‘An epiphany moment’

As big businesses scramble to pause political donations, citing revulsion over the rampage at the Capitol and unease with Republican lawmakers’ attempts to overturn the presidential election, they should look for lessons from IBM, Andrew writes in his latest DealBook column.

IBM has never given money to political candidates, an edict delivered by Thomas Watson when he ran the company more than a century ago. In 1968, his son Thomas Watson Jr. reiterated the company’s philosophy in a memo to employees: “We should not use IBM time, money, or materials for political purposes.” Individual employees can donate to candidates as they wish, and IBM spends millions of dollars each year on lobbying efforts. But, crucially, it has no political action committee and when it gives money to trade groups, it restricts its money from being funneled to candidates.

Lack of a corporate PAC hasn’t kept IBM from having a seat at the table. Ginni Rometty was regularly invited to the White House when she was C.E.O. in the Trump era. “I don’t believe it puts us at a disadvantage,” the company’s current chief, Arvind Krishna, told Andrew. “I think it’s actually done us a service.”

• Mr. Krishna noted that companies can spend millions on political contributions and still face unwelcome regulatory action. Just ask the old AT&T or, for a modern example, Facebook.

Now is a time for boardrooms to show leadership, Andrew writes, especially since Washington is unlikely to police itself: “This time, corporate America can make a powerful statement not with money, but without it.”

• There’s room to go further. Corporate PACs comprise only a small portion of all money in politics: The American Bankers Association, for example, was among the top donors to the Republican objectors to the election result, and it currently has no plan to pause its donations. (It will take the “troubling events of the last week” into consideration, a representative told DealBook.)

• Recode’s Teddy Schleifer argues that real change would come from measures like a permanent ban in corporate PAC donations, an overhaul of lobbying practices and a halt in giving by wealthy executives and board members.

In other money-in-politics news: Finance industry trade groups like the American Investment Council and the Investment Company Institute have also halted all political donations, and lenders like Deutsche Bank and Signature Bank are cutting ties to the Trump family business.

HERE’S WHAT’S HAPPENING

House Democrats prepare to impeach President Trump. Party leaders are expected to schedule a vote today calling on Vice President Mike Pence to invoke the 25th Amendment. If that doesn’t happen, they plan to arrange a vote on an article of impeachment tomorrow. Some House Republicans may introduce a measure to censure Mr. Trump, and explore other ways to bar him from holding office in the future.

A talk-radio giant warns staff to avoid fanning unrest. Cumulus Media, whose right-wing personalities include Dan Bongino and Ben Shapiro, told its talent to steer clear of “dog-whistle talk” that endorses election misinformation or encourages violent protest. It comes amid worries of violence at state capitols over the next two weeks.

Staples bids for Office Depot. The office-supply company made a $2.1 billion takeover offer for its rival, five years after the Federal Trade Commission blocked a $6.3 billion merger proposal on antitrust grounds. The authorities also blocked a similar deal in the late 1990s.

Novavax executives cash out, before its Covid-19 vaccine comes out. Company leaders including Stanley Erck, the drugmaker’s C.E.O., sold $46 million worth of stock since the beginning of 2020, “capitalizing on a near 3,000 percent rally” in the company’s shares, Reuters reports. In other vaccine news, Moderna said it expected its coronavirus treatment to provide immunity for up to one year.

A spotlight on Elon Musk’s philanthropy. Now that the Tesla C.E.O. is one of the world’s two richest men, Recode notes that more attention is being paid to how he plans to give away his wealth. Mr. Musk has solicited opinions from — where else? — Twitter, but has indicated two broad areas for charitable giving: Earth and Mars.

Speaking up in the new public square

After the Capitol riot, Twitter, Facebook, Apple, Google and Amazon each took steps to curb disinformation and incitement, resulting in digital suspensions for President Trump, thousands of QAnon conspiracy accounts and the social media platform Parler. Together, the moves demonstrated Big Tech’s vast influence over the marketplace of ideas — a power that worries lawmakers on both the right and left.

Parler is suing Amazon for suspending web hosting services, which effectively shut down the platform. In its suit, Parler said Amazon’s decision was “motivated by political animus” and “designed to reduce competition in the microblogging services market to the benefit of Twitter.” Experts told DealBook that Parler’s complaint contained elements of a successful antitrust claim, including a victim, a villain and harm through exclusion. But it is missing a key element: an economic theory to explain Amazon’s motivation for excluding Parler on behalf of Twitter, another Amazon customer. Parler also undercuts its antitrust arguments by citing political animus, they said.

“There lurks here an important issue,” noted Douglas Melamed of Stanford’s law school, a former assistant attorney general who headed the Justice Department’s antitrust division. He said he had “no quarrel” with the president or Parler being cut off. But, he added, “in the long run, everyone should be worried that a few companies have an enormous amount of power, especially where free speech is implicated. It could justify some kind of breaking up.”

The First Amendment applies only to public actors, not private ones, so Amazon isn’t violating any constitutional rights by dropping Parler. But there are free speech considerations, said Genevieve Lakier, a First Amendment scholar at the University of Chicago. If a few private actors control the public discourse, there is little reassurance they will publish a diversity of ideas. She asked: “Does Congress need to step in and establish more rules?”

Speaking of rules, Mr. Trump has renewed vows to repeal Section 230 of the Communications Decency Act, which shields internet platforms from liability for user content. Republicans argue that platforms discriminate against them and should moderate less, while Democrats seek stricter policing of hate speech. Lawyers say repealing the legal shield would subject companies to defamation suits, but could punish the general public most of all. It would make platforms more cautious, meaning a less robust public discussion, said Katie Fallow of the Knight First Amendment Institute. She suggested “thoughtful reform around the edges.”

“Can you imagine trying to have two kids on virtual school in a two-bedroom apartment, and then trying to do work yourself?”

— Andrew Yang, the former Democratic presidential candidate who’s running for mayor of New York, on why he’s not living full-time in the city. “Many New Yorkers have experienced just that dynamic, or far more challenging circumstances,” The Times’s Katie Glueck writes.

A Buffett protégée’s plan to mentor smaller businesses

Last year, Tracy Britt Cool introduced her first independent venture after a decade as a top deputy to Warren Buffett at Berkshire Hathaway: Kanbrick, an investment vehicle she co-founded with Brian Humphrey that applies Berkshire’s business model to small and medium-size businesses. Today, the firm is set to announce a three-month program to mentor those companies.

Kanbrick’s program is aimed at “the backbone of the economy,” namely midsize businesses that “don’t get the necessary focus and support that they need,” Ms. Britt Cool told DealBook. The initiative will initially accept up to five companies, but the firm won’t take a stake; instead it plans to build relationships with those businesses’ founders and owners.

Meanwhile, Kanbrick is adapting the Berkshire playbook for its own deals. It is looking for investments with a “moat,” a hard-to-overcome competitive advantage that Mr. Buffett has long sought in his deals. (Kanbrick’s first acquisition was a stake in Thirty-One Gifts, a direct-selling firm.) Ms. Britt Cool will apply her experience as a top Berkshire executive — including chairing Benjamin Moore and Oriental Trading Company and serving as C.E.O. of Pampered Chef — to help its portfolio companies succeed.

• That also includes applying lessons she learned as a director of Kraft Heinz, the troubled packaged-food company that Berkshire and 3G Capital control. Ms. Britt Cool said that while she appreciated the strict budgeting rigor that 3G brought to Kraft Heinz, that approach was “probably different than I would do it and the way that we’re doing it at Kanbrick.”

THE SPEED READ

Deals

• Today in SPACs: The former Credit Suisse C.E.O. Tidjane Thiam is reportedly working on a blank-check fund; the electric-vehicle maker Lucid Motors is said to be in talks to merge with a SPAC led by the financier Michael Klein; and the online therapy app Talkspace is near a deal to go public via a deal with a SPAC run by the former banker Doug Braunstein. (FT, Bloomberg)

• The investment firm Sixth Street Partners is reportedly near a deal to buy control of Legends Hospitality, a sports and entertainment company, at a $1.3 billion valuation. (WSJ)

Politics and policy

• Senator Amy Klobuchar of Minnesota, the former presidential candidate, is writing a book about monopolies that could serve as a blueprint for the Biden administration. (NYT)

• Trump administration restrictions on U.S. investment in companies with ties to the Chinese military are hitting BlackRock and Vanguard particularly hard. (FT)

Tech

• Walmart is teaming up with Ribbit Capital on a fintech joint venture. (Bloomberg)

• Many would-be cryptocurrency millionaires face a big problem: They can’t remember the passwords to their digital wallets. (NYT)

• “TikTok and Discord Are the New Wall Street Trading Desks” (WSJ)

Best of the rest

• Investors are lobbying for mandatory shareholder votes on how companies are responding to climate change. And the asset manager State Street said it would vote against boards that did not disclose the racial and ethnic makeup of their directors. (FT)

• Why workplace surveillance measures may do more harm than good. (FT)

• Bill Belichick, the coach of the New England Patriots, said he would decline the Presidential Medal of Freedom, citing the violence at the Capitol. (NYT)

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