Weekly Watchdog

July 5, 2012

ALEC faces new challenge to tax-exempt status

A prominent tax attorney has accused the American Legislative Exchange Council with improperly claiming nonprofit status, alleging the group's role is to benefit businesses, the Republican party, legislators -- and not the public. The group has attracted attention recently for its model "stand your ground" and voter ID laws which led major corporate backers like Coca Cola and Kraft Foods Inc. to drop their membership in the face of a threatened boycott by activists. ALEC "elevates commercial gain for a few over the well-being of society's less fortunate," says the complaint penned by Marcus Owens, the former chief of the Internal Revenue Service's nonprofit corporations division, on behalf of Clergy Voice, a group of ministers from progressive churches in Ohio.

Contribution limits at risk in states thanks to Supreme Court

A campaign finance arms race is in danger of breaking out in Illinois and at least three other states as lawmakers use the Supreme Court's Citizens United decision as justification for raising or even eliminating campaign contribution limits. Twenty-four states had bans in place against corporate or union spending on elections that were knocked down by Citizens United. Nineteen of the 24 states passed laws to require better disclosure.

Evidence of overtreatment at dental clinics serving poor children

Sen. Charles Grassley, R-Iowa, says he has found evidence of abuses by corporate dental chains treating children on Medicaid. Grassley's staff has been asking questions of three dental chains serving poor children on Medicaid: Kool Smiles, Small Smiles and ReachOut HealthCare America. Last week, a joint investigation by the Center for Public Integrity and FRONTLINE, revealed that the Atlanta-based chain Kool Smiles's business model of serving kids on Medicaid has led to complaints that it over-treats children.

Local leaders sue for right to control location of gas wells

When Pennsylvania passed a state law that stripped local authority over where potentially hazardous natural gas wells could be drilled, cities and townships decided to take matters into their own hands. Seven municipalities from across the state have filed a lawsuit in Pennsylvania's Commonwealth Court challenging the constitutionality of Act 13, a law passed in February that charges an impact fee for natural gas wells but also overrides local governments' zoning authority.

Bill Buzenberg
Secret money, campaign abuse

The New York Times says, "The secret world of undisclosed political contributions is in desperate need of sunlight." Finally, two government agencies, the Internal Revenue Service and New York State's attorney general, may investigate whether nonprofit groups have taken tax-deductible contributions and then used those funds for partisan political purposes.

Those are the complaints against the American Legislative Exchange Council (ALEC), the National Chamber Foundation of the U.S. Chamber of Commerce, and Crossroads GPS, founded by Karl Rove. All of these groups are spending tax-deductible dollars in ways that back mostly Republican Party policies and candidates, essentially acting as corporate-funded lobbying groups. Full disclosure of this corporate political spending is the aim of many good-government groups.

And the Center for Public Integrity has more investigative journalism coming your way in the next few weeks -- from a major black lung exposé with NPR, to uncovering the troubling global market in human tissue.

Until next week,