Will KC firms like Hallmark, Cerner keep up political spending after shunning Hawley?
Kansas City-based Hallmark made a big splash last week when it asked for the return of political donations following the deadly riot at the nation’s Capitol.
The company known for greeting cards and holiday movies added to the growing list of businesses seeking distance from Sen. Josh Hawley and others being blamed for fomenting political unrest.
As noteworthy as it was, Hallmark’s request wasn’t for much in the grand scheme of things: the company’s political action committee over the last two years had given $7,000 to Hawley and $5,000 to Kansas Sen. Roger Marshall, another Republican who objected to certifying the results of the 2020 presidential election.
In the world of big money politics, it’s unclear if the actions of companies like Hallmark will lead to any persisting changes in campaign funding. It could be the beginning of companies stepping back from the political arena. Or it may go down as a purely symbolic gesture following an unprecedented attack on the heart of American democracy.
But there’s no question that the action of Hallmark and others has pushed countess corporations to reassess their roles in the political process.
Even the uber influential conservative Koch network and its Americans for Prosperity super PAC will consider the votes of those who objected to the election in its future decisions about political donations.
Following the January 6 riot, activist groups have identified corporate funding of elections as a new front in seeking accountability for those who trafficked baseless allegations of voter fraud.
But even as major companies like American Express and Marriott end or suspend donations to Hawley and other members of Congress, it’s unclear whether corporate America is prepared to fully abandon its role in financing federal politics.
Earlier in the week, several companies released statements about re-examining their political giving. But several, including Hallmark, H&R Block, Cerner and Commerce Bank, declined to discuss their PACs further.
“I think it remains to be seen whether this will be long standing. We are right after an election so it’s perhaps the most convenient time to withhold contributions,” said Erin Chlopak, director of campaign finance strategy for the nonpartisan Campaign Legal Center. ”It’s not the time when candidates are necessarily pounding pavement to seek that money. And the impact will be more significant as we get close to the next election.”
Corporate political action committees have been around for ages. Hallmark’s PAC has been active since 1976. And a variety of local companies, including H&R Block, Polsinelli law firm and Burns & McDonnell engineering firm, have their own political arms.
But even with heightened scrutiny since the riot, corporate PACs have diminished in importance in recent years.
The Center for Responsive Politics reported that traditional PACs accounted for only 5 percent of total giving in the November election. That was an all-time low, though the November elections were the most expensive on record with a total of nearly $14 billion spent.
In recent years, some Congressional Democrats have eschewed PAC funding as part of efforts to reject the influence of special interests in politics.
PACs can represent labor unions, ideological interests like the National Rifle Association or Planned Parenthood and individual businesses. Corporations are unable to contribute directly to candidates, but can pool employee donations together through their corporate PACs.
As traditional PACs’ influence has waned, Super PACs have been exploding. Those groups can spend unlimited amounts but cannot coordinate with candidates directly. The Center for Responsive Politics said Super PACs, political parties and other dark money groups spent $2.6 billion during the previous election cycle.
Companies’ responses vary
Companies have responded to the violent attacks in D.C. in a variety of ways: While Hallmark went so far as to ask for its money back, others like Airbnb have said they will not donate to any members of Congress who objected to certifying the presidential election results.
More companies have paused political donations altogether as they reassess the situation. And others have remained silent on the issue.
Chlopak said the more specific the statement from a corporation, the more meaningful a signal it sends to the nation about the events of January 6.
“A corporation saying we’re not making any contributions anymore doesn’t mean much,” she said. “But a corporation who says we refuse to fund candidates who undermine democracy is obviously more significant.”
Corporate PACs oftentimes donate to candidates on both sides of the aisle.
Cerner Corp., the Kansas City area’s largest private employer, spent more than $370,000 in political contributions between January 2019 and November 2020, according to Federal Elections Commission data.
Last week, Cerner announced it would suspend donations to Hawley and others “who took part in or incited violence last week in Washington, D.C.”
The company’s PAC gave $10,000 to Marshall’s campaign committee over the last two years and $10,000 to Fighting for Missouri, a leadership PAC sponsored by Hawley.
Cerner’s donations during the 2020 election cycle leaned heavily Republican. But the PAC still gave money to Democrats such as Rep. Emanuel Cleaver and the former head of the Democratic National Committee, Florida congresswoman Debbie Wasserman Schultz.
That’s not unusual.
But Chlopak says it underscores a central criticism of corporate involvement in politics: “It’s not really about advocating a particular policy position, but it’s really more about ingratiating that corporation with as many people in power as possible to ensure their ability to be heard.”
Marshall and Hawley have not commented on the possible loss of corporate funds.
They are under no legal obligation to return Hallmark’s donations. A company official said staffers of both senators have acknowledged the request that they return donations, but it’s unclear if they will return the funds.
A permanent shift?
Last week’s unusual turn of events has many wondering whether companies will walk away from political spending altogether for fear of future public relations problems.
That could hurt fund-raising, but it’s a relatively small piece of the pie.
Hawley spent more than $11 million in the 2018 election against Democrat Claire McCaskill, according to the Center for Responsive Politics. But outside groups like super PACs spent nearly $40 million to oppose McCaskill’s reelection bid, according to the center.
“It’s not insignificant,” Greg Vonnahme, chairman of the political science department at the University of Missouri-Kansas City, said of company donations. “But a majority of their money is going to come from individual donors.”
While the public may think corporate donations heavily influence policy, Vonnahme said such funds have relatively minor impact. Companies aren’t purchasing specific bills and policy plans, but the hope of access, he said.
“They’re not really looking at who’s conservative, who’s liberal. They’re contributing very widely and very broadly, mainly to candidates who will win,” he said. “And they want to contribute to candidates that will be in the majority and that will have influence.”
Even if it wouldn’t upset the balance sheet too much, a widespread abandonment by corporations could portend a rocky political future for senators like Hawley.
“They’re clearly engaging in a calculus,” Vonnahme said. “They think these candidates are weakened candidates where having access to them is not as important and maybe having an association with them could create problems.”
Any employee of a company can voluntarily contribute to a corporate PAC, though executives and top managers more frequently participate, Vonnahme said.
Federal data show that about 70 employees and company officers made a total of 690 donations to the Hallmark PAC in 2019 and 2020, ranging from $10,000 from board chairman Donald J. Hall to a few employees who made a single contribution of $40. Many others in between gave regularly in small increments that amounted to hundreds or thousands over time.
Similarly, many Cerner employees made regular contributions to the company PAC. Several executives gave exactly $192.31 every couple of weeks, equal to $5,000 a year, the limit for individual donations.
The PAC representing employees of Kansas City’s Black & Veatch engineering firm is primarily funded by monthly donations from a small group of top executives.
The PAC spent less than $10,000 in the last election cycle, supporting Kansas Republican Rep. Ron Estes, the Kansas Republican Party and Missouri Republican Rep. Sam Graves. In 2018, it donated to both McCaskill and Republican Kansas Sen. Jerry Moran.
In a statement, Black & Veatch said the nonpartisan PAC aids the company’s efforts to shape public policy concerning energy, water, telecommunications and the oil and gas sectors.
“It is the vehicle that ensures we have a voice in the political process,” the company’s statement read.
Putting pressure on companies
Activists have already started to compile lists of the companies that supported Marshall, Hawley and others who objected to the presidential election.
And groups like The Lincoln Project, formed by former Republicans to defeat President Donald Trump, have pledged to keep pressure on companies that stay silent or continue to give.
On Twitter last week, one of the group’s founders said the organization planned full-page newspaper ads across Missouri naming companies who had disavowed Hawley and targeting those who continued to finance him.
The group has launched a national ad campaign accusing Hawley of sedition in an effort to prevent him from ever winning the presidency.
“The corporations that donate to Josh Hawley will be known to the American people,” said Rick Wilson, co-founder of the organization. “If a company decides they want to donate to Josh Hawley and they are of a certain public stature, we believe their customers, their stockholders, their vendors, and the world needs to know about it.”
Wilson said the organization was surprised by the companies that abandoned what he called the “sedition caucus.”
“But we were very gratified that corporate America had a realization that the kind of behavior on display at the Capitol was so far outside of the usual back and forth ideological sparring that happens in this country,” he said.
The Star’s Mike Hendricks contributed to this report.
