• February 5, 2023

Corporate America Reckons with Its Role Enabling Trump

On January 6, Michael Araten was working at home with the television on in the background when he saw live footage of pro-Trump protesters storming the United States Capitol. He stopped what he was doing and stared at the screen. “First, it was a bit of a shock,” said Araten. “During the day I got both very sad and very angry.” The thing that discouraged him most was that eight Republican senators and one hundred and thirty-nine Republican members of the House had refused to endorse the election results even after the violence and lawlessness erupted in the Capitol. “There is a good faith objection and a bad faith objection,” said Araten. “This only shows the desperation to hold onto power for the sake of power.”

At fifty, Araten is president of a Philadelphia-based plastic injection molding company, the Rodon Group. Like other members of the business community, Araten immediately thought about what he could do to support democracy and condemn lawmakers who fueled the idea that the election was illegal. On January 7th, still in shock at what had just happened, he mentally cycled through the various organizations he was involved with, wondering if any offered a place to do something useful. Most obvious was the Philadelphia Chamber of Commerce, where Araten serves as vice chairman of the policy committee and has a role in deciding how the PAC, which donates to political candidates at the state and local levels, spends its money.

Pennsylvania was at the center of the controversy over the presidential election. Biden carried the state with roughly eighty thousand votes, and the Trump campaign targeted the state with lawsuits aimed at reversing the loss. Almost all of the lawsuits were denied, dismissed, or withdrawn. Pat Toomey, the Republican Senator from Pennsylvania, publicly condemned efforts to scrap the election results, but eight of the nine members of the Republican House who represent the state voted to reject the results anyway. According to the TimesOne of them, Rep. Scott Perry, a five-year-old Congressman from South Central Pennsylvania, went ahead and introduced President Trump to a Justice Department official who was interested in helping him try to reverse the election results. (Perry didn’t respond to the Times’ request for comment.) Pennsylvania state lawmakers are Republican-controlled and GOP state officials attended a hearing on Nov. 25 at which Rudy Giuliani and Jenna Ellis, two of Trump’s, attended Lawyers who made unsubstantiated allegations widespread fraud. In general, Araten said, members of the Pennsylvania business community were “appalled.”

Araten emailed the chairman of the chamber’s board of directors stating that the chamber should stop all political donations to Republican politicians because too many members of their party supported flimsy election fraud claims. He told me that some Chamber members were unwilling to withdraw funding from all Republican politicians, especially those like Toomey who publicly denounced efforts to overthrow the elections. The Chamber’s tradition is to work with incumbents, regardless of party, to achieve their goals, including promoting an inclusive business community. Araten argued that the damage caused by Trump’s lies about the election made complicity too important to ignore. “I think it’s time to change that thinking,” he said. “Because if this behavior has no consequences, you will get more of it.” He noted that the Chamber’s PAC is relatively small, giving away only a few hundred thousand dollars a year. He is just one vote on the board who will vote on the future of the Chamber’s political giving in the coming months. However, he believes that regardless of the organization’s decision, it was important to get your thoughts out there. “When you have a platform, big or small, this is the time for the guide to stand up and tell your friends I believe in that.”

In the final weeks of the Trump presidency, dozens of companies announced that they would stop making political donations in response to the unrest in the Capitol. Hallmark Cards, based in Missouri, urged Senators Josh Hawley and Roger Marshall to return their donations of $ 7,000 and $ 5,000, respectively. Others, like Amazon, AT&T, and Marriott, said they would stop donations to lawmakers who voted against confirming President Biden’s victory. Several other companies, including 3M and American Airlines, said they were pausing all donations to both parties and reviewing their strategy for the future. One company, brokerage firm Charles Schwab, said it would permanently dissolve its political action committee. All of this suggests that big business leaders are struggling to acknowledge, and possibly mitigate, the damage caused by their previous support for Trump and his party. Many business people never liked Trump and found his way of communicating repugnant. But he offered them something that big business executives wanted badly: the promise of regulation cuts and tax cuts. Only now, after the unrest, has this compromise been largely called into question in the business world. The question right now is whether the changes companies are making in response are merely immediate actions to repair reputational damage or something more permanent.

“I think people have made peace [Trump]because it delivered what many business leaders and mainstream Republicans wanted, ”said Ron Shaich, founder of Panera Bread. “You could argue that you didn’t like Trump personally, but that what he did was a net positive and you would take it. You made a deal with the devil. “Shaich followed the events of January 6th from his home in the Caribbean, where he has been living and working since last March. “I walked away so powerfully sensitive to how fragile it all is,” he said. “I grew up in a world where nothing would ever happen to America. We won the wars, we believed in ourselves and, to some extent, believed in the invincibility of our system. I could never have imagined a world where legitimate people would plead for almost absolute power in the executive, and how small lies became big lies. You want to shake people and say, “Don’t you get it?” ”

Shaich noted that he had personally made political donations during his years at Panera, but he did not direct the company to do so because, while permissible, it was not the right thing to do. “I understand why people advocate policies that affect their businesses,” he said. “But I don’t think CEOs should make decisions with shareholders’ money or company assets.”

There was a time when companies were focused only on their business and tended to stay out of politics. The free market economist Milton Friedman argued that companies should prioritize their profits and nothing else. In the last few decades, as the country became more polarized, and budget cuts and incompetence in governing bodies were unable to solve citizens’ problems, companies have become increasingly proactive in their political activities. Michael Useem, professor of management at Wharton Business School, told me that this partly reflected the size of America’s largest corporations, which have grown to such an extent that they can have a tremendous influence on policy making. But he also said that pressure from employees, especially younger ones, is pushing companies to be more open.

There is also a more cynical view. Trump is already out of office and the Democrats control the presidency, the Senate and the House of Representatives. There is little to lose in alienating him or his supporters in Congress. “On the one hand, I think it’s important and right for companies to make this statement,” said Rachel Curley, who works to promote transparency in corporate policy spending at a nonprofit called Public Citizen. From a public relations perspective, there have been many other opportunities, such as the white nationalist protests in Charlottesville in response to plans to remove a Confederate memorial, when companies could and did not take a strong public stance. “There were so many things in the Trump administration and the Republican Party administration that should make companies reconsider their political donations,” she said. “It’s only at the moment when our democracy is almost collapsing that companies say: Wow, that’s not great.”

Even more telling, Curley went on, companies would commit to disclosing their state-level donations and contributions to dark money super PACs that can accept unlimited donations and spend unlimited amounts of money to influence elections. “Without tying this step – without anything else – it feels like a really easy lift for them to get some good press,” she said. However, she noted that good could come of this moment: “The fact that this is so visible and that companies are taking this position gives the rest of us an opportunity to see that companies can actually make these changes whenever they want want. ”

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