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Archive for the ‘Taxes’ Category

Teach for America solicits donations, public funds, finder fees while amassing $1 billion fortune, tax records show

Posted in BESE, Budget, Education, House, Senate, Legislature, Legislators, Public Records, Taxes on March 5, 2013| 17 Comments »

Remember when teaching was about answering to a calling—before the Jindal administration came charging onto the scene with its half-baked ideas of education reform through sweeping legislation that promoted something called Teach for America?

As noble and magnanimous as Teach for America (TFA) would have you believe its motives to be, it would be wise to keep your eye on the dollar sign.

While Teach for America is going around asking for money from state legislators and local school districts, the organization has quietly been amassing a fortune even as TFA comes under fire from former TFA teachers and the media.

Like a snake trying to swallow its own tail, TFA has begun to devour itself, to feed off its own perceived success to the detriment of those it was formed to help.

TFA’s 2010 federal tax return reveals that it has received nearly $907.5 million in gifts, grants, contributions and membership fees over the five-year period from 2006 through 2010, including $243.6 million in 2010.

The breakdown, by year, shows that TFA had $77.94 million in income in 2006; $142.35 million in 2007; $251.52 million in 2008; $193 million in 2009, and $243.65 in 2010.

Other 2010 revenue brought TFA’s total income to $270.5 million against expenses of $218.7 million for a net income of $51.8 million, the return shows.

Of those expenses, $129.9 million was for salaries.

Another $548,437 was spent on “direct contact with legislators, their staffs, government officials and legislative bodies,” or lobbying.

TFA CEO Wendy Kopp is paid $393,600 by the organization she founded in 1989, according to the tax return, but the salaries of her support staff are equally impressive for an outfit that purports to wants only to uplift the nation’s neediest students in poverty-stricken school districts. A few examples:

• Matthew Kramer, President: $328,100;

• Tracy-Elizabeth Clay, General Counsel, Secretary: $174,500;

• Osman Kurtulus, Vice President of Accounting & Controls & Assistant Secretary: $178,500;

• Miguel Rossy, Chief Financial & Infrastructure Officer: $260,600;

• Elisa V. Beard, Chief Operating Officer: $233,400;

• Elissa Clapp, Senior Vice President of Recruitment: $246,700;

• Ellen N. Shepard, Chief Information Officer: $214,800;

• Lily Rager, Executive Vice President: $178,500;

• Aylon Samouha, Senior Vice President, Teacher Preparation Support: $253,500;

• Eric Scroggins, Executive Vice President: $231,000;

• Jeffrey Wetzier, Senior Vice President, Chief Learning Officer: $235,300;

• Kevin Huffman, Executive Vice President, Public Affairs: $243,300;

• Gillian C. Smith, Chief Marketing Officer: $238,800;

• Aimee Eubanks Davis, Chief People Officer: $229,000;

• Theordore Quinn, Vice President, Strategy & Research: $179,900.

So now, TFA, which faced financial collapse several times in the early years, comes begging to the state of Louisiana with a $5 million request for NGO (non-government organization) funding even though that request is a bit misleading.

The request is made on behalf of TFA by the compliant Department of Education (DOE) to fund TFA operations in several high need areas of the state. Instead, the legislature funds, through DOE, three contracts totaling more than $2.3 million to help recruit TFA teachers in different school districts around the state, including $1.27 million to specifically recruit teachers for the Recovery School District and for the Teaching Fellows program in northwest Louisiana.

In neighboring Mississippi, TFA requested a legislative appropriation of $12 million to send 700 recruits to the impoverished Delta area of the state. Instead, the Mississippi legislature appropriated $6 million, sufficient to fund 370 teachers.

Just how the money is spent is something of a mystery because the local school districts are required to pay TFA a fee of $3,000 per teacher recruited and the districts must also pay the TFA teacher salaries.

On top of all that, TFA receives generous grants and contributions from such philanthropists as the Walton family of the Wal-Mart retailing empire.

TFA does offer summer training to prepare recruits for the classroom—an entire five-week training course as opposed to four years and more (for advanced degrees) for teachers to receive college degrees in education and who generally sign up for the long run as opposed to TFA teachers who commit to only two years.

Some remain beyond the two year hitch but for the most part the TFA turnover is a negative factor in educating kids and in school staffing continuity.

Despite that, Louisiana Superintendent of Education John White, himself a TFA alumnus, calls TFA “an incredibly good investment.”

Of course they are. School districts are laying off veteran teachers with years of education and classroom experience in favor of TFA corps members because they are less expensive to hire. Some districts seem to prefer to cycle through ill-trained TFA teachers every two years.

A former TFA teacher claims that the organization’s five-week training model is ineffective, that TFA spends $33 million “doing a poor job teaching corps members to teach.” He describes the TFA training as “not enough depth, not enough breadth, not enough time.”

Reuters News Service, in an article entitled “Has Teach for America betrayed its mission,” quotes TFA alumni as claiming that policies promoted by TFA-trained reformers threaten to damage the very schools TFA once set out to save and that TFA’s relentless efforts to expand has betrayed its founding ideals.

For example, Reuters says that TFA, founded to serve public schools so poor or dysfunctional they couldn’t attract qualified teachers, now sends fully one-third of its recruits to privately-run charter schools, many of which have outstanding academic credentials, wealthy donors and flush budgets.

It’s about the money, folks.

And while there certainly are TFA teachers who truly have the welfare of students at heart and who are effective teachers, TFA has backed off its claim that almost half of its teachers achieve outstanding academic gains by students.

Heather Harding, TFA’s former research director, told Reuters that statistics claiming significant gains were unreliable and misleading because only 15 percent of TFA recruits even teach subjects and grades that are assessed by state standardized tests. As an alternative means to measure growth, Harding said, many teachers rely on assessments they design themselves.

So while TFA recruits may come into the classroom with high ideals and lofty goals for their students, TFA long ago stopped being about the students and became all about the money.

It would be a mistake for parents, legislators, school administrators and benefactors to forget that.

Any coach of any sport will tell every player on his team to keep his eye on the ball.

In this case, keep your eye on the dollar signs.

It’s all about the money.

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Radar to M*A*S*H compound: ‘Attention. Attention. Transparency arrives at long last to state government’

Posted in Business, Economy, Governor's Office, Jobs, Legislature, Legislators, Revenue, Taxes, Transparency on February 27, 2013| 7 Comments »

For five long years now we have patiently (or impatiently in some cases) awaited the arrival of all that transparency touted by Gov. Bobby Jindal upon his part time occupancy of the governor’s office.

Now it seems that heretofore elusive aspect of the Jindal administration has finally arrived.

No, it wasn’t Superintendent of Education John White telling News Corp. Senior Vice President Peter Gorman (aka “Dude”) that he is White’s “recharger.”

Nor is the LSU Board of Supervisors which has refused to release the names of applicants for LSU president on the grounds that the applications are conveniently (convenient for the board and the administration, that is) submitted to a Dallas consulting firm which, being a private entity, is not subject to the public records law.

It wouldn’t be the Louisiana Office of Economic Development either. LED a couple of years back refused to surrender records to the Legislative Auditor’s office so that the state auditors could perform the function with which they are charged—auditing the state’s books.

And, needless to say, it is not Attorney General Buddy Caldwell, who found a way to punt on our request for assistance in prevailing upon the Department of Education to comply with the Louisiana public records law (the law, the AG’s office informed us, says it can intervene on behalf of the public meetings law but there is no provision for it to assist with public records).

That’s a classic case of legal hair splitting, but hey, the attorney general’s office is the official legal counsel for state agencies (a veritable horde of state-contracted legal counsels notwithstanding), so who are we to argue? We’re just the low-lifes who work, pay taxes and vote in this state. Never mind some 80 or so (we finally quit counting when we reached that number) legal opinions by the AG issued to various state agencies which opine that public records must be surrendered.

But we digress (as we often do).

No, it’s none of those. The shocker here is that the transparency that has suddenly and without warning opened up before our very eyes originates in none other than the governor’s office.

Yep, chalk one up for Bobby, our part time, absentee governor who would rather run for president than run the state.

Don’t believe us? Still harboring some doubts as to the veracity of our claim?
Well, we have the proof.

Jindal is proposing scrapping the state personal and corporate income tax and replacing it with…well, something. He hasn’t the vaguest idea what (he said earlier this month that he’s still working on details of his plan).

In general terms, Jindal is talking about an increase in the state sales tax and a dollar increase in the cigarette tax (remember when he refused to sign the renewal of the 4-cent cigarette tax because, he said, he was opposed to “new” taxes?).

Never mind that a sales tax would hit the low- and middle-income taxpayers the very hardest https://louisianavoice.com/2013/01/16/par-lsu-economist-richardson-cast-doubts-on-%CF%80-yush-plan-to-replace-louisiana-income-tax-with-state-sales-tax-increase/, abolishment of state income taxes has become the mantra of Republican governors nationwide because it would represent the ultimate tax break (read: political reward) for corporate campaign donors.

But rather than rely on the lack of merits in a weak proposal, Jindal has enlisted his minions to launch a letter-writing campaign in support of his as yet incomplete tax plan.

That’s correct: the plan isn’t even completed, much less polished and officially presented to the legislature and the public, but the letter-writing campaign has already started. Never mind that the plan has as yet progressed no further than a two-page outline pretentiously entitled “A Framework for Comprehensive Tax Reform.” It apparently suffices for the purposes of initiating a well-orchestrated PR campaign from the governor’s office or perhaps from Timmy Teepell’s OnMessage (Oops, we forgot; they are one and the same).

It officially began on Feb. 20 with the publication in newspapers statewide of a letter by LED Secretary and presumed future LSU President/Chancellor/High Potentate Stephen Moret.

Boiled down to its essentials, Moret’s 12-paragraph letter claims that Jindal’s undefined, unreleased, still-in-the-works, everything-still-on-the-table plan would somehow magically bump Louisiana from No. 32 to No. 4 in something called the State Business Tax Climate.

Fine for business climate, yes, but Moret conveniently neglects how that plan, still being formulated somewhere out there in the fog-enshrouded concepts of the policy wonks, would affect the working stiffs. An addition 2 or 3 percent on the sales tax for the purchase of say, a package of toilet paper won’t be such a burden. But tack that same 2 or 3 percent onto the cost of a new refrigerator, central air and heating unit or a new automobile and suddenly, in the words of the late Illinois Sen. Everett Dirksen, you’re talking about real money.

But no matter; Moret obviously had his marching orders: write a glowing letter about how the Jindal Plan (not to be confused with the Stelly Plan that he repealed, at a cost to the state of about $300 million a year) would be great for business—and everyone knows, as President Calvin Coolidge said way back in 1925, “The chief business of the American people is business.” (The stock market crash, of course, was only four years away when he said that, which subsequently put a lot of American people out of business.)

Exactly a week after Moret’s letter, on Feb. 27, the Baton Rouge Advocate (and probably a few other papers across the state) published a second letter endorsing the still mythical tax plan. This one was written by someone named Matthew Glans, who identifies himself as senior policy analyst for The Heartland Institute in Chicago (described by The Economist last May as “The world’s most prominent think tank promoting skepticism about man-made climate change,” according to the institute’s own web page) and which also describes itself as an advocate of free market policies.

Probably its greatest claim to fame, however, came in the 1990s, when it worked with Philip Morris in attempts to debunk the science linking secondhand smoke to health issues and to lobby against government public-health reforms.

(The Heartland Institute bears an eerie resemblance to the fictional “myFACTS” currently being lampooned by Garry Trudeau in the comic strip Doonesbury.)

Glans calls Jindal’s plan “a strong step towards improving the state’s economic competitiveness and returning tax dollars to Louisiana citizens and businesses.”

At the same time he cautions against a system “that allows the government to choose winners and losers.”

“A tax system filled with tax increases on targeted items such as tobacco or subsidies for certain businesses (read: tobacco, in states like North Carolina), however, is not sound policy,” he says, adding, “A system that lowers rates across the board, like much of Jindal’s proposal, would spur economic growth.”

Strange how Glans, sitting in Chicago, could know so much about the part time, absentee governor’s tax plan when Jindal himself confesses that his “plan” is still evolving and stranger still that he would single out tobacco (and tobacco subsidies) as a potential victim of increased sales taxes.

Curious, too, that he is so knowledgeable when legislators remain in the dark.

But, hey, we wanted transparency from our governor.

And this “independent” letter-writing campaign is about as transparent as it gets.

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Kristy Nichols: ‘We didn’t present a truly balanced budget because we couldn’t’ (or ‘down the old rabbit hole’—again)

Posted in Budget, Governor's Office, Guest Columnist, House, Senate, Legislature, Legislators, Politicians, Revenue, Taxes, Transparency on February 23, 2013| 20 Comments »

Guest Column
By STEPHEN WINHAM

The long-awaited Jindal administration proposal to balance the Fiscal Year 2013-2014 budget was released yesterday (February 22). The most surprising thing about it was its almost complete lack of surprises. Once again, we were presented with a budget that uses one-time money, contingencies, and outright conjecture, along with increased college tuition, to create the illusion of a balanced budget that does little or no harm.

Perhaps the most surprising and indefensible part of the presentation was revealed in Melinda Deslatte’s AP wire story late yesterday. Deslatte reported that commissioner of administration Kristy Nichols defended the use of patchwork funding in the budget on the grounds that not doing so would result in “needless reductions to critical services.” Think long and hard about what that means.

The governor is happy to tout his refusal to increase state taxes. He is also happy to talk about his successes in reducing the size of government and refusal of additional federal support. He is very direct, if not necessarily consistent, when it comes to holding the line on these things. Although there is no second half to his current plan to eliminate income and franchise taxes, he assures us that, if he actually ever presents a proposal for the other side of the equation, it will be income neutral.

If Nichols’ testimony is to be taken at face value, we can only assume it is not possible to maintain critical services with our current level of recurring revenue. So far, the governor’s approach to reducing state government has been to gradually strangle it through continued submission of unrealistic budgets intended to give the impression everything is okay. The legislators adopt these proposals and congratulate themselves on another successful year.

In reality, everything is not okay. The governor knows it. Ms. Nichols knows it. The legislators interested enough to pay attention know it. As long as projected revenues from reliable, stable sources do not equal projected necessary expenditures, things will NEVER be okay. Governor Jindal has not submitted, nor has the legislature adopted, such a budget during his entire administration. This is proven by the mid-year cuts that are always necessary in adopted yearly budgets and the never-ending projections of deep holes for every future year.

Governor Jindal has been quoted repeatedly in the national press saying we all have to learn to live within our means. If he really believes this, why does he not present budgets that allow the state of Louisiana to do so? I think Ms. Nichols has made the answer quite clear – because we simply cannot live the way we want to within our present means. Presenting a truly balanced budget would result in an outcry from even the staunchest fiscal conservatives who would immediately begin to cry, “Why don’t you cut the fat, not the meat?” They would never accept there isn’t enough fat left to leave the meat alone.

A group of legislative “Fiscal Hawks” [a term coined by respected blogger C. B. Forgotston] has attempted to solve the perennial problem of unbalanced budgets by forcing the governor and the legislature to simply comply with the clear spirit of the state’s existing constitution and statutes as they apply to the budget.

Regardless of how complicated some might attempt to make these laws, their intent is plain common sense: we should do our best to project recurring revenues and adopt a budget that balances expenditures with them. If one-time revenues are used, they should only be used for clearly one-time expenses because doing otherwise automatically creates holes in future budgets. We shouldn’t budget on contingencies and conjecture because if the revenues fail to come in we will have significant trouble paying for or cutting the services they were supposed to fund.

Could anything be simpler or make more sense? If the governor and the legislature know we cannot live within our means why don’t they do something as simple as following the intent of existing law? The governor doesn’t propose budgets doing so because, like Ms. Nichols, he knows it is impossible without making unpopular cuts to essential services. Cutting taxes is popular. Cutting needed services, or raising taxes, is not.

The legislature doesn’t demand we live within our means for the same reason and also because of their collective belief that their constituents are only interested in the extent to which they bring home the bacon. Legislators believe not bringing home the bacon equals not getting re-elected. Although they already have a history of funding local services to the detriment of state programs in the past, we have now reached a critical stage.

If essential state services are cut at the same time purely local projects are funded, there might actually be a backlash for individual legislators. They might learn that their constituents benefit from the critical state services to which Ms. Nichols refers and actually care about the future of the state in which they live as much as their local neighborhoods.

Why can’t our state’s leaders just be honest about this and do the right thing? Understanding and dealing effectively with the budget dilemma requires a level of knowledge that can only be gained through fairly intimate involvement with, and knowledge of, the state’s budget and fiscal status. It is unreasonable to expect individual citizens to educate themselves at the detailed level necessary to make the right decisions about how to fix things even if they could. When we elect our governor and legislators, we do so with the reasonable expectation that they can and will take care of these things in our behalf.

It is certainly easy to understand why it is difficult to make hard cuts when cash is, or even may be, available to avoid them. But willfully allowing gross fiscal instability to continue indefinitely is a violation of the public trust. It serves no one well and doesn’t even allow the ability to isolate inefficiencies and make rational cuts in spending where they actually need to be made.

Only by facing reality can our state’s leaders make the necessary changes to move us forward. The administration has admitted the current gap cannot be closed by cuts alone. We should support those legislators and other elected officials who have the courage and conviction to make responsible decisions about our future even if they include additional taxes.

(Stephen Winham is the retired Louisiana State Budget Director)

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Surprise! Jindal admits in brief press conference that he ‘doesn’t have a plan’ (clue) on abolishing state income tax

Posted in Broadband, Internet, Charters, Education, Exemptions, Incentives, Governor's Office, Health Care, Higher Education, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Prison, Privatization, Retirement, Revenue, State Agencies, Taxes, Vouchers on February 15, 2013| 14 Comments »

Whenever Gov. Bobby Jindal speaks, be it on Fox News, CNN, to fellow Republican governors or at a rare press conference such as the one held on Thursday, his threefold purpose always seems to be to inflate weak ideology, obscure poor reasoning and inhibit clarity.

His less-than-masterful tax plan for the state, which he admitted to reporters is like so many of his ill-conceived programs in that it actually remains a non-plan, might well be entitled “The Dynamics of Irrational and Mythical Imperatives of Tax Reform: A Study in Psychic Trans-Relational Fiscal Recovery Modes” (with apologies to Calvin and Hobbes, our all-time favorite comic strip).

It’s not certain what drives him to wade off into these issues (see: hospital and prison closures, higher education cutbacks, charter schools, online courses and vouchers, state employee retirement “reform,” and privatization of efficiently-operating state agencies like the Office of Group Benefits) but his actions are probably precipitated by deeply ingrained biological, psychological and sociological imperatives that have triggered a reduced functionality in the cerebral cortex (Pickles).

Or it could be some depraved attempt to inflict vengeance on society because his two imaginary childhood friends teased him and wouldn’t let him play with them.

And though he insists he has the job he wants, we can’t help but wonder if he isn’t even now casting a covetous sidelong look at the advantages of plundering (Frazz) in case his presidential aspirations fail to materialize.

The reason for all this speculation is brought on by his admission in that ever-so-brief (less than 12 minutes or six question, whichever came first) press conference Thursday that the administration does not have a proposal as yet to eliminate personal and corporate income taxes despite his well-publicized announcement that he wants to scrap state income taxes for individuals and corporations (especially corporations) in a “revenue neutral” way that would most likely involve increased sales taxes.

But he doesn’t have a proposal yet.

Are you listening, legislators? He doesn’t have a proposal yet. That means the onus is going to be on you and if he doesn’t have his way with you (as he has for the past five years—and you can take that any way you please), he’s going public with the blame game.

If everything goes south, you don’t really think he’s going to take the blame, do you?

He doesn’t have a proposal yet. Now we see where State Superintendent John White gets his prompts on running the Department of Education. White has not submitted a completed plan for any project begun at DOE since he took over; everything—vouchers, charters, course choice—is in a constant state of flux. He announces rules, retracts, readjusts, re-evaluates only to lose a lawsuit over the way his boss proposed to fund state vouchers.

Jindal doesn’t have a proposal—for anything. His retirement “reform” package for state employees was a disaster from the get go. Even before he lost yet another court decision on that issue in January, the matter of whether or not the proposed plan for new hires was an IRS-qualified plan—meaning a plan the IRS would accept in lieu of social security—remained unresolved.

He didn’t have a proposal: let’s just do it and see later if the IRS will accept it. Throw it up against the wall and see if it sticks.

Remember when he vetoed a bill two years ago to renew a five-cent tax on cigarettes because, he said, he was opposed to new taxes (it was a renewal!)? Well, now he’s considering a $1 tax increase on a pack of cigarettes.

“Everything is on the table,” he said. “That’s the way it should be.”

But isn’t he the same governor who closed hospitals and prisons without so much as a heads-up to legislators in the areas affected.

Isn’t he the same governor who rejected a federal grant to make boardband internet available to rural areas of the state but had no alternative plan for broadband?

Isn’t he the same governor who continues to resist ObamaCare at the cost of millions of dollars in Medicaid funding to provide medical care for the state’s poor?

He said he is looking at different ways to protect low- and middle-income citizens.

By increasing the state sales tax by nearly two cents on the dollar? By rejecting another $50 million federal grant for early childhood development? By shuttering battered women’s shelters and attempting to terminate state funding for hospice? By pushing for more and more tax breaks for corporations and wealthy Louisiana citizens? By appointing former legislators to six-figure state jobs for which they’re wholly unqualified while denying raises to the state’s working stiffs? Yeah, that’ll really protect the low income people of the state.

“It’s way too early to make decisions on what’s in and out of the plan,” he said of the soon-to-be proposed (we assume) income tax re-haul.

Well, Governor, it’s your job to make decisions, to come up with a proposal to present to the legislature so House and Senate members may have sufficient time to debate the issues—unlike your sweeping education package of a year ago.

In your response to President Obama’s State of the Union address this week (not your disastrous response in 2009 in which the Republican Party subjected you to national ridicule), you said, “With four more years in office, he (Obama) needs to step up to the plate and do the job he was elected to do.”

That’s right, folks. You can’t make up stuff this good. The response is so easy that it’s embarrassing but here goes:

Pot, meet Kettle.

In retrospect, drawing on comic strip for inspiration when writing about Jindal somehow seems entirely appropriate.

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ALEC mantra of small government is huge paradox when weighed against perks of low taxes, big public contracts

Posted in ALEC, American Legislative Exchange Council, Business, Charters, Contract, Contracts, Prison, Privatization, Taxes, Vouchers on January 30, 2013| 4 Comments »

It’s interesting to note that the very existence of the American Legislative Exchange Council (ALEC), which writes “model legislation” for lawmakers to introduce back in their respective state capitals rests on one ginormous paradox.

For example, consider this mission statement from ALEC’s 4th edition of its state economic competitiveness index entitled Rich States, Poor Stateshttp://www.alec.org/docs/RSPS_4th_Edition.pdf: “ALEC’s mission is to discuss, develop and disseminate public policies which expand free markets, promote economic growth, limit the size of government (emphasis ours), and preserve individual liberty within its nine task forces.”

Yet, for all its breast beating about making government smaller and more accountable, it’s curious and somewhat contrary to that theme that of the top 100 companies in the Fortune 500, fully one-half are—or were—corporate members of ALEC http://money.cnn.com/magazines/fortune/fortune500/2012/full_list/.

In fact, 31 of the 50 largest corporations in America helped pay the bills to wine and dine state legislators at seminars, conferences, planning sessions and annual meetings of ALEC delegates, including the 2011 annual meeting held in New Orleans at which Gov. Bobby Jindal was the keynote speaker.

Fallout over the shooting of teenager Trayvon Martin in Sanford, Florida, last February coupled with ALEC’s endorsement of the controversial “Stand Your Ground” law in that state which was linked to his shooting has resulted in the decision by some two dozen corporations to drop their ALEC memberships.

Among those who have bailed out are Wal-Mart, General Motors, General Electric, Bank of America, Entergy, PepsiCo, Walgreen, Dow Chemical, Marathon Petroleum, Procter & Gamble and Coca-Cola.

Some of those retaining their memberships, however, include Hunt-Guillot of Ruston, ExxonMobil (the largest corporation in the U.S.), Chevron, AT&T, Verizon, UnitedHealth Group, Archer Daniels Midland, Wells Fargo, Pfizer, Boeing, Microsoft, and FedEx.

ALEC’s “small is better” philosophy for government takes a sharp 180 when its corporate membership is placed under the microscope. While 50 of the 100 largest members of the Fortune 500 are ALEC members, that number drops precipitously in the ensuing blocks of 100.

For example, of the corporations ranked in size from 101 to 200, only 29 are ALEC members and for 201 to 300, the number is 17. For 301 to 400, the membership is 13 and for the final group, 401-500, you will find only seven who are ALEC members.

So while the lobbying group maintains that small is better, it appears that it goes after the larger corporate sponsors first and is increasingly disdainful of the smaller companies.

The 116 Fortune 500 companies who are members of ALEC combined for $4.5 trillion in revenues in 2011 and altogether realized net profits of $484.2 billion. Remember, that does not include the other 384 Fortune 500 companies—just the 116 ALEC members.

Just for the record, here are 50 ALEC members from the Fortune 100 with 2011 rankings, revenue and profits in parentheses http://money.cnn.com/magazines/fortune/fortune500/2012/full_list/:

• ExxonMobil—(1; $452.9 billion; $41.1 billion);

• Wal-Mart—(2; $446.9 billion; $15.7 billion—terminated membership);

• Chevron—(3; $245.6 billion; $26.9 billion);

• ConocoPhillips—(4; $237.3 billion; $12.4 billion);

• GM—(5; $150.3 billion; $9.2 billion—terminated membership);

• GE—(6; $147.6 billion; $14.2 billion—terminated membership);

• Ford—(9; $136.3 billion; $20.2 billion);

• AT&T—(11; $126.7 billion; $3.9 billion);

• Bank of America—(13; $115.1 billion; $1.4 billion);

• Verizon—(15; $110.9 billion; $2.4 billion);

• CVS—(18; $107.8 billion; $3.5 billion—terminated membership);

• IBM—(19; $106.9 billion; $15.9 billion);

• UnitedHealth Group—(22; (101.9 billion; $5.1 billion);

• Wells Fargo—(26; $87.6 billion; $15.9 billion—terminated membership);

• Procter & Gamble—(27; $82.6 billion; $11.8 billion—terminated membership);

• Archer Daniels Midland—(28; $80.7 billion; $2 billion);

• Marathon Petroleum—(31; $73.6 billion; $2.4 billion);

• Walgreen—(32; $72.2 billion; $2.7 billion—terminated membership);

• Medco Health Solutions—(36; $70.1 billion; $17.8 billion—terminated membership);

• Microsoft—(37; $69.9 billion; $23.2 billion);

• Boeing—(39); $68.7 billion; $4 billion);

• Pfizer—(40; $67.9 billion; $10 billion);

• PepsiCo—(41; $66.5 billion; $6.4 billion—terminated membership);

• Johnson & Johnson—(42; $65 billion; $9.7 billion—terminated membership);

• State Farm Insurance—(43; $64.3 billion; $845 million);

• Dell—(44; $62.1 billion; $3.5 billion—terminated membership);

• WellPoint—(45; $60.7 billion; $2.6 billion);

• Caterpillar—(46; $60.1 billion; $4.9 billion);

• Dow Chemical—(47; $60 billion; $2.7 billion);

• Comcast—(49; $55.8 billion; $4.2 billion);

• Kraft Foods—(50; $54.4 billion; $3.5 billion—terminated membership);

• Intel—(51; $54 billion; $12.9 billion);

• UPS—(52; $53.1 billion; $3.8 billion);

• Best Buy—(53; $50.3 billion; $1.3 billion—terminated membership);

• Prudential—(55; $49 billion; $3.7 billion;

• Amazon.com—(56; $48.1 billion; $631 million—terminated membership);

• Merck—(57; $48 billion; $6.3 billion—terminated membership);

• Coca-Cola—(59; $46.5 billion; $8.6 billion—terminated membership);

• Express Scripts Holding—(60; $46.1 billion; $8.6 billion);

• FedEx—(70; $39.3 billion; $1.5 billion);

• DuPont—(72; $38.7 billion; $3.5 billion—terminated membership);

• Honeywell International—(77; $37.1 billion; $2.1 billion);

• Humana—(79; $36.8 billion; $1.4 billion);

• Liberty Mutual Insurance Group—(84; $34.7 billion; $365 million);

• Sprint Nextel—(90; $33.7 billion; –$2.9 billion);

• News Corp.—(91; $33.4 billion; $2.7 billion);

• American Express—(95; $32.3 billion; $4.9 billion);

• John Deere—(97; $32 billion; $2.8 billion—terminated membership);

• Philip Morris—(99; $31.1 billion; $8.6 billion);

• Nationwide Insurance—(100; $30.7 billion; -$793 million).

Of course, ALEC also pushes its agenda of lower taxes very strongly (who do you think helped write Gov. Jindal’s proposal to eliminate the state individual and corporate income taxes in favor of increase sales taxes? Surely, one would not believe he came up with that all by himself).

It’s no coincidence that Louisiana is pushing to ditch the state income tax at the same time as several other states, including Nebraska, Missouri, Oklahoma, Kansas, and North Carolina. Each state has read the ALEC playbook.

“Money is spent more efficiently by the private sector than by governments, so it is reasonable to expect that states with lower overall taxes have better economic environments than states with high taxes and more government spending,” the Rich States, Poor States report says.

Apparently the authors of that statement did not bother to review the histories of the subprime mortgage crisis, junk bonds, Enron, Bernard Madoff, Stanford Financial Group, the savings and loan crisis of the 1980s, collateralized mortgage obligations (CMOs), Tyco, WorldCom, AIG, Lehman Brothers, and the bursting of the dotcom bubble.

Be that as it may, let us go back to ALEC’s mantra of lower taxes and see how that might apply to its corporate membership.

General Electric is the poster child for tax dodges. With $19.6 billion in net profits for the years 2008-2011, GE managed not only to pay no taxes, but got $3.7 billion in tax refunds.

Other ALEC members, their net profits and taxes/refunds for years 2008-2011 include: http://www.ctj.org/pdf/notax2012.pdf

• PG&E—($6 billion; $1 billion refund);

• CenterPoint Energy—($3.1 billion; $347 million refund);

• Duke Energy—($5.5 billion; $216 million refund);

• Con-way—($422 million; $23 million refund);

• Ryder System—($843 million; $46 million refund);

• DuPont—($3 billion; $325 million paid in taxes—10.8 percent, less than one-third the standard 35 percent tax rate);

• Consolidated Edison—($5.9 billion; $74 million refund);

• Verizon—($19.8 billion; $758 million refund);

• Boeing—($14.8 billion; $812 million refund);

• Wells Fargo—($69.2 billion; $2.6 billion paid in taxes—3.8 percent, barely 10 percent of the 35 percent standard rate);

• Honeywell International—($5.2 billion; $102 million—2 percent).

Some of the CEOs for ALEC member corporations received more in compensation in 2010 than their companies paid in taxes. Here are a few with salaries first, followed by taxes paid: http://www.dailyfinance.com/2011/08/31/ceo-pay-vs-corporate-taxes/

• International Paper: $249 million refund; CEO John Faraci received $12.3 million;

• Prudential: $722 million refund; CEO John Strangfeld received $16.2 million;

• Verizon: $705 million refund; CEO Ivan Seidenberg paid $18.1 million;

• Chesapeake Energy: paid no taxes; CEO Aubrey McClendon paid $21 million;

• eBay: $131 million refund; CEO John Donahoe paid $12.4 million;

• Coca-Cola: paid $8 million taxes; CEO John Brock paid $19.1 million;

• Dow Chemical: $576 million refund; CEO Andrew Liveris paid $17.8 million;

• Ford: $69 million refund: CEO Alan Mulally paid $26.5 million.

If you still believe that ALEC favors smaller government over, say, being able to exercise control over government taxation and spending, then consider the General Services Administration’s list of $69 billion in federal contracts held by these ALEC members in fiscal year 2011: https://www.fpds.gov/fpdsng/index.php/reports

• Boeing: $21.6 billion;

• Northrop Grumman: $15 billion;

• Raytheon Co.: $14.8 billion;

• Humana: $3.4 billion;

• General Electric: $2.8 billion;

• Honeywell International: $2.2 billion;

• Dell: $1.4 billion;

• IBM: $1.7 billion;

• FedEx: $1.6 billion;

• Merck: $1.3 billion;

• Shell: $913 million;

• Pfizer: $1.2 billion;

• UPS: $701 million;

• AT&T: $743 million;

It’s easy to preach small government and lower taxes but to achieve this, a lot of ALEC members would stand to lose a chunk of business with Uncle Sam.

And that doesn’t even include state and local contracts like the $18.3 million in state contracts currently held by ALEC member Hunt, Guillot & Associates of Ruston and the $11.4 million state contract awarded to Northrop Grumman.

Smaller, more streamlined and accountable government sound great, most would agree. But the implementation of changes across the board may well affect one’s bottom line and that, as they say, is when the cheese gets binding. It is then that we simply must follow the money.

Charter schools and vouchers, for example, would benefit investors who see a fortune to be made in private education—especially when most of that money would be paid by the state.

The continued growth in the number of private prisons (along with more laws that send more people to prison) would be quite a windfall for those operators who contract with state and local governments to incarcerate lawbreakers.

Elimination of personal and corporate income taxes in favor of sales tax increases would further lighten the financial burden of business and industry—and shift that burden onto the backs of low- and middle-income citizens.

The rejection of a federal grant to build a broadband internet system for rural Louisiana certainly benefitted commercial cable companies like AT&T which contributed $250,000 to the Supriya Jindal Foundation.

Likewise, relaxed environmental regulations endorsed by ALEC certainly aided member Dow Chemical which coincidentally kicked in $100,000 for the Supriya Jindal Foundation. Soon after that donation, proposed fines of subsidiary Union Carbide for allowing the release of a toxic pollutant and failing to notify authorities of the leak were dropped.

Or Marathon Oil, whose $250,000 donation to the foundation may have greased the skids for the awarding of $5.2 million in state funds to a Marathon subsidiary.

Instead of listening to the rhetoric of ALEC’s membership, one would do well to watch how certain specific proposals might affect that membership.

In other words, don’t listen to what they say; watch instead for what they do.

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