Dems seize on foreign donations to pounce on U.S. Chamber backing

Endangered Democrats in several key Senate races are seizing on what they say is evidence that foreign interests are helping fuel their opponents' campaigns.

Sens. Russ Feingold (D-Wis.), Michael Bennet (D-Colo.), Rep. Joe Sestak (D-Pa.) and Ohio Lt. Gov. Lee Fisher (D) have blasted their opponents for benefiting from campaign spending by the U.S. Chamber of Commerce, which accepts foreign contributions to its general treasury fund.

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The criticism is part of a broader Democratic strategy, outlined by White House political strategist David Axelrod in a July meeting with Senate Democrats, to paint Republicans as the defenders of corporate special interests.

Fisher is accusing his opponent, former Rep. Rob Portman (R-Ohio), of getting an indirect boost from foreign-owned corporate interests.

The Democratic campaigns have seized on a report published earlier this week by ThinkProgress, a blog affiliated with the Center for American Progress, a liberal think tank.

“This new report is alarming — companies that are directly benefiting from the trade policies that Congressman Portman has fought for may be funding political ads on his behalf,” said Holly Shulman, Fisher’s campaign spokeswoman, in a statement Thursday.

“These revelations suggest that foreign companies — and foreign governments — are trying to influence our elections, and Congressman Portman should call for the Chamber to stop running political ads until this troubling issue is resolved,” Shulman said.

Jessica Towhey, a spokeswoman for Portman’s campaign, said Fisher has wrongfully attacked a trade organization that represents U.S. businesses.

“Lt. Gov. Fisher’s campaign is embarrassing itself with false and inane attacks against Ohio’s job creators,” said Towhey. “While it may be politically expedient to ignore the 400,000 jobs lost in Ohio while Lee Fisher was asleep at the wheel, Ohioans will see through these desperate attempts to cover up a campaign that is failing just as much as Lee Fisher failed as the state’s Job Czar.”

Recent polls by Quinnipiac, CBS News and The New York Times, and Reuters show Fisher trailing Portman by double digits.

The ThinkProgress report described hundreds of thousands of dollars in dues the Chamber received from companies in Bahrain and India.

The Chamber received dues from Bahrainian companies such as Aluminum Bahrain, Gulf Air and the Bahrain Petroleum Company, a state-owned organization, according to the report. The companies paid dues into the Chamber’s general treasury account through the U.S.-Bahrain Business Council.

Indian businesses such as the State Bank of India have given more than $200,000 a year in dues to the Chamber through the U.S.-India Business Council, according to ThinkProgress.

Tita Freeman, a spokeswoman for the Chamber, said only a “relative handful” of the Chamber’s 300,000 members are “non-U.S.-based companies.”

“The Chamber is proud to have global companies among our membership,” Freeman said. “We’re careful to ensure that we comply with all applicable laws. No foreign money is used to fund political activities.”

She said the report was motivated by political considerations and a plan to “take business and its representative organizations out of the advocacy process.”

Freeman said the business councils were created to represent U.S. companies in overseas markets. These groups pay “nominal dues” totaling around $100,000, Freeman said.

The report has given ammo to Democratic candidates who have been targeted by the Chamber’s $75 million campaign spending plan for the midterm election.

Feingold has called on his opponent, businessman Ron Johnson, to denounce a new attack ad funded by the Chamber.

The ad is the fifth anti-Feingold ad funded by a corporate special interest group, according to the Feingold campaign.

“The corporate special interests are lining up to take out their No. 1 enemy, Russ Feingold,” said Feingold spokesman John Kraus.

"It’s clear whose side Ron Johnson is on — the wealthy, out-of-state corporate special interests who are trying to buy this election. It’s time for him to get off the sidelines and take a principled stand against secret donors and outside interests,” he added.

A McClatchy/Marist poll at the end of last month showed Feingold trailing by 7 points.

A spokeswoman for the Johnson campaign declined to comment on the Chamber ad.

In Colorado, Bennet has also made an issue of foreign companies paying dues to the Chamber.

"Why won't Ken Buck stand up against the practices of these shady special interests orchestrating attacks on his behalf and denounce the practice of accepting overseas expenditures to fund smear campaigns?" said Trevor Kincaid, a spokesman for Bennet’s campaign.

"Ken Buck should reject the Chamber's support and call on them to immediately stop running ads on his behalf with tainted foreign money."

A spokesman for Buck’s campaign said Ken Buck has no control over the ads aired by the Chamber. He accused the liberal groups allied with Bennet for distorting Buck’s record.

“Unfortunately, the way campaign finance law is written, we don’t have any say in that stuff,” said Owen Loftus. “Michael Bennet and his allies have been called out repeatedly for lying about Ken Buck.

“Michael Bennet needs to take responsibility for his own actions instead of calling on Ken Buck to take responsibility for what he has no control over,” Loftus added.

Democrats in Washington have supplemented the campaign-trail criticism of the Chamber by calling for a federal investigation of the issue.

The Washington State Democratic Party on Thursday tried to turn the Chamber's political activity against GOP candidate Dino Rossi. 

"One of Dino Rossi’s closest corporate sponsors, the U.S. Chamber of Commerce, has come under scrutiny recently after reports found that they are using money raised in foreign countries in their political attack campaigns," the state party charged in a statement. "Campaign finance laws expressly prohibit foreign corporations from getting involved in American elections."

Sen. Al Franken (D-Minn.) has called on the Federal Election Commission to investigate allegations that the Chamber has used money from foreign groups for political ads.

Senate Finance Committee Chairman Max Baucus (D-Mont.) has written a letter to the Internal Revenue Service asking it to investigate the political activity of groups organized under section 501(c)6 of the tax code, such as the Chamber.

“The law requires that political campaign activity by a 501(c)(4), (c)(5) or (c)(6) entity must not be the primary purpose of the organization,” Baucus wrote in a Sept. 28 letter to IRS Commissioner Douglas Shulman.

“If it is determined the primary purpose of the 501(c)(4), (c)(5) and (c)(6) organization is political campaign activity the tax exemption for that nonprofit can be terminated,” Baucus wrote.

Lee Fang, the author of the ThinkProgress report, argued that even if the Chamber did not directly spend dues from foreign companies on campaign ads, the foreign dues boosted the available resources for attack ads.

“Money is fungible,” he said. “Once this foreign money goes into one big honey pot, it gets commingled with other funds. That frees up the Chamber to spend more on ads.”