275 Investors Demand U.S. Chamber of Commerce Reveal Funding Sources

Amid allegations the U.S. Chamber of Commerce is using membership dues and donations from foreign firms to wage an all-out ad-war against Democratic politics, at least 275 members are demanding the group cease its “punitive campaign” against anyone who supported the Affordable Care Act and reveal their sources and methods of funding the ads.

The Interfaith Center on Corporate Responsibility (ICCR) has lodged its second complaint in two years against the U.S. Chamber of Commerce for what it sees as overtly partisan attack ads and possible misuse of members’ donations. The U.S. Chamber of Commerce has refused to reveal what sources of funding are being tapped to fund its political attack-ad campaign.

On 21 October 2010, the ICCR issued an open letter urging all of its members to send formal requests demanding the Chamber release the full details of its donation and campaign funding system. The letter read, in part, as follows:

The Interfaith Center on Corporate Responsibility and its members, a coalition of 275 institutional investors representing $100 billion in assets under management, including shareholders in [our company], are writing to express our profound concerns about our company’s potential role in furthering the highly politicized agenda of the U.S. Chamber of Commerce in the 2010 mid?term election and the Chamber’s continued hostile opposition to health care reform.

As widely reported in the press, the Chamber has taken an extremely antagonistic position on the Patient Protection and Affordable Care Act and is using its considerable political and financial influence to punish those members of Congress who voted in favor of the bill and further, to obstruct its implementation. Specifically, the Chamber is reportedly spending up to $75 million this November, much of it in the form of a calculated series of attack ads. As active proponents of quality and affordable health care for all Americans and investors in [our company], we are requesting that [our company] review and fully disclose how its membership dues to the Chamber are being spent to ensure that our company’s funds are not contributing directly or indirectly to this campaign. In addition we urge you as a dues?paying member of the Chamber to join with other companies to challenge the Chamber’s political campaign and its ongoing opposition to health care reform.

As responsible shareholders we are invested in [our company] because we believe you are committed to good corporate citizenship. We are concerned that membership in the Chamber could be construed by the public as implicit support for its deliberately divisive and exceedingly negative campaign. We believe this “guilt by association” could have a deleterious effect on our company’s image and ultimately, adversely impact shareholder value.

Apple Computer has left the U.S. Chamber of Commerce altogether, allegedly in protest over its overtly antagonistic political attacks against Democratic politicians and progressive politics. The organization is now seen as biased and as misusing its legal and tax status as a 501(c)(6) account holder to influence political outcomes in favor of one party over another.

Small businesses, which have benefited from the various reform policies of the Obama administration, have complained the U.S. Chamber of Commerce has misrepresented its relationship with them and has misused membership dues, in order to work on behalf of major multinational corporations and Republican politicians, many of whom have labored tirelessly over the last two years to oppose tax breaks that would benefit small businesses.

Questions have been raised about whether the U.S. Chamber of Commerce is actually violating federal election law by not disclosing the specific names and figures of every donation funneled into campaign advertisements. The Supreme Court ruling that unleashed this flood of secret corporate money to buy airtime and crowd out citizens’ voices, ironically called Citizens United v. FEC, actually operated on the assumption that all such donations would be disclosed in a near immediate and fully transparent fashion.

Justice Anthony Kennedy, the Supreme Court “swing vote” who wrote the majority opinion in Citizens United v. FEC, actually included in his ruling the (some say “naïve”) assumption that “With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions.” He went on to explain that the right of corporate entities to spend was conditioned on the presumption that: “This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

American Crossroads and Crossroads GPS (both groups founded by Karl Rove and Ed Gillespie), along with the U.S. Chamber of Commerce and other 501(c) groups, appear to believe that the ruling was at least in this respect a gross misreading of American electoral law, in that they reserve the right to keep absolutely secret. The problem is: if that is the case, the entire logic of the ruling would be undermined, necessitating a reversal and a ban on unlimited spending.

As Joe Conason has noted in Salon:

When Kennedy, along with his four conservative colleagues, overturned the century-old limitations on corporate funding of political campaigns, he justified this enormous gift to his fellow Republicans with what amounted to a false promise. Full and timely disclosure of the sources of the expected flood of corporate money, according to Kennedy, would serve the same essential purpose as the discarded restrictions, keeping voters informed by exposing politicians and their business benefactors.

Conason pulls no punches in his critique of Kennedy’s ruling, and many on the left and right of the political spectrum would agree his tone is fair, given the consequences in undermining the power of individual citizens’ voices to play a role in the election debate. He suggest that “With the zeal of an internet huckster, he claimed that technology would dispel the aura of corruption and secrecy that inspired McCain-Feingold and earlier attempts to restrict corporate money.”

For the most part, Conason’s critique is in line with all the critics of the ruling who predicted it would lead to an incredible glut of untraceable campaign spending, a more far-reaching and severe “aura of corruption and secrecy”, and the very deliberate and unashamed cloaking of a new pay-to-play system under the heady comfort of a legally unfounded Supreme Court mistake in judgment.

The fact that the 501(c) groups in question have roundly rejected any request that they disclose their source or methods of financing for political attack campaigns, and that they have seen fit to coordinate their spending with Republican political campaigns —both violations of the law as interpreted under Citizens United— implies they no more took seriously the legal founding of the ruling than do its critics.

According to Conason’s reporting for Salon:

A recent study by Public Citizen, the nonpartisan organization founded by Ralph Nader, shows that effective disclosure of spending by “independent” groups has dropped from 98 percent in 2004 to 32 percent this year. Political malefactors like Karl Rove, who were unable to conceal the sources of the “Swift Boat” sewer money six years ago, feel so liberated by Citizens United that they are now collecting and spending tens of millions of dollars without bothering to register as a political committee, let alone disclose the names and interests of their fat-cat backers.

The impunity with which millionaire and billionaire financial backers have poured money into these attack campaigns, some allegedly writing checks for as much as $20 million, suggests there was either 1) no legal founding for the Citizens United ruling or 2) such profound naïveté on the Court that the fitness of several justices to serve must be called into question.

That the U.S. Chamber now appears poised to reject its own members’ demands to know who is funding attacks that many of them perceive to run contrary to their interests, or to confer with membership about the nature of its advertising, suggests the possibility that there is, in fact, some wrongdoing to conceal. So far, the Chamber has provided no clear explanation as to how it can take foreign donations into the same account used for its attack ads, yet not use any of that money for those ads.