Economy & Politics

US election US corporations turn off Trump’s party the money tap

Ready for the storm: In the US Congress, a Republican MP passes a metal detector set up for security.
Ready for the storm: In the US Congress, a Republican MP passes a metal detector set up for security. imago images / UPI Photo

The outgoing US President Donald Trump is said to have reacted really furiously because his golf club in New Jersey was not able to host an important tournament in 2022. So it says in reports from the White House. After the storm on the Capitol, the American Association of Professional Golfers (PGA) pulled the rip cord. But golfers are only a small selection, because large parts of America’s companies are now distancing themselves from the current president: They condemn the agitation and undemocratic behavior of Trump and his Republican supporters in Congress – and they have announced that donations will be stopped.

In an electoral system where money is so important, that can hurt. The Grand Old Party (GOP) has benefited from the bustling White House entrepreneur like seldom before. According to calculations by the transparency initiative Open Secrets, Trump raised $ 863 million for himself and the party around the 2020 election. Traditionally, the largest sums of money come from large corporations, which tend to be favored by business-minded conservative Republicans.

Under US law, only individuals are allowed to donate. But senior managers bundle company grants in so-called Political Action Committees (PACs). These then finance party-political PACs such as Trump’s organization “America First Action” – or his youngest lobby group called “Save America”, through which funds were recently raised before the Senate election in Georgia. Depending on how these PACs are designed, the greater part of the income goes to individual candidates and the smaller part to the party.

Wave of donation stops

A whole wave of companies is now stepping on the brakes when it comes to party funding. Many of them specifically disapprove of the 147 Republican representatives in the US Congress who opposed the approval of the Democratic election winner Joe Biden in parliament, while an angry mob of Trump fans prepared to storm the Capitol. Other corporate leaders called for a general “donation break” for both parties. There are dozen of them and they cover almost every economic sector, from Wall Street to the oil industry to big tech in Silicon Valley.

They all have one thing in common: concern for the reputation of their company, which they see threatened by being too close to dubious political events. The beginning of the unprecedented movement was the insurer Blue Cross Blue Shield, the hotel chain Marriott International and the chemical giant Dow Chemical, according to the newsletter Popular Information. Four of the largest banks, Citigroup, JP Morgan, Goldman Sachs and Morgan Stanley, as well as the credit card providers Visa, American Express and Mastercard quickly followed. The telecom providers AT&T, Verizon and Comcast joined them, as did General Electric, Airbnb and Amazon, or American Airlines and Coca-Cola.

“We want to make sure that we do not support any candidates who do not adhere to law and order,” said a spokeswoman for Citigroup, which wants to withhold all funds until March. Other companies justify their departure from the fact that the observed destructive actions of some MPs against a peaceful transfer of power contradict their company values. Hallmark, known for its greeting cards, even asked two Republican senators from Kansas and Missouri for their money back. One of them did particularly well to reiterate the unsubstantiated Trump allegations that the elections were stolen by the political opponent.

Opportunism wins

Hardly anyone had expected that the alarming events surrounding the storming of parliament would trigger such far-reaching reactions in the world of business. Even organizations like the Center for Responsive Politics, which use “Open Secrets” to campaign for transparency in donations in a non-partisan way, were surprised. Above all, however, a threatened drying up of the generous party funding – parallel to a second impeachment procedure for the removal of Trump – should accelerate political processes.

Because a major donation correction can drive a decisive wedge between Trump and the Republican Party. “It may be,” Jacob Parakilas of the London School of Economics (LSE) told Bloomberg, “that some people make the cynical calculation that the wind is permanently turning against Trump, and that it is time for a break in the drafts Party with the outgoing President. “

Donations to individual representatives in the US Senate or House of Representatives from the PACs of “Corporate America” recently totaled several hundred million dollars. The more they pass on to the party, the greater their chances of getting a seat on a committee or a leading position, explain transparency watchdogs. Typically, a candidate can expect at least $ 10,000 per election cycle. Some Republicans had at least 60 percent of their 2020 election campaign from company donations.

Break or be silent?

Their loyalty to Trump could cost these partisans such checks in the future if, as announced, the companies review their donation practices in view of the undemocratic attitude. Conversely, the break with Trump apostates can also bring in the anger of displeased and violent fans of the current president, who have already made it clear that they will not give peace anytime soon.

Companies that distance themselves from Republicans include traditional financiers of the Grand Old Party, including AT&T and Comcast, and the Blackstone financial group, which condemned the attack on the Capitol and the Constitution. Mega donor Charles Koch of Koch Industires had encouraged Republican officials to confirm the electoral vote in favor of Joe Biden.

Other top donors from the Trump camp, however, were completely silent, as noted by the US media. Including associations of real estate dealers and developers, defense companies, or well-known billionaires such as Internet investor Peter Thiel, Thomas Peterffy from Interactive Brokers or Andrew Beal from Beal Financial.

War Box

Regardless of how the relationship between the Republicans and the outgoing president is shaken, one thing seems certain: Trump is leaving the White House not only with the shadow of violence in the Capitol but also with a well-stocked war box for future political campaigns. Allegations that Tump is said to have diverted hundreds of millions from election campaign funds through a mailbox company owned by son-in-law Jared Kushner have yet to be clarified. The Federal Electoral Commission (FEC) is examining a corresponding complaint about said company AMMC.

The independent federal agency that regulates campaign finance will also know in late January the extent to which Trump has raised funds through his campaign and various other action committees (PACs) since he was voted out on November 3. By the end of November alone, more than $ 200 million had been reported to the FEC. “Save America”, which was founded in some states for the legal mud battle against the election, had raised half a million within two weeks.

And depending on the layout of the action committees, Trump can decide how he will spend the money – whether for like-minded politicians, surveys, consultants, travel, or expensive dinners.

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