Promises kept: The companies not funding sedition
The companies not funding sedition
Of the 249 companies that originally committed not to give to members of the Sedition Caucus, less than half—85—have stood fast in their promise. Hopefully, with the leadership of corporations like PepsiCo, Nike, and Zillow—who are among those that halted their giving—the future political landscape of corporate giving will look different than it does today.
Amid the ongoing and serious threats to American democracy, there have been some positive stories of those who have made the sometimes hard choice to uphold democratic principles. Among those stories are the companies that have kept their vows to ensure their political spending doesn’t fund anti-democratic activities.
This takes place against the backdrop of the deadly insurrection at the Capitol on January 6th, 2021, after which hundreds of companies made commitments to stop giving to what has become known as the Sedition Caucus—the 147 members of Congress who voted not to certify the 2020 election and helped fuel the lies that led to the attack. These members have faced no censure or internal blowback for their votes, and while a single member has publicly expressed regrets, none have repudiated their votes or committed to respect democratic elections in the future.
In the days following the attack, as more and more companies made commitments to stop giving to members of the Sedition Caucus, CREW began tracking the contributions that flowed from corporate and industry group PACs. It became clear quickly that some companies would abandon their commitments once some of the original focus on the attack died down, forsaking their responsibility to the long-term viability of American democracy for the short-term benefit of access and influence they get from political contributions. Other companies didn’t make a commitment to stop giving at all and continued donating to members of the Sedition Caucus as though nothing happened.
CREW has continued to hold companies accountable for abandoning not only their public commitments, but also in some cases their own stated principles regarding democracy and representation. There is, however, something equally worth highlighting: Companies that made commitments after the insurrection and stuck with them. These companies are forgoing the potential short-term benefits of political contributions for the longer-term health of the democracy, and they deserve recognition. We certainly hope that these companies continue to maintain these commitments and that this report will serve as a benchmark for future corporate responsibility.
The urgency to confront and fight back against the erosion of democratic norms has not subsided since January 6th, 2021. The actions being taken by powerful political figures to weaken democracy continue unabated, and many members of the Sedition Caucus not only continue to trumpet the Big Lie that Donald Trump actually won the 2020 election, but also actively support measures around the country that aim to weaken decades of voting rights advancements, discredit nonpartisan election officials, and lay the groundwork for overturning election results they don’t like. In this crucial moment and beyond, we need corporations to use their megaphone for good, and, as we will argue, doing so might be good for business, too.
Companies keeping their commitments
(as of March 31, 2022)
As of the end of March, 85 of the 249 companies that committed not to give to members of the Sedition Caucus have stood fast in their promise. These companies run the gamut from large multinational corporations like PepsiCo and Nike to less well-known businesses like the waste-disposal company Republic Services. They represent industries from real estate (Zillow) and tech (Lyft and Cisco) to investment (Prudential), hospitality (Marriott), and retail (Target). There are also trade associations like TechNet, which advocates on behalf of the interests of dozens of corporations.
In assembling this list, we included companies that not only have kept their promise not to give to the campaigns and leadership committees of the 147 members of the Sedition Caucus, but have appropriately gone above and beyond by also avoiding giving to the National Republican Senatorial Committee and National Republican Congressional Committee, the two main party committees which are almost certain to support members of the Sedition Caucus. By avoiding giving to the party committees as well as the campaign and leadership committees, these companies are ensuring that their pledges are meaningful and that their practices align with their stated commitments to democracy. Anyone interested in more detailed information about how companies are giving can go to our tracker page here. Promoting transparency for companies regarding their commitments to social responsibility is essential to maintaining those standards.
Not all of the companies that made, and kept, a commitment to abstain from giving political contributions outlined how long the prohibition would last. More than 48 companies in this group committed to stop giving indefinitely. Four companies committed to stop giving permanently—including the ride-sharing company Lyft, which said it had never given to members of the Sedition Caucus and “committed to not supporting them in the future.”
Some companies did however give a timeframe for their commitments, but in several of these instances, the companies have continued the prohibition long after those deadlines lapsed. For example, shortly after the insurrection, Whirlpool committed to stop giving to all members of Congress for 6 months to a year, releasing a statement to CNN saying “Late last year the leaders of the Whirlpool employee PAC began discussing the long-term vision of the PAC, and whether it should be continued and if so, with what changes.” So far, Whirlpool has not yet shut down its PAC, but it has refrained from giving to any members of the Sedition Caucus and has drastically scaled back its overall giving—handing out just $32,500 in the first year of this cycle, compared to $154,000 over the same period the last cycle.
Other companies that have kept their commitments have also stopped short of shutting down their political action committees, while significantly scaling back all of their contributions. For example, in the first 15 months of the 2020 cycle, Marriott International gave $206,500 in contributions to other political committees, including to members like Virginia Foxx, Kevin McCarthy and Josh Hawley who would go on to vote against certifying the election results. During the same time in the 2022 cycle, Marriott International’s PAC has spent less than $93,000 on contributions, with none of those funds so far going to members of the Sedition Caucus.
Several other companies, like homebuilder PulteGroup, only pledged to stop giving contributions for 6 months, but nearly a year and a half later they have still not made a contribution to the Sedition Caucus. It’s important to note that even if the companies that made short-term commitments were to give now, long after their original commitment has expired, they would still be abandoning their commitment. That’s because election cycles last two years for House members and six years for senators, and it doesn’t much matter when donors give during a cycle, whether it’s in the first months, or later. It is positive, however, and to their credit, that these companies have still not abandoned their commitments.
It is possible, though, that some of the companies on this list will start giving again in the coming weeks and months, and while we hope that is not the case, we will track their contributions on our Sedition Caucus tracker page.
Democracy is good for business
Corporate executives have a number of reasons to take seriously the decision of whether or not to give money to members of the Sedition Caucus. First, on a fundamental level, we should all want to live in a free country with equal representation and rule of law. Unfortunately, we currently find ourselves fighting forces who would attempt to disqualify the votes of entire states with large minority populations and push baseless, anti-democratic lies in the face of repeated failed court challenges and audits that expose the unfounded nature of these theories. We are at an inflection point in American history, and it is not clear that we can take the security and freedom that we and our families are accustomed to for granted.
But businesses themselves also depend on these values—chief among them the stability, continuity, and rule of law fostered and protected by the U.S. government. Standing up against lawlessness and attempts to undermine the fundamental underpinnings of our democracy is in the long-term interests of companies whose success has been bolstered by a government that protects intellectual property, enforces contracts, and protects American business interests at home and abroad. These systemic risks threaten individual Americans and businesses alike.
Corporate leaders, like the rest of America, have long been able to take American democracy and stability for granted, but this can no longer be the case. As former Thomson Reuters CEO Tom Glocer told TIME last year, recounting a meeting of corporate executives held shortly after then-President Trump began laying the groundwork for the lies that led to the insurrection in the days after the 2020 election, “The market economy works because of the bedrock foundation of the rule of law, the peaceful succession of power and the reserve currency of the U.S. dollar, and all of these things were potentially at risk.” He continued, “CEOs are normally hesitant to get involved in political issues, but I would argue that this was a fundamental business issue.”
Furthermore, the benefits of a stable, inclusive democracy flow both ways. Take the Voting Rights Act as an example. A 2020 report from Equitable Growth shows that the passage of the VRA in 1965 actually led to higher wages for Black workers and narrowed the gap in wages between Black and White workers, with “no loss of employment for Black or White workers.” Another report from Citi that same year concluded that “if four key racial gaps for Blacks — wages, education, housing, and investment — were closed 20 years ago, $16 trillion could have been added to the U.S. economy. And if the gaps are closed today, $5 trillion can be added to U.S. GDP over the next five years.”
In other words, not only do American businesses benefit from the continuity and protection afforded by a stable democracy, but they also benefit from the economic growth that flows from advancing racial equity and a more inclusive democracy. The converse is also true: As countries slip democratically, the government starts to levy impediments to business. As Freedom House pointed out in 2015, the less free a country becomes, the more those in power start to “impose more red tape, build up barriers to trade, and fail to enforce contracts.” These countries “breed corruption due to their opacity and concentration of power, are prone to sudden and arbitrary decisions due to the lack of checks and balances, and are more susceptible to political unrest than democracies because they do not allow peaceful changes of government through elections.” The Freedom House report states the obvious: “None of these traits are helpful to businesses.”
In making their commitments not to give to members of the Sedition Caucus, several companies that have kept their promises explicitly pointed out the importance of democracy and inclusion. Nike, for example, told the independent journalist Judd Legum that the values it supports through campaign contributions “rely upon upholding the principles of democracy” and that its PAC “will not support any member of Congress who ignores these principles.” In announcing its decision to stop giving to members who voted not to certify the election, Cisco tweeted that it “will continue to look carefully at our political contributions to members of Congress to ensure they align with our values and purpose to power an inclusive future for all.”
Microsoft went further, noting on its corporate blog that it had heard concerns from “some members of the PAC community who do not want to contribute to political candidates but instead would like to donate to work that will address the issues and policies that are important to the preservation and promotion of democracy.” To that end, the company said it would “create a new Democracy Forward Initiative to support organizations that promote public transparency, campaign finance reform, and voting rights” that employees could contribute to. Microsoft appears, so far, to have made good on the commitment with some tangible results. The company also committed to “promote and join a conversation with other businesses and organizations that want to strengthen democracy.”
The business community’s role
An important question arises from this conversation: Why should we even be asking corporations to become more engaged in the pro-democracy fight? There are at least two answers to this question beyond the fact that corporations benefit, like everyone else, from the protections the government is supposed to provide. The first is that Americans trust corporate leaders. Edelman’s 2021 Trust Barometer, released shortly after the January 6 attack, showed that business is “not only the most trusted institution among the four studied, but it is also the only trusted institution with a 61 percent trust level globally, and the only institution seen as both ethical and competent.” The same week, a Just Capital poll found that most Americans trust CEOs “when it comes to taking action to protect and uphold democracy.” When corporations support an officeholder who undermined democracy, it confers credibility; when they noticeably don’t, it isolates those who have undercut our system. The companies that have kept their commitments are leveraging the trust the American people have in them to advance the cause of democracy; if trusted companies hold the line against those who undermine democracy, more Americans are likely to register the need to do so as well.
Corporations have traditionally been wary of getting involved in politics beyond their own parochial interests, for fear of appearing partisan, but democracy is not, and should not be, a political issue. Furthermore, from a campaign finance perspective, regular Americans don’t have the financial resources that corporations have to impact change. The vast majority of Americans do not give political contributions above $200. Far fewer give $2,700 or more. Yet, corporate PACs and the lobbyists they hire routinely max out to members of Congress, and by virtue of that fact they have access and influence that regular Americans don’t. As Microsoft president Brad Smith explained during an employee town hall soon after the insurrection, “You have to write a check and then you’re invited and participate… [T]he reason you go is because the PAC writes a check.”
Regular Americans do not have the ability to get the kind of political influence that comes with large political contributions, nor do they have the ability to hire powerful lobbyists to push their interests on Capitol Hill. More importantly for this discussion, they don’t have the ability to make a statement through the absence of their contributions.
It’s important to pause here and note that while political giving is one way that corporations get access and influence to powerful lawmakers, it’s not necessarily in the long-term interest of the business community. As such, closing their PACs should be on the table, and companies should think long and hard about whether or not giving at all is worth it, or whether they are feeding the cynicism that contributed to the January 6th attack. Corporations’ outsized influence feeds a lot of the souring views the public holds about whether their government actually represents the people, or just the powerful. A 2020 Pew poll showed that 82 percent of Americans think that corporations have too much power in today’s economy. These sentiments erode trust in elected officials and make large segments of the population more susceptible to anti-democratic demagogues.
The idea that businesses need to have well-funded PACs and powerful lobbyists is a relatively recent development in American history. The first PACs were formed in the 1940s, but it wasn’t until the mid-1970s—with the growth of professional, for-profit lobbying firms—that the use of PACs began to explode. From 1974 to 1984, the number of PACs in existence went from about 600 to more than 4,000, and today there are thousands of PACs, more than 1,600 of which are tied to a corporation.
As the former CEO of Unilever wrote shortly after the insurrection, “It’s time to reset the private sector’s relationship with U.S. politics and move forward in a way that ensures the government runs on the will of the people, not the power of the dollar.” He points out that companies like IBM never formed a corporate PAC, yet it “is still given a seat at the table and able to advocate for policies that benefit its workers, communities, and other stakeholders.” In the wake of the insurrection, Charles Schwab Corporation shut down its PAC altogether, though Charles Schwab himself has continued to give political donations, including to members of the Sedition Caucus. More companies should consider shutting down their PACs entirely and calling on others to follow suit. Some may do so: Hewlett Packard committed to “permanently end” its PAC after the insurrection, but for now, FEC records show the PAC is still in operation.
There’s another reason companies would be wise to consider putting their long-term interest in democracy and stability ahead of the short-term benefits they get from donating to anti-democratic members of Congress. In particular, companies that prioritize civic engagement—for example, by giving their employees time off to vote or promoting democratic principles—may outperform the market.
Aligning corporate values and rebuilding trust
Whether a corporation contributes directly to a candidate or indirectly to a PAC or so-called “dark money” group, it is ultimately accountable to its employees, consumers, and, in the case of publicly-traded companies, its shareholders.
It is clear that in a post-insurrection world, corporations are being held more accountable than ever by stakeholders for political giving that is not aligned with their professed corporate values. Some companies are leading the way in correcting misalignment, but others’ inaction poses a threat to the wider business community.
Shareholders and advocates have long been pushing for corporations to disclose their political giving and adopt oversight of how they make spending decisions in order to mitigate the reputational and business risks involved. What one executive might view as a political contribution that is good for business can still create backlash with employees and the public, as large corporations have seen in the past.
Since the insurrection, the risks are an even bigger worry to shareholders. Last year, political transparency proposals presented at Netflix and United Airlines’ annual meetings received 80 percent and 68 percent of shareholder support, respectively. For the first time ever, the three largest institutional investors—BlackRock, State Street, and Vanguard, stewards of trillions of dollars of Americans’ investment and retirement assets—all voted in favor of at least one political transparency resolution.
The growing concerns were valid. After Toyota violated its pledge not to give to members of the Sedition Caucus and resumed contributions just weeks after January 6, the company faced significant criticism from the public on social media and in press coverage that led it to recommit to stop giving for six months and re-evaluate internally (Toyota unfortunately began giving to members of the Sedition Caucus again in March 2022.) Capital One, Cox, Motorola, and Exelon have since broken their pledges, too. While breaking promises can hurt a company’s reputation, even corporations that never made a pledge not to give are at risk of appearing to contradict pro-democracy values. The companies that have kept their commitment have avoided the risks of blowback from customers, employees, and shareholders that other companies have faced on this issue.
Recently, shareholders have begun demanding that companies go a step further than transparency and align their political giving with the values they often tout on their websites—like diversity, sustainability, or democracy. AT&T is one of 10 companies this year that faces a call from shareholders to address financial support of politicians who undermine the corporation’s stated values on a range of issues, from climate change to voter suppression. Eight of those corporations—AT&T, AbbVie, Amgen, Charter Communications, Cigna, FedEx, Home Depot, and Pfizer—have given to at least one member of the Sedition Caucus and the other two—JP Morgan and United Health Group—have given to committees that support the re-election of Sedition Caucus candidates.
Employees are growing similarly frustrated when management action doesn’t square with company values. Disney employees staged a walkout in March following their CEO’s underwhelming statement in response to the controversial Florida “Don’t Say Gay” bill. A few years ago, the threat of an employee walkout pressured Amazon to take action on climate change. Companies want to attract the best employees from diverse backgrounds, and there is a risk of alienating workers by making a misaligned political contribution.
Like in the case of Toyota, threats of consumer boycotts and public shaming can pressure a company to halt its political contributions, temporarily or permanently. Consumers are also speaking with their wallets another way—by leveraging their retirement savings and investing in funds that filter stocks by environmental, social, and governance (ESG) criteria. Socially responsible investments funds empower consumers to further align their financial decisions with their own ethics. The big three investors, BlackRock, Vanguard and State Street, all now have options for ESG funds.
Today, the reputational and business risks resulting from inaction are too high to be ignored. The companies that have kept their commitments not to give to members of the Sedition Caucus have recognized this; we urge them to continue with their admirable behavior, and other companies should follow their examples. Increasing disclosure of corporate political spending and remedying the misalignment between political spending and public corporate social responsibility (CSR) statements would be further steps in the right direction. Rebuilding public trust, however, is no small task. Such change will not happen overnight. That is why we urge corporations that have kept their pledges to lead in this space, encouraging other businesses to follow their example.
Here are some of the actions corporate leaders can take to shore up democracy:
- Be consistent in withholding support from political leaders who undermined democracy by voting against certifying the 2020 election and who continue to undermine democracy in other ways at both the state and federal level. We urge those companies that have kept their commitment to stay on target, and invite other companies to follow their example.
- Advocate for the passage of voting rights legislation and campaign finance reform that will protect the right to vote, make it more difficult to undermine elections, and shift the balance of power away from wealthy donors, giving regular Americans faith that their interests are being heard.
- Pledge to be fully transparent about political contributions. Provide the public with a full accounting not only of donations made to PACs and other political organizations, but also to 501(c)(4) social welfare organizations and 501(c)(6) trade associations that can and do spend heavily in elections, often without disclosing any of their donors. Or consider terminating corporate PACs altogether and giving up on political contributions.
- Become a leader in the business community not only through example, but also by proactively persuading other businesses of the long-term benefits of defending democracy, including urging others to end support of politicians who have undermined democracy and to take the other important steps outlined here.
These challenges for corporations are not going to go away. If companies continue to give political contributions, they are going to continue to find themselves answering for the actions of the political figures they choose to bankroll. It is no longer possible for companies to separate the strategic benefits they derive from giving to a member of Congress who sit on certain committees from the potential blowback the company will face—from the public, their shareholders, or even their employees—if those members of Congress undermine democracy, or espouse beliefs or push policies that people find dangerous or reprehensible. The corporations that have kept their post-January 6 commitments have recognized this risk and taken—and stuck to—a key step to reduce risks, maximize benefits, and secure American democracy.
We applaud these companies for taking a principled stance and urge them to continue setting this example. With their leadership, hopefully the movement will grow, and the future of corporate political spending will look very different than it does today.
Full list of companies keeping their commitment as of March 31, 2022
Justine Ellis contributed to this report.
Header image CREW illustration/Photo by Tyler Merbler under a Creative Commons license.