Contact: Ray De Lorenzi
202-965-3500, ext. 8369
U.S. CHAMBER HYPOCRISY REACHES HISTORIC HEIGHTS
Enron, AIG, financial crisis prove U.S. Chamber “has lost all credibility”Washington, DC – Exactly one year ago at its annual “State of American Business” event, U.S. Chamber President and CEO Tom Donohue predicted that the economy would “dodge the bullet” of a recession, strenuously objected to “a bailout of investors who made the wrong bet,” and complained that American business was being strangled by too much regulation and oversight.[i]
What a difference a year makes.
Today the country is in the worst economic crisis since the Great Depression. And even though the U.S. Chamber completely flip-flopped -- supporting government bailouts of Wall Street and automakers -- the corporate lobby is still ignoring the nation’s demands for more oversight and accountability to help the crippled economy.
“The U.S. Chamber has lost all credibility to push self-serving solutions for a crisis they helped create,” said American Association for Justice (AAJ) CEO Jon Haber. “U.S. Chamber wants one rule for corporations and another rule for everybody else.”
No one has lobbied harder than the U.S. Chamber for the financial deregulation that pushed the country into an economic crisis. These efforts escalated in the aftermath of Enron, another corporate scandal that drove the economy to the brink of collapse, and include:
- AIG funneling over $20 million into U.S. Chamber to aggressively push deregulation for the insurer and its fellow Wall Street giants, lobbying to strip post-Enron reforms, and giving former AIG CEO Hank Greenberg a seat on its board.
- The release of a misleading report demanding immunity from securities class-actions, but totally ignoring the underlying subprime crisis, a key first indication that something was seriously amiss in the financial markets.
- U.S. Chamber targeting government agencies that were trying to regulate the financial industries, filing court briefs to aid those involved in Enron and block SEC reforms intended to protect investors.
The accounting scandals of the early 2000s, involving the likes of Enron, Tyco, WorldCom, and others, was estimated by the SEC to have cost the U.S. economy $5 trillion, or $60,000 per household.[ii] This may ultimately pale in comparison to the economic collapse the U.S. Chamber helped create.
The Real State of American Business
U.S. Chamber actually knew that the subprime collapse was about to have a devastating effect on the economy, but chose to hide the fact. In July 2008, its Institute for Legal Reform released a study[iii] claiming securities class-actions were skyrocketing and that corporations needed immunity. However, the report omitted one critical word: “subprime.”[iv] In fact, more than half of the class action filings were related to the subprime collapse, a fact that U.S. Chamber failed to mention. The rising numbers of subprime securities class actions was actually the first indication that something was seriously amiss in corporate America.
The U.S. Chamber chose not only to ignore this red flag, but to try and use it for its own political gain.[v] Many corporations involved in subprime lending are now under FBI investigation for fraud.[vi]
In an echo of the most recent financial crisis, the U.S. Chamber immediately began an aggressive campaign after Enron to defend the corporations that caused the economic calamity and push back against any regulatory reform. After Enron, but before the current economic crisis, Donohue railed against the Sarbanes-Oxley reforms, saying, “I’m an old man and I've never seen a feeding frenzy like the one we've had on corporate accountability. Business should stop apologizing for being the one institution in America that really works.”[vii]
The U.S. Chamber even began targeting government agencies that were trying to regulate the financial industries. In 2005, U.S. Chamber filed an amicus brief arguing for lighter sentences for top Merrill Lynch officials involved in the Enron scandal.[viii] The U.S. Chamber even went so far as to sue the SEC to block reforms intended to protect mutual fund investors.[ix]
In Their Own Words: U.S. Chamber’s Hypocrisy
Ironically, the corporate mouthpiece often talks out of both sides of its mouth. Nothing illustrates U.S. Chamber’s hypocrisy than its own words, further showcasing their “one rule for corporations, one rule for everybody else” attitude.
Then: “There is no right for business to go to government to take care of their [own] follies and errors.” -Tom Donohue, January 2002.[x]
Now: “The U.S. Chamber of Commerce emphatically supports Congressional efforts to provide a bridge loan to the domestic automobile industry for operations.” -Bruce Josten (VP for Government Affairs), December 2008.[xi]
Then: “[The Chamber objected] to any bailout for investors who made the wrong bet.” –Tom Donohue (via Dow Jones Newswire) on housing crisis, January 2008.[xii]
Now: “This is not a bailout; this is Treasury buying toxic assets that they will dispose of over a period of time and resell.” -Bruce Josten, October 2008.[xiii]
Then: “We can’t see this as an opportunity to line up at the trough.” -Tom Donohue on bailouts, September 2001.[xiv]
Now: “We are pushing. We are pressing. We are playing hard.” -Bruce Josten, on the Chamber’s efforts to ram through a bailout, October 2008.[xv]
Then: “Government can do many constructive things. But counting on Washington to provide complete financial security -- at the expense of freedom and opportunity -- is a bad bargain. In the end, Americans would find themselves neither prosperous nor secure.” -Tom Donohue, January 2008.[xvi]
Now: “The defeat of the financial rescue plan in the House of Representatives on Monday dealt a needless blow to an already faltering economy…It's time for Congress to put aside partisan differences and act in the national interest.” -Tom Donohue, October 2008.[xvii]
Then: “One path would take us back to where we've been before - back to the old, discredited idea that government can solve every problem and soothe every anxiety by raising a tax, imposing a regulation, or creating a new bureaucracy. On this path, we would put our faith in Washington and its unaccountable bureaucrats to eliminate all risk and uncertainty in life. -Tom Donohue, January 2008.[xviii]
Now: “Extraordinary government intervention is essential to restoring confidence and ensuring credit availability. Stabilizing the financial system and preventing a systemic collapse of our capital markets must be the federal government’s top priority.” -Bruce Josten, September 2008.[xix]