Weak disclosure laws allow corporations to bankroll ALEC with no accountability

The American Legislative Exchange Council (ALEC), a national policy organization founded to advance conservative and free-market principles, marked its 50th anniversary last month and continues to be under intense scrutiny for promoting policies that undermine democracy and disproportionately target marginalized communities. From championing “Stand Your Ground” laws to spearheading efforts to curtail voting rights, and pushing for harsher sentencing laws, ALEC’s state legislative initiatives raise questions of whose interests ALEC truly serves. Is the “better life” their CEO recently claimed they aim to create meant for the broader society or for the select few major donors and corporations who fund them? 

ALEC’s legislative priorities, including its indifference to democracy and racial justice, threaten to deepen divisions and disparities in our society. ALEC has substantial legislative impact, with members, including corporate executives, actively participating in formulating legislation. ALEC is structured in task forces, each dedicated to specific policy domains such as education and healthcare. The organization operates as a shadowy influence across the country, with model legislation crafted at ALEC meetings and pushed through state legislatures with little to no public awareness or participation. Between 2010 and 2018, state legislators in all 50 states introduced over 2,900 bills connected to ALEC-crafted model legislation. More than 600 of those bills became law, a testament to ALEC’s power at the state level. 

Understanding ALEC’s funders sheds light on the motivations at play and the potential consequences for the individuals and communities affected by these laws. 

Despite annual revenues that have reached above $10 million, ALEC has no legal obligation to disclose its funding sources. This works to the benefit of the multinational corporations, trade associations, and billionaire donors that fund ALEC because they want the benefit of access to powerful state officials, but they don’t want to be held accountable for supporting an organization that’s responsible for policies that hurt the very same communities they claim to support. This dichotomy permeates every aspect of corporate influence in the United States, but ALEC in many ways is a poster child for how corporations get to have influence without accountability, to the detriment of American democracy. 

A CREW review of tax data shows that ALEC has received funding in recent years from trade associations representing the gambling industry, pharmaceutical companies and the petrochemical industry, among many others. Major national business groups like the U.S Chamber of Commerce Foundation and the National Federation of Independent Business as well as groups tied to wealthy conservative donors like the Charles Koch Foundation, Searle Freedom Trust and the Bradley Foundation have also funded ALEC over the years. And none of this accounts for what is likely a  significant portion of ALEC’s funding that comes directly from corporations—though exact totals of each company’s support are unknown. 

In recent years, ALEC’s deep ties to some of the largest corporations in the country have only become apparent when those corporations cut ties with ALEC. For example, in 2012, companies like Coca-Cola, Pepsi, Mars, and McDonalds—along with the Bill and Melinda Gates Foundation—said they would stop giving grants to ALEC after facing public pressure against ALEC’s work pushing  restrictive voter ID laws and Stand your Ground laws. In 2018, Verizon, and AT&T fled the organization following an annual meeting that featured the head of an anti-Muslim extremist group as one of its speakers. Blue Cross Blue Shield, American Electric Power and Uber have said they were distancing themselves from ALEC, only to reappear on ALEC documents later. Many of these and other companies are also members of trade associations that continue to fund ALEC, thereby indirectly funding the organization. 

Corporations—by virtue of their massive financial resources and the nature of political influence in America—have an outsized influence on legislative outcomes around the country.  Therefore, the values they espouse in statements about the need to defend the rights and protections afforded to disadvantaged groups or even to American democracy as a whole carry weight that most other special interests don’t because they are backed by the unmatched resources of their corporate coffers. This is precisely why the public needs the ability to hold them accountable when they break the commitments they make to the public. . 

Corporations, as CREW has written about in the past, and lawmakers alike depend on a stable democracy and a diverse workforce. Corporations often commit to safeguarding marginalized communities in specific contexts but fall short in adhering to these commitments. Funding politicians and groups like ALEC with such obvious detrimental impact on those communities is a clear example. 

Similarly, many of the companies that spoke out against racist voting laws in Georgia in 2021 were the same companies that continued to fund members of Congress who voted to overturn a free and fair election in 2020, effectively disenfranchising millions of voters of color, and who continue to push laws that disproportionately impact disadvantaged communities. Whether corporations fund ALEC or not, they should take steps now to ensure that the public, their shareholders and their employees have access to information about where the corporation’s money is going. 

Many companies have already voluntarily disclosed their grants and political contributions—including to ALEC itself—and more should do so.  But ALEC’s influence underscores the urgent necessity for greater transparency and the implementation of legal frameworks that would mandate nonprofit organizations to reveal more about their corporate donors, in particular. Similarly,  whether or not it is mandated by law, corporations owe their employees and shareholders more information about their spending on political and legislative initiatives to ensure equitable and fair policy development.

ALEC has a consistent track record of promoting policies that harm marginalized communities around the country. Additionally, the lack of transparency surrounding the sources of its funding makes it difficult to discern the driving forces and corporate interests behind these policies, which is precisely what their corporate funders would want. ALEC’s operations have demonstrated a stark contradiction to its stated mission, pushing limited democracy and punitive policies when it says it’s pursuing the greater good. The public deserves to know the truth about ALEC’s work, and who is bankrolling it.