“Pro-Business” Political Spending: Giving the Lie to DEI and Fueling a Far-Right Insurgency

Diversity-Washing of a Different Order

Over the past year and half, we’ve seen a proliferation of articles rightly calling out those recognizable — you might even say sham — gestures of virtue-signaling about social justice and inclusion by businesses that simultaneously perpetuate many of the very problems DEI work at its best is intended to address. (For a more positive spin on virtue-signaling, see this.)

The practice has variously been called diversity-washing or woke-washing, and anyone with a nose for disingenuousness knows it when they see it.

But as we approach spring in this critical year for American democracy — to say nothing of a war in Europe, which at its core is about an autocrat’s nostalgia for past dominance and the threat liberal democracy poses to his power — it’s time for some unvarnished talk about a different category of diversity-washing practiced by too many corporations and their most high-profile representatives:

It’s the crafting of strategic “pillars”; filling of company websites with ESG, CSR, and DEI pages; and issuing of statements in support of equality, racial justice, and an inclusive culture — all the while continuing to make political contributions to elected officials, candidates, and, yes, the historically “pro-business” American political party, which for months now has been accelerating the passage of legislation brazenly designed to undermine the principles of JUSTICE and EQUALITY FOR ALL.

Imagine, for example, the CEO of a Fortune 500 company who issues a statement like this in the wake of the George Floyd murder (modified slightly):

“No one is safe until we are all safe. There is no place in any community anywhere in the world for racism, bigotry or hate. We will not stand quietly or idly on the sidelines of this issue.”

…who then gives money to a political candidate who writes this:

“The [life] of each and every African American matter[s], and there’s no debating the fact that there is no place for racism in our country. However, I adamantly oppose the Black Lives Matter political movement, which has advocated for the defunding of police, called for the removal of Jesus from churches and the disruption of the nuclear family structure, harbored anti-Semitic views, and promoted violence and destruction across the country.”

Or imagine an organization of nearly 200 of the most recognizable American business CEOs, with a website page devoted to Racial Equity and Justice, which puts out this statement:

“Last October, in the wake of George Floyd’s murder, Business Roundtable member companies committed to stepping up our efforts to address the inequities and injustices that exist within our society’s systems. After convening more than 100 experts, Business Roundtable created a plan for sustained action. During the past year, Business Roundtable member CEOs have worked within our companies and in communities to advance economic opportunity for Black citizens. We know there’s still a lot to be done, but we remain committed to building on our momentum and having a substantial impact.”

And now imagine this same organization with a pattern of political donations — most notably between 2016 and 2022 (the Trump years) — that looks like this:

Is there ANY way to view this other than as an exercise in hypocrisy?

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As almost anyone who has spent time in a large corporate environment knows, it can feel taboo to talk too openly about political affiliation. There’s an assumption that business cultures should be able to accommodate people of all political persuasions. And the official company line on political spending probably goes like this:

• “It’s done in a spirit of nonpartisanship, in support of business interests”

or:

• “It’s bipartisan and based on a variety of considerations”

Such rhetoric of “business neutrality” has, of course, long obscured more partisan and political realities.

But at a time when those realities are threatening the stability of America’s entire political system; when our (imperfect, but better than the alternative) system of government is teetering on the edge; when one of our two major political parties (at least as reflected in the Republican National Committee) has mutated into what some are calling a far-right extremist insurgency — adopting Orwellian Newspeak by re-branding the political violence of January 6th, 2021 as “ordinary citizens engaged in legitimate political discourse” and purging non-loyalists by censuring its own — we need to crack open this vault of language, which allows too many to buy into the illusion that “neutral,” “pro-business” decisions do not ultimately translate into moral and ethical decisions, and choices made by human beings with agency.

We need to shine a light on the kinds of moral and ethical choices the language of nonpartisan neutrality — wrapped in the mantra of business-as-usual — is helping obscure.

And we need (in my opinion) to get over our squeamishness about discussing openly political matters.

Simply put, business-as-usual is hurtling us over a cliff, toward possible autocratic, minoritarian rule — not to mention suppression of the many cultural freedoms and gains won as a result of the Civil Rights movement — by the very marginalized or underserved groups that DEI work purports to give “voice” and “space” to; to whom it claims to “offer a seat at the table.” (Cases in point: bans against teaching “uncomfortable” truths about America’s history and against mentioning sexual orientation or gender identity.)

These choices and actions are irreconcilable with stated claims about valuing equality, racial justice, and greater social inclusion, whether inside or outside the walls of your organization.

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Perhaps the most generous interpretation of hypocritical political spending as a practice is to call it a decades’ old system still running on autopilot.

It’s no secret (although the language of “business neutrality” helps contribute to secrecy) that many who identify as “pro-business” have historically identified as Republican and have tended to support traditional Republican policies — i.e., low corporate taxes, government deregulation, free-trade, and general opposition toward labor unions.

It’s also no secret (except when it is; read about untraceable, “dark money” channels) that businesses of all stripes make political contributions — whether to individuals, trade associations, political action committees (PACs), or Super PACs— in order to sway policymakers to design policies favorable to their specific business interests.

Often, this practice translates into donations made in relatively equal measure to BOTH political parties, as a form of bipartisan political engagement. (A cynical take is that this allows businesses to hedge their bets on who might hold decision-making power, come the next election).

But more often, as in the example of the Business Roundtable (BRT) above, American business donations have long skewed more heavily toward the Republican Party, as documented in a recent issue of the Harvard Business Review:

“In 2019 researchers at Harvard Law School and Tel Aviv University ran the names of all individuals who had been CEOs of companies in the S&P 1500 from 2000 to 2017 through federal campaign-finance databases, which record contributions to party committees as well as to congressional and presidential candidates. They found that nearly 60% of CEOs donated to Republicans. The same Public Citizen study just mentioned found that from 2010, when the Citizens United decision was issued, to 2020, corporations gave $282 million to Republican candidates, versus $38 million to Democratic candidates.”

The January 6th, 2021 insurrection spurred an uncharacteristically large number of large businesses to pause contributions to any member of Congress who refused to certify the 2020 U.S. Presidential election under the pretext that voting fraud, not a majority of Electoral College votes fairly cast and counted, had handed the victory to Biden.

That pause sent a loud public signal that trying to undermine the peaceful transfer of power, in favor of the kind of election manipulation common in autocratic regimes, was a line in the sand — a line that even the election of Trump in 2016, overt bigot though he was, with early policies (Muslim ban, separating migrant children from parents) taken straight out of Senior Advisor Stephen Miller’s white nationalist playbook, did not compel them to draw.

In the year since January 6th, 2021, however, many of these businesses have reneged on their promise. Two organizations tracking details of these broken promises are Crew (Citizens for Ethics) and Accountable.US (See also this article by Ja’han Jones.)

And as we round the corner toward the 2022 midterm elections, too many businesses appear to be slipping back into the well-worn groove of existing political spending patterns, as if it’s possible to resume the familiar, business-as-usual posture of standing on neutral ground.

It isn’t.

Why?

Because that ground has shifted — dramatically — even as the language used to maintain an apolitical stance remains unchanged.

To democracy and social justice watchers, observing this business-as-usual behavior is like watching corporate giants sleepwalk toward the edge of a cliff, dragging with them our hopes for more a democratic, inclusive society — and for more democratic, inclusive organizations — tethered as we all are to their outsized power and influence.

What we need now is to rouse these giants from their slumber; to make them see that American democracy is even MORE at risk than a year ago; that not only is a now far-right party working to undermine the electoral system, it’s also waging a counter-offensive against the social and cultural gains made by historically marginalized groups since the Civil Rights era.

In short, it’s even MORE crucial that businesses find the moral courage to change course now, where it comes to the political uses of their pocket books.

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To take a step back, it might be helpful to re-cap HOW the ground has shifted over time — so much so that affiliating with the “pro-business” party — or even giving equally to both parties in a spirit of bipartisanship — is no longer what some may imagine it to be.

In an October, 2020 article titled “Large Corporations Contributed to Our Political Polarization,” political scientist Mark Mizruchi chronicles the history of big business in America and its policy and political leanings.

Mizruchi writes:

“[H]istorically, most American businesspeople have held solidly conservative political positions. These views have included strong support for free markets with minimal regulation, support for low taxes, and a suspicion of organized labor and government social spending.”

He then draws attention, though, to a small circle of business elites that once acted as a moderating force against a then-fringe, extreme anti-government business faction, because they “felt a sense of responsibility for the well-being of the larger society”:

“There was a period, from the end of World War II into the 1970s, when the leaders of American big business were a source of moderation and pragmatism who exhibited a degree of concern for the larger population…[These] heads of large corporations…played a major role in helping our political system work. They did this in part by keeping at bay, and delegitimizing, the extremist elements that were as present in our society then as they are now.”

Those extremist elements, Mizruchi writes:

“wanted to return to an earlier time, when businesses were free to operate without any regard for protecting their employees, consumers, or communities; when government ignored the society’s problems, allowing large segments of the public to live in poverty and despair; and when anyone who was not a native-born white Protestant was viewed with suspicion, if not active hatred.”

By contrast, many of these corporate elites were members of an organization (the Committee for Economic Development, or CED) formed “to develop a plan for the postwar economy,” including the Marshall Plan:

“This was a generation that had experienced the Great Depression and World War II. Several business leaders had even served in the government during the war, and many of them emerged with a deeper understanding of the issues with which public officials were forced to grapple, and with a newfound respect for the difficulties of implementing policies to address them. Many firms at the time were based in communities to which the companies’ officers were attached, and to which they felt a responsibility. Perhaps equally important, there was a belief among business leaders of the era that they had an obligation not only to their communities but to the larger society.”

If this starts to sound like the language of what we hear today under the umbrella of ESG, CSR, and DEI, then hold that thought…

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By the mid-70s, according to Mizruchi, corporate elites began to align themselves with more ideologically conservative business figures who had always rejected policies grounded in the idea of social responsibility; in short, anything that interfered with the goal of maximizing profit:

“Business organizations, including the newly-formed Business Roundtable (which had begun to replace the CED as the most influential representative of large corporations), began to attack government regulation. Teaming with existing foundations and both older and newly-formed think tanks (funded by far-right donors), they became increasingly aggressive in fighting unions, arguing that the latter, along with government regulatory agencies, were responsible for the decline in productivity growth. They also pushed for reductions in corporate tax rates, which they viewed as a drag on investment.”

Mizruchi sums up the trajectory of change this way:

“By the early 1990s, big business had in effect ceded its influence in the party to those the group had previously shunned…”

And he adds:

“What had begun as an extremist fringe now has control of one of our major political parties. The election of Donald Trump, who was supported by virtually none of the top 100 American corporations, represented the culmination of this process.”

If nothing else, this history rebuts the idea that businesses are ever truly apolitical in their choices or actions.

But let’s pause on the fact that the top 100 corporations did not support Trump. They either supported more “establishment Republicans,” or, in the general election, Hillary Clinton, who is generally viewed as a business-friendly, centrist Democrat.

Whether for moral/ethical reasons, or because they feared economic instability or unpredictability under him, backing Trump was seen as a bridge too far.

In the six years since, despite Trump’s defeat in 2020, the party that DID back him, already decades under the control of an extremist business fringe by then, has since caved to an extremist sociopolitical fringe — one Trump openly catered to — and has allowed that fringe to permeate its center.

That fringe is nothing less than a brand of white Christian nationalism or fascism.

And let us not forget, in this moment of crisis in Ukraine — as some start to backpedal from their recent role as apologists for an autocrat who last year re-wrote constitutional laws that would allow him to hold office for two more terms, until 2036 (he’s been the de facto head of state since 2000), and who has spent two decades working to undermine democratic pluralism in the West and around the world — that much of this faction still looks to Putin and Putin’s Russia as the model for a race-based, patriarchal Christian nationalism they aspire to “restore” America (and the West) to.

Under these conditions, no business that claims to embrace values of racial and social justice should be allowed to rationalize continued financial ties to that party, nor be able to reconcile support for DEI values with a massive flood of dollars into that party’s coffers.

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Mizruchi’s historical snapshot serves as a reminder that there is an inherent, never-entirely-resolvable tension between public good and private gain.

At its most fundamental, the business drive toward making a profit doesn’t care about social justice. And within the history of post-industrialized America, you can chart pendulum swings between periods of business activity unrestrained by wider social considerations, and periods of business activity in which some sense of the greater public good is used to reign in the runaway horse of unbridled greed.

We, of course, have been living through one of these runaway horse phases for decades now.

If the first Gilded Age was followed by the Progressive Era, and if few would deny that we are living through a second Gilded Age, then you might say the rise of stakeholder capitalism, conscious capitalism, B-corps, businesses with a social purpose — all are a check against the extreme, once-fringe, now-core business elements that have dominated much of American (and global) business since the 80s and 90s.

Similarly, one way to understand the rise of ESG, CSR, and DEI efforts within businesses is to see them as part-and-parcel of this historical pendulum swing — of a resurgent reformist, civic- or public-minded energy largely snuffed out over the forty-year period following the Reagan revolution.

This time around, however, the legacy of the Civil Rights movement is also making its energy felt — as if that era’s gains created a partial opening for previously excluded groups to enter the places and spaces of power and gradually find new form.

It’s as if this Civil Rights energy quietly seeped into America’s business veins. Or managed to enter the corporate world through the back door.

Since then, renovations have been underway. But in its bones, the house is still largely Mid-Century.

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Still, these energies HAVE caused a stir.

Indeed, in the years since 2016, the Business Roundtable has at least rhetorically shifted its stance, as if in nod to the demands of the wider society or the idea of public good as a value.

In 2019, the BRT put out a new Statement on the Purpose of a Corporation, committing to a stakeholder vs. shareholder-centric philosophy — a pledge that many media observers viewed as a ground-breaking philosophical shift.

While many have called the statement an empty gesture — and its pattern of political donations certainly suggests as much (see “The Illusory Promise of Stakeholder Governance” and a study by Harvard Law School’s Program on Corporate Governance) — there are defenders, as well.

But perhaps even more significant have been the actions of the U.S. Chamber of Commerce — THE largest business lobbying group in the U.S., with a history much longer than the BRT’s.

Founded in 1912 as “a counterweight to the labor movement,” the Chamber gained a reputation, especially between 1997 and 2021 under the stewardship of then-CEO (and openly partisan) Thomas J. Donohue, as a largely Republican-leaning lobby.

Yet, right after the Jan. 6th insurrection, Donohue put out a statement condemning Trump for undermining “our democratic institutions and ideals.”

And since Donohue’s retirement in 2021, current CEO Suzanne Clark (the first woman elevated to CEO in the organization) seems to be taking the Chamber in a new direction — enough so that Congressional Trump loyalists have begun to disparage the Chamber of Commerce or publicly sever ties, attacking it as “a front service for woke corporations” (woke, of course, meant as a term of disparagement).

In fact, in a January Brookings Institution article entitled, “Is democracy failing and putting our economic system at risk?,” authors William A. Galston and Elaine Kamarck point out that:

“[A]t the elite level, the traditional bonds between the Republican Party and big business are also breaking down. For example, a recent op-ed by Republican Senator Marco Rubio (R-Fla.) calls out corporate America for taking sides in the culture war: “Today, corporate America routinely flexes its power to humiliate politicians if they dare support traditional values at all.”

So the shift of direction is clear.

But if it is to help forestall anti-democratic electoral subversion, which looms around the corner, the shift feels neither fast enough, nor widespread enough, nor full-throated enough in its force.

The larger context of the Galston/Kamarck article is an argument for why corporations and businesses need stable democracies. And it ends with a series of questions the authors think investors need to ask themselves, among which are:

• Should portfolio companies follow responsible business practices by urging organizations to which they belong to terminate any financial or other support for measures that result in voter suppression in the U.S., and to withdraw from such organizations if such efforts fail?
• Should portfolio companies end any political contributions associated with elected officials or candidates for elected office who decline to accept the legitimate outcome of US elections or who support seditious acts?
• Should investors regularly monitor financial agents they may employ to ensure that they are aligned both in word and deed with our efforts to address the systemic risks to U.S. constitutional integrity?

To all of these, we urgently need conscientious business leaders who see the answers as yes, yes, and yes.

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At its root, DEI work is, or should be, in my view, a moral endeavor. Its aim should be to nudge, cajole, demand, sometimes even shame an organization into acting on the basis of moral instead of business imperatives. But insofar as business is about making money, generating profit, and maximizing gain — essentially selfish endeavors — its deepest motivation is not to act morally or care about moral choices.

So, asked to care about values like justice, fairness, equality, and equity, there is, again, an inherent tension at play.

But insofar as businesses are made up of human beings, and insofar as human beings are generally governed by at least SOME values other than pure selfishness (unless they’re narcissists), businesses can never fully avoid moral and ethical choices.

Sadly, one of the things we know “corporate speak” can do is disguise a moral or ethical decision in the language of business neutrality, in such a way that “the business decision” becomes detached from the realm of moral or ethical choice. (Laying off employees thus becomes a “business decision.”)

To the extent that people learn to live and breathe this language, they can become desensitized to just how many “business decisions” involve choosing between what serves the self and what serves something beyond the self.

And yet, just as we ALL do, businesses (or the humans running them) are continually making choices about where to draw that line.

Perhaps this is one explanation for how and why hypocritical practices like diversity-washing become so commonplace: the selfish, profit-driven elements feel peer pressure to care about values beyond self-gain. Or perhaps they vaguely DO care about values like diversity, equity, and inclusion. But they don’t REALLY want those values to impinge upon that deeper, acquisitive drive.

Still, as in life, selfishness often feels the need to rationalize its behavior or hide its motives behind the appearance of something less crude; more elevated, or noble.

Diversity-washing might thus be viewed as an act of maximizing the appearance of caring about and addressing moral concerns, while minimizing the disruption of those moral considerations on the ultimate goal of making money.

Any business that wants to integrate social justice values must navigate and negotiate that tension and achieve a balance that doesn’t feel hollow.

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To return, then, to the issue of political giving: businesses (and the people who run them) ought to put aside the cloak of business neutral language and consider WHO, WHAT, and WHICH VALUES they are lending support to as moral and ethical choices, whenever they donate dollars to candidates or PACs.

If you think that person or group won’t try to regulate your industry, but they will promote the false narrative that Trump won the 2020 election, and they’ll install election officials who will only certify a result if the winner is a Republican — are you okay with that?

If they’ll vote against social spending, but they’ll pass laws that make it a crime for your children to be taught why six million Black people migrated from the South to other parts of the country between 1910 and 1970, or how so many Native Americans ended up living on reservations, with a possible 90% population decline since 1492 — will you accept that line?

If they won’t raise corporate taxes, but they will hobnob with white nationalists and others who spread anti-Semitic and other racist, misogynist, and homophobic hate, or who advocate for a Charles Lindbergh-style America First future as a white ethno-nationalist state — can you live with that trade-off?

Let’s be blunt. PLENTY of corporate leaders are well aware of what a business-as-usual pattern of donations may lead to; yet the drive toward maximizing profits will always outweigh other concerns. Recent price gouging during a pandemic only reinforces what we know — that all-too-many corporations are still motivated by self-interest and greed, their leaders steeped, no doubt, in Ayn Randian ideology. Plutocracy doesn’t care about social justice. It doesn’t care about democracy.

For these businesses and the leaders who represent them, DEI really is mere theater. And they probably perform its rituals with a cynical eye. And the pessimist in me doesn’t believe such people can be appealed to.

But this plea is not intended for them.

My hope is that there are enough business leaders out there — leaders with sway and clout within these corporations — leaders with a conscience, who can help steer a better course. Those leaders may still have to worry about turning a profit and keeping the lights on, but they genuinely believe in progressive social values and want their organizations to reflect these as much as possible.

For those leaders, perhaps part of the problem with (and at-times-ineffectual nature of) much that falls under the umbrella of DEI is that it’s still constrained by these rules of a so-called apolitical, “pro-business” system that doesn’t really care about principles like wider representation or democratic inclusion.

It’s as if progressive sentiment is trying to make noise within a regressive system designed to do everything it possibly can to keep actual progressive gains at bay, inside and outside its walls.

In discussing a 2020 Business Roundtable pledge to act on climate change, Rhode Island (Democratic) Senator Sheldon Whitehouse — a strong advocate for getting dark money out of politics and a strong critic of Big Oil interests that have lobbied for decades to prevent Congress from taking action on climate change — said this:

“I suspect a lot of the CEOs signed this in good faith. They don’t know.”

And he suggests something they might do, in this case, on climate, but we could easily broaden this to include “protecting democracy”:

“[C]ommission an audit. Learn what your company is really doing on climate…Do an audit of your trade associations. If you are a member of a trade association, get in there and see what they are up to…demand that your trade associations declare where they get their money…”

Do the work, in other words, to make sure your political contributions do not give the lie to your DEI commitments.

Perhaps the left hand doesn’t fully know or understand what the right hand is doing. Perhaps not everyone is informed enough to connect so many dots. Those leading the charge with DEI statements and even pillars of action are not generally the same people writing political checks.

But it’s those people we need to start working NOW to find out what exactly is happening in their own backyards.

And if some corporate leaders won’t own up to their role in helping undercut their company’s stated social justice values through financial giving, then we need lower-level leaders who hold any sway — who perhaps know better but continue to keep mum on this particular front — to find the courage to issue a moral wake-up call, even if it means biting the hand that feeds you.

We need ANYONE AND EVERYONE with a conscience — business leaders who have not lost their moral compass, and anyone with any amount of influence within the business community — to pay attention; to ask your company’s left hand to look into what its right hand is doing; and, bluntly stated, to help divert the flow of cash from a direction that is helping put all of us — that is, anyone who sincerely believes in or has hope of creating a more just and inclusive society — at risk.

For all those people, it’s high time to connect the dots.

As we enter the 2022 midterm season, what’s needed is hardly a return to business-as-usual, but rather a massive stopping up of the dam.