(Photo: REUTERS / Larry Downing )
President and CEO of the U.S. Chamber of Commerce Thomas J. Donohue speaks to the press at the U.S. Chamber of Commerce "Jobs for America Summit 2010" in Washington, July 14, 2010.
A United States Senator has asked the Federal Election Commission to investigate reports that the U.S. Chamber of Commerce may be using money from foreign corporations to help fund its ad campaigns for the 2010 elections.
"I am profoundly concerned by recent reports that foreign corporations are indirectly spending significant sums to influence American elections through third-party groups, including 501(c)(6) trade organizations," wrote Sen. Al Franken, D-MN, to the FEC on Wednesday.
"I am writing to ask that you investigate these claims, enforce existing laws and regulations prohibiting foreign spending in American elections, and strengthen those very laws through new regulations and policy guidance," Franken said.
As the Senator makes clear in an accompanying press release, the principal 501 (c)(6) trade organization he refers to is the U.S. Chamber of Commerce.
Franken's call for an investigation follows fast upon a report published Tuesday on the ThinkProgress website alleging that the Chamber was using fees and donations from foreign members and affiliates to help fund its massive $75 million ad campaign to elect Republican candidates in the upcoming mid-term elections.
The ThinkProgress report said "the Chamber funds its political attack campaign out of its general account, which solicits foreign funding. And while the Chamber will likely assert it has internal controls, foreign money is fungible, permitting the Chamber to run its unprecedented attack campaign."
It is illegal for foreign entities to influence American elections, on the federal, state or local levels, by directly or indirectly contributing to political campaigns. The Chamber, which openly opposes many of the principal policies of the Obama administration, is one of the most active domestic spenders in campaign ads this years, about $25 million so far, all of it for Republican candidates.
But the Chamber vehemently denies soliciting or using foreign money in the campaigns, and insists that it has broken no laws.
"We're careful to ensure that we comply with all applicable laws," said Tita Freeman, a Chamber spokesperson. "No foreign money is used to fund political activities."
Another Chamber spokesperson was more emphatic.
"No foreign money - from AmChams of otherwise - is used to fund political activities," said P.J. Fielder. "None of the AmCham money is used for political activities."
AmChams are foreign chapters of the U.S. Chamber of Commerce, composed both of American companies operating abroad and foreign companies. There are 115 AmChams, according to the Chamber. They each pay dues to the Chamber. The Chamber insists that these monies are nominal and that they do not enter into the monies spent for campaign ads in the U.S.
"Collectively, AmChams pay nominal dues to the Chamber - approximately $100,000 total across all 115 AmChams," Freeman said. "Under our budgeting system, the nominal funds received from AmChams and business councils are used to support our international programs."
Faiz Shakir, who wrote the investigative aritcle on ThinkProgress, said the Chamber is soliciting funds from foreign companies and that AmCham dues are the smallest part.
"Most of the Chamber's foreign sources of funds come from large multi-national corporations who are headquartered abroad, like BP and Siemens," Shakir said. "Direct contributions from foreign firms also are accepted under the auspices of the Chamber's 'Business Councils' located in various foreign countries."
Shakir said that the U.S.-Bahrain Business Council raises at least $100,000 a year from its members for the Chamber, and the U.S. India Business Council raises at least $200,000 annually.
Business councils are distinct entities from AmChams and, while Shakir says that allows them to send checks to the Chamber, the Chamber also denies using any money from business councils in political ad campaigns.
Shakir said that the company is employing an accounting dodge.
"Money is fungible," he said. "If they are raising money from abroad to fund a general account, with the expectation that the general account will have a certain amount of dollars in it, that of course influences their decision about how much to spend on domestic partisan attack ads. To be clear, we are not against the Chamber receiving foreign funds. We are opposed to the illegal activity of soliciting foreign funds for electioneering purposes."
It is that activity the Chamber staunchly denies. ThinkProgress has called on the Chamber to prove how they keep the funds separate by making their records public. The Chamber, so far, has not responded to that request.
Sen. Franken wants the FEC to make sure they do. In his letter he says that the Chamber may have done nothing illegal, but he wants the federal agency to ensure that the Chamber has followed all proper accounting procedures.
Ed Shelleby, a spokesperson for Franken, explained that while it is illegal for foreign entities to contribute to American political campaigns, the FEC has issued guidances in the past that create exceptions, some of which are quite large.
That is why Franken has also asked the FEC to rescind a guidance issued in 2000 that allows foreign companies to spend on U.S. elections as long as the company is incorporated in the U.S. and creates a special election committee staffed by Americans.
"The FEC has been in contact with our office and said that they will be following up on the Senator's letter, which is about making sure that the FEC takes a look at how all groups - including the Chamber of Commerce - are operating in the wake of the Citizens United decision," Shelleby said.
The U.S. Supreme Court's Citizens United decision, reached earlier this year, allows corporations unlimited donations to political campaigns, and it allows corporations to contribute to campaigns as political action committees -- that is, under some innocuous name, without disclosing who they are.
Democrats, including Franken and President Barack Obama, were infuriated by the decision of the conservative-leaning high court. Democrats sought to fight back legislatively with the DISCLOSE Act, which would require that corporations making political contributions publicly and clearly reveal who they are and what they are donating. But the bill did not make it past a Republican filibuster in the Senate.
Franken contends that the FEC must be more vigilant than ever to protect American elections from the influence of foreign money now that American corporations may hide behind the veils of both a permissive FEC guidance and Citizens United.
The President, too, weighed in on the latest developments in the ongoing issue, at a campaign rally.
"Just this week, we learned that one of the largest groups paying for these ads regularly takes in money from foreign corporations," Obama said. "So groups that receive foreign money are spending huge sums to influence American elections, and they won't tell you where the money for their ads comes from."
The Chamber called the President's reference to them an "act of desperation" and part of a "smear campaign."
The Chamber had a similar opinion of Sen. Franken's activity.
"This is simply a sad and predictable attempt to use the threat of federal action to silence legitimate political speech," the Chamber's Freeman said. "The U.S. Chamber has been fighting for business for almost 100 years and we are not about to allow juvenile scare tactics like this keep us from our mission."
This article is copyrighted by International Business Times, the business news leader