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.
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- Civil Justice
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- Money in Politics
- Workers' Rights
While many Americans are signing up for a gym membership or vowing to read for fun, the U.S. Chamber of Commerce is at it again with a slew of resolutions for the new year that, while they may line the pockets of Big Business and the very rich, promise nothing but trouble for the rest of us and the planet we call home. Without further ado, our list of the Chamber’s new year’s resolutions for 2017:
- Shed those last few pounds regulations
Now that several Chamber-alums are occupying key spots on the transition team, the Chamber has set its sights on kicking off the new year with a rollback of federal regulations. The Chamber will continue to flex its dark money-fueled muscle in the hard-fought battle to pass the Midnight Rules Relieve Act (MRAA). The MRAA would allow Congress to revoke a plethora of public protections under the Congressional Review Act with just one vote. This would have severe consequences for our health, safety and economic security and the Chamber’s support of the MRAA demonstrates once again that it sides with big corporations’ bottom lines over people’s well being. Also making the top of their resolution list is the passage of the Regulatory Accountability Act (RAA) which would add dozens of new requirements to the regulatory process and would allow non-expert judges to second-guess the decisions made by an agency’s technical experts, thereby giving industry additional opportunities to attack public protections. New year, same deceptively named legislation!
- Get Outdoors While You Still Can
While we don’t know if 2017 will finally be the year the Chamber makes up its mind on the science of climate change, we do know that their list of resolutions includes killing the Clean Power Plan, the Obama administration’s signature initiative to reduce greenhouse gas emissions from power plants. The Chamber is also advocating to undo the Clean Water Rule, designed to protect streams and wetlands, and by extension, our drinking water. And if that wasn’t enough, the Chamber is also fighting to reverse President Obama’s decision to close much of the Atlantic and Arctic basins to offshore drilling. If the Chamber gets its wish, the great outdoors may not be so great anymore.
- Spend Less Money…On Workers
The Chamber has yet again resolved to stand up for the interests of very wealthy individuals at the expense of hardworking Americans. The Chamber will continue to oppose an increase in the minimum wage and implementation of the overtime rule that would make millions of middle income Americans eligible for overtime pay. The Chamber also intends to stiff hardworking Americans by asking for a repeal of several other Obama administration Executive Orders, including (but certainly not limited to!) the Establishing Paid Sick Leave for Federal Contractors EO, which provide workers at companies doing business with the federal government the opportunity to earn up to 7 days of paid sick leave per year. New year, but no new money in your paycheck!
- Get Organized Unorganized
Just like some of us resolve every year to spend less money eating out or to stop smoking, the Chamber resolves every year to weaken unions and the protections they offer workers. In 2017, the Chamber has resolved to continue pushing laws weakening unions, seeking to build on “victories” in states such as Wisconsin, Michigan, and Indiana. New year, same war against unions!
- Party Like it’s 2007
Ain’t no party like a financial crisis party! In keeping with its role as a lobbyist for Wall Street, the Chamber will continue its fight to roll back the Dodd-Frank Act, passed in the wake of the financial crisis as a way to prevent future financial crises. Dodd-Frank instituted a host of consumer protections as well as limits on reckless risk taking by banks. One important part of Dodd-Frank that the Chamber adamantly opposes is the Volcker Rule which prohibits big banks from using depositors’ funds for proprietary bets. The Chamber will also continue to oppose the Consumer Financial Protection Bureau’s efforts to combat unfair forced arbitration clauses and class action bans. These “rip-off” clauses prevent consumers from having their day in court and offer big corporations another way to avoid accountability for corporate wrongdoing as the recent Wells Fargo scandal has shown. Another safeguard that the Chamber seeks to eliminate in 2017 is the fiduciary rule, which protects retirement savers from greedy financial advisors. New year, same defense of Wall Street greed!
So while many of us are wondering if we can really make it to the weekend without a drink or just how far into February our other resolutions will last, we should be more concerned that the Chamber is working to strip us of public protections, all while destroying the only planet we’ve got. Perhaps we should add a resolution to our list: oppose the U.S. Chamber’s harmful agenda.
Last week, Public Citizen’s Chamber Watch project began a series exposing the U.S. Chamber of Commerce as one of the central actors pushing the modern day Republican Party’s extremist agenda. This week, we dive into the Chamber’s dark money spending during the 2016 election cycle. As discussed in last week’s blog, under Tom Donohue’s leadership, the U.S. Chamber of Commerce has gone from a rather staid business advocacy organization with ties to both political parties to one that has become rabidly partisan.
In the 2016 election cycle, however, the Chamber took partisanship to even greater heights. For the first time ever, 100% of the Chamber’s elections spending benefited Republicans. What’s more, the Chamber formed an explicit alliance with leading Republicans (enter Mitt Romney, Jeb Bush, Carly Fiorina) whose goal was to “Save the Senate” for the GOP and prevent a Democratic takeover of the closely-divided body. The Chamber was so determined to preserve a Republican majority in the Senate that it even spent big against Democrat Evan Bayh, a man it used to employ, and top Chamber officials often disparaged and mocked Bayh and other Democratic candidates on social media.
The Chamber, like other groups organized under section 501(c) of the tax code, is not legally required to disclose the sources of the money it independently spends on elections. It and other dark money groups can serve as conduits for anonymous donations from corporations and other wealthy special interests to flood elections, making it particularly dangerous to democracy. In a recently released report, “The Republican Party and the Chamber of Secrets,” Chamber Watch analyzed campaign spending data from the Center for Responsive Politics to get a fuller picture of the Chamber’s election spending.
The Chamber was the second largest non-disclosing outside spender in the 2016 cycle, after the National Rifle Association, and was the largest non-disclosing outside spender on congressional races. It spent nearly $30 million, all to benefit Republican candidates. [Table 1]
The Chamber spent most heavily on races for the U.S. Senate, spending a total of $25.8 million in 10 Senate races. Nine Senate races saw at least $25 million in outside spending – political expenditures from outside groups that are independent of a candidates’ committee. The Chamber reported expenditures in eight of these nine races and in eight of the 10 congressional races that drew the most outside spending in 2016. [Table 2]
Both the Pennsylvania race, and the New Hampshire Senate contest broke spending records, with campaigns and outside groups spending $164 million and $121 million, respectively. In the Pennsylvania race between Pat Toomey (R) and Katie McGinty (D), the Chamber was the largest non-disclosing outside spender out of 27 groups, spending more than $6.1 million. In the New Hampshire race between Maggie Hassan (D) and Kelly Ayotte (R) the Chamber was also the largest non-disclosing spender out of 14 groups, spending more than $3 million, while the next largest non-discloser spent just over $700,000. The Nevada Senate race saw the third highest level of outside spending, with the Chamber spending more than $4.2 million, more than any of the other 26 dark money spenders. Out of the top ten races with the most outside spending, the Chamber was the highest spender among non-disclosing groups in five races. [Table 3]
Of the ten marquee Senate races in 2016, the Chamber spent in 9 of them. The Republican candidates it supported won 7 of those 9, guaranteeing that the Senate would in fact be “saved” for the GOP. While it’s of course impossible to say that the Chamber’s dark money deluge in these races accounted for the slew of GOP victories, it certainly may have helped tip the balance in the closer races.
The Chamber’s deluge of dark money in congressional races should alarm all those concerned about the health of our democracy. When the nation’s leading business group can form an explicit alliance with one of our two major parties and solicit unlimited donations from anonymous donors, individual voters and small businesses should be worried that their voices will be shut out.
The Chamber’s 2016 election spending makes it abundantly clear that rather than being a voice for American business, the Chamber has become a very loud, very powerful voice for the Republican Party.
Over the last few decades, businesses have become far more focused on increasing profits than on providing quality workplaces for their employees. Executives have come to regard workers as simply a cost center, to be squeezed ever more tightly. Indeed, labor’s share of national income has dropped somewhere between 3 and 8 percent since 1980, a trend that has accelerated since 2000. This drop annually shifts about $750 billion from workers to business owners, meaning gains flow disproportionately to the already well-off. This shift is one of the drivers of deepening income and wealth inequality in the United States.
The U.S. Chamber of Commerce has been among the most forceful proponents of such Darwinian thinking. It opposes any increase in the shamefully low minimum wage. And it has led the charge against the overtime rule, which would raise the salary level below which salaried employees are entitled to be paid for overtime from $23,660 to $47,500 per year.
Real world business evidence is now beginning to mount showing that the Chamber’s opposition to higher wages is wrongheaded, not just for the millions of workers it shortchanges, but for the businesses the Chamber claims to represent. Many retailers have discovered that they see greater returns when they pay their employees better wages.
Costco recently raised its starting salary to $13 an hour for full and part time employees. Costco Co-Founder Jim Sinegal has observed that paying good wages “is not altruism, it’s good business,” which in turn leads to increased productivity and lower rates of employee turnover. Ikea has adopted a new policy that increases employee wages based on the prevailing living wage of the region in which they work. This resulted in an average increase of 17 percent over the company’s average minimum hourly wage. As a result of this new policy, Ikea experienced a 3 percent drop in employee turnover rates.
Perhaps the most dramatic example of the business case for paying employees more comes from where you might least expect it: Walmart. In 2014, the company realized it had a serious problem. According to a recent New York Times report, “shoppers were fed up. They complained of dirty bathrooms, empty shelves, endless checkout lines and impossible-to-find employees. Only 16 percent of stores were meeting the company’s customer service goals.” The retail giant, famous for treating employee wages as a cost to be curtailed, was watching sales plummet; revenue fell for the first time in 45-years.
Faced with a serious threat to its profitability, Walmart was forced to find a solution. Its executives, breaking with the last few decades of management dogma, began to suspect that perhaps paying employees more and offering better opportunities for advancement might offer a solution to Walmart’s problems. Starting in early 2015, Walmart raised hourly pay for workers and began offering them training as well as greater opportunities to advance and build a career at the company.
The results have been impressive. Walmart’s customer survey reviews have improved over the past 90 consecutive weeks, and at stores that have been open for at least a year, sales were up 1.6 percent over the previous year in the most recent quarter. And this, while sales fell at competitors.
And then just last week, Walmart announced that it would be raising assistant managers’ salaries from $45,000 to $48,500 in response to the new overtime rule. Walmart’s decision to preemptively raise the salaries of assistant managers has exposed the Chamber’s prediction that the new overtime rule would have disastrous effects for businesses and workers as just another example of the Chamber crying wolf. The Chamber’s response to any new rule or regulation is to predict doom, and then when the sky fails to fall, it moves on to sounding yet another false alarm about something else.
Businesses aren’t the only employers who see value in paying employees higher wages. Over 150 non-profits have already signed onto a letter in support of the overtime rule stating that it is “a critical opportunity to improve the working conditions and the economic lives of the people [they] serve,” noting that their own workers deserve fair compensation and greater economic security. These non-profits, like the giant retailers discussed above, recognize that when they pay employees more, they are, in turn, happier and more productive.
As more and more businesses discover what economists have long known – that paying workers more makes them more productive – the Chamber’s steadfast opposition to measures that would increase wages becomes harder to justify. The Chamber is supposed to be the voice of business and yet in this instance, it is opposing policies that are actually beneficial to business. While one wouldn’t expect the Chamber to stand up for workers, something is very wrong if the Chamber isn’t even standing up for business.
So whose interests is the Chamber standing up for? As discussed above, the decline in workers’ share of national income has shifted hundreds of billions of dollars to CEOs and business owners. It would appear that the Chamber is standing up for the interests of very wealthy individuals, whose short-sighted greed has led them to embrace a management credo that isn’t even good business.
In a much earlier era, the United States had visionary business-people who understood that it was good business to pay workers a decent wage. Which leads one to wonder: if iconic American capitalist Henry Ford understood at the beginning of the last century that paying his employees higher wages was good business, why has the Chamber still not caught up over 100 years later?
The Chamber of Commerce & Big Business: Transforming Democracy into Corporatocracy One State at a Time
Earlier this month, The Guardian published an investigation into the network of politicians, donors, and groups that raised tens of millions of dollars to defend Wisconsin Governor Scott Walker and several Wisconsin state senators who faced recall elections in 2011 and 2012. They also looked at conservative Wisconsin Supreme Court Justice David Prosser, Jr., who was up for re-election in 2011.
It is estimated that an astounding $137 million was spent on the recall races, with millions more spent on the Supreme Court race. The Guardian exposé, based on over 1500 pages of leaked emails and other documents, gives us a bird’s eye view into the dirty business of raising boatloads of cash from corporate special interests and the very rich.
This trove of leaked documents is particularly important because Wisconsin law does not require the disclosure of monies spent on “issue advocacy” ads that praise or criticize a candidate without explicitly calling on voters to vote for or against the candidate. Many groups, including the U.S. Chamber of Commerce, ran “issue advocacy” ads in these races, and therefore their names do not appear in publicly available databases of elections spending in Wisconsin. The leaked documents offer the public a chance to peak behind the legal curtain that shields deep-pocketed special interest groups from having to disclose their electioneering activities.
ChamberWatch wanted to learn more about the role played by the Chamber in financing the deluge of ads that dominated the airwaves in the months leading up to these elections. So we reviewed the 1500 pages of leaked documents that The Guardian made available online.
We found that the U.S. Chamber of Commerce as well as the Wisconsin state chamber, Wisconsin Manufacturers & Commerce, played major roles as outside spenders in these races, particularly in the Supreme Court race.
Tellingly, when Walker’s chief fundraising consultant laid out an initial blueprint for funding his recall election, she listed the Chamber’s Institute for Legal Reform as a major potential donor along with the Koch brothers, Sheldon Adelson, major corporations, and CEOs of major corporations, among others.
The primary evidence that the Chamber spent money on behalf of Walker comes from an email sent by Chamber head of communications Tom Collamore to one of Walker’s campaign consultants. The email includes a Wall Street Journal article about a $2 million ad buy by the Wisconsin state chamber promoting Walker. (The total spent by the state chamber on the recall elections was at least $4.7 million). The consultant then forwards the email, writing “Tom is a good friend…we have had many conversations about Scott…they know the significance of this race and that is why they are so supportive…and will continue to be so.”
Unfortunately, none of the leaked documents indicate exactly how much money the Chamber spent on the governor’s race. However, we know that a PAC associated with the Republican Governors Association was one of the largest outside spenders in the governor’s race. We also know that the Chamber gave $1.25 million in 2012 to the RGA, making it the sixth largest donor to the group. Of course, we don’t know how much if any of this money was spent in Wisconsin.
The evidence of Chamber elections spending is even more clear cut with respect to the Supreme Court election. One of Walker’s top advisors writes that he assumes the Chamber is in for a minimum of $1.1 million for the Supreme Court race. A subsequent email from the same advisor mentions a Chamber ad buy of $1.5 million for the Supreme Court race. Judging by estimates of total spending it is a safe bet that the Chamber was one of the largest if not the largest spender on the Supreme Court race.
The leaked documents also reveal that at the same time the U.S. Chamber and Wisconsin state chamber were showering Walker and Prosser with money, the state chamber was also providing corporations including Altria, Walmart, Kimberly-Clark, Xcel Energy and AT&T access to Walker as well as lobbying him on unemployment insurance and workers compensation.
And therein lies the reason why the Chamber and the large corporations it represents were “so supportive” of Walker and Prosser and why they spent so much money bolstering their reelection campaigns. Walker and his conservative allies in the state legislature were receptive to lobbying by Big Business pushing an anti-worker agenda. They had just passed a major bill eviscerating worker rights and protections. And Prosser could be counted on to protect this legislation from any legal challenges. Without Walker, without a conservative majority in the state legislature, or without Prosser, not only would it have been possible to undo the damage done by this legislation, but Big Business would no longer have the opportunity to get additional items on its anti-worker wish list enacted into law and upheld by the courts.
The leaked Wisconsin documents paint a picture of a political system almost entirely reliant on—and beholden to—big money corporate donors. And the U.S. Chamber and its affiliates stand at the nexus of this unholy alliance between Big Business and the political class. Perhaps it’s time to admit the obvious: our democracy is now a corporatocracy.
By David King, Intern at U.S. Chamber Watch
On June 22, 2016, U.S. Chamber of Commerce President Thomas J. Donohue gave a speech entitled “Financing America’s Economic Growth: How Robust Capital Markets Can Help Revitalize Our Economy” at the Nasdaq MarketSite in New York City. He began this speech by recalling that he previously spoke at Nasdaq in 2007, in the months before the Financial Crisis. He claimed that his advice then went unheeded. One is left to wonder exactly to what advice he is referring, as the Chamber has been a longstanding advocate of the type of deregulation that helped lead to the 2008 financial crisis. However, despite his dubious claims of prescience, Donohue offered us a second chance to dissect his well-worn platitudes that mask the Chamber’s aggressive deregulatory agenda.
Claim #1: “We want smart regulation.”
While Donohue may claim to seek “smart” regulations, the reality is that the Chamber almost never supports any new regulations. The Chamber does, however, spend its vast resources fighting against regulations intended to safeguard the American public. Most recently, the Chamber has opposed the Department of Labor’s fiduciary rule requiring money managers to act in their clients’ best interests as well as the Overtime Rule requiring that more salaried workers be paid for any overtime hours they work. Not to mention the Chamber’s epic fight against implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, including the Volcker rule banning commercial banks from engaging in proprietary trading activity with depositors’ money and rules proposed by the Consumer Financial Protection Bureau (CFPB), like limiting the use of forced arbitration clauses. Claiming that you’re for “smart” regulation when you almost never propose any is nothing more than a smoke screen to hide the Chamber’s reactionary, anti-regulatory agenda.
Claim #2: “If we take away the right to fail, we take away the right to succeed.”
Donohue’s defense of Wall Street ignores the fact that the new regulations born of the financial crisis do not take away the right for banks to fail; they merely attempt to eliminate the right to be too big to fail and therefore require taxpayer dollars for bailouts. While Donohue claims that these newly enacted regulations harm Main Street, the reality is that they shield Main Street from the enormous collateral damage that occurs when Wall Street’s casino games blow up as they did during the financial crisis. Credit for Main Street dries up when banks’ speculative activities run amok, something Donohue tries to gloss over in his speech.
Claim #3: “Too often rules are decided in the backrooms of Washington”
Talk about chutzpah. The Chamber is the nation’s largest lobbyist and is a habitué of Washington backroom deals. What’s more, Donohue has the audacity to demand greater transparency at various regulatory agencies despite the fact that the Chamber itself is quite opaque, refusing to disclose where its own money comes from. The Chamber received nearly $170 million in 2012 from just 1,500 donors. Not a single donor was disclosed. The Chamber’s very own head lobbyist, Bruce Josten, has stated “We never disclose funding or what we’re going to do.” If Donohue is serious about bringing transparency to Washington, then he should start with his own organization.
Claim #4: “I know a thing or two about the Post Office… Having it launch a banking operation is as dumb an idea as I have heard in Washington, a town full of dumb ideas.”
Postal banks are a fixture in many industrialized nations. The U.S. also historically had postal banking. Allowing the Post Office to expand its product line would provide much needed financial services to those who would normally go unbanked. This would be a great thing for consumers, particularly poor consumers who would benefit immensely from being able to avoid payday lenders and their astronomical interest rates. Of course, a Post Office bank would be a terrible thing for payday lenders, so naturally, the Chamber is against it.
Claim #5: “We’re not looking to pick winners and losers.”
Au contraire! Donohue and the Chamber’s agenda is very much looking to pick winners, and the winners in this speech, delivered in the heart of Wall Street are, not surprisingly, Wall Street banks as well as the rest of the financial services industry– the payday lenders, insurance companies, credit card issuers, and student loan issuers. Donohue’s agenda also creates losers, starting with small businesses and consumers who are harmed when the financial services sector is deregulated as Donohue wishes it to be.
Donohue famously stated that he wanted to turn the Chamber into “the biggest gorilla in this town.” When it comes to the Chamber’s anti-regulatory agenda, Donohue is not so candid. While he may claim to support transparency and regulations and to act in the best interests of Main Street, that could not be further from the truth. Donohue and the Chamber’s M.O. should by now be clear: say one thing, do another.
U.S. Chamber of Commerce Watch Statement of Principles
The United States Chamber of Commerce is the nation’s largest lobbyist, having spent over $1.2 billion on lobbying activities since 1998. While the Chamber claims to represent the interests of more than 3 million American businesses including “mom-and-pop shops” and pursue an agenda aimed at helping “revitalize the American economy, create jobs, spur growth, and lift incomes,” the reality could not be more different.
In fact, the Chamber primarily represents the interests of big business. Indeed, 90% of its claimed members are linked to the Chamber only through their membership in an affiliated state or local chamber of commerce. And Chamber president Thomas Donohue has admitted that small firms “provide the foot soldiers, and often the political cover, for issues big companies want pursued.”
The Chamber’s agenda, despite its lofty claims to the contrary, has little to do with improving the American economy and everything to do with improving the bottom lines of the Chamber’s multinational donors who supply the lion’s share of financial support to the Chamber. Repeatedly, the Chamber has lobbied and/or litigated against environmental protections, against action on climate change, against whistle-blower protections, to restrict consumers and workers’ access to the civil justice system, against consumer and worker protection regulations, against efforts to reduce tobacco consumption, against political spending disclosure, against incorporation transparency legislation ,against financial reform, against efforts to restrict multinationals from exploiting tax loopholes, and against a living wage.
We, the undersigned organizations, call on the United States Chamber of Commerce to:
I. Disclose the original sources of the donations it receives as well as the original sources of monies it spends on specific election campaigns or directs toward specific lobbying campaigns.
II. Recognize the danger posed by climate change and the need to promote sustainable businesses.
III. Recognize that paying employees a living wage improves productivity and worker retention in addition to stimulating the American economy.
IV. Recognize that limiting the size and risk profiles of large financial institutions is necessary to safeguard the global economy.
V. Recognize that access to the courts and environmental, consumer, public health, and worker protection laws and regulations are essential to creating and preserving a large and healthy middle class.
VI. Recognize that the tax code should not favor large multinationals over small businesses and every day Americans.
If the Chamber is truly serious about representing the interests of all businesses, revitalizing the American economy, creating jobs, spurring growth, and lifting incomes, then it will endeavor to adopt these principles as part of its agenda.