Corporate Ethics -- The Chamber's Non-Disclosure

October 12, 2010

by Faiz Shakir, Benjamin Armbruster, George Zornick, Zaid Jilani, Alex Seitz-Wald, and Tanya Somanader

CORPORATE ETHICS

The Chamber's Non-Disclosure

Since ThinkProgress.org reported on the U.S. Chamber of Commerce's foreign sources of funding last week, the media appears to have been confused about the report due to the spin coming from the right. Here are the facts that our report established: 1) The Chamber gladly accepts money from foreign companies, and the Chamber acknowledges that fact. 2) Those funds go into a general 501(c)(6) account, and the Chamber acknowledges that fact. 3) The Chamber refuses to disclose its system for ensuring foreign money is not influencing our elections, and the Chamber claims, "We are not obligated to discuss our internal procedures." While the Chamber claims that it does not use foreign funds to finance its election ads -- which is illegal -- thus far, the corporate lobby has refused to offer any proof to alleviate the concerns raised by the ThinkProgress report. Lawmakers and outside groups have called for investigations into whether the Chamber is using foreign money to fund campaign ads. Even President Obama weighed in last week. "Groups that receive foreign money are spending huge sums to influence American elections. And they won't tell you where the money for the ads come from," the President said. "This is a threat to our democracy."

WHAT WE KNOW: The Chamber receives funding from three foreign sources: 1) Foreign-based corporations, 2) Business Councils that operate out of the Chamber's Washington, DC headquarters to solicit foreign donations, and 3) independently-run AmChams that are based overseas. Most of the Chamber's foreign sources of funding come from large multi-national corporations which are headquartered abroad, like BP and Siemens. Business Councils in Bahrain and India have raised at least $300,000 in direct contributions to the Chamber's 501(c)(6) account. And "AmChams" are a red herring, as we explain in the next paragraph. There is no oversight of the Chamber's money flow -- something the Chamber fought successfully to prevent. "Money, however, is fungible," a Times editorial explained last week, "and it is impossible for an outsider to know whether the group is following its rules." The Chamber claims that it has a "system" in place to prevent foreign funds from being used for its political attack ads, but it refuses to disclose what exactly that system is or how it works. "To me, there is absolutely no doubt that this is a back-door way to get around what are long-standing and legitimate restrictions," Norm Ornstein, resident scholar at the conservative American Enterprise Institute said when asked about the Chamber's dubious funding, adding that regulations "are being flouted and abused even as we speak."

IT'S NOT ABOUT 'AMCHAMS':The Chamber has offered only a sliver of disclosure on the matter, saying that its foreign chapters, called "AmChams," pay "nominal dues" to the Chamber -- approximately $100,000 total across all 115 AmChams, thus suggesting that any foreign money coming to the Chamber's 501(c)(6) account is minuscule. This whitewash campaign -- started by the Chamber, picked up by the right wing, and filtered through to the mainstream media -- is beginning to cloud the primary issue with the Chamber's foreign funding: namely, that undisclosed monies from foreign entities may be funding its political attack ads. Right wingers such as Karl Rove and the Media Research Center have picked up and amplified the Chamber's narrative, which migrated to the Associated Press, the Washington Post and the New York Times. All of them published stories largely dismissing the main concerns about the Chamber's foreign sources of funding, choosing to focus instead on the "AmChams." The Times even disregarded the thrust of the ThinkProgress report as part of the "Washington spin cycle." The Times and Post stories have since provided cover for the rest of the Beltway media and right-wing talking heads. "The New York Times looked into the Chamber specifically and said the Chamber really isn't putting foreign money into the campaign," CBS Face the Nation host Bob Schieffer said on Sunday. That it does charge its foreign affiliates dues that bring in less than a hundred thousand dollars a year," he said. Using a neologism invented by Sarah Palin, former RNC chair Ed Gillespie said later in the program that the Times and Post "both completely 'refudiated' this charge of foreign money being funneled through the Chamber of Commerce into American campaigns."

HOW TO PUT IT TO REST: It's vitally important the public is informed about who are special interests paying for the TV advertisements that are trying to affect the outcome of U.S. elections. MSNBC's Chris Matthews explained the danger yesterday. Big corporations "engage in outsourcing. They send jobs overseas. They outsource their supply lines overseas. They do everything they can to screw the working person and make more money," he said, adding, "Where do they get their money? The U.S. Chamber of Commerce gets money from those very sources and uses it to elect people in Congress who will support that enterprise of shifting jobs overseas, cost cutting, eliminating the American workforce." The Chamber is currently advocating for tax loopholes that send American jobs overseas and its CEO Tom Donahue has said that outsourcing has been good for Americans. Indeed, just this week, the Chamber is using that money to air an unprecedented $10 million in political ads this week alone. In an interview with ABC News, White House senior adviser David Axelrod succinctly noted the main concern about foreign funding to the Chamber. "What we don't know is where the millions of dollars -- $75 million -- is coming from that they are using to fund these campaigns," Axelrod said, asking, "And the question back to them keeps coming back from us and others is why not simply say? What is it that is so nefarious about the sources of their money that they won't reveal it?" "This isn't a hard thing," Mother Jones's Kevin Drum wrote on Sunday, adding, "Either money from overseas goes into the Chamber's general fund, which is the same fund used to buy attack ads on Democrats, or it doesn't. All the Chamber has to do is demonstrate the latter and this will all go away. So what's the holdup?" However, the Chamber is refusing any transparency. "We are not obligated to discuss our internal accounting procedures," Chamber spokesperson Tita Freeman told the Washington Post last week. David Donnelly, national campaigns director for Public Campaign Action Fund said, "They basically say, 'trust us' when there's mounting evidence they're outsourcing the funding of their political attacks ads? Yeah, right."

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"I'd be for it."
-- Gov. Joe Manchin (D-WV), 3/17/10, saying he would have voted for the health care reform law

VERSUS

"The president's plan -- 'Obamacare,' as it's been called -- is far too reaching. It's overreaching. It needs to have a lot of it repealed. But you can fix that. If you can't fix that, repeal the whole thing."
-- Manchin, 10/11/10