Common Cause of Pennsylvania this week asked the state attorney general to investigate the tax status of the American Legislative Exhange Council (ALEC), the Washington-based group that has advocates for a variety of conservative measures in state legislatures.
In the complaint filed with Attorney General Linda Kelly, Common Cause alleges that ALEC is "primarily a lobbying group and may therefore be in violation of its tax exempt status."
"ALEC is a corporate lobby front group masquerading as a public charity on the taxpayers' dime. Pennsylvanians shouldn't have to subsidize ALEC's agenda to limit voting rights, undermine our public schools, spread Stand Your Ground gun laws, and weaken laws protecting our environment. Tax fraud is illegal, which is why Common Cause/PA is calling on the Attorney General to review ALEC's registration as a charity and whether its lobbying activities in Pennsylvania are being properly disclosed," said Common Cause/PA Executive Director, Barry Kauffman.
The complaint also alleges that ALEC was also the beneficiary of a $50,000 Pennsylvania tax-payer subsidy to its 2007 convention in Philadelphia. The funds appear to have been used for food at a reception at the Philadelphia Marriott, including $3,600 for crab cakes, $3,000 for cheesecake lollipops, $4,000 for cheesesteaks.
Common Cause said questions have been raised as to whether Pennsylvania lawmakers "double-dipped"; taking ALEC scholarships and submitting for reimbursement from the state.
Earlier this week the national organization of Common Cause filed a whistleblower complaint with the IRS on the grounds that ALEC is flouting federal tax laws by posing as a tax-exempt charity while spending millions of dollars to lobby for hundreds of bills each year in state legislatures across the country.
ALEC 's membership includes 2,000 state legislators, including many Pennsylvania lawmakers, and more than 140 corporations including the following based in Pennsylvania – Crown Cork & Seal; Endo Pharmaceuticals; SAP America, Inc.; and TEVA Pharmaceuticals.
Several large corporations, including McDonald's and Coca-Cola recently withdrew from the organization because of its sponsorship of legislation including "stand your ground" self-defense laws.
Pennsylvania lawmakers of both parties are members of ALEC. (See list at www.justsaynotoalec.com)
At least five state lawmakers, including Reps. Kate Harper, Sandra Major, Mark Mustio, Harry Readshaw, and Sen. John Pippy have said they have dropped their ALEC memberships, according to a Keystone Progress survey.
The Pennsylvania complaint filed against ALEC follows the filing of a complaint by the national Common Cause organization challenging the organization's status as a federally tax-exempt charity.
In a response to the national complaint, Alan P. Dye, ALEC's legal counsel, said the attacks were based on "patently false claims by liberal front groups." It accused Common Cause of being a "partisan front group masquerading as an ethics watchdog."