Supporters of U.S. President Donald Trump protest in front of the U.S. Capitol Building in Washington, January 6, 2021.
Stephanie Keith | Reuters
Somewhere at the intersection of media and politics, violence has grown in the Grand Old Party. And corporate America is starting to back away.
Between the misinformation and conspiracies, the fear mongering and hate, a segment of the party has worked its way up to a coup. We still don’t know how large a segment it is, only how much of it could afford time off last Wednesday, Jan. 6 to storm the U.S. Capitol Building. We also don’t know which fact or image — the gallows, the zip-ties, the pipe bombs, chanting, or deaths — pushed so many to say “enough.”
Maybe it was just the shock that something like this could happen in America.
Whatever the reason, dozens of companies have quickly grown sour on the GOP. In fact, AT&T, Blue Cross, Blue Shield and Comcast — the three largest corporate donors to Republicans between 2013 and 2018 — just announced that they will immediately stop contributing to the 147 Republican members of Congress who refused to certify the Presidential election results. Dow and Walmart, both of whom are also large GOP donors, made the same pledge (ironically Dow and its senior executives have donated more to Donald Trump than all other candidates but one).
Meanwhile, other large companies, like Facebook, JP Morgan, Goldman Sachs, and Northrop Grumman have decided to pause PAC donations to both parties. (Somewhat counter-intuitively, Facebook’s announcement hurts the Democrats more than Republicans as Facebook donates substantially more to Democrats than to Republicans.)
Does corporate money in politics matter? Of course it does. As Senate Majority Leader Mitch McConnell put it, “The three most important words in politics are ‘cash on hand’.” That’s because, in general, the candidate who spends the most money wins 85% to 95% of the time.
Corporate campaign donations through super PACs not only increase the total amount of money politicians raise in each election — thereby diluting everyone else’s voice — corporations also generally have much more money than individuals.
If a company can give a politician millions of dollars through a super PAC, then the self-interested politician is certainly going to prioritize that company and its views more than the constituents the politician represents.
This undermines our democracy. Perhaps that is part of the reason why 72% of voters want both parties to reduce the influence of money in politics.
Cash then, regardless of whether it moves voters, moves politicians. So, the GOP stands to lose a lot if corporate donors continue defecting.
But will it stick? Corporations are clearly starting to rethink political donations. What determines if it’s a squall or a sea-change is how far the blame radiates and how active the consumer backlash against these corporations becomes.
If news coverage parks on members of the mob and President Trump, this trend will likely blow over. If, however, it continues into the whole supply chain of radicalization, the effect could be pervasive and long-term.
Countless Americans are changing their mental model of government to include a fourth branch: corporations, next to the legislative, executive and judicial branches. They’re realizing that change can come faster if they boycott a major donor rather than contributing to the politician’s political opponent. And the longer these stories stay on the front page, the more people realize that corporations have been funding these politicians the whole time with money they gave them through their purchases and business.
Put simply, if consumer backlash grows against the companies that have been funding Republicans, a lot more companies will get out of politics. On the flip side, if consumers show support for the companies instituting these bans, the change could become more permanent. This could have an enormous impact on how political campaigns are run, and more importantly, whether corporations will continue to have an oversized influence over our politicians. Businesses think in quarters instead of election cycles, so they’re necessarily more responsive to popular will.
If we want to change corporate money in politics and keep this trend going, we’ve got to impact what corporations focus on the most: their bottom lines. If even a small percentage of the population starts changing their purchasing habits based on company politics, many corporations will choose to stop bankrolling super PACs and politicians.
And that would be a wonderful thing.
—By Amy Jo Miller, chief operating officer and Ian Woods, lead researcher at Goods Unite Us, a Madison, Wisconsin based start-up that offers a free app providing transparency into corporate political donations.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.