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US Democrats blaming Indian business money

Indira Kannan  |  New York 

US-India Business Council denies charge of routing poll help to Republicans.

It may come as to Avasarala Technologies of Bangalore or Jagran Prakashan of Kanpur, or even the Indian government, that they are influencing the US mid-term elections of November 2 by funding Republican candidates. Yet, this unlikely scenario has been one of the loudest campaign complaints of the Democratic Party in recent weeks, as it prepares for what election observers predict will be major losses in both the US Senate and the House of Representatives.

Democrats have repeatedly attacked the US Chamber of Commerce for its alleged ties to foreign donors. On the campaign trail, US President Barack Obama himself has referred to the possibility that foreign companies could be funding Republican candidates indirectly, through their donations to the Chamber. US law prohibits soliciting or accepting donations from foreign nationals or entities for election activity.

The Chamber is one of several groups on both sides of the political spectrum that help election campaigns at the federal and state level from outside, spending money on advertisements and other activities in support of their preferred candidates. While there are some instances of local chapters of the Chamber supporting Democrats, the group mostly supports Republicans, who are perceived as being more pro-business. Groups like the Chamber, which are called Section 501(c)(6) organisations, are not required to disclose their donors.

Blog attack
The issue of foreign funding was first raised by ThinkProgress, a liberal, pro-Democratic blog. In October, the website reported that the Chamber, which was expected to spend $75 million, mainly on behalf of Republican candidates, in this year’s elections, “funds its political attack campaign out of its general account, which solicits foreign funding”. It went on to state that “dozens of Indian businesses, including some of India’s largest corporations like the State Bank of India (state-run) and ICICI Bank, are members of the US Chamber of Commerce through the USIBC” or the US-India Business Council.

The report said the USIBC generated “well over $200,000 a year in dues for the US Chamber of Commerce”, and referred to the USIBC’s website where “many of the group’s lobbying goals advocate changing American policy to help businesses in India”. The report alleged that foreign corporations were seeking to defeat Democrats this November, partly because of Democratic candidates’ opposition to outsourcing.

ThinkProgress followed up with another post, listing 83 foreign companies that “actively donate to the Chamber’s 501(c)(6)”, besides big multinational firms like BP, Shell Oil and Siemens. Of these 83, as many as 55 were Indian firms, listed along with their reported dues, ranging from $7,500 to $15,000.

Another report criticised the Chamber for “following a big-oil agenda” to defeat Democrats who wanted to limit US dependence on oil, and cited Reliance Industries, Tata Group, Punj Lloyd and Jindal Power among many other Indian and foreign companies funding the Chamber’s “anti-clean energy agenda” in this year’s elections.

‘Poll rhetoric’
While Democrats on the campaign trail quickly seized on these reports to allege Republicans were being funded by foreign interests, the US Chamber of Commerce denied any wrongdoing and insisted it had a system in place to separate any foreign funds from its domestic political activities.

Asked about the allegations, USIBC President Ron Somers called them “patently false”. He added, “All money coming to the USIBC in the form of dues, registrations, and sponsorships are restricted for use by the USIBC only – and thereby only dedicated to advancing US-India commercial ties. None of these funds have been or will ever be utilised for anything other than the advancement of US-India commercial ties. USIBC has its own Board, chaired by Terry McGraw, CEO of McGraw-Hill Companies, and the Board sets our policy advocacy agenda to ensure that USIBC maintains its autonomy in all matters of policy.”

The allegations by liberal groups and the Democrats didn’t get much traction in US media. Many outlets called these exaggerated and a desperate stretch by a beleaguered party. Sanjay Puri, Chairman of USINPAC, a lobby that promotes US-India ties, said, “This is typical charged election rhetoric during a tense election cycle, where each side tries everything to gain an advantage against its opponent.” Indian companies, he said, were probably not even aware of the controversy.

However, President Obama’s harsh attacks on the Chamber will likely – and happily – be a distant memory on November 6 in Mumbai, when he headlines a business summit organised by the USIBC, and calls for stronger business ties with the very companies that were allegedly working to defeat his party.

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First Published: Mon, November 01 2010. 00:58 IST