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'Extraordinary' corporate revolt over campaign donations shakes political world

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Posted: Jan 11, 2021 3:32 AM
Updated: Jan 12, 2021 11:00 AM


Some of the country's largest firms are scrambling to distance themselves from last week's insurrection at the US Capitol by freezing or reassessing their political donations -- sending tremors through a political system that has relied for decades on the predictable flow of corporate financial support.

Companies such as Google, Coca-Cola and UPS all have pledged to suspend contributions across the board, while others took aim specifically at lawmakers they viewed as complicit in President Donald Trump's effort to disrupt the certification of Joe Biden's election.

'This is extraordinary. It's corporate America saying, 'Enough,' ' said Richard Levick, the CEO of LEVICK, a Washington-based public relations firm. 'Capitalism is trying to ride to the rescue of a political system that doesn't have an answer' for Trump's conduct.

The Democrat-led House of Representatives plans to vote Wednesday to impeach Trump for 'incitement of insurrection,' but convicting Trump would be a tall order in the narrowly divided Senate.

Business PACs are significant players in politics, accounting for more than $360 million in federal contributions during the 2020 cycle -- with about 57% of the money flowing to GOP candidates, according to the nonpartisan Center for Responsive Politics, which tracks political donations.

'I've never seen anything like this,' said Fred Wertheimer, who runs the watchdog group Democracy 21, of the corporate retreat in the wake of the riot by pro-Trump supporters. 'The key is: Is this temporary or is this real?'

'To do this for two or three weeks, and after the heat falls off, go back to business as usual isn't going to solve anyone's problems,' he added.

House Republican Leader Kevin McCarthy and Florida Republican Sen. Rick Scott, the new chair of the National Republican Senatorial Committee, were among those in Congress who objected to the presidential election results. The backlash among the business community to that vote after the Trump-incited attack on the Capitol could impair Republicans' fundraising effort to flip both the House and Senate in 2022.

'Rick Scott will spend the next two years at the NRSC explaining his vote to the donors,' said a GOP strategist involved in congressional races who requested anonymity.

Chris Hartline, a NRSC spokesman, told CNN, 'We have no interest in engaging with nonsense from DC consultants who have no idea what they're talking about and I have no intention of responding to anonymous quotes, ever.'

'Rick Scott will raise a ton of money,' he added. 'He will help build a strong grassroots operation. He will stay on message. And we will win back the Senate majority in 2022.'

Wertheimer and others in the campaign-finance reform world said the corporate reexamination could provide a needed push to overhaul election laws and center them on small-dollar contributions. A measure advanced by Democrats, who will soon control both congressional chambers and the White House, would give federal candidates as much as a 6-to-1 match of public funds for small donations.

Democrats have become increasingly adept at attracting small-dollar donations: In the 2020 election cycle alone, nearly 15 million grassroots donors contributed a staggering $4.8 billion to Democratic groups and candidates up and down the ballot via the online fundraising platform ActBlue.

Other reformers on Monday blasted companies that opted to freeze donations to Republicans and Democrats alike -- given that only Republicans voted against certifying Trump's decisive White House loss.

'These corporations' announcements are nothing more than a PR stunt -- and a bad one at that,' Tiffany Muller, the president of End Citizens United, said in a statement. 'There's only one party -- and specifically 147 members of Congress -- who incited the violent and deadly assault on our Capitol,' she added.

At least one firm, greeting card maker Hallmark, has asked for refunds, requesting that two GOP senators who objected last week, Josh Hawley of Missouri and Roger Marshall of Kansas, return their PAC donations.

In announcing their decisions, many companies described their actions as only temporary suspensions to review their political giving. The chemical company Dow, however, promised a more lasting punishment for those who backed Trump in Congress. It said it would cut off donations to lawmakers who voted against certifying the election for the entire two-year terms of the House members involved and the six-year terms of senators.

The Lincoln Project -- the group of Republican and former Republican strategists responsible for searing ads opposing Trump's reelection -- is pledging to keep the pressure on companies that bankroll the politicians it views as backing Trump's actions, along with those that try to add loyalists to the President to their corporate boards.

'If you are a member of the Trump administration right now ... and you don't take action on what are obviously illegal and dangerous things that Trump is doing, then when you go out to get a seat on a corporate board, people are going to remember that,' Rick Wilson, a Lincoln Project co-founder, told CNN in a recent interview.

'We are going to be very diligent about making sure actions have consequences,' he said.

Even more important than halting contributions is the new message that corporate America delivered to Washington this week, said Michael Malbin, a political science professor at the University of Albany and an expert on campaign money.

'The fact that major organizations are saying that they are disgusted matters,' he said. 'This is a public statement about what they believe is right and wrong.'

This story has been updated with comments from Lincoln Project co-founder Rick Wilson.

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