CEOs Consider Ways To Smooth Biden’s Presidential Transition, Including Holding Back Campaign Money
Leaders of some large companies say they may withhold political donations and investments in states whose lawmakers are challenging Electoral College results. CEOs Consider Ways To Smooth Biden’s Presidential Transition, Including Holding Back Campaign Money
In a virtual gathering of chief executives convened to discuss political turbulence stemming from the 2020 election, leaders of some of the largest U.S. companies said they were considering withholding donations to Republican lawmakers seeking to impede the presidential transition.
During an hourlong meeting Tuesday, a group of about three dozen chief executives discussed divisions in the country, efforts to thwart the presidential transition and what voice they thought business should have in politics, according to people who participated in the conversation.
Some business leaders who have donated to Republican campaigns stated that they were considering withholding future political contributions to elected officials who have said they would oppose certifying the Electoral College results for President-elect Joe Biden, those people said.
Among business leaders on the call were Walt Disney Co. Executive Chairman Robert Iger, a noted Democrat who has indicated interest in an ambassador role under the Biden administration; Accenture PLC Chief Executive Officer Julie Sweet, a Republican who has donated to Sen. Ted Cruz; and Merck & Co. CEO Ken Frazier, who publicly broke with President Trump in 2017, but has donated to candidates from both parties, including Senate Majority Leader Mitch McConnell.
The gathering included about a dozen advisers, such as former Obama administration Homeland Security Secretary Jeh Johnson and Anthony Scaramucci, who served briefly in the Trump administration but has more recently been a critic of the president.
The gathering, along with a letter sent by nearly 200 CEOs on Monday urging Congress to accept the election results, marks a shift in tactics for business leaders, some of whom are joining forces to take newly strident positions on politics rather than speaking out individually.
Other business groups, including the U.S. Chamber of Commerce and the Business Roundtable, have also issued statements this week calling for a smooth transition of power.
Also in the meeting, people familiar with the gathering said, were Goldman Sachs Group Inc. Senior Chairman Lloyd Blankfein, a Democrat, and Deloitte CEO Joseph Ucuzoglu, who doesn’t disclose his political affiliation, both of whom donated to Republicans in recent years. The discussion began with a conversation about political instability in the country, the people said.
About halfway through, the executives began discussing potential actions they could take to help ensure a smooth presidential transition, some of the people said. The group discussed withholding political contributions, which some viewed as more meaningful than public statements, they said.
Some executives in attendance said they would reconsider hiring, business and investments in states whose officials were fighting the transition, some of the people said.
“We have to create some level of cost,” said Thomas Glocer, a former CEO of Thomson Reuters Corp., and a director at Merck and Morgan Stanley, who attended Tuesday’s meeting. Mr. Glocer, a registered Democrat, says he has voted for candidates in both parties. “Just coming out with another public letter isn’t going to do much. Money is the key way.”
Mr. Glocer said a debate among the CEOs in attendance Tuesday and in conversations leading up to the call centered on how to most effectively persuade lawmakers to uphold the rule of law. Some executives could withhold campaign contributions to senators opposing the Electoral College results, for example.
But executives also discussed working behind the scenes, trying to influence lobbyists and those close to elected officials. Though some lawmakers see opposition from CEOs as a point worth celebrating, “money is something they do care about,” Mr. Glocer said.
Most business leaders are reluctant to hold back campaign contributions or bring political matters into the boardroom, but many now feel there is little choice, Mr. Glocer said. “Respect for the rule of law underlies our market economy,” he added. “Business leaders need to stand up on these issues because in the end they are business issues, not just politics as usual.”
A group of Republican senators say they plan to object to the Electoral College votes Wednesday, pushed by President Trump to challenge a contest that was won by Mr. Biden. By law, Congress must hold a joint session Jan. 6 to ratify Mr. Biden’s 306-232 Electoral College win. Majorities in the House and Senate would have to agree for the challenge to succeed, an extremely unlikely prospect given that Democrats control the House and Republican party leaders have opposed the effort.
Business leaders are often active political donors to both parties. Mr. Cruz, the Texas senator who is spearheading the Republican senators’ efforts, has received millions from hedge fund operator Robert Mercer and fracking billionaires Dan and Farris Wilks, The Wall Street Journal has reported.
Jeffrey Sonnenfeld, a Yale School of Management professor, convened the meeting along with an earlier virtual gathering of business leaders shortly after the election. Mr. Sonnenfeld, who has critiqued the Trump administration at times but remains close to some officials, said the CEOs said Tuesday they also plan to review investment practices, reconsidering staffing decisions and facilities in states where officials are impeding the transition.
U.S. Capitol Building Siege Leads Election Donors To Hit Republicans In The Wallet
Companies should use the one tool every lawmaker pays attention to: money.
Early Wednesday afternoon, as the siege of the U.S. Capitol building was underway, Jay Timmons, the chief executive officer of the National Association of Manufacturers, issued a remarkable statement. The association represents more than 1,000 industrial companies, including Exxon Mobil Corp., Caterpillar Inc. and Dow Inc.
Like most business lobbying groups, it generally stays away from purely partisan issues. But Timmons, clearly outraged by what he was seeing on television, expressed a fury that many Americans were feeling.
“Armed violent protestors who support the baseless claim by outgoing president Trump that he somehow won an election that he overwhelmingly lost have stormed the U.S. Capitol today, attacking police officers and first responders, because Trump refused to accept defeat in a free and fair election,” he began.
This is not law and order. This is chaos. It is mob rule. It is dangerous. This is sedition and should be treated as such. The outgoing president incited violence in an attempt to retain power, and any elected leader defending him is violating their oath to the Constitution and rejecting democracy in favor of anarchy.
Anyone indulging conspiracy theories to raise campaign dollars is complicit. Vice President Pence, who was evacuated from the Capitol, should seriously consider working with the Cabinet to invoke the 25th Amendment to preserve democracy.
Though Timmons’s bluntness set him apart, he was hardly alone in condemning the efforts of the dozen or so Republican senators — led by Ted Cruz of Texas and Josh Hawley of Missouri — and the more than 120 Republican representatives who planned to challenge President-elect Joe Biden’s electoral victory. The effort “undermines our democracy and the rule of law and will only result in further division,” the Chamber of Commerce said.
The Business Roundtable said that the rioting was “the result of unlawful efforts to overturn the legitimate results of a democratic election.” On Monday, some 200 top executives — most of them CEOs — signed on to a short, pointed statement calling on Congress to “certify the electoral vote.” It added, “Attempts to thwart or delay this process run counter to the essential tenets of our democracy.”
Jamie Dimon of JPMorgan Chase & Co., Stephen Schwarzman of Blackstone Group Inc., Larry Fink of BlackRock Inc., David Solomon of Goldman Sachs Group Inc. and other top executives issued individual statements condemning the violence and calling for the peaceful transfer of power that has long been the hallmark of American democracy.
The day before Wednesday’s trauma, Yale School of Management professor Jeffrey Sonnenfeld convened a virtual meeting of some three dozen executives, including Robert Iger, the chairman of Walt Disney Co., and Merck & Co.’s CEO Ken Frazier. During the meeting, Sonnenfeld took a poll:
* Is President Trump attempting to overturn democratically run elections to stay in office? Yes: 88%.
* Did President Trump break federal and/or state election laws in pressuring Georgia officials to change vote tallies? Yes: 91%.
* Are 50% of GOP House members and 25% of GOP Senate members aiding and abetting sedition? Yes: 88%.
But here’s the question that really caught my attention: Should CEOs warn lobbyists privately that their companies will no longer support election deniers in Congress? This answer was unanimous: Yes.
“We have to create some level of cost,” Tom Glocer, a director at Merck and Morgan Stanley, told the Wall Street Journal. “Just coming out with another public letter isn’t going to do much. Money is the key way.”
There’s no doubt Glocer is right. Over the last few days, as Hawley, Cruz and the others made it clear they would object to millions of legally cast votes in the states that were critical to Biden’s victory, nobody paid much attention to the statements made by executives. Although the GOP was once the party of big business, those days are long gone; on issues from climate change to shutting down the government, Republican ideologues have shown themselves to be indifferent to the entreaties of CEOs.
What they are not indifferent to is money. A decision by companies to withhold contributions to the campaigns and political action committees of lawmakers who were involved in objecting to the certification of Biden’s election would make a huge difference. It would show that there are severe consequences for defying the Constitution and democratic norms.
But what are the chances of this actually happening? On Wednesday morning, a website called Popular Information listed the 20 largest corporate contributors to the campaigns of 13 senators and 126 members of the House who it said were attempting to “subvert democracy.”
The companies included AT&T ($2 million between 2014 and 2020), Amazon.com Inc. ($598,000), Microsoft Corp. ($505,000) and Comcast Corp. ($1.74 million).
The authors of the article called a handful of the companies to ask whether they would be withholding future contributions from them. Not a single one said yes. Some, like Amazon, declined to comment; others issued statements like this one from Pfizer Inc.: “Pfizer supports candidates and elected officials from both sides of the aisle who deal with decisions important to our industry.”
That statement was made before the assault on the Capitol building; maybe the shock of those Wednesday afternoon images will cause companies like Pfizer to reassess. Because somebody needs to hold those who voted to defy the Constitution accountable. The body politic lacks the means — and the will — to do so. In too many cases, voters won’t either because they believe the lie that Trump has peddled ceaselessly that the election was somehow “rigged.”
That leaves companies. Glocer told the Journal that the proper functioning of democracy isn’t only a political issue — it’s a business one, too. “Respect for the rule of law underlies our market economy,” he said. The rule of law and the smooth functioning of democracy are underpinnings that companies have long taken for granted. Now, like the rest of us, they know how fragile the system is.
Ultimately, it’s in their own self-interest to ensure that events like Wednesday’s travesty never happen again. Withholding their money is the best weapon they — and we — have.
Blankfein Calls Out Wall Street For Ignoring Trump’s Character
Former Goldman Sachs leader Lloyd Blankfein is taking the financial industry to task for failing to speak out sooner against President Donald Trump, whose administration juiced Wall Street profits but is now winding down in violence.
Many in finance don’t support Trump. But most were willing to look past the president’s character — on full display this week, as he incited a mob that stormed the U.S. Capitol — in exchange for tax cuts and weakened regulation that helped drive markets through the roof.
“If you are willing to overlook bad character because they do good things for you, then that comes back to bite you,” Blankfein, who retired as Goldman Sachs Group Inc.’s chief executive officer in 2018, said in an interview from Miami. “Trump was doing a lot of good things, but all the while he was showing such poor character.”
Few groups in the U.S. worked with the administration like Wall Streeters. While deans of the industry criticized Trump’s rhetoric in the 2016 campaign, they openly welcomed the president’s promises of lower taxes and looser regulation. And once Trump took office, many in the industry publicly muted the concerns they expressed privately about his leadership, even as the country hurtled from one divisive crisis to the next.
To Blankfein, 66, the longtime enabling of Trump reminds him of executives who turn a blind eye to bad behavior by rainmakers, despite the damage they inflict on teams or the rules they bend.
“It’s tempting to keep a trader who’s very profitable,” he said. “If you ignore a difficult person just because he makes you a lot of P&L, that will end badly. That’s kind of like what happened with our president.”
The former Goldman boss had a close-up view of the president’s rise to power. In the closing days of the 2016 campaign, Blankfein’s image featured in an ad as Trump’s voice promised to take down a “global power structure.”
Blankfein publicly shrugged it off, and his longtime lieutenant, Gary Cohn, soon joined the nascent White House to see through an overhaul of the U.S. tax code that proved especially beneficial to banks.
Peers such as JPMorgan Chase & Co. CEO Jamie Dimon, meanwhile, assured the public that Trump was populating his team with serious people like Cohn, as well as others from finance.
Even Blankfein, a longtime Democrat, defended the White House’s economic policies. Occasions when he broke with the president included his crackdown on immigration.
His successor, David Solomon, was among a group of business leaders who met the president at the White House last year at a time of desperate need for economic resuscitation. Even in that moment, some emissaries of the industry couched their demands behind praise for Trump shown on televisions around the world.
Blankfein said it would be unfair to expect business leaders to cry foul every time they disagree with the president. But the riot at the Capitol shows Trump was allowed to go too far.
“Wall Street leaders owe their platforms to their companies, and they generally should focus on things within their expertise or on things that are important to their employees,” he said. “But this is so reprehensible that I think everyone should speak out.”
Events of this week, in the waning days of Trump’s presidency and power, finally sparked strongly worded expressions of disgust from across the finance industry, even if few CEOs mentioned him by name.
“We knew the president’s character: all the scandals, all the people who came forward. He was a TV star and a tabloid favorite,” Blankfein said. “His business ethics were poor and some establishment figures wouldn’t deal with him, but because he lowered taxes and reduced regulatory barriers, a lot supported him.”
Capitol Riot Prompts Some Big Banks And Companies To Pause Political Funding
JPMorgan to halt all PAC donations for six months; Blue Cross and Marriott pause funding to Republicans who objected to Electoral College results.
JPMorgan Chase & Co. said it is pausing all corporate political-action committee donations to Republicans and Democrats for the next six months in the wake of last week’s riot at the Capitol.
The largest U.S. bank by assets is among other companies that announced this weekend they would make changes to donations via company PACs. Some, including the Blue Cross Blue Shield insurance group and Marriott International Inc., said they would pause donations to Republican lawmakers who objected to President-elect Joe Biden’s Electoral College win after supporters of President Trump stormed the Capitol on Wednesday.
Congress certified Mr. Biden’s win early Thursday, ending attempts to overturn results in two states from seven Republican senators and more than 100 representatives.
The actions follow a week in which businesses and their chief executives have sought ways to ensure a peaceful transition of power, with some calling for Mr. Trump’s removal from office by invoking the 25th amendment or impeachment. Others say they are holding back on such action as they await Mr. Biden’s inauguration on Jan. 20.
The announcements could reflect an acceleration of recent trends among large companies to limit or better disclose political spending.
JPMorgan, the largest bank in the country, made the decision to pause political giving because of the growing political crisis following the violence at the Capitol alongside health and economic crises, said Peter Scher, JPMorgan’s head of corporate responsibility, in an interview.
“The focus of business leaders, political leaders, civic leaders right now should be on governing and getting help to those who desperately need it most right now,” said Mr. Scher, who is also chairman of the bank’s Mid-Atlantic region. “There will be plenty of time for campaigning later.”
JPMorgan’s PAC raised about $900,000 for federal candidates in the 2019-2020 cycle, according to data analyzed through Nov. 23 by the Center for Responsive Politics. Its federal candidate donations skewed Republican, with about 58%, compared with 42% given to Democrats, according to the Center. It also donated about $100,000 to trade association PACs and party committees.
While the PAC’s donations are a fraction of overall political giving, JPMorgan employees also donate directly to politicians and other political groups that may not disclose their donors. The Wall Street Journal reported last week that some CEOs, both Republicans and Democrats, were considering withholding political contributions from lawmakers seen as trying to impede a peaceful transition of power.
JPMorgan’s PAC contributed $2,000 since 2017 to a committee led by Missouri Sen. Josh Hawley, according to data from the Center for Responsive Politics. Mr. Hawley has come under fire from members of his own party, as well as Democrats, for what critics see as his role instigating Wednesday’s Capitol riot.
The bank began discussing potential changes to its PAC giving several days ago, a person familiar with the discussions said. The decision to pause all political donations gives the bank time to think through future giving, the person said.
JPMorgan said in December it would make contributions to food banks instead of the inauguration given hardships facing communities affected by the pandemic.
The newsletter Popular Information earlier reported that three companies—health insurer Blue Cross Blue Shield Association, Commerce Bancshares Inc. and hotel giant Marriott—would halt political spending to lawmakers who impeded the transition following the violence at the Capitol.
Marriott’s PAC has given $1,000 to Mr. Hawley’s campaign, as well as another $1,000 to a PAC he heads. A Marriott spokeswoman said the company would pause giving from its PAC to those who voted against certification of the election. “We have taken the destructive events at the Capitol to undermine a legitimate and fair election into consideration,” she said.
A spokeswoman for Commerce Bancshares said its employee-funded PAC suspended donations for “officials who have impeded the peaceful transfer of power.” The spokeswoman added: “Commerce Bank condemns violence in any form and believes the actions witnessed this week are abhorrent, anti-democratic and entirely contrary to supporting goodwill for Americans and businesses.”
Commerce Bancshares has given $5,000 to Mr. Hawley’s campaign since 2017, according to Center for Responsive Politics data.
‘While a contrast of ideas, ideological differences and partisanship are all part of our politics, weakening our political system and eroding public confidence in it must never be.’
— Kim Keck, CEO of Blue Cross Blue Shield Association
Blue Cross Blue Shield Association Chief Executive Kim Keck said it is suspending contributions to Republican lawmakers who “voted to undermine our democracy.”
“While a contrast of ideas, ideological differences and partisanship are all part of our politics, weakening our political system and eroding public confidence in it must never be,” Ms. Keck said in a statement.
The association has given $500 to Mr. Hawley’s campaign since 2017, while Anthem Inc., a Blue Cross Blue Shield licensee with health plans in more than a dozen states, has given $5,000 to committees supporting the Missouri senator, Center for Responsive Politics data show.
A spokeswoman for medical-device maker Boston Scientific Corp. said it is temporarily suspending its PAC activity for an unknown period of time given the recent violence and polarized political environment and will review its approach to future contributions. Popular Information earlier reported on the announcement. The company has given $3,000 to Mr. Hawley’s campaign committee since 2017.
CEOs and business groups have condemned the riots and taken other steps in recent days. The National Association of Manufacturers on Wednesday called on Vice President Mike Pence to consider invoking the 25th amendment, which allows for a transfer of power when a president is unable to fulfill his duties.
Twitter Inc. banned President Trump’s personal account from its platform, citing a risk of further incitement of violence, while the Canadian e-commerce company Shopify Inc. took stores run by Mr. Trump’s business and campaign offline and Stripe Inc. will no longer process payments for Mr. Trump’s campaign website.
Some CEOs, though, said they didn’t plan to adjust their political funding for now. “I’m not thinking about that at this point,” said Paul Sarvadi, CEO of Insperity Inc., a publicly traded provider of human-resources and other business services, who has donated to Republicans. “I think it pays for companies to be more deliberate, less reactive.”
Companies face growing pressure from investors and shareholders over political spending. Since 2004, 200 of the S&P 500 companies have faced shareholder proposals seeking to limit political spending or to improve disclosure, according to the Center for Political Responsibility, a nonpartisan group in Washington that works with investors to push companies to limit or better disclose political spending.
Nearly half of companies in the index fully disclose or prohibit contributions to candidates, parties and political committees, up from 183 in 2015, according to the group. Most of those prohibit at least one kind of contribution altogether, often independent expenditures or contributions to candidates and political committees.
A key factor is the backlash—from consumers, employees and investors—that companies can face for funding candidates who later take stands conflicting with popular sentiment or the company’s own public positions, said Bruce Freed, the group’s president. He expects companies to come under increasing scrutiny in coming weeks and months.
“All of their statements become hollow if their political money is going to members who voted to overturn this election,” Mr. Freed said. “The risk of political giving has gone up exponentially.”
Billionaires Who Championed Trump Have Now Gone Largely Quiet
They bankrolled Donald Trump. They applauded his tax cuts. They cheered as the stock market soared. Now, the sound coming from some of the president’s wealthiest donors is this: silence.
As chaos engulfs the White House and Democrats talk of impeachment, few of these billionaires have much to say about the president they showered with many millions in campaign contributions.
“I’m sorry, I am not available right now,” wrote venture capitalist Peter Thiel. No thank you, said Thomas Peterffy, who controls Interactive Brokers Group Inc. Richard LeFrak, the New York real estate magnate, said through a spokesman he’s not doing press at the moment.
And Andy Beal, the Texas banking billionaire, couldn’t comment because, “he doesn’t know what happened,” according to his assistant. “He wasn’t there and he doesn’t believe mainstream news reporting anymore.”
Only a handful of the two dozen or so of Trump’s wealthiest donors contacted by Bloomberg News left statements or declined to comment; most didn’t respond. A few published statements. No one agreed to be interviewed on the record.
Many among the world’s ultra-wealthy tend to air political leanings through financial contributions rather than words. But their silence echoes particularly loudly this week as a final act of a turbulent presidency turned into mayhem that sent shock waves around the globe.
On Thursday, Democratic lawmakers urged Trump’s cabinet to immediately remove him from office and threatened to impeach him a second time if they don’t act. They accused him of inciting the crowd that breached the Capitol. The riots have left five people dead, including one police officer.
A few of Trump’s supporters spoke out against the violence, including Blackstone Group Inc. founder Stephen Schwarzman, who contributed more money to Trump’s re-election bid than anyone else in high finance.
“The insurrection that followed the president’s remarks today is appalling and an affront to the democratic values we hold dear as Americans,” Schwarzman said in a statement. “I am shocked and horrified by this mob’s attempt to undermine our constitution. As I said in November, the outcome of the election is very clear and there must be a peaceful transition of power.”
“I unambiguously condemn the thugs and criminals who yesterday epitomized the worst elements of society by vandalizing the sacred halls and chambers of Congress, together with all who incited and abetted their unconscionable violence,” said Ronald Lauder, the billionaire chairman of Estee Lauder Cos. and a Trump donor.
Lauder’s statement, which he made in has capacity as president of the World Jewish Congress, didn’t specifically mention Trump.
The National Association of Manufacturers, through its chief executive officer, Jay Timmons, on Wednesday called on Vice President Mike Pence to consider invoking the 25th Amendment, which could eject Trump from office before the Jan. 20 transition.
Harold Hamm, the oil titan who’s a Trump confidante, sits on the board of the trade association. He didn’t return requests for comment.
Also silent were Richard and Liz Uihlein, owners of Uline Inc., who’ve poured tens of millions into conservative causes in recent years. Hedge fund manager John Paulson didn’t respond to a message seeking comment, nor did Charles Dolan, whose family controls the Madison Square Garden companies.
Others were succinct in their thoughts. Ken Fisher of Fisher Investments wrote that Wednesday’s events were “sickening behavior in so many ways and a tragedy.”
And Nelson Peltz, who organized a fundraiser for the president last year, said in a joint statement with his two co-founders of Trian Fund Management that they “condemn President Trump’s efforts to overturn the election results.”
In a Thursday interview with CNBC, Peltz was even more blunt: “I voted for him in this past election in November. Today I’m sorry I did that.”
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