Attorney General Eric T. Schneiderman of New York has begun investigating contributions to tax-exempt groups that are heavily involved in political campaigns, focusing on a case involving the U.S. Chamber of Commerce, which has been one of the largest outside groups seeking to influence recent elections but is not required to disclose its donors.
Mr. Schneiderman issued a wide-ranging subpoena on Tuesday to executives at a foundation affiliated with the chamber, seeking e-mails, bank records and other documents to determine whether the foundation illegally funneled $18 million to the chamber for political and lobbying activities, according to people with knowledge of the investigation.
The investigation is also looking at connections between the chamber’s foundation, the National Chamber Foundation, and another philanthropy, the Starr Foundation, which made large grants to the chamber foundation in 2003 and 2004. During the same period, the National Chamber Foundation lent the chamber $18 million, most of it for what was described as a capital campaign.
In a complaint filed last year with the attorney general, watchdog groups asserted that the loan had been used to finance lobbying for “tort reform” legislation in Congress and to run issue advertising in the 2004 presidential and Congressional campaigns, most of it against Democrats.
The airwaves are already filled with blaring political attacks masquerading as “issue ads,” such as the one in Missouri in the United States Senate race that ends with: “Call Claire McCaskill. Tell her Missouri doesn’t need government-run health care.” This ad, and dozens like it, is sponsored by the United States Chamber of Commerce, which likes to claim that it is merely educating voters about the issues rather than telling them how to vote.
A few weeks ago, though, a federal judge issued a decision that upended this system, requiring that the donors for these kinds of ads be publicly disclosed, as Congress intended in its 2002 campaign finance law, before the Federal Election Commission incorrectly changed the rules.
So will the Chamber of Commerce, which sponsors more political advertising than any other group, follow the clear language of the court order and begin revealing the names of its donors? Of course not.
Secrecy is at the core of its political strategy and its business model. The chamber is worried that the public might learn which companies pay for the biennial barrage of negative ads, allowing voters to decide whether to take their business elsewhere.
“We’re not going to pull back from anything we’re doing,” said R. Bruce Josten, the chamber’s executive vice president for government affairs, speaking at a Washington breakfast last week that was reported by the newspaper The Hill. “It’s full steam ahead.”