One year ago today a mob staged a violent riot at the U.S. Capitol, inspired by the lie that Joe Biden stole the 2020 presidential election. 147 Republicans played a key role in the day's events, voting against the certification of the Electoral College results. 

That vote promoted dozen of corporations to take the unprecedented step of freezing PAC donations to Republican objectors. Since then, some companies have abandoned their commitments. But many other corporations have stuck to their word. As Popular Information documented, corporate PAC contributions to Republican objectors are down by about 60% compared to the last election cycle. 

As a matter of principle, this makes sense. Nothing has changed since January 6, 2021, that would justify corporations changing their policies. Of the 147 Republican objectors, only one, Representative Tom Rice (R-SC), has publicly expressed any regret for their vote. With a few exceptions, Republican objectors are still unwilling to acknowledge that Biden won the presidency legitimately. 

There is one group of people who are displeased about the current state of affairs: corporate lobbyists. The job of a corporate lobbyist at the federal level is to influence members of Congress. Although there are many ways to gain influence, one important tool is to direct corporate PAC donations to members of Congress as a way of purchasing goodwill and access. 

In February, shortly after the freezes went into effect, the Wall Street Journal reported that aides to Republican objectors were "considering punishing the companies that halted PAC donations by banning their lobbyists from coming to their offices to advocate on legislation." 

Now, a year later, corporate lobbyists on both sides of the aisle are talking to the media, arguing that companies would be foolish not to donate to Republicans who voted to overturn the election. Lobbyist Cristina Antelo is telling her clients that Americans have already forgotten about what happened on January 6 and should resume donations to Republican objectors:

“For better or for worse, and whether I agree with it or not, Americans have short memories,” Democratic lobbyist Cristina Antelo, who runs the bipartisan firm Ferox Strategies, said during a recent webinar put on by CQ Roll Call parent company FiscalNote. 

Antelo said she’s telling her clients to build relationships with Republicans, who may be in line for leadership positions or committee chairmanships. 

“You should start that here in January, you should start that now in advance, you should start those conversations and get to know them and have them get to know you,” she added. 

Antelo's lobbying firm, Ferox Strategies, represents Reynolds (parent company of R. J. Reynolds Tobacco), Intuit, Disney, The Gap, and other major corporations. One of Ferox's clients, Eli Lilly, is among four that cut off donations to Republican objectors in January but directly broke the pledge. Another Ferox client, Walmart, has not directly donated to Republican objectors but contributed to the NRCC and the NRSC, the multi-candidate PACs that support all Republicans in the House and Senate. Microsoft is also a Ferox client but has pledged to maintain its freeze on Republican objectors through the 2022 cycle. 

The Hill anonymously quoted "a lobbyist at a Fortune 500 company that is currently pausing PAC donations to GOP objectors" who warned that corporate strategy needs "to align with the current political reality that Republicans are almost certainly taking the House in November." In the same article, two Republican lobbyists also stressed the importance of backing Republican objectors. 

Stewart Verdery, a Republican lobbyist who runs the firm Monument Advocacy, is advising his clients that it is "not really a sustainable position to say you won’t give to two-thirds of the Republican House caucus, including the leadership and the likely next speaker."

But while the status quo is clearly not sustainable for corporate lobbyists who are used to doing business in a certain way, it is doubtful that corporations themselves would benefit from resuming donations to Republican objectors. Supporting members of Congress who tried to overturn an election could cause significant damage to corporate brands. And while restarting donations would make their lobbyists happy, there is scant evidence that these donations meaningfully benefit corporations. 

Do corporations actually benefit from political spending?

Corporations justify political spending, even when it contradicts their stated values, as necessary to enhance their bottom line. But in the latest issue of Harvard Business Review, Dorothy Lund and Leo Strine argue that "political donations greatly heighten corporate risk" and "destroy value by suppressing innovation and distracting managers from more-pressing tasks." Lund and Strine contend that corporations should "reduce their involvement in time-wasting and costly political spending, and better align their lobbying and donations with their stated values."

Lund and Strine note that after the Supreme Court greatly expanded the ability of corporations to spend money in politics in Citizens United, "[c]orporate leaders have not chosen to seek [shareholder] approval for political donations… despite the fact that shareholders are paying for them with their entrusted capital." Meanwhile, corporate managers in charge of political spending decisions "are more likely to identify as Republican than are members of the general public." And corporate political spending skews strongly toward Republican candidates and committees.

But isn't political spending making corporations more profitable? Research suggests the opposite is true. Lund and Strine cite "a study of corporate political activity in the form of lobbying and PAC spending by S&P 500 companies from 1998 to 2004 (conducted by John Coates, a Harvard professor who recently served as general counsel of the SEC)." That study found that corporate political spending "was strongly and negatively related to company value." Lund and Strine postulate that "when companies feel they have to compete on regulatory shortcuts rather than on productivity and innovation, they may be poorly positioned to produce sustainable profits by selling quality goods and services and evolving to meet new consumer demands." The authors argue there is "no sound business justification for corporate political giving as it is practiced today."

It's worth considering as corporations decide whether to maintain the commitments they made after January 6 or go back to business as usual.