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Chamber spends early, often on GOP congressional candidates

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For the big-spending U.S. Chamber of Commerce, the 2012 election season began early with a flurry of hard-hitting ads in six states that included attacks on two vulnerable Democratic senators -- a harbinger of the $50 million-plus drive it plans to mount this election year.

To help Republicans gain control of both houses of Congress, the Chamber dropped about $2 million on "issue advocacy" ads late last year -- in Iowa, Montana, Nevada, Ohio, Pennsylvania and Washington.

In February, the pro-business behemoth poured another $10 million into ads aimed mostly at weakening Democrats and bolstering GOP members in eight Senate and 12 House contests. Just one ad was supportive of a Democrat's positions.

This hefty and early ad spending underscores the huge political stakes in the coming congressional elections for many of the Chamber's most generous corporate supporters -- including energy, insurance, health care and Wall Street firms.

Democratic Sen. Sherrod Brown of Ohio, for one, has been targeted by the Chamber with almost $2.5 million worth of slick spots saying he "voted to block American energy production and increase energy taxes."

Some of the ads have been criticized by independent fact-checking groups and one drew barbs because it showed a sinister-looking Brown sporting a beard in what appears to be a doctored photo.

The Chamber's key issues -- attacking "government-run" health care, federal curbs on domestic energy production and "job-killing regulations" -- have been standard lobbying themes during the Obama years.

"We hope and plan to have the most aggressive issue advocacy campaign," ever run by the Chamber, Bruce Josten the group's top lobbyist told iWatch News.

Springtime ad spree

The Chamber's issue ads don't urge votes for specific candidates, but do discuss where candidates stand on several of the Chamber's leading "free enterprise" issues.

Fundraisers close to the Chamber expect another multimillion-dollar ad drive in April or May that will equal or surpass the group's February foray.

The ad spree reflects the Chamber's fundraising muscle, led by its feisty, silver-haired CEO Tom Donohue. During his decade and a half at the Chamber's helm, Donohue has been instrumental in boosting its annual budget to about $200 million (more than four times what it was when Donohue took over) and making the group far and away Washington's premier lobbying spender.

Last year alone, the Chamber spent $67 million on lobbying, according to the Center for Responsive Politics.

And this election season the Chamber is again thinking and spending big.

By November, the Chamber expects to run ads in at least a dozen Senate contests and at least 30 House races -- but following tradition it won't be directly involved in the presidential race.

"We're not going to be engaged in presidential politics," Scott Reed, the veteran GOP operative who joined the Chamber last fall as senior  political strategist, said in an interview. "But we'll be engaged in presidential policies and issues as part of our voter education."

Why such an early start for the Chamber on the electoral front?

"We saw an opening in the political calendar and a need to set the terms of the debate," Reed said. By getting its ads up early the Chamber is trying to "grow the map by making more races competitive," Reed said, adding that many local chambers have supported their efforts. 

Veteran campaign finance analysts aren't surprised by the Chamber's fast start.

"It makes sense that the Chamber would spend early -- and big -- if they're trying to put more races in play, particularly to shore up their chances of flipping the Senate," said Sheila Krumholz, the executive director of the Center for Responsive Politics. "Last cycle, the average winning Senate seat cost nearly $10 million, so challengers generally need major resources and outside support to be viable."

The Chamber's tough and expensive messages have irked Democratic targets -- especially Sherrod Brown.

"Perhaps a pollster somewhere thought Ohioans were averse to a public servant with a beard," said Justin Barasksy, a campaign spokesman who defended his boss's position. "Like most Ohioans, Sen. Brown believes it's more important to stand up for our middle class by fighting to lower the deficit than it is to protect the bottom line of big oil companies who reap billions in profits while gas prices remain high."

The chamber's tactics and messages haven't sat well with local chambers in two battleground states.

Chambers in Montana and Virginia have criticized the national organization's ads for their stances and factual charges about Democratic candidates, a phenomenon that mirrors dissent in 2010 by dozens of local chambers over that cycle's national Chamber ads.

Leaders of three local Montana chambers objected to a Chamber ad claiming that Democratic Sen. Jon Tester had voted to raise taxes to pay for health care reforms. One chapter leader in Missoula, according to a local newspaper, said the ad was "counterproductive."

Money machine

Such criticism hasn't slowed the Chamber's fundraiser-in-chief Donohue, who has been on a tear, tapping long-time corporate coffers and hitting up new prospects.  The Chamber is using a well-honed network of fundraisers and consultants and is recruiting new muscle to raise more bucks, according to Chamber tax documents and interviews with lobbyists.

This year, the Chamber seems well positioned to rake in tens of millions of dollars for its advocacy drive.

"The Chamber has always been a positive force on the GOP side of the aisle," Lewis Eisenberg, a senior advisor to buyout behemoth KKR, said in an interview. 

Eisenberg, a veteran GOP fundraiser who is helping Mitt Romney's presidential drive, added that "the addition of Scott Reed gives them extra firepower." Reed was executive director at the Republican National Committee in 1994 when the GOP won control of both houses of Congress for the first time in 40 years.

As a nonprofit organization, the chamber allows huge corporate donors to remain anonymous.

"For a corporation that is fearful of retaliation or publicity, the Chamber is a very convenient vehicle for political money," said Jack Pitney, a government professor at Claremont College in California.

And Donohue has been a successful and crafty corporate pied piper.

The Center has learned new details about some of the Chamber's biggest donors for its different political, lobbying and other programs.

Among them are energy companies, health care interests, the Pharmaceutical Research and Manufacturers of America, Dow Chemical, Exxon Mobil and private equity firm the Blackstone Group.

In 2008, the Chamber received $15 million from PhRMA for an issue advocacy drive to help defend members who were under attack by Democrats urging price controls for some drugs for seniors.

According to IRS documents, the Chamber spent more than $300,000 in 2009 alone for fundraising help from Jim Nicholson, the former RNC chairman  and Carol Hallett, the ex-CEO of the Air Transport Association of America.

The duo helped rope in about $5 million that year.

Since he assumed the reins at the Chamber almost 15 years ago, Donohue has built a sprawling fundraising operation that keeps lobbying, litigation and political campaigns humming. Donohue is widely known for making big asks of potential donors and being an aggressive fundraiser.

"Donohue is fearless and the business community admires that," Billy Tauzin, the former leader of PhRMA, now special legislative counsel with Alston & Bird, told iWatch News. "Tom weighs in and he's not afraid of deep water."

Historically, Donohue has shown an uncanny knack for setting up special projects and institutes that have been magnets for seven-figure corporate donations -- on top of annual dues.

"In past years, Donohue was a frequent visitor to Houston and other headquarters to push for extra funding for specific issue advocacy campaigns," recalled Don Duncan, the former head of the Washington office of Conoco Phillips. 

A prime example, the 2007 launch of the 21st Century Energy Institute, a Chamber center that takes a free market approach that appeals to oil, coal and other energy giants.

To jump start the institute, energy lobbyists say the Chamber solicited seven-figure and upper six-figure donations from energy companies. Funding for the Center was led by America's largest oil company Exxon Mobil and included the likes of, Koch Industries, Peabody Energy and Southern Co. 

Energy lobbyists say that the Chamber is now hitting up some of these companies again for this year's issue advocacy ads and is expected to rake in big bucks from a few of these giants and others.

Insurers big backers

In 2009 and 2010, when the Chamber was fighting aggressively to block Democrat-backed healthcare reforms, $86 million was raised from insurers, including Aetna, Cigna, Humana, United Healthcare and Wellpoint, for the Chamber's expensive but ultimately unsuccessful ad drive.

Those funds were sent to the Chamber under the radar by routing them through America's Health Insurance Plans, a trade group, according to tax documents and published reports.

Likewise, the Chamber is looking for extra help this year from several of its Wall Street supporters who have been allies in efforts to curb some of the regulations pending at federal agencies to minimize the risks of another financial crisis.

A fight has raged over the creation of regulations to implement the financial services reform law known as Dodd Frank. The Chamber has revved up its Center for Capital Markets and Competitiveness, which tries to fend off business regulations it deems too harsh.

After it unsuccessfully opposed creating the Consumer Financial Protection Bureau, the Chamber and its center have tried to limit the bureau's powers and budget. The Center has also won Wall Street backing as it has stepped up efforts to curb regulation of derivatives, the financial instruments that contributed to Wall Street's meltdown.

Veteran GOP lobbyists close to Wall Street praise Donohue's fundraising prowess and have tried to help with some clients. "Donohue is a force of nature," said Wayne Berman, a mega-GOP fundraiser and lobbyist. At least one of Berman's clients, the Blackstone Group, has backed some Chamber programs.

Another Chamber program that's been a huge financial magnet for corporate funds is the group's Institute for Legal Reform, which was set up in part to curb litigation aimed at potential corporate abuses and what it claims is excessive use of the courts.

In 2011, the ILR accounted for almost one-third of the $67 million that the Chamber spent on lobbying, according to the Center for Responsive Politics.

Historically, the Legal Institute has received seven-figure and high six-figure donations from insurance giants like Aegon, Allstate and State Farm and a handful of corporate giants like Dow Chemical, according to fundraisers and lobbyists familiar with the institute.

Lisa Rickard, a former head of Dow's Washington lobbying operation has run the ILR since 2003 and has helped to pull in extra funding from the chemical giant, say lobbyists familiar with its finances. According to tax records, Dow gave the Chamber $1.7 million in 2008 to help in part with lobbying against tougher regulations of chemical plants meant to ward off potential terrorist attacks.

To boost its financial clout, the Chamber added former RNC chairman Nicholson. According to its 990 filing with the IRS in 2009, the Chamber paid $102,256 to Nicholson for his help in raising more than $3 million.

Nicholson said in an interview that he helped open doors with energy, financial service and real estate companies.

Another new outside consultant the Chamber is counting on for financial muscle and political smarts is Andrew McKenna, who recently did a stint fundraising for Karl Rove's American Crossroads super PAC and boasts ties with Wall Street donors.

Further for almost a decade, the Chamber has employed as a counselor the ex-trade group CEO Hallett, who according to tax forms earned handsome fees for fundraising. In 2009, Hallett was paid $233,332 for help in raising $4.9 million.

To keep the Chamber's multiple projects humming financially, Donohue travels widely at home and abroad to meet personally with CEOs. For instance, while the Chamber was fine tuning its hefty $10 million ad blitz, Donohue in late January jetted to Europe.

Flying for dollars

As he's done for many years, Donohue flew to Davos, Switzerland to pitch CEOs at the annual World Economic Forum to make fundraising contacts.

Just how much Donohue's Davos pitch this year focused on the elections isn't clear, but the Chamber is already in overdrive to help its business allies win big in November.

The odds on regaining the Senate, though, may be getting longer, partly because GOP Sen. Olympia Snowe of Maine abruptly announced her retirement.

Regardless, the Chamber is betting it will spend more than the $33 million it pumped into issue ads in 2010 and the millions more that it used for its growing get-out-the-vote operation. The Chamber has built a sophisticated data base with the names of over 7 million people, dubbed "Friends of the Chamber," that's used for voter mobilization.

The Chamber ads will "focus on big-government solutions that have contributed to slow economic recovery," said Chamber lobbyist Josten.

Chamber ads are aimed both at blasting Democratic senators, and boosting House members who have been key allies, like Fred Upton, the Republican chairman of the House Energy and Commerce Committee, who is facing a primary challenge from a Tea Party candidate.

To expand its political muscle, the Chamber meets periodically to share intelligence with a dozen or so powerful GOP allied groups, including the Rove linked super PAC American Crossroads.

The meetings are aimed at maximizing their firepower by trading polling data and other information about key races -- including in battleground states.

But the Chamber's pro-business messages face rebuttals from unions like the AFL-CIO which historically have poured tens of millions of dollars into getting out the pro-labor Democratic vote.

Michael Podhorzer, the union's political director, said the Chamber needs all the money it can get.

"The Chamber is raising more and more money from corporations because they realize they're trying to sell a less and less persuasive message -- no accountability for the corporations that tanked our economy," he said.

Continue this story and read more investigations at iWatch News