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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
capitol riot
Pacific Press/Getty

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.