- The mass exodus of corporate backing could affect how senators vote on Trump‘s impeachment trial, experts say.
- Dozens of companies have pulled funding from the GOP lawmakers who voted against Biden‘s certification.
- CEOs say they increasingly have no choice but to bring politics into the boardroom.
- Visit Fintech Zoom’s homepage for more stories.
Moral convictions may not be the only reason that GOP lawmakers are turning their back on former President Donald Trump.
Lawmakers who voted against certifying Joe Biden as president may also be rethinking their stance after losing corporate funding, experts told Insider.
After Trump supporters stormed the US Capitol in a desperate bid to overturn the presidential election results, which turned into a violent insurrection leaving five people dead, businesses have been quick to cut ties with Trump and the lawmakers who backed his baseless claims of election fraud.
Read more: Lawmakers, Hill staffers, and reporters recount the harrowing experience as a pro-Trump mob broke into the Capitol to protest the electoral-vote count
Walmart, Amazon, and Morgan Stanley are among the companies that have cut off political funding to the 147 GOP lawmakers who voted against certifying Joe Biden as president. Hallmark went a step further, and asked Republican Senators Josh Hawley and Roger Marshall, who both voted against Biden‘s certification, to refund its political donations.
This mass exodus of corporate backing could have an effect on politicians’ actions, experts told Insider.
“Cutting funding hits these politicians where it hurts,” Donald Hambrick, a professor of management at Smeal College of Business, Pennsylvania State University, told Insider.
Withholding donations is “probably the more profound of the actions that can be taken,” he added.
The House of Representatives voted to impeach Trump on January 13. It’s now up to the Senate to decide whether to convict him. If he gets the two-thirds majority required to be convicted, the Senate will then hold a vote on whether to bar him from ever holding public office again.
“I think senators are gonna be squirming,” Hambrick said.
As more FBI reports and video footage of the riots are released, more companies will take action, making “senators squirm all the more,” Hambrick added. This could ultimately affect how senators vote, he said.
“These corporations could have a substantial effect on senators’ votes,” he said.
“The Senate vote could be very much not in Trump‘s favor.”
Trump‘s closest political allies are under pressure from some members of the party to continue supporting Trump and from companies and other politicians to pull away from him, Eric Schiffer, chairman of Reputation Management Consultants, told Insider.
California Rep. Kevin McCarthy, the House minority leader, may have begun back-pedalling in his support for Trump because of the corporate response, Hambrick said.
“People are saying it’s primarily because of the corporate cuts he faces and his party faces. Observers are tracing his own about-face to these corporate cuts,” Hambrick said, citing news reports he had read.
“People have traced it to all the cuts in corporate donations, specifically to him.”
Insider contacted McCarthy’s office for comment.
Companies aren’t just removing funding
Cutting funding isn’t the only action businesses can take to cut ties with Trump and his supporters.
In recent years, companies have been increasingly grouping together to write open letters, Hambrick said, but these may not have as big an influence on politicians.
“If the Business Roundtable wrote a letter, it would have some effect, but not as much as cutting political donations,” Hambrick said.
Companies have likely cut funding to specific politicians before, Hambrick said, but “nothing on this scale, nothing with as much fanfare or visibility.”
Businesses are also taking other actions in response to the siege, but these aren’t necessarily directed at politicians, Forrest Briscoe, a professor of management at Smeal College of Business, Pennsylvania State University, explained.
Twitter, for example, purged 70,000 accounts associated with QAnon, a far-right conspiracy theory, and Amazon Web Services, Apple, and Google were among the companies who cut ties with Parler, a social media site popular with Trump supporters.
Briscoe also referred to the New York Stock Exchange. Jeffrey Sprecher heads up its parent company, Intercontinental Exchange (ICE). Sprecher is married to Georgia Senator Kelly Loeffler, an avid Trump supporter who supported his baseless claims of election fraud.
Loeffler had been among the lawmakers planning to vote against Joe Biden‘s certification as president, though she changed her mind after the siege. But her years of support for Trump could still cause businesses to rethink their relationship with the NYSE, Briscoe said.
As more information is released related to the siege, “it’s gonna be uglier and uglier, and employees and customers are gonna lean on these companies to do something and basically punish the Republicans who helped bring this about,” Hambrick said.
Companies are getting increasingly political
“A lot of us are hesitant to wade into political waters,” a CEO told Jeffrey Sonnenfeld, founder of Yale’s Chief Executive Leadership Institute, on condition of anonymity. “We don’t want to bring politics into the boardroom or to our employees.”
“But we need to recognize that threats to the rule of law are legitimate business issues,” they continued.”It’s totally legitimate and therefore also very important that we speak out on these issues.”
The number of companies responding to the Capitol siege will increase in the coming weeks, Briscoe said, and feeds into a longer-term trend of businesses becoming more political.
Their reasons for engaging in sociopolitical activism vary, he added.
“Sometimes it’s clearly in the interests of the firm, and sometimes it’s not, it’s just about values and beliefs and positions that people have as citizens or personally,” Briscoe explained.
Often, the companies decide to take action because of demand from their employees, Briscoe explained. Over recent years, staff have become increasingly vocal about their sociopolitical stances and have lobbied their companies to take action, he said. Google employees, for example, fought against Alphabet’s contract with the US government’s defense department on Project Maven, a drone warfare project – and, after months of protests, the company said it wouldn’t renew the contract.
But it’s not just employees who may have urged companies to respond to the Capitol siege.
CEOs are under pressure to consult their boards before they take actions such as cutting or limiting corporate funding, Hambrick said. And the directors may even have proposed the idea to the CEO in the first place, he added.
And here they have the backing of customers, too. Americans are overwhelmingly in favor of companies pausing funding, too, The Harris Poll found. In its survey of 1,960 Americans, nearly three in four said they support companies pulling the plug on political donations for the time being.
Ultimately, what companies and CEOs do matters, Sonnenfeld told Insider.
“The business leaders right now are the most trusted pillar – over the clergy, public officials, even media and academic,” he said.