Guilty until proven innocent?

October 7, 2010   •  By Jeff Patch
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The U.S. Chamber of Commerce continues taking fire from Democratic officials and liberal interest groups after a Tuesday blog post in ThinkProgress alleged that the business organization used foreign funds for political advocacy.

Despite the uproar from Democratic candidates and allied groups, no actual evidence has emerged that the Chamber violated the law, which prohibits foreign nationals from funding political activity. It’s not improper for 501(c)(6) business associations such as the Chamber to accept money from foreign affiliates to fund international operations as long as the organization maintains a reasonable accounting procedure to ensure such funds aren’t spent on American politics. The Chamber has repeatedly said it has such a system in place and no foreign funds were spent on its political efforts.

Furthermore, the idea that the Chamber is funding its political ad campaign with this money is laughable. The Chamber has an annual budget in excess of $150 million, of which it appears about two-tenths of one percent comes from foreign enterprises.

Unsatisfied, prominent Democratic politicians such as Sen. Al Franken, Democratic Congressional Campaign Committee Chairman Chris Van Hollen, the New York Times editorial board, MSNBC talking heads Chris Matthews and Ed Schultz and liberal interest groups such as are demanding a Department of Justice criminal investigation and a Federal Election Commission inquiry.

Exchanges on MSNBC’s “Hardball with Chris Matthews,” “Countdown with Keith Olbermann” and “The Ed Show” are instructive:

ThinkProgress’ Faiz Shakir: We don’t know exactly how that money gets transferred… but we know that all that money is going into a central account that is being used for funding attack ads.

Matthews: So it’s fungible, it goes into a big pile of money and it goes outside another door

Shakir: That’s exactly it.

Matthews: Is there any way they could argue the money didn’t go through that route, it didn’t come from that source?

Shakir: They could argue that they have internal controls, but we’re trusting them, and I don’t think that’s the proper [cut off]…”

Lee Fang, the author of the ThinkProgress blog post, made a similar comment Tuesday on MSNBC’s “Countdown with Keith Olbermann”:

“So, you know, these funds—they’re fungible. They can be moved around. We really don’t know. What’s alarming is the Chamber of Commerce hasn’t put out any documentation. They haven’t proved that there’s some firewall. They’re just saying, hey, trust us.”

Under a graphic entitled “ANTI-AMERICAN MONEY BOMB!” MSNBC host Ed Schultz railed about the ThinkProgress blog post, even alleging that those who accept the Chamber’s explanation are un-American:

“If you’re on the side that’s gettin’ all the money, then you keep your mouth shut,” he said. “Well, I challenge you: that’s not American… We, as red-blooded Americans, oughta be furious about what is happening right now. You know, it’s a national security issue. It is a national security issue. And it’s pretty damn scary, I think.”

In other words, according to ThinkProgress (a unit of the Center for American Progress Action Fund) and its allies, the Chamber is guilty until proven innocent and must prove its purity against every phony allegation of impropriety from its political opponents.

It’s hard to believe that any serious person would view this as anything but a blatant attempt by liberal groups to silence the speech of groups with whom they disagree. When we’re talking about the three musketeers at MSNBC and, that’s their First Amendment right. But when we’re talking about supposedly serious news outlets and Democratic politicians, it’s a bit more troubling.

The New York Times ran an editorial Wednesday parroting the ThinkProgress blog post, claiming that “[m]oney, however, is fungible, and it is impossible for an outsider to know whether the group is following its rules.”

The problem, of course, is that the Times‘ editorial writers seem to be ignorant of election law.

Even Sen. Franken, who dashed off a letter Tuesday to FEC Chairman Matthew Petersen demanding an investigation of the Chamber, noted that “[u]nder prior Commission guidance, this commingling is not per se illegal. However, a company must be able to demonstrate through a ‘reasonable accounting method’ that its foreign funds were not, in fact, used in connection with election contributions or expenditures” [Franken’s letter is not an official FEC complaint. It doesn’t even mention the Chamber directly, an indication it’s a P.R. ploy].

The Chamber must only demonstrate this to the FEC if there is a reason to believe that it violated the law, which generally requires more evidence than an unsubstantiated blog allegation.

Perhaps the most ridiculous development is a letter from Political Action to the Department of Justice requesting a criminal investigation of the Chamber. The letter alleges that because the Chamber hosted informational events on the 2010 midterm elections at AmChams (foreign affiliate) with former Ambassador Frank Lavin, all Chamber solicitations for AmCham funding violate U.S. law prohibiting foreign involvement in elections. officials probably didn’t even both to read the event description, which notes that Lavin “will not advocate any course of action, but will draw on his White House background to discuss likely consequences of the mid-terms” [Plus, Lavin’s not even a Chamber official; he works for a P.R. firm]. plans a rally outside the Chamber’s Washington headquarters Thursday, according to the Los Angeles Times. Public Citizen also plans to organize a rally Thursday at the same location.

The Huffington Post notes that these developments are part of a campaign by the “Democratic Party’s infrastructure” alarmed by the ThinkProgress blog post. blasted its five million members via e-mail, asking them to sign a petition asking for a criminal investigation.

The Washington Post’s Greg Sargent also reported that Democratic strategists are urging House candidates to seize on the ThinkProgress allegation to smear their Republican opponents.

“A senior Democratic strategist tells me that embattled incumbents and candidates are being instructed to seize on yesterday’s ThinkProgress report, which raised questions as to whether the money the Chamber raises from foreign companies is being used to help bankroll its multimillion-dollar campaign against Democrats,” Sargent wrote. “House Dems and candidates who are being bludgeoned by Chamber ads will start raising the specter of foreign money rigging our elections as a way to fight back against the ads.”

Rep. Tom Perrillo (D-Va.) said the way the U.S. Chamber is funding an ad running against him is “un-American.”

“This latest move is beyond outrageous, to being fundamentally un-American and un-democratic, I’m just outraged,” he told local media in a conference call.

If one accepts the simplistic notion of the New York Times editorial board and ThinkProgress that money is “fungible,” notwithstanding campaign finance law, the outrage against the Chamber seems politically motivated.

After all, several major international unions appear to accept at least a de minimus amount of foreign funds. If money is fungible, why are these labor unions held to a different standard? Or is it just business money that’s fungible?

As noted earlier, CCP has asked officials with several international unions to clarify whether their general funds accepts funds from foreign entities. According to an attorney familiar with the operations of the Service Employees International Union, out of an abundance of caution, the union does not accept funds from its Canadian affiliate into its general fund. It would not be illegal to do so if the union had an accounting procedure to ensure foreign funds weren’t being spent on politics. Furthermore, this official notes that unions are prohibited from accepting money from employers, so it would never accept money from a foreign business entity [other union officials have not yet responded].

Union membership in Canada is relatively common among major labor unions.

According to the Canadian Department of Human Resources and Skills Development there are at least seven U.S.-based unions with significant membership in Canada (50,000 or more): United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (AFL-CIO) (280,000); United Food and Commercial Workers International Union (245,327); International Brotherhood of Teamsters (108,516); Service Employees International Union (92,781); Laborer’s International Union of North America (68,650); International Brotherhood of Electrical Workers (57,130); United Brotherhood of Carpenters and Joiners of America (50,000).

Unless every one of these unions has a strict accounting procedure in place that it’s willing to demonstrate to political opponents and the government, groups supposedly concerned about foreign influence in U.S. campaigns need to ask their friends in the labor community a few questions…

Jeff Patch

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