Dividends and US companies cut donations to politicians after Trump’s election challenge

The last Presidential election cost over $1 billion and in many ways, it was money well spent. If the desire is for as many people to vote as possible, then the Presidential election was an overwhelming success with over 80 million voting for President Biden and 74 million voting for Mr. Trump. For a billion dollars, that is very heavy fundraising and both parties turned to corporations for their major funding. All smaller donations are wonderful and needed to ensure the grassroots turns out to vote, but the large donors play a significant factor. It is one of the reasons why most politicians are wealthier than the average voter and fundraising is a 12 month exercise, not just before the election. One election finishes, another one starts.

Each of the 2 parties Democratic and Republican policies tend to attract some companies over the other. It is not that the companies can not work with the other, in some industries it is much easier than others. The classic case is the oil industry has given more to Republicans because the Republicans start with liking the oil industry, the Democrats tend to tolerate it. There are industries that both parties find it easier to raise money.

All major companies have Political Action Committees (PACs) and they all have government relations departments to ensure legislation is helpful rather than harmful to the companies.

In an article by Reuters, for political activity, companies disclose their actions to the Federal Election Commission. They are regular filings, similar to companies filing at the Securities and Exchange Commission (SEC). In January companies including Microsoft, Walmart, AT&T and Comcast did not donate to 147 Republicans who voted to support former President Trump after the January 6 assault on the US Congress. The reason why the companies did not give money is former President Trump had not declared he lost fair and square. In the world of business and politics the game has moved on without former President Trump.

During the last 2 year cycle, those 147 lawmakers would have received more than $2 million from the PACs. In January 2017, the 10 company PACs donated $190,000 and during the 2019-20 election cycle, the PACs gave $10 million.

Linking to dividend paying stocks, if you wonder who finances political activity, it is the same companies who make profits and pay dividends. There are valid reasons to giving money, guaranteed access and to ensure people vote to do no harm, which can save money for the company. Making profits and paying shareholders is the reason to own the shares, but companies can and do more in the outside environment.

There are more questions than answers, till the next time – to raising questions.

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