Corporate campaign donations, a quarter later
After the January 6 riot at the Capitol, scores of companies vowed to pause their political donations. Some stopped giving to all politicians, while others shunned only those 147 Republicans who voted to overturn the presidential election results. A recent deadline for candidates to release fund-raising details for the first quarter revealed more details about how corporate giving has changed.
Companies largely kept their word. Only a handful of corporate PACs gave to the Republican objectors, whose total corporate and industry PAC donations dropped precipitously in the first quarter versus the comparable period in the last election cycle. The losers include powerful party leaders like the House minority leader Kevin McCarthy, whose two PAC donations came from the California Beet Growers Association and the National Federation of Independent Business. Mr. McCarthy had more than 100 donations from business groups in the same period in 2017.
But there are shades of gray. Some companies gave money to specific Republicans, taking the view that not all of the 147 lawmakers are the same, a stance adopted by the Chamber of Commerce (and one that DealBook hears is being contemplated by other PACs).
Toyota gave to more than a dozen of the Republicans who voted against certifying the election results. A company spokesperson said Toyota “does not believe it is appropriate to judge members of Congress solely based on their votes on the electoral certification.” The company decided against giving to unspecified others, who “through their statements and actions, undermine the legitimacy of our elections and institutions.” After the Capitol riot, the company said it would assess its “future PAC criteria,” a more vague pledge than those of many other companies.
Cigna gave to Florida’s Byron Donalds, South Carolina’s Tom Rice and other House members after it said in January it would “discontinue support of any elected official who encouraged or supported violence, or otherwise hindered the peaceful transition of power.” A spokesperson for the insurer said that congressional votes are “by definition, part of the peaceful transition of power,” and that its cutoff of donations “applies to those who incited violence or actively sought to obstruct the peaceful transition of power through words and other efforts.”
Lawmakers at the forefront of the push to overturn the election raked in cash from other sources. Senators Josh Hawley of Missouri and Ted Cruz of Texas each brought in more than $3 million for the quarter, tapping into the outrage of their individual supporters. Rep. Marjorie Taylor Greene of Georgia similarly raised $3.2 million, more than nearly every other member of House leadership. The financial haul for those with the loudest and most extreme voices, against the backdrop of the corporate pullback, highlights a shift in the Republican Party’s longtime coziness with corporate America. It also raises questions about big business’s ability to influence policy, as pressure builds on companies to weigh in on hot-button issues like restrictions on voting.
HERE’S WHAT’S HAPPENING
A decision on the pause to Johnson & Johnson’s vaccine could come soon. Dr. Anthony Fauci said that he expected federal health officials to decide whether to resume giving the shot as soon as Friday. The halt was reportedly imposed because of concerns that doctors would mistreat the rare instances of blood clots potentially related to the shot, according to The Wall Street Journal.
There may be a consensus on raising corporate taxes. Senate Democrats are increasingly coalescing around 25 percent as the new rate, according to Axios — down from the 28 percent that President Biden has proposed, but up from the current 21 percent.
Crypto prices take a tumble. Over the weekend, cryptocurrencies suffered a big drop in value: Bitcoin, for instance, fell 15 percent. (It has since recovered somewhat.) The potential culprits: speculation about impending enforcement actions by financial regulators and power outages in the Chinese region that is home to major Bitcoin mining operations. Or crypto is just being volatile again.
Jack Ma may give up his stake in his Chinese financial giant. The billionaire is reportedly weighing options for selling his stake in Ant Group, the fintech company he co-founded, according to Reuters. The deliberations come amid pressure from Beijing officials on his business empire, including Ant and Alibaba.
A Swiss billionaire drops out of the bidding for Tribune. Hansjörg Wyss, who had teamed up with a Maryland hotel mogul to bid for Tribune Publishing, withdrew after deciding it would be too difficult to turn The Chicago Tribune into a national publication, The Times’s Katie Robertson writes.
The big money behind European soccer’s huge rift
A dozen of the top European clubs announced plans to create a new soccer league that would rival the longstanding Champions League, The Times’s Tariq Panja reports. The plan could concentrate the billion-dollar sport’s economics with just a handful of teams — if it survives the potential legal challenges.
Meet the Super League. Twelve teams so far have signed up for the new league, which was hatched in secrecy over several months. Among them are Arsenal, Liverpool and Manchester United of England; Real Madrid and Barcelona of Spain; and AC Milan and Juventus of Italy. (A few more teams are expected to join.) The idea is for the league to hold exclusive midweek matches in between domestic league matches. The closed league would operate more like the N.F.L. or the N.B.A., doing away with different teams appearing in the pan-European Champions League tournament each year, based on their domestic league performance.
The share prices of publicly traded clubs, like Juventus and Manchester United, jumped more than 10 percent in early trading.
There’s a huge amount of money at stake. The Super League’s founding clubs would split 3.5 billion euros, or more than $4 billion, as part of its formation, or more than $400 million per team. That’s four times what the Champions League winner took home last year.
The news spurred an outcry from the establishment. The organizer of the Champions League, UEFA, criticized the proposal as a “cynical project” and has been exploring ways to block it. The governing body of European soccer also noted that FIFA, the global soccer governing body, has threatened to expel players who participate in unsanctioned leagues from tournaments like the World Cup.
“The Fed has become more emboldened to discuss issues that have an economic impact, even when they fall into areas of partisan disagreement.”
— The Times’s Jeanna Smialek, on how the U.S. central bank is facing criticism as it wades into climate and racial equity issues, leading some to question its political independence.
Gary Gensler gets to work
The new chair of the Securities and Exchange Commission was sworn in on Saturday, making today the first Monday on the job for the former M.I.T. professor, commodities regulator and Goldman Sachs banker. “Every day I will be animated by our mission: protecting investors, facilitating capital formation, and promoting fair, orderly, and efficient markets,” Mr. Gensler said in a statement. He didn’t offer specifics, but the S.E.C.’s recent activities suggest three major priorities.
Environmental, social and governance issues: Lately, the S.E.C. has discussed the increase in investor demand for company disclosures on things like climate-related risks, board and leadership diversity and political donations. Most recently, it issued a risk alert about the “lack of standardized and precise” definitions of E.S.G. products and services, which could lead to confusion among investors and inconsistent reporting by companies.
At his Senate confirmation hearing, Mr. Gensler appeared inclined toward more expansive disclosures, noting that “it’s the investor community that gets to decide” what is material.
Blank-check companies: Special purpose acquisition companies, or SPACs, have been proliferating, raising many regulatory concerns. These include “risks from fees, conflicts, and sponsor compensation, from celebrity sponsorship and the potential for retail participation drawn by baseless hype, and the sheer amount of capital pouring into the SPACs,” said John Coates, the acting director of the S.E.C.’s corporate finance division, in a statement.
Given Mr. Gensler’s strong enforcement credentials, many predict more scrutiny of SPACs in the months ahead. This could take precedence over the other recent market frenzy, meme stocks, but regulatory action on the gamification of trading, payment for order flow and other factors in the mania around GameStop and others may not be far behind.
Bringing cryptocurrency into the mainstream: Mr. Gensler was confirmed on the day that the crypto exchange Coinbase went public, signaling a new era of legitimacy at a time when crypto rules are in flux. Blockchain executives and their growing lobby told DealBook that they welcome working with Mr. Gensler, who is more versed in crypto technology than most other policymakers. “He gets what’s going on,” Hester Peirce, an S.E.C. commissioner and vocal crypto champion, said of Mr. Gensler.
Clarity on when a digital asset qualifies as a commodity or a security tops Coinbase’s wish list, according to its chief counsel, Paul Grewal: He’s “hopeful” about Mr. Gensler’s tenure, noting that he will be well-informed and engaged on crypto issues, “even if we won’t always agree.”
THE SPEED READ
CVC Capital Partners has reportedly delayed submitting a final takeover bid for Toshiba following the resignation of the Japanese conglomerate’s C.E.O. (Nikkei)
Penske Media, the publisher of Rolling Stone, has reportedly agreed to buy a 50 percent stake in the South by Southwest festival to keep the tech, music, and film event afloat. (WSJ)
WeWork may be trying to go public through a SPAC instead of an I.P.O. this time, but concerns about its rosy projections for growth and profitability remain. (WSJ)
Politics and policy
All the ways British officials are trying to defend London’s status as a major financial hub after Brexit. (NYT)
Super PACs are starting to play an outsize role in the race for New York City mayor. (NYT)
President Donald Trump may be out of office, but the One America News Network has bet its business on essentially pretending he never left. (NYT)
Two men were killed in an accident involving a Tesla that was apparently operating in Autopilot mode. (NYT)
Clubhouse has raised new funds at a $4 billion valuation, but there are signs that the audio chat app’s popularity is waning. (CNBC)
Best of the rest
What research says about how to make hybrid work succeed. (Reset Work)
Speaking of the future of work: HSBC’s senior leaders have scrapped their own executive floors and now “hot desk” like everyone else. (FT)
“The New York Power Lunch Is Back, With New Rules” (WSJ)
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