Chamber of Commerce Said to Be Campaign Probe Subject

New York authorities are investigating whether a nonprofit affiliate of the U.S. Chamber of Commerce illegally funded political activity, according to a person familiar with the matter.

State Attorney General Eric Schneiderman subpoenaed the National Chamber Foundation seeking information about $18 million that the organization reported it loaned to the Chamber of Commerce, according to the person.

At issue is whether the nonprofit made political contributions through the Chamber of Commerce that are prohibited, said the person, who declined to be identified because they weren’t to speak publicly about the investigation.

The probe also involves the Starr Foundation, which had made $19 million in grants to the National Chamber Foundation between 2003 and 2005, according to the person. In the same period, the National Chamber Foundation reported in filings with the attorney general’s office that it had loaned $18.1 million to the Chamber of Commerce, the person said.

Schneiderman, a Democrat, is investigating whether the funding from the National Chamber Foundation to the Chamber of Commerce was a true loan, according to the person.

The National Chamber Foundation is the public policy think tank affiliate of the Chamber of Commerce, according to its website.

Chamber Statement

Thomas J. Collamore, a spokesman for the Chamber of Commerce, said the attorney general was using his office to “rehash a very old story.”

“This curiously timed subpoena will play out in the appropriate legal channels,” Collamore said in an e-mail.

A call for comment to the Starr Foundation wasn’t immediately returned. Maurice “Hank” Greenberg, the former chief executive officer of American International Group Inc., is the chairman of the Starr Foundation.

The probe comes as the U.S. Supreme Court this week threw out Montana’s ban on corporate campaign spending in a reaffirmation of its Citizens United decision in 2010 that left federal elections awash in money from big spenders. That ruling let corporations and unions spend unlimited sums.

More than 600 super-PACs have raised more than $240 million and spent $133 million this election cycle, according to the Center for Responsive Politics, a nonpartisan research group in Washington.

Election Spending

Nonprofit organizations that don’t have to report donors have spent at least $12.4 million in this election cycle so far, according to the Sunlight Foundation, a Washington-based group that promotes campaign-finance disclosure.

The expenditures by super-PACs and nonprofits add up to more than twice what outside groups had spent by this point in the 2008 election cycle, according to the Center for Responsive Politics.

The Chamber of Commerce opposed the Montana law. It said in court papers that “to the extent that there has been more speech in recent elections, that is a First Amendment good, not an excuse to resurrect a censorship regime.”

The fundamental activity of the U.S. Chamber of Commerce, which calls itself the world’s largest business organization, “is to develop and implement policy on major issues affecting business,” according to its website.

New York’s investigation was reported earlier by the New York Times.

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

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