Chamber: Unions to gain from campaign finance decision

The senior attorney at the U.S. Chamber of Commerce said the Supreme Court’s loosening of campaign finance restrictions will have little effect on the group’s politicking.

Steven Law, chief legal officer and general counsel for the Chamber, said the biggest beneficiary of the Citizens United vs. Federal Election Commission decision would be the labor movement. Under the ruling, both corporations and unions saw restrictions on their campaign spending lifted.

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“We don't see the Citizens United decision having a significant impact on our approach to political activities going forward, and we think that's going to be true for most of the business community,” Law told The Hill. “What's really going on here is that Congress is trying to seize a political opening and drive a truck through it, and the proposals they are pushing would overcorrect the campaign finance rules to their political advantage.”

The comments from Law follow a March 11 op-ed by the Chamber attorney that appeared in the Wall Street Journal. In the column, Law argues that unions stand to benefit the most from unlimited political spending because they are not facing the same restraints tied to corporations, such as “earnings targets, investment analysts, ratings agencies and dividend-hungry shareholders.”

“That's why most corporations spend little or nothing on politics and can be expected to do the same going forward,” Law wrote.

While Law says his group, the nation’s largest business association, will see little change from the ruling, most experts have said that business associations like the Chamber could see a rise in donations because it could help hide companies’ political activism.

“Business associations will likely see an influx of money because they will be a convenient vehicle for corporations to launder money in order to potentially avoid disclosure of unpopular political activity,” said Paul Ryan, an attorney for the Campaign Legal Center.

“Business associations are likely to be where the action is going to be. No for-profit corporation I know wants to take an ad out, saying it is sponsored by that corporation. One method to avoid disclosure is to donate a trade association instead, if it is done in the certain way,” said Kenneth Gross, who heads the political law practice at Skadden Arps Slate Meagher and is an expert on campaign finance laws.

The Supreme Court ruling lifted restrictions on how both unions and corporations can participate in election races. The decision now allows both of them to expressly advocate against a candidate, telling voters to oppose or support someone running for office, and also frees up their general treasury funds to be used for election activities, such as television ads.

Right now, the Chamber is one of the biggest forces in national politics as the biggest spender on K Street. The business association spent about $144 million on lobbying in 2009, according to disclosure records, which easily surpassed their union opponents. 

Despite the Chamber’s heavy spending, the business group’s attorney believes the labor movement is now in control of Washington due to the Supreme Court ruling. In his op-ed, Law argues that lawmakers should push for a number of reforms, such as allowing union members deduct political expenses from their dues. Union officials countered they already run some of the most transparent organizations in politics.

“Unions, by law and practice, are democratic institutions. They are accountable to their members like members of Congress are accountable to their constituents. Corporations operate on a completely different model,” said Laurence E. Gold, associate general counsel for the AFL-CIO.

Gold as well as Michelle Ringuette, a spokeswoman for the Service Employees International Union, said unions have to file campaign spending forms with the FEC, tax filings with the Internal Revenue Service and annual financial disclosure forms with the Labor Department. All are released publicly.

There has been disagreement among campaign finance law observers on whether or not the Supreme Court ruling will produce a rise in campaign spending. Ryan believes both corporation and union spending will jump but Gross says corporations remain skittish in delving too deep into politics because of tight economic times and shareholder scrutiny.

Like Law, Gold did not think the Supreme Court decision would not affect the labor movement much either.

“The AFL has always been a member-driven organization and its electoral activity has been directed towards mobilizing its own members,” Gold said. “That won’t change. This decision does not provide any additional means to do that.”

Both the Chamber and the AFL-CIO filed amicus briefs in the Supreme Court case, arguing for some restrictions to be lifted from campaign spending.

Nevertheless, Democrats are working on legislation to counteract the Citizens United decision. A proposed legislative framework by Rep. Chris Van Hollen (D-Md.) and Sen. Charles Schumer (D-N.Y.) concentrates on increasing disclosure from corporations, such as filing all their campaign donations and expenditures with the Federal Election Commission.

"The legislation being crafted by Congressman Van Hollen and Senator Schumer ensures greater accountability and transparency for all groups who make political expenditures, including businesses, unions, and third party groups," said Doug Thornell, senior advisor to Congressman Chris Van Hollen (D-MD). "The Supreme Court's ruling in Citizens United has the potential to wreak havoc on our democratic process. When elections are inundated with special interest money, we need to make sure voters know who is delivering and paying for the message.”

But Law counters that while the framework calls for more disclosure from companies, it does not go after unions to the same degree.

“The list of comparable reforms for union political spending is simply an acid test for how balanced and non-political Congress really intends to be in tackling this issue,” Law said. “Right now, the fact that two campaign committee chairmen are leading the charge, and their proposal is designed to do minimal harm to their most generous political benefactor, suggests that the legislative campaign is just a lay-up for Congress' reelection campaign.”