- The massive exodus of corporate support could affect the way senators vote in Trump’s impeachment trial, experts say.
- Dozens of companies have secured funding from Republican lawmakers who voted against Biden’s certification.
- CEOs say they increasingly have no choice but to bring politics to the boardroom.
- Visit the Business Insider home page for more stories.
Moral convictions may not be the only reason why Republican lawmakers are turning their backs on former President Donald Trump.
Lawmakers who voted against Joe Biden’s certification as president may also be rethinking his position after losing corporate funding, experts told Insider.
After Trump supporters invaded the U.S. Capitol in a desperate attempt to overturn the results of the presidential election, which turned into a violent uprising that left five dead, companies were quick to cut off relations with Trump and lawmakers who supported his unfounded allegations of electoral fraud.
Read More: Lawmakers, Hill officials and reporters recount the harrowing experience when a pro-Trump crowd stormed the Capitol to protest the electoral vote count.
Walmart, Amazon and Morgan Stanley are among the companies that cut the political funding of 147 Republican lawmakers who voted against Joe Biden’s certification as president. Hallmark took a step further and asked Republican senators Josh Hawley and Roger Marshall, who both voted against Biden’s certification, to repay their political donations.
This mass exodus of corporate support could have an effect on the actions of politicians, experts told Insider.
“Cutting funding reaches these politicians where it hurts,” Donald Hambrick, professor of administration at Smeal College of Business at Pennsylvania State University, told Insider.
Donation retention is “probably the most profound of the actions that can be taken,” he added.
The House of Representatives voted to impeach Trump on January 13. Now it is up to the Senate to decide whether to condemn him. If he obtains the two-thirds majority needed to be sentenced, the Senate will vote on whether to prevent him from holding public office again.
“I think the senators are going to squirm,” said Hambrick.
As more FBI reports and videos of the riots are released, more companies will take action, making “senators squirm even more,” added Hambrick. This could affect the way senators vote, he said.
“These corporations can have a substantial effect on the senators’ votes,” he said.
“The Senate vote may not be in favor of Trump.”
Trump’s closest political allies are under pressure from some party members to continue supporting Trump and companies and other politicians to stay away from him, Eric Schiffer, president of Reputation Management Consultants, told Insider.
California MP Kevin McCarthy, a minority leader in the House, may have started to backtrack in support of Trump because of the corporate response, Hambrick said.
House minority leader, Congressman Kevin McCarthy and former President Trump, in the Oval Office.
Anna Moneymaker / The New York Times / POOL / Getty Images
“People are saying that it is mainly because of the corporate cuts that he faces and that of his party. Observers are plotting their own turnaround from these corporate cuts,” said Hambrick, citing reports he read.
“People attributed this to all the cuts in corporate donations, specifically for him.”
Insider contacted McCarthy’s office for comment.
Companies are not just removing funding
Cutting funding is not the only action companies can take to cut relations with Trump and his supporters.
In the past few years, companies have increasingly come together to write open letters, Hambrick said, but that may not have as much influence on politicians.
“If the Business Roundtable wrote a letter, it would have an effect, but not as much as cutting political donations,” said Hambrick.
Companies have probably cut funds for specific politicians before, Hambrick said, but “nothing on that scale, nothing with so much fanfare or visibility.”
Companies are also taking other steps in response to the siege, but not necessarily targeting politicians, explained Forrest Briscoe, professor of management at Smeal College of Business at Pennsylvania State University.
Twitter, for example, eliminated 70,000 accounts associated with QAnon, a far-right conspiracy theory, and Amazon Web Services, Apple and Google were among the companies that cut ties with Parler, a social media site popular with Trump supporters. .
Briscoe also referred to the New York Stock Exchange. Jeffrey Sprecher runs his parent company, Intercontinental Exchange (ICE). Sprecher is married to Senator Kelly Loeffler of Georgia, an avid Trump supporter who supported his unfounded allegations of electoral fraud.
Loeffler was among lawmakers who planned to vote against Joe Biden’s certification as president, although she changed her mind after the siege. But his years of supporting Trump may still prompt companies to rethink their relationship with the NYSE, said Briscoe.
As more information related to the siege is released, “it will become increasingly ugly, and employees and customers will rely on these companies to do something and basically punish the Republicans who helped to do this,” said Hambrick.
Companies are becoming more and more political
“Many of us are hesitant to go into political waters,” said a CEO to Jeffrey Sonnenfeld, founder of the Yale Executive Leadership Institute, on condition of anonymity. “We don’t want to bring politics to the board or to our employees.”
“But we need to recognize that threats to the rule of law are legitimate business issues,” they continued. “It is completely legitimate and therefore also very important that we talk about these issues.”
The number of companies responding to the Capitol siege will increase in the coming weeks, Briscoe said, and fueling a long-term business trend becoming more political.
His reasons for engaging in socio-political activism vary, he added.
“Sometimes it’s clearly in the company’s interest, and sometimes it’s not, it’s just about values, beliefs and positions that people have as citizens or personally,” explained Briscoe.
Often, companies decide to act due to demand from their employees, explained Briscoe. In recent years, the team has become increasingly active in its socio-political positions and has pressured its companies to act, he said. Google employees, for example, fought Alphabet’s contract with the United States government’s defense department on Project Maven, a drone war project – and, after months of protests, the company said it would not renew the contract.
But it is not just employees who may have urged companies to respond to the siege of Capitol Hill.
CEOs are under pressure to consult their boards before taking steps to cut or limit corporate financing, Hambrick said. And the directors may even have proposed the idea to the CEO in the first place, he added.
And here they also have the support of customers. Americans are also overwhelmingly in favor of companies stop funding, too, The Harris Poll discovered. In their survey of 1,960 Americans, nearly three out of four said they support companies that are turning off political donations for now.
Ultimately, what companies and CEOs do is important, Sonnenfeld told Insider.
“Business leaders are now the most trusted pillar – about the clergy, civil servants, even the media and academics,” he said.