TALES OF CORRUPTION: NY Attorney General to Investigate Chamber of Commerce Lobbying Activities
- Pick your issue: corporations paying
no taxes, job loss, illegal immigration, corporate scandal, no national
health care plan, unprovoked war, cronyism, attacks on worker rights and environmental laws, out of control federal deficits, budget cuts,
financial scandals, Wall Street bailouts, Citizens United v. FEC, on and on, choose any one you want; they are all connected by the single
thread of corruption of government by corporate sponsors.
Until people see this as the central problem we will just continue to spin
our wheels and lose battle after battle. We are up against massive corruption.
General Eric T. Schneiderman of New York has begun investigating the
Chamber of Commerce's lobbying activities. (photo: Develop Economies)
Attorney General to Investigate Chamber of Commerce Lobbying Activities
By Nicholas Confessore, The New York Times
28 June 12
ttorney General Eric T. Schneiderman of New York has begun investigating contributions to tax-exempt groups
that are heavily involved in political campaigns, focusing on a case
involving the U.S. Chamber of Commerce, which has been one of the largest outside groups seeking to influence
recent elections but is not required to disclose its donors.
Mr. Schneiderman issued a wide-ranging subpoena on
Tuesday to executives at a foundation affiliated with the chamber,
seeking e-mails, bank records and other documents to determine whether
the foundation illegally funneled $18 million to the chamber for
political and lobbying activities, according to people with knowledge of the investigation.
The investigation is also looking at connections between the chamber’s foundation, the National Chamber Foundation, and another philanthropy, the Starr Foundation, which made large grants to the chamber foundation in 2003 and 2004.
During the same period, the National Chamber Foundation lent the chamber $18 million, most of it for what was described as a capital campaign.
In a complaint filed last year with the attorney
general, watchdog groups asserted that the loan had been used to finance lobbying for “tort reform” legislation in Congress and to run issue
advertising in the 2004 presidential and Congressional campaigns, most
of it against Democrats.
A spokeswoman for the chamber declined to comment, as did a spokesman for Mr. Schneiderman.
Mr. Schneiderman’s investigation is the first
significant one in years into the rapidly growing use of tax-exempt
groups to move money into politics. The biggest such groups, including
Americans for Prosperity, which is backed by the billionaire brothers
Charles and David Koch, and Crossroads Grassroots Policy Strategies,
which was founded by Karl Rove and other Republican strategists, are
expected to spend hundreds of millions of dollars this year on issue
advertisements against candidates to sway the outcome of the
presidential and Congressional elections.
But the sources of that money are largely obscured
from public view by mazes of transactions between allied groups and laws that allow tax-exempt organizations - unlike candidates and “super PACs” - to shield their donors.
Calls from Democrats and ethics watchdogs for tighter
oversight of the groups’ political activities have resulted in little
action by either the Federal Election Commission, which is deadlocked
over the issue, or the Internal Revenue Service, which regulates
charities at the federal level. But the subpoena from Mr. Schneiderman, a Democrat who made tougher campaign finance laws a centerpiece of his
2010 election campaign, suggests that he - like his predecessors Eliot
Spitzer and Andrew M. Cuomo - is preparing to aggressively exploit the
unusually broad regulatory powers of his office to vault onto the
Under New York law, tax-exempt groups - including
foundations, trade associations and social welfare organizations - that
do business or raise money from donors in New York must file auditors’
reports and their federal tax returns with the attorney general’s
office. The Starr Foundation is based in New York.
The U.S. Chamber of Commerce is among Washington’s
biggest political players. The group spent $66 million on lobbying in
2011, according to the Center for Responsive Politics, and its officials have pledged to spend at least $50 million on issue ads during the 2012 election cycle.
While the chamber claims roughly 300,000 members, its
political and lobbying activities are largely financed by a much smaller group of corporations, which can donate unlimited amounts to the
chamber for issue ads against candidates without having to disclose the
contributions publicly. During 2008, close to half of the chamber’s $140 million in contributions came from just 45 donors, often coinciding
with lobbying or political campaigns of concern to the companies giving
The chamber’s loan transactions have been the subject of several complaints lodged with federal authorities by U.S. Chamber Watch, a union-backed group, and other organizations. People with knowledge of the investigation said Mr. Schneiderman was looking at how the $18
million had been accounted for and raising questions about whether it
had been a legitimate loan.
The chamber reported paying no interest on the loan
until 2005, the people said. No principal was paid until 2009 - payments that were disclosed in tax returns dated after U.S. Chamber Watch filed its complaint with the I.R.S.
Mr. Schneiderman is seeking documents and
correspondence connected with the loan, including any loan agreement
between the chamber and the foundation. He is also seeking information
on whether any other individuals and corporations were solicited in the
capital campaign for which the foundation has asserted most of the money was earmarked.
The Starr Foundation is one of the country’s largest
philanthropies, with total assets of about $1.3 billion. Named after
Cornelius Vander Starr, the founder of American International Group, the foundation is headed by Maurice R. Greenberg, who was AIG’s chairman
until being forced out in 2005. As AIG chairman, Mr. Greenberg also
served on the board of the Chamber of Commerce and was a vocal advocate
of legislation limiting class action lawsuits.
The National Chamber Foundation has not confirmed that the Starr Foundation grants paid for its loan to the chamber. But the
chamber foundation’s tax returns suggest that the loan would not have
been possible without the Starr grants, which totaled roughly $19
Blaming democrats for rancor in congress is like blaming America for World War II