According to Brendan Fischer of PR Watch, Marcus Owens, former chief of the Internal Revenue’s non-profit division has just filed a complaint with the IRS that the American Legislative Exchange Council (ALEC) has violated the terms of its nonprofit status by lobbying on behalf of its corporate members. Owens is a nationally recognized expert on nonprofit tax law. He filed the complaint on behalf of Clergy VOICE, a group of Christian ministers in Ohio.
ALEC is an organization composed of conservative thinkers, state legislators of both parties, corporations dedicated to drafting to draft research, policy papers and model legislation to assist and influence state legislatures and promote free-market and conservative ideas. Until recently, most major American corporations belonged to it.
ALEC and Florida’s Stand Your Ground Law
Over the past six months, ALEC has received a lot of negative publicity regarding specific model laws they have written. The Florida “Stand Your Ground Law,” which George Zimmerman invoked after shooting and killing Treyvon Martin, the unarmed black teenager, is the most notable. ALEC is also responsible for drafting anti-union legislation in Wisconsin, Ohio and Indiana to limit collective bargaining rights of public sector unions, as well as Arizona’s anti-immigration law. They are also the driving force behind efforts to privatize the US post office.
The model laws ALEC writes often benefit the financial interests of its corporate members, which Owens emphasizes in his complaint. He gives the example of the asbestos liability act, which specifically shields ALEC member Crown Holdings from asbestos liability claims, and the Drug Liability Act, which benefits ALEC member pharmaceutical companies like Pfizer and Merck by protecting them from lawsuits when their products injure or kill patients.
Owens Demands Criminal Penalties
In his complaint, Owens notes that ALEC and those who helped prepare ALEC’s deceptive IRS filings are liable to civil penalties, fines, and potentially criminal charges. ALEC could also be stripped of its tax-exempt status. This is because ALEC has deliberately lied, under penalty of perjury, in completing their annual IRS Form 990 about lobbying and payments to state officials. They claimed to have spent zero dollars on lobbying, as well as denying any payments to state officials. Both are blatantly untrue.
The IRS is still processing two prior complaints about ALEC lobbying in violation of its nonprofit charity status. The Campaign for Media Democracy filed one in March, and in April Common Cause filed a “whistleblower” complaint based on similar charges.
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