U.S. Chamber of Commerce Faces Changing Times
At Centennial, Group Faces Reshaped Landscape
U.S. Chamber of Commerce President and CEO Thomas Donohue had much to celebrate when the business lobby marked its centennial last weekend. He also had cause for alarm.
The chamber has unleashed its costliest, most ambitious political mobilization effort ever, targeting about a dozen Senate and more than 50 House races in a campaign that, by some estimates, will top $50 million. It’s also spent more than $86 million on lobbying since the beginning of last year, outpacing all other advocacy groups.
But the chamber, which has been trumpeting its milestone in videos on YouTube and elsewhere, could be facing the political fight of its life. The Republican Party’s shift to the right has put the group at odds with lawmakers and advocacy groups allied with the tea party, fueling intraparty rifts on Capitol Hill and on the campaign trail. In addition, a new generation of super PACs that can raise and spend unlimited money is crowding the airwaves in key races across the country, threatening to drown out the chamber’s message.
The organization’s increasingly aggressive lobbying and advocacy stance has also riled erstwhile allies, including local chambers of commerce, small-business advocates and corporations such as Yahoo and PG&E Corp. And the group faces pressure from consumer and shareholder advocates that oppose undisclosed political spending. As a 501(c)(6) trade group, the chamber operates outside campaign disclosure rules.
The recent progressive campaign to pressure more than a dozen corporations — including Coca-Cola, Kraft Foods and Mars Inc. — to withdraw from the conservative American Legislative Exchange Council could serve as “a model that can be replicated” to encourage “similar defections from the chamber,” Christy Setzer, a spokeswoman for U.S. Chamber Watch, a labor-backed watchdog group, said in an email.
“There are always people who are going to oppose the business community,” responded chamber Senior Vice President Rob Engstrom, the group’s national political director. “We welcome the debate every single time.”
Engstrom said friction with some House Republicans elected with the chamber’s help in 2010 has been overblown. Several recent chamber-backed measures — including legislation to raise the debt limit, reauthorize highway programs and renew the charter of the U.S. Export-Import Bank — have run aground amid conservative opposition.
Chamber-backed lawmakers have consistently scored 70 percent or higher in the group’s Congressional vote rankings, Engstrom said.
“At the end of the day, if someone’s voting with you 70 percent of the time, they’re your friend,” Engstrom said, acknowledging he’d like to see scores in the 90th percentile.
Engstrom said the chamber’s political program “is growing in an exponential way” and will surpass the almost $33 million in political expenditures that the group made in 2010, itself a record for the organization. In addition to campaign ads, which already top $3 million, the chamber is building on a grass-roots program launched in 2007 dubbed Friends of the Chamber that’s built an email network of 7.5 million likely voters.
The chamber is capable of doing anything it wants without the need to form a super PAC and can draw on its century-old brand, Engstrom said.
Still, leading super PACs could well outspend the chamber this year, including the GOP-friendly American Crossroads, which, with its affiliated nonprofit, has pledged to spend $240 million in the current cycle. And the anti-government Club for Growth, which operates a new super PAC that’s raised more than $5 million, is running ads attacking Rep. Fred Upton (R-Mich.) and Sen. Dick Lugar (R-Ind.), both of whom won backing from the chamber.
“The super PAC development has given, I think, more voices the opportunity to engage in the political debate, and I think that’s a good thing,” Club for Growth President Chris Chocola said. He said the club is “a pro-free-market” organization, while the chamber is a “pro-business organization,” adding that he couldn’t recall working closely with the chamber on anything.
The chamber’s latest ad campaign, aimed at 20 House Members and Senators, has led some local chambers and business leaders in Montana and Virginia to distance themselves from the messaging. Two rounds of ads targeting Sen. Jon Tester (D-Mont.), which the campaign said totaled $600,000 and included one ad that misspelled his name, prompted Steve Malicott, president and CEO of the Great Falls Area Chamber of Commerce in Montana, to pen an op-ed assuring business leaders that his group didn’t support the ads or help underwrite them.
“As more and more businesses understand what’s going on [at the chamber], the more they’re saying ‘That’s not us,’” said Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce and vice chairman of an alternate business group dubbed the American Sustainable Business Council that purports to represent 100,000 businesses. “They do not represent the interests of the majority of small businesses in this country.”
The tension isn’t limited to small or progressive businesses. Corporations such as Apple Inc. and Exelon Corp. dropped their membership in the chamber after its leaders opposed Environmental Protection Agency climate regulations. More recently, Yahoo left the chamber after its campaign to back anti-piracy legislation.
Liberal activists are pressing for more defections. MoveOn.org and a group called Sum of Us have mounted campaigns, so far unsuccessful, to get Toyota Motor Corp. and Google to leave the chamber. A growing shareholder movement aimed at improving disclosure of political expenditures, including the money companies spend through trade associations, could bring more unwanted exposure.
“In many cases, the large companies provide the most significant amount of funding” to the chamber, said Bruce Freed, president and founder of the Center for Political Accountability, which has played a lead role in the push for corporate disclosure. “Will they continue to give the chamber the leeway that it has, or will the companies become more assertive?”