The advocates are celebrating decisions by several major food and beverage companies to sever financial ties with the organization, the American Legislative Exchange Council (ALEC). Coca-Cola, PepsiCo, McDonald’s, Kraft Foods and Wendy’s have cut their support for the group, although all played down any connection to the Florida shooting.
The tension in corporate boardrooms over the case is the latest example of the pitfalls companies can sometimes face when they donate to political and lobbying groups, even those that seem safely below the radar of public consciousness.
The ALEC controversy is now sparking a broader debate about corporate participation in politics and the polarized state of political discourse. At a minimum, it has strengthened calls for companies to develop clear policies explaining their spending.
“I would caution companies to be very aware of where their money is going,” says Nell Minow, director of GMI Ratings, which provides corporate governance information to investors, corporate auditors and regulatory agencies. “Companies are going to realize they can take a real reputational hit with this kind of affiliation.”
She and others recall the tempest that erupted in 2010 around Target after the company donated to a nonprofit group supporting a Minnesota gubernatorial candidate who was known for opposing gay rights initiatives.
The Supreme Court decision that year in Citizens United v. Federal Election Commission gave corporations the right to contribute directly to groups active in election campaigns.
But most major corporations have not jumped at the chance. Rather, publicly traded companies have largely continued to donate through nonprofit lobbying and political groups — many recently formed — that are not compelled to reveal their donors.
Ron Scheberle, executive director of ALEC, said Thursday that the attacks are part of an “intimidation campaign . . . to silence our organization” led by left-wing activists opposed to the group’s free-market agenda.
In recent weeks, companies that have supported the state legislative group — many of them listed on the ALEC Web site — found themselves in the glare of a national protest organized by the government watchdog Common Cause, the civil rights organization Color of Change and other groups.
The list of companies now targeted includes AT&T, Johnson & Johnson, Pfizer, Diageo, Wal-Mart and the industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA).
ALEC has had a significant impact in statehouses since it was founded in the 1970s by conservative activist Paul Weyrich. ALEC funders include the National Rifle Association, which led the way to passage of the Stand Your Ground law in Florida and other states. ALEC officials have said they were not directly involved in the Florida effort, but their organization’s Web site touts similar ALEC-backed legislation passed in other states.