In Defense of the US Chamber of Commerce (Sort Of)

| Mon Oct. 11, 2010 11:46 AM EDT

Democrats, including the president, spent the weekend ramping up their attacks on the US Chamber of Commerce, the big business lobbying group that's spending tens of millions of dollars of corporate money to elect Republicans this election cycle. But the Democrats, as usual, are missing the point. Instead of focusing on the plain facts—that big corporations make huge, secret, unregulated donations to the chamber to elect Republicans and evade accountability for it—the Dems are seizing on the idea, first explained in a ThinkProgress report, that some of the money is coming from overseas. US subsidiaries of foreign companies can participate in US politics, but the companies themselves cannot. So the legal experts ThinkProgress spoke to suggested that "the Chamber is likely skirting longstanding campaign finance law that bans the involvement of foreign corporations in American elections."

Mother Jones has criticized the Chamber's pratices in the past (see our full coverage here), but, in this case, there are a number of problems with the Dems' "foreign money" attacks. If the Chamber is indeed funelling foreign money into campaigns (and that remains an open question), it's a relatively small amount—perhaps several hundred thousand dollars. That's a tiny percentage of the Chamber's overall ad spending—the group aims to spend $75 million this cycle. But there's also an accounting issue here. Kevin Drum hinted at this in a post this weekend, when he asked whether foreign donations to the Chamber go into the group's general fund. The Chamber has said that it has a "system in place" to prevent foreign money from being used to fund political ads. It has also said that "No foreign money...is used to fund political activities." That's pretty explicit, and it suggests that the Chamber almost certainly has some sort of accounting scheme in place to segregate funds from foreign and domestic sources. 

ThinkProgress has suggested that such accounting tricks don't matter, because money is fungible. The idea is that every dollar the Chamber gets from foreign sources and uses to say, pay salaries, represents a domestic dollar that doesn't have to be spent on salaries—and can therefore be used for attack ads. But I remember the health care debate, when almost everyone on the Left was singing a very different tune about the fungibility of money. Back in February, Republicans were attacking Democrats for the "accounting gimmick" in the health care bill that allowed Dems to claim the bill didn't pay for abortions. (Here's the Center for American Progress Action Fund's Jessica Arons, blogging on WonkRoom, ThinkProgress' sister blog, back in February.) Basically, under the Nelson amendment (and current law), people who want to buy health plans that include abortion coverage will have to write two separate checks—one to cover the bulk of the policy and another to cover abortion and related services. But some of those folks will be receiving subsidies for their insurance from the government. That's where the accounting gimmick comes in—the "abortion check" will have to come entirely from the customer's own funds. If you believe in the absolute fungibility of money, that's a ridiculous distinction. But it's the distinction that the White House and Democrats relied on to claim that the bill wouldn't fund abortion. The Stupak amendment, of course, relied on a similar "accounting gimmick"—separate policies as opposed to separate checks.

Here's the point: people believe in "accounting gimmicks." They're used in politics (and business) all the time. They're even used in non-profits: the Center for American Progress, which is organized under section 501(c)3 of the tax code, shares staff with its sister organization, the Center for American Progress Action Fund, a 501(c)4.

If Democrats really want to criticize the Chamber of Commerce, they should stop harping on accounting and focus on the larger issue: the vast sums of money that domestic corporations are spending, without any disclosure or accountability. It's easy to pick on scary foreigners. But if Democrats don't want to get buried under a tidal wave of corporate cash, they're going to have to toughen up and focus their criticisms on the US-based companies that are trying to take them out. If Dems don't have the stomach for that, they had better get used to the new landscape.

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