Minnesota Lawyer
Common Cause Minnesota's Mike Dean
On the heels of a federal complaint to the IRS over the American Legislative Exchange Council’s alleged misuse of federal tax law, Common Cause’s Minnesota chapter has followed the lead of its national organization, asking Attorney General Lori Swanson and the Campaign Finance Board to investigate ALEC’s activities in Minnesota.
“ALEC operates as a corporate lobby group masquerading as a public charity,” Mike Dean, head Common Cause Minnesota, said in a statement announcing the two complaints. “Minnesotan taxpayers should not be forced to subsidize ALEC’s lobbying efforts.”
The pair of complaints come from allegations that ALEC is involved in lobbying activities but presents itself for tax and campaign finance purposes as a charitable organization. By doing this, the complaints allege, ALEC is flouting state tax law by classifying its funds as part of a charitable effort and failing to register as a lobbying organization under state campaign finance and public disclosure regulations.
In a letter to the Attorney General’s office, Common Cause cites a specific state law that it says ALEC would be in violation of by coloring itself as a charitable organization as opposed to a lobbying outfit.
“ALEC’s compliance with state tax, gift, and solicitation should be reviewed by your office,” the letter states. “ALEC’s primary purpose appears to be providing a vehicle for its corporate members to lobby state legislators and to deduct the cost of that activity as charitable contributions.”
In that same vein, Common Cause alleges that those lobbying activites should require the group to register as a lobbying organization under state law. In the complaint to the Campaign Finance Board, Common Cause presents e-mails and ALEC materials as evidence of the group’s lobbying activities.
“ALEC engages in a measurable amount of lobbying and has thus filed false tax returns when it claims otherwise,” the complaint says. “It seems incontrovertible that ALEC is substantially and indeed primarily engaged in attempting to influence legislation. All of its efforts are geared toward developing and promoting favored state legislation.”
The criticism of ALEC is not a new phenomenon in Minnesota or in many areas around the country, including Washington. Democrats and liberals have looked to line up ALEC with shadowy corporate interests and to paint a number of GOP-backed initiatives in state capitols and Washington as ALEC-driven measures.
The complaints in Minnesota come as the group has seen also seen increasing scrutiny in Washington over its status as a charitable organization with the IRS, which is at the heart of the federal complaint filed last month. Much like the Minnesota action, the IRS complaint alleges ALEC has misused its charitable organization status to function as a political lobbying outfit. It’s also unlikely, the group alleges, that the charitable status should even apply to ALEC given its purpose and structure.
Republicans in Minnesota have mostly deflected the criticism and downplayed any ALEC influence in their dealings at the Legislature. But Gov. Mark Dayton often made a point of citing ALEC’s influence when he would veto certain measures, calling them against the interests of everyday citizens and corporate-driven pieces of legislation.
So far, though, the group has been able to deflect the legal scrutiny. The fallout from the Trayvon Martin shooting in Florida, though, which brought attention to ALEC’s support of so-called “shoot first” legislation, did cost the group some members and corporate supporters.
