State AGs' corporate cash cow
The AG Alliance, a rising organization of state attorneys general, is drawing criticism for courting sponsorships for lavish conferences and foreign junkets from a stable of lobbyists and corporate patrons.
Why it matters: State AGs have immense influence over public safety and consumer decisions with huge financial implications for corporate America. Some companies are ponying up tens of thousands of dollars to get exclusive access to officials who might one day be asked to investigate or prosecute them.
Driving the news: Chris Toth, who stepped down as executive director of the National Association of Attorneys General on June 1, contended in his retirement letter that the AG Alliance — a competitor — is selling access to lobbyists and corporate patrons.
- The AGA, which began as the Conference of Western Attorneys General, has grown from a regional group to one that represents AGs in 45 states, four U.S. territories and the District of Columbia.
- Toth wrote that he's "increasingly alarmed at the growing influence of lobbyist and corporate money in the attorney general arena, particularly involving entities that are being investigated and/or sued by AGs," but he did not name any specific companies or investigations.
- The AGA "seems to exist for no other reason than to provide access by such actors to attorneys general" at regular meetings, where donors "essentially buy programming," he alleged.
- "AGA is overwhelmingly dependent on corporate and lobbyist money for its activities. That means when you go on a delegation, some lobbyist or corporation is paying for that. When you have your room and airfare paid for, some portion of that is coming from someone you are investigating or suing."
Between the lines: AGA includes attorneys general from both major parties, but its influence has swelled in recent years as some Republican AGs — including in Alabama, Missouri, Montana and Texas — severed ties with NAAG over what they described as a leftward drift.
- Texas AG Ken Paxton spoke at last week's AGA meeting. His panel on "evolving litigation trends" examined how "attorneys general and businesses can navigate these issues together."
- It was one of a number of panels that brought together state AGs and executives at companies that support AGA financially.
By the numbers: Financial filings from the Conference of Western Attorneys General, which says it formed AGA to expand its mission beyond Western states, show a deep reliance on donor funds.
- More than half its income in the 12 months ending in June 2020, and nearly two-thirds of its revenue the year before, came from sponsorships, according to its most recent publicly available audit report.
- In contrast, NAAG gets most of its income from dues paid by its member AG offices — and portions of legal settlements those offices secure.
The intrigue: In response to a request for comment, the AGA referred Axios to a statement from NAAG's president, Iowa AG Tom Miller, who distanced his own group from Toth's remarks.
- "They were his statements alone and they were not made on behalf of NAAG," Miller said. "Both [AGA and NAAG] play important roles in supporting our nation’s attorneys general, and our constituents benefit from the organizations’ ongoing growth and strength."
- NAAG declined to comment further on the matter.
How it works: AGA's membership is tiered, according to an internal report obtained by Axios. In 2020, "legacy" donors, its top tier, paid $50,000 for perks including "access to invite-only events."
- Lower tiers also get benefits, such as promotion in AGA event materials and early access to and priority hotel reservations at the organization's retreats.
- Access to AGA meetings, where company executives can meet state AGs and discuss major policy issues, is available only to the organization's donors, according to that report.
- Programming materials for AGA's annual meeting, which took place last week in Sun Valley, Idaho, listed more than 200 companies, trade associations and lobbying firms across AGA's 10 sponsorship tiers.
Sources familiar with both AGA's and NAAG's work say the former has developed a reputation in AGs' offices as a more opulent competitor that's known to wine and dine state officials and their staffers.
- AGA "is all about the trips, all about the experience, all about the fun," a former senior aide to one member AG told Axios. "They've been starting to encroach on the NAAG space, trying to be the alternative to NAAG, in that it was this bipartisan organization, but they were the more fun kind of group."
Often that entails junkets to foreign countries, where AGA has set up exchange programs with senior law enforcement officials to "facilitate a cooperative relationship with government partners who share the goal of strengthening legal systems and the Rule of Law," as an AGA spokesperson put it in an emailed statement.
- Its financial patrons have a hand in that as well. Three sources familiar with the trips told Axios that AGA delegations to Morocco and Qatar were organized in collaboration with consultant Rick Smotkin, whose firm is listed as an AGA sponsor.
- Both of those nations' governments are Smotkin clients, according to foreign agent filings. His work has focused on arranging trips to those countries by U.S. state and local government officials, a common practice for foreign governments looking to build relationships with American policymakers.
- Smotkin did not respond to inquiries about his involvement.