Online retail giant Amazon is being criticized for its relationship with the American Legislative Exchange Council [3] (ALEC), and accounts of its participation in ALEC illustrate how ALEC's corporate members and funders drive the ALEC agenda.

The Progressive Change Campaign Committee (PCCC) is asking Amazon to follow the lead of 12 other corporations and drop its association with ALEC [4]. Amazon apparently became an ALEC member in part to oppose new state taxes on online sales, but Amazon's membership dues and sponsorship grants help fund the overall ALEC agenda, which includes bills like "Stand Your Ground / Kill at Will," voter ID, anti-environmental legislation, and more.

In response to growing criticism of ALEC and an exodus of corporate and legislative members, ALEC has published a new set of "Frequently Asked Questions" [5] to present a positive image of the organization. ALEC's claims in those FAQs -- such as how “elected state legislators fully control ALEC’s model legislation process” or how ALEC meetings allow the public and private sectors to "share their views” -- are contrary to what some participants say actually happens in ALEC meetings, including those involving Amazon.

Corporate Members Play Leading Role

One example of how corporations dominate the policy discussion within ALEC comes from a subcommittee of the ALEC Telecommunications and IT Task Force at ALEC's 2011 Annual Meeting in New Orleans. The subcommittee considered a proposal to adopt a sales tax rate on e-commerce on par with the sales tax rate for brick-and-mortar retailers. According to some estimates, increasing this sales tax could raise $24 billion in revenue [6] for cash-strapped states confronting deficits and high unemployment caused by the financial crisis.

Not surprisingly, online retailer Amazon vigorously opposed the proposal. While legislators were present at the meeting, the corporate lobbyists drove the discussion. "Not a single legislator spoke up" during the nearly 40 minute debate over the proposal, said Jeff Wright, a Florida teacher's union member who paid nearly $1000 to attend the conference so he could observe ALEC in action. "The discussion was not an exchange of ideas between the public sector and private sector, but a debate between the corporate members," Wright said.

Amazon sponsored the Annual Meeting at the "Director" level (which cost $10,000 the previous year), as well as having paid membership dues (between $7,000 and $25,000) and additional fees for Task Force membership (between $3,000 and $10,000). Amazon succeeded in getting the proposed internet tax tabled.

Who Drives the ALEC Agenda?

Wright's observations also contradicted ALEC's claims [5] that "elected state legislators fully control ALEC's model legislation process." The new rhetoric stands in stark contrast with the level of involvement of corporate lobbyists in the task force meetings, where the real business of approving model legislation occurs. While the ALEC public sector board has final say on adopting a task force-approved bill, according to ALEC's procedures the model bills are automatically adopted if no one on the board objects within 30 days.

"My impression was that legislators knew that the corporations in the room were the ones that would be funding their election campaigns," so they were not going to take sides in the debate between Amazon and Wal-Mart. "They were not going to weigh in [on the proposal]. They let the corporations battle it out."

Wright said he noticed the same dynamic at the Task Force meeting he attended. The Task Forces are where ALEC's corporate and other members can propose model legislation, and where the Task Force's corporate and legislative members vote as equals to decide whether to adopt it. "If I'm running for reelection, am I going to vote against the proposals of the corporations funding my campaign? I don't think so."

Other reports [7] from Task Force meetings show that even when a majority of legislators support a particular proposal, it can be killed if the corporate members do not.

"Going into the ALEC meeting," Wright said, "I knew that the corporate members participated. But I did not anticipate how much the corporations really are the ones in charge at ALEC."