How the U.S. Chamber of Commerce became America's enemy
Illustration by Patrick Faricy
I. Meet America's business cheerleaders.
People tend to view the Chamber of Commerce in the same colors as the Rotary Club or the Knights of Columbus: officious do-gooders lending a helpful hand in the name of economy and country. It's a largely accurate assessment — at least on the local level.
In Davenport, Iowa, it means hosting music festivals like River Roots Live, a "quality of life initiative" that brings 30,000 people downtown each year, says Jennifer Walker of the Quad Cities chamber.
In Largo, Florida, it means introducing the small and struggling to the guys with all the money. "They want to meet heads of the hospitals, heads of the banks, so they can generate business from one another," says the president of that city's chamber, Tom Morrissette.
In Pasadena, California, it means pushing a business agenda without the sectarian shrieking of Washington. "We can still go for a beer after work and talk about our kids," says chamber president Paul Little.
These are sainted duties. Local chambers chiefly represent small businesses, which collectively make for the nation's largest and most stable employer. After all, the florist and the restaurateur are more likely to sponsor a softball team than ship their jobs to Indonesia. Neither is prone to demanding public welfare under threat of bolting for Tennessee.
The local chambers are their cheerleaders, providing mercantile expertise, all with a cheerful disposition built to illuminate the possible.
But that reputation is being smeared by their national umbrella group, the U.S. Chamber of Commerce. It's quietly become the baddest bully in Washington. And its behavior is causing dozens of locals — and some of America's most prominent companies — to flee its ranks.
II. Now meet their weird Uncle Ed, who's ruining the family name.
Think of the U.S. Chamber as your crazy Uncle Ed. He spent too much time listening to talk radio, developed a raging victim complex, and came to believe that the country was being destroyed by sloth and moochery. So he formed a lobbying group to defend the one true antidote: free enterprise.
Over the past century, the U.S. Chamber has sounded a lot like Ed when he's surrounded by a battalion of vanquished Budweisers.
The national organization was against America's rush to stop Hitler in World War II. It called Franklin Roosevelt's remedies for the Great Depression, among them Social Security, an attempt to "Sovietize" America. After the war, it cheered on Joe McCarthy's hunt for imaginary Commies.
More recently, the U.S. Chamber fought against civil rights, the Americans With Disabilities Act, and safeguards for gays and lesbians. At one point, it even championed the need to discriminate against pregnant employees.
The Chamber is against workplace safety, regulating pollution, paid family leave and banning chemicals that cause birth defects.
The group's guiding principle: If it might help regular people, the Chamber considers it heresy. Free enterprise should be absolutely free, this logic goes, even if it turns the country into Rwanda with nicer Burger Kings. Anything less is an outrage.
"They've been on the wrong side of every issue in U.S. history," says Auden Schendler, a vice president at Aspen Skiing Company who pushed his city's chamber to leave the national group.
Still, up until 1997, the U.S. Chamber enjoyed bipartisan respect in Washington. It was viewed as the Official Voice of Business, capable of playing amiably with others. But it was also losing members, money and effectiveness.
That year, Tom Donohue became its new CEO. If the old Chamber was crazy Ed, Donohue's version would be Sean Hannity on steroids and meth, with a monster war chest and a prime-time audience.
III. The Big Gorilla gets a pocketful of money.
Donohue, the former head of a trucking trade group, instinctively understood Washington's unofficial law — namely, if you dole out millions of dollars to punctuate each sentence, you suddenly don't sound that weird anymore.
So he traveled the country, grubbing donations from the largest companies. His goal, as he wrote at the time, was to "build the biggest gorilla in this town."
And he did.
In 1997, the year that Donohue arrived, the Chamber spent $17 million on lobbying. Today that figure approaches $140 million annually, three times the purse of the next-biggest congressional manipulator, the National Association of Realtors.
"They're kind of the poster child for how big business and the super-rich are able to control the agenda in Washington," says Jake Parent, who runs the "U.S. Chamber Watch" website at Public Citizen, a D.C. consumer group with 250,000 members.
Officially, the Chamber still fancies itself the Voice of American Business, a town crier advocating for small government, less regulation, and the miracle cure of free enterprise. "We passionately believe it's time to stop apologizing for the one system in our society that actually works," Donohue said in his annual "State of American Business" speech in 2012.
But to raise the millions needed for his lobbying efforts, he had to beg from the only people with millions to give: America's mightiest corporations. And they, quite naturally, wanted a return on their investment.
Soon the U.S. Chamber began sounding less like the apostle of free markets and more like the official welfare agency of the golden-parachute set. Donohue called for drastic cuts to social programs. But he also wanted taxpayers to bail out BP after its Gulf spill, defended the oil industry's $12 billion annual welfare package, and was outworked by no one in protecting Wall Street banks from Too Big to Fail laws.
"The Chamber isn't really anti-government," says Damon Silvers, policy director of the AFL-CIO, a federation of some of the nation's largest unions. "They just want the government to be subordinate to big business."
(The group isn't keen on discussing such contradictions. Spokeswoman Blair Latoff Holmes asked that questions be submitted in writing, but then never responded.)
Even Chamber members understand that small merchants have been sidelined. "We try to help small businesses grow, and the U.S. Chamber is more big business," says Mark Jaffe, president of the Greater New York chapter.
This wouldn't be a problem if Donohue and company would stay in Washington. The trouble usually begins when they take their show on the road. After all, if you're fighting against things like equal pay for women or rules on dumping hazardous waste, you need a sugary helping of deceit to make it edible in the heartland.
And that's when the local chambers rebel.
IV. Honesty may be the best policy, but what does that have to do with politics?
During the last elections, some 40 local chambers were forced to publicly distance themselves from the national group. That's because the U.S. Chamber prefers to speak by attack ad when it arrives in the hinterlands.
Stylistically, the TV ads are the same ham-fisted productions found in most campaigns. Ominous music. Voice-overs predicting doom. A simpleton's message impugning character. Senator Bill Swenson: He's impolite to his mother.
What sets the U.S. Chamber apart is its consistent — even comical — level of deceit.
Go ahead — run a search for "U.S. Chamber" at FactCheck.org, a non-partisan group that researches political ads for their veracity. The group has written about so many Chamber ads deemed false or misleading that it could sue for carpal tunnel damage.
In Florida, the U.S. Chamber ran one TV ad claiming that Democratic U.S. Senator Bill Nelson voted to cut $500 billion from Medicare to fund Obamacare. The assertion was widely debunked, but that didn't stop the Chamber from running the ad 2,599 times to terrify the state's elderly.
In Ohio, it ran another attack ad 5,515 times, this time claiming that U.S. Senator Sherrod Brown voted to raise energy taxes. Brown actually voted to phase out a $12 billion annual welfare package to the hyper-profitable oil industry, something that even conservative Ohioans would probably applaud.
"They're certainly one of the worst," says Justin Barasky, communications director for the Brown campaign. "You can usually bet good money that they're misleading at best, ridiculously false at worst, and often offensive."
Yet the Chamber created its biggest fury in Montana, a small-population state where politics operate on a first-name basis. The locals mutinied.
V. The Big Gorilla rides into town...and gets its ass kicked.
It's been more than a year since the U.S. Chamber's assault on Senator Jon Tester, a Montana Democrat. He's still seething.
"They just come in and try to distort, distort, distort," Tester says. "When you're being outspent significantly, it's tough to fight back."
In Montana, the Chamber threw the same awkward roundhouses that it did at Nelson and Brown, adding claims that Tester had raised taxes, killed jobs and almost singlehandedly increased unemployment. Taken as true, you'd assume that Tester also spent his days punching Girl Scouts.
But it wasn't true. And the local chambers knew it.
The Great Falls Chamber labeled the assault "hit ads" and "half-truths." The director of the Butte Chamber called the spots "a real waste of money," adding, "I don't think that's where chamber memberships and dues should be going." Other Montana chambers sought cover, announcing that they played no role in the smear.
"The whole goal was to make me into something I wasn't," says Tester. "They weren't particularly well done. They misspelled my name, for example. One of the issues I got marked down on was equal pay for women. The U.S. Chamber doesn't think women should get equal pay for equal work."
The campaign backfired. Tester was re-elected.
What the Big Gorilla couldn't seem to grasp is that what makes you mighty in Washington tends to make you repellent everywhere else. Depending on who's doing the counting, this has caused somewhere between 40 and 60 local chambers to leave the national group.
Robin Comstock will tell you why.
VI. A rebellion in New Hampshire.
In 2008, the U.S. Chamber aimed its guns at Jeanne Shaheen, a popular former governor running for the U.S. Senate in New Hampshire. One ad parodied silent movies, showing a caricature of Shaheen being tied to railroad tracks and run over by a train, says Comstock, president of the Greater Manchester Chamber.
"The reaction was horrible," she says.
After the ad launched, Comstock would arrive at work each day to find her phone ringing off the hook. Shaheen, a Democrat, held wide support among businesspeople. Comstock's members mistakenly believed that the Manchester Chamber was behind the attack.
"People were appalled," she says. "I was losing members. I was under more and more pressure to distance myself from this ad campaign. So many members were calling to ask if their portion of their dues were going to support the national [Chamber]."
Comstock called Washington headquarters, asking that disclaimers be placed on the ads to absolve the locals of culpability. No one called back. Comstock promptly dumped her national membership.
These days, the relationship between Manchester and Washington is still toxic. "If an operative from the U.S. Chamber of Commerce comes to one of our events, I can't even sit with them, because our members would be suspicious," Comstock says. "So I don't associate with them in any way at all."
The problem, it seems, is that the boys back in D.C. still believe that businesspeople only come in a 1950s cartoon model: middle-aged conservative men with pattern baldness who storm against welfare queens and Socialists. But these days, business owners are just as likely to be yoga studio owners, software titans, or chefs with a string of locavore bistros.
Pasadena's Little explains the diversity: "We have members who are sending rovers to Mars, and we have the guy who works on my car."
These modern members are anything but a one-note chorus. "We have 550 companies, and they probably have 550 perspectives on any given thing," adds Largo's Morrissette.
It's a diversity that's made the national Chamber's golden-parachute platform increasingly untenable. After all, when Big Oil gets welfare or Big Pharma gets special protections, the little guy gets stuck with the tab.
"I think the fundamental problem with the Chamber is that they purport to speak for the economy as a whole," says Public Citizen's Parent. "But in reality, they speak for only a very small portion of very large U.S. corporations, often to the detriment of small business."
Nowhere is this more evident than in the U.S. Chamber's secretive lobbying campaigns, where huge piles of cash turn free markets to farce.
VII. Frontman for hire. Complete anonymity, no questions asked.
And here's the beauty of it: Because the U.S. Chamber is technically non-profit and non-partisan, it can take a drug cartel's approach to finance, raising limitless millions without ever saying where the money comes from.
In reality, the Chamber is as non-partisan as Fox News. More than 90 percent of its money goes to Republicans. Donohue, meanwhile, makes nearly $5 million a year while being squired around the country via private jet. For him, at least, the Chamber is plenty profitable.
But under federal law, just pretending to play it straight is good enough.
"They have unlimited resources," says the Brown campaign's Barasky. "There's no rule about how much money they can raise. You don't have to sign your name when you write them a check, so it's very easy to put out false ads all over the country."
This has led to a lucrative side business: the Chamber as frontman for hire. Companies kick money under the table, and the Chamber assumes the role of their public attack dog.
The true extent of the operation is unknown. But Prudential, Dow Chemical, Goldman Sachs and Chevron have all been outed for signing up for the service. Their money goes to things like weakening Wall Street regulations, fighting security rules for chemical facilities, and generally sabotaging any attempt to rein in the less seemly practices of commerce.
Even when a law is passed, the Chamber's lobbying power can tie it up for years, watering it down before it takes effect.
The most bungling campaign came during debates over the Affordable Care Act. Since the 1990s, health-care premiums have averaged double-digit hikes every year, creating a diamond mine for insurers. But Obamacare requires insurers to spend at least 80 percent of those premiums on actual care — about 10 percent more than they were spending before. Anything less, and their customers get a refund.
This didn't please the insurance industry. While publicly feigning support for the Affordable Care Act, companies like Aetna, Cigna, UnitedHealth and WellPoint secretly funneled $86 million to the U.S. Chamber, which launched a fusillade of attack ads claiming that Obamacare would give you everything but leprosy.
Even the CEO of General Electric called the Chamber's position "lunacy." Virtually the entire business world wanted something done about soaring health costs. The point wasn't whether one favored Obamacare or not. It was that the Chamber offered no meaningful alternative. It simply chose to sacrifice its members so that insurers could continue to gouge them.
But it would take even greater weirdness to drive the big boys away.
VIII. Science is a liberal plot. No, really.
Give American business credit. When global warming was finally recognized as a reality, entrepreneurs jumped in feet first, building whole new industries devoted to pure innovation, be it turning cooking grease into auto fuel or recycled plastic into synthetic wood.
"We have hundreds and hundreds of green businesses," says Terri Hiroshima of the Seattle Metropolitan Chamber of Commerce, which has also canceled its national membership. "Even organizations that have nothing to do with green often use a green lens."
But if confirmation of global warming was a triumph for free enterprise, it wasn't exactly the kind the U.S. Chamber wanted.
The national group receives big money from the coal, oil and chemical industries. So it once again sacrificed its smaller members.
Through lobbying and public statements, the Chamber implied that global warming was a lie peddled by the eco-effete. It fought the EPA's right to regulate carbon-dioxide emissions, and vandalized Washington's every attempt to tame the earth's heating.
"No organization in this country has done more to undermine such legislation," the New York Times editorialized.
The Chamber also did its best to keep Congress ignorant. In 2010, for example, more than 90 percent of the candidates it backed were climate-change deniers.
Unfortunately, the organization began to believe its own press releases. That's when William Kovacs, the Chamber's senior vice president for environment, technology and regulatory affairs, completely jumped the shark.
In 2009, he asked the EPA to hold a grand public hearing, which would place the science of climate change on trial. There would be witnesses and a judge. Kovacs called it the "the Scopes monkey trial of the 21st century," likening it to the famous 1925 hearing in which fundamentalist Christians tried to debunk the theory of evolution.
Scientifically speaking, it was like the American Medical Association wondering out loud whether leeches should be used to treat cancer. Kovacs's buffoonery backfired.
Apple dumped its membership. Nike left the Chamber board. Even old-line energy companies like Exelon, PNM and Pacific Gas & Electric chose to bail, as did local chambers as far away as Homer, Alaska.
"Extreme rhetoric and obstructionist tactics seem to increasingly mark the Chamber's public stance on this issue," Pacific CEO Peter Darbee wrote to the Chamber. "These reflect neither the true range of views among members nor, in many cases, an honest view of the economic and environmental realities at hand."
The U.S. Chamber found itself in a familiar place: While such gibberish raised hosannas in D.C., it was more commonly regarded as "talking like a moron" in the rest of the country.
Yet the Chamber has nonetheless built an anti-science faction in Congress capable of stalling any change. Laugh as people might, the Big Gorilla still owns the best fortifications money can buy.
"They're basically one of the most effective anti-climate organizations in the world," says the Aspen Skiing Company's Schendler.
His firm operates one of the largest ski resorts in America, employing 3,400 people. Global warming is its greatest threat. "We're not going to be able to fix climate until we get money out of politics," Schendler says. "And the U.S. Chamber is that problem writ large."
IX. You didn't actually believe what we were saying, did you?
Last year, the Chamber's bulwark began to erode. It neglected to factor in the one unavoidable downside of extremism: In the end, the crazy train always leaves the rails.
Since the turn of the century, the Chamber has spent hundreds of millions of dollars buying a government-is-the-Antichrist Congress. It hasn't seemed to notice that its candidates have gone from centrist businessmen to bomb throwers of uncertain mental hygiene.
The centrists of the past understood that all of that small-government bluster was merely theater for red-meat voters. They never really wanted to burn down Washington. After all, the Chamber's benefactors — and the Republican Party's — get too much welfare, too many special laws, too many exemptions and too many sweetheart deals to upend the golden trough.
But the Chamber's new breed of Tea Party candidates appear unable to grasp such nuances. They're more interested in busting out the water cannons. And they've forgotten to stay bought.
The Tea Partiers have repeatedly threatened to shut down the government. They've refused to take up immigration reform, preventing Big Ag, Silicon Valley and the restaurant industry from getting their mitts on cheap labor. And they've attacked the Chamber's most loyal footmen, like John Boehner and Mitch McConnell, for their insufficient vigor in setting Washington aflame.
Donohue's frustration is clear. After a recent breakfast sponsored by the Christian Science Monitor, a reporter asked him about Ted Cruz, noting that businesspeople might prefer that the Texas senator sit down and shut up. "That might be one thing we could work on," Donohue responded.
These days, the Chamber looks like an organization with buyer's remorse. In the 2012 election, it spent tens of millions tarring Democrats, only to find its message too archaic for modern sensibilities. Most of those Democrats were re-elected.
It spent millions more electing jihadists like Cruz, people who don't seem to care how many fights they pick — or how often they lose — as long as their heroics are nationally televised.
All of these train wrecks have led the Chamber to undergo a reluctant self-examination.
"The Tea Party has become so radical and so polarizing that the Chamber doesn't want to be seen looking like that," says the AFL-CIO's Silvers.
This new self-reflection was evident in November, when another mutant appeared on the horizon. His name was Dean Young. He was a real-estate developer running in the Republican primary for Mobile, Alabama's congressional seat.
Only a year before, Young would have been the ideal Chamber candidate: a gay-baiting, shutdown-backing conservative who still believed Barack Obama was born in Kenya.
But this time, the Chamber dumped $200,000 on his mild-mannered opponent, lawyer Bradley Byrne, who won.
After a century of playing with gasoline, it seems the Chamber has finally discovered that moderation is less prone to accidental explosion.
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