Tom Donahue, the 'Gang of 6' and Red America

Well, it turns out that the Sunrise Senior Living scandal isn't the first time Mr. Donahue has been involved in corporate accountability problems, but I'll save that for a later post.  I want to explain why I'm blogging about Tom Donahue and the US Chamber of Commerce, because it gets at the heart of the problem for the progressive movement.  A substantial amount of political power in this country is controlled by a relatively small number of people.  These people sit on corporate boards, they know each other, they pay each others' salaries, they go to conferences in Davos, and they fund campaigns for both parties.  They are willing to invest in substantial sums - like hundreds of millions of dollars - and make alliances with right-wing Christian groups to eviscerate the power of the Federal government and progressive policies to be effective.  

The 2001 tax cuts, for instance, aside from giving billions to the wealthy, destroyed the capacity of the government to do much affirmative good work.  By crippling governance, these elites are pushing the public to accept private goods in lieu of what should be public services.  Private schools, bottled water, health food, private and chartered travel, elite medical institutions - these are all part and parcel of building what John Edwards calls the 'Two Americas'.  It really is quite stark.  If you are in the business or political elite, compared to normal Americans, you live in different areas, have different crime rates, eat different food and drink different water, send your kids to different schools, travel more efficiently, are subject to a different set of laws, and have access to superior medicine.  The public at large responds to this in different ways - liberals get despondent and cynical, and blue collar ethnic whites begin to rely on right-wing church networks for what had been public services.

The key to building and sustaining this reactionary America is allowing individuals like Thomas Donahue to act above the law for personal profit, while lobbying to weaken agencies that might hold them accountable.  It fits perfectly into this destruction of the public sphere, and allows bad actors to profit from doing bad.  We will not and cannot build a progressive America as long as we have an economy that incentivizes people like this to steal from investors and use that money to lobby against us.

I would encourage you to read this article by Jeffrey H. Birnbaum on the power of the Chamber of Commerce, and the revolution in business lobbying that Donahue helped to usher in.  Long story short, the Chamber of Commerce used to be a trade association that advocated in a bipartisan manner for narrowly tailored policies to benefit its members.  Since 1997 or so, it has become a fully functional part of the partisan Republican machine, with Donahue raising its budget to $150M a year from corporate chiefs satisfied with his ability to move policy through a Republican Congress.  

Thomas Donahue plays extreme hardball; he has called investigations by New York state Attorney General Eliot L. Spitzer "the most egregious and unacceptable form of intimidation that we have seen in this country in modern time." He creates a climate of fear and intimidation in DC, and along with the 'Gang of Six' trade associations - the "Business Roundtable, the National Association of Manufacturers, the National Restaurant Association, NFIB and NAW" - pushes for extreme right-wing policies that don't make any sense unless you look through the lens of a greedy and unaccountable management class.  

It's a formidable group and it's not going away.

The chamber eagerly deploys every weapon in the lobbying arsenal and can be counted on by the president to get things done. It has demonstrated its success repeatedly in the past four years on issues as disparate as loosening ergonomics standards and creating health-savings accounts.

Its lobbyists blanket Capitol Hill. Its Web sites and telemarketers stir up voters back home. It donates generously to political campaigns coffers, and it bankrolls multimillion-dollar ad campaigns for the politicians and policies it supports.


In the first half of last year (the latest figures available), the chamber ranked first among all organizations in lobbying expenditures, at $30 million. The chamber also contributed more than $4 million to the November Fund, a group that attacked Democratic presidential candidate John F. Kerry for choosing a former trial lawyer, John Edwards, as his running mate. Today, the chamber is solidly in the black, its $150 million annual budget triple what it was when Donohue took over. It also is staunchly Republican in most of its legislative positions and played a pivotal role in cutting the tax on dividends and approving free-trade pacts, among many other Bush priorities. Whenever the president or his people called, the chamber assembled coalitions of like-minded groups and contacted its 3 million member firms to step up political pressure and donate lobbying-related funds.


For the 2004 elections, the chamber dispersed 215 political operatives to 31 states, mailed 3.7 million letters to targeted voters, made 5.6 million phone calls and sent 30 million e-mails to persuade pro-business voters to go to the polls.

Donahue is really smart, and the Chamber isn't going away.  If you read the full article, you'll see that he hired Al From, head of the DLC, to make sure that right-wing policies succeed in both parties.  

The key though to understanding Donahue and the ascendance of the right-wing corrupted elites is that they don't really have a base.  Local Chambers of Commerce are largely unaware of Donahue's work and record.  They don't know that he was on the board of Qwest and Union Pacific when both companies faced serious legal problems due to either fraud or lack of investment in safety procedures, or that he was just caught selling shares of Sunrise Senior Living - another company on which he is a board member - in advance of the release of damaging accounting information .  Local Chambers are mostly composed of businesspeople who get together in communities and are mostly ethical normal folk looking to network and support local commerce.

It is a cornerstone of Bush's ascendance, and more than that the right-wing movement that built him up, that corrupted groups like the Chamber and the 'Group of Six' can operate as arms of a partisan vicious political movement to destroy the government without the people they purport to represent knowing about it.  It's a larger institutional problem of management capture, the same lack of accountability among elites that let Enron and Iraq happen.

I mean the head of the US Chamber of Commerce, a guy who's pushing to weaken every tool of the public to possibly hold corporations accountable for unethical behavior and a rabid Bush supporter, was just caught selling shares ahead of bad accounting news.  That's not good for investors, for corporations, for employees, or even for profit.  It's only good for Thomas Donahue.  And that's what his America is all about.

There's more...

Corrupted Commerce: Thomas Donahue

If it were possible to pick one person as the representative for American business in Washington, Thomas Donahue is that man.  He is the President and CEO of the United States Chamber of Commerce, the most important business lobbying group in the country.  He is also on the Board of Directors and the Audit Committee of Sunrise Senior Living, and was caught selling stock ahead of the revelations of accounting problems.  That is a serious no-no for any board member or any business executive.  It's deeply unethical and possibly illegal, because it's stealing from investors.  If there's any indication that the business lobby under Republican rule became unbelievably corrupted, look no further than Thomas Donahue, the man that the business community picked to represent them to the Republican power structure.

It's time for the business community to turn over a new leaf.  Donahue needs to go.  Progressives, New Democrats, and Blue Dogs have different relationships with the business community, but all of us agree that corruption is wrong and that having someone like Donahue attempting to make policy recommendation is egregious. And let's be clear - Donahue and the Chamber of Commerce are very very powerful.

But it's not of course just the stock sales and theft from investors.  These assisted living facilities are managed badly, and that often means that they are a living hell for the people taking care of fading elderly and the patients themselves.  My grandfather lived in an assisted living facility before he died, and his stuff was stolen by an undertrained staff that was clearly badly managed.  I was little, but I remember the stress as my mother had to worry about whether he was being fed and taken care of properly, juggling two kids and a full time job.  It's not just that business corruption is some abstract problem, in this case its consequences are horribly cruel and immoral.  I know I'm not alone in these kinds of stories; we do not treat our elderly well in this country, because these relatively unregulated industries are allowed to flourish and rip everyone, including investors, off.

Here's an investigation from USA Today on these facilities:

Staffing worries caregivers themselves

Sunrise administrators would periodically say, "Get more staff in here," says Stilabower, who resigned in 2001 and now is co-owner of a nearby adult day care facility. "Then, two or three weeks later, after they've gotten the profit and loss report and the numbers were not on, I'd be asked to see if anyone wanted a day off, or would work less than eight hours."

During the two years after Stilabower left, three residents or their families filed lawsuits against the Sunrise facility. Two of the lawsuits alleged inadequate staffing and training, and the third involved allegations of a medication overdose. Two have been settled. State health officials cited the facility for several violations in January 2003, including failing to adequately care for an incontinent resident and failing to properly change the dressings on a resident's wound.

But the center has been free of violations since May 2003, according to the Indiana Department of Health.

Sunrise credits the change to a new executive director, who began work in May 2002 and soon moved to replace the facility's management team by hiring seven new supervisors. Sunrise spokeswoman Sarah Evers said employees who did not embrace Sunrise's model that "no task is beneath any team member" were let go. But the staffing level was not increased.

"It wasn't changing the number of people working there, but it was changing the people who worked there," Evers said of the improvement in the facility's record.

Still, assisted living staffers across the country voice complaints similar to Stilabower's.

That Donahue is still President and CEO of the US Chamber of Commerce is an outrage.  He should step down.  Members of the US Chamber, Forture 500 companies, ought to think better of themselves than to let a sleazy and unethical man represent them in DC, one who makes millions stealing from small investors in an industry known to mistreat the sick and elderly.  Rarely is a situation this stark, morally speaking.

The business elite in this country has a responsibility to ethical corporate governance and business practices, but I still don't hear any of them speaking out.  And as for Democrats, this is an easy one.  We need a healthy and honest business lobby in this country, one that operates in good faith and can faithfully represent corporate interests.  If you take money from corporate lobbyists and meet with them to discuss business objectives, then you have an interest in speaking out here.  It's time to let the business community know that the rampant corruption tolerated in DC under Republican rule is no longer acceptable.

I'm going to stick on this one.  I'm just outraged that Donahue is still in charge of the Chamber.  Please send me any statements from elected officials, corporate executives, or local Chambers.  This is egregious, and it's an easy one.

There's more...

US Chamber of Commerce Chairman Caught Ripping Off Investors

Gretchen Morgenson, a good business reporter for the New York Times, has an important story about the Chairman of the US Chamber of Commerce being caught in a very shady insider trading scandal.  The scandal involves Sunrise Senior Living, an assisted living provider for the eldery, and insider sales of stock prior to public revelations of accounting problems which crushed the stock price.

Selling during the period were Paul J. Klaassen, the founder and chief executive; Theresa M. Klaassen, his wife and Sunrise's chief cultural officer; Ronald V. Aprahamian, a consultant and investor who is chairman of Sunrise's audit committee; Thomas J. Donohue, a Sunrise director who is chairman of the United States Chamber of Commerce; and J. Douglas Holladay, founder of a private equity firm and a director.

Mr. Donohue's sales are of particular interest, given his day job. He has been a force behind the Chamber of Commerce's efforts to defang Sarbanes-Oxley, the Enron-era law designed to clean up corporate accounting and governance. The chamber also has the S.E.C.'s enforcement division in its sights; one chamber priority is to ''curtail the S.E.C.'s overly broad authority to launch investigations,'' according to its Web site.

Insider sales at Sunrise, in the face of accounting troubles that could clip $100 million from the company's net income for 1999 through 2005 -- equal to 29 percent of its earnings -- have spurred a shareholder to demand the appointment of an independent monitor to investigate the accounting. The shareholder has also asked that a monitor scrutinize the timing of large option grants to the company's top executives from June 1996 to October 2005. Five of those grants were dispensed at or near periodic lows in Sunrise's stock.


Mr. Donohue, the Chamber of Commerce chairman, has been a Sunrise director since 1995 and heads its compensation committee. He is also a member of its audit committee. On Nov. 21, 2005, he sold shares worth $3.4 million, according to regulatory filings. Mr. Klaassen is on both the Chamber of Commerce's board and that of its research arm, the National Chamber Foundation.

It's not surprising that Thomas Donahue is an unethical guy who sold out the investors he's supposed to be looking out for.  He's the head of the Chamber of Commerce, the paradigmatic example of corrupted lobbying practices.  Kos is right; lobbying is more complex that just suggesting 'it's bad', but it's unquestionably awful to have corrupted people like Donahue arguing on behalf of what is supposed to be a representation of the business community.

In fact, the United States Chamber of Commerce, which, while it purports to work for a business-friendly environment that helps its members, is actually one of the most wingnutty groups around.  Despite massive costs for the insurance industry, for instance, the Chamber is still in denial, urging "Congress to carefully review the climate change issue before taking further action." Despite the obvious interest small businesses have in a free and open internet, the Chamber of Commerce opposes net neutrality. The Chamber wants to weaken or eliminate the Family and Medical Leave Act, the minimum wage, and the Americans with Disabilities Act.  They want to cut every possible tax despite massive deficits, privatize Social Security, and just generally pursue the right-wing agenda down the line.  

The national Chamber of Commerce isn't pro-business, in other words, it's just a fully captured right-wing organization that has been taken over by the Republican Party.  There are state and local Chambers all over the country that are not right-wing, but are genuinely apolitical organizations fostering networking and business growth in local areas.  Many trial lawyers in the South belong to local Chambers, unwittingly contributing to a massive lobbying operation in DC undercutting their ability to represent the public against abuses.

The business community is not monolithic; small businesses want universal health care and a functional government, tech businesses want net neutrality and education, etc.  But more than that, this should be outrageous to all the hardworking businesspeople in America.  It is a total disgrace that business managers allow a deeply unethical man like Thomas Donahue to represent their community, to advocate against Sarbanes-Oxley with so little credibility.

Culturally I come from a business-oriented background.  My grandparents and parents were and are business professionals, and when I was little I didn't want to be a fireman, I wanted to be an investment banker.  Weird, yes, but I always had and continue to have deep respect for people who dedicate themselves to ethical and profitable commercial enterprises.  My first job was as a project manager for a software company, and it was an awesomely useful experience to have, building and selling products.  I believe that Google has done great things for the world, and the market mechanism is often often the most moral system for increasing individual liberty.  I mean a lot of blogs are small businesses!

All of which is to say that I believe that business can and must be an important force for good.  At the same time, corruption in our corporate elites is a serious problem.  When business turns to paying its managers more as the primary point of its organizational apparatus, it becomes corrupted.  And when business leaders allow people like Thomas Donahue to represent their political interests by running groups like the Chamber of Commerce, they undercut their own credibility.  Elected officials who took money from the Chamber need to seriously consider whether they ought to speak out on this travesty.  

And members of local Chambers or the United States Chamber of Commerce ought to be outraged and demand that Donahue step down.

There's more...

Nurses: Get on Board Phone Bank Buses

During Schwarzenegger's special election, the California Nurses Association received a great deal of attention for aggressive politics after Ahnold talked of "kicking their butts." This year is no different with the nurses taking aggressive tactics to the battle for Proposition 89 - The Clean Money and Fair Elections act.

How aggressive? Well how many initiative campaigns get reviewed by the industry website All Hip Hop?

Now CNA is (literally) rolling out six mobile phone bank buses, with 24 lines a piece and wrapped in signage. This will allow the ability to drive to hospitals for shift changes and let nurses easily phone bank before or after shifts.

There's more...

Take Your Gun to Work Day: The NRA versus Chamber of Commerce

Now this is fascinating (hat tip to the awesome Florida News blog).

Big business declared victory over the gun lobby Wednesday in an escalating fight over whether employees should be allowed to take guns to work.

For the second time, the National Rifle Association failed to advance a proposal that would penalize businesses that prevent employees from keeping guns in their cars at work. Lawmakers in a House committee sidestepped a final vote after an hour and a half of debate that mostly focused on the troubles the law could create.

"Anyway you cut it, property owners and the Florida chamber won," said Mark Wilson, executive vice president of the Florida Chamber of Commerce. "And the NRA lost."

Apparently the wingers were squeezed:

Lakeland Republican Rep. Dennis Ross could speak from both sides.

"I'm sorry that we have to come to this crossroad where I have to make a decision between what I think are two very fundamental rights," said Ross, who said he belongs to the NRA, numerous hunting organizations and even holds a permit to carry a concealed weapon.

But he couldn't support the NRA's bill.

"While I believe that my Second Amendment rights are very important to me, as a business owner my private property rights are (paramount)," said Ross, a lawyer.

And now there's political organizing going on against each other.

So the fight continues, with lobbyists on both sides accusing each other of negotiating in bad faith.

At the Florida chamber, Wilson vowed to fire up a grass roots business lobby to make sure the NRA proposal doesn't return. That could mean everything from television ads to asking members of local business chambers to send e-mails in opposition.

"Now it's time to just go kill this bill the way it should have been done today," said Wilson, who doesn't expect the NRA to give up. "The NRA in Florida, as far as I know, never lost a bill before. ... We're in uncharted territory. They're unpredictable."

The Republican coalition is quite solid until it gets picked apart.  Really weird wedge issues like this - should you get to take your gun to work - are where the future of political fights could happen.

There's more...


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