Big business and ethics of political donations
Can big business help clean up America’s public square? It’s a question that matters all the more in the present context, as the US gets a new president while still wrestling with the insurrectionist impulses and polarisation promoted by the outgoing one.
A fortnight after the rampage at the US Capitol in Washington, at least two dozen American companies declared they will penalise some Republican politicians for their alleged role in the riot as well as their frenzied legislative attempts to overturn the results of a free and fair presidential election.
Well-known international brands – including Amazon, Walmart, Disney, Nike, Airbnb, Morgan Stanley, Dell and American Express – will withhold funding to certain politicians. Dozens of other companies, including Bank of America, Target, Google, Facebook, JPMorgan, Visa, Boston Scientific and Citigroup have announced a more neutral approach, by suspending all political giving – to Republicans and Democrats alike – pending a policy “review”.
The popular take on the unprecedented backlash from business towards overly unruly politicians is that Donald Trump (as well as his Republican Party) has been impeached twice in one week – by the House of Representatives on January 13 and following that, by corporate America.
If only it were that simple. At least three questions arise from corporate America’s stated revulsion to the violent, failed attempt to derail the country’s centuries-old tradition of the peaceful transfer of power. How long will the anger last? Can a good corporate citizen really influence the change it wants to see? That is to say, is the corporate chequebook really that invaluable in the business of politics? And finally, do chief executives of large companies have the moral stature to bend an increasingly inchoate style of politics to their will?
The last question is the most easily addressed. There is good news for business in a new 28-country survey by PR agency Edelman, which has been measuring public trust in people and institutions across the world for 20 years and normally releases the Edelman Trust Barometer at the World Economic Forum in Davos. This year’s survey of 33,000 people found perilously low trust in all institutions including government, NGOs and the media, but a strikingly high level of faith in business. With 61 per cent trust level globally, business is well placed “to be the connective tissue (of a country), while the politics are sorted out,” says Richard Edelman, the company’s chief executive.
The survey explains its findings by pointing to the internationally held belief that business is the only institution that is “both ethical and competent” but at least in America there may be another, slightly less wholesome factor. Americans emerge from this Edelman survey as people who repose faith only in the individuals and institutions they personally know, which means they trust the companies from whom they buy and where they work; their own boss but not a government official.
This shrinking of the circle of trust to locally present entities could be seen as a form of tribalism. But it offers an undoubted opportunity for business to lead. And more to the point, to have a reasonable chance of building support for the cause.
Will it? Suspending political donations to the Republicans right now is significant but so too is the timing. The current pause coincides with the first quarter after a presidential election, a period that is normally light on donor activity anyway.
As William Oberndorf, an influential Republican donor, recently noted, it had been a mistake for the party not to oust Mr Trump during his first impeachment trial last year and “they now have a chance to address this egregious mistake and make sure Donald Trump will never be able to run for public office again”. He added, in a reference to Mr Trump’s upcoming impeachment trial in the Senate, that “Republican donors should be paying attention to how our elected officials vote on this matter”.
There is something to be said for making monetary gifts conditional on desirable political behaviour. It remains to be seen if companies will forswear the chance to clandestinely give to groups that aren’t required to disclose their donors and simply funnel the takings to unsavoury political actors.
Even so, American elections are notoriously expensive and business can expect to exert some influence, even if not always decisive. It is in corporate America’s self-interest. The Aspen Institute’s Judy Samuelson, whose eponymous new book lays out the six new rules of business, says: “a business can’t succeed in a failed society”.
In fact, the implications are even more dire. Were political instability to roil America for much longer, US government bonds, long considered the safest assets on the planet, could become riskier. That would increase the US government’s long-term borrowing costs, hurting the country’s finances and its banking system.
We are not yet at that point but big business is clearly feeling and articulating the fear. “We had sedition and insurrection in DC,” says Jamie Dimon, the chief executive of JPMorgan Chase. “I feel betrayed,” adds Ken Langone, the billionaire co-founder of Home Depot and an ardent supporter of Mr Trump. “There’s going to be consequences, no question about it,” declares Ed Bastian, chief executive of Delta Air Lines.
So, are they and other chief executives poised to take up the challenge of serving as “the fourth branch of government”, as some say they now must?
Perhaps America’s approach to the leverage of business on politics – and on society more generally – is best understood through the words of a US president in a different time, but faced with some of the issues that bedevil America today.
When Calvin Coolidge took office in 1923, after the scandal-scarred term of his predecessor Warren Harding, he said: “the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world.” And then he issued the caveat that really just says it all: Wealth must be “the means and not the end”.
Suspending political donations to the Republicans right now is significant but so is the timing
Rashmee Roshan Lall is a columnist for The National