US business lobby grows bigger, stronger

The U.S. Chamber of Commerce is building a large-scale grass-roots political operation that has begun to rival those of the major political parties, funded by record-setting amounts of money raised from corporations and wealthy individuals.

The chamber has signed up some 6 million individuals who are not chamber members and has begun asking them to help with lobbying and, soon, with get-out-the-vote efforts in upcoming congressional campaigns.

The chamber's expansion into grass-roots organizing -- coupled with a large and growing fundraising apparatus that got a lift from Supreme Court rulings -- is part of a trend in which the traditional parties are losing ground to well-financed and increasingly assertive outside groups. The chamber is certainly better positioned than ever to be a major force on the issues and elections it focuses on each year, analysts think.

The new grass-roots program, the brainchild of chamber political director Bill Miller, is concentrating on 22 states. Among them are Colorado, where incumbent Democratic Sen. Michael Bennet is vulnerable; Arkansas, where Democratic Sen. Blanche Lincoln faces an uphill reelection battle; and Ohio, where the chamber sees opportunities in numerous House races and an open Senate seat.

The network, called Friends of the U.S. Chamber, has been used to generate more than a million letters and e-mails to members of Congress, 700,000 of them in opposition to the Democratic healthcare plan. That is an increase from 40,000 congressional contacts generated in 2008.

What makes the initiative possible is a swelling tide of money. The chamber spent more than $144 million on lobbying and grass-roots organizing last year, a 60% increase over 2008, and well beyond the spending of individual labor unions or the Democratic or Republican national committees.

The chamber is expected to substantially exceed that spending level in 2010.

The chamber's expanding influence is worrisome to top officials in the White House -- including Chief of Staff Rahm Emanuel, who has expressed concern about the chamber in the past, and senior advisor Valerie Jarrett, who tried to build direct contacts with company executives last fall when the chamber was fighting the administration's legislation to regulate carbon emissions.

Several companies, including Pacific Gas & Electric and Apple, left the chamber over its stance on climate policies, but since then many more firms have joined and made substantial contributions, chamber President Tom Donohue said.

Amassing cash

Two major factors are driving the chamber's growing success in fundraising.

First, President Obama and Democratic majorities in both houses of Congress have alarmed a widening circle of business leaders with their calls for greater government involvement in healthcare, tighter federal regulation of the financial industry and legislation to help unions organize workers, among other issues.

Second, the recent Supreme Court ruling that corporations have a free-speech right to spend money to help elect or defeat candidates not only struck down a century of laws limiting such spending, but it also made many business executives feel more comfortable about using corporate money for political purposes.

Industries that are the most directly affected by Washington policies and regulations -- pharmaceuticals, for example -- have always spent lavishly on lobbying and politics. But many others have held back, deterred by concern over violating the complex laws on campaign spending and by a general sense that putting money into politics might open companies to criticism.

The Supreme Court decision appears to have allayed those concerns, according to corporate lawyers and others involved in the process.

"In the past a lot of companies and wealthy individuals stood on the sidelines," said Robert Kelner, who heads the Election and Political Law Practice Group at Covington & Burling, one of Washington's most influential corporate law firms.

"In just the last election, we had the spectacle of John McCain threatening to prosecute his own supporters if they spent their money on outside groups that ran advertising in the presidential race.

"That cloud has been lifted," he said.

Anonymity

Using trade associations such as the chamber as the vehicle for spending corporate money on politics has an extra appeal: These groups can take large contributions from companies and wealthy individuals in ways that will probably avoid public disclosure requirements.

The chamber has developed that into something of a specialty: Under a system pioneered by Donohue, corporations have contributed money to the chamber, which then produced issue ads targeting individual candidates without revealing the names of the businesses underwriting the ads.

At the chamber, officials contend that rising donations are less the result of the recent Supreme Court ruling than they are of a 5-4 decision in 2007 in which the court ruled it was unconstitutional to ban issue-related advertising close to an election.

As a result of that ruling, the chamber was able to spend $1 million on so-called issue ads in the final days of the Massachusetts Senate race in January to help elect Scott Brown, the state's first Republican senator in decades.

As ominous music played in the background of one of the ads, a moderator intoned: "Washington politicians continue to fail us. More spending and fewer jobs. Scott Brown . . . supports measures that hold spending and cut taxes. . . . Call Scott Brown. Thank him."

Powerful as the effect of such advertising could be, the chamber and its allies expect the next big expansion of influence will come in street-level organizing and voter turnout operations.

Miller, a former chief of staff to a GOP lawmaker and co-owner of a restaurant in Washington's tony Georgetown section, built up the chamber's grass-roots organization in 2008 and expanded it in 2009 with the help of consulting firms.

Studying magazine subscriptions, voter registration and consumer buying habits, the consultants built a list of potential allies in 122 key congressional districts.

Individuals were invited to join the Friends of the U.S. Chamber initiative and were promised updates and special insights on Washington. They were then "activated," asked to write letters or call Congress on a particular issue or get involved in events in the districts.

Miller said the so-called activation rate was "roughly equivalent" to the rate claimed by Organizing for America, the network known as Obama for America during the presidential campaign, which has twice as many members.

The chamber has also given its staff, especially senior leaders, incentives to push fundraising. They are now working, in effect, on a commission system: the more money they bring in, the more they are compensated.

Leaning right

Officially, the chamber is a bipartisan nonprofit organization, but over the last decade it has tilted decidedly toward the Republicans. During 2008, 86% of the spending by the chamber's political action committee went to Republicans. Far more was spent on issue ads, most supporting GOP candidates.

The chamber says it represents 3 million companies that pay dues to the national chamber or a local affiliate, though internal documents suggest the organization's treasury is filled in substantial part by contributions from a couple dozen major corporations most affected by Washington policymakers.

Tax records from 2008 show that 19 companies or individuals paid between $1 million and $15.3 million, providing a third of the chamber's total revenue that year. Because the chamber is a nonprofit, it must disclose donations, but not necessarily the identity of the donors.

The chamber insists that those donors remain anonymous.

Some labor-backed organizations, such as Working America, which has 3 million nonunion members nationwide, have also declined to release details of its donors, which suggests a rocky road for legislation to require more transparency.