U.S. Midterm Elections Series: Impacts of Political Involvement on Organizations

In an increasingly divided political climate, an organization’s perceived values can have a major impact on how they are regarded. The past several years have brought many divisive issues to the surface, including the coronavirus pandemic, voting reform, policing, income inequality, and other social justice issues. All of these issues have existed for years, but many have been increasingly moved to the forefront of society, particularly during election cycles. With information regarding campaign contributions from organizations - and leadership social media postings - readily available online, groups and individuals can easily  research where organizations give their funding and where they stand on social issues. When those stances or donations do not align with expectations or desires of a segment of society, it can be the basis for physical, cyber, or reputational attacks.

Details

In years past, organizations could remain relatively quiet when social and political issues arose. Today, the far-reaching scope of social media has expanded and expedited awareness around these stances, with an organization’s stance - or silence - on notable issues now being examined under a microscope. 

Analyst Commentary

The impacts on organizations due to their political involvement became much more visible around the 2020 U.S. election cycle. Many websites made information readily available on campaign contributions which can be traced back to specific donors and organizations. This information highlights the amounts given to candidates as well as lobbying efforts, and allows users to easily locate organizations giving money to candidates and efforts that those users may not agree with. In a study conducted by Sprout Social, 70 percent of consumers indicated that they felt more connected to brands where their CEOs were active on social media, as well as 53 percent saying they felt connected when that brand’s values align with their own.¹ From there, these users frequently reference such contributions through social media postings and in forums to stir up negativity towards the organization, which can trickle down to impacts on their investors as well. 

Organizations not only face social pressure from the outside, but they also see it from the inside with their employees. Many employees, particularly younger workers, are extremely motivated by the desire for where they work to share their values. In one survey, those categorized as millennials were willing to accept a 34 percent pay cut to work for a firm that shared their values—more than double the amount that workers categorized as baby boomers were willing to give up.² Social pressure can also make an impact on employees choosing to leave their roles, with social media campaigns having the ability to elicit a strong response.

More frequently than ever before, activists and consumers are paying attention to the political affiliations of a particular organization’s leadership. Finding which political candidates and committees an individual donated to only requires asimple search on a portal within the Federal Election Commission’s (FEC) website. 

Under the Federal Election Campaign Act (FECA), political committees, which include candidate committees and political action committees (PACs), must register with the FEC and comply with disclosure requirements. Political committees are required to file periodic reports that disclose the total amount of all contributions they receive, and the identity, address, occupation, and employer of any person who contributes more than USD 200 during a calendar year. 

Given the laws against straw donors (someone who makes a campaign contribution illegally with another person’s money in their own name), all individual contributors are mandated to donate in their own name, with their correct personal information listed. This means that FEC disclosures could potentially be a major source for accessing private information. This information is displayed in a publicly accessible database and individual contributor searches may be performed using one or more filters to narrow the actual search.

Data collected on individual contributors include the following:

• Name
• Occupation or Employer
• City
• State
• Date of transaction
• Amount of contribution
• Name of committee disclosing the contribution

One such tool is Zippia, which is a job search portal. The site aggregates the contributions of every employee whose donations were publicly available and displays how many belong to each political party. 

Additionally, the financial news website MarketWatch compiled the political contributions of every S&P 500 CEO during the midterm election cycle and created a searchable database. The data is broken down by political party, and each donation can be viewed individually.

Activists are also using FEC data to target contributions from organizations themselves. One such example is Goods Unite Us, which is a free mobile app that allows users to search for an organization and learn about which political parties and candidates senior employees have donated to. The app was started by legal professionals and says it has info on over 4,000 brands.

In the current political climate, the stakes are increasingly high. In March 2021, Georgia Governor Brian Kemp signed SB 202, creating a new voting law that made several  changes to how elections are run in the state. Following the bill's signing in to law, many individuals, groups, and organizations condemned it and attempted to distance themselves from the state and the politicians that supported it - particularly those headquartered in Georgia, which saw increased scrutiny of their political donations.³ Many organizations spoke out against the law, and a professional sports league moved their 2021 All-Star Game and Draft out of the state as a direct result of the law, costing the state significant revenue.⁴

Activists targeted individuals that had previously donated to the politicians that authored and/or supported SB 202. While they could not do anything to immediately remove the politicians from office, they could publicly shame or harass the donors that helped elect politicians with differing views from theirs.⁵

This particular issue highlighted another area  which could elicit backlash against an organization - corporate political spending not aligning with an organization’s public stance. Several organizations were maligned for funding a group accused of supporting voter suppression laws, while publicly stating that they supported voter rights.⁶

Similarly, in the lead-up to the 2020 presidential election, many media outlets highlighted the corporate executives that were the largest donors to Donald Trump and Joe Biden. This was used to show which leaders, and by proxy, their organizations, supported which political candidate. Once again, there was observed backlash towards organizations who publicly stated one viewpoint, but whose political donations were perceived to be in opposition to those statements.⁷ Organizations found to be in support of certain candidates or political parties faced backlash and boycott activity which impacted their revenue. However - the backlash did not stop there, as this then translated into backlash and boycotts of organizations they supplied, with organizations being targeted due to who their third parties were.⁸

Recommendations

Organizations should maintain awareness of their campaign contributions and have a communication plan in place should these contributions become publicly known and generate backlash. In addition, executives should refrain from providing residential addresses on their campaign contributions in favor of PO boxes in order to limit the exposure of this information to activists looking to target them for their views. While previous contributions cannot be updated to remove this information and thus remain available on the FEC website, leadership can limit these disclosures on their campaign contributions moving forward. ZeroFox Intelligence can provide security teams with Executive Threat Assessments to determine current exposures and provide mitigation recommendations where available. Lastly, a policy around social media activity that outlines acceptable leadership and employee behavior on social media  is strongly recommended as a means to proactively prescribe how interactions around social and political issue should be handled.

^{1  hXXps://sproutsocial[.]com/insights/data/social-media-connection/}

^{2 hXXps://www.cnbc[.]com/2018/06/27/nearly-9-out-of-10-millennials-would-consider-a-pay-cut-to-get-this.html}

^{3 hXXps://truthout[.]org/articles/corporations-back-away-from-georgia-voting-bill-after-funding-its-sponsors/}

^{4 hXXps://www.espn[.]com/mlb/story/_/id/31183822/mlb-moving-all-star-game-atlanta-georgia-voting-law}

^{5 hXXps://atlantaciviccircle[.]org/2022/04/21/election-workers-on-their-own-when-facing-threats-accusations-of-misconduct/}

^{6 hXXps://documented[.]net/reporting/google-deloitte-and-citigroup-quietly-collaborate-with-gop-group-pushing-voter-suppression}

^{7 hXXps://www.crispthinking[.]com/blog/brands-guilty-by-association}

^{8 hXXps://www.cnn[.]com/2022/06/09/business-food/martins-potato-rolls-doug-mastriano-cec/index.html}