Eye on ALEC

How a Shadowy Network of Corporate Front Groups Distorts the Marketplace of Ideas

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Image: Center for Media and Democracy/ Progressnow

In 1971, Lewis Powell, who would become a Supreme Court justice the following year, penned a memo calling on the American business community to aggressively engage in shaping the country’s political discourse and regulatory landscape. The “American economic system is under broad attack,” he wrote. He said the time had come to fight back. “Business must learn . . . that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination — without embarrassment and without the reluctance which has been so characteristic of American business.”

For Powell, it was all about organizing and planning over the long-term to sway public opinion and shape public policies. “Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations,” he wrote.

As Jacob Hacker and Paul Pierson wrote in their book Winner Take All Politics, “The organizational counterattack of business in the 1970s was swift and sweeping — a domestic version of Shock and Awe.”

The number of corporations with public affairs offices in Washington grew from 100 in 1968 to over 500 in 1978. In 1971, only 175 firms had registered lobbyists in Washington, but by 1982, nearly 2,500 did. The number of corporate PACs increased from under 300 in 1976 to over 1,200 by the middle of 1980. On every dimension of corporate political activity, the numbers reveal a dramatic, rapid mobilization of business resources in the mid-1970s.

And they didn’t organize only at the federal level. In 1975, the American Legislative Exchange Council (ALEC) was born in order to take the fight into state houses across the country.

In a democracy, lobbying and writing model legislation isn’t enough. Big business has also invested heavily in shaping public opinion. Last week, two progressive groups, the Center for Media and Democracy (CMD) and ProgressNow, released a report detailing another piece of infrastructure in corporate America’s political war machine. “Exposed: The State Policy Network” shines a light on a network of well-funded, ostensibly independent state-based think tanks that are hard at work undermining workers’ rights and environmental and consumer protections, and establishing a climate in which it’s all but impossible to hold their corporate funders accountable.

Moyers & Company caught up with Lisa Graves, CMD’s executive director, to discuss the report. Below is a lightly edited transcript of our interview.

Joshua Holland: Lisa, let’s begin of a brief overview of what the State Policy Network is and how it operates.

Lisa Graves: We’ve documented, through our work at ALECexposed.org, how ALEC has been putting corporate bills in the hands of politicians. But there are also these other groups that call themselves think tanks which help push those bills into law. They provide talking points and cooked book statistics to support this legislation, and then they take credit for those bills being introduced and passed. The State Policy Network (SPN) is a group that has flown below the radar for most Americans, and yet it’s extraordinarily influential.

What we’ve uncovered is the extent of this network and how it’s growing. The State Policy Network, cumulatively — between the national organization and all 63 of its affiliates — spent more than $80 million last year to advance the ALEC corporate bill mill agenda.

It’s a huge sum. Just to put this in perspective, it came out recently that the Koch brothers — David Koch’s Americans for Prosperity — spent $122 million last year in the elections, which was a massive amount. And then you realize that beyond the money that was spent in the elections last year, there’s another $83 million going in through the SPN to support their underlying agenda.

Holland: That figure, $122 million, that’s the first post-Citizen’s United presidential cycle, and it was more than all of Americans for Prosperity’s spending in previous years combined. It was a huge amount of money.

Let’s talk a little bit about coordination. These 63 “stink tanks,” as you call them, claim to be totally independent research organizations. But that’s not what you found, is it?

Graves: They’re legally independent, as a technical matter. But as a practical matter, they coordinate very closely. We found that they were using cookie-cutter templates for reports. For a variety of materials that they produce, they basically use the same common national agenda and then paste the name of their organization to try to give it a state-based flavor. A lot of the reports appear that way.

We also document how some of their agenda items work hand-in-glove with both ALEC and Americans for Prosperity. So we traced the way these groups are using similar language to produce the same results, to promote the same legislation in various states.

While they describe themselves as fiercely independent, they work quite closely together. And what they’re doing is moving a pretty extreme agenda that has real-world negative impacts on ordinary working Americans.

Holland: Let’s talk about that. They call themselves nonpartisan. And of course, they are nonpartisan in that they’re happy to have Democrats embrace their agenda as well. But it’s distinctly ideological, right? Can you tell us about the specific agendas that these think tanks are forwarding?

Graves: They describe themselves as nonpartisan. They actually have pretty close alliances with a lot of partisan politicians, and in fact, some of them really brag about how close they are to various legislators, which has gotten them into some trouble in some states. There have been questions about whether they’re complying with state ethics or tax laws.

But on the substantive agenda, it really is quite extraordinary. A number of these groups help advance the climate change denial machine. They have been working most recently on efforts to roll back renewable energy contracts. There are a number of pieces of legislation that they’re pushing to privatize our schools, privatize Social Security and other social programs.

They also have been pushing legislation – and statewide initiatives in some instances — to roll back worker rights, to enact the so-called “Right to Work” legislation in Michigan, for example. The SPN group in Michigan called the Mackinaw Center recently won the top award from SPN for pushing Right to Work into law in Michigan, that longtime union state. It was recognized by two of the richest, most active right-wing millionaires in the country, Richard and Betsy DeVos. And yet, when we pulled the 990 tax forms for Mackinaw for 2012, they reported zero lobbying. But they’re sure as heck credited by some of these billionaire extremists for making that agenda into law in Michigan.

Holland: We just mentioned ALEC, and similarly, they’re not registered as lobbyists. They woo state lawmakers, though, with things like junkets to fancy resorts with their families. They’re clearly engaged in what most people would consider lobbying.

You mentioned that they work closely with this network of “stink tanks.” How does that actually work, when you get down into the weeds?

Graves: Well, the American Legislative Exchange Council actually provides what they call scholarships to lawmakers, not because they’re really good at anything, but because they want to have an excuse to bring them on these trips to these fancy resorts where they sit behind closed doors with corporate lobbyists and with the special interest group representatives from the “stink tanks.”

Some of the biggest corporations in the world have been funding trips for these lawmakers where they hang out three times a year — many of them do — with their spouse and their children. Their children go to this daycare thing with the children of lobbyists and special interest group representatives while the parents — the lawmakers and their spouses – go off to parties and are wined and dined by these corporations that have legislation before those state houses.

And then, during the day, many of those politicians, those elected representatives, actually sit in a room, without the press present, without the public present and they actually vote on these model bills before they’re introduced in the state house.

And then these lawmakers come back to their state houses, as Bill Moyers has documented so carefully in his United States of ALEC documentary — they come back to their state house and they introduce these bills, cleansed of any reference to the fact that they were plied with alcohol and trips to get them to meet up with these special interest groups. They’re cleansed of any reference to the fact that they were pre-voted on by these groups or that ALEC bills are part of this corporate agenda. And sometimes we’ve seen these bills move in the states without really any opportunity for other people to amend them or stop them, because, quite frankly, these lawmakers are often not interested in what the local people think; they’re interested in what the corporations think, rather than their own constituents.

Holland: The image of the children playing together, these little pint-sized corporate lobbyists, kind of plying the children of conservative lawmakers, I can’t get that out of my head.

Graves: They call it Kids’ Congress, for kids six months old to 17.

Holland: Think tanks traditionally influence not only legislators, but the broader public. Researchers — let’s say at like Brookings Institution or the Heritage Foundation — they’ll write op-eds in major newspapers about their research and the policy implications of their research. What did you find on this front with these supposedly independent think tanks based in the states?

Graves: What you see is just a lot of distortion. And it’s a bit of the right-wing echo chamber, where they basically tell themselves that their policies are working or that these policies are good for America. You know, they try to claim that these are ‘freedom-boosting’ policies.

In many instances, these polices are limiting the rights and opportunities of Americans. For example, a number of the SPN groups are in support of trade bills that have really wreaked havoc on the American economy, that have shipped jobs overseas. They’re also proponents of the privatization scheme – the outsourcing of America’s public sector to the private sector, which, again, has reduced good-paying jobs in the public sector and pushed them into the private sector for lower-wage jobs with less security and where CEOs get paid huge salaries and benefits. You also see the way they’ve moved the tort agenda to make it harder to sue if your parent or child is killed or injured by a corporate product.

So it’s a pretty extreme agenda. It’s dressed up to sound like it’s liberty, but it’s actually not.

Holland: And according to the report, you see their op-eds even in local small-town newspapers and stuff like that. It really filters through the states’ political discourse, if you want to call it that.

Now, we talked a little bit about Americans for Prosperity. Do we know who else is ponying up the cash here? Can we follow the money at all?

Graves: We know that some of the biggest right-wing CEO families are funding it: the Kochs, the Scaifes, Coors and others – the family fortune of the company that was bought out by Monsanto. So you have a number of these big CEO family fortunes that are being brought to bear, as well as the Waltons.

And in addition, you have a number of corporations that are supporting it. SPN has long ties with the tobacco industry. There’s a bunch of big tobacco companies that help bankroll SPN and have helped push efforts over the past 20 years to try to block efforts to protect Americans from the consequences, sometimes deadly consequences, of passive smoking or inhaling other people’s smoke.

You have a number of other corporations that have been supporting these groups, including Koch Industries itself – and David Koch himself, out of his own checkbook.

In addition, you have some new entrants in the SPN world. Microsoft is supporting SPN, as is Facebook. And so that’s sort of a new twist on what these groups are up to, to be recruiting from these big corporations. But as for Facebook, when we took a closer look at it, it turned out that Facebook’s rep to the SPN meetings was actually a woman who was previously a staffer for the Koch-founded Cato Institute and the Koch-funded CEI.

Holland: Lisa, this network was supposedly Ronald Reagan’s idea, right? Tell us a little bit about Ted Cruz’s involvement in one of the think tanks of the State Policy Network.

Graves: Before Ted Cruz became a senator — and before he shut down the American government — he was a fellow at the Texas Public Policy Foundation. He received an unknown, undisclosed amount for putting forward what became known as the health care compact. This was another attempt to thwart the implementation of the Affordable Care Act at the state level. His proposal made Tenth Amendment arguments against the law and that became part of an ALEC idea that’s been moving in a number of states.

When we looked at that more closely, we realized that one of these big foundations has actually spent hundreds of thousands of dollars to fuel almost the exact same report with the exact same name, branded with a different name for each state, to basically try to destroy the implementation of the Affordable Care Act.

Holland: If you’re an editor looking for some content to run, and you don’t pay a lot of attention to the details of policy, it’s hard to tell the junk research from the serious scholarship. And I think one of the points here is to muddy the waters, to give pro-business conservatives kind of a gloss of intellectual backing, something to hang their hats on. It gives them talking points for media appearances and the like. It’s really pernicious in that it’s an attempt to influence the marketplace of ideas. We talk about a free market of ideas, but when you put all this money into it, you’re actually distorting that marketplace.

Graves: That’s right. What you see with the SPN groups is how big money is throwing its voice in these states, so that you don’t know it’s Koch money, you don’t know that it’s tobacco money. And that’s the classic example of a front group, where you have these groups in the state – they’re branded as a state group – but in fact, they’re moving a national agenda of a pretty narrow percentage of the American people, some of the most elite, and in fact the most extreme millionaires and billionaires in the country.

We did a lot of work in our investigation to try to uncover how the money flowed, who was really behind it, and we did uncover some new things about this funding network that has grown to an empire of more than $80 million being spent each year, in my view, on propaganda, to try to distort the public debate, to try to make everything into ‘he said, she said,’ so the press feels they’ve got to quote both sides, even when the facts are completely against them. They’ll have some economist who might be connected to one of the Koch fellowships who they can cite without revealing that he’s connected to any broader organization. So you have a lot of distortion going on, a lot of front group maneuvering and a lot of classic PR techniques being used by these groups.

Joshua Holland is a senior digital producer for BillMoyers.com. He’s the author of The Fifteen Biggest Lies About the Economy (and Everything Else the Right Doesn’t Want You to Know about Taxes, Jobs and Corporate America) (Wiley: 2010), and host of Politics and Reality Radio. Follow him on Twitter or drop him an email at hollandj [at] moyersmedia [dot] com.
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  • Cahty Talbott

    I just wish you would not pose this as a “conservative” backed issue but rather show how the corporations have funded both “conservative” and so-called “liberal” organizations to achieve their goals. The Council of State Goverments is bipartisan and receives nearly 5 times as much funding from corporate interests than ALEC. It does the American people a diservice to point the finger only at the “right.”

  • Anonymous

    Thank you for pulling the curtain back with the dark details of what many of us have known but had no idea to the full extent of control by the Corporate propaganda Brigade

  • Chris Jonsson

    Yes there are conservative Democrats too. Mary Landrieu, LA for example, and Max Bacus.

  • Chris Jonsson

    Progressives should to involve high school and college students more in politics. That is where the energy is and risks are taken more easily. Those days can be some of the most formative in a person’s life. They are also the most ideological and vulnerable. Lifetime friendships are formed then. Conservatives have been cultivating students for years and have an advantage because of it. Morals and ethics are up for grabs. Our point of view needs to be heard too.

  • Russell Ray

    In the mid 1970′s GE Corporate in Fairfield CT open a Media Center for their top executives so that they would know how to perform in front of news media and convey a point of view that was honest and forthright. At the time Big Business was telling everyone that “unions” were destroying the economy. Every time the media would televise debates between a C.E.O. and a union leader, the union leader would come across as a low brow ignoramus. It was quite effective. The union leadership did not respond to their “beat down” till the mid 1980′s. They instituted new workers seminars in which they inform the new hires about the benefits the unions brought to “ALL” workers. Paid vacations, paid holidays, medical coverage, pension programs. The list goes on, but it was too little, too late. What does this have to do with this article? Just showing you what lengths the “dark side” will go to persuade the American people that big business knows best.!