“The Guardian” Reveals the State Policy Network’s Coordinated Effort for 2014—An Assault on Education, Taxes, Healthcare, and Workers

Submitted by Elaine Magliaro, Guest Blogger

In November, I wrote a post titled State Policy Network (SPN)—The “PR Firm” for ALEC and a Right-Wing Agenda. According to the Center for Media and Democracy, SPN “is funded largely by global corporations and by groups and foundations associated with conservative billionaires David and Charles Koch.” Journalist Jane Mayer provided a good description of SPN in her article Is IKEA the New Model for the Conservative Movement?which appeared in The New Yorker this past November.

Mayer:

In every state in the country, there is at least one ostensibly independent “free-market” think tank that is part of something called the State Policy Network— there are sixty-four in all, ranging from the Pelican Institute, in Louisiana, to the Freedom Foundation, in Washington State. According to a new investigative report by the Center for Media and Democracy, a liberal watchdog group, however, the think tanks are less free actors than a coördinated collection of corporate front groups—branch stores, so to speak—funded and steered by cash from undisclosed conservative and corporate players. Although the think tanks have largely operated under the radar, the cumulative enterprise is impressively large, according to the report. In 2011, the network funnelled seventy-nine million dollars into promoting conservative policies at the state level.

The Guardian newspaper has dug up more information about the workings of SPN…and its plans for 2014. The paper published an article on the subject entitled State conservative groups plan US-wide assault on education, health and tax just last week. According to Ed Pilkington and Suzanne Goldenberg, the authors of the article, SPN and its affiliated conservative groups/”think tanks” are planning “a co-ordinated assault against public sector rights and services in the key areas of education, healthcare, income tax, workers’ compensation and the environment…”

Pilkington and Goldenberg:

The strategy for the state-level organisations, which describe themselves as “free-market thinktanks”, includes proposals from six different states for cuts in public sector pensions, campaigns to reduce the wages of government workers and eliminate income taxes, school voucher schemes to counter public education, opposition to Medicaid, and a campaign against regional efforts to combat greenhouse gas emissions that cause climate change.

According to Pilkington and Goldenberg, documents obtained by The Guardian “contain 40 funding proposals” from groups affiliated with SPN in 34 states that provide “a blueprint for the conservative agenda in 2014.” They said their paper partnered with the Texas Observer and the Portland Press Herald in Maine to publish the summary of SPN’s proposals for the coming year in order “to give readers and news outlets full and fair access to state-by-state conservative plans that could have significant impact throughout the US, and to allow the public to reach its own conclusions about whether these activities comply with the spirit of non-profit tax-exempt charities.”

Most of the conservative “think tanks” working in collaboration with SPN “are constituted as 501(c)(3) charities that are exempt from tax by the Internal Revenue Service.” Such groups are “subject to strict restrictions on the amount of lobbying they are allowed to perform.” It was reported, however, that some of “the grant bids contained in the Guardian documents propose the launch of ‘media campaigns’ aimed at changing state laws and policies, or refer to ‘advancing model legislation’ and ‘candidate briefings’, in ways that arguably cross the line into lobbying.”

SPN gathered the grant proposals—monetary requests ranging in size from $25,000 to $65,000—from the 34 states in late July. The requests were then “submitted for funding to the Searle Freedom Trust…” Pilkington and Goldenberg said that the documents show that SPN’s link to Searle was Stephen Moore. (Moore happens to be an editorial writer for the Wall Street Journal.) They added that Moore, “who advises Searle on its grant-giving activities, was asked by SPN to rank the proposals in two halves – a ‘top 20’ and ‘bottom 20’.”

Moore claims that he serves as an “unpaid adviser” to the Searle Foundation…and that he has been a lifetime friend of Dan Searle. He also said that “the grant decisions were made by Searle’s sons and grandsons based upon the late businessman’s ‘commitment to the advancement of free enterprise and individual rights’.”

(Link to a document provided by The GuardianState Policy Network: Searle Tax and Budget Grant Proposals)

Pilkington and Goldenberg claim, however, that the “proposals in the grant bids contained in the Guardian documents go beyond a commitment to free enterprise…” They provided examples of the submitted proposals:

• “reforms” to public employee pensions raised by SPN thinktanks in Arizona, Colorado, Minnesota, Missouri, New Jersey and Pennsylvania;

• tax elimination or reduction schemes in Alabama, Arkansas, Georgia, Maryland, Nebraska and New York;

• an education voucher system to promote private and home schooling in Florida;

• campaigns against worker and union rights in Delaware and Nevada;

• opposition to Medicaid in Georgia, North Carolina and Utah.

Kenneth Quinnell (AFL-CIO) wrote, that depending upon which 20 proposals Searle chooses to fund, there were “12 ways that SPN could assault the rights of working families in 2014.” Here are some of the examples Quinnell provided:

1. Alabama Policy Institute: Requested $25,725 to fund the “spark plug” for eliminating the state income tax. Such a plan would lead to the cutting of services for working families. (Also requested for tax cuts or elimination: Advance Arkansas Institute, $35,000; Georgia Public Policy Foundation, $40,000; Nebraska’s Platte Institute for Economic Research, $25,000; New Mexico’s Rio Grande Foundation, $30,000; Ohio’s Buckeye Institute for Public Policy Solutions, $40,000; and Opportunity Ohio, $35,000).

2. Delaware’s Caesar Rodney Institute: Requested $36,000 to fund strategies to repeal the state’s prevailing wage law, which would lower wages for working families.

3. Florida’s James Madison Institute: Requested $40,000 to fund efforts to promote vouchers (which they call Education Savings Accounts), which would reduce funding for public schools. Lower public education funding would lead to worsening student performance and teacher layoffs. (Also requested on this topic: Oregon’s Cascade Policy Institute, $40,000.)

4. Georgia Center for Opportunity: Requested $65,000 to fund opposition to Medicaid expansion, which would mean fewer residents have health care. (Also requested on this same topic: North Carolina’s J.W. Pope Civitas Institute, $46,500; Texas Public Policy Foundation, $40,000; Utah’s Sutherland Institute, $50,000.)

5. Illinois Policy Institute: Requested $40,000 to fight to change Chicago’s public employee pension system to a defined-contribution plan, which would mean less retirement security for working families. (Also requested on cutting public employee pensions: Arizona’s Goldwater Institute for Public Policy, $40,000; Minnesota’s Center of the American Experiment, $40,000; Missouri’s Show-Me Institute, $25,000; Pennsylvania’s Commonwealth Foundation, $35,500.)

6. Maryland Public Policy Institute: Requested $40,000 to push for cuts in corporate tax rates, which would lead to the cutting of services for working families.

Lisa Graves is the executive director of the Center for Media & Democracy, an organization that “has tracked the work of the State Policy Network”—as well as the workings of the American Legislative Exchange Council (ALEC). When speaking to The Guardian, Graves said that “such groups are betraying the communities they claim to represent by introducing ‘model legislation’ that undoubtedly are designed to serve the interests of large corporations and the wealthy.” She continued, “They appear to be advocating purely local interests but what they are promoting is part of a larger national template to radically remake our government in a way that undermines public institutions and the rights of workers.”

The difference between 501(c)(3) and 501(c)(4) organizations (From New Jersey On-Line)

According to the Internal Revenue Service Code, 501(c)(3) and 501(c)(4) organizations are nonprofit organizations that are exempt from paying federal income tax. 501(c)(3) organizations are either a public charity, private foundation or private operating foundation with open membership whereas 501(c)(4) organizations are civic leagues or associations operated exclusively for the promotion of social welfare or local associations of employees with limited membership.

When it comes to lobbying and political activity, 501(c)(3) organizations can appeal directly to legislative bodies and representatives and may support issue-based legislation. However, they must notify the IRS of their intent to lobby by filing form 5768, which formally informs the federal government that one has elected to use the expenditure test to have the organization’s lobbying activity measured. Under this test, lobbying capacity is typically limited to spending less than 5 to 20% of the organizational budget on lobbying activities, depending on the size of your organization.

*****

Have you reached a conclusion yet regarding whether or not the activities of the organizations/think tanks written about in this post comply with the spirit of non-profit tax-exempt charities?

SOURCES & FURTHER READING
State Policy Network—The “PR Firm” for ALEC and a Right-Wing Agenda (Jonathan Turley)

State conservative groups plan US-wide assault on education, health and tax (The Guardian)

Free-market research group’s climate proposal denounced by host university: Suffolk University says Beacon Hill Institute had not followed rules and that research plans did not match university’s mission (The Guardian)

The Money Behind the Fight to Undermine Medicaid: Documents show how a conservative think tank hinders expansion of health insurance in Texas.  (Texas Observer)

New Rules Would Rein In Nonprofits’ Political Role (New York Times)

Guardian Documents Expose State Policy Network Groups’ Intent to Lobby (Center for Media and Democracy)

State Policy Network: The Stealth Network Dramatically Influencing State Law (Center for Media and Democracy)

Stink Tanks: State Policy Network Internal Budget Documents Revealed by The Guardian (Firedoglake)

Is IKEA the New Model for the Conservative Movement? (The New Yorker)

Here’s ALEC’s Plan To Bring Right Wing Policies To States Near You (Crooks and Liars)

12 Ways the State Policy Network Could Assault the Rights of Working Families in 2014 (AFL-CIO)

Washington County residents have mixed reactions to plan to eliminate taxes (Portland Press Herald/Maine Sunday Telegram)

Army of Rightwing Groups Plan Assault on State Laws in 2014: Internal documents show how state-level affiliates serve national interests of corporations and wealthy, conservative ideologues (Common Dreams)

The difference between 501(c)(3) and 501(c)(4) organizations (New Jersey On-Line)

Treasury, IRS Will Issue Proposed Guidance For Tax-Exempt Social Welfare Organizations (U.S. Department of the Treasury

Stinktanks.org

59 thoughts on ““The Guardian” Reveals the State Policy Network’s Coordinated Effort for 2014—An Assault on Education, Taxes, Healthcare, and Workers

  1. Skip said: “It all or nothing because once you allow a right to be usurped by the ruling class, you will someday end up with being prosecuted for speaking out against the State.”

    It’s the ruling class that is helping to fund ALEC and the SPN and its affiliated “think tanks.” It’s the ruling class that has being trying to work under the radar to get laws written in states across the country that will benefit them.

    • Elaine, Whether you know it or not, we are actually fighting against the same people, just believe that each others methodologies are wrong. I do not believe that you can beat them using the system they control (government). You do not believe, as I do that the free market is the solution. They have us at odds and that is by design. What’s they old adage, “divide and concur.”

  2. Elaine, It is hard to know specially who represents the ruling class. I believe at the top of the list it is the central bankers that maintain the greatest power. The control banking and wall street, i.e. investment banking as well as the campaign and political system that funds the politicians. They control who runs the military industrial contractors, as well as big pharma, big oil and big agriculture. Just because one has money and believes in less government and taxation, does not necessary make them a part of the ruling class. It is possible that those really in control hide behind those they control. Do the Rothschild’s, Rockefellers and other prominent banking interest control much of the industrialized world? It appears so, as the Central bankers meet every two months at the BIS in Basil, Switzerland. Not something they teach us in college is it? “The Tower of Basil” is a recent book on the subject. I have not read it but heard the author discuss some of it’s content.

  3. Stink Tanks: Historical Records Reveal State Policy Network Was Created by ALEC
    By Steve Horn
    12/9/13
    http://www.desmogblog.com/2013/12/09/stink-tanks-historical-records-reveal-state-policy-network-created-alec

    Excerpt:
    A 1991 report tracked down by DeSmogBlog from the University of California-San Francisco’s Legacy Tobacco Documents reveals that the State Policy Network (SPN) was created by the American Legislative Exchange Council (ALEC), raising additional questions over both organizations’ Internal Revenue Service (IRS) non-profit tax status.

    Titled “Special Report: Burgeoning Conservative Think Tanks” and published by the National Committee for Responsive Philanthropy, the report states that State Policy Network’s precursor — the Madison Group — was “launched by the American Legislative Exchange Council and housed in the Chicago-based Heartland Institute.”

    Further, Constance “Connie” Campanella — former ALEC executive director and the first president of the Madison Group — left ALEC in 1988 to create a lobbying firm called Stateside Associates. Stateside uses ALEC meetings (and the meetings of other groups) as lobbying opportunities for its corporate clients.

  4. ALEC Opposed Divestment From South Africa’s Apartheid Regime
    Lee Fang
    December 6, 2013
    http://www.thenation.com/blog/177509/alec-opposed-divestment-south-africas-apartheid-regime#

    Excerpt:
    There’s a lot of news this week on the American Legislative Exchange Council and the related network of state-based think tanks, the State Policy Network.

    Almost a year ago, when I was at a small upstart blog called Republic Report, we first sent a letter to corporations involved with ALEC, asking them to leave the organization, given its role in crafting the Stand Your Ground law in Florida. The Guardian unveiled a trove of documents revealing that ALEC has suffered tremendously from the negative press around those efforts, which involved a group of left-of-center organizations, including the Center for Media and Democracy and Color of Change. Many businesses actually did leave ALEC.

    While ALEC seems down, they’re not out. According to the documents obtained by The Guardian, ALEC and its allied organization, SPN, have redoubled their efforts to expand and find new funding streams. The documents suggest fundraising off of gambling efforts, efforts to push worker retirement accounts into dubious 401(k)-style plans, and other corporate giveaways that ALEC and SPN can spin into legislative templates and advocacy. Specific corporations and lobbying organizations are listed as prospective donors. The money just never stops.

    This is the inherent difference between right-leaning organizations and their counterparts on the left. Large corporations view their right-wing giving as a strong return on investment. For almost every major conservative issue campaign, at least on economic policy, the wealthy and powerful ultimately benefit, meaning their donations to groups like ALEC and their cohorts are well-served. If corporate donors give to the left, as they sometimes do, they risk higher taxes, more empowered workers and less influence over elections. So it should be no surprise the the vast majority of corporate wealth in politics flows to the right and far right.

    This pattern has repeated itself for many decades, though it has accelerated in recent years. During the course of my research on how the conservative movement rebuilt itself in the aftermath of the 2008 elections, I found myself digging through many historical files that show this dynamic repeating itself like an endless feedback loop.

  5. Corporate Money in Network of Right-Wing State Policy Think Tanks
    Written by Rick Cohen
    Nonprofit Quarterly
    11/14/13
    http://www.nonprofitquarterly.org/policysocial-context/23239-corporate-money-in-network-of-right-wing-state-policy-think-tanks.html

    Excerpt:
    Some years ago, in a study of foundation support for school privatization, we noted the multiplicity of state-level conservative “think tanks” supporting a pretty consistent state-to-state agenda, achieving widespread success in pushing for vouchers, corporate tax credits for private schools, and charter schools. We documented the grantmaking to these state think tanks, highlighting the significant role of the Roe Foundation based in South Carolina.

    Yesterday, Progress Now and the Center for Media and Democracy released a hard-hitting study about 63 state-level conservative think tanks that are members of the State Policy Network. Founded in 1991 and incorporated in 1992, SPN’s founding board chair was in fact Thomas Roe himself. From 13 member think tanks at its founding, SPN now has think tanks operating in all 50 states. Based on a suggestion from Ronald Reagan that he try to create a Heritage Foundation in every state, Roe’s animating idea was that state level policy think tanks would capture the attention of state policy makers.

    It was smart thinking. As Gordon Lafer, a professor at the University of Oregon, noted during a press briefing organized by the two sponsors of the study, many state legislators are “thinly staffed” and therefore look to outside experts for frameworks and suggestions. These conservative state think tanks give legislators detailed analyses and model legislation addressing business issues (such as deregulation, right to work, and low minimum wages), healthcare (actively opposing state-level implementation and collaboration with the Affordable Care Act), and state taxes (reduced tax rates for corporations and for the wealthy)—though much of the model legislation comes ready-made from SPN’s association with the American Legislative Exchange Council (ALEC), known for its advocacy of pro-business legislation as well as restrictive voting rights bills and stand-your-ground statutes.

    The study suggests that the State Policy Network has grown into a well-funded system of state-level advocates, whose combined revenues in 2011 exceeded $83 million. Twenty-two of the SPN think tanks are either members of ALEC or sit on ALEC task forces that generate the model bills frequently introduced in state legislatures. Thirty-four SPN members have “direct ties” to ALEC, and SPN itself is a member of ALEC. Like ALEC, SPN and many of its state think tank members, such as Arizona’s Goldwater Institute, are 501(c)(3) public charities and claim to do no lobbying, though some of the 501(c)(3) think tanks have 501(c)(4) arms. One clear demand from Brian Rothenberg, the executive director of ProgressOhio, a member of Progress Now, is that these lobbying think tanks, like the Buckeye Institute in his state, should register accurately and fully as lobbyists and comply with the reporting and transparency required of lobbyists.

  6. hskiprob,

    “Hey gbk, It’s all about money.”

    ‘Nuff said.

    But it’s also about competence. It’s sad you can’t find investors for a 150 year-old invention, nor a vertical axis wind turbine. Do you even know what “scaling” means?

  7. hskiprob,

    “It appears pretty tough out there unless you work for the government and even the various governments are having a tough time meeting liabilities.”

    Sure, hskiprob.

    It’s the government that made your inventions fail. If only they would have exploded you would have been successful.

    Given your wind turbine design though, it was obviously a lack of wind speed that kept this goal from being accomplished.

  8. Any business owner that cuts employee hours over healthcare will not be in business for long. You will have no choice but to hire less desirable, less dependable people because the pay and hours are not enough. The best and the brightest will be forever denied to you for your selfish acts. Your employees will come to hate you.

    If your business model is so flawed you cannot pay a fair market wage then your business deserves to fail, as it most certainly will.

  9. Not a surprise, but interesting:

    “ALEC Boots Mother Jones From Its Annual Conference”

    —By Andy Kroll, Fri Dec. 6, 2013

    “When asked why I’d been turned away, Meierling pointed to our previous coverage of ALEC and said it’s clear that Mother Jones “fundamentally hates” ALEC. We’ve covered ALEC for more than a decade—a 2002 exposé titled “Ghostwriting the Law,” coverage of the group’s proposals regarding voting rights and workers’ rights, and more recently the departures of big-name corporate members.

    At the same time he was explaining why I couldn’t attend, Meierling stressed to me that ALEC is “moving toward transparency.” To his credit, he acknowledged the irony.”

  10. just a girl:

    I think Obama care is the reason for those changes. The employees can buy health insurance on the Obama care website now that it is up and running. They will get a subsidy if they cannot afford insurance.

    I think it is really great that we can now all afford health insurance, dont you?

  11. hskiprob,
    Without government controls and restrictions on your so-called free market, the middle class would be shrinking even more. Of course, ALEC is working hard to make sure the middle class disappears and that the market is only free for the wealthy.

  12. rafflaw:

    the middle class is in decline because of the actions taken by government in the last 12 years. That doesnt have any connection to a free market.

  13. Bron,

    “the middle class is in decline because of the actions taken by government in the last 12 years.”

    Twelve years is your perspective of why, “the middle class is in decline?”

    Much too short — in time — in my opinion, because this would put us at the year 2001 when your claimed government actions put the middle class in decline.

    But I guess it’s better that your perspective has at least twelve years of history associated with it rather than none; though your timeline suggests a self-serving perspective – one disassociated with the damage of neo-liberal policies that found root after the fall of the Berlin Wall and the Soviet Union—much before your vaunted twelve years.

    Despite your claims of me being a statist, there was talk about a “peace dividend” given the end of the “Cold War,” in the early 1990’s.

    Our defense budget at the time was approximately $230B – and there was real political talk of this cost being reduced.

    Where are we now, Bron?

    When are you going to speak to the capital expended by this country on war?

  14. Lisa Graves on “Democracy Now!”, yesterday:

    http://www.democracynow.org/2013/12/11/alecs_institutional_corruption_from_backing_apartheid

    “The secretive American Legislative Exchange Council (ALEC) has just ended a week-long meeting in Washington where corporate lobbyists worked with state lawmakers on model bills that will later be introduced in states nationwide. ALEC has reportedly drafted a number of new bills designed to prevent President Obama from cutting emissions, and to weaken state policies promoting clean energy. Now conservative groups across the United States are apparently planning a coordinated effort in six states to raise money for attacks on public sector rights and services in the key areas of education, healthcare, income tax, and workers’ compensation. The proposals were coordinated by the ALEC-backed State Policy Network, an alliance of groups that act as incubators of conservative strategy at the state level. ALEC is struggling to re-enlist donors after an exodus prompted by its backing of Florida’s “Stand Your Ground” law. According to The Guardian, ALEC has lost nearly 400 state legislators from its network over the past two years and more than 60 major corporate donors. We discuss ALEC’s latest efforts, along with its historic opposition to divestment campaigns from apartheid South Africa, with Lisa Graves of the Center for Media and Democracy. Please check back later for full transcript.”

    • Anonymously, Go figure, the tax man has been hated throughout history and people join groups to fight them and the ruling oligarchy that gives them their powers. And the Counsel on Foreign Relations is what?

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