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New Business October 7, 2009, 6:55PM EST

Does the U.S. Chamber Speak for Big Business?

The U.S. Chamber of Commerce's aggressive opposition to climate change legislation is costing it credibility, clout—and members

By Jane Sasseen

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Philip Burke

There aren't many who would willingly take on Apple (AAPL) icon Steve Jobs—and lecture him on technology. But Thomas J. Donohue, the combative head of the U.S. Chamber of Commerce, isn't one to step away from a fight.

So on Oct. 6, a day after Apple became the fifth—and most prominent—company to resign or reduce its role at the Chamber because of its aggressive opposition to climate change legislation, Donohue fired back. "It is unfortunate that your company didn't take the time to understand the Chamber's position on climate and forfeited the opportunity to advance a 21st century approach," he wrote to Jobs. He stressed the Chamber's belief that business can spur much of the technology to reduce greenhouse gases, much as the private sector has "developed the innovations that we now take for granted, from the personal computer to the medicines that keep us healthy."

Donohue is renowned for his bulldog style. Now he and his colleagues find themselves embroiled in a fight over climate change that raises questions about how broadly they speak for business—and whether the Chamber, allied with the Republican Party for the last decade, can retain its influence in a heavily Democratic Washington.

$100 Million War Chest

The Chamber has moved sharply to oppose much of the legislation and many of the regulations and policies streaming out of the Obama Administration and the Democratic Congress on health care, labor issues, and finance. In a move some see as little short of a declaration of war on the White House, Donohue has been crisscrossing the country to raise $100 million to launch the "Campaign for Free Enterprise." It is intended to promote open markets and fight a rise in regulations and tax hikes that he argues will undermine job creation and the economy. "We are certainly not alone," says Donohue, adding that the Chamber's controversial policy choices reflect his members' views: "This is not me.…This is not my staff. We are delivering on the issues that concern the business community."

Many well-placed Democrats believe that hard-nosed attitude is starting to cost the Chamber credibility—on energy and beyond. "The more they get out in opposition on core issues to the Democrats, the more they will continue to alienate them," says a top aide to a key Democrat in the Senate. "The Chamber's best shot is to influence moderate Democrats, but the more unrealistic they get, the more they will leave the moderates wondering why they should work with them." As proof of the Chamber's flawed approach, Democrats point to its recent leading role in what many saw as an over-the-top attack on the Administration's plans for an agency to protect consumers from predatory lenders. Even moderate Democrats who are often supportive of the Chamber took note. "It's unfortunate that some business groups are allowing misleading information to confuse the debate," says one influential representative in financial matters, referring to claims by the Chamber and others that many small businesses would be covered by the proposal. "We should be debating the real issues."

The Administration, meanwhile, is going out of its way to foster ties with CEOs and business leaders on its own, rather than rely on the Chamber. "I'd rather talk to [Cisco (CSCO) boss] John Chambers than to the Chamber," says Valerie Jarrett, the Presidential adviser responsible for outreach to the business community. "I don't stop listening to the Chamber, but [the resignations] do make me question whether they have the pulse of their membership." Adds Hilary Rosen, managing partner of the D.C. office of communications strategy firm Brunswick Group and a White House confidant: "Most business leaders we speak to are looking for solutions. The Chamber's posture has become a barrier."

Business Roundtable More Pragmatic

The White House appears to be turning more to the Business Roundtable, a group of over 160 CEOs, for feedback and input on its policies. John Castellani, the Roundtable's president, says its members have met frequently with White House staff in recent months. The group's leaders, such as Ivan G. Seidenberg of Verizon Communications (VZ) and Andrew N. Liveris of Dow Chemical (DOW), have featured prominently on the list of CEOs invited to dine with the President or his top aides.

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