Secrets of the chamber: the U.S. Chamber of Commerce exaggerates the dangers of government action to its corporate paymasters and gets paid handsomely, whether it wins or not.

• Author: Drutman, Lee
• Position: Book review

The Influence Machine: The U.S. Chamber of Commerce and the Corporate Capture of American Life

by Alyssa Katz

Speigel & Grau, 336 pp.

In 2011, Chamber of Commerce president Tom Donohue vowed that his organization would fight against what he called a "regulatory tsunami": the thousands of pages of new rules that were beginning to flow out of federal agencies as they implemented the Dodd-Frank Wall Street Reform and Consumer Protection Act and other legislation Barack Obama had signed in his first two years in office. Donovan's threat wasn't idle. His organization's army of lobbyists and researchers was already engaged in a bruising fight on behalf of the financial industry, aimed at bullying understaffed regulatory agencies into backing off.

The Chamber hit the Securities and Exchange Commission hard, for instance, over a new rule that required companies to open up their shareholder elections. The rule, known as "proxy access," was widely reviled in corporate America. The Chamber hired consultants to demonstrate that the rule would be ineffective and costly. It hired lawyers to claim that the SEC had violated the Administrative Procedure Act in drafting the rule. And, despite an estimated 21,000 hours of SEC staff work, the D.C. Circuit Court sided with the Chamber, concluding that the SEC "had failed to respond to substantial problems raised by commenters." The rule was vacated.

As the journalist Alyssa Katz describes in her new book, The Influence Machine, "The swift obliteration of the board elections rule ... had a chilling impact on the entire machinery of financial reform, at the SEC most of all. No agency could risk more accusations that it hadn't properly evaluated all potential costs and consequences of a piece of Dodd-Frank." And so, in Katz's telling, agencies were cowed. They tailored rules to avoid running afoul of the Chamber's demands, not eager to fight costly court battles. And the effectiveness of Dodd-Frank was thus blunted. Wall Street continued to thrive.

The Chamber also fought Dodd-Frank implementation in Congress. It lobbied (successfully) to keep the budget for the Commodity Futures Trading Commission low. It aggressively pushed Republican senators to filibuster the appointment of Richard Cordray to head the new Consumer Financial Protection Bureau, in hopes of keeping the agency leaderless. In short, it did whatever it could to undermine Dodd-Frank.

The Influence Machine is full of these kinds of stories. In Katz's book, the Chamber comes off as a relentless fighter, user of all the tools in the lobbying tool kit. It funds the academic studies to ground its arguments. It scours the legislative calendar for low-profile opportunities, for long, must-pass bills in which to slip a provision, at the same time as it fights high-volume public PR battles. It bird-dogs regulators with piles of comments and then threatens everything with a lawsuit. The Chamber, Katz writes, is somewhat unique in that it is a "single institution that shapes the balance of power in the courts, at the ballot box, in the halls of state legislatures, and in the U.S. Congress."

All this is true. But is it also true, as Katz announces in the opening lines of The Influence Machine, that the Chamber is "the single most influential organization in...