(See updated entry at end of blog regarding Walker veto of this amendment.)
A letter to Governor Scott Walker from the American Legislative Exchange Council (ALEC), and the group’s response to questions, are a glaring demonstration of the group’s influence and desire to remain underground while imposing their influence. The June 20 letter from an ALEC Director, Courtney O’Brien, congratulates Walker on the legislature’s passage of an amendment to AB40 during the budget process. The Amendment exactly mirrors an ALEC “model resolution” on tax policy for moist smokeless tobacco products – chewing tobacco, or MST. Simply stated, the amendment changes the way MST is taxed. The product used to be taxed “ad valorem” based on unit price. The new tax is calculated by weight, and will (surprise) result in a tax break (and higher profit margin) for tobacco wholesalers. The tax change has nothing to do with tax “fairness” – it puts more money into the hands of the tobacco company and wholesalers. It is no surprise that ALEC has drafted a model resolution, which Wisconsin has copied and implemented, considering where their money comes from. The surprise is that in the letter they admit it. Especially considering the lengths they go to remain underground, and the money and influence they wield.
When contacted via phone for comment on the letter; a spokesman for ALEC stated that they have no “preferential” contact with Governor Walker, that ALEC does not “push” model legislation on states, and that ALEC merely acts as a “clearing house” for like-minded legislators to exchange ideas and legislative philosophy. Really. We’ll see about that. First, the money.
RJ Reynolds has much to gain by the passage of this budget amendment. With recent crackdowns on public smoking, smokeless tobacco is still legal in public, addictive, and profitable. This amendment would increase those profits. In ten years, the company has reported over $63 million in campaign contributions – the vast majority (67%) going to Republicans. They are the main lobby to this legislation. In fact, Reynolds American, Inc. is a registered lobbyist in Wisconsin. The lobbying firm RAI Services Company lists a North Carolina office, but has two full-time lobbyists in Madison, and one working out of Oak Park, IL. RJ Reynolds money and influence is also omnipresent in ALEC.
RJ Reynolds is one of the leading financiers and supporters of ALEC – participating at the “Chairman” donation level. Not only do they give massive financial support, their influence is present on the ALEC “Private Enterprise Board.” Scanning down the page to the 2011 “Private Enterprise Board” is the name David Powers – Reynolds American. David Powers is able to exercise his significant influence to the legislators (many from Wisconsin) in this position. This amendment alone demonstrates outside corporate influence in Wisconsin policy-making, something David Powers is very good at.
David Powers is the “Vice President of State Government Relations” at Reynolds American Inc. Prior to this position, Powers was Regional Director in Washington DC for the Smokeless Tobacco Council. Prior to that position, he served as Senior Intergovernmental Affairs Officer in the George H.W. Bush Administration. David Powers knows how to peddle influence – and he uses it to get what he wants for RJ Reynolds, and for himself. What does that mean to Wisconsin?
In the context of this legislation, the ALEC spokespersons’ statement is a farce on several levels. First, Scott Walker was an ALEC member as a legislator – he has a history with the group. They would certainly see Wisconsin as ripe for the picking with that history. Second, it is historically inconceivable that a power and influence broker like David Powers would serve on the “Private Enterprise Board” of ALEC without exercising that influence to his benefit. Finally, based on the facts and nationwide consistency of these policies, it is clear that Legislators like Robin Vos and Alberta Darling are spoon-fed this type of Corporatic policy by people like David Powers. Never mind what is best for Wisconsin or its people.
Wisconsin’s Governor and GOP continue moving us to a Corporatic Government, with an all-powerful Executive – after the ALEC Corporate structure. Spread the word – Legislation and policy for Wisconsin, not multi-nationals. Join the people’s revolution – make your voice heard. And tell everyone about ALEC – that is exactly what they don’t want, and what the movement needs.
UPDATE: Scott Walker has vetoed the change in tax structure for smokeless tobacco products. Pressure from The American Cancer Society and other groups caused Walker to veto the provision. Fortunately, in this case, common sense and pressure prevailed. If only that were the case with this entire budget – taking away the ALEC – corporate sponsors’ slush fund and taking care of the people of Wisconsin.