The Press Bats Down Obama’s Chamber Smears

Almost certainly a bogus scandal on foreign money in the campaign

It looks like the Democrats and Obama are trying to ape part of the campaign playbook perfected by Republicans: the fake scandal a la Swift Boat Veterans, the New Black Panther Party, and ACORNgate.

Find a hot-button issue, create an angle to raise dark suspicions about your opponent, and run with it—evidence be damned. Sure you may go to hell for it, but you’ll raise your opponent’s negatives!

This business from the administration about the Chamber of Commerce and foreign funding probably focus-groups well: “Danged furreners are stealin’ our jobs and secretly buyin’ our elections (spit).”

But it’s awfully thin gruel—almost certainly a bogus story trumped up because Obama & Co. has a bum hand with this economy thing—one exacerbated by his lowball economic predictions when he came into office. Expectations game, dude! That’s politics 101.

Anyway, let’s look at the report from the Think Progress blog that set this off. It reports that:

According to legal experts consulted by ThinkProgress, the Chamber is likely skirting longstanding campaign finance law that bans the involvement of foreign corporations in American elections.

Alas, ThinkProgress doesn’t name any of these legal experts.

And there’s lots of innuendo here:

Here’s how it works. Regular dues from American firms to the Chamber can range from $500 to $300,000 or more, depending on their size and industry, and can be used for any purpose deemed necessary by the Chamber leadership. For example, the health insurance giant Aetna has reported that it paid $100,000 in annual dues to the Chamber in the past. But for specific advocacy or advertising campaigns, corporations can hide behind the label of the U.S. Chamber of Commerce and give additional money. Last year, alongside their regular dues, health insurance companies like Aetna secretly funneled up to $20 million to the Chamber for attack ads aimed at killing health reform (publicly, health insurance executives claimed they supported reform). Last week, Politico reported that News Corporation, the parent company of Fox News, gave an extra $1 million to the Chamber for its election season attack campaign.

That’s bad! But ThinkProgress doesn’t have any evidence that the Chamber is taking money on the sly from foreign companies and laundering it to run anti-Dem ads. In case you didn’t catch that insinuation, here’s the lead-in to the above paragraph (emphasis mine):

Of course, because the Chamber successfully lobbied to kill campaign finance reforms aimed at establishing transparency, the Chamber does not have to reveal any of the funding for its ad campaigns. Dues-paying members of the Chamber could potentially be sending additional funds this year to help air more attack ads against Democrats.

Now that’s a weasel-word combo! “Could” and “potentially.”

The Obama administration doesn’t have any evidence either, for that matter, which led to this embarrassing exchange for chief Obama consigliere David Axelrod with CBS’s Bob Schieffer:

“This part about foreign money, that appears to be peanuts,” said CBS chief Washington correspondent Bob Schieffer. “Mr. Axelrod, do you have any evidence that it’s anything other than peanuts?”

“Well, do you have any evidence that it’s not, Bob?” the White House adviser replied. “The fact is that the Chamber has asserted that, but they won’t release any information about where their campaign money is coming from.”

Ah, the ol’ prove-the-negative thing. “Please prove to me that you don’t beat your wife.”

Schieffer’s pushback is part of a pretty good performance by the old-school press on this story, though there have been some weak he-said/she-said stories, like this one from the Washington Post.

The New York Times’s Eric Lichtblau pointed out how thin the ThinkProgress/Obama storyline is:

But a closer examination shows that there is little evidence that what the chamber does in collecting overseas dues is improper or even unusual, according to both liberal and conservative election-law lawyers and campaign finance documents.

Unions have international branches, too, as the Times points out, and the Democrats get the lion’s share of labor’s campaign spending.

The Associated Press also was good to flatly say there was “no evidence” to support the charges.

Jake Tapper and Devin Dwyer of ABC also pooh-poohed the story:

“We have no idea if the Chamber or any 501(c) organization as defined by the IRS code, is taking foreign money for the purposes of playing politics,” said Dave Levinthal of the Center for Responsive Politics. “Saying that that foreign money is actually going toward attack ads or any type of messaging in the political realm, you just don’t know. It’s speculation and nothing more.”

ThinkProgress’s Chamber story talks about foreign money in the hundreds of thousands of dollars, which the Chamber says goes to its international division. Meanwhile, the Chamber is spending $75 million on the elections this year. ThinkProgress raises the whole “money is fungible” thing to criticize the Chamber for allegedly mixing that international money in its general fund.

But the fungible thing goes two ways. Even if the Chamber kept the foreign money strictly segregated in an overseas account, it would still be fungible to the Chamber in the U.S. The key question is whether the amount of (apparently minimal) foreign money raised goes to foreign uses. But I don’t see any evidence that that’s not the case.

The pity of this nonstory is that there are plenty of good reasons—and good journalistic ones—to question the role of corporate money in campaigns, especially this year, in the wake of the Citizens United Supreme Court decision. The opacity of the system allows corporations to flood money into political ads without their names attached. Disclosure is sorely needed, and the press ought to fight for it.

It’s beyond me why you have to stretch and/or invent a “story” to make Big Business look bad. Hello, corrupt drug companies. Howdy, eight-figure Wall Street bonuses. Bye bye, outsourced jobs.

And somebody in the press might oughta point out that at the same time the Obama administration is mau-mauing the Chamber, it’s bending over backwards to smooth out that whole foreclosure fraud thing the Chamber’s biggest members have been perpetrating on a massive scale. Guess who’s leading the charge on that? David Axelrod—on the same show where he tried to smear the group.


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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.