This story is co-published with The Daily Poster.
In response to the violent insurrection at the U.S. Capitol, the Charles Schwab Corporation yesterday announced it will shut down its political action committee, which gave less than a quarter million dollars to Republican lawmakers in 2020.
“In light of a divided political climate and an increase in attacks on those participating in the political process,” the company said, “we believe a clear and apolitical position is in the best interest of our clients, employees, stockholders and the communities in which we operate.”
While the news generated headlines, the company did not respond to questions from The Daily Poster about whether it will review or try to restrict the much larger political contributions made by the company’s billionaire Chairman Charles Schwab.
During the 2020 election, the firm’s namesake donated more than $9 million to the Congressional Leadership Fund (CLF) and the Senate Leadership Fund (SLF), the two main party-aligned super PACs supporting House and Senate GOP lawmakers. A majority of House Republicans, 139 of them, voted to overturn the election results, while Republican leaders in the Senate were still endorsing Donald Trump‘s right to challenge the election results after media outlets had already called the race.
Schwab is no anomaly: name-brand companies have issued press releases about halting or reviewing the relatively small PAC donations to the lawmakers who egged on the mayhem. However, The Daily Poster contacted scores of companies linked to top SLF and CLF donors, and virtually none committed to taking steps to restrict top corporate officials from continuing to make far larger donations to the super PACs that bankroll congressional Republicans.
Halting PAC donations while doing nothing to stop corporate titans’ bigger super PAC donations is a head fake. The maneuver lets companies clean their reputations by pretending they are taking decisive action to punish insurrectionist Republicans, even though they will not stop corporate officials from recapitalizing the slush fund that those lawmakers will rely on for reelection. The vast majority of these companies do not publicly disclose if and when they make donations to dark money groups that also spend on elections.
The bait and switch is underscored by the data: SLF and CLF together raised more than $578 million to support Republican lawmakers in the 2020 election, while their affiliated dark money nonprofits, One Nation and American Action Network, spent another $50 million on unregulated TV ads, according to OpenSecrets.
By comparison, all corporate PACs combined donated less than half that amount to Republicans congressional candidates in the 2020 election, and those contributions comprise an all-time low of just 5 percent of all campaign donations in 2020.
An election in Colorado illustrates how CLF often plays a far more direct role than PAC donations in supporting insurrectionist Republicans. Freshman Rep. Lauren Boebert, who voted against certifying the presidential election and refuses to walk through Capitol metal detectors, was boosted by more than $900,000 of spending by CLF and received only $20,000 from business PACs.
“Are these corporations saying they’re no longer donating their $5,000 max corporate PAC checks to Republicans, or saying they’re no longer doing bundling and financing million-dollar super PACs on behalf of Republicans?” asked Justice Democrats‘ Waleed Shahid, whose organization works to elect progressive lawmakers. “Big difference.”
That difference explains the dissonance between exuberant media headlines heralding the end of PAC donations and quiet reassurances that there will be no interruption of the much larger flood of cash funding the GOP’s political apparatus. Indeed, most corporations contacted by aides to GOP House Leader Kevin McCarthy—who voted to block the election results—”have assured them that they have no plans to back away from the party,” according to Politico.
“This is a temporary issue that will quickly disappear when corporate America sees how extreme the agenda is of the Democrats who now have complete unchecked power in Washington,” one GOP lawmaker told The Hill. “They will be running to [the National Republican Campaign Committee] and CLF by March or April.”
The Daily Poster contacted roughly 90 companies and interest groups that either directly donated or whose officials contributed to the CLF and SLF, accounting for roughly $370 million raised by the groups in the last cycle.
Among the organizations donating directly from their treasuries to CLF and SLF were the National Realtors Association, ConocoPhillips and Boeing, which have all said they are reviewing their donations. None of the companies have pledged to permanently stop donating to the Republican super PACs.
The National Realtors Association said that its PAC met this week and the “association is temporarily pausing federal political disbursements.” The organization, which directly contributed $6.6 million to SLF last cycle, said it “will continue to closely monitor events in Washington in the days and weeks ahead in order to ensure our political participation most closely represents the will of our REALTOR® members and the best interests of American real estate.”
“Given the current environment, we are not making political contributions at this time,” Boeing announced on Wednesday, in a statement that appeared to cover its PAC contributions. Boeing made $750,000 worth of corporate contributions to SLF, including $250,000 in mid-November, as the group turned its sights on the two Georgia senate runoff races.
ConocoPhillips, which directly donated $1.3 million to the groups, said: “In light of Congress‘s recent vote on the certification of the electoral college results, ConocoPhillips has suspended all political contributions for at least six months. While the company has a robust governance for political contributions, we are actively reviewing our current policies.”
The Daily Poster reached out to several companies that have said they are halting or reviewing their PAC donations and that contributed to the Republican Attorneys General Association (RAGA) last election cycle.
Republican attorneys general in 17 states sought to invalidate the election results in at least four swing states, and RAGA’s nonprofit arm helped direct people to the protest at the U.S. Capitol last week that preceded the insurrection.
“Future political donations are under review based on the events of the past few weeks,” said a spokesperson for CVS Health, which donated $50,000 to RAGA last year, according to data from PoliticalMoneyLine.
Coca-Cola, which donated $100,000, said the company is “reviewing our participation in groups like the Republican Attorneys General Association (RAGA), and we will continue to do so with last week’s events in mind.”
None of the companies contacted by The Daily Poster pledged to restrict donations by their senior officials. A few firms argued that their corporate officials are simply making their own contribution decisions.
A spokesperson for Elliott Management, whose founder and co-CEO Paul Singer contributed $7 million to SLF and CLF, said: “You seem to be referring to donations made by individual employees in their capacity as private citizens—these are not corporate decisions.”
Legal experts told The Daily Poster that in general, corporations can restrict executives’ political donations as a condition of employment—and in fact some companies assure investors that their executives’ donations are reviewed and approved by the companies so they don’t trip over anti-corruption rules and avoid potential reputational damage.
“If they say that they are reviewing [donations], they do have the ability to influence,” said Jay Dubow, a former SEC regulator who now advises corporations on compliance. “If it has to be reviewed, then there’s a veto [power].”
“I can’t think of anything that would stop a company from telling executives not to make political contributions or from requiring pre-approval of any political contributions,” said Brendan Fischer, director of federal reform at Campaign Legal Center. He added that, with some exceptions, “in most private-sector, non-unionized workplaces, the law does not stop employers from firing workers for their political views or activities, including for their record of political contributions.”
Companies’ new attempt to feign ignorance and powerlessness about their officials’ donations obscures how corporate and individual contributions often work in tandem. A recent study from Northwestern University researchers found that executives’ political contributions are driven by business considerations.
“The likelihood of an individual corporate leader donating to a member of Congress increased by 11 percent when that legislator received a committee assignment making him or her ‘policy relevant’ to the donor’s company,” the analysis concluded. “The likelihood of a corporate executive donating to a sitting member of Congress was 31 percent higher during election cycles in which that executive’s company was actively lobbying the federal government.”
Bruce Freed—whose organization, the Center for Political Accountability, encourages companies to disclose their political contributions—said firms “need to have policies and procedures in place to protect the company and to protect themselves from the risk they face from election-related spending.
“At this point, companies are facing existential risks by having any association with the insurrection attempt of last Wednesday, but also any association with the congressmen who voted to overturn the election results or the attorneys general who were involved in the lawsuits to overturn the election results,” he said.
Freed noted that many companies are talking only about reviewing or halting their PAC donations, which are limited to $5,000 per candidate, rather than contributions to groups like super PACs, dark money nonprofits, trade associations, and 527 committees—which can accept donations of any size, including money direct from corporate treasuries.
In addition, most political donations—more than 70 percent since 2000—are from individuals.
Blackstone presents the most illustrative example of the cat-and-mouse game of culpability and authority when it comes to political spending.
The private equity giant is run by billionaire CEO Steve Schwarzman, who gave $35 million to SLF, $2.5 million to CLF, and $3 million to the pro-Trump super PAC America First Action. He also gave $325,600 to the Republicans who objected to the electoral results.
Right after the election, Schwarzman, a Trump confidant, reportedly told business leaders that Trump had a right to challenge the results and “took issue with suggestions made during the meeting that the U.S. could be on the verge of a coup,” according to the Financial Times.
Schwarzman publicly acknowledged Biden’s victory a few weeks later, and last week he decried the violence at the Capitol—but he has not pledged to stop funding any Republican groups.
“We have been advised by counsel that we cannot direct political giving by individuals,” a Blackstone spokesman told the Washington Post.
Blackstone’s own filings with the Securities and Exchange Commission suggest that the company evaluates all donations from executives.
“Personal political contributions or other political activity could be restricted by law or agreement or could have seriously negative business ramifications,” Blackstone’s policy reads. “Therefore, all [Blackstone Group] employees and senior advisors (and members of immediate family) must obtain prior approval… to make any political contributions or to solicit or coordinate any political contributions, including contributions to political parties or political action committees… The employee will receive a reply from [Blackstone’s] chief legal officer or his designee granting or denying clearance.”
A company spokesman told The Daily Poster: “Our code of ethics simply helps ensure our employees adhere to their legal and compliance obligations; it does not relate in any way to directing employee giving on a partisan or ideological basis, and implying so is a total distortion.”
The Hidden Way Corporations, Billionaire Execs, Fund Republicans Who Claimed Voter Fraud The British Journal Editors and Wire Services/ Newsweek.