Corporate America is bracing for political gridlock and a flurry of GOP investigations as Republicans appear poised to exit the midterm elections with a majority in the House of Representatives.
The GOP is favored to narrowly capture the House, although the battle for the lower chamber is still ongoing. Election projections have given Democrats a slight edge in the Senate that may not be decided for days, if not weeks.
That outcome will set the stage for a divided government that will struggle to find common ground on key economic and social issues, likely strengthening the GOP’s focus on launching investigations into the Biden administration and corporations they say are “woke.”
“Oversight and must-pass bills are really going to be in the spotlight because why are you trying to pass things that President Biden won’t sign or Senator Schumer won’t sign. [D-N.Y.] Won’t you give me time?” said Aaron Cutler, a partner at Hogan Lovells who was previously chief counsel to former House Majority Leader Eric Cantor (R-Va.).
House GOP officials plan to shed light on Biden’s withdrawal from Afghanistan and Hunter Biden’s business dealings, but will also focus on private companies, compared to a few years ago when Republicans handed historic tax cuts to corporate America.
House Republicans are preparing investigations into the activities of corporations in China, content moderation on Big Tech platforms and companies’ environmental, social and governance (ESG) initiatives, among other efforts.
Those investigations are part of a broader effort by House Minority Leader Kevin McCarthy (R-Calif.) and other GOP leaders to punish companies for siding with the party on LGBT rights, abortion restrictions, voting rights and other issues.
“If you’re outside of government and you look at this Republican House, these are not the same types of Republicans that came in in 2011 in terms of how they treat companies and corporate actors,” said Karen Christian, Akin Gump- partner who previously led the GOP investigation on the House Energy and Commerce Committee.
Tensions flared last year when dozens of Fortune 500 companies suspended PAC donations to GOP lawmakers who voted against confirming the 2020 election results after the Jan. 6 Capitol attack, a move that angered McCarthy.
Since then, most major corporations have reversed course, including Amazon, which ended its freeze last month. Still, the topic is still sore for many Republicans, and some receive enough money from individual donors that they no longer need to rely on corporate PACs.
McCarthy is still angry with the U.S. Chamber of Commerce, the nation’s largest business group, which has long aligned with Republicans, for choosing to back the Democratic ticket in the 2020 House elections. Last week, he unsuccessfully pushed the Chamber’s board of directors to fire his leadership team.
“How business approaches Republicans in this next Congress will dictate a lot whether lawmakers want to work with them or not,” said GOP lobbyist Casey Higgins, who served as a top aide to former Speaker Paul Ryan (R-Wis.). “Frankly, I think a lot needs to be done to mend that relationship.”
A House GOP victory would likely hand control of the House Judiciary Committee to Rep. Jim Jordan (R-Ohio), a longtime critic of Big Tech who plans to investigate allegations of anti-conservative bias at social media companies and the Meta and FBI- coordination between .
Republicans have vowed to investigate banks and investment firms that advocate ESG policies they see as an attack on the oil and gas industry. Last week, Sen. Tom Cotton (R-Ark.) sent letters to law firms labeling the ESG movement as “arming corporations to reshape society in ways Americans will never approve at the ballot box.”
Lobbyists told The Hill that they coached senior executives when they were inevitably ordered to testify before House committees. In some cases, that means imitating lawmakers’ lines of questioning aimed at making executives stumble or lose their tempers.
Republicans extol the virtues of limited government intervention and the free market. However, the party’s rising stars are increasingly willing to use their power to go after private companies.
Florida Gov. Ron DeSantis (R), a leading contender for the 2024 GOP presidential nomination, revoked Disney’s self-governing status in retaliation for his bill against the company that would have banned schools from teaching gender identity and sexual orientation through third grade.
McCarthy last year warned telecommunications and social media companies not to cooperate with the Jan. 6 panel, saying the Republican majority “will not forget” their decision.
Still, Republicans continue to side with big business on lower taxes. they plan to seek an extension of some of the 2017 tax cuts and fewer regulations. They have worked hand-in-hand with business groups to oppose Biden’s rules aimed at empowering the workforce and fighting climate change.
They are aligned in opposing a Securities and Exchange Commission rule that would require public companies to disclose their climate-related risks. McCarthy has called on Congress to eliminate the National Labor Relations Board, which under Biden has fueled a wave of union campaigns at big companies like Starbucks and Amazon.
“There’s no doubt that corporate America needs to take into account the growing Republican skepticism of big business, but even against this backdrop, we see tons of offensive opportunities for our clients in the House Republicans,” said Jonathan Slemrod, a former Senate Republican and Trump supporter. an administrative assistant who does lobbying for Harbinger Strategies.