Merck, one of the world's largest pharmaceutical companies, and Wells Fargo, one of the largest banks in the United States, have joined 38 other major firms and cut ties with the American Legislative Exchange Council (ALEC). ALEC is a controversial "bill mill" that brings together right-wing legislators and corporations to draft controversial model bills behind closed doors. The exit of the two firms brings the total to 40 major American firms that have departed ALEC in recent months. Meanwhile, Duke Energy, the largest regulated utility company in the United States, has not responded to recent intensified consumer pressure to dump ALEC. Beyond their membership in ALEC, all three firms have been criticized for dodging taxes from 2008-2010.
Merck "Reviews" ALEC Membership and Opts Out
Merck, a global pharmaceutical manufacturer with $48 billion in annual revenue, was last embroiled in controversy for developing and marketing the anti-inflammatory drug Vioxx, which was later subject to recall when publicly available research tied the drug to a significant increase in heart attacks. The firm has also been criticized for turning a profit but failing to pay federal taxes 2008-2010.
Merck, along with other major pharmaceutical firms, has been a long-time ALEC member. ALEC's own records show that it was a member of the Health and Human Services Task Force as far back as 1993. More recently, it sponsored ALEC's 2011 annual meeting in New Orleans as a "Trustee." (This level of sponsorship cost a corporation $5,000 in 2010).
ALEC's health and civil justice task forces have adopted a number of "model" bills that benefit Big Pharma by limiting the right of Americans to seek justice if they are injured or killed by dangerous drugs or medical devices.
Merck spokesperson Kelley Dougherty told the New Jersey Star-Ledger, "Merck reviews its memberships every fall to decide which will be retained for the upcoming calendar year based on budget constraints and policy priorities. As a result of this review, the company will not be renewing its membership for several organizations. ALEC is one of these groups."
A group of concerned Merck shareholders and advocates led by Walden Asset Management and the American Federation of State, County and Municipal Employees (AFSCME) sent Merck an open letter in August asking the company to publicly withdraw its membership and financial support from both ALEC and the Heartland Institute. The latter has been the subject of controversy recently over a billboard it ran in Chicago comparing those who trust climate change science to the Unabomber.
Wells Fargo: Out of ALEC, Still in Private Prisons
Wells Fargo, a mega-bank with $38 billion in annual revenue, has been subject to public criticism for its role in the financial crisis, aggressive foreclosures, and its investments in coal-burning power plants and for-profit prisons.
The firm was criticized for turning a profit but failing to pay federal taxes 2008-2010, and for paying only a 14 percent effective tax rate (instead of the 35 percent corporate tax rate) in 2011. This makes it one of the Rainforest Action Network's "top 10 dirty corporate tax dodgers of 2011."
The Denver Business Journal reported that Wells Fargo had been an ALEC member but had cut its ties. Wells Fargo spokesperson Richele Messick confirmed to the Center for Media and Democracy (CMD) that the company was a member for a year, but had declined to renew its membership in April 2012.
Coalition Asks Duke Energy to Dump ALEC
Corporations that have publicly cut ties to ALEC since the launch of ALECexposed and related public interest campaigns include General Electric, Sprint Nextel, General Motors, Walgreens, Best Buy, Hewlett-Packard, MillerCoors, John Deere, Dell, Johnson & Johnson, Wal-Mart, Amazon.com, Procter & Gamble, Mars, Wendy's, McDonald's, Kraft Foods, PepsiCo, and Coca-Cola. The addition of Merck and Wells Fargo brings the total to an even 40. Four non-profits and 70 state legislators have also cut ties with ALEC.
Greenpeace and other members of the Energy Action Coalition have been pressing Duke Energy to cut ties with ALEC in recent weeks.
Duke Energy is an electric power generation company headquartered in Charlotte, North Carolina, recently home to the Democratic National Convention (DNC). The company distributes electric power to about seven million customers, according to promotional materials. It recently completed a merger with Progress Energy, another ALEC member, making it the largest regulated utility company in the United States.
Duke Energy CEO Jim Rogers raised funds for the DNC. At the same time, Duke's membership in ALEC means that it is supporting an agenda that the Democratic Party has called "suppressive": promoting voter ID laws that are in effect in 11 states and introduced or passed in many others (including Wisconsin, where the law has been ruled unconstitutional by two different judges).
Duke has also been the subject of criticism for paying no corporate income tax from 2008-2010. According to the Citizens for Tax Justice, the company made $5.475 billion in profit in those three years and paid an effective negative tax rate of 3.9 percent.
Duke has been a member of ALEC's Energy, Environment and Agriculture Task Force, which works to undermine environmental protections, oppose uniform rules for disposal of hazardous coal combustion waste, and oppose state climate change initiatives. It has also been ALEC's state corporate co-chair of Indiana and South Carolina, two states where ALEC's agenda has been felt particularly strongly (see CMD's reporting on this here and here).