Alexander Hertel-Fernandez, Harvard University
originally published in the Bangor Daily News on February 18, 2014
The American Legislative Exchange Council, or ALEC, has attracted considerable attention in recent years for its role as a forum for companies to lobby state legislators. Operating since 1973, ALEC describes itself as a “nonpartisan public-private partnership of America’s state legislators, members of the private sector and the general public” and is not registered as a lobbying group.
But the group has also been characterized by The New York Times as a “stealth business lobbyist” and as a “bill laundry” for corporate policy ideas by Bloomberg BusinessWeek. Companies pay hefty dues to ALEC for the opportunity to draft model bills that are circulated to state legislators, attend annual meetings and sponsor events with those legislators.
Hundreds of ALEC bills, focused on privatizing state services, lowering environmental, labor and corporate regulations, and weakening labor unions, are introduced and enacted across the states each year. ALEC bills privatizing prison and educational services and introducing voter identification requirements have been introduced in Maine’s Legislature in recent years.
Which companies decide to invest the time and money to participate in ALEC? This question is especially puzzling in light of the negative publicity ALEC received after the group was tied to the controversial “stand-your-ground” self-defense law cited in the shooting of Florida teenager Trayvon Martin. Many companies left ALEC after being bombarded with phone calls and boycotts, though a majority of ALEC corporate members remained in the group.
Other companies have joined the group since the Martin incident. Many in the media and in advocacy groups were surprised when the otherwise progressive Google joined ALEC. What explains these corporate decisions about whether to “pay to play” with ALEC?
According to my ongoing research, three factors explain which companies participate in ALEC. First, larger companies are much more likely to participate compared to smaller companies, likely because bigger firms have more resources to invest in political activities. This is reflected in the list of ALEC’s top sponsors, which include corporate behemoths such as AT&T, Pfizer and Altria.
Second, firms that are more engaged in other traditional political activities — such as lobbying on Capitol Hill or participating in other business associations — are more likely to join ALEC.
And finally, firms that have strong interests in the sort of legislative priorities pursued by ALEC were more likely to join the group. For instance, firms with poorer environmental and product safety records — like oil producer Exxon — are more likely to join ALEC, as are firms engaged in tax controversies with federal and state governments.
If those factors explain why firms join ALEC, what explains why firms leave the group? To answer that question I examined which factors best predicted whether a firm left ALEC in the wake of the Trayvon Martin episode. One of the strongest predictors was if a firm was in a consumer-facing industry, such as restaurants, stores or manufacturers of consumer products. Firms that were not in such industries — those that mainly sold their products to other businesses — were much more likely to stay in ALEC. This is why Walmart, Amazon and Coca-Cola all rushed to distance themselves from ALEC after the controversy had started.
Together, these results show ALEC is a complement to, and not a substitute for, other traditional forms of business political participation, such as membership in the U.S. Chamber of Commerce or hiring K-Street lobbyists. And so we should not be surprised when we discover that large, politically active companies — such as Google or Facebook — are ALEC members: ALEC is another tool in these firms’ lobbying arsenal.
In addition, the importance of product safety, environmental and tax issues to ALEC members helps us to make sense of ALEC’s legislative agenda since these three policy areas occupy much of the content of the group’s model bills.
Finally, my results indicate a key weakness in ALEC’s membership base: firms that depend heavily on interactions with ordinary consumers. These firms are especially likely to bolt when their sales are threatened by negative publicity. ALEC’s success at courting such firms, which represent an important and profitable part of the economy, will depend on whether progressive groups and journalists continue to draw public attention to the group and its activities.