The Chamber’s Tough Week

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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.

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“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

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And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

payment methods

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