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McDonald’s Joins Rush to the Exits over ALEC Controversy

| Thursday April 12th, 2012 | 0 Comments

McDonalds announces it has severed tied with ALECGlobal food giant McDonald’s is not happy with the controversy that recently exploded over the lobbying group ALEC, the American Legislative Exchange Council. A spokesperson for the purveyor of the Happy Meal, Big Mac and many other icons of American cuisine has announced that the company has severed its relationship with ALEC. In doing so, McDonald’s becomes the latest in an exodus that so far includes Kraft, Pepsi, Coca-Cola, and Intuit according to a series of articles in thinkprogress.com.

Given that ALEC has counted hundreds of corporate members over its 30-year history, it seems that membership in the organization was once a standard mark of responsible corporate citizenship. So, what has changed?

Shareholder activism and ALEC

Last week, Coca-Cola made itself the first to publicly announce a split with ALEC, though apparently Pepsi had severed its ties without fanfare earlier this year.  When Coca-Cola went public, we speculated that other companies were bound to sit up and take notice, and that appears to be the case as Intuit and Kraft have quickly piled on.

Part of the motivation for acting swiftly may be to forestall the kind of shareholder activism that could easily lead to a long, drawn-out battle and a pile of avoidable, negative publicity. Indeed, shareholders have wasted no time according to a new report at thinkprogress.com, which states that shareholder activists have already questioned the ALEC connection at UPS, Altria Group, Union Pacific, Peabody Energy and Kraft Foods.

ALEC and consumer alienation

The other factor at work here is damage control, pure and simple, as companies act swiftly to avoid alienating large swaths of their consumer base.

ALEC describes itself, somewhat oxymoronically, as “a nonpartisan membership association for conservative state lawmakers.” Be that as it may, a recent profile of the organization by New York Times columnist Jack Krugman details the organization’s role in formulating questionable public policy, leading Florida and other states to adopt model legislation that disproportionately impacts a large group of consumers, namely minority citizens. These include the “Stand Your Ground” law that has factored into the Trayvon Martin shooting, and various voter ID laws.

In addition, as TriplePundit pointed out last week, ALEC is involved in policy issues involving climate change denial, which is another sore spot that has the potential to alienate other large groups of consumers. Last summer, The Nation published a series of articles detailing ALEC’s financial ties to the Koch brothers, who have become notorious for undermining state and federal action on climate change and other environmental issue.

Who will be next to shut the door on ALEC?

If you’d like to engage in a bit of tea-leaf reading, SourceWatch keeps a list of companies tied to ALEC. Take a look at the list, then do a quick search online to see which of these companies has recently issued an optimistic sustainability report, or a strong corporate social responsibility report, or has recently publicized its green cred. That group would include Kraft and Intuit. The SourceWatch list numbers into the hundreds, and if you can spot some that are likely to be next to leave ALEC, drop us a note in the comment thread.

Here’s another hint: compare the companies on SourceWatch’s list with those involved in some of President Obama’s environment and energy initiatives. A good one to keep an eye on is the National Clean Fleets Partnership, which aims to propel electric vehicles and other clean technologies into the mass market with the help of private sector companies that own large fleets of vehicles.

It should come as no surprise that Pepsico is a flagship member of the Clean Fleets partnership, which launched last year. Also no surprise is Coca-Cola, which joined the Clean Fleets initiative this year along with a number of other new Clean Fleet partners.

Look for the next group of ex-ALEC companies to include one or more of the following: AT&T, FedEx, Verizon,  General Electric and Ryder, all of which are Clean Fleets partners with strong profiles in the consumer sector.

Image: Happy Meal, Some rights reserved by Christian Heindel.

Follow Tina Casey on Twitter: @TinaMCasey.


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