The U.S. Chamber - Driven By an Elite Corporate Agenda

The U.S. Chamber is leading the fight against Wall Street reform. It would allow companies to keep incentives that reward excessive risk-taking and short-term profiteering. It fights reforms that would make executive compensation more transparent, financial statements more reliable and accounting fraud more difficult to conceal. And it has waged a decade-long campaign to roll back the corporate accounting reforms contained in the post-Enron Sarbanes-Oxley Act.This should come as no surprise given that U.S. Chamber chief CEO Tom Donohue sits on corporate boards that gives gigantic salaries and bonuses to executives, regardless of their performance and even when they are accused of mismanagement or accounting fraud.

For instance, Donohue has served on the board and compensation committee of Sunrise Senior Living since 1995, which paid $13.5 million last year to settle shareholder litigation alleging that its officers and directors backdated stock options and traded shares improperly. Sunrise’s shares tumbled to a tenth their former value after the company admitted it inflated earnings for over a decade. Sunrise ex-CEO Paul Klaassen, who worked as Donohue’s driver while in college, has served on the boards of the U.S. Chamber and the National Chamber Foundation - the U.S. Chamber's 501(c)3 nonprofit affiliate. 

Donohue also sits on the board and compensation committee of Union Pacific, which counted as earnings the proceeds from the 2003 spin-off of Union Pacific’s trucking subsidiary, Overnite Transportation. That led to an $ 8 million payout to Union Pacific’s CEO under a long-term pay plan triggered  by mis-classifying the proceeds from the sale. Overnite subsequently appointed Donohue’s son to its board. Union Pacific donated at least $800,000 to the U.S. Chamber and received substantial legal support from U.S. Chamber lawyers for court cases brought by killed and injured workers and female employees facing discrimination.

Donohue was on the Qwest Communications board and its compensation committee that paid CEO Joe Nacchio $81 million in 2001, one of the worst years in the company’s history, and then gave him a $12 million severance package when he left under a cloud. Two years later, Qwest paid $250 million to settle SEC charges that the company engaged in a “massive financial fraud designed to mislead the investing public.” A jury convicted Nacchio of insider trading while at Qwest and sent him to jail for six years. In 2009, the U.S. Chamber urged the U.S. Supreme Court to overturn Nacchio's conviction. 

Donohue also spoke out in defense of AIG CEO Maurice “Hank” Greenberg the day after the company admitted it had overstated its book value by $1.7 billion through inaccurate financial reporting. At the time, Greenberg sat on the U.S. Chamber’s board and controlled a foundation that contributed $24.5 million to the U.S. Chamber, much of which appears to have been dedicated to “education and research programs” that would lay the groundwork for rolling back the Sarbanes-Oxley reforms. A few years later, AIG required a massive government bailout because of its involvement in insuring questionable derivatives contracts.

Indeed, Donohue seems to enjoy rewarding bailed out banks, even as the U.S. Chamber rhetorically claims to oppose bailouts. When the U.S. Chamber needed a banker on its board, Donohue turned to the vice chairman of JP Morgan Chase & Co., whose CEO, James “Jamie” Dimon, had to borrow $25 billion from the Troubled Assets Relief Program during the 2008 financial meltdown.

Donohue has thrived under this pay-to-play system and the U.S. Chamber's coffers are bulging.  However, this financial success come at the expense of the U.S. Chamber's credibility and its legitimacy as a voice for American small business.