June 27, 2012

Yesterday, New York Attorney General Eric T. Schneiderman issued a subpoena targeting a foundation affiliated with the U.S. Chamber of Commerce for illegally funneling $18 million to the Chamber for its political campaigning and lobbying efforts.

The New York Times reports:

The investigation is also looking at connections between the chamber’s foundation, the National Chamber Foundation, and another philanthropy, the Starr Foundation, which made large grants to the chamber foundation in 2003 and 2004. During the same period, the National Chamber Foundation lent the chamber $18 million, most of it for what was described as a capital campaign.

Watchdog groups claim that the grants given to the National Chamber Foundation from the Starr Foundation had subsequently been loaned to the Chamber of Commerce to be used to finance lobbying in Congress and run issue advertising in the 2004 presidential and Congressional elections.

Schneiderman’s investigation is significant because it targets the use of tax-exempt groups that funnel money into politics while hiding donors:

The biggest such groups, including Americans for Prosperity, which is backed by the billionaire brothers Charles and David Koch, and Crossroads Grassroots Policy Strategies, which was founded by Karl Rove and other Republican strategists, are expected to spend hundreds of millions of dollars this year on issue advertisements against candidates to sway the outcome of the presidential and Congressional elections.

By targeting the U.S. Chamber of Commerce, Schneiderman is striking at one of the largest political players in the country. In 2011 alone, the Chamber spent $66 million on lobbying and has promised to spend at least $50 million on issue ads on the upcoming elections.