How to Get Around Lobbying Rules

What do you call it when corporations get together with politicians to work out the details of legislation? Normally, of course, it’s called “lobbying” and is subject to federal regulations requiring corporations to disclose how much they’re spending and what policies they’re advocating. But if you call the meetings between corporations and politicians “education,” you don’t have to worry about federal lobbying rules.


The trick, as Laura Sullivan reported for NPR—in an article that deserves to be widely read—is to set up an organization like the American Legislative Exchange Council. Although formally a non-profit, the American Legislative Exchange Council functions as a front organization for corporate lobbying groups. State legislators pay a nominal $50 annual membership fee, but the group is primarily funded by big corporations like ExxonMobil, Pfizer, and Reynolds American, each of which donates tens of thousands of dollars. The American Legislative Council then hosts conferences for lawmakers and their families—lawmakers are given “scholarships” paying their way—which include open bar parties and expensive entertainment.

While at these conferences, the lawmakers sit down with the group’s corporate sponsors and put together “model bills” to demonstrate legislative “best practices.” The American Legislative Exchange Council’s senior policy director, Michael Bowman, insists that it’s not lobbying, because the groups corporate members aren’t pushing for legislation so much as helping lawmakers come up with legislative ideas. But that's a distinction without much difference, since lobbyists make their views known to legislators while treating them and their families to expensive junkets. It’s certainly not legislators' company corporate representatives are interested in.

Sullivan reports that more than 200 of the group’s model bills became laws over the past year. Arizona’s controversial law making failure to carry immigration papers a crime and granting the police broad authority to detain suspected illegal immigrants was among them. In fact, Sullivan found, the bill was originally written at one of these conferences with the help of the Corrections Corporation of America, a private prison management company which sees the detention of illegal immigrants as its next big market.

If the companies that underwrite the American Legislative Exchange Council had paid for the meetings directly they would have had to disclose what they spending and what they were spending it on. And the legislators would have to report the expenses for their trips as gifts. But instead as long they call it “education,” companies can write off what their lobbying efforts as a business expense—or even as a charitable donation.

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