Big-money Chamber of Commerce to impact elections, mostly for GOP

Center for Public IntegrityMarch 9, 2012 

WASHINGTON — For the big-spending U.S. Chamber of Commerce, the 2012 election season began extra early with a flurry of hard-hitting issue advocacy ads in six states that included attacks on two vulnerable Democratic senators, a harbinger of the $50 million-plus drive it plans to mount this election year.

To help Republicans gain control of both houses of Congress, the Chamber dropped about $2 million on issue advocacy ads late last year — in Iowa, Montana, Nevada, Ohio, Pennsylvania and Washington.

In February, the pro-business behemoth poured another $10 million into ads aimed mostly at weakening Democrats and bolstering GOP members in eight Senate and 12 House contests. Just one ad was supportive of a Democrat's positions.

This hefty and early ad spending underscores the political stakes in the coming congressional elections for the chamber's most generous corporate supporters who back the group's "free enterprise" economic positions.

Democratic Sen. Sherrod Brown of Ohio has been pounded by the chamber with almost $2.5 million worth of slick spots bashing him with charges that he "voted to block American energy production and increase energy taxes."

Some of the ads have been criticized by independent fact-checking groups, and one drew barbs because it showed a sinister-looking Brown sporting a small beard in what appears to be a doctored photo.

The chamber's key issues — attacking "government-run" health care, federal curbs on domestic energy production and "job-killing regulations" — have been standard lobbying themes during the Obama years.

"We hope and plan to have the most aggressive issue advocacy campaign" ever run by the chamber, Bruce Josten, the group's top lobbyist, told iWatch News.

The chamber's issue ads — which don't say vote for specific candidates but criticize or back key positions of different candidates — are part of its "Advance and Protect" pro-business interest campaign strategy.

Fundraisers close to the chamber expect another multimillion-dollar ad drive in April or May that will equal, or surpass, the group's February foray.

The ad spree also reflects the chamber's enormous fundraising muscle, led by its feisty, silver-haired CEO Tom Donohue. During his decade and a half at the chamber's helm, Donohue has been instrumental in boosting its annual budget to about $200 million (more than four times what it was when Donohue took over) and making the group far and away Washington's premier lobbying spender.

Last year alone, the chamber spent $67 million on lobbying, according to the Center for Responsive Politics.

By November, the chamber expects to run ads in at least a dozen Senate contests and at least 30 House races. But it says that by tradition it won't be directly involved in the presidential race.

"We're not going to be engaged in presidential politics," Scott Reed, the veteran GOP operative who joined the chamber last fall as senior political strategist, said in an interview. "But we'll be engaged in presidential policies and issues as part of our voter education."

Why such an early start for the chamber on the electoral front?

"We saw an opening in the political calendar and a need to set the terms of the debate," Reed said. By getting its ads up early, the chamber is trying to "grow the map by making more races competitive," Reed said, adding that many local chambers supported the ads.

Veteran campaign finance analysts aren't surprised by the chamber's fast start.

"It makes sense that the chamber would spend early — and big — if they're trying to put more races in play, particularly to shore up their chances of flipping the Senate," said Sheila Krumholz, the executive director of the Center for Responsive Politics. "Last cycle, the average winning Senate seat cost nearly $10 million, so challengers generally need major resources and outside support to be viable."

Little wonder that the chamber's tough and expensive messages have irked Democratic targets — especially Sherrod Brown.

"Perhaps a pollster somewhere thought Ohioans were averse to a public servant with a beard," said Justin Barasksy, a spokesman for Brown's campaign. "Like most Ohioans, Sen. Brown believes it's more important to stand up for our middle class by fighting to lower the deficit than it is to protect the bottom line of big oil companies who reap billions in profits while gas prices remain high."

A few local chambers in Montana and Virginia have criticized the national organization's ads for their stances and factual charges about Democratic candidates.

Such criticism hasn't slowed the chamber's fundraiser in chief Donohue, who has been tapping longtime corporate supporters and hitting up new prospects.

"The chamber has always been a positive force on the GOP side of the aisle," Lewis Eisenberg, a senior adviser to buyout behemoth KKR, said in an interview.

Eisenberg, a veteran GOP fundraiser who is helping Mitt Romney's presidential campaign, added that "the addition of Scott Reed gives them extra firepower."

As a nonstop fundraising juggernaut, the chamber is also a nonprofit and does not have to reveal its donors.

"For a corporation that is fearful of retaliation or publicity, the chamber is a very convenient vehicle for political money," said Jack Pitney, a government professor at Claremont College in California.

The chamber's biggest donors for political, lobbying and other programs have in recent years included energy giants, the pharmaceutical industry, insurance companies and Wall Street firms. In 2008, the chamber received $15 million from PhRMA, a trade group that represents the country's leading pharmaceutical research and biotechnology companies, for an issue advocacy drive to help defend members who were under attack by Democrats urging price controls for some drugs for seniors, according to two industry lobbyists familiar with the donation.

According to the chamber's 990 tax forms, the chamber paid more than $300,000 in 2009 alone for fundraising help from former Republican National Committee chairman Jim Nicholson and Carol Hallett, former CEO of the Air Transport Association of America. This duo helped rope in about $5 million that year.

"Donohue is fearless and the business community admires that," Billy Tauzin, the former leader of PhRMA who is now special legislative counsel at Alston & Bird, told iWatch News. "Tom weighs in and he's not afraid of deep water."

Historically, Donohue has shown an uncanny knack for setting up special projects and institutes that have been magnets for seven-figure corporate donations — on top of annual dues.

"In past years, Donohue was a frequent visitor to Houston and other headquarters to push for extra funding for specific issue advocacy campaigns," recalled Don Duncan, the former head of the Washington office of Conoco Phillips.

A prime example: the 2007 launch of the 21st Century Energy Institute, a chamber center that takes a free-market, light-regulatory approach that appeals to oil, coal and other energy giants.

To jumpstart the institute, energy lobbyists say the chamber solicited seven-figure and good sized six-figure donations from energy companies. Funding for the center was led by America's largest oil company, Exxon Mobil, and included the likes of Koch Industries, Peabody Energy and Southern Co.

Likewise, the chamber is looking for extra help this year from several of its Wall Street supporters.

As a fight has raged over creating the regulations to implement the financial services reform law known as Dodd-Frank, the chamber has revved up its Center for Capital Markets and Competitiveness, which tries to fend off business regulations it deems too harsh.

After it unsuccessfully opposed creating the Consumer Financial Protection Bureau, the chamber and its center have tried to limit the bureau's powers and budget.

"Donohue is a force of nature," said Wayne Berman, a GOP fundraiser and power lobbyist, one of whose clients, Blackstone Group, has backed some chamber programs.

To boost its financial clout further, the chamber often adds new muscle with corporate chieftains like former RNC chairman Nicholson, who has a consulting role with the chamber as a "fellow." According to its 990 filing with the IRS in 2009, the chamber paid $102,256 to Nicholson for his help in raising more than $3 million.

For almost a decade, the chamber has employed as a counselor former Transportation Secretary Hallett, who according to 990 tax forms was paid $233,332 for help in raising $4.9 million for the chamber.

The odds on regaining control of the Senate, though, may be getting a bit longer — partly because Republican Sen. Olympia Snowe of Maine announced her retirement.

But the chamber is still betting it will spend more than the $33 million it pumped into issue ads in 2010 and the millions more that it used for its growing get-out-the-vote operation. The chamber has built a sophisticated database with the names of more than 7 million people, dubbed "Friends of the Chamber," that's used for voter mobilization.

The chamber's pro-business messages face rebuttals from unions like the AFL-CIO, which historically have poured tens of millions of dollars into getting out the pro-labor Democratic vote.

"The chamber is raising more and more money from corporations because they realize they're trying to sell a less and less persuasive message, said Michael Podhorzer, the AFL-CIO's political director. "No accountability for the corporations that tanked our economy."

(The Center for Public Integrity is a nonprofit center for investigative journalism.)

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