Big companies halted campaign contributions after the Capitol insurrection. Here's what it means for business and democracy - Technical.ly

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Jan. 15, 2021 2:17 pm

Big companies halted campaign contributions after the Capitol insurrection. Here’s what it means for business and democracy

Corporate America drew a line in the sand after Jan. 6's violence, and Republicans' continued support of overturning the election. It brought a new wave of corporate social responsibility seemingly overnight.
The U.S. Capitol in the spotlight.

The U.S. Capitol in the spotlight.

(Photo by Flickr user BKL, used under a Creative Commons license)

Jan. 6 was the breaking point.

After two months of President Donald Trump’s baseless claims about fraud in the 2020 presidential election and pushes against the infrastructure of democracy to change the results, his supporters stormed the U.S. Capitol. Then, when lawmakers returned later that night, some Republicans still cast their vote against certifying the election results.

In other words, they supported the (failed) effort to overturn the outcome of a free and fair election.

The shockwaves through society were immediate, and calls for accountability rose to the top. That has resulted in Trump’s second impeachment this week, but it goes beyond the halls of the Capitol.

For the business community, it was another moment in the last year where leaders couldn’t stay silent. In this case, corporations also brought their power to bear in a key area for politicians: money. A host of big companies across the country stopped political donations to the 147 members of Congress who supported the efforts to go against the will of the voters.

It started as companies like Citi and Dow. Then, we saw companies based in areas Technical.ly covers react, too: Philly-based comms giant Comcast, Baltimore and D.C.’s largest health insurer CareFirst and Bethesda, Maryland-based hotel chain Marriott suspend contributions from their political action committees to the Republicans who voted against certification. They were among a host of bigwigs in American commercial life, like some of the largest Big Tech companies, as well as Verizon, AT&T, Coca-Cola and Walmart. The list goes on.

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“The CareFirst Associates’ PAC will continue to support candidates across political parties who will work to foster, not tear down, the democratic process,” CareFirst said in a statement under the headline that its associates “stand together with and for our democracy.” “Together, with the principles of democracy as our north star, we are a stronger, healthier nation.”

Democracy and the free markets

Corporations compete for business, but with public actions outside of their products, they tend to follow trends and pay close attention to practices that others are implementing. The protests sparked a new approach in corporate social responsibility, said John W. Michel, an associate professor of management in the Sellinger School of Business & Management at Loyola University Maryland. This one wasn’t the subject of months-long strategy meetings or conferences. It all developed in less than a week. And it’s worth pointing out: A fundamental move like stopping campaign contributions is exactly the kind of political step that corporations have long been criticized for using CSR initiatives to avoid.

In one sense, it shows the intersection of democracy and free markets.

“It’s showing that these organizations care about social justice,” Michel said. “They are saying to their customer base that ‘we are in support of our country and the safety and the care of all people that are potential customers of us.’ Basically this insurrection made a stand against the heart of our democracy. … This is a big stand and a big statement for them to say this.”

It’s not the only way big brands responded. The PGA decided not to hold a major pro golf event at one of Trump’s clubs, hitting him directly in the wallet. Twitter and a host of other tech companies removed Trump from their platforms, while Amazon stopped hosting Parler, the social network that became a redoubt for Trump supporters.

Yet the move to pause donations is a bit different. For one, it has implications not just for Trump, but the members of Congress who supported him. Those officials have frequently come under pressure the last four years to respond to the president’s norm-shattering moves.

“The fact that they’ve done it sends a really important signal that, ‘Look we’ll put up with a lot, but we’re not putting up with this,'” Michel said of the companies. “This goes too far to them.”

It also hits directly at the influence machinery that underlies D.C. workings. The specific lever the companies pulled puts pressure on the politicians to adhere to certain norms of a democracy, or risk their jobs.

“What they’re saying is that, ‘If you were part of the problem, if you were condoning conspiracy theories, if you were inciting the insurrection by firing people up, we’re not going to donate anymore,'” Michel said. “That’s a message as to what they stand for. It’s also a message that, ‘Without our contributions, there’s a good chance you won’t be able to get elected again.'”

Company values and implications for workplace culture

Corporate political contributions increasingly flow to politicians on both sides of the aisle, and they’re becoming more sizable as drawn-out election cycles make running a campaign more expensive. It’s meaningful money. As PhillyVoice reported, Comcast donated $916,000 to the 147 Republicans who objected to the election results during 2020.

To be sure, the pauses on giving took different forms. Some companies made a specific move to stop support of those who wanted to reject the election results, while others said they were putting a hold on all contributions to review policies this year. That could open the door to resuming the giving by the next Congressional campaign in 2022.

But in the near term, the moves are a reflection of the lack of trust in Congress to respond like the country should to a coup attempt. And this week, they got another data point in the fact that many House Republicans voted against impeachment even after these moves. Companies also operate on a global stage, so they must be mindful of how their actions at home affect how they’re viewed abroad.

At the same time, it’s a question of leadership — the corporate decision makers themselves, who oversee of a team of people who are citizens of this country. For any company building a culture, from large corporations to startups, responses to a tough societal moment show something to those who might be considering working there.

“It sends a signal of what kind of people are going to apply to your company. It sends a signal of whether your business is tuned into the broader society,” Michel said. “Especially from a hiring and culture fit perspective, it certainly does matter.”

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