Outside the Beltway

Fire David Keene – The ACU Pay-for-Play Scandal

James Joyner · Friday, July 17, 2009 · 6 comments

David Keene and the American Conservative Union offered to take sides in an NLRB dispute between rivals UPS and FedEx based on who would pay to play. FedEx refused to pay the bribe of $2 to $3 million, so ACU supported UPS. FedEx went public, turning over the letter outlining ACU’s extortion request to POLITICO’s Mike Allen.

Doubters can and should read the letter themselves.  Allen’s summary, though, is fair:

The letter exposes the practice by some political interest groups of taking stands not for reasons of pure principle, as their members and supporters might assume, but also in part because a sponsor is paying big money.

In the three-page letter asking for money on June 30, the conservative group backed FedEx. After FedEx says it rejected the offer, Keene signed onto a two-page July 15 letter backing UPS.

[…]

Just two weeks earlier, ACU had offered its endorsement to FedEx, saying in a letter to the company: “We stand with FedEx in opposition to this legislation.”

But there was a catch — an expensive one. ACU asked FedEx to pay as much as $3.4 million for e-mail and other services for “an aggressive grass-roots campaign to stop the legislation in the Senate.”

“For the activist contact portion of the plan, we will contact over 150,000 people per state multiple times at a cost of $1.39 per name or $2,147,550 to implement the entire program,” the letter says. “If we incorporate the targeted, senator-personalized radio effort into the plan, you can figure an additional $125,000 on average, per state” for an estimated 10 states. The total would be $3,397,550.”

I read this quickly earlier this morning, following a link from Taegan Goddard, but ultimately wasn’t sure what to make of it because I glossed over the nature of the difference in the FedEx and UPS position.

If ACU were simply offering to throw its weight and lobbying effort behind FedEx and asking that FedEx pay the freight, that wouldn’t be a big deal.  That’s how a lot of non-profits work:  Getting major corporations to pay to get their name on something the non-profit wanted to do, anyway.   And FedEx’ position in the dispute is consistent with ACU’s alleged principles:

FedEx currently has one U.S. union contract for its entire express business. Under a change passed by the House and awaiting action in the Senate, FedEx — like UPS — would have to negotiate union contracts for individual locations, which FedEx claims would make it much more difficult to promise worldwide regularity for deliveries.

I elided that part of the article on my initial read but got it figured out after a brief Twitter dialog with Teresa Kopec and Brian Faughnan.

UPS’ position is mere rent-seeking:  Trying to get government to impose a cost it already bears on a competitor.  For ACU to side with UPS would be outrageous enough; to do so after having been rebuffed on a pay-for-play bid is scandalous.  (George Will noted that yesterday in a column written before this scandal broke, but I hadn’t read that until after coming to the conclusion independently.)

It should be noted that ACU is claiming that, despite his use of their logo in the second letter, Keene was acting as an individual.  If so, Keene should be ousted at once if ACU is to retain even a shred of credibility. (Dan Riehl, who’s to my right on most issues, agrees.)

If not, however, ACU’s tax-exempt status should be pulled and conservatives should cease supporting it immediately.

UPDATE: An emailed ACU press release signed by Executive VP Dennis Whitfield is even more vehement:

Mr. David Keene’s name was on a letter prepared by another organization.  This was a personal decision on his part and he was not representing ACU at the time.  No permission was given by ACU, and no logo was provided by ACU, to the organization who issued the letter in question.

ACU’s policy position on this issue has not changed and it will not change.

ACU’s positions on important policy issues have never been for sale.

ACU does not support moving businesses under the jurisdiction of the NLRB or expanding the federal government’s power, reach or authority under the NLRB.

Keene, who has been its chairman since 1984, is the ACU from the standpoint of many.  If he’s not fired, it really doesn’t matter.