ALEC Adopts Business Plan to "Function More Like a Business" - Formalizes Pay-to-Play Corporate Legislative Model

In 1996, ALEC adopted an internal business plan that explicitly redefined the organization’s purpose in commercial terms, cementing its pay-to-play structure for moving pro-corporate legislation through state legislatures. The plan stated: “ALEC must begin to function more like a business, and recognize that it has a product that it provides to a defined customer base for a ‘profit.’” According to the business plan, “ALEC’s product is policy, and its customers are state legislators and private sector supporters.” This formalization represented a watershed moment in legislative capture—an organization openly declaring that legislation itself was a commercial product to be sold to corporate buyers.

Commercialization of Legislative Production

The 1996 business plan made explicit what had been implicit in ALEC’s operations since the 1980s: the organization functioned as a broker matching corporate legislative demand with state legislator supply. Corporate members paid between $7,000 and $25,000 annually for base membership, plus additional thousands for task force participation, purchasing direct access to legislators and voting power on model bills. State legislators paid only $50-$100 annually, accounting for less than 1% of ALEC’s revenue. This pricing structure created a clear power asymmetry—corporations were ALEC’s actual customers and legislators were the distribution channel for the “product” (model legislation).

Task Force Structure as Corporate Legislative Production Line

By 1996, ALEC operated ten policy task forces organized by issue area: commerce, education, energy, environment, health, criminal justice, tax policy, telecommunications, and others. Each task force brought together corporate representatives and state legislators as co-equal voting members in three-hour closed-door sessions. The task force structure functioned as an industrial production line for legislation: corporations identified regulatory obstacles or opportunities, drafted model bills addressing their business interests, secured legislator co-sponsorship within the task force, and then ALEC distributed the approved templates to its network of 2,000+ state legislators for introduction in their home states.

Disguising Corporate Authorship Through Legislative Laundering

The 1996 business plan formalized ALEC’s “legislative laundering” mechanism—the process of disguising corporate-authored legislation as lawmaker-originated bills. When ALEC members introduced model bills in their state legislatures, they appeared under the legislator’s name with no mention of ALEC or corporate authorship. This created plausible deniability for both legislators (who could claim they wrote the bills) and corporations (who could avoid disclosure as the actual authors). Academic research published in Perspectives on Politics found that ALEC model bills were introduced at a “non-trivial rate” across state legislatures and had better passage rates than typical legislation, demonstrating the effectiveness of this corporate legislative laundering system.

Revenue Model: Corporations Pay for Legislative Outcomes

The 1996 business plan’s explicit framing of “profit” through “product” sales meant ALEC had to demonstrate return on investment to corporate “customers.” Corporate recruitment documents from the 1990s claimed ALEC members introduced more than 1,000 bills per legislative cycle. The value proposition to corporations was clear: pay ALEC membership dues, draft favorable legislation through task forces, receive legislative introductions across multiple states simultaneously, and achieve passage rates superior to traditional lobbying. This productized approach transformed legislative capture from art to science—a repeatable, scalable business model.

Financial Evolution from Movement to Mechanism

The 1996 business plan reflected ALEC’s evolution from ideological conservative movement (1973-1979 focus on social issues) to corporate legislative mechanism (1980s-1990s focus on business regulation). By explicitly rejecting nonprofit advocacy framing in favor of business model framing, ALEC acknowledged its true function: serving corporate interests in exchange for funding. Financial records showed ALEC’s revenue grew from approximately $1.5 million in 1988 to $3.9 million by 1992, more than doubling as it formalized corporate membership structures. By 2024, ALEC’s revenue would reach $10.9 million, with over 98% from non-legislative sources (i.e., corporations and foundations).

Significance for Systematic Legislative Capture

The 1996 business plan represents perhaps the most brazen articulation of legislative capture ever committed to paper by a nonprofit organization. By explicitly declaring that “policy is the product” and corporations are “customers,” ALEC revealed the transactional nature of its model legislation system. This was not ideological coalition-building or civic engagement—it was commercial legislation production sold to corporate buyers.

The business plan formalized structures that enabled corporations to purchase equal voting power with elected officials, draft laws behind closed doors, and deploy those laws nationwide through a franchised legislator network—all while maintaining 501(c)(3) nonprofit tax status and claiming to do “zero lobbying.” The plan demonstrated sophisticated understanding of regulatory arbitrage: state legislatures offered lower barriers to corporate influence than federal Congress, and ALEC provided the platform to exploit this asymmetry at industrial scale.

By 2010-2018, ALEC model legislation would be introduced approximately 2,900 times across state legislatures, with over 600 bills enacted into law—validating the commercial viability of the business model formalized in 1996. The plan proved that legislative capture could be systematized, productized, and scaled as a profitable enterprise, establishing ALEC as the paradigmatic example of how corporate money transforms democratic lawmaking into corporate legislative production.