Another Chamber? Upstart Group Says Old Guard Business Lobby Hasn't Been Doing Its Job
Also, SEC climate rule still far away and (very much) remains a work in progress
Friday Q and A: Today we talked over the phone with Gentry Collins, the CEO of a new business lobby group called the American Free Enterprise Chamber of Commerce that advocates for non-woke companies. He launched the organization this spring with Terry Branstad, the former Republican governor of Iowa and ambassador to China during the Trump administration. It’s based in Des Moines, though it keeps a strong focus on the Washington policy agenda. While the group doesn’t reveal its members, Collins says it represents a number of small and mid-sized firms across the country – and it is growing. That’s partly because it charges a $99 membership fee, no matter the size of the company.
Collins has roots in Washington, having been the national political director at the Republican Governors Association and the Republican National Committee. Still, he says the AmFree Chamber is non-partisan. Read on to hear his thoughts on why there needs to be a new chamber of commerce, how the environmental, social and governance movement impacts businesses, and what it’s like trying to get to the games of your seven (!) children. Here’s our (lightly edited and condensed) conversation:
Capitol Account: Tell us how the AmFree Chamber got started.
Gentry Collins: American businesses, particularly small and mid-sized businesses, didn't feel like they had a seat at the table or a voice in the public policy conversation going on in the country. That increased during the Covid period. There was a sense that there were disparities in treatment.
CA: Your annual membership fee sounds like a bargain. How did you land on that?
GC: One of the reasons that we've kept our membership fee so low – almost ridiculously low compared to what you see at other major national trade associations – is that, number one, our objective is to gain scale in terms of members. Number two, we want to be in a position where we can say that none of our members is writing a big enough check to make us compromise on our principles.
CA: A lot of people in Washington assume your organization was created to take on the U.S. Chamber of Commerce. Is that accurate?
GC: My perspective is that if the old Chamber had been doing this work then there would be no need for us to exist. But my focus is on doing what we perceive to be the important work for American businesses, not being against the old Chamber. When we can ally with them, or find common purpose, I'll be thrilled about that. However, there is a large and legitimate concern that not every business had equal access to the marketplace, during and after Covid, and that the advocacy from existing organizations was not up to the task of fixing that problem.
CA: It used to be that Republicans were viewed as the party of business but that’s not really true anymore. How do you navigate that?
GC: I don't think it's the case at all that Republicans don't support business. I think that there are a small number of businesses that are looking to do something other than the traditional mission of pursuing an economic benefit. And they are looking to force that on other businesses.
CA: And you will be looking to counter that?
GC: We’ve heard a whole variety of concerns from our members about the lack of principled advocacy on these issues, where business groups were dealing not with business issues but with social and cultural issues. I want to be clear: we are not here to be part of the social and cultural issues. We want to get back to talking about business, fiscal and economic issues. And out of businesses saying that returns to shareholders are less important than a social mission.
CA: Republicans are predicted to take the House but the outlook for the Senate is a bit murkier. How do you think things will play out, and what will be the impact on policy?
GC: It's clear that whether we have a Democratic Senate or Republican Senate, that it won't be a large majority, making real legislative change difficult. And you've got a Democratic administration, at least for the next couple of years. So I don't see radical policy change on the near-term horizon. What I do see is a House that is committed to shining a spotlight on these types of questions: What is ESG? Where is ESG valuable? Where is it really eroding some of the economic strength of the country? Where do we find that line?
CA: Is AmFree anti-ESG?
GC: We are certainly not a group that is blindly opposed to an ESG member. At the same time, I think there is a big – and growing – voice in the country that has very legitimate concerns about some components of the ESG agenda.
CA: Competition with China is another issue AmFree is very focused on, right?
GC: The threat that China poses was made very clear over the Covid period. They have not been playing fair – from intellectual property concerns to manipulation of the supply chain to a whole variety of human rights concerns. We are looking to help American businesses navigate that.
CA: Regulation is also a top concern of yours. SEC Chair Gary Gensler has been extremely aggressive. Do you plan to push back on that?
GC: We will be doing some advocacy around these things – I’d say starting with comments on rulemakings and continuing perhaps through litigation. This is not just the SEC, but the FTC as well. The aggressive nature of their behavior is a big concern to a lot of American businesses. I'll tell you, we hear more from our existing small and mid-size business members about regulatory concerns, frankly, than we do about ESG.
CA: So you might be among those lining up to sue the SEC?
GC: We will see if that's necessary, but I certainly wouldn't rule it out.
CA: Is there a message you are trying to send by being in Iowa, instead of working out of a big building, say, across the street from the White House?
GC: There's an operational necessity to being in the middle of the country, and I don’t mean that precisely. I mean the middle economically. I mean the middle ideologically. And maybe geographically, as well. That’s where the country is right now – and it doesn’t feel heard. I say this as a guy who loves D.C. I lived and worked there for a decade or more. But there’s a feeling that Washington doesn’t always hear us, out in the middle of the country. And again, I mean the middle in the broadest sense.
CA: Would you describe the AmFree Chamber as a Republican group?
GC: We are not partisan. Certainly my background, and the governor’s background, is Republican politics. Yet our express commitment is not to be partisan. Our commitment is to principles that we believe support American free enterprise. Those are not about being a Republican or Democrat. They're about saying, ‘Hey, here is what we believe is good for the country and good for the economy and good for our people collectively.’ To the extent that means supporting some Democrats and some Democratic policies, we're open to doing it.
CA: What do you do when you are not running the AmFree Chamber?
GC: My wife and I have seven kids. You can imagine that that consumes a lot of time between hockey, football, basketball and soccer. Somebody's playing something about every night of the week.
CA: Can you get to all their games?
GC: My wife and I split them out. One of us tries to be at every game…We've got a younger son who plays Pop Warner football on Saturday, and an older son who plays varsity football on Friday nights, and a freshman in high school who plays JV Football on Monday. So you can actually make three football games in a week. I may be the only guy you've ever met who gets to Monday and says, ‘Thank God I can go back to the office.’
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Calm Down on Climate: We’re not in the business of fact-checking other news stories, or even reporting about them for that matter. But with a mini-frenzy erupting over Gensler’s climate rule this week, we thought it might be worth checking in with some sources to see what’s going on. The short answer: not much.
Well, there is actually a decent amount of reading being done. But, people familiar with the matter tell us that there’s no rule text floating around. And there have been no discussions about what the final version of the regulation might look like. The SEC, run mostly by lawyers, is a process-driven agency, and digging into the process is often telling. Here’s what we learned:
Staff members who’ve been tasked with going through, and then summarizing, several thousand comment letters on the proposal, are still working away. That’s the first step when the SEC issues a final regulation – and it’s not that close to being completed, the people say. (The numbers are a bit broad, but the agency has said it received between 14,000 and 15,000 letters on the plan; however 3,000 to 4,000 are “unique,” i.e. not form letters. They need to be analyzed.)
Once the summaries are finished, the agency’s five commissioners are given copies and a briefing. It will likely focus on important points raised in the comments, and discuss staff recommendations for what parts of the proposal may need to be revised. Next, a “term sheet” is put together that broadly outlines the final rule. Lastly, the rule text is circulated. None of this has happened, the people tell us. That means there has been no move – or even an attempt at this point – to take a major step like stripping out controversial provisions, such as the requirement that companies report on supply chain emissions (scope 3), from the final rule.
Negotiations and compromises will come, of course. The horse-trading will also be very interesting, and potentially difficult. Gensler and his two Democratic-appointed colleagues, Caroline Crenshaw and Jaime Lizarraga, will be hashing out changes on their own. Republicans Hester Peirce and Mark Uyeda aren’t going to vote for the plan. All the Democrats will have to agree on the final version for it to pass. Still, they can’t really have serious talks until there is something on paper.
There are many potential potholes ahead as well. That’s another reason the climate rule is taking so long. As most people know by now, the proposal, issued in March, calls for companies to disclose climate-related risks to their businesses, as well as their greenhouse gas emissions. It’s likely the most controversial item on Gensler’s agenda and is opposed by much of the corporate world.
Worse for Gensler and the SEC, the climate disclosure plan is fraught with all sorts of political and legal issues. Most Democrats see the effort as a key piece of President Joe Biden’s administration-wide push to curb global warming – and they are lobbying to keep it tough. (Some progressives, like Senator Elizabeth Warren, have complained it doesn’t go far enough.) On the other side, Republican politicians, and some business groups, have already pledged to sue – no matter what the final product looks like. The Supreme Court, in its June decision that shot down the EPA’s regulation of carbon emissions, gave them a potentially powerful precedent to help their cases.
As the people we talked to point out, that is a lot of tricky stuff for the commissioners, the SEC general counsel and the staff to work through. The upshot, they say: Don’t expect a final rule anytime soon. Probably not even early next year.
PS: Rest assured, there will be leaks and many more stories as the agency gets closer to voting on the climate rule. It’s just a bit premature to get a handle on what it is actually going to look like.
On Monday Oct. 24, Gensler, Treasury Secretary Janet Yellen and CFTC Chairman Rostin Behnam are among speakers at the Securities Industry and Financial Markets Association’s annual meeting. Click here to see the full agenda.
On Tuesday Oct. 25, Gensler will participate in a fireside chat at 5 PM ET with New York University’s law school to discuss the regulation of digital assets.
On Wednesday Oct. 26, the SEC holds an open meeting to vote on three rules, including a requirement that companies set policies for clawing back CEO pay after a financial restatement.
On Friday Oct. 28, Acting OCC chief Michael Hsu speaks at 3:15 PM ET at an event hosted by the National Asian American Coalition.