Will the Real Voice of Small Business Please Stand Up?

By the time the polls close, the U. S. Chamber of Commerce will have
spent an estimated $75 million on television ads and other "voter
education" efforts aimed at defeating Democrats and giving Republicans
control of the House and Senate. It's a record-setting expenditure: more
than double what the Chamber spent in 2008 and more than any
non-candidate has ever spent on an election.

The Chamber, which describes itself as "the voice of business,"
insists that its political activities serve the interests of American
business in the broadest sense. The group claims to represent 3 million
businesses and says that 96 percent of these are small, defined as
having fewer than 100 employees. That's an impressive figure-one that
the Chamber invariably touts in press releases and testimony, and relies
on to lend considerable weight and legitimacy to its lobbying on
Capitol Hill.

But it is a spurious claim. The Chamber arrives at this 3-million
figure by counting all of the businesses that are members of state and
local chambers. These local groups, however, are independent
organizations. Many pay a few hundreds dollars a year to affiliate with
the U. S. Chamber in order to take advantage of discounts and other
programs. But they have no say over the national group's political
activities, its lobbying or endorsements-and many, we are now learning,
in fact disagree with its views.

The U. S. Chamber's actual membership is only about 300,000
businesses. And while small businesses are a prominent part of its
public image, the Chamber's boardroom is dominated by large
corporations. Its 125-member board includes representatives of just two
local chambers and only a handful of small businesses. The rest comprise
a veritable who's who of the country's most powerful corporations:
Pfizer, Alcoa, JP Morgan Chase, and so on.

As skewed as its board is, the Chamber's budget is even more so. In
2008, one-third of the $147 million the group raised came from just 19
companies. (Exactly which companies is unknown. While U. S. law requires
the Chamber to list amounts given on its annual tax return, it is not
obligated to disclose their names.)

The U. S. Chamber is not the "voice of business." It is the voice of a
few giant corporations, which use the Chamber to push their political
agenda, all the while cloaking their self-interest behind an image of
millions of small businesses.

The Chamber's real allegiance is obvious in its lobbying. Among its
top priorities this year, the Chamber spent millions lobbying to weaken
the health care bill and has now filed suit to block the law, even
though 4 million small businesses stand to gain a sizable tax credit to
offset the cost of providing health insurance to their employees. The
Chamber's other top issue was the financial reform bill.
There it did the bidding of big banks, whose recklessness has sunk
countless small businesses and which, even now, continue to strangle the
supply of credit on which entrepreneurs depend.

Over 90 percent of the television ads the Chamber ran during this
election season attacked Democratic candidates and praised Republicans.
The Chamber insists that its support for the GOP simply reflects the views of small business owners, who are naturally conservative and share with their larger rivals a hostility toward government.

But an independent poll by American Express found that small business
owners more or less mirror the population: 32 percent are registered as
Democrats, 33 percent as Republicans, and the rest independent. I doubt
that most see eliminating government as being in their self-interest.
After all, government is essential to constraining the predatory power
of bigness to ensure real competition.

Fortunately, the U. S. Chamber's long-held monopoly on speaking for
American business may at long last be coming to an end. A growing number
of small business owners are beginning to revolt, pulling back the
curtain to reveal that the Chamber, like the Wizard of Oz, is not what
it purports to be.

Two months ago, in a commentary for Business Week,
I noted that a few local chambers in cities like San Antonio and New
York were distancing themselves from the national Chamber. In the weeks
since, that trickle of defections has grown into a stampede as local
chambers in New Hampshire, Pennsylvania, Connecticut and other states
have disavowed the political attack ads that the U. S. Chamber has been
broadcasting in their communities and publicly declared their
independence from the group.

Meanwhile, newer chambers, like the South Carolina Small Business Chamber of Commerce,
which has 8,000 members, have not only declined to affiliate with the
national group but have been among its most vocal critics. "They get the
majority of their funding from big businesses. That's who drives their
decisions," explains Executive Director Frank Knapp, noting that, unlike
the U. S. Chamber, his group supported the health care bill and
financial reform, and favors legislation to curb global warming.

Perhaps most encouraging of all has been the explosive growth of Independent Business Alliances and Local First groups,
which are now active in over 130 cities and count more than 35,000
locally owned, independent businesses as members. These organizations
are working to rebuild local economic systems in food, energy, retail and other sectors, and to make "locally owned" and "locally produced" something people seek out when they make purchasing decisions.

As they mature, they are also becoming increasingly outspoken on
public policy issues, sometimes even going head-to-head with the
Chamber. "They are on the other side of the room every time we testify,"
explained Vicki Pozzebon, executive director of the Santa Fe Independent Business & Community Alliance, which is fighting to close a state tax loophole that benefits big corporations.

"The Chamber never takes the small business perspective. They are on a
totally different track on almost all of issues that we care about,"
says Betsy Burton, owner of an independent bookstore in Salt Lake City
and co-founder of Local First Utah,
which has grown to a membership of over 3,000 local businesses and is
working to change the direction of local and state economic development
policy.

None of these upstarts have anything like the resources of the U. S.
Chamber, but like scrappy startups in any industry they're growing fast
by fulfilling an unmet need: providing a real voice for small business.