Drama in the US Chamber as council tries to break away

A feud has erupted inside Washington’s most powerful business lobby.

The U.S.-India Business Council’s (USIBC) board of directors voted 29-0 last week to cut ties with the U.S. Chamber of Commerce. The group’s members include hundreds of corporate giants and high-powered firms.

While it cites disagreements over the structure of the council as a reason for the split, the Chamber says the vote will not be recognized because the USIBC has no legal right to separate. 

The argument centers on whether the council is essentially responsible to the Chamber. While the council handles major policy decisions and considers itself largely autonomous, the Chamber feels it assumes all risk and liability on USIBC’s behalf. 

{mosads}In a letter sent Tuesday evening, Chamber President and CEO Tom Donohue told USIBC members the council “is part of the Chamber, and the Chamber does not plan to transition it anywhere.”

The Chamber “will not consent to the demands of a group of disaffected individuals who seek to impact the USIBC’s entire membership by moving USIBC out of the Chamber, where it has operated for decades, into a new entity,” Donohue wrote.

The clash with leaders of the council appears to be the culmination of long-running tensions, with both sides now digging in.

“While the Chamber does many things well, it does not have the extensive experience in U.S.-India trade relations that our executive committee members, who have been carefully selected based on their unique expertise and strong government and business relationships, do,” a senior person at USIBC told The Hill on Wednesday morning after receiving Donohue’s letter. 

The Hill spoke with three individuals within the council, all of whom rejected claims made by the Chamber in correspondence. 

The Chamber has been having talks since last fall to fully integrate the USIBC into the industry group, a move that angered members of the council’s board.

The Chamber allegedly demanded that the USIBC’s president report to Myron Brilliant, the Chamber’s executive vice president and head of international affairs, rather than the USIBC board, according to the senior USIBC source. 

Meanwhile, the Chamber emphasizes that the USIBC board of directors is comprised of voluntary members. 

“We’re in the business of solving problems for our members, not putting problems on our members’ desks,” said a Chamber spokesman. 

Those at USIBC say they are confused by the suggestion that the integration is needed. 

“All I can say is that it remains [a mystery] to me, I cannot figure out why this is necessary,” said a person close to the USIBC board. “There is nothing broken, there was nothing that needed to be repaired.”

A spokesman for the Chamber pushed back on that characterization.

“There was something wrong with the structure,” the spokesman said. “On a continual basis, the USIBC leadership has been wanting to operate outside the bounds of normal coordination and cooperation with the rest of the Chamber. That became a risk that we were not willing to continue to take.”

While the Chamber generally provides administrative support to the council, the USIBC’s board decides policy, the direction of the council and other official matters. 

“This was the last thing that we wanted to do, as the USIBC and the U.S. Chamber have had a relationship since 1976, but recent actions by the U.S. Chamber have left the USIBC Board with no choice but to re-evaluate this relationship,” the USIBC’s executive committee wrote in a July 10 letter obtained by The Hill following the 29-0 board vote. Four board members did not vote, and it’s unclear which ones abstained and how they feel about the separation.

The person at USIBC said tensions between the Chamber and the council came to a head over the Chamber’s “unwarranted demands” during a hectic time for the USIBC, as it was preparing for the June visit of India’s prime minister, Narendra Modi. 

The council also reportedly booked Vice President Pence for a keynote at its annual leadership summit during a time Chamber leadership wanted him at another event.

Then the leader of the Chamber’s international affairs division sent an email to members of the USIBC’s board on June 30 emphasizing a push to bring the group in-house. The email came days after the Modi visit and the Pence appearance.

“We are now moving forward with a plan to fully integrate the USIBC, as we have with our other 14 councils. With your continued support as the advisory leadership of the council, we will grow the USIBC’s membership and capabilities for the benefit of our members,” Brilliant, the Chamber executive, wrote in an email to the council’s board obtained by The Hill.

The email from Brilliant also announced the resignation of USIBC President Mukesh Aghi. USIBC members say Aghi was terminated, which the Chamber denies.

Donohue sent his own message to the USIBC board a day after Brilliant’s email, much of which he repeated in his letter Tuesday night.

“Whether you choose to attend the meeting proposed by [USIBC board chairman] John Chambers on July 7th is your decision, but please know that the meeting and the proposed ‘vote’ will not be binding in any way — on the Chamber or on the USIBC’s members,” he wrote in an email sent on July 1 that was obtained by The Hill.

Neither side is sure what kind of response an attempted separation would bring, or whether legal measures would be considered. Donohue has scheduled a meeting for Friday to field questions, clear up what the Chamber calls “misconceptions” and chart the future of the council.

“Because the Chamber puts our members’ interests first, we would never waste your time by asking you to ‘side’ with us or against anyone else,” Donohue said in his letter Tuesday. “We urge you to continue your participation in [the] USIBC” and any other Chamber programs beneficial to members’ business. 

Even if the USBIC separation from the Chamber occurred, the companies involved — including Cisco, Walmart, IBM, Merck, PepsiCo, Lockheed Martin and MasterCard — would still be members of the Chamber of Commerce, Washington’s biggest business lobby.

It’s unclear how many of the council’s 355 members would participate in a council outside the Chamber, should the board members attempt to follow through on leaving.