April 13, 2021

Seattle businesses and politicians are at odds. The new Chamber CEO is calling a truce.

After years of escalating hostilities between Seattle’s business community and its political establishment, at least…

After years of escalating hostilities between Seattle’s business community and its political establishment, at least one business leader says she’s ready to call a truce.

Rachel Smith, the new president and CEO of the Seattle Metropolitan Chamber of Commerce, says she’ll avoid the hardball campaign tactics that the chamber has sometimes used in previous elections.

“I think we have to really put down our dukes,” says Smith, who has run the chamber since Jan. 4, after more than 15 years in nonprofit and government roles, including the No. 2 spot in King County.

Smith’s chamber won’t endorse candidates in Seattle’s elections this year — for mayor and two citywide council seats — and its political action committee won’t fund campaigns for or against any candidates. And so far, Smith and her colleagues are also skipping the combative political rhetoric favored by Smith’s predecessor, former Tacoma mayor and now-U.S. Rep. Marilyn Strickland.

Instead, Smith is pursuing the kind of government-business collaborations on issues such as homelessness and public transit that she helped marshal for King County and Sound Transit — and which she sees as key to the Seattle area’s post-pandemic recovery.

“I’m not here to teach anybody a lesson,” says Smith, 41, in the friendly but careful tones of someone steeped in bureaucratic protocols. “I am here to work in partnership and to demonstrate leadership to solve the toughest challenges that we have in our region. Period.”

Whether Smith’s more pragmatic and conciliatory stance can succeed is far from certain, given the awkward position the business lobby now occupies in the world of Seattle politics.

The chamber, whose roughly 2,500 members across the Puget Sound region range from small restaurateurs to giants like Amazon and Microsoft, is deeply distrusted by a broad swath of the Seattle political establishment. That’s partly due to the 2019 Seattle election, when the chamber’s political action committee spent more than $2 million — much of it from Amazon — in a brazen, unsuccessful effort to unseat left-leaning City Council members.

The venture — five candidates with business backing lost — angered the business community, some members of which reportedly blamed Strickland and Amazon. But it also raised questions about the business community’s political future in Seattle, and its ability to shape policy in a city whose most visible politicians may no longer care about winning the business vote.

“The day I get the approval of the chamber is the day I’ll know I’m doing something terribly wrong,” says socialist Councilmember Kshama Sawant, a top target of the chamber’s 2019 campaign strategy.

As the city heads into a new election, one of Smith’s main challenges is helping Seattle business leaders “reestablish that they do have some clout and some relevance and some ability to help shape outcomes,” says political consultant Sandeep Kaushik.

If anyone were going to reestablish business’s political relevance in Seattle, it would probably be Smith, many political and business insiders say.

The Oklahoma native has worked at the intersection of Seattle-area business and progressive politics since 2005, when she joined the Transportation Choices Coalition, a Seattle-based transit advocacy group. That was followed by stints at the city of Seattle, Sound Transit and King County. Smith rose to become County Executive Dow Constantine’s deputy and chief of staff and worked closely with the Metropolitan King County Council.

Smith earned a reputation for skillfully managing complex coalitions among businesses, government agencies, labor groups and nonprofits. She also built important connections among the region’s political and business communities. (Her partner is former Seattle deputy mayor-turned-top political consultant Tim Ceis.)

Smith also gained hands-on experience with business-backed government initiatives — such as the $54 billion Sound Transit ballot initiative in 2016 and King County’s sales tax-funded “Health through Housing” homeless housing initiative in 2020 — that some in Seattle believe can still guide city politics.

“We don’t have to go that far back in time to see areas where there was sort of a business-, labor-, pro-growth coalition,” says Seattle Councilmember Andrew Lewis, who bested a business-backed opponent in 2019 with the help of labor support. And, Lewis adds, “Rachel is very good at that. “

Granted, prospects for such collaborations in Seattle seem much dimmer since 2018, when the chamber and the City Council waged a high-profile fight over the council’s per-employee “head tax” on large city employers with annual revenues of more than $20 million to help fund homeless services.

The chamber helped pressure the council to repeal that tax, in part by arguing that the city wasn’t effectively using existing homeless funding. But Lewis says the 2019 election results left some council members feeling they had a mandate to enact what became last year’s JumpStart tax on large employers with high-earning workers, which many critics saw as targeting tech firms like Amazon.

In December, the chamber sued the city over the JumpStart tax, contending it violates the Washington state constitution. But even if the chamber prevails in court (Smith declined to comment on the suit, other than to say it “preceded me”), the 2019 election outcome points to a more fundamental problem for the chamber and the business community, some observers say.

Where many candidates for local races once routinely sought both business and labor backing, that’s less the case today, some politicians and consultants say. To the contrary, with the recent success of many progressive candidates, some Seattle politicians realize that “you don’t need the chamber — in fact the chamber may be a liability,” says former Councilmember Mike O’Brien, a frequent target of chamber ire.

Some observers say that’s partly a legacy of 2019, when a last-minute $1.05 million contribution from Amazon to the chamber’s political action committee quickly became a rallying cry for progressives like Sawant. (She still calls the chamber’s strategy “a straight up attempt at a corporate takeover of City Hall.”) Some political observers think that donation helped Sawant and others win.

But even without Amazon’s money, Seattle’s business lobby faces a challenging political landscape. The city’s younger, more progressive voting demographic is simply less sympathetic toward business, says Ben Anderstone, a political consultant with Progressive Strategies NW, who has done some work with the chamber.

If “you just think about the average voter you need to win [in Seattle] there’s not a single election where it’s not a progressive-leaning Democrat, perhaps even more progressive than the national average,” says Anderstone.

“I think that the chamber really has to grasp the arithmetic on that,” adds Lewis. 

Some business leaders, however, say the political arithmetic isn’t so black and white.

The Seattle business community has long supported progressive causes, says Anderstone and other political observers. The chamber itself broke with the U.S. Chamber of Commerce in 2011 over the national organization’s opposition to climate policy, and has long been staffed by former Democratic activists and staffers.

Further, many of those progressive leaning Democratic voters share some of the business community’s concerns about Seattle, political observers say.

According to an October poll by EMC Research for the chamber and the Downtown Seattle Association, homelessness and job loss/business closures are the top two concerns for Seattle voters. And a majority of voters (62%) think the City Council’s “lack of action on homelessness and public safety is driving businesses and jobs away from Seattle,” according to the survey.

Voters also have a broadly favorable view of Seattle businesses — even big tech firms that some politicians criticize. When asked whether the jobs that companies like Amazon create are good for Seattle, “all things considered,” 80% agreed — and 44% strongly agreed — and only 20% disagreed, according to a May 2020 EMC survey.

Those sentiments, some business leaders say, create an opening in this year’s election campaign for business-led initiatives on issues like homelessness and public safety.

For example, Smith and a group of business leaders, political moderates and social service nonprofits recently developed a citywide ballot measure, launched this month, that would amend Seattle’s city charter and require the city to build 2,000 units of housing for unsheltered people within 12 months, and help fund drug treatment and mental health services.

Although the chamber has yet to formally endorse the proposal (it fully supported Smith’s involvement), political observers expect it to affect the public debate leading up to the November election. Some observers think the chamber might try to use the measure as a “wedge issue” between left-leaning candidates and moderate city voters.

That strategy brings some political risks, political observers say. The charter proposal is controversial; among other things, it requires the city to clear homeless encampments once housing is available and is vague on funding.

Some political observers have questioned whether it can be done without another business tax increase. But business leaders such as DSA president Jon Scholes think the measure could be funded in part using “the significant federal dollars” Seattle will be receiving under the Biden Administration’s new pandemic recovery act.

The proposal also inserts the business community and, potentially, the chamber, into a divisive debate — not least within the business community itself — as happened during the 2018 head tax fight. Though business leaders will “generally be careful” in how they publicly speak about the charter amendment and homelessness, predicts O’Brien, “they will have members that will say things that are offensive, and that will set them back … so it will get messy.”

Chamber officials are already treading carefully on the charter amendment — partly because it’s not yet formal chamber policy — and they reject the idea that it will be a wedge issue.

But Smith makes no bones about business leaders wanting homelessness and public safety to be priority issues in the election, along with economic recovery, racial justice and housing affordability.

“I want to see candidates talking about what they’re going to do about [those] issues,” says Smith. “And I want to see that from every single candidate.”