Thursday, March 4, 2021
March 4, 2021

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Corporate donor backlash follows Capitol riot, but advocates question if it will last

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WASHINGTON — Major corporations, and the lobbyists who advise them in Washington, are in crisis mode as they grapple with a backlash of their political support to lawmakers who voted against certifying states’ Electoral College results even after a violent mob infiltrated the Capitol.

Some companies have said they will temporarily pause all their publicly disclosed campaign donations. Others said they would cut off the lawmakers who, in line with President Donald Trump and the attempted insurrectionists he incited, voted to decertify the electoral wins of President-elect Joe Biden. Campaign finance overhaul groups said they would ramp up their pressure on companies to keep to such promises and urged them to seek refunds of past contributions.

Still, corporate denizens and political donors may dispatch political money through more opaque channels, such as nonprofit organizations and trade associations that are not required to disclose the sources of money. And it remains unclear whether companies that have suspended their political action committees, or cut off certain lawmakers from donations, could reverse those decisions in the near, or distant, future.

“My sense is this is a moment of truth,” said Bruce Freed, president and co-founder of the Center for Political Accountability, which encourages companies to adopt its model code of conduct for corporate political spending, which he said more companies were likely to look into given recent events.

“Whether a company is directly contributing to or spending in elections or indirectly participating through payments to political or advocacy organizations, a code commits senior management and directors to responsible participation in our nation’s politics,” Freed added.

Within days of Wednesday’s deadly riot, businesses said they would withhold at least some donations. They include hotelier Marriott as well as Airbnb, Citi, JP Morgan Chase and others.

“We have taken the destructive events at the Capitol to undermine a legitimate and fair election into consideration and will be pausing political giving from our Political Action Committee to those who voted against certification of the election,” Marriott’s Julie Rollend said in an email to CQ Roll Call.

Scott Jennings, a Republican strategist who has worked for Senate Majority Leader Mitch McConnell and in the George W. Bush administration, said the withholding of $5,000 PAC checks wouldn’t make a huge difference to many multimillion-dollar political campaigns.

“But it is indicative, I think, of probably what will be a building campaign of public pressure for people to act differently. And so it’s not just the money, it’s the PR of it too,” he said. McConnell opposed the efforts to reject the electoral votes of Arizona and Pennsylvania on Wednesday.

Airbnb issued a statement saying the company “strongly condemns” the attack on the Capitol and that “the Airbnb PAC will update its framework and withhold support from those who voted against the certification of the presidential election results.”

Banking giant JP Morgan Chase planned to pause “all giving” from its corporate PAC for six months, according to an email from a company spokesperson.

“We believe participating in the political process is essential, and fully intend to continue to support our PAC moving forward — but it will look different,” the company’s Trish Wexler said in an email.

The chemical company Dow said it was suspending all corporate and PAC contributions to any member of Congress who voted to object to the certification of the electoral results. “This suspension will remain in place for a period of one election cycle (two years for House members; up to six years for Senators), which specifically includes contributions to the candidate’s reelection committee and their affiliated PACs,” the company said in a statement.

Lobbyists said such decisions stemmed from rage at the corporate executive level, even as many K Street advisers, of both parties, cautioned against long-term decisions that could potentially hurt companies’ policy agendas on Capitol Hill.

Cutting off donations to lawmakers who voted the way Trump and the mob preferred means cutting off donations to some of the Capitol’s biggest GOP fundraisers, including the two top House Republicans, Minority Leader Kevin McCarthy of California and Minority Whip Steve Scalise of Louisiana, as well as a majority of the party in the House. Eight senators, led by Missouri’s Josh Hawley and Ted Cruz of Texas, took such votes.

“Companies are definitely actively considering what their path forward is and if these lawmakers will be supported by their PACs in the future,” said Kristin Brackemyre, director of PAC and government relations for the Public Affairs Council.

Amazon said it was suspending PAC giving to those who voted against electors until the company discusses the issue with them and can “evaluate their responses.”

As more companies have come out with statements and decisions about withholding contributions, that has reverberated to other companies. Some lobbyists, especially Republicans, said companies that cut off an entire political party could find it harder to pursue their policy agendas in Washington. But it’s worth noting that even for companies that stop donating to specific Republicans, they could continue to pipe in money through the national party and House and Senate campaign arms. Lawmakers also routinely contribute to their colleagues.

Still others said it all depends on how congressional Republicans handle the division and angst within their own party about the riot.

It also could affect the business community’s lobbying agenda “because if certain members are seen as pariahs, you’re not going to want them carrying your water on certain issues,” said Stewart Verdery, a former Republican congressional staffer who runs the Monument Group.

He added that Democratic operatives have a valid gripe at corporate PACs that are shutting out Democrats too. “My argument is going to be, we had nothing to do with the riot,” he said.

Groups that already worked against corporate PAC donations have ramped up to hold companies to their recent decisions. Adam Bozzi of End Citizens United, which encourages lawmakers and candidates to voluntarily reject donations from the PACs of businesses, said his group had compiled lists of the donations from companies to the lawmakers “who voted to overthrow the election.”

“It’s a big step that corporations would cut off members, and we have to make sure it’s a step and not a PR stunt,” Bozzi said. “On the one hand, there are some corporations saying they won’t give to these specific Republicans anymore, while others are taking a pause, which seems like they’re just trying to lay low until the heat dies down.”

Bozzi added that if companies take a three-month, or even six-month, pause, they’d still have the majority of the 2022 election cycle left to restart donations. He said his group also is leaning on companies to ask for refunds of donations to the lawmakers who voted against the electoral results.

Most of the lawmakers who have sworn off donations from corporate PACs are Democrats, but Florida GOP Rep. Matt Gaetz had done so previously and encouraged his fellow Republicans to do the same. “Liberate yourselves from the Corporate Woketopia,” he tweeted.

Some Democrats have voted to reject presidential electors in previous cycles without corporate backlash. They did so, however, with little attention or controversy because those votes were not accompanied by a breach of the Capitol and multiple deaths.

Groups are also calling on lawmakers to move on legislation that would require more disclosures of so-called dark, or undisclosed, political money.

“That’s where, frankly, more of the money comes in from corporations,” said Michael Sozan of the Center for American Progress. He said companies should also decide to not give money to 501(c)(4) or 501(c)(6) nonprofit organizations.

But, he noted, what they’ve done so far is a big deal that could have far-reaching consequences for political campaigns.

“This move that corporations are starting to make, and I think it’s just the beginning, it shows how utterly toxic these members of Congress have already become,” he said. When the business community abandons Republicans, the party typically associated with business interests, “it shows how much their brands have been tarnished.”

Jennings, the former McConnell aide, added that he expects mounting public and corporate pressure on lawmakers “to act right and to be responsible.”

“And to be honest with you, if you’re somebody who went down to the floor of your chamber after the United States Capitol had been occupied and still cast a vote that way, then you probably deserve it,” he said.

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