“Re-investing Resources”: ALEC Gives In, But There’s No Reason To Celebrate
After weeks of pressure, the American Legislative Exchange Council (ALEC) appears to be backing away from long-term efforts at creating barriers to voting (voter-ID laws) and pushing “Stand Your Ground” legislation. The latter allows those who feel threatened in public places to use force; Florida’s version is currently at the center of the Trayvon Martin case. Giving in to public pressure, ALEC announced Tuesday that it was disbanding its Public Safety and Elections task force, which promoted such legislation and helped see it proliferate. The organization is now “reinvesting these resources in the task forces that focus on the economy.” ALEC’s spokesperson did not respond to interview requests nor did Public Safety Task Force Chair Jerry Madden, a Texas state representative.
ALEC, which proudly calls itself “the nation’s largest, non-partisan, individual public-private membership association of state legislators,” has operated as a largely secret arena in which corporate sponsors and conservative legislators share ideas. The group offers model legislation to its members, which has in the past simply been introduced in legislatures unchanged. While the group says its goals are job growth and economic development, it has actively promoted voter-ID legislation to make it harder to vote as well as anti-union measures and those to limit lawsuits. The group also pushes for law taxes and decreased regulation.
As controversy grew around the slaying of Trayvon Martin and Florida’s Stand Your Ground laws, ALEC found itself on the ropes. The Martin shooting sparked widespread public outcry. Civil-rights group Color of Change helped lead public campaigns against ALEC and its affiliated companies for its support of such laws. In the face of growing grassroots pressure over the last few weeks, major ALEC corporate members like Coca-Cola and PepsiCo have dropped membership, as have McDonald’s, Kraft Food, Mars and others. Just Monday, a New York Times editorial slammed ALEC for its role in promoting Stand Your Ground legislation.
In the statement announcing the end of the Public Safety and Elections task force, the organization shifted its focus to “free-market, limited government, pro-growth policies.”
But this hardly constitutes a victory. ALEC still has a variety of task forces: There’s the Civil Justice Task Force, Education Task Force, and Health and Human Safety Task Force, all of which seem a bit removed from the group’s ostensible goals. The Civil Justice Task Force’s efforts appear largely focused on tort reform, as evidenced by the latest initiative “Expanding the Law Under New Restatement of Torts” and its latest publication, “The State Legislator’s Guide: Tort Reform Boot Camp.”
Then there’s the disturbing impact on health care and education. As The Nation showed in its “ALEC Exposed” series, the group has lobbied all out against health-care reform, while its education task force, headed partially by an executive for the for-profit online education company Connections Academy, has pushed hard for vouchers and increased privatization in American public schools. Its latest publication, a report card on education, begins with by comparing the battle over education reform to the World War II, with teacher unions being—you guessed it—Germany and Japan.
In the end, the Public Safety and Elections task force has already had its success. Voter-ID laws have proliferated around the country, making voting harder for poor and minority Americans. And according to the Times, Stand Your Ground is already law in 24 states.
Color of Change and its boycott isn’t likely to stop the pressure any time soon. In a statement responding to the news, executive director Rashad Robinson didn’t mince words: “To simply say they are stopping non-economic work does not provide justice to the millions of Americas [sic] whose lives are impacted by these dangerous and discriminatory laws courtesy of ALEC and its corporate backers.
By: Abby Rapoport, The American Prospect, April 17, 2012
“Lobbyists, Guns And Money”: ALEC, NRA And The “Exploitation Of Public Fear”
Florida’s now-infamous Stand Your Ground law, which lets you shoot someone you consider threatening without facing arrest, let alone prosecution, sounds crazy — and it is. And it’s tempting to dismiss this law as the work of ignorant yahoos. But similar laws have been pushed across the nation, not by ignorant yahoos but by big corporations.
Specifically, language virtually identical to Florida’s law is featured in a template supplied to legislators in other states by the American Legislative Exchange Council, a corporate-backed organization that has managed to keep a low profile even as it exerts vast influence (only recently, thanks to yeoman work by the Center for Media and Democracy, has a clear picture of ALEC’s activities emerged). And if there is any silver lining to Trayvon Martin’s killing, it is that it might finally place a spotlight on what ALEC is doing to our society — and our democracy.
What is ALEC? Despite claims that it’s nonpartisan, it’s very much a movement-conservative organization, funded by the usual suspects: the Kochs, Exxon Mobil, and so on. Unlike other such groups, however, it doesn’t just influence laws, it literally writes them, supplying fully drafted bills to state legislators. In Virginia, for example, more than 50 ALEC-written bills have been introduced, many almost word for word. And these bills often become law.
Many ALEC-drafted bills pursue standard conservative goals: union-busting, undermining environmental protection, tax breaks for corporations and the wealthy. ALEC seems, however, to have a special interest in privatization — that is, on turning the provision of public services, from schools to prisons, over to for-profit corporations. And some of the most prominent beneficiaries of privatization, such as the online education company K12 Inc. and the prison operator Corrections Corporation of America, are, not surprisingly, very much involved with the organization.
What this tells us, in turn, is that ALEC’s claim to stand for limited government and free markets is deeply misleading. To a large extent the organization seeks not limited government but privatized government, in which corporations get their profits from taxpayer dollars, dollars steered their way by friendly politicians. In short, ALEC isn’t so much about promoting free markets as it is about expanding crony capitalism.
And in case you were wondering, no, the kind of privatization ALEC promotes isn’t in the public interest; instead of success stories, what we’re getting is a series of scandals. Private charter schools, for example, appear to deliver a lot of profits but little in the way of educational achievement.
But where does the encouragement of vigilante (in)justice fit into this picture? In part it’s the same old story — the long-standing exploitation of public fears, especially those associated with racial tension, to promote a pro-corporate, pro-wealthy agenda. It’s neither an accident nor a surprise that the National Rifle Association and ALEC have been close allies all along.
And ALEC, even more than other movement-conservative organizations, is clearly playing a long game. Its legislative templates aren’t just about generating immediate benefits to the organization’s corporate sponsors; they’re about creating a political climate that will favor even more corporation-friendly legislation in the future.
Did I mention that ALEC has played a key role in promoting bills that make it hard for the poor and ethnic minorities to vote?
Yet that’s not all; you have to think about the interests of the penal-industrial complex — prison operators, bail-bond companies and more. (The American Bail Coalition has publicly described ALEC as its “life preserver.”) This complex has a financial stake in anything that sends more people into the courts and the prisons, whether it’s exaggerated fear of racial minorities or Arizona’s draconian immigration law, a law that followed an ALEC template almost verbatim.
Think about that: we seem to be turning into a country where crony capitalism doesn’t just waste taxpayer money but warps criminal justice, in which growing incarceration reflects not the need to protect law-abiding citizens but the profits corporations can reap from a larger prison population.
Now, ALEC isn’t single-handedly responsible for the corporatization of our political life; its influence is as much a symptom as a cause. But shining a light on ALEC and its supporters — a roster that includes many companies, from AT&T and Coca-Cola to UPS, that have so far managed to avoid being publicly associated with the hard-right agenda — is one good way to highlight what’s going on. And that kind of knowledge is what we need to start taking our country back.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 24, 2012
“Territorial Tax System”: CEO’s Of Tax Dodging Corporations Push Congress To Cut Corporate Tax Rates
Several corporate CEOs representing the Business Roundtable, a lobbying group, were on Capitol Hill today to unveil a set of measures that they claim will boost the economy. Not surprisingly, some of the high-profile items are a cut in the corporate tax rateand shifting to what’s known as a territorial tax system:
Fresh out of a meeting with members of the Blue Dog Coalition, dozens of CEOs in town for a series of Business Roundtable policy and lobbying meetings today unveiled proposals to boost the economy.
The plan, billed as “Taking Action for America,” calls for a balanced federal budget, a reform of federal regulations and a lower corporate tax rate based on a territorial tax system, among others.
A territorial system, as well as cutting the corporate tax rate without raising more corporate tax revenue, are both misguided proposals. But the interesting thing about these particular CEOs pushing this particular policy prescription is that several of them already run corporations that pay little to nothing in taxes.
For instance, Boeing CEO Jim McNerny is part of the group calling for corporate tax cuts, despite the fact that his company has a negative federal tax rate for the last decade. Only twice in the last ten years has Boeing had federal tax liability in a given year, and between 2008 and 2010, the company made $9 billion in profits without paying any federal corporate income tax.
Andrew Liveris, president and CEO of the Dow Chemical, also joined the lobbying party, even though his company received nearly half a billion dollars in tax refunds in 2010. Proctor & Gamble’s CEO also participated, while heading a company very fond of exploiting loopholes to avoid taxes.
Corporate tax rates are already at a 40 year low. As billionaire investor Warren Buffett explained, “it is a myth that American corporations are paying 35 percent or anything like it…Corporate taxes are not strangling American competitiveness.” Yet corporate CEOs whose companies already pay literally nothing think driving rates down further is the answer to boosting the economy.
By: Pat Garofalo, Think Progress, March 7, 2012
“Corporate Personhood”: Should Corporations Have More Leeway To Kill Than People Do?
Next week, the Supreme Court will hear a case with many potential ramifications for American and international law, and for corporate responsibility for human rights around the globe. The justices will be asked to decide whether the corporations to which they have been extending the rights of individuals should also be held accountable for crimes against human rights, just as individuals are.
The story behind the case begins in 1980, when my colleagues at the Center for Constitutional Rights and I helped obtain the first semblance of justice to the family of a slain 17-year-old Paraguayan youth named Joelito Filártiga.
A police inspector general in Asunción, the capital, had tortured the boy to death in retaliation for his father’s opposition to Paraguay’s brutal dictatorship. But the case was decided in New York, far from Paraguay, where the crime had occurred and where justice had proven impossible for the Filártiga family; the boy’s murderer was ultimately ordered to pay the family $10.4 million in damages.
The precedent-setting case was made possible by a remarkable decision by the United States Court of Appeals for the Second Circuit, which allowed it to be brought under a long-obscure law enacted by Congress in 1789. Known as the Alien Tort Statute, the law has been interpreted to mean that foreigners who commit heinous crimes abroad in violation of international law can be held accountable in the United States if they are present or do business here; the Supreme Court upheld its constitutionality in 2004.
Since that decision, dozens of successful alien tort claims have been brought in American courts – at first against individuals, and eventually against corporations. As a result, many foreign victims of egregious crimes – ranging from torture and slave labor to the execution of loved ones – that were sanctioned, endorsed or commissioned by corporations have found justice in our courts.
Yet in September 2010, a divided Second Circuit – the very court that had rendered the Filártiga decision – held that only individuals, and not corporations, can be sued under the statute.
That ruling, in a case known as Kiobel v. Royal Dutch Petroleum, came less than a year after the much more famous – and criticized – Supreme Court decision in Citizens United, which removed restrictions on political spending by contributions and wildly expanded the concept of corporate personhood.
Together, these decisions have triggered a wave of outrage among advocates for human rights, which see in them a signal from the courts that corporations have extensive rights but few responsibilities under American law.
On Tuesday, the Supreme Court will hear arguments on the alien torts ruling, which could produce its first decision regarding corporate personhood since Citizens United.
The question of whether foreign corporations doing business in the United States can be sued here for crimes committed elsewhere has arrayed international businesses against human rights advocates, with many “friend of the court” briefs filed on both sides. Four governments have also chimed in: Britain, the Netherlands and Germany for the corporate defendant and the United States on the side of the Nigerian plaintiffs.
The story behind the Kiobel case is compelling: The plaintiffs are members of the Ogoni people in Nigeria’s Niger Delta, where Royal Dutch Shell had extensive oil operations in the 1990s through contracts with the brutal military dictatorship that held power at the time. The region is widely considered a zone of calamity, in terms of both environmental and human rights. In the suit, Royal Dutch Shell was accused of assisting the Nigerian government in torturing and, through sham trials, executing Ogoni activists who had threatened to disrupt Shell’s operations because of the devastating health and environmental effects of unregulated drilling practices. The plaintiffs are either victims of torture themselves or had relatives who were executed. Esther Kiobel, the plaintiff after whom the suit is named, is the widow of a victim.
If the Supreme Court rules in favor of Royal Dutch Shell and against the plaintiffs, multinational corporations – particularly in mining and other extractive industries – could draw the lesson that it is now safer to forge alliances with autocratic regimes that have poor human rights records because they will not be judged culpable in the way individuals can be.
In fact, many “friend of the court” briefs filed by corporations in this case contend that the companies are committed to voluntarily complying with human rights norms – but that standards set by the United Nations and other public and private organizations are mere guidelines that are not enforceable as legal norms. What they are really saying is that there are legal norms against torture and such, but that they can’t be enforced against corporations because they have never been enforced under international law – a claim the plaintiffs strongly contest.
This leaves the Supreme Court with an extraordinary choice to make, in juxtaposition to its previous ruling in Citizens United: whether to accept an argument that, in effect, leaves corporations less culpable than individuals are for human rights violations committed abroad – or whether to hold that if a 200-year-old law can be used to hold individual violators to account, it can be used against corporate violators as well.
A decision affirming that Shell should go unpunished in the Niger Delta case would leave us with a Supreme Court that seems of two minds: in the words of Justice John Paul Stevens’s dissent from Citizens United, it threatens “to undermine the integrity of elected institutions across the nation” by treating corporations as people to let them make unlimited political contributions, even as it treats corporations as if they are not people to immunize them from prosecution for the most grievous human rights violations.
A more startling paradox is difficult to imagine.
By: Peter Weiss, Op-Ed Contributor, The New York Times, February 25, 2012
Mitt Romney Relied On Corporate Welfare: How Bain Capital Leveraged Government Assistance To Boost Profits
During the presidential campaign, Mitt Romney has lashed out at the Obama administration’s taxpayer subsidized grants to clean energy start-up companies. “The U.S. government shouldn’t be playing venture capitalist,” wrote Romney in October. “The very process invites cronyism and outright corruption.” But public records show that Romney’s private equity firm, Bain Capital, repeatedly persuaded the government to play venture capitalist when it came to its own portfolio of companies.
News outlets have recently focused attention on Romney’s history as a businessman at Bain, which he founded in 1984. What hasn’t been reported, or fully explained by the candidate, is how Romney often got ahead in the private sector by using government help.
The likely GOP nominee made much of his estimated $250 million fortune buying companies, reorganizing them, and selling them for a profit. Though Romney, whose only government experience is his one term as Massachusetts governor, is quick to claim that he turned around investments using sound management and data-driven strategies, he does not mention one aspect of his success. Bain Capital owned companies that padded their profits using millions in public subsidies. In other cases, firms owned by Bain employed K Street lobbying firms to pursue lucrative government programs.
Consider two of Romney’s first major investments: office supply company Staples Inc. and photo album manufacturer Holson Co. Both persuaded state officials to subsidize their growth.
Shortly after Bain took control of Holson in 1987, executives pushed for the company to expand in the South. Officials from the firm had negotiated with Gov. Carroll Campbell, a Republican, to extend $200,000 in utility support for a new Holson plant in the city of Gaffney. The local city council also approved a $5 million bond for construction, after meeting with representatives from Holson. Five years after South Carolina’s taxpayers had helped finance the factory, Bain chose to sell Holson’s Gaffney facility for $2.8 million. Romney’s firm reaped the profits on the taxpayers’ expenditure.
The history of Staples, a company that Bain grew from a single store, is a hallmark of the Romney record. Staples’ rapid growth, however, drew on substantial state subsidies.
In 1996, Tom Stemberg, a close Romney business partner leading Staples, met with Maryland Gov. Parris Glendening, a Democrat, to negotiate a package of taxpayer sweeteners to build a new distribution center in Hagerstown. The Glendening administration, using a “Sunny Day” fund of discretionary development money, awarded Staples $2.3 million in grants and low interest loans. The following year, as Glendening prepared for his reelection campaign, top Staples executives maxed out in donations. Stemberg and his colleagues gave a total of $16,000.
A similar story played out in Connecticut, where Staples landed a deal in which taxpayers subsidized over $6 million in low-interest loans for the company to construct a distribution center in Killingly in 1998.
Tapping Washington
The federal government also played a pivotal role in Romney’s ascendant path through corporate America.
GS Industries, a steel company purchased by Bain in the early ’90s, faced fiscal problems as Bain withdrew large dividends and management fees. Under Bain’s leadership, the steelmaker hired the K Street lobbying firm of Wiley Rein to seek government support. In 1998-99 the firm paid $140,000 for a lobbying team that included former Democratic Rep. Jim Slattery. GS Industries eventually won a federal loan guarantee, but before the loan could be delivered, the company fell to bankruptcy in 2001. Bain’s executives still made $50 million from their involvement with the firm.
In 1999, Romney departed Bain to take over as the chief executive officer of the Salt Lake City Winter Olympics. The experience, turning an organization in disarray and deeply in the red into a popular event that actually earned over $100 million in profits, is portrayed as yet another example of the candidate’s private sector management skills. Yet the turnaround was achieved in part through the use of professional influence peddling. Under Romney’s management, the Olympic organizing committee spent over $3.3 million on Beltway lobbyists to secure federal funding for the 2004 Winter games.
Olympics lobbyists from firms like Patton Boggs and King & Spalding helped secure federal grants for communications equipment, educational money and public transportation. Millions of dollars were procured from federal officials, who wanted to allay safety concerns in the aftermath of 9/11.
As the New York Times reported earlier this week, Romney’s has continued to earn a windfall from Bain. When he left the firm, he signed a severance package that allowed him to share in the company’s profits in perpetuity. The arrangement might come back to haunt the candidate, given Bain’s increased reliance on lobbyists over the last five years.
Starting in 2007, Bain Capital began retaining various lobbying firms to pressure lawmakers to keep open a loophole that allows much of the earnings by private equity managers to be taxed as capital gains rather than the top income bracket of 35 percent. Given Romney’s profit-sharing retirement deal, the campaign to extend the loophole, which still hasn’t been closed, likely boosted the candidate’s fortune. (Romney has refused to release his tax return, leaving questions about his income.)
As Romney pillories Obama for using the government to fix problems in society (health reform, the auto bailout, etc.), he invites a closer examination of his own career. A balanced view of the Romney record shows he has never had any qualms about government help when it came to his own bottom line. Whether through hiring insider lobbyists or funneling taxpayer subsidies to his companies, government assistance has been part and parcel to the rise of Romney.
By: Lee Fang, Salon, December 21, 2011
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