Alcoa joins the gang of U.S. Chamber of Commerce directors in trouble over FCPA violations
Posted by Sam Jewler on January 13, 2014
The government has taken action against yet another company, subsidiary or executive represented on the board of directors of the U.S. Chamber of Commerce or its Institute for Legal Reform for violations of the Foreign Corrupt Practices Act (FCPA). On Thursday, Alcoa World Alumina, a company controlled by Alcoa Inc., pleaded guilty in federal court to bribing officials in Bahrain to win a supply deal in violation of the FCPA, which bars U.S. companies from bribing foreign officials to gain a business advantage. Alcoa will pay a $161 million civil penalty, the third largest FCPA-related disgorgement ever.
Public Citizen’s November 2013 report “License to Bribe” documented the efforts made by the U.S. Chamber of Commerce since 2010 to weaken the FCPA. The Chamber has proposed five changes that are wolves in sheep’s clothing and would undermine the law. All of the proposed changes were rebuffed by the Department of Justice (DOJ) and Securities and Exchange Commission (SEC), which have joint jurisdiction to enforce the FCPA and released guidelines responsive to the U.S. Chamber’s requests to weaken the law.
One change the Chamber seeks is to limit a company’s liability for the acts of its subsidiaries. The DOJ and the SEC responded in a set of guidelines, saying that such a limitation would give companies an incentive to create subsidiaries for the purpose of engaging in bribery. Indeed, that is the mechanism through which many FCPA violations have taken place – including the Alcoa violations identified by the government.
The U.S. Chamber’s membership is a well-kept secret, but the organization’s efforts to weaken the FCPA seem to coincide with the behavior of a number of the companies represented on its board of directors. How much overseas bribery would the companies funding the U.S. Chamber commit if there were no law against it?
Additionally, why don’t those companies step out of the shadows and lobby openly against the FCPA, rather than hiding behind the U.S. Chamber? Would they still lobby against the FCPA if they didn’t have the cloak of anonymity afforded by the Chamber?
Alcoa’s subsidiary, Alcoa World Alumina, earned $446 million in gross profit on transactions facilitated by bribes between 2005 and 2009, according to the DOJ. The subsidiary will pay $223 million in fines and criminal penalties for violating the FCPA, while the parent company will pay a separate $161 million civil penalty for related SEC violations. According to the SEC, Alcoa’s subsidiary used an intermediary to funnel the illicit payments to Bahraini officials, and “Alcoa lacked sufficient internal controls to prevent and detect the bribes, which were improperly recorded in Alcoa’s books and records as legitimate commissions or sales to a distributor.”
No. 1 on the list of top enforcement actions is the $800 million fine levied in 2008 against Siemens Corporation, whose President and CEO is a Chamber director.
The Chamber’s record of trying to weaken the FCPA in ways that would legalize bribery, and its continued allocation of leadership positions to bad corporate actors, should cast a pall of ethical questionability over everything else it does.
Whose Opportunity Is the U.S. Chamber of Commerce Talking About?
Posted by Sam Jewler on January 09, 2014
Whose opportunity does U.S. Chamber of Commerce President Tom Donohue talk about when he talks about opportunity?
The Chamber’s policies might give the largest corporations the opportunity to grow, but that is often not the same thing as growth and opportunity for the American people. After-tax corporate profits in the third quarter topped 11 percent of GDP for the first time since the records started in 1947. But everyday Americans aren’t doing so well, with real median household income declining 4.4 percent since 2009.
When the Chamber opposes increasing minimum wages to coincide with growth in productivity and the economy overall, one must ask whose growth and opportunity the Chamber is pushing for.
When the Chamber pushes for construction of the Keystone XL Pipeline, which would ship oil out of the country, likely leading to higher U.S. energy prices and higher profits for companies, while handing much of the environmental risk to the people of the Midwest and South, whose growth and opportunity are we talking about?
In his 2014 State of American Business Address, Donohue referred to the Chamber’s National Litigation Center as a “public interest” law firm – an insidious mischaracterization for a group that that works relentlessly to restrict consumers’ access to courts and ability to hold corporations accountable for bad behavior.
And we have to wonder what the Chamber’s rampant political spending and attempts to undermine laws against bribing foreign officials say about its respect for democracy.
In December 2013, John Cridland, the director-general of the U.S. Chamber’s British counterpart, the Confederation of British Industry, said, “As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze. … There are still far too many people stuck in minimum wage jobs without routes to progression – and that’s a serious challenge that businesses and the government must address.”
Until we hear Mr. Donohue say – and act on – something like the CBI’s example, the evidence overshadows his words: The U.S. Chamber of Commerce wants growth and opportunity for the largest corporations. Everything else is public relations.
The U.S. Chamber of Commerce hits $1 billion lobbying milestone
Ever wonder why our political system seems to be dominated by corporate interests?
An excellent report just out from the Center for Responsive Politics (CRP) helps shed light on that very question.
Through some impressive tracking work, CRP showed that one of the biggest mouthpieces for Big Business – the U.S. Chamber of Commerce – has become the first organization to spend a total of $1 billion on lobbying since CRP started keeping track in 1998.
In comparison, the report showed the next highest spender during that time was General Electric, at just shy of $294 million.
Although this year so far has been slow for the U.S. Chamber (in terms of reported dollars spent on lobbying), the group’s spending has increased greatly since current President Tom Donohue took over the organization in 1997.
The year after Donohue started leading the U.S. Chamber, the group spent just $17 million. By 2010, that number had risen to $157 million.
The U.S. Chamber’s Agenda
The organization now reportedly staffs 88 in-house lobbyists in addition to others hired through outside firms. In 2012 alone, 183 individuals from 33 different lobbying groups represented the U.S. Chamber, according to the report.
So that leaves one to wonder…
What exactly is the U.S. Chamber using this money to fight for?
The U.S. Chamber has a broad agenda that includes supporting outdated energy policies like the Keystone XL pipeline and attempting to forestall implementation of the important financial regulations we need to enact to protect our economy from another financial crisis.
A Growing Difference of Opinion
Although it claims to “protect free enterprise,” the policy stances of the U.S. Chamber have been losing it the support of some in the business community.
Just a couple of weeks ago, the construction firm Skanska left the U.S. Chamber because the company felt its interest in improved green building standards were not being represented..
In addition, several big name companies like Yahoo, Apple, and PG&E have all left the U.S. Chamber because the organization chose to support policies the companies felt were opposed to the firms’ business interests.
Others like Google, (although still currently members) have voiced similar concerns as well.
And these companies aren’t the only ones raising concerns.
Recently, U.S. Chamber Watch and our allies from the Corporate Reform Coalition gathered more than 300,000 consumer signatures on a citizen’s petition and got 26 investor groups to send letters asking Google to end its ties with the U.S. Chamber.
We hope the leaders at Google listen.
By spending such a huge sum of money on lobbying, the U.S. Chamber is effectively drowning out the voices of citizens – those who matter most if we are to have a healthy political system.
Another company leaves the U.S. Chamber of Commerce over the organizaiton’s environmental policies
Construction firm Skanska on Tuesday became the latest in a string of members to leave the U.S. Chamber of Commerce over the organization’s regressive policies.
This week we had great news when Skanska Corp. made the decision to depart the U.S. Chamber. The U.S. Chamber is fighting new green construction standards that the company supports. The U.S. Chamber was so determined to block these new standards that it helped start an advocacy group – the American High-Performance Buildings Coalition – dedicated to opposing them.
Skanksa said in its press release that the U.S. Chamber was supporting the interests of a few status quo businesses – those who manufacture materials that would be banned under new rules – over those of companies that are bringing innovation to the building and construction industry.
At least one member of the U.S. Chamber-backed advocacy group said that the new rules would put jobs at risk.
But Skanska USA’s CEO Mike McNally shared another point of view, pointing out that the U.S Chamber’s efforts could potentially damage the construction industry, which has seen wide and innovative adoption of green building standards.
Given that many economists see construction as one key to the country’s economic recovery, the U.S. Chamber’s position seems contradictory to the giant banner hanging outside the organization’s headquarters that reads, “J-O-B-S”.
McNally also pushed back against calls by AHPBC for “consensus” on construction standards, saying, “There’s never going to be a consensus [on new rules]. You’d still have asbestos in buildings, you’d still have lead paint in buildings, because God forbid you should disadvantage the lead-paint business.”
Skanska is not the first company to leave the U.S. Chamber with similar grievances. Several former members – including Apple, Yahoo, Pacific Gas and Electric, and more than 50 local Chambers – have quit the organization over the past few years because of its stances on the environment or other issues.
Examples of the U.S. Chamber’s broader views on environment include calling for climate science to be put on trial and challenging in court a finding by the Environmental Protection Agency that greenhouse gases threaten public health.
We applaud the company’s move and hope that other firms follow its lead.
The surprising answer from Google on its membership in the U.S. Chamber of Commerce
It can be hard to get a big corporation to go on record about anything – much less something controversial.
That’s why I was pleasantly surprised by the answer I got at Google’s annual shareholder meeting when I asked cofounder Larry Page why the company is a member of the U.S. Chamber of Commerce, an organization that has publicly opposed many of Google’s positions and interests.
After receiving applause for my question, Google’s head lawyer David Drummond – who was helping Page to answer questions – responded that the company’s membership in the U.S. Chamber is something senior leadership debates a lot. He added that while there are some things that the U.S. Chamber is good for, there is a lot of stuff it does that Google doesn’t agree with.
He concluded by saying that, “while we are members for now, it’s something that we do review.”
Keep up the heat
Obviously there are some doubts at Google as to the value of its affiliation with the U.S. Chamber.
This is all the more reason why we need to keep pushing the company to end its membership.
Recently, U.S. Chamber Watch and our allies from the Corporate Reform Coalition gathered more than 300,000 consumers signatures on a citizen’s petition and got 26 investor groups to send letters asking Google to live up to its “Don’t Be Evil” slogan by ending its ties with the U.S. Chamber.
These consumers and investors are concerned that Google is privately undermining many of the policies it has publicly supported –from green energy to Internet privacy – by being a dues-paying member of the U.S. Chamber.
From the answer I got at the shareholder meeting, it sounds like there are those in leadership positions at Google who feel the same.
We will continue to promote our citizen’s petition and hope you will share it with your friends.
Getting Google to leave the U.S. Chamber would be an important victory because it would send a signal to other companies that being successful doesn’t mean that they have to support the regressive policies of the U.S. Chamber – policies that hurt our economy, our environment, and our democracy.
Google should disclose its political spending and leave the U.S. Chamber of Commerce
You can Google anything right?
Well, try going to the search engine and entering “Google’s political spending.”
You’ll get something like this:
Ironically, the top result is Google’s “transparency policy.”
As you can see, while we get a few results for the company’s direct lobbying activities (which it is required by law to disclose), there’s little else to indicate what Google is doing with its other political dollars.
To make things clearer, I should explain that companies can spend money on politics in a few ways.
First, they can spend directly on lobbying themselves. They can also make direct political expenditures to back candidates or contribute to federally registered political committees. And in some states, they can contribute directly to candidates. This spending generally has to be disclosed.
But they can also spend money that doesn’t have to be disclosed. This spending can vary, but is most commonly done when a company makes contributions to “social welfare” organizations like Karl Rove’s Crossroads GPS or to “trade associations” like the U.S. Chamber of Commerce. Neither the organizations nor the companies have to disclose these types of contributions, and the organizations can spend money on a wide range of political activities.
Although we know Google has supported some good policies in the past — from green energy to Internet privacy — without knowing where its political dollars are going, it’s hard to be sure whether or not Google is undermining the causes it promotes. If you are investor in Google, you just have to have faith.
While we don’t know what Google is doing with much of its political spending, we do know that it is a member of the U.S. Chamber. The trade association spent more than $32 million in the 2012 elections. The U.S. Chamber was also the biggest lobbyist organization in the country, spending more than $136 million in 2012 on such activities.
Google is undermining policies it supported in the past by funding the U.S. Chamber, which supports regressive policies such as fracking and championed SOPA and PIPA (anti-privacy legislation opposed by Google because it could have harmed the company’s users and destroyed sites like YouTube).
These apparent contradictions are why more than 300,000 people led by consumer groups U.S. Chamber Watch, US PIRG and SumOfUs, as well as more than 25 investor groups representing more than $125 billion in assets under management, have asked Google to change its political spending policies.
“Don’t Be Evil”
Google’s unofficial “Don’t be evil” slogan reflects that the company prides itself on being able to make money without doing bad things.
The investors and consumer groups acknowledged in their letters that Google should be lauded for its dedication to empowering people to find new knowledge. Throughout the world, the company is appreciated for its dedication to making the Internet accessible and transparent. The tools Google creates enable an unprecedented flow of information, allowing billions to connect with a global community.
For the company and its founders, this dedication to making information open is fundamental to what drives the company’s success. Google says the following on its website:
Transparency is a core value at Google. As a company we feel it is our responsibility to ensure that we maximize transparency around the flow of information related to our tools and services. We believe that more information means more choice, more freedom and ultimately more power for the individual.
Because the strength of Google’s brand is so strongly tied to these principles, it is troublesome that the company has not yet adopted meaningful and transparent disclosure of its political spending. The lack of transparency undermines what makes Google appealing for users and for investors.
Just read the comments on the petition page we set up.
Many of the people who shared their thoughts suggested that while they want to believe what Google says it supports, the company is doing itself (and its users) a disservice by remaining a member of the U.S. Chamber.
How can we make informed choices – as investors, consumers and citizens – without adequate information?
When companies can funnel money into the political process through organizations like the U.S. Chamber, it means those companies don’t have to be accountable to the public.
If Google’s leaders really want to live up to the slogan “Don’t be evil,” they should adopt a policy to disclose the company’s political spending and they should leave the U.S. Chamber of Commerce immediately.
New U.S. Chamber attacks on corporate political spending disclosure are a good sign
Posted by Jake Parent on May 17, 2013
How can you tell that momentum is building for change?
Well, one good sign is that the opposition starts getting nervous about your progress.
That’s why we took it as a positive sign that the U.S. Chamber of Commerce recently stepped up attacks on shareholders who attempt to make companies disclose political spending.
Earlier this month, I attended an almost comical presentation at the U.S. Chamber headquarters where speakers spent most of a four hour event attacking political spending disclosure resolutions as being bad for business.
I say ‘almost’ comical because, while much of the information is laughably wrong, the subject matter is far too important to joke about.
There are a number of things wrong with what I heard at this event, but I’d like to focus on two disturbing claims in particular.
First, I heard several participants—including former SEC commissioner Paul Atkins—make the claim that requiring companies to disclose political spending is incompatible with free speech.
That’s just flatly wrong.
Even if you agree that corporations have free speech rights similar to those of real people—which Chamber Watch absolutely does not—the courts have acknowledged that transparent disclosure of corporate political spending strengthens the democratic process and protects shareholders.
When the Supreme Court ruled in the Citizens United case, Justice Anthony Kennedy said in writing the majority opinion:
With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.
Companies should be required to disclose their political spending as part of their responsibility to provide relevant information to investors.
And that brings us to the second erroneous claim made at the U.S. Chamber event.
Participants repeatedly said that a company is violating its fiduciary duty to shareholders by disclosing its political spending.
How a company spends its political dollars can have an impact on the company’s value—so it is imperative that stockholders be well-informed about what corporate treasury money is being spent on. This information is relevant to the bottom line and clearly material to investors.
The need for this information is why shareholders have continued to demand that their companies implement strong political spending disclosure rules via shareholder proposals and why shareholders and others have made a loud call to the SEC for a uniform rule for all public companies.
More than 500,000 citizens and retail investors have signed a formal petition to the Securities and Exchange Commission asking the agency to consider requiring political spending disclosure from all publicly traded companies. The SEC has said it will consider proposing such a rule soon.
However, until a rule is proposed and implemented, we applaud the huge number of institutional shareholders that continue to introduce resolutions asking for political spending disclosure. If adopted, these shareholder resolutions would help protect our economy and our democracy.
Attacks like those at the U.S. Chamber event just show that the push is working.
Whose Forum is it Anyway?
Have you been to the U.S. Chamber of Commerce yet? If not, get moving! Hop on a plane, bus, train or carpool your way down to Washington, D.C. for your chance to finally meet the secretive members of the nation’s largest private lobbying group. The U.S. Chamber influences policy impacting your health, safety, welfare, and small business on behalf of their multi-national, corporate members.
This past Tuesday, the Office of Management and Budget (OMB) announced a Public Meeting to discuss their call for comments on “Promoting US EC Regulatory Compatibility” otherwise known as TAFTA or the Transatlantic Free Trade Agreement. These proposed trade revisions touted in the President’s State of the Union would roll back food safety, chemical, financial, and more stringent climate change regulations in Europe, taking the wind out of efforts by consumer advocacy groups and activists here in the U.S. to replicate and push for similar protections. You didn’t get the invitation? That may be because this so-called “Public Meeting” is actually hosted by the U.S. Chamber of Commerce. The convening is not taking place in ;Any-town, USA by your local town (or even city) Chamber. Not in the U.S. Department of Commerce or a similar government agency. It will be just a short jaunt from the White House on April 10th and 11th, no-doubt in a comfortably large and well-apportioned conference space. Any person wishing to give an oral statement with regard to the proposed trade rules can sign up here by simply emailing – international-OIRA@omb.eop.gov. Oh but wait, actually those who responded to the Agency’s original September notice will be given “preference” especially given the “limited amount of time available for the meeting, and to take advantage of the work already done by members of the public.” So see if they can fit you in.
Interestingly, OMB’s notice (in conjunction with the European Commission) describes the meeting as another convening of the U.S.-EU High Level Regulatory Cooperation Forum (the “Forum”). In fact, it states that “As with previous Forum meetings, the public sessions will be hosted by the U.S. Chamber of Commerce.” So if this is not new, how long has the Chamber been hosting “Public Meetings” on our behalf? And just what exactly is the Forum? According to the White House’s website, the Forum, “provides a setting for senior officials from all areas of government to come together to discuss regulatory policies of mutual interest.” That sounds like something within the public sphere, accountable to taxpayers and voters. And yet the Forum is also described as contributing to, “to achieving the objectives of high-level political bodies such as the Transatlantic Economic Council and the Energy Council.”
The Transatlantic Economic Council is a new entity, founded just this year on January 1, 2013. It was created by merging the TransAtlantic Business Dialogue (TABD) and European-American Business Council (EABC). Some of its members include such good corporate citizens as AIG, Deutsche Bank, and Phillip Morris Intl. The phrase “regulatory capture” strains under the weight of huge multinational corporations operating as an extended arm of the U.S. government, with citizens included as an afterthought.
That’s why we need to fight back. Public Citizen calls on activists to demand that OMB and the Office of the U.S. Trade Representative cancel the scheduled forum and replace it with a real public meeting. The health of our communities, natural resources, financial system, and small businesses are affected by these trade negotiations. It is completely inappropriate for the U.S. Chamber to continue to host these meetings and for the U.S. government to give “the Forum” a special seat at the bargaining table.