BILL MOYERS: Welcome, to a story that's been unfolding for more than 30 years but has gone largely untold. That's the way the central characters wanted it. They were smart and understood something very important: that they might more easily get what they wanted from state capitals than from Washington, DC. So they started putting their money in places like Raleigh, North Carolina; Nashville, Tennessee; Phoenix, Arizona; and Madison, Wisconsin. That’s because what happens in our state legislatures directly affects our taxes, schools, roads, the quality of our air and water -- even our right to vote.

Politicians and lobbyists at the core of this clever enterprise figured out how to pull it off in an organized, camouflaged way -- covering their tracks while they put one over on an unsuspecting public. This is the story of how and why it worked. Our report was many months in the making. It's collaboration between Tom Casciato and Kathleen Hughes, the filmmakers at Okapi Productions; and the Schumann Media Center that I head. Schumann supports independent journalism and public watchdog groups like the Center for Media and Democracy, whose investigators have been tracking the footprints of ALEC, an organization hiding in plain sight, yet one of the most influential and powerful in American politics.

ARIZONA DEM. REP. STEVE FARLEY: I’ve often told people that I talk to out on the campaign trail when they say “state what?” when I say I’m running for the state legislature. I tell them that the decisions that are made here in the state legislature are often more important for your everyday life than the decisions the president makes.

JOHN NICHOLS: If you really want to influence the politics of this country you don’t just give money to presidential campaigns, you don’t just give money to congressional campaign committees. The smart players put their money in states.

FORMER PRESIDENT RONALD REAGAN: ALEC has forged a unique partnership between state legislators and leaders from the corporate and business community. This partnership offers businessmen the extraordinary opportunity to apply their talents to solve our nation’s problems and build on our opportunities…

LISA GRAVES: I was stunned at the notion that politicians and corporate representatives, corporate lobbyists were actually voting behind closed doors on these changes to the law before they were introduced in statehouses across the country.

HOUSE SPEAKER JOHN BOEHNER: ALEC, has been I think a wonderful organization. Not only does it bring like-minded legislators together. But the private sector engagement in partnership in ALEC is really what I think makes it the organization that it is.

BILL MOYERS: Have heard the name ALEC in the news lately.

CHRIS MATTHEWS: The American Legislative Exchange Council, or ALEC for short.

FOX NEWS REPORTER: The American Legislative Exchange Council, or ALEC.

BILL MOYERS: ALEC is a nationwide consortium of elected state legislators working side by side with some of America’s most powerful corporations. They have an agenda you should know about, a mission to remake America, changing the country by, changing its laws, one state at a time. ALEC creates what it calls “model legislation,” pro-corporate laws its members push in statehouses across the nation. ALEC says close to a thousand bills, based at least in part on its models, are introduced each year. And an average of 200 pass. This has been going on for decades. But somehow, ALEC managed to remain the most influential corporate-funded political organization you’d never heard of--until a gunshot sounded in the Florida night.

RACHEL MADDOW: Trayvon Martin unarmed but for a bag of candy and iced tea that he was carrying.

BILL MOYERS: You’ll recall that the shooter in Trayvon Martin’s death was protected at first by Florida’s so-called Stand Your Ground law. That law was the work of the National Rifle Association. There’s its lobbyist standing right beside Governor Jeb Bush when he signed it into law in 2005. Although ALEC didn’t originate the Florida law, it seized on it for the Stand Your Ground model it would circulate in other states. Twenty-four of them have passed a version of it.

RASHAD ROBINSON: How did this law not only get in place in Florida but around the country? And all the fingers kept pointing back to ALEC.

BILL MOYERS: When civil rights and grassroots groups learned about ALEC's connection to Stand Your Ground laws, they were outraged.

RASHAD ROBINSON: ALEC doesn’t do its work alone, they do it with some of the biggest corporate brands in America.

BILL MOYERS: Before long, corporations were pulling out of ALEC, including Coca-Cola, Kraft Foods, McDonald’s, Mars, Proctor & Gamble, Johnson & Johnson. Caught in the glare of the national spotlight, ALEC tried to change the subject.

KAITLYN BUSS: You know, I think the entire debate needs to be reframed, and really what ALEC is, is a bipartisan association of state legislators -- we have legislators of all political stripes coming together to talk about the most critical issues facing the states […] and trying to come up with the best solutions to face some of the problems that we’re having.

MEGYN KELLY: Alright, so your point is it’s not a partisan organization.

BILL MOYERS: But ALEC is partisan. And then some.

LISA GRAVES: In the spring I got a call from a person who said that all of the ALEC bills were available and was I interested in looking at them. And I said I was.

BILL MOYERS Lisa Graves, a former Justice Department attorney, runs the center for media and democracy, a nonprofit investigative reporting group in Madison, Wisconsin. In 2011 by way of an ALEC insider, Graves got her hands on a virtual library of internal ALEC documents. She was amazed by its contents: a treasure trove of actual ALEC model bills.

LISA GRAVES: These are the bills that were provided by the whistleblower. That’s just the index.

BILL MOYERS: There were more than 850 of them -- 850 boilerplate laws that ALEC legislators could introduce as their own in any state in the union.

LISA GRAVES: Bills to change the law to make it harder for American citizens to vote, those were ALEC bills. Bills to dramatically change the rights of Americans who were killed or injured by corporations, those were ALEC bills.

Bills to make it harder for unions to do their work were ALEC bills. Bills to basically block climate change agreements, those were ALEC bills.

When I looked at them I was really shocked. I didn’t know how incredibly extensive and deep and far-reaching this effort to rework our laws was.

BILL MOYERS: She and her team began to plow through ALEC documents, as well as public sources, to compile a list of the organizations and people who were or had been ALEC members.

They found hundreds of corporations, from Coca-Cola and Koch Industries to Exxon Mobil, Pfizer, and Wal-Mart; dozens of right-wing think tanks and foundations; two dozen corporate law firms and lobbying firms; and some thousand state legislators a few of them democrats, the majority of them republican.

WISCONSIN DEM. REP. MARK POCAN: ALEC is a corporate dating service for lonely legislators and corporate special interests that eventually the relationship culminates with some special interest legislation and hopefully that lives happily ever after as the ALEC model. Unfortunately what’s excluded from that equation is the public.

BILL MOYERS: In the Wisconsin Statehouse, Democratic Representative Mark Pocan is trying to expose ALEC’s fingerprints whenever he can. By one count, over a third of Pocan’s fellow Wisconsin lawmakers are ALEC members.

WISCONSIN DEM. REP. MARK POCAN: When you look around especially on the Republican side of the aisle, a lot of members of ALEC, front row, ALEC, when you start going down to the chair of finance and some of the other members are all ALEC members, in fact the ALEC co-chair of the state, row by row you can point out people who have been members of ALEC over the years.

There's two main categories they have. One is how to reduce the size of government, and the other half of it is this model legislation that's in the corporate good. In other words, there's a profit driven legislation. How can you open up a new market? How can you privatize something that can open up a market for a company? And between those two divisions you are kind of getting to the same end goal which is really kind of ultimate privatization of everything.

BILL MOYERS: Mark Pocan is something of an expert on ALEC. In fact, to learn as much about it as he could, he became a member.

WISCONSIN DEM. REP. MARK POCAN: What I realized is if you join ALEC for a mere hundred dollars as a legislator you have the full access like any corporate member.

BILL MOYERS: He also took himself to an ALEC conference for a first-hand look.

WISCONSIN DEM. REP. MARK POCAN: Hi, I’m state representative Mark Pocan, I’m outside the Marriott on Canal Street in New Orleans at the ALEC convention, American Legislative Exchange Council.

That was where you watch the interaction of a room full of lobbyists—free drinks, free cigars, wining, dining, many people just came from a dinner that was sponsored by some special interests, coming to a party that’s sponsored by special interests, so they can continue to talk about special interests.

LISA GRAVES: This is from the New Orleans convention. This includes a number of seminars that they held for legislators including one called “Warming up to Climate Change: The Many Benefits of Increased Atmospheric CO2."

BILL MOYERS: That 2011 ALEC conference, lo and behold, was sponsored by BP, Exxon Mobil, Chevron, and Shell, among others. Another of its events featured guns.

LISA GRAVES: And this is the NRA sponsored shooting event. For legislators and for lobbyists. Free.

BILL MOYERS: There was even one offering free cigars.

LISA GRAVES: Sponsored by Reynolds American which is one of the biggest tobacco companies in the world and the Cigar Association of America.

BILL MOYERS: It sounds like lobbying. It looks like lobbying. It smells like lobbying. But ALEC says it’s not lobbying. In fact, ALEC operates not as a lobby group, but as a nonprofit … a charity. In its filing with the I.R.S. filing ALEC says its mission is “education.” Which means it pays no taxes, and its corporate members get a tax write-off. Its legislators get a lot too.

WISCONSIN DEM. REP. MARK POCAN: In Wisconsin, I can't take anything of value from a lobbyist. I can't take a cup of coffee from a lobbyist. At ALEC, it's just the opposite. You know, you get there and you're being wined and dined by corporate interests, I can go down there,

And be wined and dined for days in order to hear about their special legislation. I mean, the head of Shell Oil flew in on his private jet to come to this conference. The head of one the largest utility companies in the country was there on a panel. Utility company in 13 states and here he is presenting to legislators. I mean, they clearly brought in some of the biggest corporate names in “special interestdom” and had that meeting with legislators because a lot of business transpires at these events.

BILL MOYERS: The most important business happens in what ALEC calls “task forces.” There are currently eight of them, with a corporate take on every important issue in American life, from health and safety to the environment to taxation. In ALEC task forces, elected state officials and corporate representatives close the doors to press and public, and together approve the bills that will be sent out to America. But Americans have no idea they come from ALEC. Unless someone like a Mark Pocan exposes it.

WISCONSIN DEM. REP. MARK POCAN: When I went down to New Orleans, to the ALEC convention last August, I remember going to a workshop and hearing a little bit about a bill they did in Florida and some other states and there was a proposal to provide special needs scholarships. And lo and behold I come back to Wisconsin and what gets introduced? Get ready I know you’re going to have a shocked look on your face: a bill to do just that.

BILL MOYERS: Twenty-six ALEC members in the Wisconsin legislature sponsored that special needs bill, but the real sponsor was ALEC. Pocan knew because the bill bore a striking resemblance to ALEC’s model. Have a look.

But Pocan isn’t only concerned that ALEC sneaks bills into the state legislature. The intent behind the bills troubles him too.

WISCONSIN DEM. REP. MARK POCAN: Some of their legislation sounds so innocuous, but when you start to read about why they're doing it, you know there's a far different reason why something's coming forward and that's important.

I think if the average person knew that a bill like this came from some group like ALEC you'll look at the bill very differently and you might look at that legislator a little differently about why they introduced it.

This is not about education this is not about helping kids with special needs, this is about privatization, this is about corporate profits, and this is about dismantling public education.

BILL MOYERS: The bill passed in the Wisconsin House but failed to make it through the senate. However, in its “Education Report Card,” ALEC boasts that similar bills have passed in Oklahoma, Louisiana, North Carolina and Ohio. ALEC’s education agenda includes online schooling as well. Take a careful look, and you’ll find the profit motive there, too.

LISA GRAVES: What you see is, corporations that have a direct benefit, whose bottom line directly benefits from these bills, voting on these bills in the ALEC taskforce. And so corporations like Connections Academy, corporations like K12, they have a direct financial interest in advancing this agenda.

BILL MOYERS: Those corporations -- Connections Academy and K12, which specialize in online education – can profit handsomely from laws that direct taxpayer money toward businesses like theirs. In 2011 both sat on ALEC's education task force. But the two companies didn’t just approve the model bill. They helped craft it. The proof is in one of ALEC’s own documents. And there’s more to the story.

TENNESSEE SEN. DOLORES GRESHAM: Thank you Mr. Speaker […] House Bill 1030 has to do with the establishment of virtual public schools.

BILL MOYERS: Last year an online schooling bill based on the ALEC model turned up in another state where ALEC has a powerful influence: Tennessee. It was introduced in both the state senate and house by ALEC members. The bill passed, making private corporations eligible for public money for online education. Then within weeks the k-12 corporation got what amounted to a no-bid contract to provide online education to any Tennessee student from kindergarten through 8th grade.

So let’s review: The ALEC member corporations help craft the bill, ALEC legislators introduce it and vote on it, and now there’s a state law on the books that enables one of those corporations to get state money. Game, set, match. But remember: this story isn’t about one company in the education industry and one law in Tennessee. It’s about hundreds of corporations in most every industry, influencing lawmakers in state after state using ALEC as a front.

Here’s another example. The American Bail Coalition, which represents the bail bond industry, pulls no punches about writing ALEC’s model bills itself. In a newsletter a few years back, the coalition boasted that it had written 12 ALEC model bills “fortifying the commercial bail industry.” Here’s Jerry Watson, senior legal counsel for the coalition, speaking at an ALEC meeting in 2007. He has a law to offer.

JERRY WATSON: There is a model bill for you to review if you might be interested in introducing such a measure.

BILL MOYERS: He’ll even help legislators amend it.

JERRY WATSON: Now if you don't like the precise language of these suggested documents, can they be tweaked by your legislative counsel? Well absolutely. And will we work with them on that and work with you and your staff on that? Absolutely.

BILL MOYERS: All the lawmakers have to do is ring him up.

JERRY WATSON: There is a phone number there for our executive offices in Washington D.C. We are prepared to help you and your staff and support this legislation in any way that we can.

BILL MOYERS: And guess what? There’s gold at the end of the rainbow.

JERRY WATSON: But I'm not so crazy so as not to know that you've already figured out that If I can talk you into doing this bill, my clients are going to make some money on the bond premiums.

BILL MOYERS: And corporate interest conflated with the public interest.

JERRY WATSON: But if we can help you save crime victims in your legislative district and generate positive revenue for your state, and help solve your prison overcrowding problem, you don't mind me making a dollar.

BILL MOYERS: ALEC members are seldom as upfront as the American Bail Coalition. In fact, ordinarily ALEC’s hand is very hard to see at all. But if you know where to look, you’ll often find ALEC hiding in plain sight.

LISA GRAVES: ALEC has, in addition to its regular vacation resort trips, it also has special, what it calls boot camps on particular substantive issues.

BILL MOYERS: In March, 2011, ALEC held one of those ‘boot camps’ for legislators at the North Carolina capitol in Raleigh. The subject was so-called “tort reform”: how to keep the average Joe from successfully suing a corporation for damages.

The day after the boot camp two state representatives presented the draft version of a house bill chock full of ALEC priorities. It would, among other things, limit corporate product-liability in North Carolina. One of the representatives, Johnathan Rhyne, was quoted in the Raleigh News Observer saying of ALEC: “I really don’t know much about them.” That’s odd, because Rhyne had been listed as a featured speaker at the ALEC tort reform boot camp. The paper also reported that Rhyne said the bill wasn’t copied from ALEC model legislation. That too, is odd, given how the sections covering product liability could have passed as twins. The bill was controversial; it passed, but only after the product-liability sections were taken out of it. But the tort reformers didn’t give up. They were back a year later. This time with a draft bill aimed only to limit the liability of drug manufacturers. When the public was allowed to comment before a legislative panel, people who had lost loved ones came to testify against the bill. A son who had lost a father.

SURVIVING SON: You know, my dad’s gone. All I can do is be a voice for him, he can’t speak any longer.

BILL MOYERS: A grandfather mourning his granddaughter.

SURVIVING GRANDFATHER: If this bill passes, an innocent victim in NC like Brittany could not hold the manufacturer accountable. Everyone needs to be accountable for their actions.

BILL MOYERS: Unmentioned to those in the room, ALEC was present too, in the form of a lobbyist with drug manufacturing giant GlaxoSmithKline. His name is John Del Giorno.

JOHN DEL GIORNO: Several of the opposing testifiers today brought up very compelling sad, empathetic stories about.

BILL MOYERS: Not only is Glaxo an ALEC corporate member, Del Giorno himself is also a Vice Chairman of ALEC’s national Private Enterprise Board. The North Carolina bill has been tabled for now. So now you’ve seen how it works for corporations. How about for the politicians?

ANDERSON COOPER: Last night was as the President finally acknowledged to day, a shellacking. Republicans gain control of the house picking up 60 seats so far.

BILL MOYERS: When all of the returns were counted on election night 2010, ALEC was a big winner. Eight of the Republican governors elected or re-elected that night had ties to the group.

OHIO GOV. JOHN KASICH: Guess what, I’m going to be governor of Ohio.

SOUTH CAROLINA GOV. NIKKI HALEY: There’s going to be a lot of news, and a lot of observers, that say that we made history.

ARIZONA GOV. JAN BREWER: A clean sweep for Republicans!

BILL MOYERS: And a star was born that election night -- Wisconsin’s new governor, a son of ALEC named Scott Walker.

WISCONSIN GOV. SCOTT WALKER: Wisconsin is open for business!

JOHN NICHOLS: I've known Scott Walker, the governor of Wisconsin for the better part of 20 years and Scott is a classic career politician, and I don't say that in a negative way.

BILL MOYERS: Journalist and Wisconsinite John Nichols has tracked Scott Walker’s career since the 90s, when Walker was a state legislator and an ALEC member.

JOHN NICHOLS: And in 2010 he ran not presenting himself as an ALEC alumni or as an ally of big corporations or big business people outside the state. He ran a very down-home campaign.

WISCONSIN GOV. SCOTT WALKER: This is my lunch. I pack a brown bag each day so I can spend money on the more important things in life, like sending my kids to college.

BILL MOYERS: Nichols says that despite the folksy image, in the years leading up to Walker’s 2010 campaign, he had become a master political fundraiser.

JOHN NICHOLS: And he began to forge incredibly close ties with a lot of corporate interests that he had first been introduced to in ALEC, individuals and groups like the Koch brothers

BILL MOYERS: David and Charles Koch, the billionaire businessmen behind a vast industrial empire are also political activists with an agenda. Their companies and foundations have been ALEC members and funders for years.

JOHN NICHOLS: The Koch brothers were among the two or three largest contributors to Scott Walker's campaign for governor of Wisconsin.

And The Koch brothers get that if you really want to influence the politics of this country, you don’t just give money to presidential campaigns. You don’t just give money to congressional campaign committees. The smart ones, the smart players put their money in the states.

WISCONSIN GOV. SCOTT WALKER: Hi I’m Scott Walker.

JOHN NICHOLS … It’s state government that funds education, social services. And it taxes.

WISCONSIN GOV. SCOTT WALKER: If you want lower taxes and less government I’m Scott Walker, and I know how to get the job done.

JOHN NICHOLS: And so the smart donors can change the whole country without ever going to Washington, without ever having to go through a Congressional hearing, without ever having to lobby on Capitol Hill, without ever having to talk to a President.

WISCONSIN SUPREME COURT JUSTICE SHIRLEY ABRAHAMSON: Please raise your right hand and repeat after me.

BILL MOYERS: The new governor moved quickly with a raft of ALEC-inspired bills. They included one similar to Florida’s Stand Your Ground. Another made it easier to carry concealed weapons. There was a resolution opposing the mandated purchase of health insurance. And of course there was limiting corporate liability. The Wisconsin legislature passed a so-called tort reform measure that included parts of eight different ALEC models. ALEC was elated, praising walker and the legislature in a press release for their, quote -- “immediate attention to reforming the state’s legal system.” But Scott Walker was also shooting for another big ALEC prize.

WISCONSIN GOV. SCOTT WALKER: Now some have questioned why we have to reform collective bargaining.

BILL MOYERS: Taking away workers’ collective bargaining rights. That had long been an ALEC goal. A candid video caught him talking about it with one of his financial backers, a billionaire businesswoman, Diane Hendricks.

WISCONSIN GOV. SCOTT WALKER: We’re going to start in a couple weeks with our budget adjustment bill. The first step is we’re going to deal with collective bargaining for all public employee unions. Because you just divide and conquer.

BILL MOYERS: Despite an extraordinary public outcry, and after a brief but intense political struggle, walker’s anti-collective bargaining measures became state law.

JOHN NICHOLS: It was ALEC's ideas, ALEC's values that permeated the bill and un-did almost 50 years, more than 50 years of collective bargaining law in Wisconsin.

BILL MOYERS: But again, remember, this isn’t just about one state. It’s about every state. Take Arizona – it’s practically an ALEC subsidiary. One report this year found that 49 of Arizona’s 90 legislators are members. And two thirds of the republican leadership are on ALEC taskforces. And of course the governor, Jan Brewer, was an ALEC member too. So not surprising, Arizona is among the states passing ALEC-inspired laws to privatize education at taxpayer expense. And no surprise again, Arizona is also getting ALEC-like laws to limit corporate liability. And Arizona, you’ll recall, made news last year, with a law allowing police to stop someone for looking Hispanic, and detaining them if they weren’t carrying proper papers. Laws that create more arrests can create more revenue for-profit prison companies.

So it probably won’t shock you to learn that Arizona’s immigration law inspired an ALEC model, a version of which was passed in five other states.

ARIZONA DEM. REP. STEVE FARLEY: All of us here are very familiar with ALEC and the influence that ALEC has with many of the members here.

BILL MOYERS: ALEC’s domination of Arizona proved too much for State Representative Steve Farley:

ARIZONA DEM. REP. STEVE FARLEY: I just want to emphasize it’s fine for corporations to be involved in the process. Corporations have the right to present their arguments, but they don’t have the right to do it secretly. They don’t have the right to lobby people and not register as lobbyists. They don’t have the right to take people away on trips, convince them of it, send them back here, and then nobody has seen what’s gone on and how that legislator had gotten that idea and where is it coming from.

BILL MOYERS: Farley has introduced a bill to force legislators to disclose their ALEC ties, just as the law already requires them to do with any lobbyist.

ARIZONA DEM. REP. STEVE FARLEY: All I’m asking in the ALEC Accountability Act is to make sure that all of those expenses are reported as if they are lobbying expenses and all those gifts that legislators received are reported as if they’re receiving gifts from lobbyists. So the public can find out and make up their own minds about who is influencing what.

BILL MOYERS: Steve Farley’s bill has gone nowhere. ALEC, on the other hand, is still everywhere. Still hiding in plain sight. Watch for it. Coming soon to a statehouse near you.

In reporting this story we wanted to talk to ALEC and some of its legislative members as well as to some of its former corporate members. Our requests were either turned down or went unanswered. At one point, we were told that the chairman of ALEC had agreed to an interview. We pursued it but never received a response. Meanwhile, ALEC continues to make news.

You’ve heard about all those bills passed in state after state by republican legislatures to prevent people from voting unless they can produce a government-issued photo id. Many of those voter id laws are based in part on – you guessed it – an ALEC model bill. As you saw in our report, such groups as Color of Change have questioned whether ALEC is an organization with which businesses want to be associated. So far, about 40 corporations have decided their answer was, “no, thanks,” and pulled out of ALEC.

Still, many companies remain ALEC members. And ALEC continues to strengthen its ties to conservatives. Earlier this month ALEC held a high-level, closed door meeting with congressional conservatives in the nation’s capital. The watchdog group Common Cause, has filed a complaint asking the IRS to end ALEC's tax exempt status and force it to register instead as a high powered lobby. Many legislators would then have to tell their constituents what they’ve mostly been able to hide up till now – that via ALEC they’ve been wined and dined by high-powered corporate lobbyists who took a hand in shaping laws in the state where you live.

Here’s an example of what’s at stake. The American Chemistry Council – that’s the trade group for the chemical industry – has used ALEC to press for changes in health and safety rules on toxic chemicals. Earlier this fall the council poured nearly 650,000 dollars into supporting Wisconsin republican Tommy Thompson’s bid for the U.S. Senate this November. By now it won’t surprise you to learn that Wisconsin’s former governor has been a friend of ALEC going all the way back to his days as a state legislator, when he himself was an ALEC member. Take a listen to a speech Thompson made at an ALEC conference in 2002:

FORMER WISCONSIN GOV. TOMMY THOMPSON: I always loved going to those meetings because I always found new ideas. Then I’d take them back to Wisconsin, disguise them a little bit, and declare that’s mine.

BILL MOYERS: Ah yes, Tommy Thompson and so many others. Finally: ALEC, meet ALICE. That’s right, ALEC now has some competition. Inspired by professor Joel Rogers, the Wisconsin champion of open democracy, ALICE is a transparent, non-corporate, out-in-the-open, web-based library of model laws on a range of public interest issues. Alice doesn’t have corporate or billionaire backers. The work is done by volunteers -- so in the constant struggle for democracy is still David versus Goliath. But as you’ll remember from that ancient story, giants don’t always win.