Republican chair investigating Chamber of Commerce in seismic K Street shift

Ten years ago, it would have been unthinkable for a Republican committee chairman to investigate Washington’s largest business advocacy group.

But times have changed.

House Ways and Means Committee Chairman Jason Smith (R-Missouri) asked the U.S. Chamber of Commerce Foundation to answer questions about the more than $12 million it received from the left-leaning nonprofit Tides Foundation between 2018 and 2022. requested the Chamber of Commerce. .

in last monday’s letter Smith told Chamber President and CEO Suzanne Clark and Foundation Board Chair Carolyn Corey that Tides grants are inconsistent with the chamber’s mission to support American businesses. He said this appears to cast doubt on the organization’s tax-exempt status.

The Republican chairman’s investigation into the Chamber of Commerce and its establishment is a major change from the historically close working relationship between the Republican Party and the Republican Party. The investigation comes as the Chamber of Commerce prepares for a major lobbying effort to expiry former President Trump’s 2017 tax cuts, a fight in which Smith and the Revenue Republicans will have major influence. become.

If Republicans control the House, Mr. Smith is expected to keep the appropriations gavel and run the House committee responsible for tax policy. A soured relationship with Mr. Smith could undermine Congress’ ability to sway the 2025 tax fight and other priorities for the committee.

This study also well reported Tensions arose between the chamber and the increasingly populist Republican Party after the 2020 election, with some members unhappy with the chamber’s efforts to improve relations with Democrats.

The Chamber of Commerce and Foundation say the study is based on a misunderstanding. Eric Ebersole, president of the foundation’s Hire a Hero program, told The Hill that the funds the foundation receives are “a combination of corporate philanthropic donations going to donor-advised funds. It’s a thing,” he said. funds.

A Tides spokesperson told The Hill that Smith’s investigation was “a politically motivated PR tactic during an election year driven by actors who disagree with the social justice work of Tides and our partner organizations.” ” he said.

But Mr Smith made it clear he was not satisfied with the initial response.

“The Chamber’s mission is very clear: to support American businesses,” he said. “When you get $12 million from Tides and then try to claim that it actually came from someone else and not from Tides, you want to look harder.”

Smith set a Monday deadline for the chamber to respond to the survey. Asked if he would be satisfied if the foundation did not reveal the ultimate source of the funds it received through Tides, Smith said: “They would want to disclose all the funds.”

But when The Hill asked the Chamber of Commerce whether they would disclose the ultimate source of the Tides grant, they pushed back.

Neil Bradley, executive vice president and chief policy officer for the Chamber of Commerce, said: “The importance of the First Amendment’s freedom of association and the lack of disclosure requirements are widely recognized on the left and center right. There’s a pretty strong consensus among them,” he told The Hill.

In recent years, the Supreme Court has upheld the privacy of donors to tax-exempt organizations, striking down in 2021 a California law requiring nonprofits to disclose their donors.

The Ways and Means Committee on Wednesday considered a bill aimed at transparency in foreign funding to tax-exempt organizations, including a provision that would prohibit the federal government from “collecting or submitting identifying information to tax-exempt organizations.” was. ”

Mr Smith acknowledged the Chamber “can do whatever it wants” but said: “We can also act accordingly.”

How the Chamber of Commerce zeroed in on the committee

The investigation has been underway for two to three months, two people close to the investigation told The Hill.

Smith told The Hill the chamber’s investigation stemmed from a written response in August. request information As to whether a tax-exempt nonprofit organization “operates in a manner consistent with the laws and regulations governing such organizations.”

“We are reviewing all aspects of 501(c), from anti-Semitism to non-profits failing to comply with mandated voluntary accommodations, and we are continuing to review all aspects of 501(c) activity, from anti-Semitism to non-profits failing to comply with mandated voluntary accommodations, and to ensure that non-profits are legitimate.” We’ve also considered whether it’s in line with their mission statement,” Smith said.

In recent months, the committee has threatened to reconsider the tax-exempt status of Harvard, Massachusetts Institute of Technology, University of Pennsylvania, and Cornell universities following allegations that they failed to police anti-Semitism on their campuses. Ta.committee too approved the bill In December, it will revoke the tax-exempt status of U.S. companies that support terrorist organizations.

panel too picked up 4 bills Legislation announced this week would require tax-exempt organizations to disclose donations from foreign nationals and ban such nonprofits from donating to political committees, including super PACs, among other measures. The content is to crack down on foreign funds.

Raising the Ways and Means Committee’s oversight agenda was part of what Smith pitched to the Republican steering committee when he ran for chairman, a source close to Smith told The Hill. . But the chamber stands apart from the panel’s other goals, which are more traditionally aligned with Democratic and liberal ideals.

Founded in 1912, the Chamber of Commerce has been the leading voice for Washington’s largest businesses for decades.The Chambers board of directors It includes executives from well-known companies such as Deloitte, Microsoft, Meta, Ford, Fidelity, Pfizer, and Shell, as well as several mid-sized companies. The chamber reported spending more money on federal lobbying efforts last year than any other organization or company. $70 millionThat’s more than $17 million more than the second-highest spender, the National Association of Realtors, and more than twice as much as the third-highest spender, the American Hospital Association, according to OpenSecret, a political finance research group.

Our Chamber holds 501(c)(6) tax status. reserved for Although the Foundation serves member organizations, including business associations and professional soccer leagues, the Foundation operates as a 501(c)(3) with the purpose of serving the public.

Smith said he wants to know how the organizations used Tides funds, why they received the funds, and “what taxpayers are getting in exchange for the U.S. Chamber of Commerce Foundation’s tax-exempt status.” .

Both Tides and the Chamber of Commerce said the primary purpose of the grant was to support the foundation’s “Hiring Our Heroes” program, which connects the military community with employment opportunities, training and resources.

Since “Hiring Our Heroes” began in 2011, the program has provided free training to more than 9,000 service members and issued more than 5,000 certificates, according to the chamber. Approximately 2,400 positive work outcomes were reported, including job offers and promotions.

In its latest report, the foundation reported $14.3 million in program expenses in 2022, including $2 million in grants. form 990.Foundations are not required to publicly disclose their donors, but the most recent donors form 990Tides reported that it will award $175,882 in grants to the foundation in 2022 for “equity, human rights, and economic empowerment.”

From 2018 to 2022, Tides’ donations to the foundation totaled more than $12 million. In addition to the 2022 grant, Tides reported that it will send a foundation. $450,000 “Economic development” in 2018, $1.5 million In 2019 “Project Support”, $100,000 “Equality, Human Rights and Economic Empowerment” in 2020 10 million dollars “Quality Education” in 2021.

Tides’ donations to the foundation came to the committee’s attention because the left-leaning nonprofit has previously been a frequent target of anti-Semitic conspiracy theories and political powerhouses. The organization received funding from the Open Society Foundations, a nonprofit organization founded by George Soros. right.

Breitbart News, the right-wing news outlet that first reported on the Chamber of Commerce’s Tides grant, claimed that the donations from “Soros-funded organizations” were evidence that the Chamber had “moved far left in recent years.” .

But the Chamber of Commerce rejected Breitbart’s report and Smith’s investigation, saying Tides was only a vehicle for collecting money from corporate donors, not the donors themselves.

“Chairman Smith raised a series of questions based on a factually inaccurate article published by Breitbart. We appreciate the opportunity to set the record straight about this false and misleading article.” Mr. Bradley said.

Tracking the flow of donor-advised funds is similar to tracking the path of a washing machine. It is virtually impossible to trace the flow of funds from beginning to end with publicly available information. Individual donors contribute to large donor-advised funds, such as Tides, whose funds are ultimately distributed in the form of grants to organizations such as chambers of commerce.

According to the latest report, Tides raised approximately $574 million in funding and distributed $667 million in grants in 2022. form 990. The Open Society Foundations reported donating approximately $1.4 million to Tides in 2022, according to its most recent Form 990, and is not affiliated with the chamber, its foundation or Hire a Hero. Details of grants for specific programs are provided.

Even if the committee were to confirm that the money did not come from the Open Society Foundations or other left-wing individuals or organizations, it may not be enough to ease Mr. Smith’s scrutiny.

One person close to the inquiry said the chamber’s “priorities seem to be misaligned” and that while the committee was “not necessarily saying there is a correlation”, the source of the funding “raises questions”. It is certain that the level has been reached.”

However, the Chamber of Commerce supported the initiative and expressed positivity for its future.

“The Chamber responded to Chairman Smith, explaining how Breitbart made the wrong decision, and the important work we do to hire heroes, including maintaining a competitive tax system that raises wages and incomes for Americans. “We’re going to talk to all of our allies about a number of shared priorities,” Bradley said.