Myth vs. Fact: Foreign Money and Political Spending

Myth: The U.S. Chamber is spending foreign money on political activities.

Fact: The U.S. Chamber fully complies with all applicable laws and regulations. No foreign money is used to fund political activities.

You might have seen stories alleging that the U.S. Chamber of Commerce is using money from foreign companies to fund our political activities. These stories all started with a single post on the liberal blog ThinkProgress. It was not a report (as some in the media are saying) and it was not a news investigation.

These accusations by a George Soros-funded, anti-business blog are unfounded, deceitful, and completely erroneous. They are a desperate attempt to silence those who support free enterprise, and a diversion by people upset about their grim prospects in the upcoming election.

The entire storyline is fallacious and indicates the sad state of journalism today. Apparently “ThinkProgress,” or anyone else with an axe to grind, can create stories out of thin air, and they will be picked up and legitimized by the traditional media.

The real motivation behind ThinkProgress’ blog is clearly to take business and its representative organizations out of the advocacy process (whether it be legislative or commenting on a member of Congress’ record) – a playing field that is not exactly level when you consider that labor unions and their allies far outspend business on election efforts.

 

The Real Story 

AmChams are independent organizations, created to represent American companies in overseas markets, and they do not fund U.S. Chamber political programs. Collectively, AmChams pay nominal dues to the Chamber – approximately $100,000 total across all 115 AmChams. Under our budgeting system, the nominal funds received from AmChams and business councils are used to support our international programs.

Whenever a new AmCham is formed and wishes to become a member of the Chamber, we have a significant vetting process (including an examination of by-laws and members) to ensure that the AmCham is not controlled by a foreign government.

The Chamber is proud to have global companies among our membership. Of the Chamber’s 300,000 members, a relative handful are non-U.S. based companies. See below for more info on foreign companies operating in the U.S.

 

FAQs

Who creates an AmCham? Do foreign corporations or governments, or government-controlled corporations, contribute to them?

American Chambers of Commerce abroad (AmChams) are created by U.S. companies active in foreign markets to be the voice of American business in those countries. We don’t control these organizations; they have their own boards of directors and are financially independent of the U.S. Chamber. Whenever a new AmCham is formed and wishes to become a member of the U.S. Chamber, we have a significant vetting process (including an examination of by-laws, members, etc.) to ensure that that U.S. citizens and U.S. companies are in leadership positions within the organization and to guarantee that it is not controlled by a foreign government.

To describe AmChams as representatives of foreign interests is exactly backwards. Since the first AmCham was founded in France in 1896, Democratic and Republican administrations have valued AmChams as an important voice for U.S. commercial interests overseas. President Obama and members of his cabinet have met with AmChams on many occasions in their overseas travel, as did Presidents Bush and Clinton and senior leaders in their administrations. In many AmChams, the U.S. ambassador serves as honorary chairman of the board; in nearly every AmCham, a representative of the U.S. embassy is an honorary member of the board, and AmChams work closely with U.S. embassies on a daily basis.

What do the funds raised from AmChams and international business councils go to?

Under our budgeting system, the nominal funds we receive from AmChams are used to support our international programs.

 

Background

The DISCLOSE Act

The DISCLOSE Act, supported by CAP and others, is a perfect example of tilting the playing field. It would use the Supreme Court’s decision as an excuse to expand the scope of campaign finance regulations to strangle certain speakers and free speech.

The DISCLOSE Act would give preferential treatment to unions over other membership organizations engaging in political speech before the upcoming elections. Perhaps the most striking thing about the DISCLOSE Act is that, while the Supreme Court overturned limits on spending by both corporations and unions, DISCLOSE seeks to re-impose them only on corporations. This legislation restricts political speech, and restricts political advocacy of corporations and their representative organizations.

DISCLOSE seeks less to enlighten the public than to bury would-be spenders in regulation and provide politicians with a weapon with which to threaten political opponents. HR 5175 creates one more list, alongside other lists the government keeps like the terrorist watch list and the no-fly list, except in this instance to keep track of political opponents for future targeting and harassment.

In light of the stronger-than-usual anti-incumbent sentiment this year, the DISCLOSE Act would be a mechanism for the Democratic Party to minimize losses usually dealt to the President's party in a midterm election year.
 

The Chamber’s Voter Education Efforts

The Chamber endorses pro-business candidates regardless of political affiliation. For instance, we endorsed Joe Manchin (D) in WV and Rob Portman (R) in OH and a number of other Senate candidates. In the House, we endorsed Bobby Bright (D) in AL-02, Charlie Bass (R) in NH and Walt Minnick (D) in ID.

We run a voter education campaign that focuses on issues and highlights where candidates stand on policies that create jobs. Our ads note where candidates voted on important issues, like health care reform, cap and trade and the federal budget. So far in this cycle we have spent significantly in our voter education efforts for governors races, primaries, and special election (MA). This is not just on TV but also includes mailers, phones, a ground game, as well as online and our Friends of the U.S. Chamber database.
 

Prohibitions on Foreign Nationals

The Chamber is careful to ensure we comply with all applicable laws and no foreign money is used to fund political activities.

The Tillman Act of 1907 prohibits “foreign nationals” — such as foreign individuals, corporations or any “combination of persons” — from making either campaign contributions or other expenditures in connection with federal, state or local elections. The Citizens United decision left the ban on direct campaign contributions to candidates by corporations (including foreign corporations) and unions in place; the Supreme Court overturned only the federal ban on independent political expenditures, which is the equivalent of independent political speech.
 

Foreign Companies Operating in the United States

Foreign multinational corporations are members of and/or contribute to a variety of causes in the U.S. For example, Siemens is a member of the U.S. Climate Action Partnership (USCAP), originally formed by the Natural Resources Defense Council and made a $3.2 million contribution to the American Red Cross's Hurricane Katrina Relief Fund.

Siemens employs 70,000 Americans in its U.S. subsidiaries. It has the same concerns a U.S. company has with respect to laws and regulations and the economic climate because it is affected in exactly the same way by the exact same laws.

Some foreign multinational corporations have operated in the U.S. for nearly a century (example: Lever Brothers). Foreign multinational corporations employ some 5.5 million Americans—or 4.7% of private sector employment.
 

Fast Facts on Foreign Companies

  • Payroll - U.S. subsidiaries support an annual payroll of $403.6 billion –an average compensation per U.S. worker of $73,124 - 34% percent higher than compensation at all U.S. companies.
  • Manufacturing - U.S. subsidiaries represent 11% percent of American manufacturing jobs.
  • Unions - 12.4% percent of employees at foreign companies in the U.S. are covered by a union collective bargaining agreement. – compared with just 8.2% percent U.S. businesses.
  • Exports - U.S. subsidiaries export $215.6 billion in goods- 18.5% percent of the U.S total.
  • Bricks and Mortar- U.S. subsidiaries also spent $183 billion on plant construction and new equipment.
  • R&D - U.S. subsidiaries spent $39.8 billion on U.S. R&D activities, up from $34.3 billion the previous year
  • The FBI has awarded a $40 million contract to United Kingdom-based BAE Systems to provide security risk assessments, certification, and accreditation to agency IT systems.