U.S. Chamber of Commerce Part of 'Dark Money' in Politics Problem, New Report Alleges

A new report out this week casts a shadow on the U.S. Chamber of Commerce and its political influence, questioning whether the group's actions really benefit its members. 

The U.S. Chamber of Commerce represents about 300,000 member organizations nationwide, and indirectly, an additional three million businesses and trade organizations. 

Consumer rights advocacy group Public Citizen alleges in "The Gilded Chamber 2.0" report that the Chamber may only be working on behalf of "a very small number of entities" that provide a "vast majority of its funding." The Chamber of Commerce does not have to disclose the source organizations for its funding. The U.S. Chamber of Commerce has not yet responded to request for comment on this article. 

The secretive nature of many campaign donations has been an ongoing issue in the aftermath of the Supreme Court's Citizen's United decision of 2010. The ruling has allowed for profit entities and unions to spend unlimited amounts on political advertising as long as an organization is not coordinating its efforts with an official campaign. The ruling ushered in the era of the hugely funded Super PAC, which operate as shadow campaigns. Super PACs have pumped hundreds of millions of dollars into the 2016 election cycle. They must disclose their contributors, but non-profits, including business trade groups do not. The latter are considered dark money groups.

Supporters of Citizen's United say that the case did nothing more than defend organizations' right to weigh in on political events. But critics say that the ruling has given large groups with big budgets too much influence over elections and removed accountability. The Chamber of Commerce's ability to raise millions of dollars without revealing the identity of its contributors illustrates their point.

This year, the group has been the largest dark money group, spending $23.3 million. Since 2010 Citizens United decision, it has spent close to $126.7 million on federal elections and has not once disclosed a source of its funding. 

"This report shows voters that the tens of millions of dollars in secret money that the Chamber spends on elections ads are in fact financed by a very small number of extremely wealthy entities; the vast majority of the money is likely to come from large corporations," said Daniel Dudis, the Director of U.S. Chamber Watch, a Public Citizen initiative that covers the Chamber. "Voters understand that corporate capture of our political system is undermining our democracy. The Chamber is one of the primary agents of this corporate capture."

The 2.0 report is an update of a 2014 Public Citizen paper, but the findings are similar.

Gilded Chamber 2.0 bases its analysis on 2015 Form 990 tax return documents from the Chamber and its divisions, the Institute for Legal Reform (ILR), U.S. Chamber Litigation Center (USCLC) and the U.S. Chamber of Commerce Foundation (CCF). Non-profits are required to file Form 990 tax returns to report contributions of more than $5,000 to the IRS. It looks at 2014 data. (The 2014 report looked at 2012 numbers.)

The 2.0 report found that 96% of the approximately $189 million in contributions to the Chamber in 2014 came from a little more than 1500 members and 57% of the total came from just 74 members, each paying more than $500,000. The Chamber doesn't disclose major donors.

The U.S. Chamber Institute for Legal Reform (ILR), which focuses on legal issues related to business, receives 80% of its donations from only 35 donors, each more than $500,000. According to the Economist, "the ILR is increasingly used to attack any law the Chamber dislikes." The U.S. Chamber Litigation Center, which supports the ILR's work, filing lawsuits, and amicus briefs, received 99% of its total contributions from 124 donors, according to the report.

As the Chamber is not required to disclose the source of its contributions, it is difficult to identify the companies that are likely donating because they believe they stand to benefit from the Chamber's lobbying. Also muddying the waters, the same corporation may give to different Chamber-affiliated groups.

Of course, in addition to lobbying, the Chamber may also use contributions on political advertising and other activities. According to The Washington Times, the Chamber plans on engaging "tens of millions of voters" in the weeks before the presidential election.

When political ads run on television in Pennsylvania or Ohio or one of the many other states where the Chamber has spent millions of dollars, voters tend to think that the tagline "paid for by the U.S. Chamber of Commerce" in the ad represents the views of the entire business community. Similarly, when the Chamber lobbies for an elected official, he/she may think that the Chamber is advocating for the position of the larger business community.

But as the report indicates, the Chamber's political ad spending reflects the views of its most generous contributors. Moreover, voters are generally unaware of these contributors' identities.

"While the Chamber could easily disclose where the money is coming from, it chooses to hide this information as it is legally allowed to do," the Gilded Chamber 2.0 report concludes. "Disclosing its donor base would undercut its repeated claims to represent the interests of small businesses. However, even without knowing the identities of the Chamber's deep-pocketed donors, its claims to represent small businesses are undermined by the extremely large size and limited number of its donations."

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

More from Opinion

Flashback Friday: Johnson & Johnson Hits Take Historic Plunge

Flashback Friday: Johnson & Johnson Hits Take Historic Plunge

Adobe's Decline After Earnings Reflects a More Risk-Averse Market

Adobe's Decline After Earnings Reflects a More Risk-Averse Market

Throwback Thursday: GE, GM Head in Opposite Directions

Throwback Thursday: GE, GM Head in Opposite Directions

Tech Reviews Aren't Always a Good Predictor of Demand (See: Apple's iPhone XR)

Tech Reviews Aren't Always a Good Predictor of Demand (See: Apple's iPhone XR)

Wednesday Wrap-Up: Roku Rebounds, Tesla Ships

Wednesday Wrap-Up: Roku Rebounds, Tesla Ships