Chapter 14
Star Chamber
Bruce Josten has been at home at the U.S. Chamber of Commerce for more than forty years. And for about thirty-five of those years, he had pretty obvious jobs.
Josten is on paper the executive vice president for government affairs, making him the second-ranking officer at the nation’s largest and oldest trade association. In reality, he’s the chamber’s chief strategist, chief lobbyist, chief policy expert, chief go-to guy. For thirty-five years, Josten has done battle with the trial bar. For thirty-five years, Josten has pressured and educated and lectured Congress on trade and health care and immigration and taxes and spending. For thirty-five years, Josten has put together coalitions of businesses to fight for (largely) free-market legislative priorities.
In January 2010, the Supreme Court issued Citizens United, and Josten got a new job. Not one he’d asked for. Not one he expected. And not one he likes. In addition to all his other jobs, he has added, in his words, the title “chief defender of the business community’s right to open its mouth.”
The trade association became the left’s foil for everything supposedly wrong with corporate spending. And Josten’s days became all new. He found himself testifying in front of Congress against the DISCLOSE Act and other speech-suppression ideas. He found himself defending against endless attempts by the left to force the chamber and companies to disclose their political funding and political spending. He found himself researching the complex web of liberal groups that then used that disclosure to jointly target and harass companies engaged in politics. He found himself calming nervous CEOs whose companies came under pressure to leave the chamber and withdraw from political speech. He found himself educating entire C-suites on the left’s game plan, and the perils of giving in to the intimidation.
“Somebody had to get out in front of this as a spokesman,” says Josten, who credits a whole team of people at the chamber who have for several years now made it their mission to respond to the assaults. “And the mad, mad, mad thing of today is that somebody had to. We thought NAACP v. Alabama was the definitive answer—that there are rights to freedom of speech and association. The business community, and business owners, they are a foundation of this country. They represent every worker in America. Of course they must be allowed to speak about our country’s direction. And of course that voice is healthy for debate.
“But look at these groups. Look at this campaign. Look at the stakes. These folks are very clear: They not only want to silence business during a political campaign season, they want to move the business community entirely out of the legislative process in Congress, in the states. They want us silenced entirely. And they’ve got a game plan.”
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That game plan hinges on disclosure.
One thing that drives the left nuts about the chamber is that it is a trade association. Companies are barred by law from giving directly to parties and candidates. And they must disclose a lot of their political giving. But the chamber as a nonprofit is allowed (just like unions) to keep its donors anonymous, and to directly spend money on political campaigns.
And the chamber has been spending money in campaigns—growing amounts of it. Josten went to Harvard, and he gives off the appearance of a swanky lawyer. In reality, he’s a scrapper. It makes him a good fit with chamber CEO Tom Donohue, whose prior job was as the combative head of the powerful American Trucking Associations. When Donohue took the top chamber job in 1997, one of his goals was to ramp the organization into a far more powerful lobbying and political voice in defense of business and free markets. Pre-Donohue days, the chamber spent little if anything on politics. In recent cycles it has spent an average estimate of $35 million, much of it in support or defense of Republicans and free-market ideas. This amount pales compared to the regular union spending blowouts on elections. But the left would rather the chamber spent nothing at all.
Obama shared that dislike, and came to office intending to take out the organization. Not that he showed his cards at first. Obama was still acting as a uniter, and he maintained a wary but cordial relationship with the trade association for about six months. His moment came in the summer of 2009, when the chamber dared to oppose his budding proposal for a single-payer health system, running ads correctly warning that such a policy would lead to higher taxes and “government control over your health.”
The White House reaction was swift, and in keeping with the sort of intimidation the Obama team had practiced in the 2008 campaign—against the Hillary super PAC, and against conservative groups like the American Issues Project. Obama began meeting privately with dozens of CEOs, sidelining the chamber and letting it be known that their association with the group might cause them problems. On October 9 he elevated the campaign, using his podium to slam the chamber in front of the entire press corps, berating it for opposing his agenda. The president had opted out of the presidential financing system so that he could accept unprecedented campaign contributions. Yet here he was griping that the chamber spent money on lobbying.
These days, Obama routinely calls out opponents by name. It’s commonplace. But early in his tenure it was still a bit shocking to see a president—one who’d taken an oath to represent all Americans—use his power to demonize a specific organization. Activists took the president’s cue and mobilized against companies allied with the chamber’s campaign against single-payer care. Some staged unpleasant protests outside the homes of insurance CEOs. They showed up at CIGNA CEO Edward Hanway’s house outside Philadelphia. They showed up in Indianapolis, outside the home of WellPoint CEO Angela Braly. They showed up in Wayzata, Minnesota, at the home of UnitedHealth CEO Stephen Hemsley. In September, they staged some 150 demonstrations at insurance headquarters nationally. The joint activist-presidential attacks provoked publicity, which was Obama’s aim. It sent a powerful message to every CEO that the chamber was a political risk.
It was part of a broader effort by left-wing organizations, which had for more than a month been targeting individual chamber members. This was 2009, and one of the hot topics in Washington was climate change. Democrats had failed miserably in prior efforts to pass climate legislation, but Obama had reelevated the issue and promised to ram through a bill. Corporate America was still highly sensitive to the topic, worried about what would happen if it opposed Obama. As Jim Rogers, the CEO of Duke Energy, said in that era, “If you don’t have a seat at the table, you’ll wind up on the menu.” Some thirty companies had even formed a new organization, the U.S. Climate Action Partnership (CAP), to try to demonstrate their interest in reducing greenhouse gas emissions.
The left was aware of this sensitivity, and pounced when the chamber came out in late summer against the Obama suggestion that it might use the Clean Air Act to impose climate regulations. The chamber wasn’t opposed to steps on global warming. It instead argued that Congress was the only appropriate body to impose such a massive shift in the energy economy, and that the United States should consider it only if the world’s biggest polluters—China, India—also took steps.
Liberal groups didn’t have a roster of chamber donors, but they did have at the ready a list of company executives who were formal board members of the chamber—including a short list of those they felt most susceptible to pressure. Thus began a campaign against select boards and CEOs, in which they labeled any organization that stayed with the chamber a climate denier. Weak-kneed companies started folding like accordions. Two California utilities, PG&E and PNM Resources, both announced their withdrawal from the chamber. Also nuclear-power generator Exelon. Nike was a particular profile in noncourage, issuing a statement complaining that it “fundamentally disagrees with the U.S. Chamber of Commerce’s position on climate change and is concerned and deeply disappointed with the U.S. Chamber’s recently filed petition challenging the E.P.A.’s administrative authority and action on this critically important issue.” (Nike skipped over the small detail that EPA had no administrative authority.) The company withdr
ew from the chamber’s board, though kept its (useful) membership. Apple got in on the action, noting that “we strongly object to the chamber’s recent comments opposing the E.P.A.’s effort to limit greenhouse gases.” It issued a resignation letter, effective immediately.
Josten points out archly that not one of the corporate members of CAP ever endorsed Waxman-Markey, the Democrats’ proposed cap-and-trade bill. They all knew how bad it would be for the economy. Yet several CAP members were happy to make a spectacle out of their resignation from the chamber, in an effort to curry greenie points. “We were brutalized as an organization simply for pointing out a few obvious realities, like that no climate action would make a difference unless all countries participated,” he remarks.
The pressure was so successful, liberals couldn’t wait to replicate it. They got their next chance in January 2010, only a few weeks before Citizens United. The National Journal’s Peter Stone broke the news that the chamber ads of 2009—the ones that had slammed Obama’s plan for single-payer health—had been funded in part by six large health care insurers. Since this was money to nonprofits, the donations were legally anonymous. But two health care lobbyists had divulged the insurers’ names to the reporter.
Liberals were thrilled to have a new list of corporations to attack. Nineteen Senate Democrats almost immediately called for legislative retribution, demanding that the insurers be stripped of their antitrust exemption in the coming health care bill. Obama joined those calls. Another round of protests ensued. In early March, thousands of union and liberal activists bombarded the insurance industry’s annual conference, held at the Ritz-Carlton hotel in Washington, issuing “citizen’s arrest” warrants for health care CEOs, engaging in civil disobedience, and unrolling an oversized yellow police tape reading “CORPORATE CRIME SCENE.” Later that month, nine protestors were arrested in downtown Manhattan on charges of disorderly conduct while protesting at WellPoint’s corporate offices—blocking the entrance, chanting “Arrest the Profiteers.” It was part of a dozen similarly riotous sit-ins across the country. They were all designed to target the companies and direct public animosity against any organization that opposed Obama’s health care agenda.
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Obama signed his health care bill that same month, and conservatives got a powerful issue. Citizens United also gave them a voice. As the midterm season rolled along and Democrats faced a tidal-wave defeat, they escalated their campaign against corporations and nonprofits—and made the Chamber of Commerce a unifying target for the whole campaign.
Congressional Democrats pursued their DISCLOSE agenda, and Josten spent days in hearings, attempting to get members of the most democratically elected institution in the world to remember the Constitution. Democratic operatives filed complaints about conservatives with the FEC and the IRS. Activists started petitioning other federal agencies to impose disclosure, and unleashed shareholder proxy wars against companies. Obama began his public campaign against “shadowy” groups, echoed by the liberal establishment and powerful Senate Democrats, spurring the IRS to action.
But the president had a special and ugly attack waiting for the chamber, which the White House still blamed for the agony of, and anger over, its health care law, and Dodd-Frank, and its prospective climate bill. And for the millions of dollars the chamber was spending against Democrats in the midterm. Obama’s goal was twofold—to silence the chamber, and to get more names of companies to target.
Obama let loose that attack in early October, about a month before the election. A little-known researcher by the name of Lee Fang at the liberal Center for American Progress crafted a highly irresponsible posting for its ThinkProgress site. It pointed out that the chamber accepted foreign “dues money” and on the basis of this argued that the trade group was “likely skirting longstanding campaign finance law” against foreign spending in U.S. elections. It cleverly dropped in the names of some Middle Eastern countries that hosted chamber chapters—Bahrain, Egypt, Abu Dhabi—to make it all sound a little more sinister. Fang’s “likely” was proof that he had no idea what he was talking about and was engaged in pure muckraking.
That muckraking was good enough for the president of the United States, though, who two days later in a public rally complained bitterly about a new round of ads that were running against his Democrats. “Just this week, we learned that one of the largest groups paying for these ads regularly takes in money from foreign corporations,” Obama railed.
The rapid response from the rest of the liberal establishment was almost impressive. The Democratic National Committee rushed out ads repeating the libel, claiming that “it appears” the chamber has “even taken secret foreign money to influence our elections.” Liberal activists put out releases and statements claiming that foreign corporations were stealing our democracy by funneling illegal money through the chamber. MoveOn.org made up a dollar amount, claiming, “Foreign corporations are funding some of the $75 million the U.S. Chamber of Commerce is spending to defeat Democrats.” It also imagined up donors, claiming the lobby was getting the money from foreign corporations “in countries like China, Russia and India, the same companies that threaten American jobs.” In Bauer style, it urged its members to call on the Justice Department to investigate.
Josten, who was growing accustomed to this White House’s tactics, was nonetheless floored. “I won’t even call this guy a reporter, he was a hack, at ThinkProgress—which isn’t even a news organization—and he tries to convince people we’re using foreign money in campaigns. And amazingly, within a week he had the president of the United States citing it. I couldn’t believe it.”
Josten and the chamber flatly denied the charge, and explained that the organization received only a small amount of money from foreign sources and that none of it went into domestic ads. The lie was so large that even the left-tilting mainstream fact-checking organizations had a field day. FactCheck.org, a project of the Annenberg Public Policy Center, ran a long piece under the headline and tag “Foreign Money? Really? Democrats peddle an unproven claim.” The writer, Brooks Jackson, explained that “Democrats, from President Barack Obama on down, are trying to turn an evidence-free allegation into a major campaign theme.” Jackson noted that the FEC allows organizations to take in foreign money and still make donations, so long as they have a “reasonable accounting method” and enough money from U.S. sources to cover the donations. Jackson ended, “Accusing anybody of violating the law is a serious matter requiring serious evidence to back it up. So far Democrats have produced none.”
The New York Times, hardly a chamber cheerleader, ran its own well-researched story, concluding, “There is little evidence that what the chamber does in collecting overseas dues is improper or even unusual, according to both liberal and conservative election-law lawyers and campaign finance documents.” The Times noted that plenty of liberal groups, like the Sierra Club and the AFL-CIO, also have international units and also spend money domestically. Other groups pointed out that the real offender in terms of foreign money was the union movement. According to the Center for Competitive Politics, close to half of the unions that are members of the AFL-CIO are international. And they presumably pay union dues.
The whole episode marked a height in cynical and unaccountable politics. The president of the United States singled out and accused a political opponent of a crime, on the basis of an undocumented and untrue slur. Josten is still stunned years later. “We have 114 American chambers of commerce physically located abroad. Their membership is composed of U.S. multinationals doing business abroad. We have an entire vetting process, whenever a new one is formed, to make sure it is not a phony government organization in some third-world country, but rather a legitimate chamber formed by U.S. money,” he notes. “The amount of dues that flow up to the U.S. Chamber of Commerce is about $100,000 a year. That goes into our international division, which services them. $100,000 a year. Seriously. We have a more than $250 million budget.”
Yet Obama stubb
ornly kept repeating the claim. Then, as the president confronted growing press criticism for spreading misinformation, the White House abruptly changed tack, claiming that the real problem was “anonymity.” This was 2010 and it fit in neatly with Obama’s campaign at the time against “shadowy” nonprofits. White House press secretary Robert Gibbs declared that the better chamber discussion needed to be about disclosing “the identities of [its] donors.” Obama Svengali David Axelrod also cleverly attempted to use the uproar to force the chamber to hand over the names the left so eagerly wanted. “I guess my answer to the chamber is just disclose where your money is coming from and that will end all the questions,” he told ABC News’s Jake Tapper. Time magazine in a follow-up story wrote, “Such calls, says the chamber’s executive vice president for government affairs, R. Bruce Josten, amount to an attempt to intimidate donors with the implicit threat of boycotts and harassment.” Josten was speaking from experience, having watched the coordinated activist campaigns against companies that spoke out against health care or climate.
The episode moved Bob Schieffer, the no-nonsense host of CBS’s Face the Nation, to call bullshit on Axelrod during a Sunday appearance. “They do spend heavily on politics,” said Schieffer of the chamber. “But this part about foreign money, that appears to be peanuts, Mr. Axelrod. I mean, do you have any evidence that it’s anything other than peanuts?” Axelrod, rather than answer the question, attempted to turn it around and force the chamber to prove a negative. “Well, do you have any evidence that it’s not, Bob?” Schieffer didn’t appreciate the dodge. He finished the segment with a withering appraisal: “I guess I would put it this way. If the only charge three weeks into the election that the Democrats can make is that somehow this may or may not be foreign money coming into the campaign, is that the best you can do?”
The Intimidation Game Page 23
