In the days following last week's insurrection at the U.S. Capitol as Congress voted to certify Joe Biden as president, American corporations drew a line in the sand.
Wall Street banks, major automotive manufacturers and various other noteworthy Michigan companies including Rocket Companies Inc. and Dow Inc. have released statements announcing, to various degrees, changes to political donations as they've expressed dismay with the attempts to disturb a free and fair election and the violence that ensued.
The statements generally have fallen into two distinct buckets: companies like Rocket based in Detroit have announced a blanket halt to political donations as the mortgage company contemplates "the role corporations play in the political process," CEO Jay Farner said in a statement to Crain's. Midland-based Dow, meanwhile, took a more targeted approach, announcing it would suspend all corporate and employee political action committee contributions to "any member of Congress who voted to object to the certification of the presidential election."
The two views of how to proceed lead to the question of whether the violence at the Capitol and attempts by nearly 150 Republican lawmakers to overturn the presidential election in favor of Donald Trump make for a watershed moment that could alter the decades-long trend of corporate money in American politics. Or is this likely just a blip and American elections will continue getting more expensive?
Simon Schuster, the executive director of the Michigan Campaign Finance Network, a Lansing-based organization that tracks money in Michigan politics, said it will largely depend upon how the Republican Party does or does not reinvent itself post-Trump.
"Is there a wide movement to purge Trump and sort of his acolytes and the ideological strain of populism that he has sort of garnered from the party?" Schuster asked, noting that under Trump the party had veered from much of the business-friendly policies members had long supported. "Tariffs and protectionist trade policies are not something that would be represented by business."
What it is clear is that politics and elections have become far more expensive. That's been particularly true since the landmark Citizens United case decided by the U.S. Supreme Court that allowed for unlimited political giving by corporations.
The Washington, D.C.-based nonpartisan money-in-politics watchdog group Center for Responsive Politics reported late last year that spending in the 2020 election would hit $14 billion, the most money spent on record and more than twice as much as the previous record in 2016.
"Donors poured record amounts of money into the 2018 midterms, and 2020 appears to be a continuation of that trend — but magnified," Sheila Krumholz, executive director of the Center for Responsive Politics, said in the report. "Ten years ago, a billion-dollar presidential candidate would have been difficult to imagine. This cycle, we're likely to see two."
Roughly one-third of the $14 billion spent in the lead-up to the 2020 election — $5.7 billion — came from large U.S. banks, according to a Bloomberg report, citing figures from the Center for Responsive Politics.
Similar to the split between Rocket and Dow, large banks were announcing a variety of actions ranging from ceasing all donations to those who voted against certification, to broader pauses of all donations, according to a Bloomberg report.
But not every banking group says it is re-evaluating donation strategy. Michael Tierney, the president and CEO of the Community Bankers of Michigan, an East Lansing-based trade group that donates to a broad swath of politicians on both sides of the aisle, said political contributions need to be made with a holistic viewpoint, rather than on individual votes.
"I think it's a very slippery slope when you start making decisions off of one single action," said Tierney, who noted that he strongly objected to the attempts to overturn the election. "No matter what the issue is, when you make a decision of who you're going to support or who you're not going to support off of one single action, that's probably not the best way to make your decisions because you want to look at the whole of what somebody does."
It remains to be seen the current "pause" for many companies will move the needle in any meaningful way on overall corporate money for politics. Moreover, the "pause" for companies like Rocket and others comes at a time when there's something of a lull for political donations, as the 2020 election cycle has concluded and the 2022 midterms have not yet begun in earnest.
A spokesperson for Rocket declined to address further questions from Crain's as to why the mortgage lender chose that route and whether the company would be back and donating in advance of the 2022 midterm elections.
Schuster with the Michigan Campaign Finance Network said he's skeptical that the overall landscape will change much.
"I don't think that by pausing … their political contributions, (companies) really have a ton to lose in that regard, because businesses and corporations have long, enduring influence in American politics," said Schuster. "And I don't think … these legislators who might be impacted by this, really see this as a long-term threat to their financial viability as candidates."
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