The Intimidation Game (28 page)

Tiger Joyce, president of the American Tort Reform Association (ATRA), likewise refused to say what organizations his group gave money to. He instead wrote a skewering piece in
Forbes
, noting that “Durbin summons not-so-faint echoes of the late Senator Joseph McCarthy, who shamelessly purported to possess documents that somehow proved his targets' guilt by association. Such tactics, which went unchallenged for too long in the 1950s, today warrant vigorous criticism from Senators on both sides of the aisle.”

Mr. Joyce also sent a letter to the
Wall Street Journal
, where he not-so-subtly gave Durbin a taste of his own medicine. “After all,” wrote Joyce, “how would he feel if those of us he targets were to turn the tables by deciding collectively, if quietly, to conduct our many conventions, conferences and meetings in any state other than Illinois?” ATRA's head of communications, Darren McKinney—well known in D.C. circles for his witty go-rounds with the forces of the trial bar—went so far as to draw up a T-shirt design for attendees to Durbin's committee hearing. It pictured Durbin and Joseph McCarthy side by side, with the words “Have You No Sense of Decency, Sir?” printed in between.

Says Joyce, “I'm a lawyer, and I found this reprehensible. This was just really cheap intimidation. And utterly beneath the dignity of the office. I was counsel to a committee in the Senate once, and watching this offended me. The people I used to work for, they would have never considered doing something like this. And I'm talking about Republicans and Democrats.” He adds, “But Senator Durbin did, and whether it's a senior member of the Senate, or a governor, or an attorney general, our response will always be the same: We will fight. In the ATRA playbook, page one, chapter one, our job is to build a strong coalition of different entities and interest organizations. If you allow for someone to fracture that, or peel it apart with intimidation, to in any way unduly limit our ability to advance our mission, we reject that. We push back with all we have.”

Durbin also underestimated his corporate targets. Most of ALEC's weakest company links had fled the organization the year before. Those who remained were not only willing to see the organization through, but some were willing to take a public stand for corporate speech rights. One such profile in courage was AT&T's Jim Cicconi. Cicconi's from Texas—he still has the drawl—and he did time in both the Reagan and George H. W. Bush White Houses. These days, he's the head of the telecom giant's external and legislative affairs department. He's a big defender of the rights of debate and free speech, and unlike a lot of corporate execs, he has a complete spinal system. It helps that he had the full confidence and backing of his boss, AT&T CEO Randall Stephenson.

Cicconi was on August vacation when the Durbin letter hit. He was bothered enough to decide he'd write AT&T's response personally. “I figured I was likely to end up in a congressional hearing, and in any event would be held accountable for the response, so I decided I'd write and sign it myself—and say exactly what I wanted to say,” remembers Cicconi.

His three-page letter back to Durbin was extremely polite, even as it was very direct. Cicconi noted that he found Durbin's request “unusual” because “we are not normally required by federal law to disclose contributions of this nature, and your letter makes clear that providing this information on a confidential basis is not an option.” He then pointedly referenced the campaign against companies that support ALEC. It “seems to us inescapable that any response to your request will be used by those interests whose purpose is to pressure corporations to de-fund organizations and political speech with which they disagree.” Translation: We know exactly what you are up to.

Cicconi informed Durbin that he was acknowledging that AT&T gave ALEC funding not because he had to, but because he wanted to. He said that AT&T contributes to groups “that span the political spectrum,” since its goal is to “support healthy and respectful political dialogue and well-informed, well-debated public policies.” He declared that just as ALEC's opponents are “certainly free to engage in such activity as part of their free speech rights, companies like AT&T must also be free to make our own decisions on such matters as part of our free speech rights.” Where this balance of rights “breaks down,” he wrote, “and where we must all be careful, is where one party seeks to enlist government in its pressure tactics.”

ALEC itself turned around a letter signed by more than three hundred state legislators from thirty-nine states, protesting the Durbin assault. Its PR team stayed up for three straight days, rallying its troops, spreading the word, pushing back on the senator. ALEC's supporters lit up Twitter. ALEC's then–first vice chair and Iowa House majority leader Linda Upmeyer blasted back, “Members and donors to 501(c)(3) organizations are specifically protected by the Internal Revenue Service and the Supreme Court to shield them from the type of political intimidation found in Sen. Durbin's letter.”

Meierling points out that the Durbin letter in fact became a big turning point for many on the right; it opened a lot of eyes. “It got people to realize there is a huge difference between secrecy and privacy. And that everyone has the right to associate freely, the right to debate free ideas.”

Durbin had planned his hearing for September, though a shooting at the Washington Navy Yard pushed it back to October. By the time that hearing happened, it was a chastened Illinois Democrat who took the stage. Durbin barely mentioned ALEC, turning the hearing instead into a look at gun violence. He'd been called out.

In the coming months the left kept throwing things at ALEC, but they were things mostly dredged out of the archives and lacking any real-time relevance. It launched Stand Up to ALEC, a campaign designed to throw out a new attack every week and keep up the pressure. Responding to those attacks was time-consuming, Meierling admits, but ALEC's rapid response to them also meant that few of the attacks got any traction.

In late 2013, ALEC decided on a change. Ron Scheberle had been involved with the organization for decades as a board member, a consultant, and ultimately as executive director. He had spent his final years commuting back and forth from Texas. He wanted to go back to his family, and ALEC needed a shot in the arm. The board started recruiting.

It didn't take long for them to zero in on exactly who they wanted. A spunky dirty blonde who knew all about the left's intimidation tactics, and who had only recently left a top corporate job at Visa.

Lisa Nelson. She came just in time for round three.

Washington has its share
of talented people, though especially prized are those with more than one talent. You can find legislators who are exceptionally astute about politics. You can find corporate lobbyists who are exceptionally astute about business priorities and concerns. You can find activists who are exceptionally astute about the grassroots. Finding someone who is exceptionally astute about all three is rare.

That's Nelson. The Californian cut her political teeth with an old pro. She was at Newt Gingrich's side as he ascended to Speaker of the House, serving as his public affairs liaison for three years. In the run-up to that job she'd worked under Gingrich as the executive director of GOPAC, the political group started in the 1970s by Delaware governor Pete du Pont as a training operation for Republicans looking to ascend to higher office. Gingrich had run his conservative revolution from within GOPAC, and Nelson had interacted with the wide conservative establishment, from the grassroots up. After Newt, she managed AOL Time Warner's shop of federal and state lobbyists for seven years. And then on to Visa, where she ran government relations not just in D.C. but for the financial company in Canada, Latin America, and Asia.

Nelson loved working with her CEO at Visa, and when he retired she decided to leave too. “I was sitting on the shelf—retiring, getting my daughter off to college—when I got a call from an ALEC board member, saying, ‘You should really think about taking this job on.'” Nelson turned that suggestion down, and about a month later turned it down again. But she'd been watching the ALEC struggles, and she understood just how important the organization was to the free-market fight. She'd also seen the struggles from the corporate side and watched the way the left had bullied companies into funding liberal priorities and backed them out of giving dollars or support to organizations that actually believed in business. The next time they called, she allowed her name to be put on a list. The next thing she knew, she was in charge.

ALEC was feeling good about its aggressive response to Durbin and to the Stand Up to ALEC campaign. It was starting to rebuild the organization, and Nelson, when she attended the group's annual meeting in Dallas in July 2014 (she still hadn't officially started), was impressed by its initiative to recruit new types of companies. That included a focus on pulling in tech firms. As onetime start-ups like eBay or Amazon had graduated to the economic big leagues, they'd fallen prey to the same troubles as the brick-and-mortar oldies. Federal and state government intruded more and more on their business models. ALEC was a new way for them to voice concerns and hammer out solutions at a state level.

What Nelson and ALEC didn't entirely realize, however, was the extent to which these companies were wimpy on environmental issues. It was 2014, and billionaire environmentalist Tom Steyer was ginning up a slow-rolling but growing campaign against the Keystone XL pipeline. Militant activists such as 350.org's Bill McKibben were redefining what it meant to be green. The McKibben view was that old-line groups like the Sierra Club and the Natural Resources Defense Council had gone soft, making too many compromises. McKibben's activists chained themselves to the White House; they demanded that all fossil fuels stay in the ground, starting immediately; they pressured pension funds to divest from all fossil-fuel companies, comparing their investments to the immorality of apartheid.

“I grew up in Palo Alto, I know the tech community pretty well, and there's a subtlety to how they operate that is very different from a Pepsi or a McDonald's,” says Nelson. “These firms are more motivated by their employees, and it is part of the culture that the CEO has coffee with them on Friday to hear and address their concerns. And the progressives were targeting those tech employees with this message about climate and, it turns out, about us.”

Fact: ALEC does not have a position or a model policy on climate change. Never has. Probably never will. What it does do very aggressively, however, is agitate against energy mandates. That includes things like renewable portfolios, which require states to generate a certain percentage of their electricity from renewable sources—requirements that distort markets and drive up prices. The group also promotes legislation to get rid of taxpayer subsidies for boondoggle state equivalents of Solyndra.

This hardly makes it a climate denier, but the left didn't care. It had its new issue, and it ran with it. And it was a particularly good wedge issue to run with. Polls show that few Republicans think climate change is a big concern, whereas close to 60 percent of Democrats do. So this is a debate that sends the right to sleep, even as it inspires the left. And a lot of tech employees in California sit on the left.

The slow-rolling campaign hit warp speed on September 22, 2014. (Nelson had only just started on September 11.) Google executive chairman Eric Schmidt was in Washington. His book
How Google Works
was out, and he went on the left-of-center
Diane Rehm Show
on National Public Radio to engage in a little self-promotion. Near the end of the hourlong interview, he fielded a call from a woman in New York asking him about Google's financial support of ALEC, given its supposed climate denial.

Schmidt rolled out a perfectly scripted response, dropping the bomb that Google would quit funding the group. He then launched a broadside against the organization that had helped his company out at the state level. Google “has a very strong view that we should make decisions in politics based on facts—what a shock,” he said. “And the facts of climate change are not in question anymore. Everyone understands climate change is occurring. And the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place. And so we should not be aligned with such people. They're just literally lying.”

ALEC immediately believed it had been set up. Schmidt seemed way too prepared, way too slick in his answer, to have done it off the cuff. Most likely the question had been a plant, much like the Lois Lerner question in the tax forum event. And the full-scale backup Schmidt immediately received from all the anti-ALEC forces suggested that more than a few people had been in the know.

Schmidt's self-serving pablum was particularly frustrating to free marketers, who know that Google is about as altruistic as Gordon Gekko. The company publicly spins up its “Do No Evil” motto even as privately it keeps a hardheaded focus on its bottom line. It's no accident that at least one of Google's power-sucking data centers is located in Iowa near extremely cheap coal-fired electricity. Its Ivanpah, California, solar farm threatens tortoises and incinerates close to forty thousand birds a year. That operation is meanwhile floated by a $1.6 billion federal taxpayer–funded loan. Gmail may be free, but consumers pay for it dearly elsewhere.

Nelson and the team went back into hyperdrive, putting out a strong statement noting that it was “unfortunate” that Google was succumbing to “public pressure from left-leaning individuals and organizations who intentionally confuse free market policy perspectives for climate change denial.” Yet ALEC's problem was that tech companies are the ultimate sheep. Google's departure sparked another (albeit far smaller) round of resignations. eBay. Yahoo. Facebook. “There is a strength-in-numbers question here for all companies,” says Nelson. “Once one goes, they all go.” This is the double whammy of disclosure. It doesn't just tee up one organization. It tees up lots of them.

Indeed, the left had been ready after the Schmidt defection with the usual tactics—sending threats to boards, revving up the netroots to send e-mails, issuing press releases, and hounding corporate donors. One tech CEO, who will remain unnamed, received twenty thousand e-mails protesting ALEC funding in just one day. Nelson notes that this is common; some companies have to regularly reconfigure CEO e-mail addresses just to spare them the spam effect.

The departures this time, however, were different. “The companies were incredibly apologetic,” says Nelson. ALEC had done such a good job pushing back against Durbin that the corporate universe was now far more aware. “They understood what was going on.” She remembers one company that as a result of public pressure announced it was getting out of ALEC. The next week, ostensibly in response to a piece of direct mail, the CEO of that company sent ALEC a personal check for the same amount the company had pulled. Coincidence? Not likely.

What frustrated ALEC too is that the left took credit for some strikeouts that weren't theirs. It kept claiming the climate issue had driven all the tech companies out of ALEC's orbit when in fact some had left for entirely different reasons. Microsoft, for instance, had ended its membership in July, well before Schmidt's interview. It ended it on the same day it had announced eighteen thousand layoffs as a result of its merger with Nokia. The company was tightening its belt, and presumably didn't feel it right to keep funding outside initiatives even as it was firing employees. Yelp ended its membership even prior to that. It put out a friendly statement noting that it joined ALEC with the very specific purpose of developing model legislation that made it harder to bring frivolous lawsuits against individuals who share their opinions online. Yelp explained that its model bill passed ALEC unanimously, and that “given our very specific goal was achieved, we allowed our membership to expire.” The anti-ALEC left nonetheless perpetuated the lie that it had driven these groups out of the conservative orbit.

The press believed it, and sometimes that's all that matters. Stories bubbled about the “flight” of corporations from ALEC. Durbin's letter—all the past outrage and bullying—was forgotten. ALEC was a “climate denier” and it deserved what it got.

Nelson is a fighter, and she's spent the past two years rebuilding ALEC, donor by donor, member by member. She's gaining ground—recruiting new companies, honing ALEC's pushback, building back up political membership. And all the while she has been keeping true to ALEC's mission of developing model policy. What makes her progress a wonder is that she's doing it even as she does daily battle with the anti-ALEC forces.

Because the Durbin and Google episodes were just the big moments. Over the years, ALEC's foes had developed a roster of pressure tactics designed to hit the group daily, to grind it down, to make its hour-to-hour existence a headache. Make anything painful enough, goes the attackers' thinking, and maybe the other side will just give up.

One big tactic has been harassing ALEC for more disclosure. Nelson estimates that the Center for Media and Democracy has at this point filed more than twenty-five hundred sunshine requests for information against ALEC and its state-level chapters. Every state has its own sunshine law, and CMD leverages them to try to force ALEC to produce information about its work. These suits haven't produced much of any real ammunition for the left, but they do eat up hours and hours of compliance time, put in by legislative staff that is already lean and overstretched. “The point of these is to force us to keep our attention on these disclosure demands, thereby taking us away from our real work,” says Nelson.

Another tactic is the daily drumbeat of press releases and news bombs, which requires ALEC staff to spend hours of their day refuting accusations and exposing lies. It's tedious work, but Nelson understands that her organization can't afford to let any misinformation permeate the ecosphere. A favorite liberal misrepresentation is that ALEC is a fully funded, secretive creature of Charles and David Koch, the billionaire libertarians who fund groups such as Americans for Prosperity. “I got hit with that one in a 2014 radio interview and we went back and looked. Turns out that, of our entire budget, about 1.5 percent is Koch money,” says Nelson. “The fact that I had to look it up goes to show how diversified ALEC funding really is.” What makes these accusations particularly rich is that they often come from groups that receive funding from billionaire George Soros.

The left has tried to string ALEC up for tax fraud. At least four different liberal groups, including Common Cause and the Center for Media and Democracy, filed complaints with the IRS, pushing the agency to revoke ALEC's 501(c)(3) charitable status. The IRS, reeling from its nonprofit escapades, has been wise enough not to take that bait—at least so far.

The congressional campaign continues. In April 2014, Arizona House Democrat Raúl Grijalva, among the left's worst intimidators, wrote to demand that the Interior Department inspector general “investigate the role of [ALEC] in efforts to pass bills at the state level” that undermine federal authority. It also asked the Interior IG to “liaise with the IRS to determine whether ALEC activities violate federal, state or local lobbying and disclosure regulations.” Mr. Grijalva's letter was a repeat of Democratic demands for the IRS to attack Tea Party groups, and came less than a year after the agency admitted to doing so.

The pressure on Democratic legislators in ALEC has become even more wild and nasty. In 2012, the website for Bill Moyers, the liberal journalist, put up an interactive map to allow people to look up whether their local representative was a member of ALEC, an organization that Moyers's team described as existing to “dilute collective bargaining rights, make it harder for some Americans to vote and limit corporate liability for harm caused to consumers.” ALEC doesn't disclose its legislators' names—because it turns out they get, uh, harassed. But groups like CMD created a wiki that lists who they “believe” to belong. Moyers based his tenuous map on that tenuous information, as well as putting out a call for his readers to help “complete” the map by calling their legislators and demanding to know if they were in ALEC.

The left uses this information to hassle legislators, even going so far as to employ it in campaigns against them. “This is the part that I hate the most,” says Nelson. She acknowledges that some of the Democratic drop in ALEC membership is due to bigger forces. The Democratic Party has shifted to the left, and many of its pro-business Democrats were ousted in primaries, beaten by Republicans, or switched parties. “But those who are left are viewed and attacked as pariahs, just for deigning to work with the other side,” says Nelson. “These activists don't want bipartisanship, they don't want solutions. They want anyone who doesn't agree with them shut down.” Nelson has even struggled in recent years to get a Democrat to serve in the rotating top ALEC leadership position.