Customers could be forgiven some confusion when the drugstore giant CVS announced earlier this month it was immediately canceling its membership in the U.S. Chamber of Commerce, the nation’s largest business advocacy organization.
Certain facts appeared clear enough. The New York Times had just exposed the Chamber as secretly battling overseas to block measures that sought to discourage smoking. CVS had recently stripped tobacco products from its stores’ shelves and rebranded itself as a leading health care provider. This marriage between a health retailer and tobacco companies was doomed to divorce.
But the contretemps begged a bigger question: why in the world was the Chamber of Commerce, “representing the interests of more than 3 million businesses of all sizes, sectors and regions,” per its own marketing, advocating for the tobacco industry in the first place? And bigger than that: What other interests might the Chamber be working for -- and which businesses was it therefore working against?
The bottom line for businesses is that there’s no way to know for sure -- and ample reason for would-be members, especially small firms, to take a clear-eyed look at how and for whom the national Chamber of Commerce operates.
In short: As a take-no-prisoners lobbying (and much more) juggernaut, working above all on behalf of a relative few deep-pocketed donors.
Bakers, truckers, tech firms, chemical manufacturers, florists, agribusiness and every other sector under the sun, multinational and Main Street: The Chamber’s giant tent encompasses the vast spectrum of American business in all its glory. Most members join not the organization itself but a state or local affiliate, and get U.S. Chamber membership in the bargain.
It’s that national organization whose business model caused CVS such agita, by taking on a campaign on behalf of a particular, and particularly horrendous, industry. And that dance with tobacco makers is not a departure from business as usual, but central to the organization’s business model and not insignificant political muscle in Washington.
Internal cigarette industry records show sizeable contributions to the Chamber in exchange for requested projects, including a report concluding that smoking has no connection to worker absenteeism (not true) and the defeat of a proposed tax.
So it goes for energy, chemical, insurance, equipment and other companies with tough sells to make in Washington -- whether a bill in Congress, a regulation to block or a court case to win. The Chamber is by far the most active lobbying force in Washington, spending more than runner-ups American Medical Association, National Association of Realtors and General Electric combined.
By in effect hiring the Chamber to serve as a public face of their cause, companies gain two benefits. One, they insulate their brands against the bad p.r. that could emerge if concerned members of the public found out they’re pushing unpopular measures -- say, an auto company fighting safety rules. And two, they convey -- accurately or not -- that they are asking not for some self-serving favor, but progress for business and the economy as a whole.
Supercharging its lobbying oomph, the Chamber is simultaneously a leading player in the Wild West world of secret-donor spending on political campaigns, in an end run around the federal campaign-finance system. Most of its politicking ($35 million worth in the 2014 congressional elections) consists of heated TV and internet ads to win congressional seats for allies -- nearly all Republicans -- the Chamber could count on to oppose government regulation of business, from the Affordable Care Act to financial reform to greenhouse-gas controls.
The Chamber operates as a nonprofit trade association, so Internal Revenue Service rules protect the anonymity of donors. But what we do know is that a relative handful of companies contribute the lion’s share of the $236 million budget of the Chamber and sister U.S. groups. A look at the groups’ board of directors shows a heavy presence from insurance, fossil fuels and transportation -- interests that just so happen to align with the Chamber’s Washington agenda.
Some small-business owners and enterprises fit right in with the Chamber’s absolutist less-regulation-is-more stance. Others find membership incompatible with their own ways of doing business -- such as the growing numbers of firms that have adopted environmentally sustainable practices, or which have found they benefit from having employees purchase subsidized health care on insurance exchanges instead of providing it themselves.
Whatever their point of view, businesses also have to consider what’s best for their own competitiveness: the further growth of entrenched companies paying dearly to protect their market positions? Or the emergence of new players and industries ready and able to adapt to a marketplace with tougher regulations intended to protect workers, public safety and the environment?
The engineering giant Skanska made its choice in 2013: It dropped its membership, after the U.S. Chamber of Commerce attacked building codes favoring green construction materials.