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Are U.S. companies punishing Republicans for Jan. 6? Here’s what our research finds.

Contributions to members of Congress who supported overturning the 2020 election are down compared to four years ago. But it’s early.

- January 4, 2022

After the Capitol insurrection a year ago, 60 percent of the House Republican conference — 139 members — voted to overturn election results in Pennsylvania, Arizona, or both. In doing so, they endorsed the false idea that Donald Trump won the 2020 presidential election. Many corporations denounced the violence. Some announced they would withhold donations to those 139 members in particular.

We wanted to know whether companies followed through. Using publicly available Federal Election Commission data, we found Fortune 500 PAC donations to these 139 Republicans were down — from 60 percent to 20 percent — between Jan. 1 and June 30, 2021, compared to the same period in 2017. Not all corporations paused their donations — and as a recent Accountable.US report noted, some have resumed.

So which corporations paused their donations — and why? Here’s what we found.

Companies concerned about public image are more likely to “pause” donations

Major companies often slow down their PAC contributions to candidates for a time after each general election. After Jan. 6, a CNN survey found that 38 percent of Fortune 500 PACs were implementing a “pause.” While some stopped contributing to members who voted to decertify the elections, most of the pausing PACs stopped contributions to all candidates for the first three months of 2021.

But which companies did this? To see, we looked at the CPA-Zicklin Index (CZI), a scorecard compiled by the Center for Political Accountability, a shareholder activist group, which assesses companies’ transparency practices and political activity, such as involvement in trade associations and independent spending to support or oppose candidates for office.

Companies pay close attention to this index. Firms have changed behavior to bring up their scores, suggesting that CZI measures not only a company’s socially responsible behavior but also its desire to be perceived as a good corporate citizen.

We found that companies with the highest CZI scores were 12 percent more likely to have paused than companies with an average CZI score. Companies with the lowest CZI scores were 16 percent less likely to have paused PAC operations than those with average CZI scores.

Most corporate PACs scheduled their pauses to run for three months from January through March of 2021 — the first quarter of the 2021-2022 political cycle. This time happens to be a slow period in a PAC’s life. For the House of Representatives, election cycles last two years, with the final year being the year of the election. Most PACs fundraise throughout the two years and make most of their contributions in the final year of the cycle. In the first six months after an election, few people have yet declared their candidacies for the next congressional election; even fewer are holding fundraising events, which is how candidates usually solicit PAC contributions.

A pause that ends 18 months before the next election is therefore a cost-free way to express concern, since plenty of time remains to catch up on contributions.

In other words, through these PAC pauses, companies were signaling to employees and the world at large that they were concerned about the fate of U.S. democracy. These could be seen as the “thoughts and prayers” of corporate PACs — symbolic gestures with little meaning, revealing only concern about being perceived as good citizens.

Some say the U.S. is headed for civil war. History suggests something else.

What about corporations that withheld contributions to the Republicans who voted to overturn election results?

While a general pause in giving was largely symbolic, withholding contributions from the Republicans who supported overturning the election results was much riskier. Those 139 included members of the Republican leadership, most freshmen GOP lawmakers, and 59 percent of committee ranking members. Choosing not to contribute to influential lawmakers can make it harder for companies to lobby successfully.

During the period we studied, only 20 percent of Fortune 500 PACs made at least one contribution to one of the 139. This is a surprisingly low number compared to previous off-year donation patterns; while contributions typically slow in this period, they usually don’t stop completely. For instance, in the first six months of the year after the 2016 election, 60 percent of Fortune 500 companies gave to one of the 139 who were in office at the time.

One might expect companies that paused PAC donations after Jan. 6 would be less likely to give to legislators who voted against certification, but we find no relationship between a PAC pausing donations and its decision to give to one of the 139. Of the PACs that paused, 20 percent contributed to one of the 139 after their pauses lifted in March 2021.

Republicans and Democrats have split over whether to support multiethnic democracy, our research shows

So which companies withheld contributions from these 139? What appeared to matter most was the political environment in the state where the company was headquartered. We found that only 16 percent of companies headquartered in California, Massachusetts, Maryland, New York, and Rhode Island — the five bluest states with Fortune 500 companies, as measured by Biden’s vote share in the 2020 election — gave to at least one of the 139. The opposite is true in the five reddest states with Fortune 500 companies, which are Alabama, Kentucky, Oklahoma, Idaho, and Arkansas: 40 percent of companies based in these states gave to at least one of the 139. Similarly, Republican members of Congress from redder districts were more likely to vote against confirming Joe Biden’s victory. Apparently, how local residents — meaning legislators’ constituents and companies’ employees and customers — saw the election influenced the behavior of both legislators and corporations.

We don’t yet know whether corporate PACs will continue to change their contributions based on the Jan. 6 events. According to a study by the Public Affairs Council, since Jan. 6, 47 percent of corporate PACs reevaluated their candidate contribution criteria, making changes as a result.

We expect more Fortune 500 companies to resume contributing to the 139, especially those headquartered in states that voted for Trump in 2020. But how many? We will find out this year.

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Florian Gawehns and Amy Meli are PhD students at the University of Maryland, College Park.