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 StopTheChamber.com, 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:

  • In 2002, Business Week named QWest to its list of eight “Worst Boards,” citing an expert who referred to the compensation committee on which Donohue served as “comatose.” The committee awarded QWest CEO Joe Nacchio (who was later jailed for insider trading) an $88 million pay package in 2001, one of the worst years in the company’s history. The same year, Qwest contributed $100,000 to the US Chamber. The Chamber later intervened in four separate legal cases on behalf of QWest, its founder Philip Anschutz, and/or Nacchio.
  • Without admitting liability, Sunrise Senior Living recently paid $13.5 million to settle shareholder litigation alleging that Sunrise officers and directors, including Donohue, received backdated options and traded their shares improperly. Between 1996 and 2005, Sunrise overstated its profits by 94 percent; it remains the target of an ongoing SEC investigation. Since 2007, the value of its stock has fallen 90 percent.
  • While Donohue served on the compensation committee of Union Pacific railroad, two UP executives raked in $1.7 million in payouts. After UP spun off the railroad’s trucking subsidiary, Overnite Transportation, the two executives named Donohue’s son to Overnite’s board of directors. Since 2004, UP has given the Chamber $700,000 and received substantial legal support.
  • The compensation committee of XM Satellite Radio, on which Donohue served, granted executives excessive stock options despite poor performance. In 2004, it was given a “red flag” by the corporate governance ratings agency Governance Metrics. XM’s shares fell 32 percent over Donohue’s tenure as director.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

Share your feedback: We’re planning to launch a new version of the comments section. Help us test it.