Clinton's Echo Chamber

...And it's continuing to climb...

...Membership levels are a touchy subject at the Chamber...

...Martin mentioned to Ted Wu that he had met with William Archey and asked Mr...

...Baldrige was I think personally devastated that Archey was tied up in this...

...And he had equipment at his house that was to be returned, and we went out when he told our people to go out, period...

...Lesher's performance dispelled the comforting illusion that perhaps he was little More than a detached and unwitting creature of the purposeful Archey...

...While more conventional business lobbies deployed guys in tasseled loafers armed with expense accounts and depreciation schedules, Lesher deployed ideas...

...The Gorr letter, Delay concludes, is "a declaration of war...

...They hoped that Chamber Vice President and Chief Economist Lawrence Hunter could arrest the drift from within and feared that an open attack on the Chamber would only compromise him and his allies on the staff...

...The memo explains "why the tax committee didn't really mean what it said in the attached recommendations," he says...

...If you signed up as a Chamber member because you were given that pitch and suddenly you find the Chamber where it appears to be at the moment, I expect you'd have a certain sense of betrayal...

...You gotta give the devil his due," says a former Commerce Department official...

...Acolleague recalls that when the Reagan budget cuts affected funding for the program his brother was in, Archey did an impersonation of his brother denouncing the cuts...

...Under him, the Chamber gave crucial early backing to the Steiger and Kemp-Roth tax cuts...

...But Lesher is unable to suppress the fatalism underlying the circumlocutions...

...Former Archey associates in Ronald Reagan's Commerce Department have seen the pattern before: the establishment of a toehold under a false flag, the calculated seduction of a powerful patron, the knifing of conservative rivals and subversion of their agenda...

...He may be able to hang on to his $413,000-a-year job as president of the Chamber, but he has become a general without an army...

...An early meeting between Lesher and House Republican leaders Newt Gingrich, Dick Armey, and Tom Delay left the congressmen "more disturbed after talking with him than before," according to a source...

...I told him under the circumstances he didn't need to come into my office with any more awards, that I wouldn't hang the damn things on the walls...

...It was a $200-300 billion preposition...

...What he did in fact was poll their membership immediately after the president's State of the Union speech," says Kansas Republican Pat Roberts...

...Since Lesher and Archey began blowing kisses to the Clintons, Senate Republicans have unified to kill the "emergency stimulus" bill...

...He told Mr...

...But the free marketers kept their growing suspicions en famille...

...The Chamber has either failed tolobby aggressively, taken a walk, or flip-flopped on a number of key issues, such as free trade, 'no new taxes,' increasing the minimum wage, health-care mandates, family leave, and school choice...

...Et Tu, Lesher...

...In contrast to its rival business organizations the National Federation of Independent Business and the National Association of Manufacturers, the Chamber had been invisible during the key congressional votes on the Clinton budget plan...

...This is not Mr...

...After Rush Limbaugh picked up the Evans and Novak piece, angry callers jammed Chamber phone lines for two hours with a message from the grass roots...

...An incredulous Rahn called Chamber President Richard Lesher...

...On the advice of lawyers, he says, he can't be more specific...

...Archey's expressions of concern could be extreme...

...On seeing the proposed statement, Hunter says, "Archey goes nuts...

...She could base her statement on the committee's resolution...

...I can tell you on a stack of Bibles he was not fired for opposing tax policy," counters Lesher...

...But Lesher saw the Chamber as "more than a lobby...

...The Chamber's taxation committee had just reaffirmed the organization's opposition to energy taxes, he explained...

...Douglas Riggs, the general counsel, immediately summoned Archey, who claimed to be the victim of a right-wing witch hunt...

...Lesher did so, and in the process acquired a mystique among market liberals as a wing-walker...

...Archey found that he and the wife of Commerce Secretary Malcolm Baldrige shared a special concern for victims of Down's syndrome...

...This is different...

...It applauded Clinton's goals, asked for more spending cuts, and insisted that "spending cuts be implemented before any new or increased taxes are enacted...

...Just two years away from an honored retirement as the peevish but unflinching De Gaulle of the free market, he may now be remembered as its Main...

...U ltimately, Archey proved the author of his own undoing as a federal official...

...Hunter suspects the work of a fine Italian hand...

...Lesher cites four different Chamber committees and a membership poll as backing the new policy which, he says, is "slightly different" but "not inconsistent" with the anti-tax stance it replaced...

...C olumns by Paul Gigot and Evans and Novak ridiculed the Chamber for falling in with corporate collaborationists queuing up to collect favors from the Clinton administration...

...When William Von Raab took over as Ronald Reagan's customs commissioner, he found Archey rooted in place as his deputy...

...The business community would probably be supportive of the White House tax package when it was completed," Archey added...

...While he was "very bright, he was just too liberal, and I felt that it was a conservative administration," says Von Raab...

...Archey boasted of the rewards of accommodationism...

...Victims of Archey's ideological cleansing portray him as a bilious bureaucratic Iago who has poisoned Lesher against faithful friends and surreptitiously pulled procedural ropes to bring Chamber policy into alignment with Clinton-era government paternalism...

...Later, Martin said he did not leave Washington until 1987, at least a year after Archey had left Commerce for the U.S...

...The same day, with public enthusiasm for the Clinton economic plan at peak levels in the afterglow of Clinton's State of the Union success, the Chamber's board of directors issued a statement on the plan...

...And another thing: "Did you hear he got six months' pay...

...But in decrying interference in the Chamber's "democratic policy-making process," he disingenuously obscured the reason for the Republicans' approach...

...They did a number on the chairman, somehow got him to write this memorandum...

...However, several times in the course of being interviewed, Martin altered his story, raising questions about his reliability...

...So be it...

...No longer was it a matter of neutralizing the Chamber, he was going to deliver the Chamber...

...6 6hey fired him the day his father-in-law died and basically told him he had to clean out his office right then, even though he should have been home with his family," says Richard Rahn, Hunter's predecessor...

...trade representative, and could not contain his enthusiasm for the incoming administration...

...Archey's agenda began to take shape during the campaign...

...He claimed forty or forty-five were resignations and these would be $50 memberships," says the source...

...At an estimated $60-70,000, the mailing was an expensive rebuttal, particularly given its equivocal results...

...He calls me down and says this isn't the only reason, but this is such bad judgment and this goes so far beyond policy that this is the last straw...

...Von Raab was stuck with a deputy he remembers affectionately as a "Bolshevik madman...

...Another thirty were very supportive...

...Today, the market intelligentsia wonders aloud if Lesher's Chamber is up to the more modest task of resisting the country's drift toward Clintonism...

...I don't give a rat's ass what Republicans think," is a favorite Archey refrain, according to an ex-Chamber hand...

...Initially, Martin claimed he himself had left Washington sometime in the fall of 1985, and stated explicitly that he had left Washington before Archey departed from his job at the Commerce Department early in 1986...

...But the congressmen had heard it before...

...Their interest is making the deal, making a small little change in the tax code that means billions for their industry or their company, and they will trade their grandmother for that...

...Silence speaks volumes," they wrote...

...A couple of weeks later, Eric Martin was fishing with Ted Wu, Deputy Assistant Secretary for Export Enforcement, and Fred Oberin, Special Assistant to Mr...

...In an effort to put out the fire, Lesher sent out a rare letter to all Chamber members...

...Its massive six-month grassroots lobbying campaign for Reagan's 1981 tax and spending cuts left political observers groping for superlatives...

...And does that mean the rest of the country gets their huge energy tax increases...

...We went from 185,000 companies to 215,000 companies, period...

...Less than three weeks earlier, the Chamber's Taxation Committee had met to discuss taxes, deficit reduction, and economic stimulus...

...Leshertried to fend off charges that the Chamber's Washington staff was pursuing its own agenda with his standard claim that the Chamber membership was driving the policy shift...

...Archey clients in order to get the Swiss distribution license problem taken care of...

...He told Mr...

...In one year (September 1991-August 1992) seventy-two large dues-paying "national account companies" cancelled their Chamber memberships, citing tough economic times and "dissatisfaction," according to an internal memo to Archey from Josten...

...In a meeting with Hillary Clinton's health-care task force, a Chamber delegation promised Chamber support for administration plans to provide universal health insurance and require all employers to insure their workers...

...The sense of betrayal was given blunt expression by Roberts...

...In an interview, however, Wu confirmed the fishing trip...

...Public support for the Clinton "deficit reduction" plan has disintegrated, Ross Perot has attacked it, and conservative Democrats, uncomfortable with the plan from the start, have begun to edge away...

...Chamber of Commerce recently flaunted its budding romance with the Clinton administration on a balmy April evening in Washington...

...And he sounded a classic canard of the Reagan-bashing Washington elite: "I mean, in the last sixteen years we have made contempt for our government into a civic virtue...

...With Education Secretary Richard Riley serving as moderator, Clinton and his sidekick, Labor Secretary Robert Reich, didn't break a sweat...

...Lesher once told a reporter that when he took over the U.S...

...Unlike the later statement, it rejected tax increases outright: "The Chamber reaffirms its policy which calls for no increases in federal taxes...

...Reich sounded his familiar alarm about our "jobless recovery," although he did not explain how frustrated job-seekers would be helped by flooding the summer job market with high school kids...

...They say he is a protectionist and closet liberal infatuated with the faddish national industrial policy designs of Clinton mercantilists Robert Reich and Ira Magaziner, both of whom Archey claims as old friends...

...The taxation committee statement was sent to the board with a cover memo from the committee chairman Thomas P. Brock...

...But now free marketers say the Chamber has sold out...

...Gorr did put his finger on the disorienting role reversal in the relationship between House Republicans and the Chamber...

...His old friends in the movement to limit the size of government—whom he has vituperated lately as "wackos"—are ready to hang him by his heels at the first suitable opportunity...

...This apparent attempt to dictate to us what our policies should be is deeply offensive," he wrote...

...As a result, Archey became very chummy with the secretary, and he basically cut Brady out," says Von Raab...

...By signing the letter, Archey told a staff meeting, Hunter had hurt Chamber hopes of "being a player" with the Clinton administration, according to an unsigned paper that has circulated widely in Washington...

...This is not Mr...

...He had successfully cultivated a powerful protector, much as he would later cultivate Lesher...

...It has been demonstrated often in recent years (most recently in 1990) that tax increases do not produce deficit reduction because of the depressing effect tax increases have on the economy...

...Republicans are organizing themselves to fight the Clintons' expanding menu of new taxes, and Larry Hunter, newly installed as director of the Senate Joint Economic Committee's Republican staff, will be among the leaders in the battle...

...An Archey visit to the group's next meeting backfired badly, with Archey confirming in person what members had previously heard only in the press...

...We were a free-trade, low-tax, low-regulation, low-spend organization, and that's how we gained membership...

...But by the time Archey's policy agenda became clear, Brady couldn't touch him...

...Asked, for example, "Does the presidential election results [sic] make you more or less confident that significant progress will be made soon on resolving the nation's economic problems...

...It's a very, very unhealthy situation...

...Later, he admitted to having met one-on-one with Archey "two or three times...

...It's a strategy that has shown some signs of working, but even the President must be a little surprised by how responsive the U.S...

...Chamber of Commerce in the mid-1970s, "I believed that if any organization had the potential to turn the country away from its drift toward socialism, this was the institution...

...The people who wanted to see Lesher gone more than anybody else were the Washington representatives of these big corporations," says Hunter...

...Martin his resume...

...A disgruntled former employee can say any damn thing he wants, but don't make him out to be a martyr...

...Pressed on the rationale for the new, baby memberships, he demands, "Should we cut those off...

...The Chamber high command's insistence that their policy shift is member-driven looks positively cynical given that Chamber telemarketers continue to rely on fear of the Clinton economic agenda as the basis of their membership sales pitches...

...A source reports that at a meeting, Chamber Senior Vice President for Development Bruce Josten gave a breakdown of the approximately 120 letters received after Lesher's apologia...

...Members argued the Chamber was throwing away what little leverage it might have with Clinton by ducking issues on which it differed with Clinton and cheerleading for him whenever there was some marginal agreement...

...After Clinton was elected, then it was pretty clear that the strategy had changed...

...No one knew of that death," Lesher insists...

...Those taxes are diffuse...

...Dukakis coming in," he told the National Journal...

...Four days after Lesher's missive, the Chamber raised fresh doubts about its direction...

...My gosh, I stopped counting the number of times applause broke out," Lesher exclaimed...

...Senator Phil Gramm defines Clinton's strategy for prying segments of the business community loose from the Republican coalition as "seduction and intimidation...

...In the Brock memo, the committee rejection of new taxes was presented as a holding action pending the unveiling of the Clinton plan, devised by a divided and hesitant committee...

...Tactical decisions made in today's political environment will reverberate for years...

...I've heard they had over a thousand resignations that day alone, smaller guys just saying, 'That's it,' " says Hunter...

...On March 25, the House Republican leadership sent Lesher a final warning...

...He played to the hilt the fact that he had a brother who was mentally retarded," recalls a colleague at Commerce...

...The cancellations and reduced dues from other firms cost the Chamber $700,000 in revenue...

...73 percent answered "less confident," 19 percent answered "more confident...

...This has become a Republican Leadership issue...

...For more than a year, the signs of the Chamber's metamorphosis multiplied: the decimation of its economic policy staffs, its embrace of a Democratic industrial-policy blueprint, its neutral stance during the presidential campaign, its post-election encomia to President Clinton, and the tightening grip of Senior Vice President for Policy William Archey, who has fashioned a career as a liberal Trojan horse within the walled cities of conservatism...

...The "shabby, ungracious" sacking was "despicable," he told him...

...The firing of Larry Hunter is only the latest in the Chamber's flight from the principles of low taxes, limited government and the Republican Party," as the anonymous paper awkwardly put it...

...At first, Martin claimed he had never even met with Archey when Martin's supervisor was not present...

...Routine, according to Hunter...

...The letter described a meeting Archey had had two months earlier in the Swiss Embassy with Eric Martin, the Swiss economic counselor: He told Mr...

...On the other hand, Lesher and Archey had also lost their human shield...

...Martin also denied ever having been on a fishing trip with Ted Wu...

...These guys first cut their deals on Capitol Hill and then go back and sell their home office rather than vice versa...

...The matter was handled quietly as an internal fact-finding investigation...

...Send in D. Armey Among entrepreneurial conservatives in Congress, disaffection with the Chamber has escalated steadily over the last few months...

...Supported by the results of a December 1992 poll of Chamber members, the Republicans believe the Washington staff of the organization has veered radically away from its membership...

...He signed...

...To mask losses, the Chamber created two new categories of membership with lower dues...

...They sent somebody out to pick up the fax machine from his house the day of the funeral, when his wife's relatives were all there at the house," Rahn says...

...A threshold had been crossed...

...And I kept digging in my heels...

...Lesher has his "seat at the table," and the editorial approval of the Washington Post, which has extolled his newfound "pragmatism," but such "pragmatism" carries a price...

...So Archey was moved to the Commerce Department, where the incoming assistant secretary for export administration, Lawrence Brady, was determined to cooperate with the Pentagon in trying to curtail the flow of sophisticated Western technology with military uses to the Soviet bloc...

...A speech where if you closed your eyes and listened to it you thought it was Jack Kemp, as opposed to a very liberal interventionist domestic policy reverting back to the Great Society...

...He used the bureaucratic maneuver perfectly to prevent the staff from commenting on the Clinton economic plan...

...Martin that the Swiss government has problems with their licenses and he would help, pending clients...

...once made, the ramifications could be quite severe...

...Now the pressure group, the Chamber, finds itself under unaccustomed pressure to keep the faith...

...Hunter says the death in his family was common knowledge at the Chamber...

...Chamber of Commerce has been to his mating call...

...Board Chairman Ivan Gorr responded for the Chamber...

...Josten declined to return a phone call, but, says the source, "Josten will tell you he called everybody and turned them around...

...An attempt to build a countervailing force to big government...

...This apparent change in policy as far as I know hasn't followed the rules of the organization," says Rahn...

...When Gackenbach returned the next day and told Hunter the group wanted the Chamber represented at a press conference, he told her to go ahead...

...There was more anger when we went back to them and said that Evans and Novak chose to distort and to lie," he says...

...Hunter Fired The Chamber has long been the country's largest and most effective business advocate of the free market—its own congressional rating system has long been considered a benchmark of how pro- or anti-business the various congressmen are...

...Clinton called for abolishing the "artificial dividing line between what's work and what's learning...

...Carter coming in...

...The watchdog that Brady thought he had hired turned out to be a "gateway" for high-tech transfers to the Soviet bloc...

...On February 23, Bill Clinton spoke to the Chamber's National Action Rally...

...Wu if it was usual practice to find Mr...

...We intend to pursue our plans to see what we can do to make the Chamber a more effective advocate for free-market, pro-growth economic policies...

...We have three categories of members, and overall our membership has been increasing dramatically," says Lesher...

...ill Archey is an avid gambler (he once told Hunter he B had developed a kidney infection from staying so long at the gaming tables in Atlantic City without getting up to relieve himself), but in betting on Clinton at the top of the market, he seems to have run out of luck...

...It wasn't a Lesher style of doing things," he thought...

...It became home to supply-side buccaneers like Rahn...

...Beginning in the late seventies, Chamber membership took off, before leveling in the mid-eighties...

...It was clear that his objective was simply to neutralize the Chamber," according to Hunter...

...As chief economist of the Chamber, Rahn would often participate in wooing big companies to the Chamber...

...Changing Times "To be effective, you've got to stand up and be counted," Lesher told a reporter in 1981...

...He defended the Chamber's decision not to oppose the BTU tax, claiming that by working with the Treasury Department, the Chamber had successfully moved the burden of the tax off producers and onto consumers...

...The Selling of William Archey When Archey fired Hunter, he was rid of an obstacle: the Chamber soon abandoned its opposition to new taxes and came out in support of health-care mandates on business...

...Oppose him, and he'll do to your business what he and his wife did to the pharmaceutical industry, whose stock prices still haven't recovered from the Clintons' February rhetorical onslaught ("profiteering at the expense of children") and threatened price controls...

...Judging by the comments of many of our colleagues, we have a feeling that this situation is about to hit a critical mass...

...In a March 10 letter to Lesher, Conservative Opportunity Society members expressed "shock" at the Chamber's endorsement of tax increases and healthcare mandates and warned him not to "sacrifice your traditional supporters in your quest to develop ties to the Administration...

...The remainder were 'What the hell are you doing?' but without resignations...

...On February 4, however, Archey fired Larry Hunter...

...Days before, Julie Gackenbach, the Chamber's top tax expert, had brought Hunter an industry coalition letter opposing new energy taxes...

...It's a clear movement away from the existing position, and from what I understand the board did not formally vote on any movement in position, which would have taken a two-thirds vote to overturn the tax committee proposal...

...On November 26, 1985, a whistle-blower letter reached the general counsel's office at Commerce...

...Your current posture is unacceptable," the Republicans continued...

...The irony of your approach will not be lost on our members—that a small group of legislators, who espouse the principle of limiting government interference in business, is attempting to interfere in the democratic policy-making process of a business organization...

...During the transition, Archey touted himself to colleagues as a possible Clinton choice for secretary of commerce or U.S...

...Archey has made a métier of boring from within...

...By hook or by crook he has been able to establish relationships with people who count, and he did then...

...In calling for cuts before new taxes, the board had issued Clinton a warrant to hike taxes...

...The committee approved a statement...

...Fortunately for Archey, the Commerce Department had no more interest in an embarrassing public disclosure of high-level influence-peddling than he did...

...Later that day, Matt Kibbe, the Chamber's director of federal budget policy and a Hunter ally, resigned...

...You've got to be willing to take on people in office who can hurt you...

...Clinton's approval ratings have fallen further faster than those of any new president in decades, and Clinton's budget director Leon Panetta, predicting legislative problems across a wide front from aid to Russia to the North American Free Trade Agreement, is urging postponement of Hillary Rodham Clinton's pricy plans for mandated health insurance...

...In the process of probably an hour, hourand-a-half meeting, it was clear that whatever the allegations were and [after] you got through the bluff and bluster that 'They're head-hunting me, no merit to it,' there turned out in fact to be enough of a kernel of truth to take it to Mac [Baldrige], and Mac got into it," says a source close to this previously undisclosed investigation...

...Archey is "trying to turn the Chamber away from old principles and old positions," says Hunter...

...Martin that he was not planning on staying at the Department of Commerce forever and gave Mr...

...We are a Jeffersonian organization," Rahn told a reporter in 1981...

...Martin that he would take care of his distribution license problem if Mr...

...He was not fired for being a conservative, and he was not fired for being incompetent...

...Finally, Lesher himself met with a group of members whose pro-business voting records, as measured by the Chamber's rating system, had earned them awards...

...And he opposed both Reagan and Bush when they raised taxes and survived them both...

...Reached in Switzerland recently, Eric Martin categorically denied that Archey and he had ever had such a meeting, that Archey had ever given him a résumé, and that Archey had proposed to him an improper quid pro quo...

...Martin would find him some clients to start his own business...

...Your letter also conveys the impression that you believe the Chamber is meant to be an unofficial arm of the Conservative Opportunity Society...

...It sent a shock wave through the Commerce Department because Archey was one of [Undersecretary of Commerce] Lionel Olmer's right-hand people and also someone Baldrige worked a lot with," recalls a former Commerce official...

...Support the Clinton economic agenda, and your fondest wish will be granted: import protection, research subsidies, fat government contracts, you name it...

...A Carter political appointee, Archey had taken advantage of a new opportunity for political appointees to burrow into the bureaucracy as career civil servants...

...The pitch was the Chamber was your bastion of free enterprise and the representative of business against the government and fought for lower taxes, less regulation, and smaller government, and we used to be very critical of the NAM and the Business Roundtable and other groups" apt to compromise basic principles, he remembers...

...Chamber vice presidents signed dozens of such letters a year without going up the line for approval...

...Don't throw your body in front of a train, if it's not going to do you any good," he says...

...Like the later board statement, it applauded Clinton's goals of deficit reduction and job creation...

...While Senate Republicans filibustered against Clinton's $16 billion emergency stimulus package, the powerful business organization invited the president up to its in-house television studio to pitch his summer youth jobs program in an interactive infomercial (billed, inevitably, as a "satellite town meeting") downlinked to audiences at almost 3,000 sites...

...When they set up the SES [Senior Executive Service] program, he somehow got himself converted in that program," Von Raab recalls...

...No Republicans were invited to speak...

...Brady left, and Archey was elevated to acting assistant secretary for trade administration, the top job in the bureau...