Is ALEC helping Republicans campaign in violation of its tax status?

By: - July 27, 2021 6:30 am
A basket filled with campaign buttons with the Republican symbol GOP

Republican lapel buttons. Photo by U.S. Consulate General Barcelona via Flickr CC BY-NC 2.0

In the 2020 election cycle, the rightwing, corporate American Legislative Exchange Council (ALEC) gave its 2,000-plus members “sophisticated partisan voter management and campaign software” worth more than $6 million, according to a complaint filed by the Center for Media and Democracy (CMD) and the Common Cause Wisconsin with the Wisconsin Ethics Commission on July 20.

The group dubbed its software “ALEC CARE.”

A separate complaint is also being filed by CMD with the Internal Revenue Service (IRS) whistleblower complaint office. Both are also filed in 14 other states whose members allegedly received this contribution. The software, the complainants state, is linked to the Republican National Committee (RNC). Common Cause and CMD are filing complaints in the other states as well.

The ethics complaint explains that ALEC’s tax status is a 501(c)(3) tax-exempt, nonprofit corporation, and thus is “barred from engaging in electoral activity under federal law and in violation of Wis. Stat. §§11.1112 and 11.0103.” A violation of its permitted activity under its tax status could result in ALEC, which drafts model legislation, losing its tax-exempt status. ALEC’s nominally, but required nonpartisan status has led to some Wisconsin Democratic legislators joining the group in the past, just to attend the conferences to learn more about what U.S. Rep. Mark Pocan described as a “speed dating” service for corporations and the Republican state legislators who introduce that legislation in their states. 

The complaints seek to strip ALEC of its nonpartisan, nonprofit tax status and fine the group.

Common Cause Wisconsin Executive Director Jay Heck

“The people of Wisconsin deserve to know who is trying to influence our elections,” said Jay Heck, executive director of Common Cause Wisconsin in a statement announcing the complaints. “Without tougher transparency and disclosure laws that allow voters to follow the money, illegal schemes like ALEC’s will continue unabated. We hope this complaint moves the state legislature to take a renewed focus on strengthening Wisconsin’s transparency and disclosure laws so our government is accountable to the people, not special interests.”

ALEC gave the software to the following Wisconsin legislators, according to the complaint:

Sen. Steve Nass (R-Whitewater)

Sen. Mary Felzkowski (R-Irma)

Rep. Mike Kuglitsch ( R-New Berlin)

Rep. Tyler Vorpagel (R-Plymouth)

All four offices stated they have not used ALEC CARE.

Kuglitsch responded, “My staff and I have never used ALEC CARE for any purposes.” Felzkowski staffer Stamena Ivanov responded for the senator saying, “Neither Senator Felzkowski nor anyone on her staff has ever used the ALEC CARE database/system and we are unfamiliar with it.” From Vorpagel: “Neither I or my staff have utilized this software for any official or outside of the building purposes.”

Nass’ Chief of Staff Mike Mikalsen responded, “Senator Nass has never accepted or used the ALEC CARE database either in his state office or as a part of his campaign activities.  He is not aware of any Wisconsin ALEC member utilizing that database.” Nass staffer Mikalsen added his take on the complaints, “The complaint filed by two liberal groups is simply more politically inspired harassment of conservatives by organizations that have been funded by George Soros and other extreme leftwing groups.”

Vorpagel has not responded to a request for comment.

The “ALEC CARE” software was valued by ALEC at $3,000 per legislator. The company that produced the software, say the complaint-filing organizations, is Republican data firm VoterGravity, which is run by conservative activist Ned Ryun, who is also the founder and president of American Majority, which trains far right Tea Party candidates and American Majority Action, which owns 84% of Voter Gravity according to its IRS 990 tax filing. The groups share a Virginia post office box. The campaign software was simply “white labeled” (re-labeled) as constituent software and marketed by ALEC.

ALEC is also required under its tax status to be nonpartisan. Its spokesperson Alexis Jarrett responded to a question from the AP with this statement: “ALEC data is not shared with any political party and no political party shares data with ALEC.” She added that the login page asks members to agree not to use it for campaign purposes.

Arn Pearson executive director of the Center for Media and Democracy

However, leaked documents from an anonymous ALEC member to The Associated Press show that the member received access to Voter Gravity’s database and discovered that it only contained information on registered Republicans and voters in past GOP primaries.

The complaint asks not only for an investigation, but for subpoena powers to be used to ascertain precisely who received the software, since it may have gone to more Wisconsin officials than just the four legislators mentioned. It also asks that the Ethics Commission to investigate whether the software was used on official business in state offices or on state time by the legislators or their staff.

“It is crystal clear from CMD’s investigation and internal ALEC sources that the CARE program provided by ALEC is just a repackaging of VoterGravity’s highly partisan campaign software, designed to help Republicans win and retain elected office,” said CMD’s executive director Arn Pearson. “ALEC CARE is a brazen scheme to help ALEC’s overwhelmingly Republican members win reelection.” 

The whistleblower law firm Constantine Cannon filed the IRS complaint on behalf of CMD. One of its attorneys — Eric Havian — accused ALEC of having abused its tax-exempt status for years.

Whistleblower attorney Eric Havian of Constantine Cannon
Eric Havian | courtesy of Constantine Cannon

“I can only hope that we have not become too accustomed to fraud in plain sight, and that the IRS will finally take action to stop taxpayers from subsidizing ALEC’s partisan electioneering and lobbying,” Havian said.

 

In Constantine Cannon’s highlighting of the complaint, its attorneys point to all the features of the program that are usable on a campaign, such as geomapped walklists, door knocks, voter data and a “strikelist” feature that will alert campaigns to who has not voted on election day. In a blog post, the company states that “this enables the campaign to contact any supporters who haven’t voted yet and track strikelist progress as it happens.”

These functions caused Max Voldman, another associate at Constantine Cannon to declare, “There is no universe in which ALEC CARE’s features could be considered constituent service. This is campaign software, plain and simple, and as such an illegal contribution to these campaigns in violation of ALEC’s 501(c)(3) tax-exemption.”

Max Voldamn | Courtesy of Constantine Cannon
Max Voldamn | Courtesy of Constantine Cannon

While the campaign software was repackaged and provided free of charge as a so-called constituent management tool to select elected officials, it counts as a contribution to those legislators because the repackaging does not reduce its campaign value, according to the complaint;. it comes “fully loaded” with campaign data and any data added by members also gets added to the RNC’s database. 

Voter Gravity’s website states that the company turns data into votes by offering “targeted, insightful and immediate information about voters, donors, and activists that mean the most to a campaign. Easily access all of the voter data you need and turn that data into votes.”

 

Past agendas from ALEC conferences included demonstrations of “this game-changing program.” And, the group added, “some ALEC members consider this one of the most valuable benefits of membership.” ALEC advertises the program on its YouTube channel in a video that talks about “walk lists,” which are generally used only in campaigns. 

It concludes: “Come see how ALEC CARE can benefit you.”

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Melanie Conklin
Melanie Conklin

Melanie Conklin is proud to be a native of the state of Wisconsin, which gave humankind the typewriter, progressivism and deep-fried cheese curds. Her several decades in journalism include political beats and columns at Isthmus newspaper, the Wisconsin State Journal and other publications. When not an ink-stained wretch, she served time inside state, local and federal government in communications. She is excited to be back at the craft of journalism as Deputy Editor of the Wisconsin Examiner. It’s what she’s loved ever since getting her master’s degree in journalism from the UW-Madison. Her family includes one husband, two kids, four dogs and five (or more) chinchillas.

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