Wednesday, Aug 19, 2015, 4:26 pm
How the U.S. Chamber of Commerce Keeps Working People Poor and Destroys the Environment
The Chamber of Commerce is a juggernaut in the American political system, and it doesn't use that power to fight for policies that would benefit much of anyone besides the ultra-wealthy. That's one takeaway from Alyssa Katz’s new book The Influence Machine: The U.S. Chamber of Commerce and the Corporate Capture of American Life, an enlightening history of the transformation of the organization from its roots as a central committee of business leaders proposed by President Taft to serve as his advisors to the electoral, legal and media mercenary that today protects some of the U.S.'s most viciously destructive corporations from any government regulation. The book follows the Chamber down campaign trails, into courtrooms and out to its hundreds of worldwide outposts—and documents the heavy damage to international workers, consumers and the environment along the way.
Katz shows that while the Chamber has sharpened itself over the 20th century into a dangerous political instrument for capital, it has also been constantly plagued by its own weaknesses, limitations and crises—sometimes as a result of the extremist positions it routinely takes. I spoke with Katz recently via telephone about her new book.
Let's start with a general description of the Chamber of Commerce. Who makes up the Chamber, and why would a corporation decide to join it?
The Chamber of Commerce is a business trade association and any business can join. The Chamber claims more than 3 million members, and the majority of those are in fact members of their local Chambers of Commerce. Those Chambers are in turn members of the national federation, but the U.S. Chamber counts them as members. But in fact the core membership of the Chamber is a fairly small number of businesses that contribute a fairly large amount of money—namely a few dozen that contribute more than half of the budget, and about 1,500 that are contributing pretty close to 94 or 95% of the total. So while it's a very diverse group of businesses, the organization is really skewed toward serving the largest of those who contribute most generously.
And what does the Chamber do for these corporations?
The Chamber really works from four fronts. One is as a pure lobbying organization. The Chamber is the biggest and most active in all of Washington. Over the past 15 years or so, it has spent more than a billion dollars on lobbying. If the lobbying doesn't succeed, the Chamber has a whole litigation unit that will go to court, up to the Supreme Court, to block unwanted legislation.
Also, the Chamber is very involved in the regulatory process, fighting regulation it doesn’t want. Lately, it has targeted the EPA and the Obama Administration’s greenhouse gas regulations and power plant regulations.
And finally, you have an election and campaign apparatus. The Chamber spends tens of millions of dollars every cycle on Congressional races to secure seats for friendly and loyal members of Congress—almost all of them Republican.
The organization is basically a lobbyist for hire that reaches into other arenas of power to set the policy agenda for the nation in areas of central concern for its members.
Now it isn’t like you sign up and pay dues and the Chamber does all this stuff for you. Major businesses hire the Chamber to carry out very particular legislative or other projects to change policies in ways that have big consequences for American consumers, American workers, international workers, the environment, and consumer regulations.
Non-profit trade groups like the Chamber do not have to disclose their donors. They are protected by Internal Revenue Service rules that govern what they call social welfare organizations. Under this cover, the Chamber can take large contributions from companies that want particular outcomes in Washington, but do not want to be exposed publicly to their customers and in the political arena to scrutiny for their actions.
You mentioned the role the Chamber plays in elections. Can you talk more about how you see this playing out in 2016?
The Chamber has been very instrumental in altering election law to allow a greater corporate role in elections and has in many ways led the way in sending anonymous and unlimited contributions from companies. Americans for Prosperity [a conservative advocacy group founded by Charles and David Koch] and American Crossroads [Karl Rove’s super PAC] are all following a playbook the Chamber took a lead in writing.
Really, the watershed year for the Chamber in its election spending was in 2010. What they disclosed to the Federal Election Commission was $33 million for 2010, but it seems like there’s a lot of funding that the Chamber funnels through other organizations that we don’t know about. They put this money into contested races, where Democrats were in “purple” districts or polled within some narrow gap with the Republican challenger. It proved very successful.
We have no direct evidence of coordination with Republican Party—that would be illegal—but clearly their spending was in sync with other independent groups and with the Republican strategy to capture the majority.
In 2016, we're now at a very interesting point. The Chamber has succeeded, along with allied outside spending groups, in securing a very solid Republican majority in the House and a fairly solid majority in the Senate. Other outside spending groups, particularly those associated with the Koch brothers, have really succeeded in getting candidates further to the right of the Chamber into a bunch of seats. The rise of a Tea Party faction in Congress is making life difficult for the Chamber and for its allies in Republican leadership. They are a major impediment to things like infrastructure investment, the renewal of the export/import bank, and other agenda items that are very important to the Chamber.
So we're seeing in 2016 the Chamber mobilizing to possibly challenge Tea Party-type incumbents in primaries to get rid of them and get more business-friendly candidates in there.
The history of the organization you provide in your book is fascinating. You talk about how the Chamber spent much of the 20th century fighting Communism, in effect starting McCarthyism in the 1930s even before McCarthy himself. They even trained 150,000 businessmen to be essentially a cadre of pro-business, anticommunist militants "to make sure capitalism ... won the 1960 elections." Do you think the Chamber's attacks on the Left have contributed to their success today?
We saw a mid-20th Century effort to target communism, but remember this is during the same era in which we first saw the New Deal and the Great Society. You have business making these efforts, certainly legitimizing McCarthyism and anti-communism, in part out of a lot of fear of what labor would do, even within the constraints of Taft-Hartley and other laws. They were concerned that labor militants and mobilizations would have a negative effect on their operations. It obviously had very, very devastating impacts for individuals who ended up being targeted by Congress, being targeted by their companies. And it clearly had a negative impact on labor organizing and left movements, that’s unquestionable. McCarthyism and the Chamber legitimized that.
That said, after McCarthyism was the rise of an incredible wave of 1960s, 1970s advocacy and activism with a lot of support from Washington. You had the whole Ralph Nader-led and -inspired consumer movement, the environmental movement, labor hanging in there and growing. You had an environment in which its power in Washington was growing, and in that moment, the pendulum was swinging in favor of a stronger regulatory state. Government really operated in the public interest in a classic sense. The Chamber was pretty powerless at that time.
We’ve now again seen this pendulum swing back towards businesses, which have reacted with a vengeance to reverse these environmental, labor and consumer gains. It's only because the advocates and their allies in Congress and the public were largely supportive of the strongly regulatory state to protect health and safety that we ended up seeing this backlash.
In the book you talk about how the Chamber built up its current four-front strategy by picking up tactics from its opponents, starting with those ‘60s and ‘70s labor and social movements, and "mimicking and outdoing" them.
The most obvious example was how Tom Donahue, the CEO of the Chamber and the leader of its transformation into this political machine, first visited the Chamber in the 1970s and created Citizen's Choice. It was a membership group for pro-business advocacy, an early example of astroturfing. It was a very deliberate response to the consumer movement and groups that had risen in Washington, particularly Public Citizen created by Ralph Nader and allies. It started building membership lists, putting out newsletters.
The Chamber very smartly took a lot of the playbook of how the movements of the ‘60s and ‘70s were able to win political power.
But even as the Chamber was finding its most useful mix of political strategies, your book comes back to the limitations and weaknesses that are built into the Chamber’s machinery. You talk about the "tangle of paradoxes" that actually undermine the Chamber and keep it from being as big and scary of a shadow organization as it wants to be.
I think we've seen this play out in a lot of the more high-profile controversies that the Chamber has been involved with in the last few years. The Chamber takes funds from particular corporate interests—when we do know who the funders are, it’s overwhelmingly companies whose products cause collateral or, like in the case of tobacco, direct damage to the public—where the company knows that they cannot justify actions that they desire to expand their market. So they hire the Chamber to rehabilitate the issue and claim that whatever agenda item they advocate for is, in fact, in the interests of all business, not just their particular industry.
So you have other businesses that say, wait a minute, you’re killing people—we don’t want to be part of this organization killing people. These kinds of conflicts end up really damaging the Chamber’s credibility as an advocate for business when it’s so ready to use its name and power to advocate for particular industries’ interests.
We saw this with the Chamber’s fight versus cap-and-trade legislation in Congress a few years ago, and now with its ongoing efforts to fight EPA regulations on greenhouse gases and on coal-fire power plants. The Chamber is mobilizing pretty aggressively on both of those fronts, and you have a lot of Chamber members having to put themselves out there to the public, sign pledges, and be part of other organizations that are saying they are taking steps to stop climate change.
So these companies are caught between the Chamber and their own pledges. And then their customers, board members, and environmental groups ask, “What the heck are you doing as a member of this group that exists to lobby in favor of greenhouse gas emissions on behalf of secret donors?” Environmentalists have been able to infer that it’s likely coal-related companies, like railroads that ship a lot of coal, or power companies that have a lot of coal-use power plants that are funding the Chamber’s campaigns against environmental regulations. But we can only guess because the Chamber's donors are secret.
What role does the Chamber and its affiliate organizations play in the international economy? I found this chapter in your book really interesting, especially how the Chamber affects labor in countries like China.
The Chamber has—in addition to affiliated local organizations in the US—affiliated Chambers around the world. They’re independent organizations, but they’re also members of the U.S. Chamber in an international federation. These are very often viewed by political leaders in those countries as, if not representatives of the American government, then the barometer of what American businesses are seeking and of American policies abroad.
The Chamber is more active in some countries than others. China is the example I focus primarily on in my book. The Chinese government rewrote its rules and put forward proposed labor laws that would have, in their initial form, prevented the use of temp labor for any extended period of time. Once a Chinese company had a temp in its employ, it would have to give them a job, and the workers would have various protections against firing.
This caused enormous pushback from American businesses. Their main vehicles were one of the two American Chamber organizations in China. There were also enterprises in China lobbying against these rules. The rules went back into redrafting and came out with much wider clearance for companies, domestic or international, to use temporary labor in China and never have to hire those workers as employees. Temp companies, like the major global temp worker agency Manpower, now see China as a huge growth market.
It's amazing. It’s a “pro-worker” state that historically a lot of worker protections, and most of the other international business players were comfortable with the worker protections because they were pretty equivalent to what Europe had. But because the proposed rules did not offer near complete freedom to use temp labor, the AmChams—the American Chambers of Commerce—really aggressively lobbied and got their way. Labor laws like the proposed temp law in China could be stronger than ours and help elevate American workers. But instead, the AmCham is pushing to weaken those laws and moving the power of workers’ rights downwards globally through that action.
How has the Chamber more directly helped weaken unions and cut into their membership here in the U.S.?
Gosh, let me count the ways. I give one seemingly trivial example in the book, but which I think is such a classic Chamber thing since it’s totally under the radar for the public, and even people in the labor movement didn’t realize this was going on, but it has had a big impact.
The National Labor Relations Board, not that long ago, sought to require notices in workplaces that said you have the right to form a union and you have the right to organize without retaliation. The Chamber and the South Carolina Chamber of Commerce went to court to block this regulation on a technicality. There was no way they could challenge the regulation on its merits, but the Chamber was able to say the administration didn't follow Administrative Procedure Act, which is this very arcane federal law that dictates how regulations get promulgated.
They were successful in getting this sidelined. This may seem like a very small thing, but across every American workplace, it has very big repercussions and helps maintain an uneven playing field in favor of employers against unions.
The Chamber ended up holding the line against the Employee Free Choice Act in 2009. It was a bill that would have enabled much easier worker organizing by facilitating card check organizing. This was introduced at a time when you had Democratic majority in both houses.
There was a real chance this could have become a law, but the Chamber and its business allies were instrumental in keeping enough potential supporters and Democrats afraid of supporting the act. Again, a very simple straightforward measure which would have made labor organizing much more feasible, didn’t get to a vote in a climate where the Chamber was preparing to spend a lot of money to attack members of Congress who didn’t vote its way.
So given the fact that Democrats and Republicans are both unable or unwilling to push back against the Chamber as the Chamber attempts to undermine regulation, what role could the labor movement play to enforce this regulation of big corporations?
All you can do is change the balance of power in Congress. With the Chamber’s spending for 2016, I think the only way to deal with it is huge mobilizations with labor and other classic Democratic Party constituencies—and to some extent elements of the Tea Party as well that have common cause against crony capitalism and favoritism by Congress for business.
And you need candidates like Bernie Sanders—which I hope we’ll have in some upcoming Congressional primaries, if not general elections—who can actually motivate voters to come out, and not just the same old candidates who aren’t going to represent people’s interests.
Simon Swartzman is a writer in Chicago.