The Chamber of Litigation – part 2
Examining the U.S. Chamber of Commerce’s involvement in
some of the most notorious civil cases of the last decade.
The Chamber of Litigation – part 1
Despite condemning civil lawsuits, the U.S. Chamber of Commerce is
itself a prodigious litigator.
The Gilded Chamber
Bigger, Richer, and (Still) Undisclosed.
Sacrificing the Pawns
How the U.S. Chamber of Commerce Recruits Small
Business Owners to Lobby Against Their Own Self-Interest.
Latest Blog Posts
- Civil Justice
- Human Rights
- Money in Politics
- Workers' Rights
Tax reform has been a hot topic since Donald Trump was elected president. Big corporations and the wealthy have been salivating over the prospect of a major tax cut ever since Trump released his “Tax reform that will make America Great Again” (or for short #TRTWMAGA) plan during the campaign and another plan in April. Both of these plans are long on harmful policy ideas while being short on details, but they contain key assumptions that underpin Trump’s budget proposal released on May 23. The House Republicans put forward a more comprehensive, but just as problematic, blueprint for tax reform in June of last year.
Last week, the House Ways and Means committee held its first hearing of the year on comprehensive tax reform. It should come as no surprise that the U.S. Chamber of Commerce has been driving much of the narrative surrounding the GOP’s reform blueprint since it was so heavily skewed in favor of Big Business at the expense of average taxpayers. Prior to the hearing, in a letter to Chairman Brady, the U.S. Chamber noted that “significant rate reductions for corporations and pass-through entities, expensing of capital purchases, an internationally competitive system for taxing foreign earnings, and simplification” are meant by “tax reform” though all of those policies would damage, rather than reform our system.
While the tax reform plan Trump campaigned on would give trillions in tax breaks to the rich and large corporations, it is only briefly mentioned in his recent budget proposal, though it supplies much of the funding tradeoffs that “balance” the budget over 10 years. The components that are mentioned in the budget, however, stem from policy proposals championed by the Chamber, and can also be found in House Ways and Means Committee Chairman Kevin Brady’s and Speaker Ryan’s tax reform blueprint. So, the GOP tax reform plan is really the Chamber’s tax reform plan, and it is designed to benefit its membership, which is made up of some of the richest corporations and individuals in our country.
Below we detail some of the main ways in which the Chamber’s tax reform proposals would result in a major payday for wealthy individuals and corporations:
Death and Taxes: Both the Chamber and Trump wish to abolish the estate tax, which would represent a massive tax cut for the heirs of the very wealthiest families, and would cost $174 billion over the course of 10 years. While we haven’t seen Trump’s tax returns and likely never will, we can safely assume that Trump’s heirs could gain hundreds of millions or even perhaps billions of dollars if the estate tax were to be repealed. The Chamber has been a staunch opponent of the estate tax for years, claiming that it harms family businesses, though that’s plainly not true. In 2016, the individual exemption was $5.45 million, a pretty penny to inherit tax-free, and the Tax Policy Center Tax Policy Center estimates that “only 120 farms and small business, where at least half the assets are in farm or business assets, had to pay the estate tax in 2013”.
The Trump Loophole: Big businesses oftentimes masquerade as small businesses by organizing themselves as pass-through entities, a tactic used by hedge funds and real estate companies (See, Trump Organization LLC) to reduce their tax bills, costing the U.S. Treasury billions. Trump’s proposed tax plan lowers the tax rate for business income from 35% to 15%, (referred to as the “Trump Loophole”) and would reduce taxes paid by wealthy recipients of “pass-through” business income by $2 trillion over the course of 10 years. Reducing the tax rate on business income is something the Chamber is championing.
Reverse Robin Hood Health Care: The Chamber has long lead the fight to repeal the Affordable Care Act (ACA), and has been a proponent of the GOP’s (American Health Care Act) AHCA . If the ACA is repealed, manufactures of prescription drugs and medical devices would see a decrease in taxes levied on their products, thus pharma supports repealing the ACA, despite the fact that with its expanded coverage more people will be able to afford care including drugs and devices. So repeal of the ACA, yet again, results in tax cuts for the wealthy, at the expense of everyday Americans. The Joint Committee on Taxation estimates that repeal of the ACA would deliver roughly $144 billion over the coming decade to those with incomes of $1 million or more.
Conspicuously missing in the Chamber-Trump tax reform proposal? Any proposals that help average taxpayers by making corporations and wealthy pay their fair share: Eliminating a $4 billion tax preference that oil and gas companies receive (for which the Chamber lobbies), repealing a loophole that allows corporations to deduct unlimited amounts of CEO-pay from their taxable income, supporting real corporate tax reform that would require profitable multinational companies like Apple to pay taxes on offshore profits, or instituting progressive new taxes like on Wall Street trades.
The tax reform proposals championed by the Chamber and largely adopted by Trump, much like his newly released budget, are rigged for billionaires and big corporations- they constitute comprehensive tax giveaway to the superrich and a payback scheme for big business. The Chamber states that it “will be at the table throughout the process—because anyone who isn’t at the table risks ending up on the menu.” If the Chamber can help it, average tax payers, many of whom voted for Donald Trump because they believed his promises to stand up for working people, will most definitely not be getting a seat at the table.
Unfortunately, as Trump’s tax reform proposals yet again prove, it’s not the people’s agenda that he’s intent on implementing, but rather the Chamber’s agenda.
The new Republican Congress is only four months old, but it’s already shown that it cares far more about big corporations than the millions of Americans who work for them. This Congress has made the U.S. Chamber of Commerce’s priorities its priorities, and this week, the House is set to vote on a bill that is the latest front in the Chamber’s War on Workers.
The deceptively named Working Families Flexibility Act (H.R. 1180/S. 801), introduced by Rep. Martha Roby (R – Ala.) and Sen. Mike Lee (R – Utah), and vigorously supported by the Chamber would allow employers to offer comp time as an alternative to time-and-a-half overtime pay when employees work more than 40 hours in a week. H.R. 1180 would give even more power to employers over employees’ wages and working hours and further undermine workers’ ability to make ends meet, while doing nothing to increase flexibility for employees.
Last month, Leonard Court testified in support of H.R. 1180 on behalf of the Chamber at a House Education and Workforce Committee Hearing. In his testimony, Court stated, among many other false narratives, that “the decision to opt for comp time always rests with the employee, not the employer.” Unfortunately, this is not the case. H.R. 1180 further widens the power gap between an employee and her or her employer in a number of ways, making it a bill that Public Citizen opposes.
Under the law, employers would have the final say as to whether to offer an employee comp time instead of overtime, and have the power to deny an employee’s request to use their comp time. For example, an employee who had opted to receive comp time for overtime hours worked could have enough hours saved up to take off work to care for a sick family member, but could still have her request denied by her boss.
What’s more, there is no guarantee that an employee who does not accept comp time in lieu of time and half overtime pay would not find herself penalized with fewer hours and loss of overtime work. An employer who wants to avoid paying overtime may just stop asking employees that refuse comp time to work overtime and instead ask employees amenable to comp time to work extra hours. Such employees will see their earnings decline without any corresponding benefits if this bill becomes law.
The Working Families Flexibility Act- or rather the Betrayal of Working Families Act- would be a step in the wrong direction for hourly, full-time workers as well as for salaried, non-exempt workers who are eligible for overtime pay. Instead of providing working people and their families with the time off and the financial stability they need to care for themselves and their loved ones, this “flexibility” bill offers forced choices and false promises.
In addition to providing employers with even more power over their employees, H.R. 1180 increases the already not-insignificant incentive for employers to hire fewer people and instead rely on existing employees working overtime hours to get the job done. Under H.R. 1180, employers can “pay” for these overtime hours in future comp time, as opposed to having to pay for them immediately in wages. This in turn could mean that H.R. 1180 could result in less hiring, leaving more people unemployed.
Workers are never better off if they accept comp time in lieu of overtime pay, but instead, can end up in a much worse situation with increased risk and delay in pay. The Fair Labor Standards Act is already in place to allow an employer to grant time off to employees who work overtime, and H.R. 1180 adds nothing new in this regard.
This legislation is a classic case of Chamber smoke and mirrors. This bill would make it harder for people who need to work extra hours to pay their bills while providing no real guarantee of increased comp time. Its ultimate goal is to make labor cheaper for corporations. Of course, in so doing, it takes money out of the pockets of working people.
It’s a shame that the GOP Congress has embraced another Chamber-touted windfall for big business. But why should we be surprised? After all, when the Chamber and other corporate interests spend big on elections, we wind up with politicians who are beholden to corporations rather than the American people.
How would you react if we told you that popular brands such as Disney, Pepsi, and Gap were funding the Trump agenda? That your hard-earned money was going to support Steve Bannon’s dreamed of “deconstruction of the administrative state” which would wipe away a whole host of public protections?
Surprised? Upset? Angry?
Sorry, but it’s true. You see, it turns out that Disney, Pepsi, and Gap all fund Washington’s most powerful lobbying group, a group that is the driving force behind much of the Trump/GOP agenda.
Which group is that? The U.S. Chamber of Commerce.
The Chamber, backed by nearly $275 million in corporate money, is Washington’s proverbial 800 pound gorilla. On issues as diverse as climate, clean air, clean water, fossil fuel production and pipelines, worker safety, financial regulation, net neutrality, healthcare, overtime pay, and deregulation in general, Trump and the GOP are ripping entire pages from the Chamber’s playbook.
Here at Public Citizen’s Chamber Watch project, we wanted to know which companies were funding the Chamber/Trump agenda, and we were particularly interested to know if companies that have made public commitments on climate, sustainability, clean water, and public health were funding the Chamber despite its long history of anti-climate, anti-environmental, pro-tobacco advocacy.
Based on our review of publicly-available information as well as conversations with company officials, we learned that many companies that have – at least on paper – good policies on climate, sustainability, and/or public health are still funding the Chamber.
And Disney, Pepsi, and Gap are among these companies.
Today, a diverse coalition of more than 50 groups in more than a dozen countries asks Disney, Gap, and Pepsi to stop funding a trade association that works against the environmental and public health policies these corporations claim to support. After all, how can we take these companies’ commitments on climate and public health seriously when they financially support an organization that is one of the lead plaintiffs against the Clean Power Plan, constantly lobbies for the fossil fuel industry, and lobbies in dozens of countries against anti-smoking laws and regulations?
Already, companies such as Apple and Pacific Gas & Electric have left the Chamber due to the Chamber’s anti-climate advocacy, and CVS left as a result of the Chamber’s pro-tobacco work. It is time for Disney, Pepsi, and Gap to do the same. To continue to fund the Chamber would be to render meaningless the positive steps these companies have taken on climate and/or tobacco.
What’s more, continued support of the Chamber poses a significant reputational risk to these companies, one that should concern their shareholders. Not only does membership in the Chamber render them complicit in the Chamber’s anti-climate and pro-tobacco advocacy, it also associates them with an explicitly partisan group.
In 2016, the Chamber formed an alliance with leading Republican luminaries to “Save the Senate” for the GOP. The Chamber ultimately wound up spending almost $30 million in dark money on congressional races, more than any other group that doesn’t disclose its donors. All of this money benefited Republican candidates.
Like all companies, Disney, Pepsi, and Gap have ideologically diverse customer bases, and presumably many of their customers would be angry to learn that companies they patronize are supporting such a partisan group. In an era when more and more consumers are linking their purchasing decisions to a company’s political activities, it is especially risky for brands like Disney, Pepsi, and Gap to associate themselves with a hyper-partisan group such as the Chamber that is one of the architects of the Trump agenda.
The Chamber’s agenda is bad for both public health and the health of the planet and its secret money partisan political spending is bad for the health of a transparent democracy. The time has come for Disney, Pepsi, and Gap to drop the Chamber.
Egyptian President Abdel Fatah Al Sisi took power in a military coup in 2013, overthrowing the country’s democratically elected president. Since that time, Sisi has embarked upon a violent crackdown on democratic freedoms. It is estimated that he has arrested and jailed more than 40,000 political prisoners. Journalists are among the detained and torture is allegedly common in Sisi’s prisons. Freedom of speech and freedom of assembly are severely abridged and civil society groups are routinely persecuted. As if all this weren’t bad enough, Sisi’s security forces have been implicated in a wave of extra-judicial killings.
Ignoring this abysmal human rights record, President Trump invited Sisi to Washington and lavishly praised him during their White House meeting on April 3rd. Given Trump’s affinity for strongmen, we perhaps shouldn’t be surprised that he would fête a leader with such a horrifying record of human rights abuses.
But Trump wasn’t the only person who fêted Sisi while he was in Washington. So did U.S. Chamber of Commerce President Tom Donohue. He welcomed Sisi to the Chamber’s headquarters across the street from the White House and one of his lieutenants declared that “[e]arly indications show we have entered a promising new period defined by the opportunity to forge a stronger partnership between the United States and Egypt based on common, vital interests.”
What are those “common, vital interests?” The Chamber highlights the two nations’ $5 billion in bilateral trade. It also mentions regulatory cooperation, entrepreneurism, and intellectual property rights as priority areas on which to focus.
Not one word on human rights.
Unfortunately, the Chamber’s embrace of Sisi and its silence about his appalling human rights record is business as usual for the group. Time and again, the Chamber has welcomed foreign leaders accused of gross human rights violations or opposed U.S. government actions to protect human rights overseas.
For example, in August of 2016, the Chamber hosted the foreign ministers of Uzbekistan, Turkmenistan, Kazakhstan, Kyrgyzstan, and Tajikistan despite the fact that all five of these nations engage in serious human rights abuses according to Human Rights Watch. What’s more, Turkmenistan and Uzbekistan are accused of using the largest state-sponsored forced labor systems of cotton production in the world. One has to wonder why an American business group would want to associate itself with business practices that are antithetical to the responsible business practices that many of its member firms publicly promote.
In January of 2016, the Chamber urged the elimination of responsible investment reporting requirements in Myanmar. This despite the fact that Myanmar’s repressive military remains in tight control of many economic sectors, creating a risk that foreign investment in the country could lead to complicity in human rights abuses. What’s more, the one company that also offered written comments on the reporting requirements, Gap (which is also a Chamber member), supported these reporting requirements as being a useful for tool for improving labor practices and human rights in Myanmar.
The Chamber has also been a consistent opponent of transparency with respect to conflict minerals. Proceeds from the mining of these minerals have funded the ongoing conflict between various armed factions in the Democratic Republic of the Congo (DRC), which is responsible for an estimated 5.4 million deaths as well as an epidemic of sexual violence. In an effort to curtail international demand for minerals mined in the DRC and thereby extinguish the flow of money fueling the fighting, the U.S. government required that companies producing and/or selling products containing such minerals determine whether their products contained minerals from the DRC and publicly disclose whether their products were free of such minerals. The Chamber sued to block the implementation of this rule. In suing to block the conflict mineral rule, the Chamber ignored the position of companies such as Microsoft, General Electric, AT&T, HP, Dell, Intel, IBM, and Verizon (at least some of whom are Chamber members) who all publicly support the rule.
Alien tort statute litigation is another area where the Chamber has shown a complete lack of concern for human rights. The alien tort statute gives non-citizens the right to sue in U.S. courts in certain circumstances. In these alien tort cases, the Chamber has repeatedly supported multinational corporations, arguing that they shouldn’t be sued in U.S. courts for alleged complicity in human rights abuses overseas. For example, the Chamber supported Royal Dutch Shell, accused of complicity in a Nigerian government campaign against demonstrators protesting environmental degradations caused by Shell’s oil drilling. The campaign is alleged to have involved rape, looting, and pillaging. The Chamber also supported Rio Tinto, accused of complicity in atrocities including rape, pillaging, aerial bombardment of civilians, and the burning of villages during a civil war in Papua New Guinea.
The Chamber’s blatant and repeated disregard for human rights has not only placed it at odds with individual companies on specific policy questions, but it has also shown the Chamber to be increasingly out of step with the growing trend of greater business attention to human rights issues. The United Nations has developed guiding principles for business and human rights under the auspices of its global compact. An increasing number of companies around the world are signing on to these principles.
Unfortunately, the Chamber remains wedded to its “profits before people” way of thinking. While the Chamber’s total indifference to human rights is of course morally bankrupt, it is ultimately short-sighted and bad for business too. Those thousands of jailed Egyptians, thousands of enslaved Turkmen and Uzbeks, and millions of dead Congolese, they also represent so many economic actors – consumers but also innovators and entrepreneurs the Chamber claims to champion – who have been quite literally erased from the economy by the strongmen or armed militias who rule over them. What’s more, autocratic, violent regimes are incompatible with the climate of free-wheeling critical thinking that favors innovation and economic growth.
The Chamber’s support for tyrants such as Sisi begs the question: does the Chamber really even care about economic growth, innovation, and entrepreneurism? Or is it just dedicated to defending the modern feudal order, preserving the rights of the strong while resisting any attempts to empower the weak?
You might think that an organization like the U.S. Chamber of Commerce would be supportive of working women. After all, when women enter the workforce, they contribute to economic growth. And the Chamber has made “#LetsGrow” its mantra for 2017.
Unfortunately, you would be wrong. In fact, the Chamber, like some members of the Republican Party it funds to advance its corporatist agenda, has been waging a decades-long war on working women.
Perhaps no other incident epitomizes the Chamber’s attitude towards women better than a blog post on the Chamber website, which has since been deleted and swept under the rug. In this piece, former Chamber Senior Director of Communications Brad Peck asserted that equal pay advocates have “a fetish for money” and that if women didn’t wish to worry about the implications of being paid less than their male counterparts, they should “not overlook the obvious, immediate, power-of-the-individual solution: choosing the right place to work and choosing the right partner at home.” Because, after all, the Chamber’s logic goes, if more women only married well, they wouldn’t have to worry about silly little things like equal pay for equal work. To add insult to injury, the piece was written on the anniversary of the 19th amendment to the U.S. Constitution, which granted women the right to vote.
And while the Chamber may have briefly interrupted what we imagine is a never-ending Mad Men binge-watching party in the office to apologize for the blog post, it has yet to interrupt its lobbying campaign against legislation that would advance equity for women.
Dating back to at least the 1970s, the Chamber has long opposed workplace policies for women relating to equal pay, pregnancy, and medical leave. In 1977 the Chamber lobbied against amending the 1964 Civil Rights Act to cover women from discrimination due to pregnancy. Just a year later, in 1978, the Chamber used the argument that pregnancy is a “voluntary” condition in its opposition to the Pregnancy Discrimination Act. We assume that these Chamber policy decisions were made in a room by people who looked a lot like this.
In 1987, the Chamber warned that the Family and Medical Leave Act would set a “dangerous precedent of federally mandated employee benefits.” What it didn’t mention is that in addition to covering pregnancy-related leave, the FMLA simply allows women to receive wages while recovering from a serious illness, caring for an ill family member, or newborn.
In 1998, the Chamber opposed President Clinton’s push for equal pay, saying that wage disparities are due to the interruption of many women’s careers in order to raise a family, as opposed to discrimination.
In 2007, the Chamber sided with Lilly Ledbetter’s employer in her suit demanding equal pay because the Chamber’s lawyers complained that Ledbetter’s “tear-stained testimony” might prejudice the jury against her employer.
But, the Chamber didn’t stop there: In 2009, it urged members of Congress “to oppose the ‘Ledbetter Fair Pay Act.’” The Lilly Ledbetter Act corrected the 2007 decision by the Supreme Court that required Ledbetter to bring her pay discrimination claim within 180 days of receiving her first unequal paycheck, even though she did not know she was being paid unfairly until years later. The Act clarified that every discriminatory paycheck restarts the 180 day clock to bring a claim. This legislation was a hugely important win for women toward eliminating the gender pay gap.
As if lobbying against a ban on pregnancy discrimination and opposing equal pay for equal work salary wasn’t enough, in 2009, the Chamber went so far as to lobby against legislation that would allow rape victims to bring lawsuits against their employers.
Recent years have not brought about a sudden change of heart and the Chamber continues its war on women. In both 2014 and 2015, the Chamber opposed to the Paycheck Fairness Act, legislation that would address the pay gap by requiring companies to justify pay discrepancies based on legitimate factors such as education, training, and experience. And this year, when the Chamber laid out its labor priorities for the new congress, it stated that while Democrats are still fighting “what they ostensibly see as lingering inequality in wages between men and women,” Republicans should use the opportunity to focus more on anti-retaliation and clarification of employers’ defenses.
When you get right down to it, as far as the Chamber is concerned, receiving equal pay for equal work decreases the profits of the companies that currently engage in gender discrimination. For the Chamber and many of the giant corporations that fund it, inequality is a lot cheaper than closing the pay gap which still remains at 22 cents on the dollar for fulltime, year-round work. The Chamber’s steadfast opposition to equal pay for equal work and other labor protections benefitting women makes us wonder, who really has the “fetish for money?”
If you’re a progressive, you might feel tempted to pop the champagne corks after the spectacular collapse of the GOP’s effort to repeal the Affordable Care Act (ACA) last week making it seem as if President Trump and Republican Congress may not be ready for prime time governing.
With all of these stories dominating the news cycle, some might think that Trump administration and GOP Congress are simply not ready to govern. Hobbled by incompetence and internal squabbling, they seem to lurch from one fiasco to the next.
However, the daily headlines of scandals mask one area where Trump and the GOP Congress have been successful at advancing the Republican agenda: they have already succeeded in pursuing the most aggressive regulatory rollback since the Reagan administration.
The main driver of this deregulatory agenda is the big business behemoth that is the U.S. Chamber of Commerce. Sure, it may have been Steve Bannon who uttered the words, “deconstruct the administrative state,” but it is the Chamber along with its big business allies who behind this drive to gut critical public protections.
So forgive us for being Debbie Downers and for corking the champagne as we take a moment to bring you up to speed on what the GOP, Chamber, and Trump have succeeded in doing during the first two months of this administration.
The past two months have been marked by an aggressive use of the heretofore rarely used Congressional Review Act (CRA), which allows Congress to strike down regulatory protections issued in the final months of a previous administration using expedited procedures. Hundreds of public protections are at risk through the CRA, 15 have been repealed by the House, 12 in the Senate, and already 7 have been signed by Trump.
In February, Trump signed three CRA resolutions, reversing Obama regulations banning Social Security recipients with a mental impairment from buying firearms, protecting streams from water pollution by coal mines, and requiring oil, gas, and mining companies to publish payments they make to foreign governments. The Chamber was a big booster of both of these giveaways to the fossil fuel industry.
Just this week, Trump signed four more CRA resolutions. Among them was the “Fair Pay and Safe Workplaces” rule, which barred companies from receiving federal contracts if they had a history of violating wage, labor or workplace safety laws. The U.S. Chamber has been lobbying against this rule since its creation, in an effort to protect big federal contractors from being finally held accountable. Another of these was a Bureau of Land Management rule known as “Planning 2.0,” which gave the federal government a greater role in land use decisions. This rule was opposed by the energy industry, and therefore the Chamber strongly lobbied for its demise.
Unfortunately, the CRA isn’t the only tool in the Trump Administration’s toolbox. Trump has also issued several executive orders (EOs) undoing our public protections. He issued an EO mandating that two regulations are to be repealed for every new one that goes on the books. This week, he signed an EO aimed at undoing numerous climate initiatives put in place by the Obama administration. The EO includes telling the EPA and other agencies to rollback components of the Clean Power Plan, reconsider carbon standards for new coal plants, reassess methane emission regulations, as well as several other changes sought by the fossil fuel industry. And, earlier this month, Trump announced the EPA would review and likely weaken Obama’s fuel economy standards for cars and light trucks in the post-2022 period. While there may be obstacles to achieving all of this, it is still a huge step in the wrong direction if we want to have a serious chance at limiting the impacts of global warming. And, sadly, these deregulatory these moves were all sought by the Chamber, which is no stranger to battling Obama-era environmental policies. In the course of just 3 years, the Chamber opposed the EPA in court 26 times and they have lobbied on these issues for years.
Most recently, the U.S. House of Representatives did the bidding of corporate America by using the CRA to vote to repeal Broadband Privacy Protections, which prevent Internet Service Providers (ISPs) from tracking the browsing habits of customers without their permission and place obligations on ISPs to keep their customers’ data secure, giving customers more control over their personal data and privacy. Earlier this month the Chamber sent a letter to the Science and Transportation Committee leadership urging members to vote in favor of this CRA stripping Americans of their internet privacy.
So there you have it. Trump and the GOP Congress are successfully dismantling many important public protections including those protecting clean water, clean air, worker health and safety, and internet privacy. And the Chamber has been behind most of these regulatory rollbacks we’ve seen in the past 60 days. While Steven Bannon may falsely claim that deconstructing the “administrative state” will benefit the people, the reality is that it is not the people that are behind this agenda, it is the Chamber and giant corporations that are pushing it. Empty populist rhetoric aside, the administration’s deregulatory zeal is proof positive of the overwhelming influence of its corporate masters.