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TUESDAY, December 06, 2022
U.S. campaign finance system rocked as major firms pause or halt political contributions after election results challenged

U.S. campaign finance system rocked as major firms pause or halt political contributions after election results challenged

TUESDAY, January 12, 2021

The funding of U.S. political campaigns is being rocked as some of the nation's largest firms such as Google and J.P. Morgan announced plans to halt all political contributions after last week's insurrection at the Capitol, with some companies targeting the 147 GOP politicians who voted against certifying the presidential vote totals - a sign of corporate America's growing uneasiness with the election doubts and violent attacks inspired by President Donald Trump.

Major companies that collectively pour millions of dollars each year into campaigns through employee-funded political action committees are registering their worry and anger about last week's chaos with a reexamination of their role in powering America's fractious politics.

Facebook, Google and Microsoft said they will halt all political donations while they reviewed their giving. Banking giants such as Goldman Sachs and JP Morgan said they were doing the same. BlackRock made a similar announcement in a memo to its employees, noting its decision was spurred by "the horrific events in the nation's capital."

But Marriott, the world's largest hotel chain, and many other firms announced a much more targeted response: A halt to the campaign cash flowing to the Republicans who voted against certifying President-elect Joe Biden's win. Marriott said its decision suspending donations to 147 Republican U.S. representatives and senators was motivated by "the destructive events at the Capitol to undermine a legitimate and fair election."

The Blue Cross Blue Shield Association said it would do the same, with the provider of health insurance to more than 100 million people pledging to end contributions "to those lawmakers who voted to undermine our democracy."

American Express struck a similar note in a memo sent to all employees Monday, halting contributions to the Congress members who voted "to subvert the presidential election results and disrupt the peaceful transition of power."

Hallmark Cards went even further. The Kansas City-based greeting card maker said its political action committee was asking that Sen. Josh Hawley, R-Mo., and Sen. Roger Marshall, R-Kan., return its donations following the Capitol attack. The committee gave $7,000 to Hawley's campaign and $5,000 to Marshall's in the last two years.

"Hallmark believes the peaceful transition of power is part of the bedrock of our democratic system, and we abhor violence of any kind," said JiaoJiao Shen, a Hallmark public relations official said in a statement Monday. "The recent actions of Senators Josh Hawley and Roger Marshall do not reflect our company's values."

Last week's violence at the Capitol appears to have companies scrambling to react, as they increasingly realize that this is not an ordinary political dispute and the option of sitting on the sidelines grows increasingly unsatisfying.

"These corporations are doing something very new, and something that could potentially alienate an important base for them," said Craig Holman, government affairs lobbyist for Public Citizen, a money-in-politics group. "I've never heard of this happening before."

The decisions could have lasting impact. Dow, a chemical company with 36,000 workers worldwide, said its decision to cut off political donations to the 147 Republican U.S. representatives and senators would last for an entire election cycle - two years for House members and six years for senators.

Commerce Bank - a holding company with branches in five mostly Midwestern states - said in a statement that its PAC has "suspended all support for officials who have impeded the peaceful transfer of power." Some of the corporate decisions were first reported by the newsletter Popular Information.

The pace of corporate announcements has picked up in the days since last Wednesday's violence at the Capitol and the vote to certify the presidential election results. What started out as companies and trade groups rushing to register their outrage -- with statements ranging from condemnations to direct calls for Trump's removal from office -- has morphed into going after one of the main fuels of political campaigns: Money.

Some political operatives doubted that companies would be able to refrain from PAC donations for too long.

"The vast majority of these guys will be back at the table," said a former White House official who departed last year, requesting anonymity to speak candidly. "When they see policies that threaten their business, they'll have to be."

But others were encouraged by the corporate reactions.

"I'd caution reading too much into it right now, but it will continue to snowball as the companies doing this continue to be applauded for it," said Rory Cooper, managing director at Purple Strategies, a corporate reputation consulting firm.

"It's a fantastically, extraordinarily big deal," said Danielle Brian, executive director of the Project on Government Oversight, good government group. She said some politicians supported a vote against election certification as part of a calculation to maintain party support and receive political contributions. "This is adding a counternarrative to that calculation."

And companies are rushing in -- with decisions that are certain to be noticed.

The PACs of tech giants Facebook, Google and Microsoft donated more than $4.2 million over the last two years, according to Center for Responsive Politics' Open Secrets.

Charles Schwab, after spending nearly $550,000 on PAC contributions in the last two years, said it was halting contribution to all politicians for the rest of this year.

Airbnb said in a statement it was withholding PAC support -- money -- from the GOP politicians "who voted against the certification of the presidential election results."

Marriott's PAC - which is funded by employee donations - gave more than $410,000 in the last election cycle, according to Federal Election Commission data.

The hotel chain also has a direct business relationship with Trump. It books travel to Trump Turnberry through the Marriott Luxury Collection program.

Marriott's decision - along with ones such as from Blue Cross Blue Shield - would hurt the fundraising efforts of those who voted last week against certifying the presidential election results.

More pressure on companies is coming. The Lincoln Project, an anti-Trump group, in the coming days will launch a multimillion-dollar ad campaign targeting companies that bankroll Republicans who voted against certifying the results of the election, pushing those firms to cease donations to these and other Republicans.

The project will launch broadcast and cable advertising aimed at these companies and their senior leaders. The Lincoln Project will also target advertising for these corporation's workers, hoping to "destabilize the companies' operations by fomenting employee rebellions," said Steve Schmidt, co-founder of the Lincoln Project.

Schmidt declined to comment on the companies the Lincoln Project plans to campaign against.

"Eighty-$90 million was spent by corporate America on political committees . . . on extremist groups that have destabilized American democracy," Schmidt said. "After this point, nothing goes back to normal."