• Ryan O'Connell

Money Talks…and Moderate Republicans Are Shouting

February 10, 2021

As moderate Republicans recoiled in horror at the January 6 assault on Congress, many blue-chip U.S. companies announced that they would stop contributing to the Congressional Republicans who voted to overturn the election results. Money is the lifeblood of American political campaigns, so this move caused consternation in the Republican leadership.

Even the Sphinx-like Sen. Mitch McConnell was worried. How could he hope to regain control of the Senate in 2022 if corporate America turned its back on the Republican Party?

The risk of losing the business community’s support may be traditional Republicans’ last defense against the Trump faction taking over the party and turning it into an authoritarian movement.

But can the Republican “establishment” wrest back control of the party from Donald Trump’s followers, or it is too late? Instead, could the Republican Party start to break up?

There’s a precedent in American history: the Whig Party was torn apart in the 1850s by a fierce debate over slavery. Northern Whigs abandoned the party to join the newly created Republican Party, while Southern Whigs joined pro-slavery political parties.

In another parallel to that troubled era, Donald Trump has relentlessly played on racial tensions to whip up his supporters. The U.S. is sharply divided now, as it was just before the Civil War.

Still, the Whigs’ Krypton-like explosion occurred a long time ago, in a very different country.

Breaking Up is Hard to Do

The corporate backlash might lead several Republicans in Congress to moderate their positions, because companies’ political action committees (PACs) are a major funding source, particularly for members of the House. However, politicians have other fund-raising alternatives, thanks to the Supreme Court’s Citizens United decision (2010) and the Internet.

Furthermore, Trump loyalists dominate the Republican Party now, on the national and the state level.

As a result, many establishment Republicans may have to choose whether to stay in the party or become independents or even...Democrats. The Republican Party lost many suburban, college-educated whites over the last four years, as Trump’s rhetoric grew even more racist and authoritarian. Perhaps we will see a parade of corporate executives join the exodus.

But a wholesale break-up of the party seems unlikely. Third parties have a lousy track record in U.S. politics.

Company PACs Are A Small Part of the Pie

Corporate PACs are important to politicians but a relatively small part of the political contributions universe.

They provided about $360 million in the 2020 election cycle. That’s a lot of money. But the total campaign expenditures, just for Federal elections, were $14 billion, of which $7 billion was spent on House and Senate races. That’s based on an estimate by the Center for Responsive Politics.

In other words, company PACs chipped in about three cents for every dollar candidate spent.

Corporate PACs can only donate $10,000 to a candidate in an election cycle. However, wealthy individuals and super PACs, which are not (directly) affiliated with corporations, don’t face such limits, because the Citizens United decision eliminated restrictions on their donations.

So conservative casino magnate Sheldon Adelson could donate $215 million to his favored candidates, while liberal Michael Bloomberg contributed $151 million. When that kind of money talks, politicians really listen.

But PACs Loom Large for House Members

Still, corporate PACs represent about 30% of contributions for House members of both parties, and in normal times, they are a reliable source of funding. Meanwhile, large individual donations provide about 40% for Republicans and 50% for Democrats. Small contributions, less than $200, have exploded because of the Internet and now provide about 20% of funding for House members.

That’s on average. More than 100 House members—about half of them Republican--rely on corporate PACs for 40% or more of their funding. They will probably pay close attention to corporate backers who think that subverting democracy is not a selling point.

Company PAC contributions are not as important for Senators, at less than 10% of funding. Small donors (30%) and large individual contributors (50%) are the critical financing sources in that arena. In any case, only eight Senators voted to overturn the election results and risk losing their corporate funding.

However, one company, Hallmark, did ask Senators Ted Cruz and Josh Hawley, the ringleaders in the Senate, to return its contributions. That was a powerful statement.

Sen. Ted Cruz/Getty Images-Zach Gibson

How Serious Are the Companies?

We have to dig behind the headlines on the companies’ suspension of contributions. An impressive list of 25 blue-chip firms said specifically that they were stopping or suspending contributions to the 130 House members and eight Senators who voted against certifying the results of the Electoral College.

But here’s an odd twist: over 40 other companies suspended their giving to all candidates, including Democrats, as they “reviewed” their policies. Democrats were dumbfounded and infuriated, naturally.

Corporations may be taking that tack to appear even-handed. Some firms might also be buying time, as they try to determine if their employees think they should donate to those particular Republicans. After all, the firm’s employees (senior and middle-management) are funding the PACs. The companies also have to take into account their customers’ views on this sensitive topic.

And how long will the companies “suspend” their contributions? Only a few firms said categorically that they would not give any money to those Republicans at any point in the 2022 election. Even in the U.S., it’s very early in the new election cycle. Will the companies change their minds in six months or a year, when the next round of races starts to heat up?

It’s Trump’s Party Now

For most of its members, the Republic Party has become a personality cult devoted to Donald Trump. As Marjorie Taylor-Greene, the newly elected Representative from Georgia and QAnon devotee, said last week, “the party is his and doesn't belong to anybody else.” MTG’s comment captures the Trumpist mind-set perfectly. This fanatical devotion to a former President is a strange new development in American politics, particularly since Trump just lost an election by a large margin. No one would have ever said that the Republican Party “belonged” to either George H.W. Bush or his son. But for Trump’s followers, he is the party, and he must be followed blindly.

Over 80% of Republicans still support Trump, even after the assault on Congress. Trump loyalists are targeting the small band of brave Republican House members who voted to impeach Trump and the Senators who said he should be impeached.

Moderate Republicans Under Attack

In Wyoming, the local Republican party has censured Rep. Liz Cheney, the third-ranking House Republican, for voting to impeach Trump. This is as if Massachusetts Democrats censured a Kennedy. The Cheneys have dominated Wyoming politics for two generations. Dick Cheney, Liz Cheney’s father, represented the state in the House for many years and served as George W. Bush’s Vice President. The Arizona Republican Party censured Doug Ducey, the Republican governor, because he fulfilled his duty by certifying that Joe Biden had won the state’s electoral votes. In the party’s eyes, the actual vote tally did not matter; the facts be damned. Ducey had to be punished because he was disloyal to Trump.

The Michigan Republican Party has just elected two hard-core Trump followers as their chair and vice- chair. Meshawn Maddock, the vice chair, parroted Trump’s lies about fraud during the election, and she spoke at his rally on January 6 in Washington, D.C. Senator Ben Sasse (R-Nebraska) also faces censure, because he said Trump should be impeached for his role in fomenting the insurrection. Sasse, an outspoken critic of Trump for some time, has formed a PAC to fund traditional conservative Republicans like himself.

This will be a critical case for establishment Republicans. Will they step up and support Sasse’s PAC, or not? They may not have many more chances to make their voices heard.

The Wall Street Democrat

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