Obama Criticizes Tax-Exempt Pro-Republican Groups

The President is ramping up complaints against attack ads funded by Republican-leaning groups with undisclosed donors

By Julianna Goldman and Kristin Jensen

(Bloomberg) — President Barack Obama is stepping up criticism of tax-exempt Republican-leaning groups using undisclosed donations to fund "attack ads" less than a month before congressional elections, a complaint his opponents call baseless.

"It could be the oil industry" funding the ads, Obama told a Democratic rally yesterday in Philadelphia. "It could be the insurance industry, it could even be foreign-owned corporations.

You don't know because they don't have to disclose." Democrats have spent weeks rebuking pro-Republican outside groups that are flooding the airwaves with tens of millions of dollars worth of political advertising before the Nov. 2 midterm elections. A new ad from the Democratic National Committee says the U.S. Chamber of Commerce may be taking "secret foreign money to influence our elections," a charge the business group denies.

Earlier yesterday, senior Obama adviser David Axelrod singled out the Chamber over its sources of donations. "If the Chamber opens up its books and says here's where our political money's coming from," Axelrod said on CBS's "Face the Nation" program, "then we'll know. But until they do that, all we have is their assertion."

The Democrats' approach is "pure partisan posturing," said David Primo, a political science professor at the University of Rochester in New York.

'Easy Target'

"The Democrats are on the defensive and think the Chamber is an easy target," Primo said. "I don't think it will resonate with voters, who are more concerned with the economy and runaway government spending."

The latest rhetoric may complicate an already tense relationship between the White House and the business community. The Bloomberg Global Poll last month found 77 percent of U.S.-based Bloomberg subscribers say Obama is too anti-business, and his favorability among the 1,408 investors worldwide is down to 49 percent from 73 percent in July 2009.

"It is a high-risk strategy," said Julian Zelizer, a history and public affairs professor at Princeton University in New Jersey. "The Chamber has a lot of money and influence. The voters who might be mobilized by these attacks are pretty demoralized by unemployment. He could end up energizing his opponents rather than his supporters."

While Obama didn't name any groups at the rally, he said political ads paid for by undisclosed donors are "a threat to our democracy."

DNC Ad

The DNC ad, a portion of which was broadcast during the "Face the Nation" program, described the Chamber as "shills" for big business who are "stealing our democracy." "The ad is ridiculous and false," Tom Collamore, senior vice president of communications and strategy for the Chamber, said in an e-mail. Collamore called the ad "a blatant attempt to avoid a serious discussion of Americans' top priority — creating jobs and growing the economy."

The Chamber, the nation's largest business lobbying group, has pledged to spend $75 million backing pro-business candidates this year. Last week, it reported $1 million ad campaigns against Senator Barbara Boxer of California and Senate candidate Paul Hodes in New Hampshire, both Democrats.

The dueling advertising campaigns are among increasingly hostile exchanges between Democrats and the Chamber. Last week, Chamber President Tom Donohue said in a speech in Iowa that the Obama administration is imposing regulations that are "suffocating the entrepreneurial spirit."

The DNC ad also targets Crossroads GPS, a group advised by Republican strategist Karl Rove and former Republican National Committee Chairman Ed Gillespie. Because it's set up as an issue-advocacy group, Crossroads GPS doesn't have to disclose its donors.

'Benign Names'

"Ed Gillespie and Karl Rove run one of them — tens of millions of dollars from undisclosed donors, under benign names like the American Crossroads fund," Axelrod said.

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