http://www.npr.org/templates/story/story.php?storyId=130891396-snip-
If ALEC's conferences were interpreted as lobbying, the group could lose its status as a non-profit. Corporations wouldn't be able to reap tax benefits from giving donations to the organization or write off those donations as a business expense. And legislators would have a hard time justifying attending a conference of lobbyists.
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Is it lobbying when private corporations pay money to sit in a room with state lawmakers to draft legislation that they then introduce back home? Bowman, a former lobbyist, says, "No, because we're not advocating any positions. We don't tell members to take these bills. We just expose best practices. All we're really doing is developing policies that are in model bill form."
So, for example, last December Arizona state Sen. Russell Pearce sat in a hotel conference room with representatives from the Corrections Corporation of America and several dozen others. The group voted on model legislation that was introduced into the Arizona legislature two months later, almost word for word.
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But first ALEC has to get legislators to the conferences. The organization encourages state lawmakers to bring their families. Corporations sponsor golf tournaments on the side and throw parties at night, according to interviews and records obtained by NPR.
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These conferences include open bar parties, banquets, baseball games, free child care -- which cost ALEC $138,000 at one conference alone, taking care of the kids and keeping them entertained. ALEC often gives legislators cash to pay for travel expenses -- those gifts are called "scholarships." Since all of this is "educational" rather than lobbying, it doesn't have to be reported. And the corporations write it off because ALEC is supposedly a charity.
The Arizona legislation that copied the ALEC model legislation, written with the help of the Corrections Corporation of America, was the controversial immigration law requiring police to arrest anyone who can't prove they entered the country legally. It didn't originate in Arizona. It originated with ALEC. (And yes, this is the NPR report mentioned in the Wikipedia article I quoted in the OP.)