Slowly, but surely, reporters are beginning to take note of the elephant, or should I say albatross, in the room, and asking whether the American Legislative Exchange Council, ALEC, is unraveling after the departure of AOL:
AOL marks the thirteenth corporation to cease its support of ALEC since August of this year. All told, estimates are that 80 corporations have left in the past two years. About a year ago, the Guardian reported that ALEC was facing a financial hole of about $1.4 million in its annual budget. With all the defections that have come this year, things might be getting worse for the organization despite its effort to bring back some former supporters through its “Prodigal Son” initiative.
In fact, things could get even worse, with a pending investigation by the IRS into ALEC’s activities. Common Cause filed a “whistleblower” report with the IRS in 2011 claiming the organization is actively engaged in lobbying on behalf of specific legislation. If true, that would cost ALEC its tax-exempt status, requiring it to pay substantial fees and fines to the IRS. It would also mean that donations to ALEC would no longer be considered tax deductible to the donor, requiring corporations like eBay and foundations like the Bradley Foundation to pay back taxes as well.
Want to know how bad things are for ALEC right now? In the short time between when this article was written and today, ALEC has managed to lose yet another major donor.
Multinational manufacturing company Emerson has joined the parade of companies leaving the conservative American Legislative Exchange Council.
A spokesman for the Ferguson-based company confirmed it is no longer a member but would not say how long it had been part of the group or when and why it had left. Emerson’s exit from ALEC was first reported Friday by liberal group The Center for Media and Democracy.
Anyone want to take bets on how many more sponsors drop ALEC before the end of the year?