This article originally provided by The Washington Post

February 5, 2005

A Quiet Revolution In Business Lobbying

Chamber of Commerce Helps Bush Agenda

By Jeffrey H. Birnbaum
Washington Post Staff Writer

After brief pleasantries on the phone the other day, Thomas J. Donohue got down to business with a top health insurance executive. "We're in a new year and a new time," Donohue said smoothly. "Can we put you on the list and get your money?"

The executive said yes, and the U.S. Chamber of Commerce was $100,000 richer. So, in effect, was President Bush's push to rein in trial lawyers and lower taxes.

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 big money has become commonplace in day-to-day lobbying, and few people are more responsible for that than the outspoken Donohue. 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.

That's a major reason Bush will rely on him and the chamber this year. "When the White House looks for the go-to people on business issues," said fellow Bush enthusiast Dirk Van Dongen of the National Association of Wholesaler-Distributors (NAW), "the chamber is among the very first groups that it talks to."

Speaking privately, several trade association heads say their members often embrace Bush initiatives and are glad the chamber and other big groups help organize their support for those issues. But some also worry that the more controversial the president's policies become, the harder it will be for them to maintain their unalloyed enthusiasm. And if they abandon the president on big issues, they risk losing administration backing for parochial matters critical to their industries.

Critics see a broader problem. They say the superior funding by corporate sources is inevitably unfair. "An average citizen speaks only at a whisper in Washington," said Celia Viggo Wexler, a vice president of citizens' advocacy group Common Cause. "But the chamber and other big business associations, thanks to their clout and fundraising, speak with a megaphone."

"The Chamber of Commerce represents the people who have an overwhelming share of the resources to deploy," said Scott Lilly, a senior fellow at the Democratic-leaning Center for American Progress. That kind of imbalance, he said, "can overwhelm the voices on the other side."

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.

The chamber's clout is a turnaround for the nation's largest business organization. When Donohue arrived, it was losing money and was widely distrusted by Washington's corporate community for having backed President Bill Clinton's Democratic health care plan.

Donohue turned the chamber into a money machine by radically remaking it. He jettisoned its resource-draining business magazine and television operation, both of which had been the pride of his predecessor, Richard L. Lesher. He also spent freely to invigorate the organization's policy and lobbying arms. The lobbying staff that had numbered only two is now at least 18 strong.

During the first two years of Donohue's rebuilding drive, the chamber's budget remained in deficit. Then, as corporate chieftains gained confidence in the rejiggered organization, donations began to pick up. Now, the chamber is a behemoth.

In the first half of last year (the latest figures available), the chamber ranked first among all organizations in lobbying expenditures, at $30 million. The chamber also contributed more than $4 million to the November Fund, a group that attacked Democratic presidential candidate John F. Kerry for choosing a former trial lawyer, John Edwards, as his running mate. 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. A senior administration official who spoke on the condition of anonymity because he is not authorized to speak to the press said the chamber's Institute for Legal Reform will be indispensable to Bush's strategy on the issue.

The Senate Judiciary Committee on Thursday approved a class-action lawsuit bill much to the chamber's liking, and the full Senate is scheduled to begin debate on the legislation Monday.

The institute expects to spend nearly $40 million this year, roughly equal to last year's total -- an amount that Donald A. "Dan" Danner, senior vice president of the National Federation of Independent Business (NFIB), calls "eye-popping." Donohue will raise the most of the money.

Other business groups will also ally themselves with Bush. The chamber is part of the so-called Gang of Six trade associations that are considered the president's most reliable supporters. They include the Business Roundtable, the National Association of Manufacturers, the National Restaurant Association, NFIB and NAW.

But thanks to his fundraising prowess, the pugnacious Donohue stands out. "When it comes to raising money, Tom is about as skilled as anyone can get," said Red Cavaney, president of the American Petroleum Institute.

That's vital expertise, given the ever-rising costs of lobbying. Modern legislative battles run in the millions of dollars because of the pricey and now-routine targeting of swing voters through telemarketing and television advertising. Groups that collect the most money invariably have an advantage.

For the 2004 elections, the chamber dispersed 215 political operatives to 31 states, mailed 3.7 million letters to targeted voters, made 5.6 million phone calls and sent 30 million e-mails to persuade pro-business voters to go to the polls.

The results were impressive. The Institute for Legal Reform won 15 of the 16 state Supreme Court and attorney general races it targeted. The chamber's candidates also prevailed in 21 of the 28 House seats and in seven of the nine Senate races it engaged significantly. It was especially active with commercials in the successful campaign to unseat former Senate Minority Leader Thomas A. Daschle (D-S.D.).

These efforts have made the chamber many friends in the Bush administration, and Donohue, whose annual salary is more than $1.6 million, isn't shy about using them. He told a new $100,000 chamber member, Lurita Doan, chief executive of New Technology Management Inc., that he could arrange a meeting for her with the U.S. customs and border protection commissioner. "I'll get you in there," Donohue said. "We'll get you a meeting." Donohue works morning to night to, as he puts it, "separate some people from their cash." He said he annually makes 200 fundraising visits in person and an additional 150 over the telephone to large corporate donors whose dues are $100,000 or more.

He travels so often for that purpose that the chamber provides him a chauffeured Lincoln Town Car for in-town use and leases him a jet for longer trips. "You can't visit as many people as I do and do it commercial," Donohue said. He leaves the lobbying mostly to the staff that his fundraising pays for.

Donohue, at age 66 a veteran association executive, has reduced begging for contributions to four intense steps. First, he said, "you have to have a product to sell." Second, "you have to get in to see the right people." Third, "you have to make the ask." And last: "You follow up, follow up, follow up" until the money is delivered.

The technique has yielded a remarkable bounty, but Donohue didn't amass it all himself. The chamber has professional fundraisers and a dozen other people who prepare briefing papers on the companies that Donohue wants to solicit. The chamber's officers are also expected to pitch in.

"If you work here, you're a fundraiser," Donohue said. "You don't raise this kind of money unless you have everybody in the game."

Officers receive bonuses and paid weekends away based on the amount they raise or help to raise. To keep up the incentive to collect, their tallies are published in reports that come out every month.

The chamber has hired the Swiss Guard of paid consultants from both political parties. Several showed up at a recent dinner hosted by Donohue at the chamber, including Al From, chief executive of the Democratic Leadership Council; Thomas F. "Mack" McLarty, who was White House chief of staff in the Clinton administration; and Scott W. Reed, who was Bob Dole's 1996 presidential campaign manager.

Donohue is careful to say, "We're not an arm of the Republican Party. We need to engage the moderate Democrats." He also doesn't conceal his displeasure that Bush might want to overhaul the federal income tax. With the effective corporate tax rate so low, reshuffling the code could produce "a brawl" among his members, he reasoned, and increase levies on some of them.

Donohue also opposes increased securities regulation -- from the Bush administration or any other source -- and does so with typical ferocity. The chamber is even suing the Securities and Exchange Commission. Donohue has called investigations by New York state Attorney General Eliot L. Spitzer "the most egregious and unacceptable form of intimidation that we have seen in this country in modern time."

"Donohue takes a hard-nosed approach," said Douglas G. Pinkham, president of the Public Affairs Council, a group that teaches executives about official Washington. "Some people don't like his style, but he's not trying to win style points. He's just trying to win."

Sometimes Donohue even clashes with fellow association heads. Former Michigan governor John Engler, the new president of the National Association of Manufacturers, has stepped onto his turf by raising money to help confirm Bush's judicial nominees and to restrain trial lawyers at the state level -- activities that come close to those of the chamber's Institute for Legal Reform.

"I respect Engler's problem," Donohue said about Engler's nascent drive. "He's taken over a membership that's divided. He has to put some points on the board."

The chamber will probably handle most of the anti-trial-lawyer lobbying. A few years ago, a study sponsored by the Business Roundtable recommended that corporate interests fortify their tort reform efforts by consolidating them in one place. The chamber was chosen.

Other groups will quarterback lobbying campaigns that advocate other Bush priorities. The Business Roundtable will head up national advertising to promote private accounts as part of Social Security. The National Association of Manufacturers will spearhead inside-the-Beltway lobbying on the same topic. But Donohue will also be a factor.

"If there's a fight on Social Security, Donohue and the chamber will be in the middle of it," said Steven C. Anderson, president of the National Restaurant Association. The reason: Donohue knows where to find the funding.

Some chief executives keep a sign on their desks that says, a la Harry Truman, "The Buck Stops Here." Donohue's desk holds a sign with a telling variation. It reads: "Show Me The Money."


Voter-Owned Elections

Citizens for Clean Elections P.O. Box 6753 Huntington, WV 25773-6753 304-522-0246