Microsoft's ugly truth

On Thursday, Microsoft President Brad Smith spoke to employees and defended the conduct of its corporate PAC. A transcript of Smith's comments was leaked on the social bookmarking site Pinboard, and later released by Microsoft

Microsoft, as Popular Information previously reported, is one of the top donors to the 147 Republicans in Congress who voted to subvert the democratic process. The company has donated over $500,000 to this group in the last three election cycles. 

In the meeting, Smith emphasized Microsoft's donations to members of Congress who attempted to throw out the election results and install Trump for a second term was only 20% of its total PAC donations over the last four years. That's a positive spin on data that shows that one out of five of the company's political dollars went to candidates willing to throw out millions of votes based on lies and conspiracy theories. At present, Microsoft has not made any commitments to stop donating to the 147 Republicans but has temporarily paused all political giving

The most telling portion of Smith's remarks, however, was when he explained why Microsoft donated to members of Congress through its PAC. Smith says that PAC donations are "important" because the money buys access and "help" from politicians.

I can tell you that, you know, [the PAC] plays an important role, not because the checks are big, but because of the way the political process works. Politicians in the United States have events, they have weekend retreats. You have to write a check, and then you’re invited, and you participate.

So, if you work in the Government Affairs team in the United States, you spend your weekends going to these events. You spend your evenings going to these dinners, and the reason you go is because the PAC writes a check. But out of that ongoing effort, a relationship evolves and emerges and solidifies.

And I can tell you, as somebody who sometimes is picking up the phone, I’m sometimes calling members and asking for their help on green cards, or on visa issues, or help to get an employee or family member who’s outside the United States, or on the issues around national security, or privacy or procurement reform, or the tax issues that our finance team manages.

And I can tell you there are times when I call people who I don’t personally know. And somebody will say, “Well, you know, your folks have always shown up for me at my events, and we have a good relationship, let me see what I can do to help you.”

On Saturday, after these remarks were leaked, Microsoft released a new statement specifying that the purpose of its donation pause was to decide "whether to suspend further donations to individuals who voted against certification of the Electoral College." It committed to announcing its decision by February 15. "The company believes that opposition to the Electoral College undermined American democracy and should have consequences," Microsoft added. 

What Microsoft knew and when it knew it

The next round of campaign finance reports is not due until January 31. But the Hawley Victory Committee, a fundraising vehicle for Senator Josh Hawley (R-MO), posted its year-end report early, on January 21. The filing, as Popular Information first reported, showed that Hawley received a $2,500 donation from Microsoft on December 31 — one day after Hawley announced he would object to the certification of the Electoral College on January 6. 

In response, Microsoft told Popular Information that "The Hawley Leadership PAC contribution was approved 12/10, the check was cut and mailed on 12/17. The Hawley organization reported it on 12/31." (The Hawley Victory Committee is a joint fundraising committee, not a leadership PAC.) 

The implication in Microsoft's statement is that, had it known that Hawley would attempt to overturn the results of the election, it would not have made the donation. But, if that was the case, Microsoft could request a refund (like Hallmark) or announce that it will not fund Hawley in the future. Thus far, it has done neither. 

Further, by the time the Microsoft PAC contribution was "approved" on December 10, Hawley had spent weeks contesting the legitimacy of the election and promoting Trump's lies about election fraud. 

Starting on November 5, during an interview with Fox News' Tucker Carlson, Hawley promoted reports that illegitimate ballots were being dumped into polling places in Michigan and Pennsylvania.  "[W]e've seen reports of Detroit about ballots brought in there, new ballots in the middle of the night. And we've seen it in Philadelphia," Hawley said. Hawley acknowledged that he didn't know "if these allegations are well founded or not." But Hawley said the ambiguity was the result of Republican election observers being excluded from polling places — which was another lie. 

On November 7, after all media outlets projected Biden as the winner, Hawley tweeted that the election was still up in the air because of "allegations of fraud." 

On November 10, Hawley introduced a bill in the Senate concerning election administration. Election law expert Rich Hansen said Hawley's bill "seems more aimed at bolstering the president's unsubstantiated claims of fraud than to offer principles for sound election administration." Trump falsely claimed that the Democrats were stuffing ballot drop boxes with illegal votes; Hawley's bill would require "round-the-clock video surveillance of absentee ballot drop boxes." Trump falsely claimed that Democrats had dumped thousands of fraudulent votes for Biden in the middle of the night; Hawley's bill would require "election offices take no breaks once the counting begins." 

"Trump's fraud claims are false and toxic. Hawley must stop endorsing them," the St. Louis Dispatch wrote in an editorial on November 11. 

On November 20, Hawley told reporters that he didn't have an issue with Trump contacting local election officials in Michigan and urging them not to certify the results. "I don’t have any concerns. I’m obviously not privy to the conversation, but I don’t really have concerns with him talking about the situation with elected officials," Hawley said. After Trump had lost dozens of court cases, Hawley said that Trump could still become president and was in the process of presenting "evidence" of fraud. 

At a Senate hearing on December 16 — after Microsoft approved the donation to Hawley but before it sent the check — Hawley said that "normal, reasonable people" believed the 2020 election was "rigged." Hawley said that "74 million Americans are not going to shut up, and telling them that their views don't matter and that their concerns don't matter and they should just be quiet is not a recipe for success in this country." 

Long before Microsoft sent its check to Hawley, his posture on the 2020 election was well-established. The suggestion that Microsoft would have been surprised by Hawley's December 30 announcement is revisionist history. 

Microsoft also donated to other politicians that were amplifying Trump's baseless claims of voter fraud. On November 9, for example, former Senator David Perdue (R-GA) called on Georgia Secretary of State Brad Raffensperger (R) to resign. Perdue claimed, without evidence, that Georgia had not conducted an "honest and transparent" election and Raffensperger had "failed the people of Georgia." On November 19, Microsoft donated $5,000, the legal maximum, to Perdue's runoff campaign against Democrat Jon Ossoff. 

The internal discord

The conduct of Microsoft's PAC has generated significant concern among employees. Several Microsoft employees spoke to Popular Information on the condition of anonymity, because they were not authorized to speak to the media. 

"Microsoft has done amazing work and contributed to so many worthy causes. But they're literally undoing their own work and undermining their own environmental and social justice initiatives with this pattern of donations," one Microsoft employee told Popular Information.

Another Microsoft employee told Popular Information that "employee affinity groups for minorities are not happy" and that "the Black/African-American group" was considering sending a letter to the C-suite expressing their displeasure. The employee said that Microsoft's January 23 statement, criticizing members of Congress who tried to undermine the election, was "not enough." The employee is not disgruntled and says Microsoft, in general, is "a great company culturally" but "the PAC is a major WTF."

A third Microsoft employee said they were "appalled" by the conduct of the PAC. This employee said that while "there are genuine cultural improvements that began under [Microsoft CEO] Satya [Nadella], increasingly I think a lot of it is performative, a way to distinguish the company’s brand from Facebook and others as we compete for talent." The employee notes that a "lot of us stopped donating to the PAC when we learned of its donations to the insurgent right." 

A fourth employee said that they had stopped "PAC contributions on 1/7 pending a refund request to Hawley and a commitment to no future contributions to anyone not condemning the insurrection." This employee was "disappointed in the half-ass response so far." 

The recent reporting in this newsletter started a "political reckoning" in corporate America, according to Bloomberg News. In the last two weeks, dozens of major corporations have pledged "to stop donating to politicians whose objections to America’s election results led to a riot at the U.S. Capitol."

But it's easy for corporations to issue statements. It will only have a meaningful impact if they follow through.

To hold these corporations accountable, Popular Information plans to comprehensively monitor their PAC activity in the months and years ahead. But Popular Information is a two-person newsletter and this is a massive undertaking. It will involve processing tens of thousands of campaign finance records from dozens of federal and state databases.

You can help Popular Information expand its capacity so we can do this work with a paid subscription.  

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