Exclusive: Foreign-Funded ‘U.S.’ Chamber Of Commerce Running Partisan Attack Ads

Published on
by
Think Progress

Exclusive: Foreign-Funded ‘U.S.’ Chamber Of Commerce Running Partisan Attack Ads

by
Think Progress

US Chamber of Commerce President Tom Donohue with former US President George W. Bush. Foreign members of the Chamber send money either directly to the U.S. Chamber of Commerce, or the foreign members fund their local Chamber, which in turn, transfers dues payments back to the Chamber’s H Street office in Washington DC.

The largest attack campaign against Democrats this fall is being
waged by the U.S. Chamber of Commerce, a trade association organized as a
501(c)(6) that can raise and spend unlimited funds without ever
disclosing any of its donors. The Chamber has promised to spend an
unprecedented $75 million to defeat candidates like Jack Conway, Sen. Barbara Boxer (D-CA), Jerry Brown, Rep. Joe Sestak (D-PA), and Rep. Tom Perriello (D-VA). As of Sept. 15th, the Chamber had aired more than 8,000
ads on behalf of GOP Senate candidates alone, according to a study from
the Wesleyan Media Project. The Chamber’s spending has dwarfed every
other issue group and most political party candidate committee spending.
A ThinkProgress investigation has found that the Chamber funds its
political attack campaign out of its general account, which solicits
foreign funding. And while the Chamber will likely assert it has
internal controls, foreign money is fungible, permitting the Chamber to
run its unprecedented attack campaign. According to legal experts
consulted by ThinkProgress, the Chamber is likely skirting longstanding
campaign finance law that bans the involvement of foreign corporations
in American elections.

In recent years, the Chamber has become very aggressive with its fundraising, opening offices
abroad and helping to found foreign chapters (known as Business
Councils or “AmChams”). While many of these foreign operations include
American businesses with interests overseas, the Chamber has also
spearheaded an effort to raise money from foreign corporations,
including ones controlled by foreign governments. These foreign members
of the Chamber send money either directly to the U.S. Chamber of
Commerce, or the foreign members fund their local Chamber, which in
turn, transfers dues payments back to the Chamber’s H Street office in
Washington DC. These funds are commingled to the Chamber’s 501(c)(6)
account which is the vehicle for the attack ads:

– The U.S. Chamber of Commerce has created a large
presence in the small, oil-rich country of Bahrain. In 2006, the Chamber
created a local affiliate called the “U.S.-Bahrain Business Council”
(USBBC), an organization to help businesses in Bahrain take advantage of the Chamber’s “network of government and business relationships in the US and worldwide.” As the USBBC’s bylaws
state, it is not an actual separate entity, rather it is simply an
office of the U.S. Chamber of Commerce’s 501(c)(6) trade association.
Many of the USBBC’s board members are Bahrainian, including Aluminum
Bahrain, Gulf Air, Midal Cables, the Nass Group, Bahrain Maritime &
Mercantile International, the Bahrain Petroleum Company (state-owned),
Gulf Petrochemical Industries Company, and First Leasing Bank. With
each of these foreign board members to the USBBC contributing at least
$10,000 annually, the U.S. Chamber of Commerce raises well over $100,000 a year in money from foreign businesses through its operation in Bahrain
. Notably, the membership form provided by the USBBC directs applicants to send or wire
their money directly to the U.S. Chamber of Commerce. The membership
form also explicitly states that the foreign-owned firms are welcomed.

– Like the Chamber’s involvement in Bahrain, the U.S. Chamber of
Commerce operates in India through a group called “U.S.-India Business
Council” (USIBC), which has offices around the world but is
headquartered in the U.S. Chamber of Commerce. Dozens of Indian
businesses, including some of India’s largest corporations
like the State Bank of India (state-run) and ICICI Bank, are members of
the U.S. Chamber of Commerce through the USIBC. Annual membership dues
range from $7,500 to $15,000 or more, and the money is given directly into the Chamber’s 501(c)(6) bank account. Like the USBBC, the USIBC generates well over $200,000 a year in dues for the U.S. Chamber of Commerce from foreign businesses.
On the USIBC website, many of the groups lobbying goals advocate
changing American policy to help businesses in India. Under the
manufacturing policy goal, USIBC boasts
that it “can play a helpful role in guiding U.S. companies to India,
while supporting various policy initiatives that will enhance India’s
reputation as a major manufacturing and investment hub.”

– Many foreign “AmChams” or Business Councils operate outside the
direct sphere of the U.S. Chamber of Commerce but nonetheless send dues
money back to the U.S. Chamber of Commerce. For instance, the American
Chamber of Commerce in Egypt is a separate entity based in Cairo that
raises hundreds of thousands of dollars from both Egyptian firms and
American businesses. However, the American Chamber of Commerce in Egypt
calls itself “the most active affiliates of the U.S. Chamber of Commerce in the” Middle East. Another
foreign chamber, like the Abu Dhabi AmCham, which includes American
firms and Esnaad, a subsidiary of the state-run Abu Dhabi National Oil
Company, claims
that it is a a “dues paying member of the U.S. Chamber of Commerce and
part of the global network of American Chambers of Commerce.”

In Russia, the relationship between the American Chamber of Commerce
there and the U.S. Chamber of Commerce here is opaque. This might be
because many of the dues-paying members of the American Chamber of
Commerce in Russia are Russian state-run companies, like VTB Bank,
and controlled by the Russian government. Asked by ThinkProgress if the
Russian Chambers pay dues back to the U.S. Chamber of Commerce, Ksenia
Forsheneva, the membership development manager at the American Chamber
of Commerce in Russia, replied, “Unfortunately the information that you require is closed for the public.”

Previously, it has been reported that foreign firms like BP,
Shell Oil, and Siemens are active members of the Chamber. But on a
larger scale, the U.S. Chamber of Commerce appears to rely heavily on
fundraising from firms all over the world,
including China, India, Egypt, Saudi Arabia, Brazil, Russia, and many
other places. Of course, because the Chamber successfully lobbied to
kill campaign finance reforms aimed at establishing transparency,
the Chamber does not have to reveal any of the funding for its ad
campaigns. Dues-paying members of the Chamber could potentially be
sending additional funds this year to help air more attack ads against
Democrats.

Here’s how it works. Regular dues from American firms to the Chamber
can range from $500 to $300,000 or more, depending on their size and
industry, and can be used for any purpose deemed necessary by Donohue
and the Chamber leadership. For example, the health insurance giant
Aetna has reported that it paid $100,000
in annual dues to the Chamber in the past. But for specific advocacy or
advertising campaigns, corporations can hide behind the label of the
U.S. Chamber of Commerce and give additional money. Last year, alongside
their regular dues, health insurance companies like Aetna secretly
funneled up to $20 million
to the Chamber for attack ads aimed at killing health reform (publicly,
health insurance executives claimed they supported reform). Last week,
Politico reported that News Corporation, the parent company of Fox News,
gave an extra $1 million to the Chamber for its election season attack campaign.

There are many reasons foreign corporations are seeking to defeat
Democratic candidates this November. The Chamber has repeatedly sent out
issue alerts attacking Democratic efforts to encourage businesses to
hire locally rather than outsource to foreign counties. The Chamber has also bitterly fought Democrats for opposing unfettered
free trade deals. To galvanize foreign businesses, the Chamber has
commissioned former Ambassador Frank Lavin — who served as the McCain-Palin
Asia campaign director and has appeared on television multiple times
recently saying a Democratic Congress is bad for business — to speak
before various foreign Chamber affiliates to talk about the stakes for the 2010 midterm elections.

Because campaign finance laws prohibit foreign entities from
contributing to political races here in America, we asked the Chamber to
defend the legality of its fundraising operation. We have yet to
receive a response. But as word of our investigation began to leak out yesterday, the Chamber informed Politico’s Mike Allen that it is now “preparing a response.”

Update: The US Chamber of
Commerce has responded to this post in a statement to the Politico's Ben
Smith. The Chamber's Tita Freeman did not dispute that the Chamber's
501(c)(6) organization running attack ads receives foreign funds, and
simply claimed, "We have a system in place" to prevent foreign funding for the Chamber's "political activities."

Share This Article

More in: