Koch Industries and ALEC: a History of Documents

By Connor Gibson, with research by Lisa Graves.

Updated May 21, 2021 to include 2019 Koch foundation payments to ALEC.

Updated Oct. 16, 2019 to include ALEC State Chair information from Documented.

The American Legislative Exchange Council is a one-stop shopping outlet for large companies seeking state legislators to move their agenda through statehouses, coast to coast. ALEC has always offered a pay-to-play service to corporations, but it used to represent a more diverse array of industries that it does today.

Times have changed since the year 2011, in particular. A series of crises have since reduced ALEC into a service for the most politically aggressive, and shameless, industries out there. Our own Lisa Graves and her team at the Center for Media and Democracy launched ALEC Exposed in 2011 after a whistleblower provided all of ALEC’s model bills – bills crafted in private meetings with lobbyists and legislators voting as equals. 

A broad coalition of progressive groups joined the ALEC Exposed effort and successfully pushed over 100 corporations out of ALEC, including some of the largest companies in the world: Walmart, ExxonMobil, Google, Coca-Cola, Dow Chemical, and Comcast. As more companies have exited ALEC, Koch Industries and the nonprofit empire controlled by Charles Koch have filled the empty seats at ALEC.

Here are three key facts about Koch’s relationship with ALEC, using documents recently added to the KochDocs archive:

1. ALEC Received over $3.8 Million from Koch-controlled Foundations from 1998-2019

This excludes payments from Koch Industries, few of which are disclosed (see below).

Total Koch Foundation payments to ALEC from 1997-2019 is $3,886,831:

From 1997 – 2018, Koch foundation payments to ALEC total $3,375,620, according to a Greenpeace database of funding from Koch foundations to organizations involved in obstructing solutions to the climate crisis.

In 2019, ALEC received $511,211 from Koch Foundations:

Source documents: 

Documents published by The Guardian in 2013 revealed that one of the Koch foundations spent $150,000 financing ALEC’s annual Rich States, Poor States report, which ranks all 50 states based on how favorable their laws are to the corporate agenda ALEC advances. That payment is included in the funding totals, above.

Source documents: 2013 ALEC Board Meeting Documents

2. Koch Industries Has Been a Member of ALEC since 1993

Koch Industries has financed ALEC in a variety of ways, most often through membership dues. Koch Industries pays additional task force fees, ranging from $2,500 – $10,000 per task force in recent years, allowing Koch to and vote on proposed ALEC model policies “as equals” to ALEC’s member legislators.

Source Documents:

The Center for Media and Democracy’s PR Watch reported in 2014 that ALEC reported a $504,700 payment from Koch Industries in 1998, from a section of its annual IRS filing that is normally not disclosed to the public.

Thanks to the Truth Tobacco Industry Archive at UC San Francisco, documents show that Koch Industries has been a member of ALEC since at least August, 1993. 

Previously, Koch Industries, ALEC, and the Koch-born Citizens for a Sound Economy worked together in coalition with the Tobacco Industry called the Coalition for Fiscal Restraint and on other shared policy objectives.

ALEC honored Charles Koch and David Koch with its “Adam Smith Award” at its annual meeting in 1994. Both Koch brothers attended the ALEC meeting to receive their awards and delivered speeches that praised the work of ALEC for complimenting their other political and nonprofit investments.

Koch Industries has had a lobbyist on ALEC’s corporate board of directors for every year since at least May of 1996. The position has almost exclusively been filled by Michael (Mike) Morgan, who remains on ALEC’s board as of 2019.

A December, 2018 list of members of the ALEC Energy, Environment and Agriculture task force, published by Documented, reveal that Koch Industries lobbyist Mike Morgan serves in one of ALEC’s most secretive positions: the private sector “state chair.”

ALEC State Chairs are composed of 1-3 legislators and a lobbyist appointed by the legislators State Chairs, in every state. ALEC discloses the legislators who serve as state chairs, but it does not disclose the lobbyists state chairs who work with those legislators.

State Chairs have several responsibilities:

  1. Raise money from corporations in their respective state for ALEC’s “Scholarship” fund. This fund, worth hundreds of thousands of dollars annually, allows legislators to get reimbursed by corporations for their traveling expenses, without disclosing to constituents which companies pay for their travel.
  2. Recruit more legislators and lobbyists from their respective state to join ALEC.
  3. Introduce ALEC model bills in their respective state. On paper, ALEC claims that it only allows legislators to oversee this process. ALEC removed mention of this responsibility from its bylaws in 2013.
  4. ALEC state chairs–elected officials who have sworn an oath of office, agree to “put the interests of the organization [ALEC] first,” according to a membership pledge that was published by The Guardian in 2013.

Source documents:

Charles Koch’s company and his primary grant-making foundation each bailed ALEC out of financial trouble in the mid-1990s, as Lisa Graves unearthed in 2011. Meeting minutes from an ALEC Board meetings in March 1997 note that ALEC leadership “thanked Koch Industries and E&M charities for their loans.” A similar note was included in meeting minutes from ALEC’s December 1996 Board of Directors meeting.

Source documents: 

ALEC’s 1998 Business Plan notes a $440,000 loan from “the Koch Foundation.” ALEC came into the 1998 fiscal year with a $540,000 deficit “carried over from the previous three fiscal years,” indicating that ALEC’s financial woes began in the 1995 fiscal year.

For years, ALEC has also received interns placed by the Charles Koch Foundation and, more recently, the Charles Koch Institute, according to archived web pages listing partner organizations to Koch training programs, and according to a few of the Koch foundations’ IRS 990 filings.

3. Koch Influence within ALEC Is Still Growing

To take one example, in 2017, ALEC hired Grant Kidwell to manage its Energy, Environment and Agriculture Task Force. For several years, Koch Industries has participated in ALEC’s EEA Task force, where model bills are approved by ALEC legislators voting with ALEC corporations, bills which generally protect the interests of polluting companies. 

According to Documented, Grant Kidwell previously worked for the Charles Koch Institute and Americans for Prosperity, which was founded and remains controlled by Charles Koch’s staff.

Representatives of Koch Industries and the nonprofits controlled directly by Charles Koch and his staff have dramatically expanded their attendance at recent ALEC meetings. 

At ALEC’s 2017 annual meeting in Denver, CO, a membership roster obtained by Documented showed that 52 Koch staff were in attendance, specifically: 

  • Seven Koch Industries employees,
  • Seven Charles Koch Institute employees, and
  • 38 staffers from Americans for Prosperity.

As reported by Documented, even more people from Koch-controlled entities paid to attend the 2019 ALEC annual meeting in Austin, TX, with 69 total–more than for any other corporation or related special interest group:

  • Five Koch Industries employees, 
  • Four Stand Together employees, 
  • Four Charles Koch Institute employees, 
  • One Seminar Network employee (which is now folded into Stand Together), and
  • 55 staff from Americans for Prosperity.
Tags: , , , ,