Unmasking the Chamber of Commerce Networks

This week, the Center for Media and Democracy (CMD) unveiled new documents showing the role that lobbyists for state chambers of commerce play in thwarting measures that American workers and, as it turns out, the overwhelming majority of CEOs support.

Who are these state chamber lobbyists and what are the trade groups they lead?

In 1971, when tobacco lawyer Lewis Powell penned his infamous memo to the U.S. Chamber of Commerce, he not only called upon the national Chamber to unify and strengthen corporate power in U.S. politics, he also identified other untapped potential for his corporate coup.

"Also," the soon-to-be Nixon nominee to the Supreme Court noted in his memo, "and this is of immeasurable merit — there are hundreds of local Chambers of Commerce which can play a vital supportive role."

Forty-five years later, many state and local chambers are doing just that: supporting a policy agenda set by the U.S. Chamber and its biggest bankrollers to the detriment of the deep economic concerns of local communities that sustain state businesses.

Powell understood that "strength lies in organization," and set out a broad list of targets, from the country's universities to its national media to the judicial branch, that the U.S. Chamber could infiltrate and organize.

The vast network of state and local chambers, however, could not organize themselves. And so the U.S. Chamber set out to develop an array of groups to unify them.

Some of these entities are special projects of the U.S. Chamber; others are individually incorporated but interconnected to it. All of them are components of a network of special interests that has largely displaced the voices of ordinary people in policymaking in what is supposed to be a representative democracy of one person, one vote.

These special interests routinely press elected officials to protect corporate profits from public policies sought by citizens that would make our economy and our environment healthier for all.

The groups are as follows.

The Council of State Chambers

Since the 1971 Powell memo, but particularly since Tom Donohue became CEO in 1997, the U.S. Chamber of Commerce has grown its revenue by prioritizing the agenda of a narrow subset of American businesses. Astute political observers are aware of this, and many of the Chamber's machinations have been exposed by intrepid journalists like James Verini.

Yet somehow the synergized role that some local chambers and all state chambers play in advancing the U.S. Chamber's special interest agenda has gone unnoticed.

Even amongst progressives, a myth endures that regional chambers are sovereign entities that advocate on behalf of their state's business interests. It's the U.S. Chamber that is corrupted or out of touch, not the state chambers, the thinking goes.

No institution disproves this myth quicker than the Council of State Chambers (COSC).

COSC has 51 member organizations, of which 48 are state chambers of commerce. The other three are the Council on State Taxation, a trade association that exclusively represents mega-corporations that operate across state and international borders, the U.S. Chamber-affiliated ACCE (detailed below), and the U.S. Chamber.

COSC is individually incorporated but deeply embedded in the Chamber's infrastructure. Rob Engstrom, the U.S. Chamber's national political director, sits on COSC's board of directors; the other 10 members of COSC's board are state chamber CEOs. All 11 of them are members of the U.S. Chamber's elite CCC 100 organization (detailed below).

Like many of the U.S. Chamber's network-affiliated organizations, COSC's primary purpose is to hold meetings for lead state chamber lobbyists at elegant resorts – like the Marco Beach Ocean Resort – twice a year, which U.S. Chamber lobbyists routinely attend. COSC's small staff also sometimes hosts webinars to help the state chamber leaders in their legislative fights.

One of those webinars was provided to CMD/PRWatch and helps reveal how the state chambers are deployed to advance narrow interests at odds with the overwhelming support of business members on key policies.

As documented by CMD, COSC hosted the online briefing for state chamber lobbyists to review polling the organization had commissioned from LuntzGlobal, a polling firm led by the GOP operative Frank Luntz.

The polling showed that vast majorities of the state chambers' members support workplace reforms like increasing the minimum wage and mandating paid sick leave. After explaining these results in the COSC webinar, LuntzGlobal provided state chamber lobbyists with PR messaging strategies to fight these reforms, instead of logically transitioning to how the state chambers, as purportedly membership-driven organizations, could best advocate for them.

COSC's actions show how they and the state chambers are subservient to the transnational corporate interests that animate and underwrite the U.S. Chamber.

A review of COSC conference materials further proves this point.

In wintry January, COSC met at the Marco Beach Ocean Resort in sunny Florida for a three-day gathering.

In addition to hearing directly from Frank Luntz about elements of the workplace reform poll that was later provided to CMD, state chamber executives participated in a communications strategy session on how to defeat minimum wage increase proposals.

Also on the agenda was a 2016 political discussion led by the Koch-founded Freedom Partners organization, and a session led by a PR firm "on how best to message a free market approach to climate issues," which is code for thwarting government efforts to promote alternative energy – the kind of efforts that the billionaire Koch brothers who lead Koch Industries, one of the largest privately held energy conglomerates in the country, have consistently opposed.

Past COSC conferences have included trainings led by representatives from the American Legislative Exchange Council, mega-corporations like Walmart, and of course the U.S. Chamber of Commerce.

One session at an earlier meeting was titled, "PAC Fundraising Strategies to Raise BIG $$$." Another panel from that same meeting was called, "Changing the Game with Independent Expenditures," the kind of election spending that is not supposed to be coordinated with electoral candidates.

COSC's conferences and webinars, coupled with the U.S. Chamber's avenues of influence, appear to have a substantive impact on state chambers' lobbying and policy positions.

Take for example the issue of workplace reforms.

LuntzPolling showed that 80% of the state chambers' own business members support minimum wage increases, while 73% support paid sick time. Yet over the over the last three years, 48 state chambers have publicly opposed minimum wage increases. And in the last 5 years, 75% of the country's state chambers have opposed paid sick leave policies.

Both measures are explicitly opposed in the U.S. Chamber's 2016 policy platform.

The U.S. Chamber's Regional Government Affairs Conferences

Since at least 2004, the U.S. Chamber has been inviting state and local chamber staff twice a year to travel to posh resorts for "regional government affairs conferences." Like ALEC's conference model, the Chamber underwrites conference attendees' travel expenses with "scholarship" money.

At the conferences, U.S. Chamber lobbyists, outside political consultants, professional pollsters and the CEOs of transnational corporations help indoctrinate state and local chamber staff on how best to follow the U.S. Chamber's special interest agenda.

The conferences cover a wide range of lobbying agenda items.

On energy, attendees are regularly briefed by Karen Harbert, the president of the U.S. Chamber's "Institute for 21st Century Energy." Harbert and the "Institute" she presides over have long advocated for deregulating fracking, expanding offshore oil drilling in U.S. coastal waters, rejecting the Obama administration's Clean Power Plan, and vastly increasing coal and nuclear energy production.

On international trade issues, attendees hear from the likes of Christopher Wenk, the "Director of International Policy" at the U.S. Chamber, on why local and state chambers should lobby lawmakers to pass "free trade" agreements like the TPP and TTIP, despite the job-killing consequences of similar trade deals that the Chamber has backed that have decimated U.S. manufacturing jobs.

On labor issues, Glenn Spencer of the U.S. Chamber's "Workforce Freedom Initiative" regularly leads panel discussions. Spencer formerly worked for David Koch's Citizens for a Sound Economy operation (the predecessor of Kochs' Americans for Prosperity and also the FreedomWorks entities) and the National Republican Senatorial Committee. Predictably, his briefings are rabidly anti-union/anti-worker rights.

And so on.

But it's not all policy talk at these "government affairs" retreats.

Conferences end with a "political workshop" highlighting the U.S. Chamber's latest approaches to effective electioneering, because, in one conference agenda's description, "Getting actively engaged in politics is the new frontier for chambers for a simple reason: it's easier to elect officials who understand your concerns than to convince officials who fundamentally disagree with you" (emphasis added).

Conference agendas also show that the U.S. Chamber is keen on making sure state and local chamber lobbyists and staff have time to booze and schmooze. Every conference features two nights of alcohol-fueled entertainment.

Last October in Nashville, conference attendees were taken by bus to the Country Music Hall of Fame to enjoy "an intimate show with Nashville's finest songwriters."

At a conference for state and local chamber lobbyists earlier in 2015 in Las Vegas, attendees were invited to an open-bar reception at RHUMBAR, a location, the conference agenda specified, where the "plush outdoor patio is reminiscent of a tropical retreat, offering a picturesque location for attendees to mingle, sip cocktails, and take in the great views of the Las Vegas strip."

The following night, Vegas attendees were encouraged to "unwind at Ghostbar," another venue "with breathtaking skyline panoramas."

The term wined-and-dined is typically used to describe corporate interests' dealings with public officials. But state and local chambers do represent – or claim to represent – their communities in democratic forums and governing bodies.

Through the U.S. Chamber's luxurious conferences, the lobbyists and staff of state and local chambers are wined, dined, and indoctrinated with special-interest talking points.

The U.S. Chamber's "Chamber of Commerce Committee of 100"

The Chamber of Commerce Committee of 100 (CCC100) is an invite-only group of state and local chamber executives that gathers with U.S. Chamber lobbyists twice a year at opulent hotels and resorts across the country to help advance chamber lobbying priorities in states and cities for the coming six months.

The Chamber states that CCC100 "advises the U.S. Chamber on programs and services for chambers and provides feedback on policy-related issues." However CCC100 documents show the opposite: the Chamber is very much in charge of CCC100's policy agenda.

On March 1-3, 2016, CCC100 gathered for its first meeting of the year at the luxurious Ritz Carlton in Orlando, Florida. The three-day conference kicked off with a golf tournament on the Ritz's PGA tour course. Cocktail receptions, dinners, electronic skeet shooting, and a Super Tuesday viewing party followed. More importantly, so did U.S. Chamber-dominated policy discussions.

The conference featured an hour-long speech from U.S. Chamber CEO Tom Donohue; a policy update from the Chamber's most senior government and political affairs executive; a luncheon featuring Michael L. Ducker, the Chamber's chairman of the board and the CEO of FedEx Freight; an economic update from the Chamber's chief economist; and a networking session co-hosted by the Chamber's managing director.

So much for CCC100 "advising" the U.S. Chamber on public policy.

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CCC100 conferences have lasting impacts on state and local chamber executives. As the former CEO of the Palm Desert Area Chamber of Commerce Barbara DeBoom stated, "My participation on the CCC100 allows our chamber to stay ahead of the herd on economic updates, public policy issues, and leadership skills."

DeBoom went on to proclaim that CCC100 also serves as an excellent resource for her community, although the U.S. Chamber is largely funded by some of the largest global corporations in the world, whose interests are generally at odds with local communities.

Lastly, the U.S. Chamber's claim that CCC100 is merely a gathering of chamber executives is unfounded. There is another group that regularly attends CCC100 meetings: other corporate lobbyists.

"This is a tremendous opportunity for you and your organization to access influential executives," the Chamber wrote in a sponsorship brochure for potential CCC100 corporate sponsors. In the brochure, the most prominently listed sponsorship perk was "three days of unlimited access to the nation's top chamber presidents and CEOs."

Lobbyists lobbying other lobbyists. There ought to be a term for the exponential explosion of corporate lobbyists hired ultimately to influence officials elected to represent actual citizens—human beings in a democracy, not global corporations.

The U.S. Chamber's Institute for Organization Management

The "Institute for Organization Management" (IOM) is a professional development program of the U.S. Chamber designed to "enhance individual performance, elevate professional standards, and recognize association, chamber of commerce, and other nonprofit professionals who demonstrate the knowledge essential to the practice of nonprofit management."

In this sense, IOM serves as a leadership pipeline for the chamber network. The four-installment program, which the Chamber describes in academic terms, is offered to chamber professionals at five so-called "institutes" across the country.

Like the Chamber's regional government affairs conferences, "scholarships" are provided to IOM participants, who are instructed by a "faculty" of political consultants, communication strategists, lobbyists, lawyers, and seasoned chamber professionals (many of whom are former graduates of IOM).

Notably, a handful of the "courses" offered at IOM are about money and influence: "E250 PACs and Political Endorsements," "E211 Sponsorship Solicitation," "E362 Policy Development and Implementation," and "C270 Effective Government Affairs Programs."

The Association of Chambers of Commerce Executives

The Association of Chambers of Commerce Executives (ACCE) works "to support and develop chamber professionals to lead businesses and their communities." (This ACCE is distinct from the new project spawned by ALEC that shares that acronym: the American City County Exchange.)

ACCE hosts a nonpartisan policy wiki web service and convenes an annual meeting for hundreds of chamber professionals.

But with ACCE, as with almost all things Chamber, the devil's in the details.

In 2001, ACCE brought Mick Fleming on as President, a position he still holds today. In an interview with Executive Leaders Radio, Fleming explained that he got the job because he "saw right away that [ACCE] had to take a bigger view than just run a club for businesspeople."

Particularly, in Fleming's "bigger view," ACCE and the chambers they worked with needed to change their revenue models. Fleming, who is a CCC100 member, explained his thought process at the time.

"...the people who give Chambers the most money care the least about what's in their membership kit. They don't care about how many discounts they get or where the mixer is nearly as much — this is the big investors — they care much more whether or not this chamber is going to make a difference in the community. Is it going to make prosperity, is it going to make a chance for prosperity in their community?"

Under Fleming's tenure, ACCE has advocated for local chambers to change their funding models so the "big investors" can "make a difference in the community." In other words, ACCE is helping local chambers adopt Tom Donohue's approach to chamber advocacy, a style that is colloquially referred inside the U.S. Chamber as the "views for dues" approach.

During the last ACCE annual meeting in 2015, there were no less than ten sessions on chamber fundraising. Many of these sessions were focused on a revenue policy ACCE has put at the forefront of its advocacy, tier-based funding models.

The mainstay of chamber revenue funding had for years been "fair-share" models. Under these agreements, chambers collect dues at modestly scaled rates adjusted to company size, and all due-paying members receive the same benefits of membership. In the fair-share model, chamber membership is viewed as a collective investment in community prosperity.

Tier-based models are structured from a different viewpoint of how chambers should function, and what chamber membership constitutes.

In tier-based funding, members are "investors" looking for a return on their "investment" into the chamber. As ACCE explains in a policy paper on the subject, under tier-models, "benefits increase as the investment level increases… upper tier benefits usually include all the benefits of the lower tiers plus such things as invitations to select events like breakfast with the mayor or advocacy trips, customized research reports and free consulting services" (emphasis added). To be clear, paying the state and local chambers more gets business more access to public officials, like "breakfast with the mayor."

In the view of the revenues consultant Kyle Sexton, tier-funding for chambers of commerce helps "to attract buyers to a high level of investment" because tier-funding provides a "...specific reason for buying" (emphasis added).

Sexton has served on ACCE's board of directors, is a frequent presenter for ACCE and for regional chamber executive organizations, and, not coincidentally, is a "faculty member" of the U.S. Chamber's Institute for Organization Management.

Local and State Associations of Chamber of Commerce Executives

In addition to ACCE, which is a national organization, there are at least 20 state-based associations of chamber of commerce executives throughout the country that spend roughly $2.2 million annually convening regional chamber executives and synergizing chamber messaging.

The Texas Chamber of Commerce Executives (TCCE) is an example for how these state-based associations work, and how connected they are to the larger U.S. Chamber framework.

TCCE hosts a conference every year for its 224 local chamber members, doling out "scholarship" money when needed. Last year, the conference included a legislative session led by Chris Wallace, the President of the Texas Association of Business (Texas' state chamber) and a "faculty" member of the Institute for Organization Management. The conference also included a keynote speech from ACCE president Mick Fleming.

Two years prior, TCCE held a government affairs conference sponsored directly by the U.S. Chamber of Commerce.

TCCE is not alone. The last conference of the Western Association of Chamber Executives, an organization led by Dave Kilby, a CCC100 member and the CEO of the California Chamber of Commerce, featured a keynote speech from Mick Fleming.

The Florida Chamber of Commerce Executives will hear from the Institute of Organization Management's "faculty" member and revenues consultant Kyle Sexton at their bi-annual conference in May. They won't be hearing from Mick Fleming, but not because Fleming's not a welcomed presenter; he spoke at their meeting last fall.

A Network of Immeasurable Merit for Whom?

In the Citizens United-era, corporate interests have access to a wide array of legal channels and entities that lend anonymity or even positive branding to their political advocacy. The change in the state chambers from locally focused to more nationally deployed falls into the latter of these two categories.

As the CCC100 member, IOM graduate, and CEO of the Glenwood Springs Chamber Resort Association Marianne Virgili has said, regarding corporations' relationships with the chambers, "We're helping them out. We're a centuries-old brand."

America's first chamber, the New York Chamber of Commerce, was founded in 1768 near the dawn of the American Revolution, as corporations were just beginning to become more common.

In the years that followed, as the nation's economy industrialized and modernized, chambers proliferated and became staples of municipalities and the states.

Some local chambers have a long history of helping to improve economic opportunity in their communities. And even though the U.S. Chamber has poured millions of dollars into synergizing chamber membership, many of the local chambers still work to those ends.

But for a growing number of local chambers and for all state chambers, the interests of community have been supplanted by the interests of the transnational corporations that drive U.S. Chamber policy.

That's part and parcel of the vision set forth by the corporate lawyer who sought to thwart federal, state, and local regulation of cancer-causing cigarettes, Lewis Powell—who used his appointment to the U.S. Supreme Court to plant the seeds for the destruction of campaign finance regulations that limit the influence of corporations and CEOs, who grafted new-found corporate and money rights onto the Constitution.

The results of the Powell legacy are ruinous, and far greater than realized.

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Lisa Graves contributed to this article.

For more info on this story see the following resources: 

Here is the poll, marked up by CMD.

Here is a short video, on the webinar by CMD.

Here is a copy of the slideshow, marked up by CMD.

Here is a transcript of the webinar, highlighted by CMD.

Here is the link to the longer version of the webinar.

Here is some information about who spoke during the webinar.

Here is CMD's press release summarizing key information about the materials.

Here is some analysis of the polling results by CMD.

Here is an interview about the materials and the efforts to preempt local efforts to increase the minumum wage, paid sick, family leave, predictive scheduling and other popular measures. 

 

Lisa Graves is CMD's Executive Director, and she is the former Chief Counsel for Nominations for the U.S. Senate Judiciary Committee for Senator Patrick Leahy. Calvin Sloan is a CMD researcher and multi-media specialist who previously worked for People for the American Way.

Calvin Sloan is a researcher and multimedia specialist with CMD. His research has been featured on Democracy Now, NPR and Mother Jones, among other publications. He has previously worked as a federal lobbyist advocating for campaign finance reform in Washington D.C., and as a camera operator and video editor in Los Angeles.

Comments

"But the basic concepts of balance, fairness and truth are difficult to resist, if properly presented to boards of trustees, by writing and speaking, and by appeals to alumni associations and groups. This is a long road and not one for the fainthearted. But if pursued with integrity and conviction it could lead to a strengthening of both academic freedom on the campus and of the values which have made America the most productive of all societies."

We most certainly have. You omit the deeply flawed thesis of the memo by the man who sought to keep our democracy from regulating cancer-causing cigarettes long after it was known that they were killing countless Americans: "[F]ew elements of American society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders. If one doubts this, let him undertake the role of 'lobbyist' for the business point of view before Congressional committees. The same situation obtains in the legislative halls of most states and major cities. One does not exaggerate to say that, in terms of political influence with respect to the course of legislation and government action, the American business executive is truly the 'forgotten man.'" That was an absurd claim then, and it's an exponentially more absurd claim today after the hundreds of millions invested to expand corporate power in our democracy by the likes of anarcho-capitalist Charles Koch and his cohorts. Koch actually said at the time that the Powell memo did not go far enough....