On a flight to Philadelphia, I am reading the secret documents from ALEC (the American Legislative Affairs Council) leaked to the Guardian. Although they contain some juicy details about declining membership and internal controversies, I find some critical interpretations of these documents a bit overblown. For instance, ALEC will require its state chairs–who are also legislators–to pledge: “I will act with care and loyalty and put the interests of the organization first.” This is being treated as evidence that ALEC’s state chairs must put ALEC before their own constituents and consciences.  To me, it just sounds like boilerplate.

But the documents do give a window into money and politics. Consider that:

Businesses have common interests in lower taxes and weaker regulation. But they face a Prisoner’s Dilemma collective-action problem. Generic “business-friendly” legislation benefits them all (a bit), yet fighting for such legislation costs each firm money and reputation.

The solution is one organization that collects dues from many members and acts in their common interest. But …

Members will be tempted to leave if their narrow interests aren’t prominent enough in the collective agenda. The internal documents show that Coventry Health Care dropped ALEC because it had “joined for a single issue” (presumably health insurance) and Novo Nordisk Pharmaceuticals may have left “because only interested in diabetes related issue.”

By Robert Michels “Iron Law of Oligarchy,” any coalition will be taken over by a relatively zealous few with passionate commitments to ideological values. Dana Milbank writes, “When I first dealt with ALEC as a state government reporter 18 years ago, it was right of center but known for thoughtful policy research. But it has since adopted an aggressive agenda to pass legislation expanding gun rights and voter-identification requirements, and limit the reach of public-employee unions, social-welfare programs, consumer and environmental protections, and Obamacare.”  Not all these issues are in the economic interest of corporate backers, and some have left as a result. The ALEC documents specifically note that many financial services companies left the coalition “Due to controversy.”

Further, ideological disputes may divide potential supporters. The Solar Industries Association “left [ALEC] because their bill did not pass the task force.” (I’ll bet their self-interest in federal support for renewable energy met ideological opposition within ALEC.) The Pioneer Institute was “kicked out of ALEC (?) because of education issue.” Pioneer opposes the Common Core standards on principled grounds that I don’t happen to share, although I respect them. But ALEC supports the Common Core, which has business backing. So ALEC expelled Pioneer.

A coalition can operate more effectively in secret, because members can solve some of their collective-action problems through private negotiations. For instance, if a bank agrees to support conservative social legislation in return for deregulatory policies, that will look terrible. But if such a deal can be arranged privately, it may work. Hence ALEC’s tradition of private meetings.

Even so, the collective-action problems are tricky, and the organization is vulnerable to rules imposed from outside. For instance, according to the documents, “ALEC does not wish to be perceived as a lobbying organization and therefore does not wish to register as a lobbyist in any state.” To register as a lobbyist would bring criticism on its corporate members and trigger disclosure requirements. This means that stronger campaign-finance and lobby-disclosure laws might hamper ALEC somewhat.

In any case, a business coalition that spends more than $1 million on its own staff’s salaries must consider the odds of raising money for any given cause. ALEC’s documents indicate that it is considering working on Native American Tribal Issues, but “there may be little to no private funding for this issue.” It is also considering issues that affect travel and tourism, but “individual companies that join will very susceptible to dropping ALEC if there is public pressure.” (Presumably, tourist industries rely on discretionary consumer choices and could alienate customers easily.)

There can even be such a thing as too much money. The documents suggest that ALEC is a little wary of advocating on behalf of casinos, because “according to Opensecrets.org, the gaming industry contributed directly over $64 million in the 2012 elections and $32 million lobbying expenses. … This industry could potentially out fund other industries at ALEC.”

(By the way, I love the irony that ALEC consults opensecrets.org–a good-government watchdog group–to fine-tune its own lobbying agenda, but it does not disclose any of its own activity as either campaigning or lobbying.)

Although I have itemized some challenges confronting industry when it attempts to influence government, the challenges are much worse for, say, homeless people or poor families. So none of the above is meant to suggest that the political system is fair. The ALEC documents still offer interesting insights into our political economy.