal documents that went through a whole range of different things. They talked about their actual agenda, they talked about their budget, which showed the degree of which they're in financial difficulty post the Trayvon Martin controversy. And one of the things that leapt out at me was a page titled "Prodigal Son Project," and beneath it was a list of 41 major companies, and I mean major.

They're among the biggest in the country and most iconic. There's Coca-Cola, Pepsi, McDonald's, Wal-Mart, Amazon, General Electric. And those are all companies that quit as members of ALEC in the two or three months after Trayvon Martin died. And by dint of that name, "Prodigal Son Project," it suggests that ALEC is very keen to get them back. And you sort of can start to understand why when you realize the funding structure of the network.

The vast majority, something like 98 percent of its funding comes from the corporation side as well as sort of major foundations, sort of conservative think tanks and funding bodies. So although they get an equal vote, the corporations, alongside the politicians, they pay the lion's share of the money.

GROSS: And this is in their dues, like in dues membership to become a member of ALEC?

PILKINGTON: Yes. I mean, the dues work something like state legislators pay very minimal amounts, something like 50 bucks a year. The corporations can pay a membership fee of up to $25,000 a year. And then there's a sort of extra level of subsidy, of donations of gifts we know less about because, being a 501(c) charity in its construction, ALEC, they don't have to reveal where they receive their money from.

GROSS: OK. So you found out through this document about the "Prodigal Son Project" that ALEC was trying to woo back a lot of major corporations who have left the organization, are no longer paying dues, and that's creating a funding crisis for ALEC. Why did they leave? Was it because of the Trayvon Martin controversy - or more specifically because of the controversy over the Stand Your Ground legislation?

PILKINGTON: Yes. I think it's fair to say that. I have to qualify it because most of the companies, when they suspended their membership, they gave a very sort of bland explanation. They said, well, you know, it's the end of the financial year; we've decided not to renew. Maybe they said they had some budget issues themselves, they didn't want to spend this money. But if you look at the timing of it, Trayvon Martin died in February. These corporations dropped off one after another in March, April, May of 2012. So the timing is extremely suggestive. And some of them made it clear. Wal-Mart made it clear that they had joined ALEC because they wanted to be party to the economic discussions that ALEC forwards, predominantly how to reduce say, corporate taxes or to reduce government regulation on corporations so that they can do their business, you know, in a more untrammeled way. And Wal-Mart said they didn't like the way that ALEC had strayed into more social political areas, such as Stand Your Ground, notably. And there are other areas too, such as voter ID laws. ALEC has been incredibly influential in spreading voter ID laws around the country. And those laws, as we know, critics like the NAACP say make it more difficult for African-Americans, for poorer Americans, for maybe elderly Americans, to get to the polling stations and cast their votes.

GROSS: So what is the extent of the budget loss for ALEC since so many corporations chose not to renew their membership?

PILKINGTON: Well, what we saw was an internal budget document. And it showed that in terms of incoming revenue, in the first six months of this year, they had about a 50 percent hole in their projections. And overall, there was about a third of their income was down. And I think there's a sort of interesting a story beyond that, beyond the pure finance of it, and for me it raises interesting issues about what happens with sunlight, is the way I think of it. ALEC's been in existence for 40 years. And until 2011, when a similar dump of leaked documents came out, until then, most people didn't even know ALEC existed. And part of its power has been secrecy. Corporations have been able to meet elected politicians behind closed doors without anyone knowing what they've been doing and agree the next session's legislation within those state legislatures. And it's worked very well for them. It's helped them with their bottom line. It's helped them beat back regulation and get laws on the books which have allowed them to make more profits.

When it's become out in the open after 2011, and with Trayvon Martin - which drew ALEC into a huge national furor, the corporations haven't liked it all. And I think there's an interesting lesson there. Corporations dislike two things intensely: they dislike taxes, corporate taxes, they dislike regulation. But they dislike even more the sort of fallout of public attention and bad publicity.

GROSS: If you're just joining us, my guest is Ed Pilkington. He's the chief reporter for The Guardian U.S., which is the American website edition of the British paper The Guardian. We're talking about ALEC, the American Legislative Exchange Council - which shapes and promotes legislation at the state level across the U.S. ALEC brings together state legislators and corporate representatives to shape, model legislation that is introduced at the state level. Let's take a short break here, then we'll talk some more.

This is FRESH AIR.


GROSS: Before publishing anything about the documents from ALEC that were leaked to you, you had a correspondence with the public relations person from ALEC. His name is Bill Meierling. And I hope I'm pronouncing that correctly, so I hope he will forgive me if I'm not. But he said to you that there is no funding crisis in ALEC. And he also said that ALEC did not draft Stand Your Ground policy. So how does that fit into your analysis?

PILKINGTON: Yes. Well, I'd like to point out that we did have this exchange, and it was a very full and frank one. And I think that in itself is significant because as I say, a group that has been noted for its secrecy and for being withdrawn from public debate actually engaged with us considerably in a very open exchange of email - which, you know, we were very grateful for because it helped us get our story as accurate as we could. So I think there is something going on in ALEC in the sense that they're trying now to be more open and transparent, and I think that they see that as an important way of winning back the trust of those Prodigal Son companies that have withdrawn membership.

GROSS: I should also add, though, that Bill Meierling of ALEC concedes that whether the connection between ALEC and Stand Your Ground is true or untrue, accusations about ALEC and Stand Your Ground cost members.

PILKINGTON: Yes, he did concede that. And to be fair to ALEC, it's true that they had nothing to do with the Florida law on which the whole controversy around Trayvon Martin happened, simply because the Florida law was the first in the country. And it was that law that ALEC then took and made into a model bill and spread it around the country. So I think quite a lot of people have becoming confused about that. I don't think that that removes ALEC from the controversy around Trayvon Martin because although ALEC has now shut down the taskforce that dealt with law and order issues and those Stand Your Ground laws, in that same taskforce, they shut down any involvement in voter ID laws that is sped around the country through their model bills. So they're no longer involved in that area at all. But they have left behind a legacy. There are something like 26 states with Stand Your Ground laws on their books partially, if not totally, based on ALEC model bills. And similarly, there's something like 35 states around the country with voter ID laws that make it more difficult for certain voters to get to the ballot box. So there is a sort of mess that ALEC has helped create that is still there and I think they still have public issues to answer for.

GROSS: So you found out through leaked documents that there is this Prodigal Son Project to try to woo back corporations who dropped their membership from ALEC. Do you know what the approach is going to be in trying to woo these corporate members back?

PILKINGTON: Well, I think it was a significant comment from Bill Meierling in his exchange with me, that he said we would be transparent from now on. And I generally think that's their main - and perhaps their only strategy is just to be seen to be more aboveboard. And I think everyone would welcome that, including critics of ALEC. I think it's also worth mentioning that Dana Milbank of The Washington Post last week, when ALEC had its most recent meeting - this one was in Washington, D.C., Dana Milbank was allowed into the ALEC meeting. Now that in itself as far as I'm aware is a first. Journalists previously have not been welcome. But he only got so far. He was allowed to see - sit in on sort of side meetings and to hear the big keynote speeches, Ted Cruz of Texas, address the meeting. But when he asked me go into a task force meeting - this is the closed-door session where politicians sit down in the same room with corporate lobbyists and discuss what they should do in the next session of the state legislature, they said to him well, this is a private meeting and we can't let you in. So I think that they've opened the doors but only so far, and that's, I think, going to be another sort of controversy going forward.

GROSS: Yes. Milbank quoted ALEC's public relations person as saying they want to introduce transparency but, quote, ALEC can't just kick the doors open.

PILKINGTON: Right. And I think Dana Milbank then went on to say yes, they can. But that's his opinion. Yes. I mean ALEC has always stood behind the defense that it is a private members club, you know, a bit like a golf club, and that therefore, it shouldn't be subject to the same scrutiny, public scrutiny, as other institutions in public life. And that's also been very significant in the other big thing that we discovered from our documents - which is the whole issue of lobbying.

Now ALEC says it does zero lobbying. And it says that literally because with the IRS, with the tax man in America, it has to disclose how much lobbying it does because that affects its charitable status. And year by year, in its tax returns, ALEC has said it does zero lobbying.

What we learned in our documents is that ALEC is now planning to set up a side organization called "The Jeffersonian Project," which would have a slightly different charity status. It would be a 501(c)4, rather than a 501(c)3 - which it would allow ALEC, going forward, to do more overt lobbying. And I think that opens a window into a huge area of public life in America that has not been given much discussion, or thought or critical thinking, and that is the area of lobbying beyond the actual election process.

Most of the focus in America at the moment is on big money going into actual election campaigns. You know, we think of Karl Rove and American Crossroads and groups like that. Apparently, $300 million was spent in the 2012 election cycle by corporations and other sort of interest groups on funding the election process. So, you know, there's good reason for focusing in on that. But what people then don't think about is the lobbying that happens at the next stage which is, you know, arguably actually more important, and that is what do those elected politicians do when, you know, given power by the voters to go to the state legislature, put bills in front of their colleagues, vote on them, and actually change the lives of individuals through these laws which really do change people's lives, whether you're a pensioner and you find your pension has been reduced or, you know, the minimum wage is not going up. It really changes lives. And yet people aren't really talking about the lobbying that happens at that stage.

DAVIES: Ed Pilkington is the chief correspondent for the Guardian, U.S., the American website edition of the British newspaper The Guardian. He'll be back in the second half of the show. I'm Dave Davies and this is FRESH AIR.


DAVIES: This is FRESH AIR. I'm Dave Davies in for Terry Gross.

We're listening to Terry's interview recorded yesterday with Ed Pilkington, the chief correspondent for the Guardian U.S., about leaked documents that reveal new information about the group ALEC, the American Legislative Exchange Council. ALEC brings together corporate representatives and state lawmakers who develop model bills, usually conservative ones, with the hope of getting them passed in state legislatures.

GROSS: What's in it for a state legislator to be part of ALEC - to be a member of ALEC?

PILKINGTON: Well, I think you have to sort of put yourself into the mind of some of these state legislators. They're, you know, they're often very poorly funded, even poorly paid. I mean in Texas the base salary of a state legislator is $7,000 a year. They'll often have very small staff and few resources to help them do the business of being an elected politician. Which can include, you know, it's really difficult to actually draft legislation because you haven't got the legal advice, you haven't got the staff to produce it, you haven't got staff even to research the subject. You know, if ALEC comes along and says well, here's a model bill for you. It's all written for you. It's all been perfectly researched. You can just take it and put it in front of your group or politicians in your state, then that's quite attractive. And a slightly darker side, perhaps, is the attraction of being taken to one of these three-times-a-year meetings. Sometimes your air travel is paid for you by ALEC. And then you get into a room and you meet some of the biggest and most sort of influential and iconic companies in the U.S. And that must be a sort of appealing just in itself. What we don't know is whether that then later down the line in any way - and it may not, but we just don't know - sort of filter through to financial help for politicians when they come to say, stand for reelection in their states. It's possible perhaps that having made those initial contacts in the ALEC room that they can keep in touch with big companies and benefit from that.

GROSS: ALEC sponsored at least 77 energy bills in 34 states last year. What are some of the things you learned through the leaked documents about what kind of energy-related bills ALEC is sponsoring?

PILKINGTON: Yes. Well, the most sort of grabby was this idea relating to solar panels. My colleague, Suzanne Goldenberg, partially based on the leaked documents we obtained, found out that ALEC was very keen to try make it more difficult for people to put solar panels on their roofs. Now if you're an American lucky enough to live in an area with a lot of sunlight, you can put solar panels on your roofs, which on one hand increases your own income, because you can sell the energy to the energy companies, and it also allows you to do your bit to try and help the planet, so it can make you feel good as well as earn a little bit of extra money.

If you think of some of the backers that ALEC has, among them are the really giant energy companies in America, including ExxonMobil, Koch Industries owned by the Koch Brothers, and they're largely carbon related companies - the coal, oil, they're involved in fracking. So they're keen to make sure that renewable energy sources are kept in their place because there is a direct economic competition with them. So what ALEC is talking about with solar panels is to charge individual homeowners extra fees for offloading their energy from the sun into the system. They're calling those homeowners "freeriders" because they don't pay very many fees to keep the upkeep of the energy network. And in other areas, ALEC is thinking about ways in which they can hold back the Environmental Protection Agency. And they're also very keen to whittle down, or even eradicate regional deals between states. There is one, a big one in the Northeast of America involving nine different states, where state legislators have required energy suppliers to take a percentage of their energy from renewable sources. So it's a sort of multi-fronted attack. And you can see that right across the board - whether it's education or health care or workers rights and pensions. They have the same approach. They'll have ongoing, maybe four or five different attacks at any one time. And overall, they're putting forward maybe 130 model bills, different model bills to state legislators every year.

GROSS: What is the argument for charging, basically for charging fees to people who have installed solar panels on their roof, as opposed to granting incentives to encourage you to install solar panels?

PILKINGTON: Well, ALEC says that the cost of putting a network of energy transmission across the country runs into billions of dollars and therefore, homeowners should pay their way. I think other people might say, you know, if we are to encourage pollution-free energy and to try and combat climate change, we need to do everything we can to incentivize people to come forward. And that by introducing impediments, you're going to make it much less likely that people will do it. The real critics of ALEC, they would say that that's the intention, that the intention is to stop renewable sources becoming a major competitor with some of the big member corporations of ALEC who are the carbon-related energy companies.

GROSS: Now do some of the model bills that ALEC has been working on in the energy area related to limiting the Environmental Protection Agency's powers to regulate fracking?

PILKINGTON: Yes. Fracking has been another big area in which ALEC has been active for now several years. And they have, it's something like a 10th of their overall output is dedicated to fracking model bills. So it is a big real concern for them. They put a lot of energy into that area.

GROSS: If ALEC succeeded in limiting the EPA's ability to regulate fracking, then it would fall to like the states and there would be a lot of different regulations. Do you know if ALEC feels they would have more control over the state level, if the EPA's powers were limited, that ALEC would have more input into how much states controlled fracking?

PILKINGTON: Well, I think this is one of the dichotomies of the ALEC model. The reason they - we talked earlier about the desire to set up a separate side organization called The Jeffersonian Project. The reason they're calling it The Jeffersonian Project is because of Jefferson's belief in federalism. And federalism is one of the big key words of ALEC. They want states to have the priority share of control of politics in America, and they want federal government to be reined right back. And that's a genuine conservative view that they hold and adhere to. But there is a sort of dichotomy here because whilst wanting power to return to the state level, to the state legislature, they also want to have more central control over what that state legislature does - which is totally, you know, overt in their model because that's what they do, they produce model bills that are uniform. They're drafted the same. They're put in front of state politicians in exactly the same wording. And so, whilst wanting states to be handed back, say, control from the EPA over energy policy, they then want ALEC to come in with the model bills and to sort of systematize and unitize what those states are doing.

GROSS: You published your stories about the leaked ALEC documents just before ALEC had a policy summit. And that summit was held last week. Do you have any idea whether the results of that summit changed the story in any way, that you've published?

PILKINGTON: No. We haven't heard anything. I mean it was interesting the exchange I had with ALEC, that they said, they said to me, we don't understand why you're publishing leaked documents. If you'd asked us for those documents we would've handed them to you. So I have now asked ALEC that question: Will they share with me the, sort of, paperwork that came out of last week's meeting, and it will be interesting to see how they respond to that. But no, we don't really know. All one can assume, I think, is that it's kind of business as usual. Although they're suffering from this funding hole, they are moving forward. There's still hundreds of state legislators attend their thrice-yearly meetings. Still, many of the biggest companies in America are still on their books. They include Glaxo Smith Kline, Pfizer, from the pharma area, Altria, the tobacco giant, AT&T from telecom - are still members. So, you know, it would be wrong to get the impression that ALEC is moribund or is on its last gasp. That's not true at all; it's still very active and still extremely influential, which is why I think it's still worth having this discussion.

GROSS: What are some of the questions you would now like answered about ALEC?

PILKINGTON: Well, I'd really like to hear the conversation in that room. I mean one can sort of enter into it in one's head.

GROSS: In the room where corporate members and state legislators get together and discuss model legislation, that room?

PILKINGTON: Precisely. I mean we've managed to piece together little snippets of what happens in there. You know, we know that there are these PowerPoint presentations by the companies, and that they then move to vote - the legislators first and then the companies move to vote. But you sort of want to know the whole tenor of the discussion, because that's what it's all about. It's a formalization of companies having sway over the political process. And we may come out of that meeting, if we're ever allowed into one and say wow, this is fine, you know, it's just a discussion. It's just a grown-up adult discussion about what should be done over energy policy, or health care, or education. Or you might come out thinking this is kind of odd. It's - why are companies dictating what elected politicians do? And one of the documents we found, what we obtained, was a draft agreement which ALEC was putting forward to their state chairs. Now the state chairs are very senior state legislators, overwhelmingly Republican, and they're asked to sort of look after ALEC business in their state. And the draft agreement, which I should point out ALEC said to us was not adopted, but it had been proposed. One of the lines said that the state chair would agree to put the interests of the organization first. And you just sort of think about that phrase, the interests of the organization first, it means an elected politician is being asked to put the interests of a third party before the interests of the people who elected them.

GROSS: And the third party is a party with a large corporate vote to it.

PILKINGTON: With large corporate backers. Now in America, the idea of big companies giving a lot of money to politicians is not, you know, it's not the first time we've heard this. But it is - I think it's that vote that counts here. You know, they give the money, then they get a vote. And that is, I think, the significance of what ALEC does.

GROSS: Ed Pilkington, thank you so much for talking with us.

PILKINGTON: It was a pleasure. Thank you.

DAVIES: Ed Pilkington is the chief correspondent for The Guardian, U.S. You can find a link to the leaked documents described in his interview at our website FRESH

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