Chamber Should Be Held Accountable for Campaign Operations

Oct. 11, 2005

Chamber Should Be Held Accountable for Campaign Operations

Statement of Joan Claybrook, President of Public Citizen

For the past few election cycles, the U.S. Chamber of Commerce, through a subsidiary named the Institute for Legal Reform (ILR) and front groups in the states, has been actively attempting to elect business-oriented attorneys general and state Supreme Court justices throughout the country.

But in doing so, it has violated state law requiring public disclosure of its secret funding of campaign ads. The Chamber has operated stealthily, creating front groups to sponsor attack ads against pro-consumer, progressive candidates for these posts. Behind the scenes, however, the Chamber’s ILR conducted polls, did research on candidates, masterminded ads, determined whether and how to place campaign ads and provided millions of dollars in contributions for state races.

In Washington state, U.S. Chamber of Commerce employees were directly involved in planning, drafting and placing ads, according to testimony revealed recently as part of a state investigation. In fact, the U.S. Chamber was so secretive that local chambers in Washington state did not know the U.S. Chamber was launching ads against state attorney general candidate Deborah Senn until after the fact, and they drafted a letter expressing their strong dissatisfaction with the Chamber’s actions.

Over the years, the Chamber has raised tens of millions of dollars from major corporations to carry out this work, which it claims need not be disclosed because the ads are issue ads, not campaign ads. This is not true, however. Last month, King County Superior Court Judge Richard Jones ruled that the anti-Senn ads were clearly ads campaigning against Senn.

The corporations the Chamber gathers money from do not want to be held accountable for fraud, deceptive practices or dangerous products by state attorneys general or state courts. Many are the same companies that have been fighting to pre-empt state laws with weaker federal rules and to limit their own liability through federal regulatory pre-emption. The Chamber has collected money for its electoral efforts from drug companies, heavy manufacturers, large retailers, insurance companies and banks.  In all, the Chamber has spent $100 million on its “legal reform” efforts, according to testimony from a Chamber/ILR employee.

These state races are particularly important to consumers. Because of the pro-business, anti-consumer bent of the current administration, state attorneys general and state Supreme Courts are becoming the place of last resort for consumer protection.

We are here today because throughout the country, the U.S. Chamber has not been open and aboveboard in conducting political campaigns for its corporate clients. In Washington state, it orchestrated attack ads using a front group, the Voters Education Committee, which is a group created by the ILR. The attack ads launched against the 2004 Democratic attorney general candidate, Deborah Senn, were paid for with $1.5 million from a joint Chamber/ILR account. In fact, in the primary race, the Chamber spent more than all the other candidates combined. But voters didn’t know that. Deborah Senn ultimately lost her race, in part because of the ads.

Although the Chamber has boasted about its influence in the outcome of elections in as many as 25 states, it has been forced to account for its deep involvement in these campaigns in only a handful of instances – primarily Mississippi, Ohio and now Washington state.

In Ohio, the Ohio Elections Commission in 2003 determined that the U.S. Chamber had violated state law when it paid for TV ads in the 2000 judicial race. In Mississippi in 2000, a U.S. district court judge ruled that the Chamber broke campaign disclosure laws by not reporting how much it spent on television ads in that state’s race for the Mississippi Supreme Court. The judge found that the ads did not discuss issues but were designed to promote candidates, but the Fifth U.S. Circuit Court of Appeals overturned that decision because the ads did not specifically urge people to “vote for” a candidate.

But that Fifth Circuit ruling was made prior to the U.S. Supreme Court’s ruling on the Bipartisan Campaign Reform Act. That Supreme Court decision strongly affirmed the right of the public to know who is paying for campaign advertisements and with how much money. The Court wrote, “The notion that the First Amendment erects a rigid barrier between express and issue advocacy also cannot be squared with this Court’s longstanding recognition that the presence or absence of magic words cannot meaningfully distinguish electioneering speech from a true issue ad.”

The action we are filing today is intended to lift the veil of secrecy that has concealed the role of the U.S. Chamber of Commerce in these election violations and to send a message: The systematic and intentional violation of state campaign laws to deceive voters must not be allowed to continue. It appears that only the imposition of stiff penalties will ensure that the Chamber and its subsidiaries will obey the law.

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