Heartland Institute

Sierra Club Releases “Clean Energy Under Siege” Report – ALEC Responds

VLTP Special Report By Bob Sloan

Last Friday, the Sierra Club released a report on clean energy that was critical of the efforts of what has become known as the ALEC Koch led “Cabal.”  One article on this provided a rundown of key points released in the report.  These include:

  • Growth in clean energy in has made it a threat, and therefore a target from “oil, coal, and gas interests.”
  • Those interests have launched a coordinated and well-funded, multi-pronged assault at the federal level (e.g., Congressional attacks on the Production Tax Credits, harping on theSolyndra non-“scandal”), as well as in the states, by groups like the dirty-energy-funded American Legislative Exchange Council (ALEC), which “provide[s] state lawmakers with ‘model legislation’ that will carry out the goals of its corporate members.”
  • Many of the self-appointed “experts” and anti-clean-energy groups “masquerade as think tanks,” (Heartland, Heritage, Mackinac and Manhattan Institute) maintaining a veneer of impartiality while being funded by oil and gas interests – people like the Koch brothers (ALEC member), etc.
  • The oil and gas message is now focused on touting the benefits of fossil fuels – including a veritable fountain of cheap natural gas from hydrofracking – while constantly pushing out tired and inaccurate lines about clean energy being too expensive, unworkable because of intermittency, and the like.”

The report cites Exxon as contributing heavily to “think tanks” pumping out false science claims about renewable energy and our environment:

“Exxon (an ALEC member) has contributed more than $600,000 since 1998 to the Manhattan Institute, and approximately $676,500 since 1998 to the Heartland Institute…”

It also provides a primary reason why such contributions are helping oil and gas companies prevent clean energy efforts from taking hold – and just why our Congress seems so ineffective in legislating anything involving gas, oil and renewable energies:

“The oil and gas industries contributed to 387 — or 88 percent — of all members of the House of Representatives in the 2010 election cycle. The industry also contributed to 89 out of 100 senators. In both chambers of Congress combined, Republicans received 86 percent of all oil and gas donations.”

Seeing their name mentioned in this report on Friday, the American Legislative Exchange Council (ALEC) immediately released a response to the Sierra Club’s findings on Saturday.  In their response, ALEC began by saying they support renewable energy as does many of their members…

“ALEC has state legislative members that are very supportive of the renewable energy industry.  In addition, ALEC has private sector members that represent renewable energy technologies and even more private sector members that work with and supply products and services to the renewable industry as whole.”

However the next paragraph “explains” ALEC’s position on renewable energy…

“ALEC’s stance on renewable energy has been very clear. ALEC believes that free markets in energy produce more options, more energy, lower prices and less economic disruptions. Also, ALEC believes that mandates to transform the energy sector and use renewable energy sources place the government in the unfair position of choosing winners and losers, keeping alive industries that are dependent on special interest lobbying. ALEC opposes mandates and therefore opposes infighting among fuel sources. ALEC also believes that government programs designed to encourage and advance energy technologies should not reduce energy choices or supply. They should not limit the production of electricity, for example, to only politically preferable technologies.”

No denial of the involvement of the Koch brothers, or campaign contributions by them and ExxonMobil.  No denial of their influences in our Congress or upon members of either house as Sierra claimed.  Research over the past few years has shown that when it comes to “special interest lobbying” ALEC itself is the leader in that category.

Further down, ALEC went on to claim:

“Sloppy research, half-truths and fabrications are found throughout the Sierra Club report. The report shows the very partisan approach and, unfortunately careless, nature behind the Sierra Club’s publications. It is important to point out some the glaring errors regarding the references to ALEC and the Energy, Environment and Agriculture Task Force within ALEC.”

These are similar claims ALEC has made regarding the very public exposure they have been receiving due to extensive research and fact checked disclosures that have been in the news over the past 18 months.  In dozens of articles published by ALEC and think tanks mentioned in the Sierra Club report (and others) they have accused “leftists, Liberals and Progressives” of leading an uncalled for attack upon ALEC and the cabal.  However, in each case the documentation, model bills, reports and articles published about them have been found to be accurate and well supported, resulting in 40 corporations, private foundations and more than 50 legislators to resign from ALEC.  Led by the Center for Media and Democracy’s “ALEC Exposed” and the efforts of other national and  activist organizations – including Occupy groups – researchers have published hundreds of informative and factual articles and reports to the public.  In April of last year more than 800 pieces of until then hidden ALEC model “bills” were turned over by a whistleblower and publicized by CMD and the Nation Magazine.

“Sloppy research, half-truths and fabrications” are what ALEC and the Koch-led cabal operate upon, not the Sierra Club, SourceWatch, CMD, Occupy or other organizations making the actions and activities of ALEC public.  Examples of this are seen in the Sierra report:

“In May, ALEC invited a Who’s Who of anti-clean energy advocates to a meeting in Charlotte to plot strategy. The Heartland Institute was there, even after its internal documents had been exposed and the damage of its self-inflicted wound with the Unabomber billboard had been done. The field general for the Koch brothers, Americans for Prosperity, was there. The first-string squad for the anti-clean energy team was suited up and on the field….

In response to this claim, ALEC did not bother to deny it – just “falsely” claiming it was false – then saying:

Fact Check: This is demonstrably false.  The American Legislative Exchange Council has three conferences a year for its members to discuss pressing public policy issues affecting the states. One of these three conferences is our Spring Task Force Summit which was held in Charlotte, NC on May 11-12.  Our private sector members who attended this conference consist of a wide variety of industries including renewable energy companies. Our agenda for the meeting covered many topics that are of interest to our state legislators from agriculture policy, smart grid deployment and what causes gas prices to streamlining permits for solar installations.”

Did they deny the Heartland Institute was there?  That Americans For Prosperity was there?  That the agenda did not include anti-clean energy advocates?  No, they just attempted to water it down by claiming they discussed many topics of interest to their legislative and private sector members.

The report identified Todd Wynn as ALEC’s staffer (actual title is Director) of their Energy, Environment, and Agriculture Task Force  and gave a history of Wynn’s past affiliations:

“…The staffer behind ALEC’s energy task force is Todd Wynn. Wynn’s resume is a journeyman’s travelogue through the world of ultra-conservative advocacy. Wynn’s opposition to wind energy is well documented from his time with the Cascade Policy Institute….While with Cascade, Wynn wrote reports with titles like, “The Dirty Secret Behind Clean Jobs” and “Renewable Energy Failure: Why Government Mandates Don’t Work and What They Will Do to Our Economy.” Before that, he worked for another “free market think tank,” the American Tradition Institute (ATI).”

ALEC’s response?

“Fact Check: Mr. Wynn has never been on the staff at the American Tradition Institute. He like many of the other fellows of ATI serves in an unpaid advisory capacity to the ATI staff”

No denial about;  Wynn’s control of the ALEC Energy, Environment, and Agriculture Task Force, didn’t deny his previous position with Cascade Policy Institute, the reports written by Wynn or his previous affiliation with the ATI.  No, their response was limited to “…Wynn has never been on the staff” of ATI, instead he’s just an “unpaid fellow” that served in the capacity of advisor to ATI staff.  Possibly Wynn was then “underpaid” for his valuable anti-renewable energy work while at ATI.

As with nearly every press release, claim, false denial or other response to the articles and reports critical of ALEC, the organization once again responded with several paragraphs of double talk and unsupported denials.  Whereas the Sierra Club report is well documented with 94 end notes supporting their claims.  ALEC’s response had…0 facts, no foot or end notes or links to where a reader could find where their claims or denials were substantiated.

Conclusion:  the Sierra Club has accurately identified the problem, the players involved with ALEC, the agenda of this cabal and how many of our Congressional officials are helping them to enrich the oil and gas companies and maintain their stranglehold on consumers’s dollars at the pump and our tax dollars paid out in needless and expensive government subsidies.

The foregoing helps us understand why it has been so difficult to separate the oil and gas companies from ALEC.  They cherish the power and influence they are able to wield upon state and federal lawmakers through their membership in ALEC.  They aren’t as worried about their “brand” as Kraft, Coke and Pepsi were when they quit ALEC.  When it comes to the oil companies, we are so dependent upon them for our fuel needs, they believe we’ll buy it because we have no other choice.  That is why it is so important to push for renewable energy and break the stranglehold upon us that ALEC has given them…and above all, understand that any press release, statements or claims coming from ALEC and their sycophantic cabal members are well thought out and designed to misinform and help them succeed in their conservative agenda.

The fact that global warming is real and oil companies and manufacturers are helping to further increase pollution, bringing us to the point of no-return – where the harm done becomes irreversible – has become undeniable.  This summer’s national drought has demonstrated this better than any report could ever do, with Americans from coast to coast experiencing the very real effects of climate change first hand and personally.  It’s time all of us begin to understand that the arguments put forth by the Koch/ALEC Cabal are nothing more than hollow words meant to distract us from realizing they will sacrifice us all – and the very planet – in pursuit of continued enrichment.  They simply must be stopped!

ALEC, the Koch Led CABAL & “The Amicus Project” – Fed Court Interference

A VLTP Special Report – by Bob Sloan, re-posted from Daily Kos.

This is a lengthy but highly important article.  We cut it down and took out sections we intend to include in subsequent Exposé’s on ALEC and in so doing realized that the single issue of ALEC’s interference in our judiciary still requires a two part segment.  This first part will deal with theALEC Amicus Project – the “front door” access to judges.  Part two will introduce readers to the “back door” access used to attempt to ensure the cabal receives favorable outcomes in important cases.  This link shows just a few of the cases ALEC informs they have filed amicus briefs in.

Let us provide that the use of amicus briefs is not in itself problematic and many lawyers, businesses and organizations have genuine need to use amicus briefing as a way of voicing their positions on important matters.  ALEC and the cabal have exploited this provision unashamedly to advance an agenda important to their members and corporate interests.  For this reason, it is important that you see just how this has been done and the results of their interference.

For you to fully comprehend and understand; each initiative of ALEC, what the cabal is, the members and how they work collectively behind curtains to first disenfranchise and ultimately to control all three branches of our government and through them – us – It is important to provide all the information possible regarding each piece of this complex operation. For that reason – grab your favorite beverage, lean back and prepare to enter the dark underside of ALEC’s influence upon our judiciary…all the way to the SCOTUS.
__________

Our last exposé informed you of ALEC’s secret memberships; lifetime, subscription and “Full” (which allows foreign officials to hold ALEC memberships).  While this is nefarious in and of itself, when considered in conjunction with ALEC’s (until now) hidden interference with our judicial system, the situation is much worse.

Below the fold you will be introduced to an entirely new function of the ALEC/Koch cabal that has been long hidden from view.  The below screen capture introduces you to the ALEC “Amicus Project”.  For those who are unfamiliar with the term or purpose of “Amicus briefing” it is the manner in which those with keen interests in the outcome of a state or federal court case or issue, can present an argument to the court on behalf of the Plaintiff, Respondent or the issue(s) to be determined.  These are referred to more commonly as “friend of the Court” briefs.

Amicus Project header capture

 

A few years ago ALEC developed an initiative allowing them to advance their ideological agenda of “Jeffersonian principles, free markets, limited government, federalism and individual liberty” straight into the ears of state and federal judges – including the SCOTUS – in key cases involving education, gun rights, Telecom issues, 1st Amendment rights, takings laws (eminent domain), environment and federal regulations.  Already having huge influence within state and federal legislatures and executive branches, this project would allow ALEC and the cabal a way to extend that influence to the judicial branch – state and federal.

Though our three branches of government are crafted to be separate and co-equal departments, serving to balance the three and provide safeguards or “checks” against abuse or usurpation of power by each of the other branches – ALEC and the cabal have found a way around those safeguards.

ALEC propagates a wide range of “model legislation” that seeks to make it more difficult for people to hold corporations accountable in court; gut the rights and protections of workers and consumers; encumber health care reform; privatize and weaken the public education system; provide business tax cuts and corporate welfare; privatize and cut public services; erode regulations and environmental laws; create unnecessary voter ID requirements; endorse Citizens United; diminish campaign finance reform; and permit greater corporate influence in elections.  This diary explains how ALEC is able to advance their agenda – through influence used to secure favorable judicial decisions from our state and federal courts.

In reality this two-part Exposé is the best example of the “cabal.” ALEC and their corporate and legislative members, “alumni” and lobbyists working collectively and using funding from the Koch brothers to exert control.  They actually are a cabal as you will begin to realize at the end of the Exposé series.  You will see the way in which they coordinate, work together and pursue issues collectively to present a unified voice and support for each other as they pursue their agenda(s) in both the Legislative and Judicial branches of our democratic system.

As ALEC began to understand how intensely we were researching and pursuing them last year following the Cincy Protest in April, they worked to scrub their site clean, removing links to anything they considered even remotely incriminating or that could be used to expose their activities to the masses.  In this manner they hoped to throw researchers and analysts off the scent.  Thankfully we grabbed hundreds of pages from their site and those we missed we quickly retrieved from the WayBack Archive.

One of the links ALEC eliminated was any reference to what they termed the “Amicus Project.”  There are still traces of their participation in this program created and used as a means of attempting to influence courts by the filing of Amicus (or “friend of the court”) briefs, but this ALEC Project itself is now hidden from sight.

The SCOTUS decision in the Affordable Care Act case, provides us with by far the best example of the individuals and organizations included in the cabal; how they work in a coordinated manner to increase their reach, influence, power and the volume of their voice in key legal determinations made by each of our state and federal courts.

In the Florida (NFIB) V. Sebilius case decided in June, there were many amicus briefs filed on both sides in the healthcare issues.  On behalf of the NFIB however (a member of ALEC), there were an extraordinary number of briefs filed in support that were filed by ALEC and the rest of their cabal supporting repeal of the ACA.  These were not simply unified briefs, with ALEC joining the Pacific Research Institute, the NFIB, Cato, etc…no, the cabal members filed individual briefs.  In addition ALEC members and alumni filed separate briefs; FORMER U.S. DEPARTMENT OF JUSTICE OFFICIALS AS AMICI CURIAE IN SUPPORT OF RESPONDENTSthat included former US AG’s, Ashcroft and Edwin Meese; BRIEF FOR AMICI CURIAE ECONOMISTS IN SUPPORT OF RESPONDENTS REGARDING INDIVIDUAL MANDATE that included economist Art Laffer (ALEC Scholar) and over one hundred other “economists” from: George Mason University, Hillsdale College, American Action Forum, Ethics and Public Policy Center, RAND Corp.,Hudson Institute, Institute for Research on the Economics of Taxation, Manhattan Institute, Mercatus Center, American Enterprise Institute, Hoover Institution, Stanford University, Cato Institute  Atlas Economic Research Foundation, and dozens of universities and colleges affiliated with ALEC and/or receiving funding from the Koch family foundations.

Above you see economists from the CATO institute joining and filing an amicus in the case…then there’s this: BRIEF OF AMICI CURIAE CATO INSTITUTE, COMPETITIVE ENTERPRISE INSTITUTE, PACIFIC LEGAL FOUNDATION, 14 OTHER ORGANIZATIONS, AND 333 STATE LEGISLATORS SUPPORTING RESPONDENTS (INDIVIDUAL MANDATE ISSUE), giving CATO in effect two voices in one key case.  Reason and Heritage were not going to be left out either; BRIEF OF CENTER FOR CONSTITUTIONAL JURISPRUDENCE, JUDICIAL EDUCATION PROJECT, REASON FOUNDATION, THE INDIVIDUAL RIGHTS FOUNDATION, THE HERITAGE FOUNDATION, ENDING SPENDING, INC., AND FORMER SENATORS GEORGE LEMIEUX AND HANK BROWN AS AMICI CURIAE IN SUPPORT OF RESPONDENTS

Also included in the list of ALEC alum/members filing briefs; AMICI CURIAE BRIEF OF THE AMERICAN CENTER FOR LAW & JUSTICE, 119 MEMBERS OF THE UNITED STATES CONGRESS,that included ALEC’s second highest member of the U.S. House, Eric Cantor…and another by the Goldwater Institute; “AMICUS BRIEF ON BEHALF OF CITIZENS AND LEGISLATORS IN THE FOURTEEN HEALTH CARE FREEDOM STATES IN SUPPORT OF RESPONDENTS” that included 100+ state and federal lawmakers, many which are ALEC members.  Speaker Boehner (ALEC’s highest ALUM in Congress) filed his own Amicus; “BRIEF OF SPEAKER OF THE HOUSE JOHN BOEHNER AS AMICUS CURIAE IN SUPPORT OF RESPONDENTS ON THE MINIMUM COVERAGE PROVISION ISSUE.”  Additionally, piling on, if you will, this brief; “BRIEF OF MEMBERS OF THE UNITED STATES SENATE AS AMICI CURIAE IN SUPPORT OF RESPONDENTS ON THEMINIMUM COVERAGE PROVISION ISSUE” was filed with amici listed as:

“Amici Curiae United States Senate Republican Leader Mitch McConnell, and Senators Orrin Hatch, Lamar Alexander, Kelly Ayotte, John Barrasso, Roy Blunt, John Boozman, Richard Burr, Saxby Chambliss, Daniel Coats, Tom Coburn, Thad Cochran, Susan Collins, Bob Corker, John Cornyn, Mike Crapo, Jim DeMint, Michael Enzi, Chuck Grassley, Dean Heller, John Hoeven, Kay Bailey Hutchison, James Inhofe, Johnny Isakson, Mike Johanns, Ron Johnson, Jon Kyle, Mike Lee, Richard Lugar, John McCain, Jerry Moran, Lisa Murkowski, Rand Paul, Rob Portman, James Risch, Pat Roberts, Marco Rubio, Richard Shelby, Olympia Snowe, John Thune, Patrick Toomey, David Vitter, and Roger Wicker are United States Senators serving in the One Hundred Twelfth Congress…”

and many listed are acknowledged ALEC alum/members.Other notable conservative groups or organizations affiliated with ALEC/Koch that also filed as amici in the ACA case include:
Mountain States Legal Foundation
Chamber of Commerce
Pacific Research Institute (Ties to ALEC)
Galen Institute (a partner organization to the Charles Koch Foundation)
Liberty Legal Foundation
Liberty University
American Civil Rights Union (affiliated with ALEC and funded by the Bradley Foundation).
Independence Institute (Koch Funded)
Institute for Justice (Ties to ALEC) (Funded jointly by Charles and David Koch)
Mountain States Legal Foundation (Funded by Coors’ Castle Rock Foundation, and ALEC member/supporter)
CATO INSTITUTE, COMPETITIVE ENTERPRISE INSTITUTE, PACIFIC LEGAL FOUNDATION,14 OTHER ORGANIZATIONS (all of these are funded or supported by Koch foundations. CEI is funded by donations from individuals, foundations and corporations. Past and present funders include the Scaife Foundations, Exxon Mobil, the Ford Motor Company Fund, Pfizer, and the Earhart Foundation).
Rutherford Institute (which just published an article in support of ALEC and opposing protesting their Annual conference in Salt Lake City, Utah this month)
Senator Paul Rand
Washington Legal Foundation (funded by Koch foundations)
In addition to affiliation with ALEC and receiving funding from Koch and Bradley foundations,Koch’s Institute for Humane Studies provides interns to many of the institutes, foundations and organizations that filed the foregoing briefs.

The listing of briefs filed in the US Supreme Court in the Florida case, are matched by the briefs filed in the Virginia v. Sebilius case – by some of the same parties:
Washington Legal Foundation
Pacific Legal Foundation (citing ALEC’s “Freedom of Choice in Health Care Act”).
Economic Scholars
American Center For Law and Justice and 49 Members of the US House
(Also citing ALEC’s Freedom of Choice in Health Care Act)
CATO Institute and Competitive Enterprise Institute

Virginia Delegate Bob Marshall, Gun Owners of America, Inc., Gun Owners Foundation, American Life League, Inc., Institute on the Constitution, the Lincoln Institute for Research and Education, Public Advocate of the United States, Conservative Legal Defense and Education Fund, The Liberty Committee, Downsize DC Foundation, DownsizeDC.org, and Policy Analysis Center – Gun owners opposing national healthcare…who would have thought that?
American Civil Rights Union
26 US States also filed in both cases (Florida and Virginia).  This is important when considering the costs of pursuing not only the litigation, but the Amicus filings and costs thereof.  Here is apartial list of the states filing amicus briefs in these cases:

Alabama, Alaska, Arizona,
Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi,
Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota,
Texas, Utah, and Washington.

It would be redundant to list the names of those parties who filed amicus briefs to the original district courts in Florida and Virginia…I think the foregoing adequately demonstrates the huge movement to overturn the ACA law.But how about other key issues involving: 2nd Amendment, Education, Tort Reform, 1st Amendment, Telecommunication, Environmental and Imminent Domain?   Asbestos “reform” legislation?  We find this pattern involving the same organizations, institutes and foundations…including ALEC.

Tobacco litigation before the SCOTUS in 2006 against ALEC member Phillip Morris (now Altria): Philip Morris USA v. Mayola Williams, Personal Representative of the Estate of Jesse D. Williams, Deceased, case No. 05-1256 (from Oregon, 2006 on punitive damages award).

This landmark case was filed March 30, 2006 and on May 1 the Chamber of Commerce filed the initial Amicus brief.  By July the American Tort Reform Association, CATO Institute, Washington Legal Foundation, National Association of Manufacturers and the Pacific Legal Foundation had joined the Chamber as amici along with RJ Reynolds and Lorillard Tobacco Co (Reynolds and Lorillard both involved with ALEC on Tobacco Tort Reform legislation going back to 1995).  That same month the Chamber and the Alliance of Automobile Manufacturers filed their second amicus briefs.  The case was decided in favor of the cabal, reversed and remanded in a 5-4 decision.

On Union dues used for political activities (involving ?Paycheck Protection) one of ALEC‘s model Acts – was challenged in Washington State.first Amendment: GUY DAVENPORT, ET AL. v. WASHINGTON EDUCATION ASSOCIATION, Nos. 05-1589 & 05-1657:

Amici included;
ALEC
Mackinac Center
CATO Institute, Center for Individual Freedom and the Reason Foundation
Evergreen Freedom Foundation
Pacific Legal Foundation
Institute for Justice
Mountain States Legal Foundation
Pacific Research Institute

This was so unusual in such a case that the National Right To Work Legal Defense Foundation published an article on the number of Amicus briefs filed  (35 altogether).

There are literally dozens upon dozens of similarly important cases involving the same CABAL.  Hundreds of Amicus briefs are filed at both the state and federal levels in support of ALEC model legislation when it is challenged.  It doesn’t have to be ALEC model legislation under a challenge, just something important to business or corporate members of ALEC.

2nd Amendment (gun rights),

McDonald v. City of Chicago, SCOTUS 08-1521 (decided 6/2010.  Amici included:

American Legislative Exchange Council
Rutherford Institute
Heartland Institute
CATO  and Pacific Legal Foundation
891 State Legislators
SENATOR KAYBAILEY HUTCHISON, SENATOR JON TESTER,REPRESENTATIVE MARK SOUDER,REPRESENTATIVE MIKE ROSS, AND 56ADDITIONAL MEMBERS OF UNITED STATESSENATE AND 249 ADDITIONAL MEMBERS OFUNITED STATES HOUSE OF REPRESENTATIVESIN SUPPORT OF PETITIONERS
AMERICAN CENTER FOR LAW AND JUSTICE
Institute for Justice
Goldwater Institute
Eagle Forum
States of Texas, Ohio, Arkansas, Georgia, Alabama, Alaska, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming
Family Research Counsel, et al.

Healthcare (First Amendment free speech):

Sorrell V. IMS (SCOTUS).  So many briefs filed between the district court and SCOTUS decision, I can’t include all of them here…suffice to say ALEC, CATO, CoC, Pacific Legal Foundation, Tommy Thompson, REED ELSEVIER, New England Legal Foundation and dozens of commercial healthcare agencies, organizations and associations listed at the foregoing link.

A key issue that has been vigorously pursued and protected is ALEC’s model legislation – “Asbestos and Silica Claims Priorities Act“.  In 2009 ALEC registered two lobbyists in NDto make presentations to the state assembly in an attempt to get passage of this legislation.  They also sent the same “lobbyist” Mark Behrens (attorney Shook Hardy and Bacon) to state legislatures to lobby for passage of this legislation.

In a case in WA State, in 2008 an attorney arguing against an amicus brief filed in the case by Mark Behrens and Victor Schwartz (SHB lobby group and ALEC Civil Justice Task Force Adviser and Chairman, respectively) spoke out about Behrens and Schwartz.  He identified both as having represented many other clients, writing research papers  and representing the American Tort Reform Association – yet appearing in the WA. case as an “Amicus” without advising the court as to their vested interest in the litigation on behalf of their clients and ALEC.

In a Texas Supreme Court case, where ALEC member and Shook, Hardy and Bacon client, Crown Cork and Seal Company, Inc. were defending a suit, SHB not only represented Crown Cork…they also represented Amici including; the Texas Civil Justice League, the Chamber of Commerce, National Federation of Independent Business (legal foundation) and the National Association of Manufacturers.  SHB top counsel and ALEC Civil Justice TF Dir and advisor, Victor Schwartz and Mark Behrens argued the case for Crown Cork and Seal.

In 2007 Schwartz and SHB filed similar amicus briefs in a CA. asbestos case in the state supreme court (Watts Regulator Co.). Amici included; Chamber of Commerce, Coalition for Litigation Justice, American Tort Reform Association, NFIB legal foundation.

Schwartz, Behrens and ALEC are also heavily involved in tort “reform” legislation/litigation.  As provided at SourceWatch’s ALEC Exposed site, ALEC has crafted dozens and dozens of tort reform and other legislation limiting liability of corporations.

In 2008, in a PA. Supreme Court case involving tort liability, SHB’s Schwartz and Behrens represented the defendant in; Bugosh v. I.U. North America, Inc., No.7 WAP. 2008.  Amicus were the usual suspects listed above in the asbestos litigation.

In 2010 in a Nevada Supreme Court case, TERESA BAHENA V. Goodyear Tire and Rubber, Case No. 49207, Schwartz represented ALEC’s amici interest in this product liability case.  Other amici were; CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA, NATIONAL ASSOCIATION OF MANUFACTURERS, NATIONAL FEDERATION OF
INDEPENDENT BUSINESS SMALL BUSINESS LEGAL CENTER, AMERICAN TORT REFORM ASSOCIATION, AMERICAN INSURANCE ASSOCIATION and the AMERICAN CHEMISTRY COUNCIL.

In cases where SHB and Schwartz and/or Behrens represent ALEC member corporations, he brings on the amicus briefs by the usual suspects.  In a Supreme court case in AL. three ALEC member pharmaceutical companies sued Alabama; Astrazeneca, Smithkline Beecham and Novartis V. Alabama, (2006) the amicus brief was filed by; National Association of Manufacturers, Chamber of Commerce and the American Petroleum Institute.  The case involved state attorney generals hiring private attorneys to prosecute entire industries.

Whether the issues directly involve ALEC legislation or SHB, Schwartz or the usual amici, they are brought into key legislation in support of corporations who find themselves in liability trouble.  In re Bridgestone/Firestone N. Am. Tire, LLC et al., No. 02-0944, amicus brief filed (Tex. May 20, 2003) amici included; National Association of Manufacturers, the American Tort Reform Association and the American Legislative Exchange Council.

All the way back in 1997 ALEC SHB and the usual suspects were using amicus briefing to influence key tort reform decisions in state supreme court cases.  In State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio St.3d 451, 1999-Ohio-123 involving tort reform, amici included;
American Legislative Exchange Council
National Federation of Independent Businesses
Product Liability Advisory Council, Inc.
National Association of Manufactures
American Tort Reform Association

The Ohio case involved questions of constitutionality of legislation adopted and passed by the Ohio legislature that affected Realtor’s and others who claimed the legislation was unconstitutional.  SHB (Schwartz) represented the NFIB, the Tort Reform Association, NAM and the Product Liability Advisory Council (Behrens was co-counsel for the PLAC).  SHB ALEC and the others supported the position of the state arguing the legislation was constitutional. The state lost this one.

Is the pattern becoming clear? Is the appearance of unified support by cabal members in/on key issues apparent?

Finally we come to the historic Citizens United SCOTUS decision.  Dozens of Amicus briefs were filed in this case – which ALEC endorsed.

Amici supporting Citizens United include;

Foundation for Free Expression
CATO Institute
Center for Competitive Politics
Wyoming Liberty GroupGoldwater Institute
United States Chamber of Commerce
Institute for Justice
Pacific Legal Foundation
NRA
American Civil Rights Union
Senator Mitch McConnell
Michigan Chamber of Commerce
Center for Competitive Politics

The foregoing demonstrates how the ALEC/Koch cabal are able to use their vast influence to whisper in the ear of our state and federal judges…and the U.S.Supreme Court.  They do it quietly, without fanfare or the media reporting on these efforts to influence important judicial decisions.  Legislators who have the elected duty to pass legislation on behalf of their “constituents” have done their job once the legislation is passed and signed by the Governor (if state law) or the President (if federal law). It is then the duty of our state and federal judiciary to rule upon those passed laws once a challenge is brought before the court by citizens.

ALEC and the corporate members are unwilling to allow the courts to make factual and unbiased decisions in key cases – based upon the merits alone.  Instead they weigh in at every stage of litigation, filing a huge number of briefs in support of the position held by ALEC or their member corporations, legislators or the conservative ideology being advanced.  This practice presents the courts with the impression that there is a vast number of diverse parties supporting one side or the other of an issue.  In many cases the court adopts sections of the amicus filings in their final decisions, so these efforts do influence important opinions that once made, determine “controlling laws” (no pun intended).

If/when the President or his Executive administration attempt to weigh in on key cases, Congress cries foul, saying the Executive branch is unfairly trying to influence the Judicial branch…while those representing the cabal in the Legislative branch are doing precisely that.  From the foregoing we’ve established that it isn’t simply the corporations, foundations and institutes representing the cabal who use these briefs to influence the courts, many of the cases such as the ACA and Citizen’s United, have briefs filed by Congressional members (McConnell, Cantor, Boehner and others affiliated with ALEC).  In the ACA litigation, hundreds of conservative Republican members of Congress and state Assemblies filed briefs to overturn “Obamacare”.

Bad enough that corporations through ALEC are able to write and propose pro-corporate legislation…but once they succeed matters are made worse by their ability to then have the opportunity to use the same lawmakers to influence the court’s decisions on their behalf to ensure a favorable outcome.

Today this “Amicus Project” concept is being used throughout our court system by the cabal.  They use it successfully to secure such favorable opinions in; telecommunications, labor, union, education, environmental, insurance, healthcare and criminal justice cases – to name just a few of their initiatives.

We as “constituents”, “voters” and simply “citizens” have no representation to present our side of any issue or case.  Those who are elected and have the duty of such representation have been co-opted, their loyalty and pursuits dedicated to the corporations, foundations, institutions and organizations who can/will/are contributing to keeping them in office and power.  Those organizations who still have some form of voice to represent us; labor groups, unions and liberal groups…are under full attack from the entire cabal who are trying to silence even the last whispers of objection to their subversion of our democracy.

Recently ALEC has claimed that their operations and activities are no different than those of the National Counsel of State Legislators (NCSL).  This argument and/or claim is disingenuous at best.  Yes the NCSL has a provision for submitting Amicus briefs – to the SCOTUS.  Here is theirrule regarding such Amicus efforts:

“[E] The decision to name NCSL as an amicus curiae on briefs filed before the U.S. Supreme Court shall be by unanimous agreement of the NCSL President, the NCSL Immediate Past President, the NCSL President-Elect, the NCSL Vice President, the legislator Co-Chairs of the NCSL Standing Committees, the Legislator Co-Chairs of the Law and Criminal Justice Committee and legislator Co-Chairs of other standing committees that have jurisdiction over the question to be resolved by the amicus brief. In the event any person voting indicates a veto, the President may initiate a conference call to allow for discussion and to confirm each person’s vote.”

In other words, such a decision to weigh in on judicial matters, the NCSL limits such involvement to the Supreme Court, does not “partner” or coordinate with other “liberal” or “Progessive” organizations and they do not interfere at the state or federal level beneath the SCOTUS – and their participation in amicus briefing is usually limited to protecting the rights of voters and citizens, not corporate advancement.  The requirement that any amicus involvement requires the current and past presidents of the NCSL to sign on, is because the NCSL is truly bipartisan and leadership changes yearly from Republican to Democrat and back.  ALEC and the cabal they belong to present only the conservative ideologies and agenda in the briefs they file trying to influence judicial decisions.  Historically, their amicus involvement involves protecting the pro-corporate legislation they have been able to enact and to also protect corporate interests in key cases.  What you won’t find is a NCSL amicus filing in the ACA, Citizens United or other constitutional matters before SCOTUS or any of the lower federal courts.Issues pursued by the NCSL in amicus filings? Nuclear regulatory decisionsNCSL signed onto an amicus curiae brief filed by State and Local Legal Center (SLLC) in the Supreme Court which argued that two Secret Service agents should be immune from a First Amendment retaliatory arrest lawsuit. In an Indianapolis case, NCSL signed onto an amicus curiae brief filed by State and Local Legal Center (SLLC) in the Supreme Court which argued that the City of Indianapolis didn’t violate the Equal Protection Clause when it forgave the assessments of homeowners who paid for sewer improvements in multi-year installments but issued no refunds to homeowners who paid for the same improvements in a lump sum.  Joining that amicus were the International City/County Management Association, the National Association of Counties, the National League of Cities, and the United States Conference of Mayors.

I urge readers to go out and do a search for both ALEC and the NCSL combined with amicus briefs filed.  You will quickly ascertain that there are vast differences in both ideology and purposes.  For ALEC and the cabal, there are literally hundreds and hundreds of these amicus briefs that have been filed at all levels of our judiciary.  Too damn many to list them all.  They are assisted in this by several law firms working month after month writing and presenting these briefs on behalf of the cabal.  Who pays for this representation? Filing fees and research?  Where in ALEC’s annual IRS 990 forms are they declaring the expenditures on such amicus activities?

As we’ve shown in this expose, they are a collective, working together; institutes, foundations, corporations, lawmakers, organizations all with an agenda of advancing the ultra-right minority conservative ideologies across all forms of our government and democracy.

Keep in mind they have a forty year head start….and this is the network they have built:
koch cabal chart.  Click on the link and see for yourself, the chart is interactive.

And ALEC:
imageDownload (2)
is only one branch of the entire cabal led by the Koch brothers.

In the next segment we will inform you of the “back door” used by the cabal to further guarantee favorable outcomes from the judiciary – free trips, seminars and gifts to federal judges and select Supreme Court Justices.

Much more to come and all of it documented, vetted and fact checked.

Duke Energy Uses ALEC to Attack Climate and Clean Energy Laws in Pay-to-Play Politics

Duke Energy is heavily invested in ALEC in several ways. Duke sponsors ALEC’s meetings, dedicates its staff to help oversee ALEC’s state operations, and consistently operates in ALEC’s anti-environmental task force, a who’s-who of polluters and apologists attacking clean energy legislation that Duke purportedly supports. Here’s an overview of Duke’s notable role in ALEC:

  • Duke representatives Chuck Claunch and Bonnie Loomis are liaisons to ALEC’s Energy, Environment & Agriculture (EEA) task force, which ghostwrites state laws attacking regional climate programs, controls for hazardous coal ash storage, renewable energy standards, EPA enforcement of clean air and water laws, and numerous other polluter handouts written and approved by the oil, coal and public relations companies in the EEA task force’s filthy roster

Read more about the duplicity of Jim Rogers and Duke Energy in this wide ranging and damning report by clicking here

Rick Snyder & the American Legislative Exchange Council’s (ALEC) Corporatist “Disaster Capitalism” on the Prowl in Michigan

From the Horace McGuffey Gazette

Michigan Governor Rick Snyder is utilizing the American Legislative Exchange Council (ALEC) crib notes, a recall offense. The “Nerd” Governor can’t make a move without employing ALEC models & policies and support from Michigan’s long history with ALEC and a long list of ALEC members

“…Lastly many, many areas of Michigan’s laws, rules and regulations are being “adjusted” at a furious pace to fit the whims of the Michigan Chamber of Commerce, The Mackinac Center for Public Policy (spin-off of the national arch-conservative Heritage Foundation), and Americans for Prosperity (AFP) – heavily backed by the Koch Bros. and mega-wealthy families like Michigan’s own DeVos & Van Andel clans...

“…ALEC’s activities are very widespread and endemic to the lawmaking processes of state legislatures across the country, and for that reason, their activities have been accepted through ignorance of the secret and underlying purposes and objectives they promote.  The public finds it hard to believe such a group exists. But they do. Consider: “ALEC has approximately 2,000 legislative members representing all 50 states, as well as more than 85 members of Congress and 14 sitting or former Governors who are considered ‘ALEC alumni‘” (Source: WikipediaCMD and VLTP who has reported on ALEC in most levels of US Courts as well).

Read the full McGuffey blog article here

ALEC footsoldier Robin Vos, WI State Representative

How do we stop ALEC?  I’m going to quote Justice Brandeis, who in praising transparency and honesty in public policy said “sunlight is the best disinfectant”.  

Exposing their corporations is working to some extent already.  We need to continue exposing their corporate members.  Their legislative members.  Their staff members.  Their supporters.

This article exposes loyal ALEC foot soldier, Rep. Robin Vos, WI (R-63).  It show his involvement in ALEC, including bills he wrote or opposed.

To read this short article which puts things together nicely for you, please click here,

The climate change deniers: influence out of all proportion to science

The Heartland Institute’s recent shaming has put the denialist camp on the defensive. But they’ve already done massive harm….

In other words, a small cadre of fervent climate-change deniers took control of the Republican Party on the issue. This, in turn, has meant control of Congress. And since the president can’t sign a treaty by himself, it’s effectively meant stifling any significant international progress on global warming. Put another way, the various rightwing billionaires and energy companies who have bankrolled this stuff have gotten their money’s worth many times over.

One reason the denialists’ campaign has been so successful, of course, is that they’ve also managed to intimidate the other side. There aren’t many senators who rise with the passion or frequency of James Inhofe, but to warn of the dangers of ignoring what’s really happening on our embattled planet.

To read more about the influence of the climate deniers, please click here.

The Enemies Within: The 20 Most Dangerous Conservatives And Their Organizations

America has enemies. Not just abroad, but within our shores as well. And our domestic enemies, as it turns out, are MORE dangerous and destructive than the terrorists could ever hope to be. Because while the terrorists want to destroy us, the following people and their organizations are doing far more damage.

To read about these threats, please click here.

Heartland Institute Compares Climate Science Believers And Reporters To Mass ‘Murderers And Madmen’

The Heartland Institute has launched one of the most offensive billboard campaigns in U.S. history. The Chicago-based anti-science think tank is comparing all those who accept climate science — and the journalists who report on it accurately — to Charles Manson, the Unabomber, and Osama Bin Laden.

Leo blog : The Heartland Institute conference billboard in Chicago…Heartland’s detailed rationalization for its hate speech confirms the very worst views of this right-wing group.

To read about this insidious attack on scientists and reporters, please click here.

 

 

ALEC’s Other ‘Deadly Force’ Campaign to Kill Climate Initiatives

MONEYPOWERANDALEC

By  from Huffington Post.

“But the secretive group’s influence in statehouses goes a lot further than deadly force, self-defense laws. Since its founding in 1973, ALEC has ghostwritten state legislation across the country on a wide range of issues, from voter ID laws to prison policy to worker protections, as a number of press accounts have pointed out.

“What has gone unmentioned, however, is ALEC’s longtime stealth campaign to scuttle state–and federal–climate change initiatives, despite the fact that a number of its corporate members publicly acknowledge that global warming is a serious problem. They include General Motors; oil giants BP America, Chevron, ExxonMobil and Shell Oil; and electric utilities Duke Energy, Entergy and Progress Energy.”

Read this important article here

ALEC, INTUIT & Reverse Mortgages – A Primer on Corporate Exploitation of Americans

It isn’t often with ALEC that one can actually see firsthand the entire procedure from creation through outcome of an initiative advanced by this “charity” through manipulation of state and federal legislation.  Usually when we buy a happy meal at McDonalds, or a two liter of Coke or Pepsi, use TurboTax to prepare our income taxes, we are not aware of or see the laws that have been put in place to increase the profits, allow less regulation concerning food safety or reducing corporate taxes to increase profits.  As consumers we are interested in the end product and put less thought into what determines the cost or safety standards in manufacturing or delivering the products we buy.

In one specific instance we can dissect both the legislation advanced by ALEC, who it was designed to benefit and which consumer market has been targeted.  It involves senior citizens, ALEC, Intuit and Reverse Mortgages.

______________________________

Today several prominent corporations – most with national markets – have publicly ceased membership to/with the American Legislative Exchange Council.  These companies; Coca-Cola, PepsiCo, McDonald’s, Wendy’s, Mars, Intuit, Kraft Foods, American Traffic Solutions (ATS) and Arizona Public Service Company (APS, Arizona’s largest electric utility) made this choice following an intense campaign by activists to expose their involvement with ALEC.  Though these efforts of separating ALEC from their affluent benefactors and members has been ongoing for a couple of years, the discovery that the Stand Your Ground law in Florida that may allow the murderer of a 17 year old to go free, has served as a new catalyst.

Each of the (now) eleven corporations that have left ALEC over the past few days have benefited from their membership with ALEC.  The important aspect is that these benefits will continue to drive profits to these companies after they’ve quit ALEC.  The laws they helped enable that extracts profits from costs to consumers and taxpayers will continue.  I believe they should not be allowed to so easily walk away unscathed.

Most are satisfied just to see these companies publicly pull their membership and support from ALEC.  Each ALEC defector did so with public claims they were only interested or participated in discussing legislation important to taxation related to their particular products or operations.  In public statements about leaving ALEC each also disavowed any participation in the Stand Your Ground and other onerous legislation disseminated by ALEC.  Activist organizations such as Color of Change, Common Cause and MoveOn.org count these corporate desertions as a victory and appear to accept the corporate claims, shifting efforts on to the hundreds of companies still refusing to drop ALEC membership, such as ; Koch Industries, BP, Centerpoint 360, UPS, FedEx, PhRMA, GlaxoSmithKline, Diageo and State Farm Insurance.

The Voters Legislative Transparency Project (www.vltp.net) urges voters to slow down just a moment and realize the amount of damages this small, handful of companies have caused us collectively and individually before we simply allow them off with a public “warning.”  Yes, we are gladdened to see ALEC’s members ceasing involvement with them – but much of the damage they’ve caused has already been done and the laws they helped write and get passed are still out there and in force.  The profits they sought are still rolling in and the legislative initiatives their financial aiding and abetting helped start, are still in the legislative pipeline; voter id, right to work, privatizing education, prison privatization expansions, privatization of utilities, etc.

As we wrote earlier this month, ALEC and their corporate members UPS and FedEx have been working silently to privatize our Postal Service (USPS), based upon a comprehensive report we publicly released in November, 2011 which identifies ALEC’s federal involvement in passing legislation favorable to corporations.  This effort of taking over the USPS and the nearly $70 billion in revenue it generates per year is only the latest privatization effort of ALEC

Several years ago ALEC and their members developed a legislative project involving a way to gain access to and control of a projected $2 trillion dollars; home equity held by seniors. The method developed to tap into this huge pool of privately held equity is today called a Reverse Mortgage.  In 2005 the CATO Institute published a Policy Analysis titled: “Aging America’s Achilles’ Heel Medicaid Long-Term Care,” written by Stephen A. Moses and nearly at the same time a similar report was issued by the National Council On Aging (NCOA) titled: “Expanding the Use of Reverse Mortgages for Long-Term Care: A Blueprint for Action”.  These reports were followed by ALEC crafting and adopting new model legislation titled the “Reverse Mortgage Enabling Act.” As with most of ALEC’s initiatives, multiple players contribute simultaneously to achieve the desired outcome.[1]

The NCOA report reveals:

Reverse mortgages are specialized loans that enable seniors to tap their home equity while they continue to live in the home. With an estimated amount of over $72,000 available on average to older households from these loans, reverse mortgages can help impaired elders pay for several years of daily home care visits, over a decade of out-of-pocket expenses and respite for family caregivers, or substantial home modifications. Despite the promise of this financing option, older Americans have not been encouraged to tap into their substantial housing assets.

The purpose of this project is to outline the rationale for increasing the use of reverse mortgages for long-term care and to identify areas where government interventions may be able to stimulate the market.

This ALEC initiative has since become the “law of the land” in nearly every state and through federal legislation developed by ALEC as a means of lowering the dependency of elderly or senior’s needs upon state Medicaid and SSI payments.  Their view was seniors held approximately $2 trillion dollars of equity in their homes and government laws provided a way for those seniors to exempt their homes from:

  1. being used to calculate eligibility for Medicaid assistance.
  2. and allowing estates or heirs an exemption from Medicaid reimbursement for their parents who had received Medicaid.
  3. allowed heirs to avoid repayment of any medical expenses paid for by the state for the deceased and to keep the land, property and assets previously owned and exempted by then current law.

They argued that it was allowing anyone to find a way to lower their assets and holdings through loop holes to avoid personally paying for their own long term care (LTC) through a program primarily designed for the poor.  The solution ALEC came up with was the Reverse Mortgage Enabling Act, “designed” so once a senior homeowner received a reverse mortgage, they no longer qualified for state Medicaid or Social Security’s Supplemental Security Income (SSI) due to liquid assets received through the transaction.  The RM proceeds were intended to be used by the mortgagee to fund forward healthcare costs, insurance premiums and long term care expenses.  This legislation was crafted to relieve the stress being experienced by individual states for financing necessary Medicaid expenses by using the equity in the property owned by seniors (age 62 or older) who were receiving Medicaid, SSi or similar government assistance.[i]They specifically targeted for exploitation the group most needing LTC, Medicaid and SSI benefits – seniors over 62 years of age who own or have substantial equity in their homes.


 

Form(s) of Exploitation

ALEC’s Reverse Mortgage Enabling Act legislation provided several exemptions from laws in place to protect consumers:

Reverse mortgage loans may be made or acquired without regard to the following provisions for other types of mortgage transactions set out in the statutes specified below:

(A) Limitations on the purpose and use of future advances or any other mortgage proceeds,

(B) Limitations on future advances to a term of years, or limitations on the term of credit line advances,

(C) Limitations on the term during which future advances take priority over intervening advances,

(D) Requirements that a maximum mortgage amount be stated in the mortgage,

(E) Limitations on loan-to-value ratios,

(F) Prohibitions on balloon payments,

(G) Prohibitions on compounded interest and interest on interest,

(H) Interest rate limits under the usury statutes; and

(I) Requirements that a percentage of the loan proceeds must be advanced prior to loan assignment.

They opined that seniors would jump at the chance to exchange home equity for liquidity during retirement years with no requirement to repay the loans.  Of course none of the seniors were aware that accepting such a financial “windfall” came with several unknown disadvantages: reverse mortgage payments may affect eligibility for government benefits, including Medicaid and SSI eligibility and payments could be garnished in unrelated circumstances such as liability for a traffic accident.

Homeowners can get the money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn on at the borrower’s option, or in a series of regular payments, called a “reverse annuity mortgage.”  Generally, these payments will not be counted as income as long as they are spent within the same month they are received.  If the funds are not immediately spent, however, they accumulate and can push resources over the allowable limits for Medicaid and SSI.

In addition, payments from reverse annuity mortgages may be counted as income for purposes of Medicaid and SSI whether or not they are spent within the month they are received.  Interest charged on the mortgages is usually in excess of what is normally allowed and will be compounded; adding to the initial principal and future interest applied to new principal amounts.

While reverse mortgages look like no-lose propositions on the surface, in addition to the possibility of losing eligibility for Medicaid and SSi, closing costs for these loans are about double those for conventional mortgages.  Closing costs on a reverse mortgage for a $200,000 home exceeds $10,000. This cost can be financed by the loan itself, but that reduces the money available to the borrower

Finally, when the holder of a RM passes away, the total note, with all principal, compounded interest, fees and other provisions are due and payable as a balloon payment.  Regardless of the assessed and appraised value of the property, the heirs owe what the bank or mortgage holder is contractually entitled to and this amount will normally equal the actual property value and most proceeds going to the lender.  In most cases the mortgage contract contains provisions that property ownership transfers directly to the mortgagor upon the death of the owner.  This removes the home – and principal asset of the deceased – from the estate and inheritance for the surviving family.  These RM’s may be beneficial and thus desirable to a small number of consumers; seniors with no family or those who don’t wish to leave their home to their children and in those circumstances an RM is well suited for their specific needs.

In a MarketWatch question and answer forum featuring the advice of housing writer Lew Sichelman, Sichelman addresses what he calls a little understood and under-publicized aspect of reverse mortgages: their impact on Medicaid eligibility;

“If a patient takes out a reverse mortgage and receives a lump-sum, they’re often ineligible for Medicaid to pay for nursing home care.  The rules are complicated but Medicaid allows a patient to have not more than $2,000 plus a house and automobile. A large, lump-sum payment can impact that dollar amount in the month when it is received.

A reverse mortgage, while it does not impact Medicare or Social Security, can have an effect on Medicaid and SSI Income, he writes.

 “If you opt for a lump-sum payment from a reverse mortgage, any amount retained the month after you receive it would count as a resource and could affect SSI or Medicaid coverage.  Also, when the proceeds of a reverse mortgage are paid out on a monthly basis, the payments act to increase the senior’s income and could possibly render him or her ineligible for Medicaid.”

While reverse mortgages are a viable option for those who wish to improve their later-years’ lifestyle, Sichelman says,

 “They could prove to be deadly—financially speaking—if they must move into a nursing home, even if only on a short-term basis.”

The reason for this concern about moving into a nursing home for any period of time, is that under RM contracts, the homeowner is required to continuously reside at the home, maintain the home and is prohibited from leaving the premises unattended for more than 60 days.  In cases of default, the loan is called due and payable immediately.

From 1990 through mid 2008 there were very few RM’s applied for by seniors; 114,692 reverse mortgages were made in fiscal year 2009, compared to 157 in 1990 when people had actual money.  Home equity was substantially greater than the valuation of those homes and elderly consumers saw no need to take advantage of an RM.  With the mortgage crisis that built and finally exploded in late 2008, homeowners lost as much as 50% of the value and equity in their homes, their retirement and pension accounts took a huge hit as well.  Seniors were particularly hard hit in that they were dependent upon fixed incomes and budgets and their greatest asset – their homes – had been devalued which instantly reduced the percentage of equity they held.  With homes devalued and retirement, pensions and 401K investments sliding by half, seniors were put in a terrible financial situation, with no ability to work and earn an income due to medical issues, age or infirmity.  Reverse Mortgages then looked like a way to keep their heads above water and many began to consider RMs as a means to live out their lives without becoming homeless or destitute.

As the economy continued to slide and property values at the lowest in decades and mortgage interest at or under 5%, banks and mortgage companies realized that the time was ripe to acquire as many properties held by seniors as possible.  The price would never be better; loaning between 65% and 85% of the appraised values would mean they could get their hands on huge numbers of homes for much less than even the depressed value of each – through relatively short term reverse mortgages that had provisions to allow higher interest rates and exemptions from usury prohibitions.  Some of the same lenders now known to be responsible for the economic collapse and sub-prime mortgage and derivatives problems, received bank bailout funding and have used some of that money to invest in lucrative RM’s. The older the borrower the more banks are willing to lend (obviously their actuarial tables provide that RMs to older borrowers results in shorter term loans).

Companies such as Intuit’s “One Reverse Mortgage” which already had a RM program in place (since 2001) began to heavily advertise RMs to seniors.  Many other companies jumped on the bandwagon and from late 2008 through today we see dozens of RM adds on TV, in our print and radio media encouraging seniors to take advantage of a RM.  In these ads seniors are informed they can walk away from the closing with huge amounts of money “to use any way they want” and enjoy the safety and security of owning their own home and having no financial worries through their retirement years.  In fact the paid spokesmen for these companies such as long time ALEC supporter and former Senator, Fred Thompson advise potential RM applicants they can use their funds to pay off any first mortgages on their homes altogether and eliminate any monthly mortgage payment. This reduces any possibility of legal conflicts between lenders when the homeowner dies – and in most cases paying off the first mortgage is a stipulation for in an RM contract.

Intuit was represented upon ALEC’s Private Enterprise Board by Bernie McKay, the Vice President of Government Affairs at Intuit Inc.  Intuit is a long time member of ALEC and as the foregoing demonstrates, this company is suspected of having a hand in writing; passing and adopting this ALEC model legislation…and is capitalizing off of RMs.  Intuit proudly proclaims, “One Reverse Mortgage is the nation’s largest reverse mortgage only company.

Having been involved from beginning to end in the Reverse Mortgage development, Intuit is realizing millions and millions off of the RM legislation they helped lawmakers pass nationwide.  If left in place this one law used to exploit seniors, unbeknownst to them will continue financial streams for Intuit and other lenders indefinitely. Simply leaving ALEC after their future earnings have been guaranteed by the laws they put in place over the past half decade is not sufficient.  Intuit must be made to help clean-up this mess they helped create; stand your ground, reverse mortgage, voter id, abortion, healthcare and other laws that began as ALEC model legislation and are now controlling laws in many of our states.

Similarly, the other corporations that have left ALEC – and those that remain – must also share in the massive legislative clean-up their actions caused.  VLTP believes that once harm has been visited upon consumers and voters there must be an effort to repair the damages done by the perpetrator.  In the case of ALEC there are hundreds of corporate perps, nearly 2,000 state lawmakers and an undetermined number of Alumni who share responsibility for the damage that has been visited upon Americans for the past four decades.

We can see from just the one legislative effort – Reverse Mortgages – that these companies have been able to amass huge profits, acquire the right or titles to millions of homes.  Charting how Coke, Pepsi , McDonald’s, Wendy’s and the others have profited can only be guesstimated for now.  At some point analysts will correlate that information, but for now its sufficient to note that they were enablers for the acts of ALEC and have to share in repairing what ALEC broke.

Too many times over the years corporations have been caught committing criminal acts and gotten away with reasonable fines and no one going to jail.  We have been left to clean up our economy, housing crisis and mortgage frauds on our own.  Now that we know who is responsible for many of these acts, they must be made to step-up, admit their involvement and provide us with financial assistance to repair the damages caused.

VLTP urges everyone to insist that Intuit and the others now trying to separate themselves from ALEC use the vast wealth they have accumulated from their relationship with ALEC and help us rebuild our economy, our communities, property values and above all to help restore a true democracy in the U.S.



[1] Editor’s NOTE: This is the same activity used in that same year to begin the effort to privatize the Postal Service; calls from think tanks to privatize, creation of model bills to address a nonexistent problem with introduction of that legislation and eventual passage.