Josh Harkinson

Josh Harkinson


Born in Texas and based in San Francisco, Josh covers tech, labor, drug policy, and the environment. PGP public key.

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The Chamber's Tough Week

The US Chamber of Commerce can't seem to catch a break. This was supposed to be the week that its new Campaign for Free Enterprise would lead Corporate America in an assault on Washington. Instead, the campaign's message was drowned out by a barrage of revelations and new questions about who the nation's largest business lobby really represents and how it adopted its right-wing agenda.

Yesterday alone, the Chamber came under withering fire. Writing in Slate, Eliot Spitzer urged institutional investors to pressure companies to quit the group, calling the Chamber "wrong on virtually every major public policy issue of the past decade." A coalition of liberal NGOs launched, a website that asks the Department of Justice to investigate the Chamber and demands that its president, Tom Donahue, be fired. And Change to Win, a large union-backed advocacy group, released a 55-page report on how Donohue "has compromised the credibility of the US Chamber of Commerce." 

Writing in the Washington Post this morning, Steven Pearlstein dismissed the Campaign for Free Enterprise as "nothing more than a desperate attempt to repackage the same old anti-tax, anti-regulation, anti-government rhetoric in hopes of derailing the major initiatives of the Obama administration and the Democratic Congress."

All of this tops off a week in which Donohue was dogged in the press over the Chamber's recent corporate defections and questionable internal governance. On Wednesday, when he appeared on MSNBC's Morning Meeting to hype the Free Enterprise campaign, host Dylan Ratigan told him, "You talk nonsense." The same day, the Chamber was forced to admit that its membership was 90 percent smaller than it had claimed after Mother Jones exposed the gimmick. We also reported that the Greater New York and San Francisco chambers are distancing themselves from the national group. (Also check out today's post: The San Francisco Chamber is withdrawing from a US Chamber program that automatically enrolls some of its local members in national group, citing differences over climate policy).

Some respected corporate watchdogs long-ago gave up on the US Chamber. "[Tom Donohue] is a thug," Nell Minow, head of the Corporate Library, told CFO Magazine in 2006. "He is big and loud and wrong. I am horrified at the way he has politicized the U.S. Chamber of Commerce, diminishing its credibility. . .He is not pro-business. He is pro-executive." 

Exploring exacly how pro-executive Donohue has been is the focus of the new Change to Win report, "Preaching Principle, Enabling Excess." It argues that Donohue's actions as a member of four scandal-ridden corporate boards show the need for the very financial and corporate governance regulations that the Chamber opposes. Since 1995, Donohue has earned millions as a board member of Qwest, Sunrise Senior Living, Union Pacific, and XM Satellite Radio. Among the report's findings:

San Francisco Chamber of Commerce Ends Partnership With US Chamber

Political disagreements with the US Chamber of Commerce have prompted the San Francisco Chamber to drop out of a program that automatically enrolled many of its members in the national group. "Given the controversy over the US Chamber's position on climate change," said San Francisco Chamber president Steve Falk, "I've decided to sever our participation in the partnership program."

The US Chamber's Federation Partnership program grants complimentary memberships to small businesses in 354 participating local chambers, often without their knowlege. It allows the US Chamber to claim a much larger number of members than it would have otherwise, but has become a potential liability for local chambers in cities where businesses may disagree with the national group's right-wing political agenda.

"I do think some of our small companies might not like the fact that they're automatically members or may not know that," Falk said in announcing the decision to Mother Jones. He disclosed the move after a reporter called San Francisco Chamber members on Tuesday to ask if they were aware of the program and comfortable with their US Chamber memberships.

Until this week, the US Chamber of Commerce often claimed the members of local chambers as its own, regardless of their participation in the partnership program. It appeared to end that practice after it was exposed by Mother Jones this week; during a Wednesday press conference, the Chamber quietly revised its claimed membership from 3 million to 300,000 (though the larger number still appears on its website).  The new membership figure is certain to grow even smaller if other local chambers follow San Francisco's lead.

It was not immediately clear how many members the US Chamber will lose due to San Francisco's withdrawl from the partnership, though the number could easily be more than 1,000. One of the ten largest chambers of commerce in the country, the San Francisco Chamber counts 2,000 members, 85 percent of whom it classifies as "small businesses." Companies with annual revenues of less than $10 million were automatically enrolled in the US Chamber through the partnership, Falk said, but will now see their national memberships lapse if they do not choose to renew them.

US Chamber Shrinks Membership 90%

A day after Mother Jones exposed the US Chamber of Commerce's inflated membership number, the Chamber quietly backed off the figure in its public statements. At a Washington press conference Wednesday morning unveiling the Chamber's Campaign for Free Enterprise, Chamber officials repeatedly cited a membership of 300,000. That's a tenth as many members as the Chamber claimed a day earlier, when a press release for the Washington event said the Chamber represented "more than 3 million businesses and organizations of every size, sector, and region."

Since 1997, the "3 million" figure has appeared in print more than 200 times in newspapers and broadcast outlets of all sizes, including, in the past year, the New York Times, the LA Times, the Boston Globe, the UK Guardian, the Associated Press, Roll Call, Congressional Quarterly, and National Public Radio. By contrast, the 300,000 figure, which appears nowhere on the Chamber's website, is cited in the news database Lexis-Nexis only three times--infrequently enough to be mistaken for a typo. The smaller number was used on October 9th by CNN, November 12, 2008 by the Denver Post, and August, 2003 by the Journal of Public Affairs. After getting the membership number correct, the Denver Post joined the rest of the media this April, describing the Chamber as "a business advocacy group with more than 3 million members."

As Mother Jones detailed on Tuesday, the Chamber's assertion that it represents "3 million" businesses is most likely based on claiming the membership of 2,800 state and local chambers of commerce as its own. But while local chambers are often dues-paying members of the US Chamber, they aren't chartered or controlled by it, nor does membership grant them a say in electing its leaders or setting its policies, which are determined by a self-appointed board composed of large companies. Moreover, local chambers do little to support the national group financially. The Greater New York Chamber of Commerce pays annual dues to the US Chamber of only $1000. That means the 2,800 local chambers probably contribute less than 3 percent of the US Chamber's $100 million budget.

As recently as 2001, before the the US Chamber fully embraced its accounting gimmick, it claimed only 150,000 corporate members.

There is, of course, a semantic difference between claiming to "represent" 3 million businesses and claiming those businesses as members. Yet the distinction has been lost on the media and even occasionally on the Chamber itself. "We have over 3 million members, and we don't comment on the comings and goings of our membership," Chamber spokesman Eric Wholschlegel told the New York Times last month in a story about the utility PG&E's departure from the Chamber over its climate policy. After three more high-profile companies quit the Chamber, the LA Times wrote, "The US Chamber of Commerce touts itself as the world's largest business federation, boasting 3 million members. Err, make that 2,999,996." The Times' math would have been correct, if it had subtracted another 2,699,996 companies.

Even when granting the US Chamber its semantic tricks, it's not certain that local chambers are comfortable with its "3 million" number. "They don't represent me," Mark Jaffe, CEO of the Greater New York Chamber of Commerce, told me Tuesday.

Chamber leaders seem to agree, given their decision to scale back their membership number by 90 percent today. The question is when the rest of the media will notice. Ignoring the Chamber's new number, an AP story on the Chamber's press conference, published Wednesday afternoon on the website of the Washington Post, said "the Chamber of Commerce claims a membership of 3 million businesses and organizations." The number most likely came from the Chamber's original press release. The Sierra Club promptly wrote to the AP asking for a correction.

Here are 17 other news organizations that have reported the "3 million" number since 2008:

Yo, Chamber of Commerce, You Speakin' For Me?

Leaders of some of the largest urban chambers of commerce are distancing themselves from the US Chamber in the wake of recent controversies over its inflated membership numbers, undemocratic structure, and right-wing policy positions. In recent interviews, they strongly disagreed with the national group's positions on health care and climate change and disputed its implicit claim to speak for their members.

"They don’t represent me," says Mark Jaffe, CEO of the Greater New York Chamber of Commerce, which is a dues-paying member of the national group.  He added that the Chamber's "parochial interests"—large corporations that control its self-appointed board of directors—"are well represented."

Jaffe also scoffed at the US Chamber's oft-repeated claim to "represent 3 million businesses of all sizes, sectors, and regions." Yesterday Mother Jones questioned the number, which appears to be based on the idea that the Chamber "represents" the members of the New York Chamber and similar local groups. That number of members would comprise more than half of the 5.7 million employers in the United States. "They are playing games" with their numbers, Jaffe said. "They don’t have half the businesses in America as registered, dues-paying members."

The New York Chamber has no plans to leave the national Chamber (its annual membership dues are only $1000 per year), yet neither is Jaffe happy with the group. "We get involved in some of their activities," like working to modernize airports, he said, "but we don’t agree with all of their principles either, like their position on health care. You have to be selfish, blind, or stupid not to want everybody to be required to have health care."

Jaffe’s objections to the US Chamber’s policies were echoed by Rob Black, vice-president of public policy for the San Francisco Chamber of Commerce. "We take a fundamentally different approach than the US Chamber," he said, adding that while the national Chamber opposes the Waxman-Markey climate bill, "we support a market-driven cap-and-trade system. It’s good for business, but it’s also a good way to try to spur innovation and new technologies."

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