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The Invisible Hand: An Obscure Group Wields Impressive Power in the States

“Wisconsin nice” is a well-known personality trait in what has often been described as the most “sociable, friendly and traditional” state in the country. That’s one reason it was such a surprise to many when, in February, Wisconsin’s Republican governor, Scott Walker, revealed one of the most aggressively austere budgets in the state’s history — one that unleashed a firestorm of protests and legal battles that continue to rock this generally mild-mannered state.

When Walker said he would cut funding for social programs and curtail union collective bargaining rights, thousands of protesters converged on Madison, shouting, singing and sleeping in the capitol building for week after week. Fourteen of the state’s Democratic senators boycotted a vote on the measure and fled to Illinois to deprive the legislature of a quorum. Though the bill eventually passed the Republican-controlled state legislature, it was tied up for months in legal disputes over rule violations. Union activists also successfully petitioned to place the recall of six GOP senators on an August ballot in hopes of turning the legislature blue and repealing the Walker budget.

The tsunami of protests in Wisconsin washed into Michigan, Ohio and Indiana, turning Wisconsin into a proving ground for a broader national agenda. Walker embodies the recent wave of conservative Republican governors, like Ohio’s John Kasich, New Jersey’s Chris Christie and Indiana’s Mitch Daniels among many others, who have dealt with budgetary shortfalls by cracking down on union rights and slashing welfare programs.

On top of making deep cuts to education and health care, in the past few months Walker and the conservative Wisconsin legislators also curtailed collective bargaining rights for public-sector unions, expanded private-school vouchers, cut taxes for businesses and introduced new voter-ID provisions. 

Many on the left were shocked by the fierce push by the Walker administration to enact what appeared to be imported ideas. Searching for an explanation, academics, union activists and community organizations have looked to small-government interest groups as one likely source of the conservative legislation sweeping Wisconsin and its neighboring states. 

Some of these special interests have made national headlines. Koch Industries, the Kansas energy conglomerate, both donated to Walker’s election campaign and garnered national attention when a liberal blogger posing as David Koch prank-called Walker, leading the governor to talk strategy with him. As union protesters flooded Madison, the Koch-backed Americans for Prosperity bused in counterprotesters across the state. Outside of Wisconsin, conservative independent expenditure groups like American Crossroads have raised millions to elect right-leaning lawmakers.

However, one of the more obscure but startlingly effective state-based groups behind the conservative groundswell is the relatively unknown American Legislative Exchange Council. The group, which goes by the acronym ALEC, brings together private-sector lobbyists and state-level legislators to hash out “model legislation” that suits ALEC’s free-market agenda. When scores of “copycat” bills are introduced in multiple statehouses in quick succession, as was the case with Arizona’s controversial immigration law, ALEC is often the origin. The group’s undisclosed corporate donors both shape the group’s plug-and-play legislation and foot the bill for lavish conferences where the private sector lobbies conservative state legislators. Their strategy works particularly well with new, inexperienced lawmakers who may be eager to prove themselves and make connections among peers. 

Although their operations are similar to that of any other lobby, ALEC differs in its one-stop-shop approach. Legislators show up, they meet with a cavalcade of business interests, and they fly back home with freshly minted bills in their briefcases. 

“ALEC provides bills that lawmakers can easily modify and make their own,” said University of Florida political scientist Daniel Smith. “This diffusion of policy is not as organic as it may seem. It's being pushed from above.”

ALEC claims it has little to do with the conflagration in Wisconsin, but investigative reporters, university researchers and liberal critics see the group’s fingerprints on much of the recent legislation there. In addition, Rep. Robin Vos, who co-chairs Wisconsin’s Joint Finance Committee, is the Wisconsin state chair of ALEC, and the leaders of Wisconsin’s assembly and senate, two brothers named Jeff and Scott Fitzgerald, are also members. Scott Walker is a former ALEC member, as is his Secretary of Administration, Michael Huebsch.

“Walker’s policies are 100 percent in line with ALEC,” said Scot Ross of the liberal advocacy group One Wisconsin Now. “His middle name should be ALEC.”

Critics point to recent Wisconsin measures like the elimination of a capital gains tax, the enactment of a voter-ID rule and the expansion of charter-school programs that are all aligned with ALEC’s positions. Conservative leaders also boast about ALEC’s national influence.

“ALEC is one of the most influential, unknown bodies in America,” said Shawn Steel, the former chair of the California Republican Party. “Now that Republicans are dominating most states, ALEC has become a fabulous idea factory.”

ALEC was established in 1973 largely by Paul Weyrich, the conservative macher behind the Heritage Foundation and the phrase “moral majority.” He was, of all places, from Wisconsin. 

Worried by the rise of liberal think tanks and foundations, Weyrich decided to beat Democrats at their own game. In an interview at the time, he explained

“I always look at what the enemy is doing and, if they’re winning, copy it.”

ALEC’s membership consists of about 2,000 state legislators, as well as representatives from some of the nation’s largest corporations and conservative think tanks. Though legislators pay a nominal fee of about $100 to participate, private members pay tens of thousands of dollars annually for the privilege of exposure to state policymakers. 

State legislators, too, stand to benefit from being part of such a powerful network.

“You can make contacts, you can distinguish yourself among your colleagues, you find friends and allies steeped in the foundational principles of the country,” said Joel Rogers, a professor of law and public policy at the University of Wisconsin-Madison who has studied the group. “When they get back home, they seem a little bit smarter than when they left. Lots of people would be attracted to that, or at least anyone ambitious would.”

Under the auspices of its corporate donors, the group produces reams of business-friendly “model legislation” templates that form the foundations of many state-based conservative bills. 

For example, the second headline of the July 2010 ALEC magazine, “Inside ALEC,” lists an article about a “Health Care Freedom Amendment.”

In March of this year, Wisconsin state legislators Sen. Joe Leibham and Rep. Robin Vos, the ALEC Wisconsin chair, introduced a “Health Care Freedom Amendment” that would change the Wisconsin constitution to prohibit the government from forcing participation in any public or private health care or insurance program — a direct move to block the implementation of the federal health care reform bill. In the months prior, legislation with the same name had been introduced in Florida, Kansas, Ohio and dozens of other states. 

A colorful map on the sixth page of the ALEC report lists 42 states that introduced versions of the “Freedom of Choice in Health Care Act,” an ALEC-provided model bill. 

ALEC has made its mark on countless legislative agendas, with approximately 20 percent of the group’s model legislation becoming law. Their legislative victories have also echoed in statehouses across the country as state representatives take cues from their ALEC colleagues. 

For instance, an NPR investigation found that Arizona’s controversial immigration law, SB 1070, is based on ALEC model legislation written in conjunction with the largest prison company in the country, the Corrections Corporation of America. Curiously, in 2010, Wisconsin Rep. Don Pridemore also unveiled an immigration bill, so that the state would be recognized as being “on the side of Arizona,” he said. Madison is 1,400 miles from Mexico, and Latinos make up just 6 percent of Wisconsin’s population.

As it advocates privatization, ALEC is also a fierce defender of businesses against government regulations. A recent trove of ALEC model bills unearthed by watchdog group Center for Media and Democracy revealed the organization’s deep mistrust of government, including seemingly benign workplace rules. (A 1996 model resolution lambasts “ergonomic regulations based on unsound science.”)

ALEC has also advocated rolling back most environmental protections, thanks in part to its funding by energy giants like Koch and ExxonMobil.

The group’s 2010 model legislation on climate change begins:

“Withdrawal Legislation Template:

WHEREAS, there has been no credible economic analysis of the costs associated with carbon reduction mandates and the consequential effect of the increasing costs of doing business in the State of ______;”

News site Grist found the same language has surfaced this year in the Michigan, Montana, New Mexico, Oregon and Washington legislatures, calling for the states to quit the Western Climate Initiative.

ALEC’s nonprofit status means they are prohibited from overtly lobbying. Although the organization claims to be nonpartisan, two-thirds of its legislative members are Republicans, and its membership rolls do not include labor unions, the main Democratic political forces.

None of this is illegal, but ethics issues arise because some legislators are reimbursed for their travel expenses with corporate-funded “scholarships.”

“I think there's a lot of positives with respect to bringing policymakers together across the states,” Smith said. “What is more ethically questionable is when lawmakers are not having to disclose who is paying for their trips to these gatherings. The scholarships from ALEC are problematic, especially in states with gift bans.”

***

Despite its long history and broad-reaching efforts, ALEC was largely out of the limelight in Wisconsin until recently. 

“ALEC operates under anonymity,” said Democratic Wisconsin state Sen. Chris Larson. “They like to be notorious among conservative legislators, but they don't like to be notorious in the public eye.”  

That is until this spring, when a single blog post channeled the populist furor over the Wisconsin state budget toward ALEC. In March, the state was in the throes of protests over Walker’s proposed budget. That’s when William Cronon, a renowned professor of history at the University of Wisconsin published an online “study guide” exposing the connection between ALEC and the “impressively well-organized wave of legislation” in the state. The blog post did not criticize ALEC’s existence, but it did challenge ALEC’s opaque practices: The group hides its model legislation, membership and corporate donor list behind a membership wall. Cronon ended with a mild admonishment:

“I have always cherished Wisconsin for its neighborliness, and this is not the way neighbors treat each other.”

Two days later, the Republican Party of Wisconsin sent a records request for Cronon’s e-mails to UW’s lawyers. (Cronon could not be reached for comment.)

The incident sparked scrutiny about ALEC’s practices and the group's potential connection to Walker’s agenda. In May, One Wisconsin Now obtained records showing that 12 Wisconsin senators have paid their ALEC dues with taxpayer funds. 

“ALEC has had conferences when we've had 40 people from the state go to them,” said Democratic Wisconsin Rep. Mark Pocan. “They have a lot of members from the state.”

Despite these connections, ALEC denies any association with Walker’s attempt to curtail collective bargaining rights for unions.

“That’s the funny part about this whole thing,” said ALEC spokeswoman Raegan Weber. “None of that is our legislation.”

As far as the rest of the Wisconsin budget is concerned, Weber said she isn’t sure whether there is evidence of ALEC influence or influence from any other group, adding, “ALEC doesn’t hold the monopoly on good ideas." 

In fact, she said, when allegations surfaced that ALEC may have had something to do with the collective bargaining restrictions, Vos, the finance committee chair, called Weber to ask what ALEC’s position was. (“We don’t have one,” she said.)

However, a July investigation by liberal magazine In These Times revealed that a similar collective-bargaining bill proposed in Florida, which, like the Wisconsin plan, would place new restrictions on the collecting of union dues, was based on three pieces of ALEC model legislation found through a records request to Florida Rep. Chris Dorworth’s office.   

What’s more, a number of researchers and activists have found other aspects of the Wisconsin budget that are tinged with ALEC’s low-tax, privatization themes.

For example, the budget included a provision to reinstate bail bondsmen, a profession that was outlawed in 1979 in the state because of corruption in the industry. Walker ultimately vetoed the reinstatement provision during the budget’s signing, but cynics say the idea came straight from ALEC, which has long promoted the private bail bonds industry.

In June, ALEC sent a letter to Walker congratulating him on a budget measure that would lower taxes on some brands of smokeless tobacco. It’s a policy that ALEC, which counts tobacco companies among its members, officially called for in a 2006 newsletter.

The list of similarities goes on. ALEC has authored at least six model bills on “school choice,” or the ability of parents to send their children to private schools with the help of government vouchers. Some of this legislation has been created in conjunction with the American Federation for Children, a group that has been lobbying for vouchers in Wisconsin and is headed by former Michigan Republican Party chair Betsy DeVos

In fact, the original Wisconsin voucher program in Milwaukee was enacted in 1990 based on a 1985 ALEC plan, said Julie Underwood, a University of Wisconsin-Madison education expert who performed an analysis of ALEC education documents. 

In 2002, former Wisconsin Gov. Tommy Thompson gushed in an NPR interview about the convenience of using ALEC legislation in the state:

“Myself, I always loved to go to these meetings because I always found new ideas, and then I'd take them back to Wisconsin, disguise them a little bit, and declare that it's mine,” he said.

Coincidentally or not, the Wisconsin budget included an expansion of the Milwaukee private-school voucher program while cutting $800 million from public education, even though studies from both sides of the aisle have shown that Milwaukee’s voucher program did not improve student performance or school quality.

“This gets to the core aspect of the administration’s belief that the government is the problem, and that anything we can take away from the government is good,” said Bob Jacobson of the nonpartisan, nonprofit Wisconsin Council on Children and Families.

One of the budget’s most inflammatory elements was its stripping away of collective bargaining rights for public-sector employees. As his foes will be quick to point out, while campaigning, Walker didn’t mention collective bargaining rights, which affect the ability of union workers to negotiate with employers on working conditions.

In promoting their budget, Walker and his administration repeatedly called the elimination of collective bargaining a “tool” that cities could use to lower the cost of public worker benefit packages without raising taxes. Some, like Pocan, believe the “tool” language hearkens to an ALEC 2010 report titled “The State Budget Reform Toolkit.”

“ALEC gives you the words to use, and they give you the legislation to propose,” Pocan said.  

Furthermore, ALEC’s June 2011 publication, “Rich States Poor States,” draws parallels to many of the decisions made by the Walker administration.

The publication touts pension “reform” and calls business taxes “onerous.” Walker’s budget will both force unionized employees to contribute more to their pensions and will cut business taxes. Tellingly, the report also calls out unions as having a “negative impact” on the economy, adding, “In what has been a very positive trend for the U.S. economy, the total percentage of the U.S. workforce with union membership has been declining steadily and steeply for approximately 30 years.”

“ALEC’s funders have certainly had a strong libertarian flair,” said Smith, the Florida political scientist. “Anti-unionism has been a plank of their agenda.” 

One of the most convincing  ALEC ties comes not from the budget but from a bill passed by the Wisconsin legislature in May, which would require voters to present a valid Wisconsin driver’s license or photo ID at the ballot box. Progressive news site Campus Progress, which is affiliated with the Center for American Progress, found it was strikingly similar to the voter-ID ALEC model legislation

“These aren’t the Wisconsin values we support,” said Christina Brey, a spokeswoman for the Wisconsin Education Association Council, Wisconsin’s main teachers union. “The governor doesn’t care about the issues that parents and teachers care about — he cares about a political agenda that lives far beyond Wisconsin.”

***

Wisconsin political experts agree, however, that ALEC is far from the only organization influencing conservative policy in the state. Walker's legislative blitzkreig simply contains far too much material to ascribe to any one group. 

“ALEC can claim credit for inspiring a great deal of the Walker agenda, but victory has many parents, and defeat is always an orphan,” said Rogers, the UW law professor.

For example, pro-voucher groups have also financed Walker’s campaign, and the American Federation for Children recently made robocalls in support of the Republican senators Wisconsin Democrats are aiming to recall.

One of the most important players comes from inside the state: Wisconsin Manufacturers & Commerce, a business lobby whose members have spent 82 percent of their sizable war chest on the state’s Republican candidates. In June, Republican lawmakers proposed drastically reducing the state tax on the production earnings of manufacturers, and a WMC spokesman responded, saying it was “icing on the cake” of the already business-friendly budget.

Still, fiscally conservative groups like the Wisconsin Policy Research Institute, which supports the Republican budget, say corporate influence in the Wisconsin legislature is minimal.

“Governors are permitted to come up with their own ideas,” said WPRI director George Lightbourn. “People are trying to look for the puppet master behind the curtain, and there isn’t one.”

***

While there may not be a single puppet master, many political scientists agree that ALEC is a key player in a larger, well-coordinated conservative network of policy influencers nationwide.

“[SuperPAC] Club for Growth is influential in candidate races, and Americans for Prosperity are influential in terms of mobilizing support for policies,” explained Smith. “ALEC helps to set the policy agenda. Because they aren’t involved in campaigns, in some ways they are even more influential in terms of policy.”

And that policy is particularly crucial in the states because, as Rogers said, “Politics in the U.S. is still run out of the states. States are the key player in environmental law, civil rights law and other issues. The right has thought a lot about that in the sort of detail that ALEC gets into.”

State policy groups like ALEC offer a welcome embrace for freshman legislators, many of whom are new to politics and seek guidance from like-minded policymakers. 

“One-third of our assembly are brand-new people, and to assume that legislators who just get in know everything is just false,” said Chris Larson, the Wisconsin Democratic senator. “What they end up doing is just following the party line.”

ALEC is also especially effective because there is virtually no counterpoint to it on the left.

“I really think they have done something that the left hasn't figured out, which is to use their political capital to push a consistent message,” Smith said.

Years ago, Larson met with Phil Montgomery, a longtime ALEC member and conservative representative from the Green Bay area. In their talks, Montgomery told Larson that while he has gone to ALEC meetings, he's also "gone to the left wing's conferences," Larson said. 

"I said, ‘What do you mean, the left wing’s conferences?’ ”

"He said, 'the NCSL,' " Larson said, referring to the National Conference of State Legislatures, a nonpartisan network consisting of the legislatures of every state. "That's when it occurred to me that conservatives believe ALEC is the response, because everything else government-related is liberal."

The NCSL highlights key differences between themselves and organizations like ALEC, like their lack of political agenda or model legislation. (“We want all our members to get information from both sides of the aisle," said NCSL spokesman Gene Rose.)

ALEC’s successes have perturbed liberals who now wonder why Democrats have not created their own state policy outfit. The Progressive States Network is somewhat analogous, but in Pocan’s opinion, “funding-wise, they are a barking chihuahua to the 800-pound gorilla that is ALEC.”

Years ago, Rogers attempted to start a progressive ALEC, but "couldn't get any interest in it" from liberal groups. He concluded that the political left might be too mired in indecisiveness to pursue a national, coordinated agenda.

“If you really want power in this country, you have to go after it,” Rogers said. “You can't assume someone's going to give it to you just because people agree with your values."

***

Pocan, the Democratic representative, got a unique glimpse into ALEC’s inner workings when he briefly joined in 2007 and attended the group’s policy summit in Washington, “Just to see what ALEC was up to,” he said.

Pocan saw presentations on the benefits of coal and on the “myth” of global warming. In one session, corporate consultants espoused the detriments of state children’s health insurance (SCHIP) and urged legislators to reject federal health care funds. 

Pocan said lobbyists were inescapable. 

“When you have [corporate representatives] sponsoring the receptions, and that’s who you talk with at receptions, you can’t really have more direct contact with them than that,” Pocan said, “unless they had you actually share a room with a lobbyist.”

At the end of the trip, Pocan exchanged cards with a vendor selling climate-change-denial T-shirts.

“Madison!” exclaimed the vendor, upon seeing Pocan’s address. “You’re behind enemy lines.”

“I didn’t have the heart to tell him,” Pocan said in an interview, “that I am the enemy.”

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