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Big Business Re-Evaluates Relationship With GOP

The divide between corporate America and social conservatives

Donald Trump's stands on immigration and other issues have alienated some traditionally Republican-leaning corporations. (Photo By Bill Clark/CQ Roll Call)
Donald Trump's stands on immigration and other issues have alienated some traditionally Republican-leaning corporations. (Photo By Bill Clark/CQ Roll Call)

An election cycle that’s produced Donald Trump’s hard-line immigration policies and anti-gay rights laws in Republican-led states such as North Carolina and Mississippi has put corporate America in a tight spot, questioning whether the GOP still speaks for its interests.  

More than 100 companies — including Northrop Grumman, Intel and Coca-Cola — have called on North Carolina and Mississippi to repeal their new laws, putting the businesses more in line with the Democratic Party on gay rights.  

At the same time, the nation’s biggest business lobby, the U.S. Chamber of Commerce, has spent all of its nearly $5.5 million in independent expenditures helping Republican candidates, according to Federal Election Commission data, indicating that Republican orthodoxy on taxes and regulations still takes precedence over social issues.  

“It’s somewhere between a minefield and a giant slalom,” said Doug Pinkham, president of the Public Affairs Council, which represents lobbying and public relations executives from some of the nation’s biggest corporations. “It’s not something you can navigate because that assumes there is a passageway.”  

“It’s not something you can navigate because that assumes there is a passageway.” – Doug Pinkham, president of the Public Affairs Council Ex-Rep. Jim Gerlach, R-Pa., who runs the Business-Industry Political Action Committee, calls the political year “messy, it is ugly, it’s one for the books. There’s a lot of nervousness from the business community.”  

Though business PAC has endorsed a slate of 13 House and Senate Republicans, Gerlach said he expects the nonpartisan group will back Democrats, too.  

“I’m not sure parties are in control anymore,” he said. “It’s all individual performance.”  

The divide between corporate America and socially conservative factions within the GOP has given Democrats an opening.  

Steve Elmendorf, the longtime senior advisor to former House Democratic Leader Dick Gephardt and co-founder of the lobbying and communications firm Subject Matter, said the problem many businesses have “is they believe in diversity and international engagement, and the Republican Party is increasingly becoming a party against diversity and engagement with the world.” Elmendorf is supporting Hillary Clinton in this year’s presidential race.  

Companies are skittish of Trump’s call to build a wall along the Mexican border, to impose new tariffs on China and to temporarily ban Muslims from the United States. Activists have targeted corporations , such as Coca-Cola and Google, for their sponsorship of the Republican National Convention and are trying to scare them away from what they portray as this year’s “Donald Trump Show” planned for Cleveland in July.  

Coca-Cola and Google didn’t respond to requests for comment.  

The U.S. chamber does not engage on social issues, a spokeswoman, Blair Latoff Holmes, said in an email. For that reason, the new law in North Carolina and the more sweeping Mississippi one, both regulating bathroom-use for transgender people, do not factor in the group’s decisions.  

“Our goal this cycle is to protect pro-business gains we made in the House and Senate in 2014 and advance our policy agenda that will lead to more jobs and economic growth,” Latoff Holmes said.  

Sen. Patrick Toomey, R-Pa., has been a top beneficiary of big business contributions during the current cycle. (Photo By Douglas Graham/CQ Roll Call)

Republican senators in tough races this year, including Sens. Patrick J. Toomey of Pennsylvania, Rob Portman of Ohio, Mark S. Kirk of Illinois and Kelly Ayotte of New Hampshire, have benefited from the chamber’s political cash, so far.  

The organization isn’t alone in targeting such tough contests.  

“It’s no secret, we are deeply engaged in the political process,” said Juanita Duggan, president of the National Federation of Independent Business. The group hasn’t yet unleashed its outside ads but plans to support vulnerable Republican incumbents such as Toomey and Ayotte.  

“Our members tell us what’s important, and it’s regulation, health care, taxes, labor issues,” Duggan said.  

Still, GOP insiders say the party’s business wing has lost touch with  grass-roots voters who are fueling the presidential candidacies of Trump and Texas Sen. Ted Cruz.  

“The business community has been misaligned with the GOP for a long time,” said John Feehery, a Republican lobbyist with QGA Government Affairs. Business leaders must “win the Republican Party because the Democrats are always going to be more anti-business, though it doesn’t seem like it now. . . . The business community has got to be more engaged at the grass-roots level in making the sell of their policies.”  

Some companies are re-assessing their policy goals, and trying to figure out how to pursue them while also keeping their brands untarnished by political rhetoric, said Pinkham of the Public Affairs Council.  

He said corporations are asking themselves: “Are you going to be accused of somehow supporting a candidate when what you’re trying to do is increase awareness of your cause, your industry, your company?”  

Gay rights have become a core issue for Fortune 500 companies eager to keep their customer bases and not alienate prominent voting blocs.  

While the Human Rights Campaign, a gay rights advocacy group, has endorsed Clinton, the Democratic front-runner, for president, the organization said its issues transcend partisan politics.  

“We are seeing a very robust and swift response from the business community against these anti-LGBT bills and the simple reason is they’re not only wrong, they’re bad for business,” said Deena Fidas, director of the group’s workplace equality program.  

That response, Fidas added, is the result of the organization working directly with major corporations over the last 15 years to put nondiscrimination policies in place.  Their efforts may provide a template for other activist organizations to follow — that is, lobby companies to make changes themselves as they wait for policy-makers to catch up.  

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