Bussiness
How Donald Trump and the GOP Broke Up With Big Business
A few weeks after the 2016 election, Donald Trump went golfing. The President-elect played a round with Tiger Woods, then walked into the clubhouse at the Trump International Golf Club in West Palm Beach, Florida, where he bumped into Stanton Anderson.
A top lawyer for the U.S. Chamber of Commerce, Anderson was something of an emissary for corporate America. During the campaign, relations between the Republican nominee and the nation’s largest business lobby had been testy. A Washington behemoth that represents about 80 percent of Fortune 100 companies, the Chamber wanted to improve foreign trade, especially with China, and reform immigration laws to permit more workers to enter the United States. Trump opposed both goals—loudly—sounding populist, anti-corporate notes that resonated with his growing base of voters.
This divide was new. For decades, the Republican Party and big business had been allies, with the former championing corporate-friendly policies and the latter supplying campaign funds. So when Anderson encountered Trump, he saw an opportunity to repair some damage. Introducing himself, he extended his hand.
Trump refused to shake it.
“You guys did everything to stop me,” Trump said with a scowl, his face reddening. “I haven’t forgotten.”
Eight years later, that rebuff looks like an omen. On Capitol Hill, an increasing number of Republicans are splitting with their longtime corporate partners, pushing measures to impose new regulations, roll back free-trade deals, block mergers, and allow workers at big companies to join labor unions—an agenda that’s the opposite of what the GOP has traditionally advanced.
Florida senator Marco Rubio backed a unionization drive at an Amazon plant. Tennessee senator Marsha Blackburn is urging the Biden administration to crack down on Ticketmaster and other online ticket brokers who gouge consumers and jack up prices for Taylor Swift concerts and other events. Iowa senator Chuck Grassley wrote a bill to give federal regulators more tools to combat monopolies in the meat and poultry industries.
In some cases, the divide is personal. When he was speaker of the House, Republican Kevin McCarthy barred officials from the Chamber from visiting his office after the business group endorsed a group of Democratic congressional candidates. McCarthy is no longer in Congress, but his right-hand man, Louisiana representative Steve Scalise, has continued to shun the Chamber and its team.
Driven largely by Trump’s rise, this growing wedge has made Washington less deferential to the needs and wants of big business—a shift with profound and ongoing implications for policy and the economy.
“Gone are the days that Republicans are going to sit on the sidelines as big behemoths take advantage of the American people,” Marsha Blackburn told the Wall Street Journal. “We are going to hold them accountable.”
The Trump Effect
For much of the 20th century, neither the Republican Party nor corporate America had much power in Washington. Instead, a ruling class of Democrats and New Deal liberals used the federal government to protect consumers from corporate excesses and redistribute wealth downward.
But as the economy faltered in the 1970s, things changed. Liberalism lost its luster. Labor unions withered. The Reagan Revolution ushered in a new era of conservative dominance—and thanks in part to the rising influence of corporate lobbyists and campaign contributions, lawmakers and officials in both major parties worked to reduce government authority and maximize economic efficiency.
This pro-business consensus served as the ballast of economic policymaking in Washington for roughly 40 years. Over time, it altered the fabric of America. The gap between rich and poor widened to levels not seen since the 1920s. Highly educated workers in certain fields flourished, but those without a college degree often found themselves punished. A political system that was responsive to the desires of wealthy elites became dangerously disconnected from the needs of most citizens. As inequality broke down social cohesion and fueled political polarization, conditions grew ripe for extremist candidates.
Enter Trump, whose 2016 campaign marked a turning point in the partnership between big business and the GOP. Appealing to the non-college-educated whites whose ranks and influence were growing inside the party, he broke with the pro-business consensus by promoting ideas that would put “America First”: tearing up free-trade agreements that benefited industry, reversing loose immigration policies that gave businesses access to low-wage labor, increasing import tariffs on Chinese and foreign imports in order to revive America’s struggling manufacturing economy.
Perhaps more troubling to corporate America, Trump thundered to the top of the Republican primary field while publicly lashing individual firms. After learning in 2015 that Ford Motor Co. planned to move some of its manufacturing activities out of the United States, an outraged Trump took to Twitter and promised that, as President, he would stop it. A month later, he said he’d boycott Oreo cookies after Mondeléz International, maker of the world-famous treat, said it was transferring some production to Mexico. Following Trump’s victory in the New Hampshire primary, he blasted a US-based air-conditioner company, Carrier Global, for planning to do the same.
Not surprisingly, Trump’s rhetoric didn’t win him many friends in corporate boardrooms. Few American business leaders endorsed his campaign, and only a handful donated money—in fact, Democratic nominee Hillary Clinton received far more donations from Wall Street, Hollywood, and pharmaceutical and other industry executives. CEOs largely believed that Trump was an untrustworthy politician who stood little chance of winning.
You guys did everything to stop me,” Trump said with a scowl, his face reddening. “I haven’t forgotten.
One of the few executives who publicly stood up to Trump during the campaign was Thomas Donohue, the Chamber’s longtime president and CEO. A pugnacious 80-year-old Brooklyn native, Donohue saw Trump as a major threat to free enterprise and was uniquely positioned to fight back: The Chamber commanded a platoon of lobbyists and spent a total of $1.5 billion on lobbying from 1998 through the 2016 election, three times more than any other interest group.
Early in the campaign, Donohue said during a television interview that Trump had “very little idea about what trade really is.” Later, after Trump clinched the GOP nomination, the Chamber warned that millions of jobs would be lost if Trump’s vision for the economy were implemented. The next day, at a campaign rally in Bangor, Maine, Trump returned fire, saying the Chamber was “controlled totally by various groups of people that don’t care about you whatsoever.”
Most business leaders didn’t fully understand the significance of the dustup until it was too late. They chose to believe Trump’s then–campaign manager, Paul Manafort, who was telling the Republican establishment in the summer of 2016 that the candidate would pivot from populist bomb-thrower to traditional Republican in the general election. They failed to see that a large number of working-class Americans had begun to view corporate capitalism not as a pathway to prosperity but as an instrument of industrial collapse, stagnant wages, poor social mobility, and structural hopelessness. In 1980, these voters had joined Ronald Reagan’s revolt against the federal bureaucracy—and now they were powering Trump’s crusade against the corporate elite.
Even after Trump pulled off his stunning victory, lobbyists for the drug companies, Big Tech firms, and other industries breathed a sigh of relief, assuming they were getting a malleable President they could bring around to their side. They were wrong.
Before he was even inaugurated, Trump unleashed a barrage of attacks on corporations. He called out Rexnord Corp. for “rather viciously firing all of its 300 workers” by moving a manufacturing plant to Mexico, an attack that drove the company’s share price down 2.5 percent. He threatened to block AT&T from buying Time Warner, hinting that it was punishment for what he considered to be poor coverage he received from Time Warner’s CNN news network. He said Amazon didn’t pay enough taxes, took advantage of artificially low shipping rates from the US Postal Service, and used the Washington Post, owned by then–Amazon CEO Jeff Bezos, as a lobbying arm to attack him. He targeted Boeing by saying it charged too much for an overhaul of Air Force One, the presidential airplane.
“Cancel order!” the President-elect demanded in a tweet. “Costs are out of control.” That prompted Boeing’s CEO to call Trump to congratulate him on his election win—and promise to lower costs.
In office, Trump withdrew the US from the business-backed Trans-Pacific Partnership, saying the trade deal hurt American workers. He imposed a controversial ban on certain immigrants, then attacked airlines for the ensuing chaos at airports. His Justice Department sued to block the AT&T–Time Warner merger (and lost). When Nordstrom said it would no longer sell Ivanka Trump’s fashion line in department stores, the President tweeted: “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person.”
Trump wasn’t unique among Presidents. Theodore Roosevelt inspired the term “bully pulpit” because he regularly used his presidential megaphone to try to rein in robber barons such as J.P. Morgan. Years later, after battling with the CEO of U.S. Steel over prices, John F. Kennedy said, “My father always told me that all businessmen were sons of bitches.” Barack Obama shamed Wall Street bankers by calling them “fat cats.” Still, no Republican in the Oval Office caused as much fear and uncertainty in C-suites as Trump—or did more to drive a wedge between the party and big business.
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A Big Loss for Big Tech
Perhaps no company was more caught off-guard by corporate America’s shifting standing in Trump’s Washington than Google.
Since the 1990s, Republicans and Democrats alike had taken a mostly hands-off approach to regulating the internet, helping the tech giant grow to spectacular size and influence. During the Obama years, Google executives met regularly with the President and top administration officials while its lobbyists and lawyers defeated an antitrust probe and secured favorable rules on net neutrality, online liability, and copyright issues.
A few months before Trump’s victory, Obama feted Google and other Silicon Valley companies at a White House festival dubbed “South by South Lawn.” Business leaders and politicians snapped selfies with Lego sculptures, tried out virtual-reality glasses made by Google, and lapped up a talk about climate change featuring the President and actor Leonardo DiCaprio.
Many of the tech executives and lobbyists in attendance were looking forward to more good times with Hillary Clinton, a perceived industry friend, in the White House. Google employees donated $1.6 million to her candidacy—nearly doubling the total donations from the next-largest corporate-cash source—while the company’s then–executive chairman, Eric Schmidt, helped set up companies to analyze political data for her campaign. On Election Night, Schmidt showed up at Clinton’s presumptive victory party wearing a badge that read staff.
Trump took note. While preparing to meet Silicon Valley executives at Trump Tower not long after his victory, he asked strategist Steve Bannon if Schmidt was “the guy that tried to help Hillary win the election.”
“Yes,” Bannon replied. “Yes, he is.”
Google scrambled. The company contributed $285,000 to Trump’s inauguration, paid for a party at the Smithsonian to welcome the new Republican-controlled Congress, and hired an aide to Texas senator Ted Cruz to manage its outreach to conservative organizations.
Yet only a few months later, Google suffered its first major policy loss. For years, the company and other internet firms had enjoyed broad legal immunity from lawsuits related to the content that people post on their platforms—even content related to child sex trafficking.
In May 2017, however, Ohio senator Rob Portman, a Republican, teamed up with Connecticut senator Richard Blumenthal, a Democrat, to work on a bill that sought to eliminate a narrow slice of that liability protection in instances involving the sex trafficking of minors. To the senators, making internet platforms responsible for blocking websites used by sex traffickers seemed like common sense.
But Google saw the legislation as a first step toward getting rid of the broader protections it enjoyed. Google executives and lobbyists worried that any carve-out from the immunity law would open the door to more exceptions and lead to a rash of frivolous lawsuits.
Google set off to defeat the legislation, not noticing that the rise of populist movements in both political parties had forced a reckoning around the concentration of economic power in big businesses. Democrats were rethinking their attitude toward the company amid allegations that Russia used Google, Facebook, and other internet platforms to help elect Trump; Republicans were hostile to Big Tech due to the industry’s size, its campaign donations to Democrats, and its support for immigration rights and other causes that clashed with their economic nationalism.
When Google made it clear it opposed any effort to change the liability protections, Portman and Blumenthal asked the company if there were changes they could make to the bill in order to win its support. Google refused to entertain a discussion. The senators kept pressing. Google dispatched a lobbyist who used to work for Portman to meet with his chief of staff in July 2017. The lobbyist argued that pushing the bill could hurt Portman politically because internet users would see him as a villain trying to regulate the web. A similar script played out when Google lobbyists visited Blumenthal’s office, telling his aides to deliver a warning: “You will destroy the internet as we know it—and it will be on you,” as Blumenthal later recalled.
That angered Blumenthal. The next month, he and Portman introduced their bill—with more than 20 other senators endorsing it. As it moved forward, Republicans did nothing to protect big business. Instead, Trump began trashing Facebook for allegedly supporting Clinton in the election, further stoking anti-tech sentiments inside the GOP. Within a few months, the House and Senate had approved the bill with little opposition. Ivanka Trump endorsed it, too, and in early 2018 Trump signed it into law.
It was the first crack in Google’s influence machine. A year later, the company fired about a half dozen of its largest lobbying firms as part of a major overhaul of its Washington operations—a concession, it seemed, to the prospect of greater government scrutiny and skepticism.
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Unfollowing the Money
Another measure of the rupture between the GOP and the corporate establishment? Campaign finance.
Starting in the late 1970s, Republican lawmakers came to depend on industry political-action committees for a substantial portion of their reelection funds. In recent years, however, they’ve grown considerably less reliant. In the 2016 election, for example, 128 House Republicans received more than 40 percent of their campaign funds from corporate PACs—but during the 2022 election, according to the Wall Street Journal, just 42 did.
Overall, corporate PAC contributions to Republican congressional candidates between 2016 and 2022 dropped by 27 percent, to $189 million. (During the same span, corporate PAC contributions to Democratic candidates rose from $135 million to $155 million.) In place of corporate largesse, GOP politicians are turning to individual small-dollar donors—ordinary citizens contributing $10, $25, or $50 a pop. These people often have different policy priorities than the Chamber of Commerce or the blue-chip companies it represents.
The changing positions of Montana senator Steve Dai nes illustrate the effects of this shift. When he first ran for Senate in 2014, corporate PACs bankrolled about 30 percent of his $7 million war chest. His platform was pro-business. By the time Daines ran for reelection in 2020, however, just 10 percent of the $30 million he raised for his campaign came from corporate PACs. Most of the rest came from small-dollar donors. Daines has since voted against reauthorizing the Export-Import Bank of the United States—bucking a lobbying push by Boeing, General Electric, and the Chamber—and also joined a handful of other Republicans to support requiring union-scale wages on certain public-works projects.
This new funding reality could leave Washington more partisan and polarized. A 2016 study by Brigham Young University associate professor Michael Barber found that small-dollar donors tend to favor ideologically extreme candidates, the kind less willing to compromise and more likely to cause legislative chaos. Yet by making Republicans less beholden to corporate America, it also may be creating new opportunities for across-the-aisle cooperation—at least when it comes to reining in big business.
In late 2022, for instance, nearly 40 House Republicans joined with more than 200 of their Democratic colleagues in voting to enact legislation giving federal antitrust regulators more resources to block corporate mergers deemed harmful to consumers. Missouri senator Josh Hawley, a Republican, has teamed up with Massachusetts senator Elizabeth Warren, a liberal icon, to introduce bills to cap credit-card fees and require the federal government to claw back compensation of executives at failed banks.
“We are at a tipping point,” says Kyle Plotkin, a political adviser to Senator Hawley. “In the past, Republican elected officials wouldn’t come near these issues with a ten-foot pole. But now many are embracing it because their constituents are demanding it.”
Of course, Democrats and Republicans don’t always have the same reasons for targeting corporate America. During Trump’s presidency, CEOs came under intense pressure from employees, shareholders, and customers to stake out progressive social positions in order to align their firms with the younger, wealthier, and college-educated Americans they consider essential to future profitability. However, taking those positions has also stoked the fury of right-wing culture warriors—led by Trump—while fueling distrust between the GOP and big business.
By making the GOP less beholden to corporate America, new funding may create opportunities for across-the-aisle cooperation when it comes to reining in big business.
Florida Republican governor Ron DeSantis feuded with Disney after its CEO opposed a state law banning discussion of gender identity and sexual orientation in some public-school classes. In Texas, GOP officials blocked the state from doing most forms of business with financial firms including BlackRock, Goldman Sachs, and JPMorgan, accusing the Wall Street banks of spurning investments in the oil-and-gas sector as part of an effort to combat climate change.
On Capitol Hill, when grocery-store companies Albertsons and Kroger announced plans to merge in 2022, several GOP lawmakers joined Democrats in criticizing the nearly $25 billion deal. During a key Senate hearing that fall, Arkansas Republican Tom Cotton questioned Kroger’s CEO about why the company had fired two employees who refused to wear an apron with a gay-pride insignia.
Citing the firings as an example of a corporation imposing “woke” social positions on employees and discriminating against conservative views, Cotton said his party was growing weary of reflexively defending big business. In the future, he told the executive, companies “probably shouldn’t come” to Washington and “ask Republican senators to carry the water for them.”
For conservative leaders of earlier generations, this sort of anti-commercial sentiment would have been unthinkable. But in the years since Trump left the White House, it has become an increasingly central feature of Republican politics. Indeed, Trump’s animus toward big business may prove to be his most enduring contribution, the lasting legacy of a President remembered by corporate America less for the art of the deal than for being a breakup artist.
This article is adapted from “The Wolves of K Street: The Secret History of How Big Money Took Over Big Government,” copyright © 2024 by Brody Mullins and Luke Mullins, published by Simon & Schuster. Brody Mullins is a former investigative reporter in the Wall Street Journal’s DC bureau. Luke Mullins, a former Washingtonian senior writer, is a contributing writer at Politico Magazine.
This article appears in the July 2024 issue of Washingtonian.
A few weeks after the 2016 election, Donald Trump went golfing. The President-elect played a round with Tiger Woods, then walked into the clubhouse at the Trump International Golf Club in West Palm Beach, Florida, where he bumped into Stanton Anderson.A top lawyer for the U.S. Chamber of Commerce, Anderson was something of an emissary for corporate America. During the campaign, relations between the Republican nominee and the nation’s largest business lobby had been testy. A Washington behemoth that represents about 80 percent of Fortune 100 companies, the Chamber wanted to improve foreign trade, especially with China, and reform immigration laws to permit more workers to enter the United States. Trump opposed both goals—loudly—sounding populist, anti-corporate notes that resonated with his growing base of voters.
This divide was new. For decades, the Republican Party and big business had been allies, with the former championing corporate-friendly policies and the latter supplying campaign funds. So when Anderson encountered Trump, he saw an opportunity to repair some damage. Introducing himself, he extended his hand.
Trump refused to shake it.
“You guys did everything to stop me,” Trump said with a scowl, his face reddening. “I haven’t forgotten.”
Eight years later, that rebuff looks like an omen. On Capitol Hill, an increasing number of Republicans are splitting with their longtime corporate partners, pushing measures to impose new regulations, roll back free-trade deals, block mergers, and allow workers at big companies to join labor unions—an agenda that’s the opposite of what the GOP has traditionally advanced.
Florida senator Marco Rubio backed a unionization drive at an Amazon plant. Tennessee senator Marsha Blackburn is urging the Biden administration to crack down on Ticketmaster and other online ticket brokers who gouge consumers and jack up prices for Taylor Swift concerts and other events. Iowa senator Chuck Grassley wrote a bill to give federal regulators more tools to combat monopolies in the meat and poultry industries.
In some cases, the divide is personal. When he was speaker of the House, Republican Kevin McCarthy barred officials from the Chamber from visiting his office after the business group endorsed a group of Democratic congressional candidates. McCarthy is no longer in Congress, but his right-hand man, Louisiana representative Steve Scalise, has continued to shun the Chamber and its team.
Driven largely by Trump’s rise, this growing wedge has made Washington less deferential to the needs and wants of big business—a shift with profound and ongoing implications for policy and the economy.
“Gone are the days that Republicans are going to sit on the sidelines as big behemoths take advantage of the American people,” Marsha Blackburn told the Wall Street Journal. “We are going to hold them accountable.”
Back to Top
The Trump Effect
For much of the 20th century, neither the Republican Party nor corporate America had much power in Washington. Instead, a ruling class of Democrats and New Deal liberals used the federal government to protect consumers from corporate excesses and redistribute wealth downward.
But as the economy faltered in the 1970s, things changed. Liberalism lost its luster. Labor unions withered. The Reagan Revolution ushered in a new era of conservative dominance—and thanks in part to the rising influence of corporate lobbyists and campaign contributions, lawmakers and officials in both major parties worked to reduce government authority and maximize economic efficiency.
This pro-business consensus served as the ballast of economic policymaking in Washington for roughly 40 years. Over time, it altered the fabric of America. The gap between rich and poor widened to levels not seen since the 1920s. Highly educated workers in certain fields flourished, but those without a college degree often found themselves punished. A political system that was responsive to the desires of wealthy elites became dangerously disconnected from the needs of most citizens. As inequality broke down social cohesion and fueled political polarization, conditions grew ripe for extremist candidates.
Enter Trump, whose 2016 campaign marked a turning point in the partnership between big business and the GOP. Appealing to the non-college-educated whites whose ranks and influence were growing inside the party, he broke with the pro-business consensus by promoting ideas that would put “America First”: tearing up free-trade agreements that benefited industry, reversing loose immigration policies that gave businesses access to low-wage labor, increasing import tariffs on Chinese and foreign imports in order to revive America’s struggling manufacturing economy.
Perhaps more troubling to corporate America, Trump thundered to the top of the Republican primary field while publicly lashing individual firms. After learning in 2015 that Ford Motor Co. planned to move some of its manufacturing activities out of the United States, an outraged Trump took to Twitter and promised that, as President, he would stop it. A month later, he said he’d boycott Oreo cookies after Mondeléz International, maker of the world-famous treat, said it was transferring some production to Mexico. Following Trump’s victory in the New Hampshire primary, he blasted a US-based air-conditioner company, Carrier Global, for planning to do the same.
Not surprisingly, Trump’s rhetoric didn’t win him many friends in corporate boardrooms. Few American business leaders endorsed his campaign, and only a handful donated money—in fact, Democratic nominee Hillary Clinton received far more donations from Wall Street, Hollywood, and pharmaceutical and other industry executives. CEOs largely believed that Trump was an untrustworthy politician who stood little chance of winning.
You guys did everything to stop me,” Trump said with a scowl, his face reddening. “I haven’t forgotten.
One of the few executives who publicly stood up to Trump during the campaign was Thomas Donohue, the Chamber’s longtime president and CEO. A pugnacious 80-year-old Brooklyn native, Donohue saw Trump as a major threat to free enterprise and was uniquely positioned to fight back: The Chamber commanded a platoon of lobbyists and spent a total of $1.5 billion on lobbying from 1998 through the 2016 election, three times more than any other interest group.
Early in the campaign, Donohue said during a television interview that Trump had “very little idea about what trade really is.” Later, after Trump clinched the GOP nomination, the Chamber warned that millions of jobs would be lost if Trump’s vision for the economy were implemented. The next day, at a campaign rally in Bangor, Maine, Trump returned fire, saying the Chamber was “controlled totally by various groups of people that don’t care about you whatsoever.”
Most business leaders didn’t fully understand the significance of the dustup until it was too late. They chose to believe Trump’s then–campaign manager, Paul Manafort, who was telling the Republican establishment in the summer of 2016 that the candidate would pivot from populist bomb-thrower to traditional Republican in the general election. They failed to see that a large number of working-class Americans had begun to view corporate capitalism not as a pathway to prosperity but as an instrument of industrial collapse, stagnant wages, poor social mobility, and structural hopelessness. In 1980, these voters had joined Ronald Reagan’s revolt against the federal bureaucracy—and now they were powering Trump’s crusade against the corporate elite.
Even after Trump pulled off his stunning victory, lobbyists for the drug companies, Big Tech firms, and other industries breathed a sigh of relief, assuming they were getting a malleable President they could bring around to their side. They were wrong.
Before he was even inaugurated, Trump unleashed a barrage of attacks on corporations. He called out Rexnord Corp. for “rather viciously firing all of its 300 workers” by moving a manufacturing plant to Mexico, an attack that drove the company’s share price down 2.5 percent. He threatened to block AT&T from buying Time Warner, hinting that it was punishment for what he considered to be poor coverage he received from Time Warner’s CNN news network. He said Amazon didn’t pay enough taxes, took advantage of artificially low shipping rates from the US Postal Service, and used the Washington Post, owned by then–Amazon CEO Jeff Bezos, as a lobbying arm to attack him. He targeted Boeing by saying it charged too much for an overhaul of Air Force One, the presidential airplane.
“Cancel order!” the President-elect demanded in a tweet. “Costs are out of control.” That prompted Boeing’s CEO to call Trump to congratulate him on his election win—and promise to lower costs.
In office, Trump withdrew the US from the business-backed Trans-Pacific Partnership, saying the trade deal hurt American workers. He imposed a controversial ban on certain immigrants, then attacked airlines for the ensuing chaos at airports. His Justice Department sued to block the AT&T–Time Warner merger (and lost). When Nordstrom said it would no longer sell Ivanka Trump’s fashion line in department stores, the President tweeted: “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person.”
Trump wasn’t unique among Presidents. Theodore Roosevelt inspired the term “bully pulpit” because he regularly used his presidential megaphone to try to rein in robber barons such as J.P. Morgan. Years later, after battling with the CEO of U.S. Steel over prices, John F. Kennedy said, “My father always told me that all businessmen were sons of bitches.” Barack Obama shamed Wall Street bankers by calling them “fat cats.” Still, no Republican in the Oval Office caused as much fear and uncertainty in C-suites as Trump—or did more to drive a wedge between the party and big business.
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A Big Loss for Big Tech
Perhaps no company was more caught off-guard by corporate America’s shifting standing in Trump’s Washington than Google.
Since the 1990s, Republicans and Democrats alike had taken a mostly hands-off approach to regulating the internet, helping the tech giant grow to spectacular size and influence. During the Obama years, Google executives met regularly with the President and top administration officials while its lobbyists and lawyers defeated an antitrust probe and secured favorable rules on net neutrality, online liability, and copyright issues.
A few months before Trump’s victory, Obama feted Google and other Silicon Valley companies at a White House festival dubbed “South by South Lawn.” Business leaders and politicians snapped selfies with Lego sculptures, tried out virtual-reality glasses made by Google, and lapped up a talk about climate change featuring the President and actor Leonardo DiCaprio.
Many of the tech executives and lobbyists in attendance were looking forward to more good times with Hillary Clinton, a perceived industry friend, in the White House. Google employees donated $1.6 million to her candidacy—nearly doubling the total donations from the next-largest corporate-cash source—while the company’s then–executive chairman, Eric Schmidt, helped set up companies to analyze political data for her campaign. On Election Night, Schmidt showed up at Clinton’s presumptive victory party wearing a badge that read staff.
Trump took note. While preparing to meet Silicon Valley executives at Trump Tower not long after his victory, he asked strategist Steve Bannon if Schmidt was “the guy that tried to help Hillary win the election.”
“Yes,” Bannon replied. “Yes, he is.”
Google scrambled. The company contributed $285,000 to Trump’s inauguration, paid for a party at the Smithsonian to welcome the new Republican-controlled Congress, and hired an aide to Texas senator Ted Cruz to manage its outreach to conservative organizations.
Yet only a few months later, Google suffered its first major policy loss. For years, the company and other internet firms had enjoyed broad legal immunity from lawsuits related to the content that people post on their platforms—even content related to child sex trafficking.
In May 2017, however, Ohio senator Rob Portman, a Republican, teamed up with Connecticut senator Richard Blumenthal, a Democrat, to work on a bill that sought to eliminate a narrow slice of that liability protection in instances involving the sex trafficking of minors. To the senators, making internet platforms responsible for blocking websites used by sex traffickers seemed like common sense.
But Google saw the legislation as a first step toward getting rid of the broader protections it enjoyed. Google executives and lobbyists worried that any carve-out from the immunity law would open the door to more exceptions and lead to a rash of frivolous lawsuits.
Google set off to defeat the legislation, not noticing that the rise of populist movements in both political parties had forced a reckoning around the concentration of economic power in big businesses. Democrats were rethinking their attitude toward the company amid allegations that Russia used Google, Facebook, and other internet platforms to help elect Trump; Republicans were hostile to Big Tech due to the industry’s size, its campaign donations to Democrats, and its support for immigration rights and other causes that clashed with their economic nationalism.
When Google made it clear it opposed any effort to change the liability protections, Portman and Blumenthal asked the company if there were changes they could make to the bill in order to win its support. Google refused to entertain a discussion. The senators kept pressing. Google dispatched a lobbyist who used to work for Portman to meet with his chief of staff in July 2017. The lobbyist argued that pushing the bill could hurt Portman politically because internet users would see him as a villain trying to regulate the web. A similar script played out when Google lobbyists visited Blumenthal’s office, telling his aides to deliver a warning: “You will destroy the internet as we know it—and it will be on you,” as Blumenthal later recalled.
That angered Blumenthal. The next month, he and Portman introduced their bill—with more than 20 other senators endorsing it. As it moved forward, Republicans did nothing to protect big business. Instead, Trump began trashing Facebook for allegedly supporting Clinton in the election, further stoking anti-tech sentiments inside the GOP. Within a few months, the House and Senate had approved the bill with little opposition. Ivanka Trump endorsed it, too, and in early 2018 Trump signed it into law.
It was the first crack in Google’s influence machine. A year later, the company fired about a half dozen of its largest lobbying firms as part of a major overhaul of its Washington operations—a concession, it seemed, to the prospect of greater government scrutiny and skepticism.
Back to Top
Unfollowing the Money
Another measure of the rupture between the GOP and the corporate establishment? Campaign finance.
Starting in the late 1970s, Republican lawmakers came to depend on industry political-action committees for a substantial portion of their reelection funds. In recent years, however, they’ve grown considerably less reliant. In the 2016 election, for example, 128 House Republicans received more than 40 percent of their campaign funds from corporate PACs—but during the 2022 election, according to the Wall Street Journal, just 42 did.
Overall, corporate PAC contributions to Republican congressional candidates between 2016 and 2022 dropped by 27 percent, to $189 million. (During the same span, corporate PAC contributions to Democratic candidates rose from $135 million to $155 million.) In place of corporate largesse, GOP politicians are turning to individual small-dollar donors—ordinary citizens contributing $10, $25, or $50 a pop. These people often have different policy priorities than the Chamber of Commerce or the blue-chip companies it represents.
The changing positions of Montana senator Steve Dai nes illustrate the effects of this shift. When he first ran for Senate in 2014, corporate PACs bankrolled about 30 percent of his $7 million war chest. His platform was pro-business. By the time Daines ran for reelection in 2020, however, just 10 percent of the $30 million he raised for his campaign came from corporate PACs. Most of the rest came from small-dollar donors. Daines has since voted against reauthorizing the Export-Import Bank of the United States—bucking a lobbying push by Boeing, General Electric, and the Chamber—and also joined a handful of other Republicans to support requiring union-scale wages on certain public-works projects.
This new funding reality could leave Washington more partisan and polarized. A 2016 study by Brigham Young University associate professor Michael Barber found that small-dollar donors tend to favor ideologically extreme candidates, the kind less willing to compromise and more likely to cause legislative chaos. Yet by making Republicans less beholden to corporate America, it also may be creating new opportunities for across-the-aisle cooperation—at least when it comes to reining in big business.
In late 2022, for instance, nearly 40 House Republicans joined with more than 200 of their Democratic colleagues in voting to enact legislation giving federal antitrust regulators more resources to block corporate mergers deemed harmful to consumers. Missouri senator Josh Hawley, a Republican, has teamed up with Massachusetts senator Elizabeth Warren, a liberal icon, to introduce bills to cap credit-card fees and require the federal government to claw back compensation of executives at failed banks.
“We are at a tipping point,” says Kyle Plotkin, a political adviser to Senator Hawley. “In the past, Republican elected officials wouldn’t come near these issues with a ten-foot pole. But now many are embracing it because their constituents are demanding it.”
Of course, Democrats and Republicans don’t always have the same reasons for targeting corporate America. During Trump’s presidency, CEOs came under intense pressure from employees, shareholders, and customers to stake out progressive social positions in order to align their firms with the younger, wealthier, and college-educated Americans they consider essential to future profitability. However, taking those positions has also stoked the fury of right-wing culture warriors—led by Trump—while fueling distrust between the GOP and big business.
By making Republicans less beholden to corporate America, it also may be creating new opportunities for across-the-aisle cooperation—at least when it comes to reining in big business.
Florida Republican governor Ron DeSantis feuded with Disney after its CEO opposed a state law banning discussion of gender identity and sexual orientation in some public-school classes. In Texas, GOP officials blocked the state from doing most forms of business with financial firms including BlackRock, Goldman Sachs, and JPMorgan, accusing the Wall Street banks of spurning investments in the oil-and-gas sector as part of an effort to combat climate change.
On Capitol Hill, when grocery-store companies Albertsons and Kroger announced plans to merge in 2022, several GOP lawmakers joined Democrats in criticizing the nearly $25 billion deal. During a key Senate hearing that fall, Arkansas Republican Tom Cotton questioned Kroger’s CEO about why the company had fired two employees who refused to wear an apron with a gay-pride insignia.
Citing the firings as an example of a corporation imposing “woke” social positions on employees and discriminating against conservative views, Cotton said his party was growing weary of reflexively defending big business. In the future, he told the executive, companies “probably shouldn’t come” to Washington and “ask Republican senators to carry the water for them.”
For conservative leaders of earlier generations, this sort of anti-commercial sentiment would have been unthinkable. But in the years since Trump left the White House, it has become an increasingly central feature of Republican politics. Indeed, Trump’s animus toward big business may prove to be his most enduring contribution, the lasting legacy of a President remembered by corporate America less for the art of the deal than for being a breakup artist.
This article is adapted from “The Wolves of K Street: The Secret History of How Big Money Took Over Big Government,” copyright © 2024 by Brody Mullins and Luke Mullins, published by Simon & Schuster. Brody Mullins is a former investigative reporter in the Wall Street Journal’s DC bureau. Luke Mullins, a former Washingtonian senior writer, is a contributing writer at Politico Magazine.
This article appears in the July 2024 issue of Washingtonian.
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