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How the Capitol Riot Is Affecting Corporate Political Spending

Some major brands are pausing donations to members of Congress who tried to reject the presidential election results.

January 14, 2021

Shortly after the insurrection at the Capitol, corporate political spenders started announcing that they would no longer financially back members who had raised objections to President-Elect Joe Biden’s Electoral College votes in key swing states. This raises bigger questions about why corporations are backing any member of Congress in the first place — and how our campaign finance system works.

What’s sad is that only the darkest days in American history prompted these companies to withhold financial support from politicians who for months have been spreading pernicious lies about voter fraud, like Sens. Ted Cruz (TX) and Josh Hawley (MO).

Corporations’ pulling away political donations from a politician in a scandal has occurred before. As I described in my book, Political Brands, this happened during the 2018 campaign of Sen. Cindy Hyde-Smith of Mississippi, who was running against an African-American and said of a cattle rancher, “If he invited me to a public hanging, I’d be on the front row.” This reference to lynching — combined with the fact that Hyde-Smith had once worn a Confederate outfit that she posted to her Facebook page with the words “Mississippi history at its best!” — caused her corporate donors to distance themselves from her.

Political action committees (PACs) that had supported Hyde-Smith asked for their political donations back, including the corporate PACs of Google, Facebook, Walmart, AT&T, and Major League Baseball. After the election, however, Hyde-Smith’s campaign had not returned over $50,000 in corporate PAC donations. (A few got their money back by cancelling their checks.) This means that for forever and a day, the brands that tried to distance themselves from her will be listed as contributors to this racially insensitive campaign. What commercial brands may learn the hard way is that supporting a political candidate is not so easy to exit gracefully.

Compared to what happened last Wednesday, Hyde-Smith’s 2018 transgressions seem tame. But Hyde-Smith was also at the heart of the objections raised against the lawful election of Biden and Kamala Harris. She was one of six senators who objected to Arizona’s electoral college votes, along with Cruz, Hawley, Roger Marshall (KS), John Kennedy (LA) and Tommy Tuberville (AL). She was also among a group of seven Senators who objected to Pennsylvania’s votes including, Sen. Rick Scott (FL) and Sen. Cynthia Lummis (WY). And troublingly, there were 139 House members who objected to Electoral College votes — and these objections were made once order was restored after the Capitol was overrun with rioters.

Actions have consequences. Corporate political spenders including Hallmark, American Express, and Dow among many others are pulling back their campaign cash for members of Congress who objected to the Biden electoral votes. Some are pulling back support for a full election cycle (two years for House members and six years for senators).

To be clear, corporations are still banned from giving money directly to federal candidates under the 1907 Tillman Act. The money at issue here is from corporate PACs, which are set up by a corporation and funded by donations from people who work there, especially executives who want to get ahead in their careers. Corporate PACs are still subject to hard money limits so they can only give $5,000 per candidate per election. So in the grand scheme of money in politics, this is small potatoes. 

The other, more significant way corporations can get involved in politics is by funding a super PAC directly, a post-Citizens United development. So long as a super PAC acts independently of a candidate or political party, it can fundraise from nearly any entity, including corporate treasury funds. The smaller corporate money is the money flowing from the corporate PACs into candidate campaigns. The bigger rivers of money flowing in our politics is from corporate treasuries into super PACs. If corporations are serious about getting out of politics, they will stop sending their $100,000 or $1,000,000 checks to super PACs who supported the objectors too.

So why are corporate political spenders pulling back their funding of the objectors? The answer likely varies firm to firm. However, this is one of the ways for a corporation to protect their own brands. These companies do not want to be associated with an attempted coup.

There are also the racial overtones of the riot that could turn off corporate brands that need to sell goods and services to everyone. The insurrectionists were overwhelming white, many of whom were wearing anti-Semitic garb, carrying the stars and bars, or donning white supremacist symbols. No brand that sells to a broad public wants their logos mixed up with this mess. If a corporate brand thinks that the members of Congress objecting to the election results were goading on the insurrection, then one way to draw a line is to cut those lawmakers off financially.

The views expressed are the author’s own and not necessarily those of the Brennan Center.