Is the powerful biz lobbyist in Washington losing its grip?
WASHINGTON: This should be the US Chamber of Commerce’s moment.
A businessman occupies the White House. Republicans, who have received generous campaign donations from the Chamber, control both houses of Congress. And the agenda is full of favourite business issues such as tax reform, regulatory rollbacks and infrastructure spending.
Yet in recent months, the US Chamber - historically one of the cornerstones of Washington politicking and policy making has been deeply shaken. Members are divided over the border-adjustment tax, health care and climate change. Some want the Chamber to more vigorously stand up to President Donald Trump to protect free trade.
There has also been turbulence on the foreign front. The US-India Business Council has operated under the US Chamber’s wing since its founding in 1975.
But on July 7, the council’s high-powered board - including top executives of PepsiCo, Cisco, Warburg Pincus, and MasterCard - voted 29-0 to break away, saying in a letter to members that the Chamber “adds no value, but imposes unnecessary bureaucracy.”
General Electric - the nation’s 1oth-largest company and maker of products as varied as CT scanners, software and gas turbines - has considered pulling out of the Chamber because it views the group as part of an antiquated Washington influence establishment, too exclusively aligned with the Republican Party, and no longer an effective advocate for GE’s interests or views, according to people familiar with the company’s thinking.
Companies like GE, which long relied on the Chamber to be their guide and advocate in Washington, are now as politically sophisticated and connected as the Chamber - if not more so. And in an era that allows virtually unlimited independent political spending, they can form their own more focused, and perhaps more effective, associations. Many lobbyists who represent companies individually think the Chamber has taken on the lumbering character of its ageing building, a 92-year-old limestone edifice lined with Corinthian columns overlooking the White House.
“If there was a time in the past when they needed the Chamber for access to the White House, that’s kind of gone,” said a public affairs consultant who had worked with three Fortune 500 companies that have weighed leaving the Chamber.
“Companies have the tools to create coalitions of like-minded firms on issues that are important to them.”
This comes on top of high-profile defections in recent years. Apple and Pacific Gas & Electric dropped support in 2009 in response to the Chamber’s attempts to cast doubt on scientific evidence of global warming and play down its economic significance. And Nike quit the Chamber’s board, saying “we fundamentally disagree” with the group’s climate posture, though it has remained a member.
Hewlett-Packard, Mars, Unilever and Yahoo have also dropped out.
“Currently our focus is on participating in trade associations that directly impact our business strategies and product portfolio,” Mars spokeswoman Denise Meredith Young said.
The pharmacy giant CVS quit in 2015 over the Chamber’s lobbying to ease restrictions on tobacco sales; CVS removed cigarettes from its stores in 2014.
Yet many of America’s biggest corporate names have chosen to remain - if not enthusiastic, at least mum and on the Chamber’s roster - paying dues to the association or its wholly owned affiliates devoted to specific issues.
At least one major firm, investment manager BlackRock, has joined so it could monitor discussions on Securities and Exchange Commission regulations.
One reason for staying in the Chamber: Companies want to be on the same side as combative Chamber President Thomas J. Donohue, nearly 80, who took the reins of the group two decades ago and remains a formidable figure and fundraiser. The Chamber and its affiliates spent just under US$104 million on lobbying in 2016, more than any other corporation or industry association by a whopping margin, according to the Center for Responsive Politics.
“The Chamber under Tom’s leadership has been a real force,” said Charles O. Holliday Jr., chairman of Royal Dutch Shell and former chief executive of DuPont. “I don’t necessarily agree with all their policies,” he added, singling out climate change, “but I think their voice has been useful.”
Founded in 1912, the US Chamber sits atop a nationwide network of local chambers of commerce that operate largely on their own. It does not publish lists of members or their contributions.
It takes more than US$4 million a week to run the 500-person national organisation, which paid Donohue a handsome US$6.6 million in 2015, according to the Chamber’s most recent Form 990 filing to the IRS.
Some Chamber members think that it’s time for Donohue, who bought a US$2.8 million house in North Palm Beach, Fla., in 2011, to step down. But people who know him say he is staying. He has said that people will know he’s dead when he is carried out of the office in a box with flowers. — WP-Bloomberg