Sunday, February 06, 2005

Chamber of HorrorsCommerce

The Washington Post had an interesting -- and rather frightening article yesterday about the growing influence of the Chamber of Commerce.

Believe it or not, I really don't have anything inherently against the idea of business associations. When I was "between jobs" in my mid-twenties, I got temporary work at a place whose motto was "Let Us Be Your Man In Washington." That made sense to me. Important things happened in Washington and people or businesses outside of Washington find it difficult to keep track. So it makes sense for them to belong to associations or labor unions or other organizations that help people "outside the beltway" keep track of what's going on in Washington that may affect their business, and to try to educate legislators and bureaucrats about the interests of their constituents who may not have the time or money to schedule frequent visits with their legislators or meetings with regulatory agencies.

That's the theory.

The reality, however, is much different -- qualitatively and quantitatively.

The chamber is at the forefront of a quiet revolution in business lobbying. Corporate groups now raise big money to advance broad issues, largely to help the Republican president enact his fiscal agenda. That's a long step away from what trade associations traditionally did: concentrate on narrow concerns while shunning partisan spats.


The chamber eagerly deploys every weapon in the lobbying arsenal and can be counted on by the president to get things done. It has demonstrated its success repeatedly in the past four years on issues as disparate as loosening ergonomics standards and creating health-savings accounts.

Its lobbyists blanket Capitol Hill. Its Web sites and telemarketers stir up voters back home. It donates generously to political campaigns coffers, and it bankrolls multimillion-dollar ad campaigns for the politicians and policies it supports.

Few organizations can muster that much firepower, except perhaps the most prominent groups the chamber will go head-to-head against this year -- the trial lawyers' lobby on legal reform issues and AARP on Social Security private accounts.


Today, the chamber is solidly in the black, its $150 million annual budget triple what it was when Donohue took over. It also is staunchly Republican in most of its legislative positions and played a pivotal role in cutting the tax on dividends and approving free-trade pacts, among many other Bush priorities. Whenever the president or his people called, the chamber assembled coalitions of like-minded groups and contacted its 3 million member firms to step up political pressure and donate lobbying-related funds.

This year, it will lead the effort to pass the president's first significant initiative -- a bill to limit class-action lawsuits against big corporations.

Think it's always been that way? Check out this anecdote about how Chamber President Tom Donohue expanded the influence of the Chamber:

When he became the group's president in 1997, the chamber took in only about $600,000 from its largest corporate members. Last year, collections for that category, called the President's Advisory Group, totaled $90 million.
Not only do they have more money, but they're far more Republican than they used to be. A 2003 Washington Montly article by Nicholas Confessore describes the purpose of meetings organized by right-wing Republican Senator Rick Santorum (PA):
The chief purpose of these gatherings is to discuss jobs--specifically, the top one or two positions at the biggest and most important industry trade associations and corporate offices centered around Washington's K Street, a canyon of nondescript office buildings a few blocks north of the White House that is to influence-peddling what Wall Street is to finance. In the past, those people were about as likely to be Democrats as Republicans, a practice that ensured K Street firms would have clout no matter which party was in power. But beginning with the Republican takeover of Congress in 1994, and accelerating in 2001, when George W. Bush became president, the GOP has made a determined effort to undermine the bipartisan complexion of K Street. And Santorum's Tuesday meetings are a crucial part of that effort. Every week, the lobbyists present pass around a list of the jobs available and discuss whom to support. Santorum's responsibility is to make sure each one is filled by a loyal Republican--a senator's chief of staff, for instance, or a top White House aide, or another lobbyist whose reliability has been demonstrated. After Santorum settles on a candidate, the lobbyists present make sure it is known whom the Republican leadership favors. "The underlying theme was [to] place Republicans in key positions on K Street. Everybody taking part was a Republican and understood that that was the purpose of what we were doing," says Rod Chandler, a retired congressman and lobbyist who has participated in the Santorum meetings. "It's been a very successful effort."
The problem with the Chamber -- and other similar associations like the National Association of Manufacturers (NAM) and the National Federation of Independent Businesses (NFIB) -- is not just their unbridled wealth and influence, it's the fact that they're fundamentally dishonest and ultimately betray the intentions of their members.

Take one of my favorite subjects, ergonomics. During the ergonomics battles of the late 1990's, when I worked at OSHA, it was not unusual for us to talk to the health and safety directors of companies who would tell us that although they had a few problems with the proposed (or final) ergonomics standard, it basically didn't require anything significant they weren't doing already. In fact, many had gone far beyond what OSHA had proposed and were saving gobs of money. But then we'd get a fax from their CEO complaining that their was no science behind ergonomics and that the OSHA standard was going to drive them out of business. As a matter of fact, we typically got hundreds of the exact same fax -- copied from the example that NAM or NFIB or the Chamber sent to their members warning them that the sky was falling.

During the hearings, we got disappointingly little candid testimony from individual business, most of them preferring to depend on the far more ideologically focused testimony of the associations they belonged to. This was disappointing -- and ultimately self destructive -- because we were really trying to understand what worked, what didn't work and how to word the regulation so that companies that were doing a good job would be in compliance with relatively little effort beyond what they would have been doing anyway.

When the standard came out, the business association made sure that all of their members knew that OSHA had issued a 600 page regulation. And how was anyone -- especially any small businessman -- supposed to even read it all, much less comply with it? In fact, why even bother trying to read or understand it when you're paying dues to an association that will read and analyze it for you?

So, of course, few people even tried to read it. If they had, they would have realized that it was actually only 8 pages long and written in plain English. CEO's might even have asked their health and safety people what they thought about it, rather than relying on the lies from the associations.

Lies? Like that OSHA would prohibit the lifting of anything weighing over 15 pounds (no such thing), like they were one-size-fits-all regulations (when actually they said, once you find you have a problem, you figure out what to do about it) that it would take "thousands of hours to understanding and complying with government-prescribed rules, and that "State workers' compensation programs and the OSHA general duty clause already address workplace injuries, including ergonomic injuries."

And how were their members to know that they were being sold a bunch of lies for their hard-earned dues that should have gone toward creating jobs for women and minorities.

But that was then. What about now? Now that we've discussed their lies, let's talk about greed.

I've written recently about Republican attempts to push "tort reform" through Congress -- basically taking away peoples' right to sue for significant damages when a company's defective drug or product kills or injures -- while they also weaken regulatory enforcement at the same time.

Last Thursday, the Senate took the first step in passing a tort-reform bill when "Senate Judiciary Committee overwhelmingly approved legislation that would shift most class-action lawsuits from state courts to federal courts." The idea is that federal courts are more reluctant to take class action suits -- such as those for people sickened or killed by asbestos -- than state courts. You can read the details here (and while you're at it, can anyone out there explain to me why Democratic Senators Chuck Schumer (NY), Diane Feinstein (CA) and Herb Kohl (WI) are supporting this piece of rubbish?)

But I digress. Back to the Chamber's greed. Aside from the fact that the bill, in the words of Senator Pat Leahy (D-NH)"would make it harder for American citizens to protect themselves against violations of state civil rights, consumer, health and environmental protection laws," there's one other "small" flaw.
One major problem, according to critics of the legislation, is that the measure creates a Catch-22 situation in which, once a case is removed from a state court, a federal court might not be able to hear it. The Supreme Court ruled in 1985 that a court cannot approve, or certify, a class action of nationwide proportions when there are "material" differences in state laws. Since then, some state courts have continued to certify such cases when the differences in the state laws are relatively inconsequential, although federal courts have not.

Thus the fear among the critics is that if the legislation were adopted without changes, a significant group of cases could not be brought in either federal or state courts.
OK, that's a problem, but not an insurmountable one. To prevent this bill from eliminating, rather than just restricting class action suits, Senator Jeff Bingaman (D-NM) introduced an amendment that would fix the problem by permitting federal courts to entertain such claims by giving federal judges the discretion to select a state law to apply. Makes so much sense that even Republican Senate Judiciary chair Arlen Specter (PA) supports it.

But not the Chamber and their buddy Senate Majority Leader Bill First (TN). Why be satisfied with a simple victory when they can take the whole cake? Why be satisfied with limiting class action suits, when you can get rid of them altogether? Why be satisfied with a piece of cake, when you can take the whole thing?
After the hearing, Stanton Anderson, a lawyer for the Chamber of Commerce, said the Bingaman amendment would "gut the bill."

And Dr. Frist said later that he hoped the Senate would pass the bill without amendments.

"If we can succeed in passing a clean bill through the Senate, it is my expectation that the House will act quickly and we can send a bill to the president," Dr. Frist said.
So what we're left with, instead of associations that represent the interests of its members in Washington and providing them with accurate and useful information, are a bunch of anti-union, anti-government ideological lobbying firms that increasingly provide the Republican party's funding and political muscle while also dictating much of the party's policy -- especially when it comes to labor and environmental issues. Are policy presriptions that are based on lies, distortions, greed and ideology really what their members signed up for? How many of their members realize today that the ergonomics standard was only 8 pages long and probably could have saved them a significant amount of money? How many of them realize that the current battle against "frivolous lawsuits" isn't really going to help the bottom lines of any but the worst among them (along with the real goal: weakening the funding base of the Democratic party?)

Update: More on this issue from Tapped.