US Chamber of Commerce under fire for campaign finance

Liberal groups charge the US Chamber of Commerce with spending foreign donations on political ads targeted against Democrats. Chamber officials deny the charge, but campaign finance law makes it hard to know for sure.

If “money is the mother’s milk of politics,” as the late House Speaker Thomas "Tip" O’Neill liked to say, then it seems to be overflowing this political season. Not surprisingly, this has led to charges and countercharges about what’s legal and ethical in campaign finance.

The focus of particular attention this week is the US Chamber of Commerce, a powerhouse in campaign financing with funds directed largely to the coffers of Republican candidates.

Liberal groups say the Chamber – which has budgeted $75 million to support its favorite candidates this year, almost exclusively Republicans – is using foreign money as part of its huge campaign war chest, which would be illegal. Chamber officials deny the charge.

But it's hard to know for sure, because under federal law the Chamber doesn't have to detail the sources of its campaign spending.

Embattled Democratic candidates, the target of Chamber-funded campaign ads, are crying foul, some pointing to the need to revisit last January’s US Supreme Court 5-to-4 decision in the Citizens United case, which makes it easier for corporations and labor unions to influence elections through campaign advertising.

To dramatize the issue, the liberal groups MoveOn.org and People for the American Way will picket the Chamber's Washington office Thursday.

Will the Justice Department get involved?

In a letter to the US Justice Department Tuesday, MoveOn.org Executive Director Justin Ruben requested “an immediate criminal investigation into the use by the US Chamber of Commerce of contributions by foreign nationals to pay for advertising advocating the election or defeat of candidates for federal office.”

The essence of the charge – based on a detailed report by Think Progress, a project of the liberal Center for American Progress Action Fund – is that the US Chamber’s political advertising money comes partly from the donations of foreign business members.

In a statement headlined “Lies & Damned Lies,” Tita Freeman, the US Chamber’s executive director for communications and strategy, calls the charge of illegal fundraising “a partisan effort to attack and silence the voice of business and free enterprise.”

At issue is the activity of the 115 American Chambers of Commerce around the world (“AmChams”), which raise money from foreign corporations and pay dues to the US Chamber. From there, the picture is less clear.

Think Progress alleges that money from the AmChams goes into a common pot, from which campaign advertising is doled out.

Not so, insists Ms. Freeman

“AmChams are independent organizations that do not fund political programs in the United States,” she says in a website statement. “We're careful to ensure that we comply with all applicable laws. No foreign money is used to fund political activities. All allegations to the contrary are totally and completely false.”

The US Chamber is one of largest interest groups spending money on political ads.

The Wesleyan Media Project, a collaboration of experts from Wesleyan University, Bowdoin College, and Washington State University, ranks the US Chamber as No. 3 in the top 10 interest-group spenders by volume and ad count. (No. 1 is the Republican Governors Association.)

Through Sept. 15, the US Chamber had spent an estimated $6.7 million on 8,462 media spots.

Of the top 10 interest groups, seven lean Republican (spending $42.5 million) and three lean Democratic (spending $16.2 million).

“One reason for the increase in overall spending has to be the fact that both Republicans and Democrats have a legitimate shot of having majorities in Congress after November’s elections,” says Travis Ridout, a political scientist at Washington State University, in the Wesleyan Media Project’s recent report. “Surely, the Citizens United Supreme Court decision, which opened the door to unlimited corporate and union donations to groups airing political ads, has also contributed to the overall increase in spending.”

When the Supreme Court issued its controversial decision in the Citizens United case, many critics warned that individual corporations would begin buying ads for candidates in federal and gubernatorial elections – presumably that would be mostly pro-business Republicans.

Keeping political donors anonymous

“But to date that has not materialized, says Erika Franklin Fowler, assistant professor of government at Wesleyan University. “Instead, we are seeing evidence of changing tactics as groups seek shelter in the rules for nonprofits that allow such organizations to withhold their donor names.”

That includes the US Chamber of Commerce, and the core of MoveOn.org's allegations are that the Chamber is using this provision illegally.

The 2010 elections come at a time when campaign-finance law is new and sometimes murky territory – both for donors and for recipients. Inevitably, that’s raised contentious political and legal questions.

“The Chamber has dispatched former Ambassador Frank Lavin to speak before foreign Chamber affiliates about what is at stake for business in the 2010 midterm elections,” writes MoveOn.org’s Justin Ruben in his letter this week to the US Justice Department. “If, as it appears, the Chamber is soliciting contributions from foreign corporations and foreign nationals while communicating to them the importance of the US elections, the Chamber is at least indirectly soliciting contributions from foreign nationals for use in connection with US elections.”