ACTION ALERT: Investigate the Chamber of Commerce’s Use of Foreign Funds in US Election Campaigns

October 11th, 2010 - by admin

Matt Lockshin / CREDO Action from Working Assets & Think Progress – 2010-10-11 02:44:46

ACTION ALERT: Investigate the Chamber of Commerce’s Use of Foreign Funds in US Election Campaigns
Matt Lockshin / CREDO Action from Working Assets

(October 10, 2010) — The US Chamber of Commerce is the poster child for corporate corruption of our electoral system. This year alone the Chamber has pledged to spend $75 million on ads attacking candidates who don’t meekly bow down to the biggest and wealthiest corporate interests.

However, an explosive new report by the Center for American Progress [see story below] reveals that some of that corporate cash might be coming from foreign entities, which would be a federal crime.

There is already entirely too much corporate cash spent on our elections. It’s intolerable that our democracy would be further undermined by illegal donations from foreign interests.

That is why we are joining our friends at MoveOn in asking Attorney General Eric Holder and the Justice Department to open an investigation immediately.

Click here to automatically sign our petition and tell the DOJ to investigate the US Chamber of Commerce immediately.

The Chamber of Commerce denies that it uses foreign money in any way that’s illegal, but the Center for American Progress has documented how the Chamber aggressively raises money outside the United State from foreign entities — including state-run companies in Bahrain, Abu Dhabi, India and Russia — and deposits that money into the same general fund used to fund the Chamber’s political program.

Because of the Chamber’s tax status as a trade organization, it is able to shield most of its financial information from the public. So without a government investigation, all we have is the Chamber’s woefully insufficient word that it is abiding by the law.

Given the stakes of this election, we cannot settle for nothing more than “Trust us” from an organization with such a huge credibility problem. And we cannot wait as this issue winds its way through a Federal Elections Commission rendered slow and toothless by its Republican members.

That is why we are calling on the Department of Justice to immediately move to investigate this explosive charge.

“US” Chamber of Commerce Running
Foreign-Funded Partisan Attack Ads

Think Progress

(October 10, 2010) — The largest attack campaign against Democrats this fall is being waged by the US 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 September 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 US 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 US 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 “US-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 US 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 US 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 US Chamber of Commerce. The membership form also explicitly states that the foreign-owned firms are welcomed.

Like the Chamber’s involvement in Bahrain, the US Chamber of Commerce operates in India through a group called “US-India Business Council” (USIBC), which has offices around the world but is headquartered in the US 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 US 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 US 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 US 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 US Chamber of Commerce but nonetheless send dues money back to the US 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 US 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 US 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 US 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 US 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 US 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 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 US 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 fund-raising 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.”