The day after an election in which the U.S. Chamber of Commerce spent millions of dollars backing losing Republican candidates, executives began the brutal process of assessing what went wrong at the nation’s leading business organization.
The Chamber spent nearly $24 million to defeat several high-
profile Democratic Senate candidates, including Sen. Sherrod Brown in Ohio, former governor Timothy M. Kaine in Virginia and Elizabeth Warren in Massachusetts, according to the Center for Responsive Politics. But out of 15 Senate races where the business organization put down money, only two went the Chamber’s way.
The results were not much better in the House, where the Chamber poured more than $7 million into 22 races, according to the CRP. The Chamber’s candidates picked up only four wins.
Even the Chamber’s close allies agreed that this year’s record spending yielded disappointment and exposed potential rifts in the business community just as Congress begins to tackle the so-called “fiscal cliff” and related tax and spending issues.
“It is ugly,” said one veteran of Chamber campaigns, who spoke on the condition of anonymity to avoid alienating the group.
Gregory Casey, head of the Business Industry Political Action Committee, a rival organization that encourages political participation by corporations, on Wednesday called this year’s spending by business-allied groups wasteful and said it was already producing demands for change.
“We learned you cannot address the fiscal and cultural differences in our society by throwing money at political dogmas that may have outlived their usefulness,” Casey said.
He called for more intelligent campaigns that provide substantive information to people instead of 30-second ads that “deliver a slogan.”
Some candidates backed by business were seen as extreme, he said, in part because of their statements on social and tax issues.
“It is pretty evident that the independents and moderates necessary to put together winning coalitions don’t like extremism of any color,” Casey said. “Appearing to be extreme or siding with those who are extreme doesn’t help.”
The Chamber declined to comment Wednesday on the House and Senate losses.
“A principal goal was to defend the pro-business gains we made in Congress in 2010 and ensure balance in the federal government when it comes to policies affecting business,” Thomas J. Donohue, the Chamber’s president and chief executive, said in a statement.
The group, which has about $200 million in annual revenue, does not have to disclose which companies are members, although some firms voluntarily reveal that they are donors.
The Chamber has been spending ever-higher amounts in political races on behalf of its member firms, just as many U.S. companies are trying to figure out how to navigate the often-opaque world of campaign finance. Following the landmark Citizens United ruling by the Supreme Court, companies and unions can spend unlimited money to support or defeat political candidates.
The Chamber spent more than $4.4 million on the Virginia Senate race alone, according to data from the Center for Responsive Politics. It was the most expensive race in the country for the Chamber.
The Chamber’s target, Kaine, got 52 percent of the vote in defeating his Republican opponent, former governor George Allen.
Some observers said Wednesday that companies giving money to the Chamber to spend on these losing races may come to regret the decision.
“This has immediate impact on companies’ relationship with elected officials,” said Bruce Freed, president of the Center for Political Accountability, which advocates for greater disclosure of corporate political spending.
Freed criticized the Chamber’s aggressive political spending with corporate funds.
“It also raises fundamental concerns about whether company funds are being expended in the shareholders’ best interest,” he said. “Companies need to have more knowledge of how money is used” by trade associations that are active in elections.
“A lot of company executives are going to have a hard time justifying to their shareholders why their company should pay millions of dollars in dues and special assessments to the Chamber now,” said Brett Kappel, who counsels business clients on campaign finance issues. “I would expect more companies to being giving money with strings attached, i.e., no funds may be used for efforts to influence elections — just lobbying.”
The second-most expensive race for the Chamber was in Ohio, where the group spent $4.3 million to prevent Brown from returning to the Senate. It also poured $3.8 million to the Florida Senate race to beat Sen. Bill Nelson. In North Dakota, the Chamber tried to beat Heidi Heitkamp by spending nearly $600,000. Brown, Nelson and Heitkamp all won.