The Unforeseen Capitol Attack Prompts Big Banks To Halt Political Funding

The shocking attack on the U.S. Capitol in the very first week of 2021 instigated financial firms JPMorgan Chase and Citigroup, along with other U.S. corporations, to pause their political action committee donations. Let’s read the complete story.

On January 6, 2021, an aggressive mob stormed the U.S. Capitol, disrupting the joint session held to confirm Joe Biden’s victory. The mob consisted of followers of the current U.S. President Donald Trump. The terrible siege at the Capitol left five people dead, including a member of the Capitol police who was crushed to death. 

Following these unfortunate events, financial firms JPMorgan Chase and Citigroup said that they will temporarily halt funding towards the political action committee donations.

According to JPMorgan’s spokesman Steve O’Halloran, the biggest U.S. bank by assets plans to pause the contributions for both Republicans and Democrats for “at least” the next six months. The New York-based bank plans to utilize the time to strategize their political-donation framework by considering the potential changes required, given the Capitol chaos.

In a statementOpens a new window to CNBC, JPMorgan’s head of corporate responsibility Peter Scher said, “The country is facing unprecedented health, economic, and political crises.” He further added, “The focus of business leaders, political leaders, and civic leaders right now should be on governing and getting help to those who desperately need it most right now. There will be plenty of time for campaigning later.”

In the wake of the Capitol riots, many top corporations such as Marriott International and the Blue Cross Blue Shield insurance group said that they will stop providing financial aid to Republican lawmakers who backed pro-Trump follower’s actions in disrupting President-elect Joe BidenOpens a new window ‘s victory. Rather than directly targeting the members of the Republican Party, banks, on the other hand, have instead decided to halt donations to all lawmakers, for the time being.

The shameful episode caught the attention of various nations across the globe, as global corporations were in a spot of bothering on how to respond to such an event. Technology giants like Twitter, Facebook, and Amazon took immediate action and decided to limit the spread of disinformation that could potentially incite more violence.

Political action committees (PACs) pool employee contributions and can donate up to $5,000 to a single candidate per election. Further, PACs can also donate $15,000 annually to any national party committee. Now, as the money is raised from voluntary employee contributions, the sudden change in donation policy sidesteps federal laws that prohibit companies from giving money directly to candidates.

Citigroup, on Friday, told its employees in an internal communication that it is also pausing PAC donations to all lawmakers during the first quarter of 2021.

Candi Wolff, head of global government affairs, said, “We want you to be assured that we will not support candidates who do not respect the rule of law.” She further added, “We intend to pause our contributions during the quarter as the country goes through the presidential transition and hopefully emerges from these events stronger and more united.”

CONFIRMED: JP Morgan to cut off PAC donations to both parties for six months, spox Trish Wexler tells me.

— Andrew Solender (@AndrewSolender) January 10, 2021Opens a new window

The representatives of the financial service firms including Goldman Sachs, Morgan Stanley, and Wells Fargo didn’t respond to the expected potential changes in donations immediately.

Three Major Corporations Hint on Curbing Donations to Members of Congress

The unforeseen Capitol event, a huge blow to the United States democracy, has led to three major corporations deciding on stopping the campaign contributions to Republican members of Congress who encouraged the rioters by objecting to the certification of the Electoral College vote, as reportedOpens a new window by Popular Information, a political newsletter.

Popular Information had contacted 144 corporations that donated to one or more of these eight Senators in the 2020 election cycle through their corporate PACs. The corporations were asked to comment if they would continue to support these Senators in the future. Blue Cross Blue Shield Association, Marriott International, and Commerce Bancshares, three major companies replied that they do not support such blatant disregard for our democratic values. And have also decided to halt donations to the members of Congress who objected to the certification of the Electoral College vote. 

BLUEPAC had donated to three Senators who objected to the Electoral College vote — $10,000 to Tuberville, $1,000 to Marshall, and $500 to Hawley, during the 2020 cycle. In  a statementOpens a new window to Popular Information, Blue Cross Blue Shield Association President and CEO Kim Keck said it was suspending all support to the 147 Republicans who voted “to subvert the results of November’s election by challenging Electoral College results.”

Similarly, Marriott’s PAC donated $1000 to Hawley’s campaign and another $1,000 to Hawley’s leadership PAC, during the 2020 cycle. Marriott’s spokesperson said, “We have taken the destructive events at the Capitol to undermine a legitimate and fair election into consideration and will be pausing political giving from our Political Action Committee to those who voted against the certification of the election,”. Further, the company did not give a hint on when it would resume supporting those 147 Republicans if ever it decides to. 

Commerce Bancshares PAC on the other hand donated $2,500 to Marshall, in the 2020 cycle. After the recent events, Commerce Bancshares saidOpens a new window that it too has “suspended all support for officials who have impeded the peaceful transfer of power.”

All three major companies have kept the window open for the possibility of resuming their support of these members sometime in the future, however, their plans are yet not clear. Although, at this point, the companies are committed to indefinitely suspend contributions to more than half of the Republicans in the House and Senate which in itself is a significant move. 

Another company,  Boston Scientific, reportedOpens a new window that it was suspending all the PAC activity “in light of recent events” pending a review. Boston Scientific had previously donated $7,000 to three of the eight Senators who objected — $3,000 to Marshall, $3,000 to Scott, and $1,000 to Lummis. 

Companies Consider Subverting the Democratic Process

Several other companies issued statements condemning the Republicans who objected to the Electoral College vote and said their actions would affect the future decisions about political giving. However, some of these companies did not give a concrete statement on whether they would stop contributing to the Republican objectors. Some of these top companies and their statements are listed below:

1. Bank of America

Bank of America’s PAC donated $5,000 to Marshall. The bank’s PAC contributes to both parties considering many factors before doing so. However, in the next election cycle, the bank’s PAC plans to review its decision-making criteria in light of the actions that contributed to the act of terrorism on the U.S. Capitol. Bill Halldin, the Bank of America spokesman said that the “appalling violent assault on the U.S. Capitol” will affect donation decisions for the 2022 midterm elections.

2. Ford

Ford’s PAC donated $15,500 to four Senators — $7,000 to Marshall, $5,000 to Hyde-Smith, $2,500 to Lummis, and $1,000 to Hawley. Ford officials said, “Ford condemns the violent actions that happened this week, which contradict the ideals of a free and fair election and a peaceful transition of power…Events over the past year have underscored the need for a broader, ongoing discussion about other relevant considerations.”

3. AT&T

AT&T’s PAC donated $33,000 to five Senators — $15,000 to Cruz, $10,000 to Marshall, $4,000 to Kennedy, $2,000 to Hawley, and $2,000 to Scott. In response to future donation consideration, AT&T said, “Prior to Wednesday’s Congressional votes, we publicly supported the U.S. Chamber and Business Roundtable in opposing efforts to delay or overturn the certification of Electoral College votes. As is their standard practice, the employees who serve on our PAC committee will weigh candidates’ positions, votes cast and actions taken when making decisions about future PAC support.”

Companies Reviewing Their Political Giving Strategies

Several other companies are reviewing the policies around their political giving or are yet to decide on the giving parameters.

1. FedEx

FedEx’s PAC donated $20,500 to four Senators — $10,000 to Marshall, $6,000 to Cruz, $2,500 to Lummis, and $2,000 to Hawley. FedEx condemned the shocking Capitol violence and  said, “Multiple factors impact our decisions to support candidates, and we are reviewing all future political contributions.”

2. Target

Target’s PAC donated $1,000 to Marshall. The company expressed its displeasure over the Capitol siege by Trump followers and the violence that ensued. They said, “We know that there isn’t a single candidate who aligns completely with Target or our team members on every issue, which is why we rely on established criteria like a candidate’s impact on our business, committee assignments, and more when we make contributions. Consistent with our current practice, we will continue to review our giving criteria and PAC contributions on an ongoing basis.”

3. Walmart

Walmart’s PAC donated $9,000 to four Senators — $2,500 to Lummis, $2,500 to Marshall, $2,000 to Cruz, and $2,000 to Hawley. Walmart’s spokesperson told ReutersOpens a new window  that it regularly reviews its donations to “examine and adjust our political giving strategy. As we conduct our review over the coming months we will factor last week’s events into our process.”

Corporate Contributors That Are Silent on Future Contributions

Out of 144 corporations that were contactedOpens a new window by Popular Information, 122 did not respond. The non-responding group included the largest corporate contributor to the Republican Senators who objected to the Electoral College count, Comcast/NBCUniversal. It has been reported that Comcast donated about $44,500 in the 2020 election cycle to four of the eight Senators who objected to the Electoral vote. Hyde-Smith received at least $17,500 from the company. Comcast is a member of the Business Roundtable stated on January 4 that it “opposes efforts to delay or overturn the clear outcome of the election.” 

Similarly, United Parcel Service donated at least $30,500 to five of the eight Senators, including $18,000 to Marshall. UPS is also a member of the Business Roundtable. The company however did not respond to the query if it would continue supporting these Senators in the future.

Boeing on the other hand has also donated at least $28,500 to three of the eight Senators since 2019. Following the riots, on January 7, Boeing CEO David Calhoun tweeted that “the vote of the people and the peaceful transition of government are core to our democracy. In the spirit of bipartisanship, we encourage them  to work with President-elect Biden to unify our nation.” 

From our President and CEO David Calhoun: pic.twitter.com/keaYFva3G6Opens a new window

— The Boeing Company (@Boeing) January 7, 2021Opens a new window

Boeing did not respond to the request on plans of supporting the Senators.

Other major corporate contributors that did not respond include Altria Group which donated at least $32,500 to five of the eight Senators,  and Lockheed Martin which donated at least $30,500 to five of the eight Senators.

In Conclusion

Several financial and corporate U.S. firms are reviewing their donation policies in the aftermath of riots that shook the U.S. Capitol in the past week. The move reflects an acceleration of the current and future trends among large companies to limit or better disclose and plan political spending. 

The unfortunate act of violence in the heart of the U.S. Capitol could reshape the ‘political spending landscape’ for years to come as businesses are forced to rethink the political donations strategy after the Capitol siege.

Do you think the attack on the Capitol could restructure the fundamental political spending framework of big banks and U.S. corporations? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!