The Chamber and Climate Change Debacle: Ignoring the First Rule of Holes

"It's been a lousy week for Tom Donohue and his pals over at the U.S. Chamber of Commerce," writes Steven Pearlstein's in the Washington Post today.

Donohue and the US Chamber have been working to raise money to finance a campaign to promote the philosophies underlying the US Chamber's position on global warming and other issues. But as Pearlstein comments:

The Campaign for Free Enterprise, of course, is not really about creating 20 million jobs over the next's 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.

Unfortunately for Tom Donohue, the world is finally catching on to his game.

In the past few weeks, a number of big-name companies -- including Apple, Nike and PG&E -- have resigned from the Chamber or its various boards and committees over its continued opposition to doing anything about global warming. Donohue and his minions tried to brush off the corporate defections as nothing more than a PR stunt orchestrated by environmental activists that would have little impact on an organization with 3 million members. But in the process, the controversy managed to expose three embarrassing truths about the Chamber.

The three embarrassing truths Pearlstein writes about?

1. The Chamber has been claiming more members than it has, and claiming to represent members that reject the idea that the Chamber represents them. As Pearlstein notes:

The Chamber, in fact, does not represent anything close to the 3 million businesses it has always claimed. In response to an inquiry from Mother Jones, the chamber acknowledged that its actual paid membership is only 300,000, including several thousand local chambers of commerce whose own membership was used in calculating the inflated 3 million figure. Moreover, when Josh Harkinson of Mother Jones contacted some of those local chambers, their leaders took pains to distance themselves from the national organization, whose policies, they said, they had no hand in shaping and with which they frequently disagree.

"They don't represent me," said Mark Jaffe, chief executive of the Greater New York Chamber.

2. The Chamber, contrary to its oft-repeated claims, does not come to its policy positions through a democratic process that all, or even the most interested, parties participate in. Pearlstein again:

While the Chamber likes to point to its network of policy committees that supposedly advise the board, the panels tend to be dominated by those members with special interests to protect. Recorded votes are rare, and presentations are heavily skewed toward experts who agree with the positions staked out by Donohue's lobbyists, who over the past 15 years tightly allied themselves with the Bush White House and the Republican leadership on Capitol Hill.

3. Following on embarrassing truth # 2, the Chamber has turned itself into a front-group that allows those companies ponying up the most money to set the policy agenda in the name of the Chamber and its members (however many there really are.) Pearlstein:

Moreover, much of the Chamber's public policy effort these days is now funneled through a network of independent entities that it has sponsored to work on specific issues. These arrangements allow the Chamber to raise large sums from businesses that may not want to be publicly identified with hardball tactics like filing lawsuits or running negative ads. The entities have the advantage of not being subject to limits on corporate political contributions, nor do they have to disclose where they get their money or how they spend it.

A recent Greenwire / NY Times story by Michael Burnham and Anne Mulkern quoted a Chamber official describing a decision-making process at the US Chamber that is driven by staff and the size of members' contributions:

"On policy, it only sets broad positions and principles," the official noted. "Groups within the chamber, like Bill Kovacs' Environment, Technology and Regulatory Affairs shop, develop detailed policy positions in concert with contributors, which include some board members ... Companies with the largest contributions tend to hold more sway with chamber staff on setting final policy positions," the official added.

Now all of this makes rather laughable the note that the Chamber sent to some of its top members - or top contributors - yesterday, in response to calls from some groups - including investors - for companies to pull out of the Chamber. Chamber COO wrote to Chamber members yesterday, saying:

We understand that you may have received e-mails, letters and others communications from various groups asking your company to withdraw its support from the Chamber.

Please note that these calls against the Chamber are part of a broad-based, multi-source campaign against us being carried out by our normal adversaries - trial lawyers, activist unions, environmental extremists, etc. It is a "corporate campaign" in the classic sense, where interest groups are looking for public leverage to force us to do things against our members' interests. (In fact, we are going to be sending you some additional information in the near future about the scope and objectives of this campaign.)

Frankly, these efforts are simply the result of how effective we have been in opposing Card Check, as well as certain aspects of proposed healthcare, capital market and climate change legislation.

Our efforts to fix these key pieces of legislation are not going to stop - business needs health care reform that focuses on reducing costs, we need (as our Capital Markets Commission Report over two years ago called for) modernization of financial regulation across-the-board, and we need and continue to call for comprehensive climate change legislation.

The Chamber also intends to continue being successful, so we expect the negative messages to your company may continue. In all circumstances, I and other Chamber staff are available to provide you with more background on our policy positions, along with help in any responses that might be warranted. I do apologize, though, for any annoyance and inconvenience these efforts against us might cause you.

Thank you very much for your continued support.

Please let Tom Donohue or me know if you have any questions or comments.

Many thanks -- David

David Chavern

Chief Operating Officer

US Chamber of Commerce

(202) 463-3101

This whiny and defensive note - which Mother Jones also obtained and wrote about - is interesting for several reasons. One is that it is clear that the US Chamber is worried about the impact of the controversy over their climate position, but it isn't worried enough to have an honest discussion with its members as to what's going on. Instead, the Chamber is firing wildly at its traditional scapegoats - lawyers, unions and environmentalists - and blaming the troubles on them. But what the Chamber is burying here is that it has created this mess for itself, and the companies that have quit the chamber and criticized it have done so of their own accord.  

In light of the growing realization that 1) the Chamber has been misrepresenting its membership numbers; 2) the Chamber doesn't really use a democratic process for developing its policy positions and 3) the Chamber sets its policy according to whoever is writing the biggest check, it is almost comical to hear its staff try to shift the blame to labor unions and environmental groups. 

The Chamber needs to learn the "First Rule of Holes":  When you are in one ... stop digging.


US Chamber's Climate Credibilty Crisis Counter:

Quit US Chamber over climate:  Apple, Exelon, PNM Resources, PG&E, PSEG, Levi Strauss & Co.*

Quit US Chamber Board over climate: Nike.

Companies that say the US Chamber doesn't represent their views on climate: Johnson&Johnson, General Electric, Alcoa, Duke, Entergy, Microsoft, Toyota(?), Royal Dutch Shell.

Media outlets observing that the US Chamber is damaging its reputation and credibility: BusinessWeek, PRWeek, Fortune Magazine's Marc Gunther, Newsweek, LA Times.   

Local Chambers distancing themselves from the US Chamber: San Jose Chamber of Commerce, Greater New York Chamber of Commerce, San Francisco Chamber of Commerce.

* UPDATE 11/12/09: Levi-Strauss informed us that the company did not leave the US Chamber over climate concerns, as Greenwire had reported.