White House confronts the U.S. Chamber of Commerce

WASHINGTON —  The Obama White House, stepping in where other Democrats feared to tread, has launched a potentially risky fight with the U.S. Chamber of Commerce -- attempting to bypass the nation’s most powerful business organization and develop independent ties to corporate America.

In recent weeks, President Obama, his Energy secretary and one of his other most senior advisors have begun criticizing the chamber publicly, casting it as a profligate lobbying organization at odds with its members in opposing the administration on such issues as consumer protection and climate change.

At the same time, the administration has been meeting privately with prominent corporate leaders -- more than 60 of them since June -- in an effort to develop its own pipeline to the business community.

The White House also has gone out of its way to cultivate another corporate group, the Business Roundtable, which is much smaller than the chamber but represents chief executives of many of the nation’s largest corporations.

“Our strategy is to reach out directly to the business community,” said Valerie Jarrett, the president’s liaison to the corporate world. “This is a shift. Previously, the chamber had served as the sole intermediary for business. That’s not our approach.”

Jarrett praised the Business Roundtable, saying that it brings member CEOs to White House meetings in addition to Washington lobbyists.

In an indirect dig at the chamber, Jarrett said the roundtable meetings were more substantive and valuable because they included not just a trade association leader but someone who actually runs a business.

The White House role in criticizing the chamber has, predictably, riled Republicans. But it also has made some Democrats nervous.

“The chamber represents thousands of businesses . . . most of which are apolitical,” said Rep. James P. Moran, a Virginia Democrat. “I’m not sure that that is the appropriate target to go after.”

Jarrett and other White House aides say they bear the chamber no ill will, and note that the organization’s staff continues to meet with administration officials. Those sessions, Jarrett and others said, remain cordial.

But behind what chamber officials describe as a facade of White House courtesy, the long-unchallenged business group sees barbed comments and a challenge to its hegemony as the voice of corporate America in the capital.

The organization’s chief lobbyist, Bruce Josten, put it this way: “They pulled the pin out of the grenades and are throwing them over the fence.”

And he offered some criticism in return, saying that the Obama White House has shown less interest and been more superficial in dealing with business issues than any he has worked with for the last two decades.

Josten and his boss, Chamber President Tom Donohue, said they would be civil in the face of what they call inaccurate White House claims.

But the chamber is unaccustomed to such high-level criticism.

Not only has it built a powerful lobbying staff, backed by a multimillion-dollar war chest, but the group’s network of local affiliates has been organized into a powerful grass-roots force.

Republicans have seldom been tempted to challenge the chamber because it, for the most part, has been a soul mate on major issues. But even Democrats in the past have shied away from head-on challenges.

Under Donohue, the chamber transformed. Its annual budget quadrupled in a few years to $200 million today. And it became more aggressive politically, developing such a fearsome reputation that Rahm Emanuel, now the White House chief of staff, told a reporter in 2006 that the group worried him more than the Republican Party did.

Emanuel at the time was an Illinois congressman who served as chairman of the Democratic Congressional Campaign Committee.

But that was years ago, said White House spokeswomen Jen Psaki, who announced late Friday that Emanuel had accepted an invitation to speak before the chamber’s board Nov. 4.

“While we have big disagreements on issues like energy and financial regulatory reform, we want to work together on areas where there is agreement,” she said.

Two weeks ago, Obama criticized the chamber’s role in opposing a new consumer protection agency, saying the group’s ads on the topic were “completely false.”

“The U.S. Chamber of Commerce is spending millions on an ad campaign to kill it,” Obama said. “They’re trying their hardest to weaken it. . . . And they’re very good at this, because that’s how business has been done in Washington for a very long time.

“In fact, over the last 10 years, the Chamber of Commerce alone spent nearly half a billion dollars on lobbying,” the president said.

The White House complaints, according to the chamber and its allies, coincide suspiciously with a more aggressive campaign by environmental and labor organizations.

The Natural Resources Defense Council has led the criticism of the chamber’s climate policy, arguing that it is at odds with the position of many of its members. And the campaign may be having some effect. Five major companies -- including Apple, Exelon, and Pacific Gas and Electric Co. -- have withdrawn from the chamber in protest of its opposition to global warming legislation, backed by the White House, that would cap greenhouse gas emissions and allow companies to buy and sell permits to emit pollutants.

Energy Secretary Steven Chu said he thought the resignations were “wonderful,” and he publicly urged the chamber to change its position.

In an interview, Donohue said his organization would stay the course. The chamber, he said, acknowledged global warming as a problem but opposed legislation that he says could harm the economy by raising energy costs. And he shrugged off the resignations of some prominent members, noting that former Vice President Al Gore, long an advocate for strong climate-change legislation, sits on the board of Apple.

“Our membership renewal rates are very, very high,” he said, noting that the chamber had picked up new members and revenue that more than offset the losses in the days since the resignations were announced.

Though dismissing the White House criticism, Donohue expressed dismay at a report produced by the labor-backed Change to Win organization titled “Preaching Principle, Enabling Excess: How Tom Donohue Compromised the Credibility of the U.S. Chamber of Commerce.”

The report alleges that Donohue “hijacked the chamber’s agenda away from serving the interests of the business community to serving corporate CEOs,” using the chamber’s name to aid specific corporate donors and opposing changes focused on executive compensation and corporate governance.

The report looks at Donohue’s service on several corporate boards, some of which had compensation and governance problems. Donohue called the document frightening because of the personal nature of the criticism, which he said was false.

In Boston on Friday, Obama criticized those who “suggest that moving toward clean energy will destroy our economy when it’s the system we currently have that endangers our prosperity and prevents us from creating millions of new jobs” -- an indirect reference to the chamber.

Such criticism, coupled with White House attacks against Fox News and conservative talk show host Rush Limbaugh, has brought counter-attacks from Republicans.

Sen. Lamar Alexander (R-Tenn.) cited Obama’s criticism of the chamber as another step in creating an enemies list, a tactic he said reminded him of the Nixon White House.

“This behavior is typical of street brawls and political campaign consultants,” Alexander said in a speech on the Senate floor Wednesday. “As any veteran of the Nixon White House can attest, we have been down this road before, and it will not end well.”

Democrats called such complaints laughable. President Nixon used the Internal Revenue Service and other federal agencies to strike back at critics, they noted, in sharp contrast to the Obama administration’s approach.

The Obama team’s actions, however, may bear some resemblance to the hardball tactics employed by Karl Rove, who as an advisor to President George W. Bush used the White House to undermine organized labor and trial lawyers while cementing relations with helpful groups like the chamber.

Whereas labor leaders had relatively few opportunities to talk with the Bush White House, the Obama staff sees its operations as far more welcoming, even to a group like the chamber that opposes key White House goals.

“Our door is always open to them,” Jarrett said.

“It’s just that they are not the only ones to get through the door, and that is a shift from what they experienced from prior administrations.”

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