How the Council on Foreign Relations Took Over the U.S. Chamber of Commerce

 

CFR’s Newt Gingrich, Thomas Donohue CFR corporate member U.S. Chamber of Commerce

Author and investigative reporter Mark Dowie published an article in the Washington  Spectator titled Corporate Lobby: The Third Chamber. Dowie’s story is about the transformation of the U.S. Chamber of Commerce into a corporate lobbying group who use their powerful government connections and large corporate donations to influence elections and buy the passage or defeat of legislation. He explains how Newt Gingrich was the architect of the new U.S. Chamber of Commerce and made Thomas Donohue its new leader. What Dowie failed to investigate was the Council on Foreign Relations connection. Gingrich and Donohue are Council on Foreign Relations members. The U.S. Chamber of Commerce is a Council on Foreign Relations Member Corporation. Many other influential CFR members worked behind the scenes in government and industry to pull off the transformation. The real story is that the Council on Foreign Relations has taken over the U.S. Chamber of Commerce and is using it to further the interest of member corporations, destroy the sovereignty of the United States and help achieve its goal of global governance.

Corporate Lobby: The Third Chamber

by Mark Dowie

Why do we criticize people for doing  what they’re hired to do? Take [Council on Foreign Relations member] Thomas J. Donohue, for example. Day after day the poor guy gets pummeled by Washing ton non-profits and mainstream media for doing his job. He’s out there challenging health care reform; suing the SEC to stifle the regulation of financial markets; lobbying Congress to reduce punitive damages in product liability litigation; attempting to gut the Foreign Corrupt Practices and False Claims Acts; undermining carbon pollution standards; questioning the causes of climate change; opposing a federal minimum wage; defending high-salt processed foods; attacking “net metering” of solar energy panels; interfering in the election of state supreme court justices; shilling for American tobacco overseas; opposing environmental legislation; fighting paid maternity  leave; persuading -American businesses to fight campaign-finance disclosure: opposing net neutrality; defending high pharmaceutical prices; and laundering large “anonymous” donations from the Koch Brothers’ Freedom Partners and Karl Rove’s American Crossroads Super Pac.

Why, should [Council on Foreign Relations member]  Donohue be rebuked for this very abbreviated list if those tasks were handed to him in 1997, when he began serving as CEO of the U.S. Chamber of Commerce [a Council on Foreign Relations corporate member], whose core mission was then, and still is, “to advance human progress through an economic, political, and social system based on individual freedom. incentive, initiative, opportunity and responsibility-“?

This would be a fair question were [Council on Foreign Relations member] Donohue committed to that mission and doing what he does for all American enterprise, or even for the 150 members of the U.S. Chamber Board of Directors, or the 3 million small businesses, 7,ooo state and local chambers, and 116 overseas American chambers he daims to represent in 103 countries.

But he’s not. He is, in fact, doing the bidding of a few national politicians and their mostly anonymous corporate sponsors who believed in 1996, and evidently still do, that a pragmatic, staid national chamber, founded to be “in touch with business  associations and chambers of commerce throughout the country'” was wasting its time and treasure.

A truly valuable trade association, according to this small group of Republican politicians and their corporate sponsors, could transform itself from a high-minded affinity group (described by a tobacco executive as a “weak sister”) into a fighting force for a few troubled American industries and products-tobacco for one, but also banking, health insurance, pharmaceuticals, firearms. coal. and other fossil fuels. All were threatened by progressive idealists and the excesses of federal regulation, according to a warning from corporate lawyer Lewis Powell. It is time, members of this corporate cabal argued, for “capitalists to carry the banner” of what Powell described as “confrontation politics” and “not to hesitate to attack liberals and push politicians for the support of the free enterprise system.”

Powell made his argument in a “confidential” memorandum written in 1971 at the invitation of his friend Eugene B. Sydnor Jr., chairman of the U.S. Chamber’s Education Committee. Powell, a former American Bar Association president, champion of winner-take-all capitalism, and a member of 11 corporate boards, warned that American business was “under broad attack” from political and social interests and organizations that wanted to institutionalize “socialism or some form of statism.” “We are not dealing with sporadic or isolated attacks from a relatively few, extremists or even from the minority of socialist cadre,” Powell wrote. “Rather the assault on the enterprise system is broadly .based and consistently, pursued. It is gaining momentum and converts.” The enemies of -American enterprise he descried included,  “not unexpectedly’ the Communists. New Leftists, and other revolutionaries who would destroy the entire system  both political and economic. These extremists of the left are far more numerous, better financed, and increasingly are more welcomed and encouraged by other elements of society, than ever before in our history”

Here was a memo from a man who had sought to keep the government from regulating cigarettes Iong after it was known that they’ were killing countless Americans and who one year later would be elevated to the Supreme Court. Powell was whining at full volume.

“Few elements of American society today- have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders. .. Business must learn the lesson, Iong ago learned by ‘labor and other self- interest groups, that political power is necessary; that such power must be assiduously [sic] cultivated; and that when necessary it must be used aggressively and with determination.” To silence the “disquieting voices” the national chamber “would require far more generous support from American corporations than it has ever received in the past.” The memo was leaked to investigative columnist Jack Anderson and widely circulated.

The pro-corporate movement it spawned would a few years later elevate men like [Council on Foreign Relations member] Newt Gingrich, Tom DeLay,  Dick Armey, and John Boehner to national prominence. Powell’s thinking would ultimately inspire like [Council on Foreign Relations member] Gingrich and his allies to transform the U.S. Chamber of Commerce.

Richard Lesher was a bright, conservative Pennsylvania gentleman who had been running the chamber for 22 years, when in 1994 he decided to support the [CFR member run] Clinton administration’s health care package. Like [Council on Foreign Relations member]Gingrich, Armey, and DeLay let the Chamber board know that Lesher had to go.

By 1997, [Council on Foreign Relations member]Gingrich had consolidated his power as Speaker of the House, and identified a replacement for Lesher, like [Council on Foreign Relations member]Tom Donohue, a take-no-prisoners Lobbyist for the trucking industry. The chamber, he told like [Council on Foreign Relations member] Gingrich and The Wall Street Journal, was a “sleeping giant, missing in in action from many important political battles.”

The deal was sealed over a three-hour dinner during which [Council on Foreign Relations member] Donohue expressed his opinions on tort reform, workers’ rights, businesses’  bottom lines, and financial regulation.

[Council on Foreign Member] Donohue turned out to be a near-perfect choice.  Not only has he quadrupled the chamber’s annual budget by scaring billions of dollars out of the corporations Powell said should be funding the counter-revolution. he has transformed the organization into the largest business lobby in Washington given the tobacco industry a global reprieve, offered wall  Street protection from Elizabeth Warren. Provided Big Pharma some hope for its future. And he can be credited with creating and maintaining a Republican majority-in both the House and Senate.

Biggest gorilla in town

“My goal is simple-to build the biggest gorilla in this town-the most aggressive and rigorous business advocate our nation has ever seen,” [Council on Foreign Relations member] Donohue wrote to Roy Mardin. the Philip Morris exec who had described the chamber as a weak sister. He then promised Marden to eliminate punitive damages in lawsuits against tobacco companies, who by then, it was clear, were killing and debilitating millions of people around the world.

“If there’s one thing I know, how to do it’s to provide great value to those who really step up to the plate…By agreeing to be a strong supporter, you will always be heard here and always have a voice,” he wrote to Marden . A check for $180,000 from Philip Morris arrived on [Council on Foreign Relations member]   Donohue’s desk a few days later, $100,000 of which immediately paid for TV ads opposing a bill Senator [Council on Foreign Relations member]  John McCain had introduced to increase cigarette taxes to pay for an anti-smoking program for children,

The new chamber president also threatened to “make life miserable” for politicians he didn’t like and promised anonymous deniability to America’s most embarrassing industries.

The chamber’s culture changed overnight, reflecting [Council on Foreign Relations member] Donahue’s announcement that he planned “to build a grass-roots business organization so strong that when it bites you in the butt, you bleed.” In less than two decades, with a chauffeured Lincoln, a private jet, and a $5.5 million annual pay, package, [Council on Foreign Relations member] Donohue became the nation’s most generously compensated American lobbyist.

[Council on Foreign Relations member] Donohue started by, expanding his lobbying team from two to 10. Today the chamber boasts 150 registered lobbyists, 87 of them in-house. It spends more on lobbying Congress ($124 million in 2014) than the next four organizations combined, and provides more election campaign support than either of the political parties, almost all of it for Republican candidates, who receive carefully laundered money from donors seeking the political cover a restructured chamber offers them.

Most of the money [Council on Foreign Relations member] Donohue raises is kept dark and its donors anonymous. “I want to give them all the deniability they need,” he declared as he began telling his donors that “people seem to listen to you more when you’ve got a bagful of cash.” It was an appealing pitch to businesses and industries with questionable conduct to hide. Yet with public anonymity comes private disclosure. Recipients of dark money must eventually be told who their donors are so they will know whom to reward with anti- regulatory law, policy, and other favors. Not long after [Council on Foreign Relations member]  Donohue placed a “show me the money” sign on his desk, he quadrupled the chamber’s annual budget from under $50 million to more than $200 million. He soon became the nation’s largest political campaign contributor, created an entirely new internal legal  subsidiary- and expanded another. He formed the Institute for Legal Reform (ILR)  to fight the power of trial lawyers’. The U.S. Chamber Litigation Center, an in-house, non-profit law firm, files more than 100 suits a year against federal regulatory agencies, mostly the EPA, SEC, and the Departments of Labor (including OSHA), Transportation, and Interior, whose regulations are perceived by [Council on Foreign Relations member] Donohue and his clients to stifle profit.

But his major accomplishment has been the recruitment of reliable, super-generous corporations. In 1997, only a quarter of Fortune 1,000 companies were members, and most of them paid paltry annual dues. Today almost all 1000 are members, and many of them part with very generous sums. Yet only a handful of donors provide the lion’s share of the chamber’s strategic assault funds. In 209 for example, 16 companies provided  55 percent of the chamber’s total budget, most of it targeting the Affordable Care Act.

Health insurers like Aetna, [CFR corporate member] Cigna, Humana, Kaiser, United- Health Group, and Wellpoint, stood to lose billions if the law passed.  A retrospective examination of their charitable contributions showed, they secretly handed the chamber a stunning $86.2 million in August 2009. Aetna alone ponied up more than $7 million. That money accounted for 40 percent of the chambers  $214.6 million expenditures in 2009. These companies are capable of producing their own ads and PR. But they use the chamber as a convenient and compliant front group.

Of the 1523 donations made to the U.S. Chamber in 2012, more than 95 percent were small and inconsequential. But that year more than half the chamber income came from 64 anonymous donors giving $121 million. To its campaign to rewrite the nation’s financial regulations.  Prudential contributed $2 million. [CFR corporate member] Goldman Sachs followed suit with an undisclosed eight-figure donation. When the chamber promised to attack tighter security requirements at chemical plants, Dow contributed $1.7 million. Another donor, to this day anonymous, gave more than $15 million. Donations of that size are not membership dues, they’re protection money.

The chamber claims to represent the “interests of more than three million businesses of all sizes, sectors, and regions.” Although that may be accurate, the claim is often made to sound as if three million firms are dues-paying members. While the chamber will not reveal membership numbers, or identities, it has admitted in the past to having fewer than 300,000 dues-paying members, many of them loosely affiliated through membership in state and local chambers that pay dues to the national organization.

[Council on Foreign Relations member] Donahue values his alleged small-firm members because some in Congress are more likely to listen to them than to big business. They’re real people rather than “corporate personhood” fictions that possess free speech and the right to make  unlimited contributions but can’t vote. Moreover, they “provide the foot soldiers, and often the political cover, for issues big companies want pursued,” [Council on Foreign Relations member] Donohue explains.

A bagful of cash

But it’s the money that provides the leverage. By 2010 the chamber was raising five times what it was before [Council on Foreign Relations member]Donohue arrived, almost  $250 million in contributions and grants. Most of the new money has been spent on lobbying, electoral campaigns. and fighting trial lawyers through the ILR, which also contributes dark money to campaigns, mostly to candidates opposing state supreme court justices with an affection for punitive damages against corporate defendants.

While one might expect that amount of money to produce consistently impressive election results, some cycles are better than others. The 2010 elections did bring a Republican majority to the House, thanks largely to chamber support of Tea Party candidates.

The 2012 election didn’t tum out too well for the chamber, which spent nearly $24 million to defeat several high-profile Democrats in Senate races, including Senator Sherrod Brown in Ohio, former governor Timothy Kaine in Virginia, Claire McCaskill in Missouri, and Elizabeth Warren in Massachusetts, all of whom are still in office. Of 15 Senate races to which the chamber contributed that year, only two event its way. The results were not much better in the House, where $7 million was pumped into 22 races and only four of [Council on Foreign Relations member] Donohue chosen candidates won.

Chamber spending in 2014, was again aimed at electing Republicans, with, for example, $5,697,144 invested in Thom Tillis’s successful campaign against Democratic Senator Kay Hagan and $3,701,491 to defeat progressive Democratic Senator   Mark Udall in Colorado.

[Council on Foreign Relations member]Donohue promises to commit $100 million to candidates in  2016. He rarely spends as much as he promises, but even half that amount, strategically spent, could keep both houses of Congress in his camp. Three million has already gone to replace retiring Senator Harry Reid in Nevada, and $10 million to support Senators Rob Portman (R_Ohio), Kelly Ayotte (R-N.H), and Pat Toomey, R-Penn. r.

Eroding Support

In 2005, the Council of State Chambers of Commerce commissioned Republican consultant Frank Luntz’s firm [ Luntz is a CFR pollster exposed by Penn and Teller  in 1996 CFR member Grover Norquist and Luntz debated Christopher Hitchens ] to poll 1000 local, state, and national senior corporate executives who are current or prospective chamber members. The survey revealed that chamber members nationwide  overwhelmingly support progressive social and business policies the U.S. Chamber is fighting.

For example, 8o percent of current or prospective members support raising their state’s minimum wage; 73 percent support paid sick- days; 72 percent support increased maternity leave time; and 82 percent support increased paternity-leave time.

In response, Luntz’s firm prepared a web seminar hosted by the Council of State Chambers in February of this year, providing “a few helpful hints on how to combat these reforms in your states.” Several local chambers had already left the national  organization. Luntz’s insulting response to his own survey will , almost  certainly lead to the exodus of others. And corporations I could follow  Apple, Mohawk Paper, Pacific Gas and Electric,  Exelon, and PNM Resources, who pulled out last fall, citing the chamber pro-fossil-fuel climate policy as their reason for leaving.  CVS Health Corporation, with its 7,800 retail drug stores, followed, revolted by the chamber’s overseas promotion, for another hazardous product, tobacco.

More recently, the staffs of about half a dozen U.S. Senators who were curious about the chamber selecting targets and taking positions contrary to the interests of many of its members, in particular regarding tobacco, surveyed the 108 corporations with executive representatives on the U.S. chamber Board of Directors. The Senate investigators found that approximately, half the corporate board members have anti-tobacco and/or pro-climate positions. And not one of their CEOs explicitly supported the chamber’s lobbying actions on tobacco or climate change.

If the chamber board and funders don’t mind the slow but steady exodus of state and local chambers, and the departure of some of the most distinguished corporations in American business, they will keep their consummate Washington fixer at the helm. Yet only a handful the nation’s business and political Ieaders brought [Council on Foreign Relations member]Tom Donohue to Washington. What can be done can be undone.

Mark Dowie is an author and investigative reporter. This article appeared in the Washington Spectator but couldn’t be found on-line at the time I updated it to expose the CFR role in the Chamber of Commerce takeover. (http://washingtonspectator.org)

 

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