House Minority Leader Kevin McCarthy (R-CA) speaks during his weekly press conference on January 21, 2021 in Washington, DC. (Justin Sullivan / Getty Images)

Companies Are Pausing Their PACs, But Their Trade Groups Aren’t

in Sludge
on January 22, 2021

After the siege on the Capitol Building on January 6, a wave of brand-name companies said they had finally had enough of congressional Republicans’ anti-democratic actions. At least 22 companies pledged to suspend their corporate PAC contributions to the 147 Republican members of Congress who objected to the Electoral College vote certification, most of them indefinitely, a few of them permanently. 

Dozens more companies moved, surprisingly quickly, to announce total pauses in their corporate PAC donations, many of them citing the Republican-backed “attack on American democracy.” These scores of companies promising newfound accountability in their PAC donations didn’t see fit to take the step to cut off funding of the Republican allies of Trump in the past—not for Trump’s anti-immigrant orders or his history of sexual assault, not for refusing to disclose his personal finances or after his first impeachment in the House, not after the negligience of his coronavirus pandemic response. But apparently, with Biden soon to be sworn in, corporations that had given hundreds of thousands of dollars to the 147 Republican objectors had reached a breaking point. 

Under the current campaign finance laws of this American democracy, though, there are plenty of ways for these corporations to get money to politicians while pausing campaign donations from their PACs. Corporations can’t make political donations, but they can come from: separate segregated funds, aka PACs; executives and senior employees; affiliated companies like lobbying shops and law firms; trade associations like the U.S. Chamber of Commerce; and more. They can be received by: individual candidate committees; joint fundraising committees; leadership PACs; national party committees; state party committees; super PACs, which can accept unlimited amounts; “social welfare” nonprofits that serve as “dark money” vehicles; and other groups. 

Because of the way money funnels between these groups, it’s impossible to calculate exactly how much money has gone from entities affiliated with a corporation to a member of Congress or other politician when counting intermediaries.

In these opaque networks, trade associations stand out as important middlemen for their dues-paying corporate members thanks to their involvement in the consequential work of lobbying the government on legislation and policy. Trade groups also often have PACs that make contributions to candidates and elected officials. The PACs of two major trade groups, American Bankers Association and the National Association of Realtors, were the second and third largest PAC donors to the 147 Republican objectors in the 2019-20 election cycle, according to an analysis by the non-profit Center for Responsive Politics. The two groups gave over $1.31 million and over $1.27 million respectively to the objectors, with four other trade associations among the objectors’ top 20 PAC donors.

The 22 companies are members of dozens of trade associations whose PACs have recently donated to the Republican objectors and have said nothing about changing their donation practices after the Capitol riot.

The American Petroleum Institute (API) receives dues from members Dow Chemical, which said it would cut off donations to objectors for their current term (two years for House members; up to six years for senators), and General Electric, which said it would cut off the objectors indefinitely. The PAC of API donated to many senators who objected to the Electoral College count in the 2019-20 cycle: Tommy Tuberville of Alabama ($1,000), Roger Marshall of Kansas ($1,000), Cindy Hyde-Smith of Mississippi ($2,000), and Cynthia Lummis of Wyoming ($1,000). API also gave $5,000 to the committee of House Minority Leader Kevin McCarthy of California, who blessed the objectors’ plan in a conference call the weekend before the Capitol assault, and joined conservatives in objecting.

NCTA – The Internet & Television Association counts as a member Comcast, which said it would cut off objectors indefinitely. The trade group’s PAC donated the maximum $10,000 to the joint fundraising committee of McCarthy, as well as other objecting Republican House members: $6,000 to Jim Jordan of Ohio, $4,000 to Elise Stefanik of New York, and $2,000 to Rep. Greg Pence of Indiana. NCTA’s president and CEO Michael Powell tweeted during the riots, “This is a sad and deeply disturbing moment for our nation…”, but did not respond to a tweet from a Virginia constituent of objector Rep. Morgan Griffith about the group’s future donations to objectors.

CTIA – The Wireless Association includes Verizon, which is pausing donations to objectors through 2021, and AT&T, pausing indefinitely to the objectors, and the group has not yet published a statement about the Electoral College challenge on its website or Twitter account. The group’s PAC contributed $2,000 to McCarthy’s campaign and $4,000 to Rep. Steve Scalise of Oklahoma, as well as $1,500 to Rep. Jordan and $1,000 to Sen. Rick Scott. 

Several prominent trade associations put out word that their donation policies would be changing somehow with regard to certain of the Republican objectors, including the U.S. Chamber of Commerce and the American Bankers Association, but their initial statements were noticeably lacking in specifics. The National Association of Realtors, National Bankers Association, and the National Beer Wholesalers Association made similar sounds. The American Chemistry Council told a reporter it would discuss the issue, though they did not post any press statement on their website, and the National Association of Manufacturers says it led a call for a peaceful transfer of power. In the pharmaceutical industry, several large givers like PhRMA said they would halt donations to the Republican objectors indefinitely, while a couple said they were reviewing their terms.

Campaign contributions from PACs are just a sliver of how corporate trade associations pump up their preferred candidates in contests. For example, the U.S. Chamber’s independent expenditures in support of Sen. Roger Marshall’s campaign last cycle ran up to $329,334, according to CRP.

After the deadly riots, McCarthy reached out to corporate backers to see if the indefinite pauses would last through the 2022 election cycle. Mike DuHaime, a former Republican National Committee executive director, told Politico, “This only matters if it holds for the entirety of the cycle. If it’s only a pause, it won’t matter.” Dozens of conservative objectors did get the majority of their campaign funding from business PACs, a CRP analysis found. 

It remains to be seen if the well-connected industry groups that said they will cut off PAC donations to the 147 Republican objectors will also pause their support for them through other means, like super PACs.

Read more Sludge at Brick House:

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