Alyssa Katz on the Influence Machine — The Chamber of Commerce and the Corporate Capture of American Life

When people hear Chamber of Commerce, they often think of local business associations that spruce up Main Street and sponsor Little League teams.


But the United States Chamber of Commerce is a different animal altogether.

It has metastisized into a fighting force designed to protect the worst excesses of American industry — an inside the beltway corporate crime lobby.

As Alyssa Katz points out in her new book —  The Influence Machine: The U.S. Chamber of Commerce and the Corporate Capture of American Life — the Chamber, through its veiled corporate sponsors, can take credit for some of the most disturbing trends in American life — the reversal of environmental protections, the destruction of unions and worker protections, the rise of virulent anti-government ideology, the enlarged role of money in campaigns, and the creation of astroturf movements as cover for the corporate agenda.

Katz is an editor at the New York Daily News in New York City.

Inside the beltway, there are a lot of corporate lobbies — the Heritage Foundation, Cato Institute, American Enterprise Institute. Why did Katz choose to focus on the Chamber?

“Those groups are classic examples of think tanks,” Katz told Corporate Crime Reporter in an interview last week. “They may have significant corporate money behind them. But their function is to provide ideological and intellectual and research cover for pro-corporate policies. The Heritage Foundation was the leader in this and then formed an early alliance with the Chamber. Tom Donohue is the CEO of the Chamber and transformed the Chamber into the political machine it is today. The moment he got the job, he connected with the Heritage Foundation. Heritage became the theory and the Chamber became the practice.”

“The Chamber has its own think tank — the National Chamber Foundation. But then it has several other branches of its operation. It is a lobbying force.”

“There are other business lobbying groups — the Business Roundtable, National Federation of Independent Businesses, National Association of Manufacturers. And every industry has its own trade group as well. They will produce their own research, but they are working for particular industries. They will send lobbyists out on particular bills, meet with members. But you look at the scale alone, the Chamber is by far the biggest lobbying group in Washington.”

“Over the past fifteen years, they have spent over $1 billion on lobbyists — some of whom are their own staff members, some of whom are hired from top Washington law firms”.

“Instead of saying — I’m from 3M, or IBM, or FedEx, these lobbyists are saying — I’m from the Chamber of Commerce. I represent not this special interest, I represent business. And supporting business is good for the economy and good for America. By hiring the Chamber, those companies can get an extra boost to their cause with this legitimization. Many of the Chamber’s major donors are not well positioned to lobby under their own identities.”

“A prominent example is the tobacco industry. You can imagine if RJ Reynolds or Altria went out to a member of Congress and said — hey, can you pass this bill for us or can you block this bill for us? That member would not necessarily be responsive. Even if the member were completely in the pocket of the company, that member might have voters that would be upset to learn that the member was working at the behest of a killer company. But by hiring the Chamber to do the lobbying, the tobacco industry changes the nature of how its requests are perceived.”

“In one case I discuss in my book, the Chamber was looking to block a tax on tobacco sales. It was meant to discourage smoking and help pay for health care for smokers. The Chamber went out there and said — we oppose this tax because its bad for business. Today this bill will tax cigarettes. Tomorrow, any industry could be next. We therefore consider this measure a threat to all business. And it was on that basis that the Chamber fought that tax. That tax never passed.”

In a way, the Chamber is also the corporate crime lobby. In her book, Katz addresses the issue of the Foreign Corrupt Practices Act. The Chamber could have come out for repeal of the law, but they haven’t.

“It’s a funny game the Chamber has to play,” Katz said. “They can’t be seen as being against law and order for businesses. They want to say — we are policing bad apples and the bad apples should be thrown into the waste bin. But look at the substance of the Chamber’s proposal to reform the FCPA. The FCPA has some serious penalties against dealing in any kind of bribery involving foreign government officials.”

“This gets complicated for businesses working in places like China, where you have close intertwining of government and nominally private sector enterprises. It’s commonplace to offer gifts or honors to the individuals you are seeking to do business with. Clearly, the FCPA is a barrier to expanding businesses in certain nations.”

“The Chamber hired Michael Mukasey, the former Attorney General, to lobby for the proposal – which would exempt subsidiaries of U.S. companies from the FCPA.”

“You ask why they didn’t come out and ask for outright repeal, well that would have done it. Any U.S. company operating overseas is operating through a subsidiary. It didn’t go anywhere, because it was an absurd proposition.”

“We are talking about a pretty narrow constituency of large multinational corporations that face consequences that require some kind of public cover. Otherwise, these companies could just lobby under their own names. They hire the Chamber because they need to be able to argue for things they could not win on their own.”

“These are companies that need to engage in foreign bribery to expand their international markets, working in nations with weaker environmental or labor laws.”

The Influence Machine came out in June. Where has it been reviewed?

“The Los Angeles Times gave it a good review,” Katz said. “There is a piece in The Nation magazine coming out next week.”

What about the Washington Post?

“The Washington Post did a negative review,” Katz said. “The nutshell was – I don’t know Washington and have no business writing about Washington. He wanted more of the backroom deals and behind the scene gossip. My book is not written for Washington insiders, who I’m sure know plenty about the Chamber. It’s written for the American public to help people better understand how does power work in society and why do elections work out the way they do. You have businesses, whose interests are so contrary to most of the American public calling the shots. Why do they have so much power and control? The Chamber isn’t the only reason why. But the Chamber is an emblematic story of how the transition to corporate power has happened. It’s not the only piece of it. The Koch Brothers are an important part of the story. You have many other wealthy interests stepping up and throwing their money around. But the Chamber has paved the way.”

“I hope to reach voters as we head into 2016 so that they can better understand who is calling the shots and how. And also how to fight back. To also understand that the kind of organized business power the Chamber represents is powerful. But it also can be defeated. And by laying it out there and explaining the mechanisms by which it works, we can understand how counter-movements can push back effectively.”

There are also business groups that don’t share the same political viewpoint of the Chamber.

“Yes, and I’m going to be going on a tour with one of them — the American Sustainable Business Council,” Katz said. “I’m excited about meeting with their members and getting out there and talking about how business can build political power in a healthier way. There is also the Small Business Majority. You also have a number of green business groups focused on sustainable energy and promoting double or triple bottom lines. Healthier business practices.”

“They are small groups. They have tiny budgets. The businesses that fund them are small. But you are seeing an untapped opportunity. You have new giants in the American economy that are not part of the Chamber coalition. Apple is a massively capitalized company. When the Chamber fought greenhouse emission controls, a number of companies, including Apple, left the Chamber over that issue. And these companies said — we can’t be part of the Chamber.”

Katz gives examples of big business executives who fought the Chamber.

“There was a father and son team — Ed Rust Sr. and Ed Rust Jr. The father was President of the Chamber while running State Farm. This was at the time that Ralph Nader and the consumer movement was growing with increasing force. Businesses were trying to figure out how to respond. Rust Sr. said — Ralph Nader is right. We need to start listening to what consumers need and want, to make sure that products are safe. These are our customers, they are the American people, and we fail to listen to them at our peril.”

“The Chamber freaked out. They disavowed what he said. Within a year, Rust Sr. was no longer with the Chamber.”

“The Wall Street Journal editorial page wrote a very positive editorial the next day saying — this guy has a point, Nader is actually good for the economy because he is expressing what consumers need and want. That was the Chamber in the 1970s.”

“Fast forward to the 1990s. And now Rust Jr. is playing an influential role in the Chamber’s Institute for Legal Reform, which is an operation designed to limit corporate liability in lawsuits.”

[For the complete q/a Interview with Alyssa Katz, see 29 Corporate Crime Reporter 33(12), August 31, 2015, print edition only.]

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