Last week, a student walked into the offices of the South Carolina Small Business Chamber of Commerce, asking to see the organization's public 990 tax forms. Odd, thought Frank Knapp Jr., the organizations' president and CEO. There was nothing legally wrong with this request, of course. But this was the first time in 10 years that anyone had asked.
After a few polite questions, the student finally spilled the beans. He'd been sent from The McNair law firm, one of the most politically connected corporate firms in the state, and recently honored by Chambers USA, America's Leading Lawyers for Business. As Mr. Knapp wrote on his blog, "[the student] understood that someone from out-of-state had asked McNair to obtain information on us." Why would a Chamber-friendly law firm covertly send a student to collect information on a local chamber of commerce?
Actually, the answer seems pretty obvious. Last week, Mr. Knapp wrote a courageous and stinging column that took on the U.S. Chamber, which appeared in a number of publications (e.g., here here). It began,
The South Carolina Small Business Chamber of Commerce, the U.S. Women's Chamber of Commerce and small business organizations and owners across this country want Wall Street Reform. But you wouldn't know that from the attention the media gives to the U.S. Chamber of Commerce, which is the mouthpiece for the big financial institutions that oppose reform....
Small business supports this reform because it will restore balance between Wall Street and Main Street through fair and commonsense policies and create a stable, transparent financial environment in which community banks and credit unions can once again feel secure in making loans.
But Mr. Knapp went even further, saying,
"The U.S. Chamber purports to represent small businesses. However, the reality is quite different." And, "[i]t's clear that the U.S. Chamber does not represent the interests of small businesses that have suffered because of the irresponsible actions of the nation's biggest banks." He also cited the recent Washington Monthly article, "Show Him The Money," which finds that "a third of the Chamber's revenues came from just 19 big companies."
In fact, the U.S. Chamber has been acting against the interests of small businesses and local Chambers of Commerce, let alone the U.S. economy, for years. It continuously attacked Madison County, Illinois, for example, condemning the legal/business climate there for the sole purpose of accomplishing its "tort reform" agenda -limiting consumer lawsuits against corporate wrongdoers. In 2004, Madison County Board Chairman Alan Dunstan complained,
"I've seen a lot of things in the newspaper with tort reform and that stuff. But I've been in contact with local chambers of commerce trying to attract people to Madison County, and we agree Madison County is a good place to locate business. There has been a lot of propaganda in the last election year." (Will Buss, "Madison County ranks No. 2 in pay increases," Belleville News-Democrat, July 10, 2004.)
The U.S. Chamber, often through its Institute for Legal Reform (ILR), is engaged in a largely covert effort to elect public officials who reflect a strong political agenda of protecting corporations from liability and weakening the civil justice system. Documents obtained in a lawsuit surrounding the 2004 defeat of a pro-consumer candidate for Washington State Attorney General, Deborah Senn, illustrate just how angry local chambers of commerce can be at such schemes.
Senn was the subject of a vicious campaign instigated by the U.S. Chamber/ILR and conducted through its local front group, the "Voters Education Committee" (VEC). When the ILR's funding of the VEC's attack ads became public, local chambers of commerce and business groups were outraged. The groups protested that the secretly funded ads presented serious credibility problems for them and diverted the public's attention from the records of the candidates. Steve Leahy, president and CEO of the Greater Seattle Chamber of Commerce, reportedly said that state business groups wanted to object to the "likely counterproductive result" of the Chamber's anti-Senn campaign and the "bone-headed practices" of trying to hide its funding sources." Leahy wrote a note to his members, including the following:
This is a follow-up to my message of last week regarding the anti-Deborah Senn TV ads that were funded by the Institute for Legal Reform, a political affiliate of the US Chamber of Commerce. As I explained to you, the Greater Seattle Chamber of Commerce was not involved with those ads and we neither engage in nor approve of negative campaigns or covert funding tactics that avoid our state's Public Disclosure Commission requirements.
One problem seems to be the fixation of the U.S. Chamber on taking out anyone who supports pro-consumer litigation, or blocking laws that can lead to it. This fixation can be so extreme, so irrational, that it causes the group to blow off the actual concerns of its small business members. The Consumer Product Safety Improvement Act (CPSIA) is pretty good example of that. CPSIA passed in 2008 after a public health disaster hit this country -- toxic toys with dangerous lead levels, causing brain damage in children and helping make 2007 "The Year of the Recall."
A year after the bill passed, the business lobbyists (and their political allies) were suddenly up in arms about the impact of this bill on certain small enterprises, issues that should have been raised at the time the bill was being written so they could have been addressed. But over the months that this bill was being drafted, groups that supposedly represented small business interests who were at the table, like the U.S. Chamber of Commerce, said nothing about these concerns. Here were the Chamber's "issues" with the bill: 1. Giving power to state Attorney General's to bring lawsuits; 2. Limiting "the preemptive authority of the CPSC," which will lead to lawsuits; 3. Giving new legal rights to whistleblowers, and; 4. A public database of product defects for parents, because it will lead to -- lawsuits!
This obsession with litigation is damaging and destructive. It causes the U.S. Chamber to "sell down the river" the small businesses it should be representing, when it matters most. And it leads to public attacks on and alienation from the very communities it should be promoting. Add these to the growing list of reasons why the U.S. Chamber of Commerce does not represent the 99.9 percent of America.