Democrats have seized on the Center for American Progress Report that the Chamber of Commerce has taken foreign money from subsidiaries to its 501(c)(6) account, and is also using that account to spend on attack ads in campaigns. Candidates across the country are accusing the Chamber of facilitating foreign money to buy elections. Here’s a sample from Joe Sestak, the Senate candidate in Pennsylvania, running against former Rep. Pat Toomey:

Congressman Toomey proves once again whose side he is on in the fight for jobs. As a new report reveals, in violation of U.S. election law, Toomey’s foreign corporation allies are now spending millions to launch attack ads aimed at distorting Joe’s record. This is not surprising given that Congressman Toomey has always put Wall Street and foreign companies ahead of American workers [...]

“This simply proves how out-of-touch Congressman Toomey is with Pennsylvania,” said Sestak spokesman Jonathon Dworkin. “He has a clear record of fighting on behalf of Wall Street and China at the expense of American workers. Joe believes it’s time to put ordinary Pennsylvanians first by investing in small business and the middle class to create jobs.”

And here’s Mary Jo Kilroy, a House incumbent in Ohio:

Rep. Mary Jo Kilroy today called on opponent Steve Stivers to disown advertisements by the U.S. Chamber of Commerce on his behalf, saying the spots were subsidized by foreign companies.

Kilroy, a Democrat, seized on reports that the business organization is funding political advertisements out of its general account, which includes money from foreign corporations. U.S. election law bars foreign corporations from funding elections here [...]

“I think this is a very troubling issue,” Kilroy said of the chamber-funded ads for Stivers.

Speaking at a union event this morning, Kilroy said Stivers should renounce the ads and call on the U.S. Chamber of Commerce not to air them.

Even the White House has weighed in on this debate.

It’s an excellent wedge issue for Democrats. The Chamber of Commerce promised $75 million in spending this cycle, just part of the record ad spending in 2010, and clearly the Chamber gets money from foreign entities. In fact, we know from the report that the Chamber of Commerce asks foreign chambers to direct money into the same 501(c)(6) account from where the spending is coming. Because of the total lack of disclosure, it’s impossible to know what money goes where, but the fungability of money makes it pretty clear what’s going on here, whether it’s “segregated” or not.

When you have Larry Kudlow, hack extraordinaire, going on CNBC and saying “Why not have the media posting of the contribution information on the Internet? That’s all. And let everybody decide,” you know the Chamber – and the Republicans getting support from them – have a problem.

Sen. Al Franken has asked the relevant regulator to look into whether election laws are being violated, and he plans to file a complaint with the FEC, but that’s a corrupted and toothless body. The disclosure of this issue in the public sphere, and the attention paid to it, would be more consequential than any FEC action.

The Chamber’s responses have been baffling. On a conference call with CAP, Faiz Shakir counted six different responses from the Chamber, alternately dismissing the charges and attacking the messenger. Al Franken, also on the call, characterized the Chamber’s shifting response by telling an old Jewish joke. “A man borrows a plate from his neighbor, and he breaks it,” Franken said. “So he breaks into the neighbor’s house and puts the broken plate on the counter. The neighbor finds it, and finds the man and asks him what happened. The man says, ‘In the first place, I never borrowed the plate. In the second place, when I borrowed it, it was already broken. And in the third place, when I returned it, it was in one piece.” That’s basically been the Chamber’s response: they have said they don’t accept foreign money, and also that they segregate that foreign money from campaign money.

If the DISCLOSE Act passed, it would have prohibited campaign spending by any company or ad hoc group with a substantial stake from foreign entities. It also would have provided the disclosure necessary to determine that. Republicans voted against it en masse, and now we know why.

UPDATE: This is from Sen. Franken: “The FEC told my office that they will be following up on my letter, which is about making sure that the FEC takes a look at how all of these groups, not just the Chamber of Commerce, are operating in the wake of Citizens United. My letter asks the FEC to conduct a comprehensive review of its own regulations and interpretive guidance to make sure that those policies are as strong as possible on foreign influence. The FEC does not need a formal complaint to do this kind of work. That’s where I’ll keep my focus, though if one of the campaigns directly affected by the Chamber’s actions decides to file a complaint, I’ll be wholly supportive.” So apparently, the FEC is telling him they don’t need to file a complaint at this point. I still maintain that the publicity surrounding this matters more than any eventual FEC action, which would come years down the road if it all.