Home Business American enterprises suspend political donations: the substantive impact is limited and more symbolic.
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American enterprises suspend political donations: the substantive impact is limited and more symbolic.

by YCPress

More big companies have taken action to distance themselves from US President Trump and his Republican allies.

On January 6, after Trump supporters violently hit the U.S. Capitol, major companies such as technology, banking and manufacturing announced the suspension of political donations to Republicans who voted against certification of presidential election results. Dow Chemical proposed a six-year suspension of donations for the relevant senators.

Goldman Sachs, Bank of America and other companies announced that all political donations would be suspended first, regardless of whether members of congressmen objected or supported the election results, and the company would reassesss the behavior of lawmakers and the company’s political donation strategy.

The Associated Press pointed out that so far, such a move has been aimed at confirming the rule of law system in the United States and clarifying the election results, but it also shows that major companies in the United States are increasingly dissatisfied with legislators who support Trump’s election fraud.

“It’s like wildfire spreading,” said Jeffrey Sonnenfeld, a professor at Yale School of Management. “The American business community is entirely willing to align with the American public, not with the paranoid Republican Party.”

However, some scholars said that the company’s move had limited practical impact on lawmakers, and the suspension of political donations was only a “symbolic promise”.

It is more symbolic for companies to suspend PAC donations.

In the United States, political donations from large companies are made through their own political action committees (PACs). A political action committee is a kind of campaign organization in the United States that collects funds from members or sponsors and uses them to support and oppose specific candidates and vote and legislative activities.

At the federal level of the United States, an organization should legally register as a political action committee if it collects or spends more than 1,000 dollars for the purpose of influencing the election.

Although many companies have expressed their statements to suspend political donations, the impact on one member of parliament is actually limited.

“This is a symbolic commitment,” said Sheila Krumholz, executive director of the non-partisan organization Center for Responsive Politics. “This is actually only one of the sources of income for parliamentarians, and some other revenues. Entry is relatively negligible, especially in the Senate.

For decades, the PAC has been a mechanism for companies and trading groups to maintain their influence in Washington. This is a large amount of money, but it is far from the only way for companies to transfer money to politics.

The cap of the company-sponsored PAC on each candidate’s political contribution per year is $5,000, according to the regulations. Campaign spending often amounts to millions of dollars, so companies make such donations only a small part of the overall fund-raising campaign.

After 2010, more emerging political forces emerged, and many companies and billionaires also donated to candidates and their causes through “527 groups” and “super PACs”, which can raise funds from individuals and companies without restriction.

More influential emerging political forces

“527 Group” refers to a private political group exempted from taxation under IRS No. 527, which is an important new force in American politics. Its main activity is to launch a large number of political advertisements during the U.S. election to encourage voters to support a party’s candidates.

Many super-rich people will invest millions of dollars in the “527 group”, making them the main way to influence and influence the election.

Super PAC (Super Political Action Committee) was born from the PAC. It has no limit on collecting donations and can accept donations from companies, unions and individuals without limit.

Therefore, its energy greatly exceeds that of traditional political action committees, but these donations cannot directly fund candidates or candidates’ election committees and Political parties must be “independent spending”, so super PACs often use these funds for campaign-related projects, such as broadcasting advertisements against a candidate on TV, or launching various videos and articles on the Internet to build momentum for a candidate.

Corporate PACs account for around 5% of total 2020 election funding, according to the Center for Responsive Politics, and the rise of small donors and PACs that allow unlimited donations allow for corporate politics to be provided directly to candidates.

The role of curative donations is getting smaller and smaller.

CNBC commented that many companies announced that they would suspend political donations to candidates, but did not include PACs that were not associated with specific candidates, which meant that the move might be more symbolic than consequences in shaping the scope of political donations in the future.

At the end of an election cycle, this is also an appropriate time to freeze political spending to see the effect.

Some enterprises have expressed their positions to reassess.

Major U.S. companies have expressed their positions this week on the decision and position of suspending political donations, and some companies have asked lawmakers to pay back the money.

A spokesman for Morgan Stanley said that the company would suspend all PAC donations for members of Congress who did not vote to prove the election results of the electoral college.

A spokesman for hotel chain Marriott said that the company would suspend its PAC’s political donations to lawmakers who “opposed to prove the election results”, and did not disclose how long the suspension would last or when donations would resume.

Chemical giant Dow said that all PAC political donations will be suspended for “any congressman who votes against proving the election results”, which will last for an election cycle, compared with two years for members of Representatives and up to six years for senators.

Communications operator AT&T, one of the largest donors to political events in the United States, said in a statement on January 11 that its PAC had decided last week to suspend donations to members of Congress who voted against the electoral college.

Hallmark asked Missouri Senator Josh Hawley and Kansas Senator Roger Marshall to return their previous election donations from their PAC, both senators who voted against proving the presidential election results.

In a statement, the company said: “Horman believes that the peaceful transfer of power is the cornerstone of our democracy, and we oppose any form of violence. The recent moves of Senators Josh Hawley and Roger Marshall do not reflect the values of our company.”

Airbnb, a short-term rental homestay platform, condemned the violence in Washington, saying in a statement that it would “update its structure and stop gaining support from lawmakers who voted against the presidential election results.”

In a statement, Coca-Cola also said it would suspend political donations: “These events will be remembered for a long time and affect our future donation decisions.”

Blue Cross Blue Shield, Boston Science, and Commerce Bancshares, a local commercial bank in the United States, all took similar targeted measures to freeze donations. At the same time, some big banks are suspending all political donations, whether in support of or against the election results.

A Goldman Sachs spokesman suspended all donations to its PAC and will “go a thorough assessment of people’s behavior during this period”, and JPMorgan and Citigroup also said that they had postponed all Campaign donation.

Bank of America, FedEx and Wells Fargo all said they would re-examine the company’s political donation strategy.

The same is true of technology companies.

Microsoft said that on January 8, it had decided to assess the “impact of last week’s events” before making follow-up political donations through PAC.

“The PAC will normally suspend donations in the first quarter of a new Congress, but this year it will take more steps to consider recent events and consult with employees,” Microsoft said in a statement.

Google also said that it would stop its PAC political donation in view of recent events.

“After a profoundly disturbing incident last week, we have frozen all NetPAC’s political donations, while evaluating and reviewing its policies,” a Google spokesperson said.

A Facebook spokesperson said in a statement: “Following last week’s serious violence in Washington, D.C., we suspended all our PAC political donations for at least one quarter and evaluated our policies.”

Amazon announced the suspension of political donations to legislators who voted against certifying the presidential election results.

“We intend to discuss our concerns directly with previously supported members of Congress and to evaluate future PAC political contributions based on their responses,” an Amazon spokesperson said in a statement.

Further extension of the prohibition

In addition to suspending political donations, companies have taken a series of other actions to distance themselves from Trump and his supporters.

In addition to social platforms such as Twitter and Facebook permanently blocking Trump’s accounts, Trump supporters face similar problems on social networks.

Twitter-like social app Parler is a stronghold of conservatives, gathering many Trump supporters. After being removed from the shelves of Google App Store and Apple App Store, Amazon finally gave it a fatal blow.

On January 11, AWS, an Amazon cloud computing subsidiary, announced that it would suspend hosting Parler on the cloud, allowing Parler to disappear directly from the Internet.

In addition, the PGA of America said it would no longer hold its iconic championship at the Trump National Golf Club in Bedminster, New Jersey. Payment service provider Stripe banned Trump campaign accounts from using its services.

Google will ban political advertising until at least January 21. It will ban any advertisements mentioning impeachment, inauguration or protests at the U.S. Capitol.

The ban applies to advertising on Google Search and YouTube platforms, as well as advertisements on third-party websites purchased using Google software.