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    ‘Black Capitalism’ Promised a Better City for Everyone. What Happened?

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    ROCHESTER, N.Y. — The Panther Graphics printing plant sits along a row of red brick buildings and empty parking lots on the edge of a circular highway that separates this city’s downtown from a largely Black neighborhood to the north. Nearby, there is a warehouse, a Baptist Church and a billboard that warns “A Shot from A Gun Can’t Be Undone,” a reference to Rochester’s soaring murder rate.Tony Jackson, the owner of Panther Graphics, grew up here, the oldest of six children. His mother died when he was 13 and his father served time in Attica, the nearby state prison. But Mr. Jackson said he always had “ink in his blood” — a helpful trait in a city dominated by the giant film and copying companies Kodak and Xerox — and he found his calling in commercial printing.Mr. Jackson named his company, which produces labels for the grocery chain Wegmans and health care enrollment packets for Blue Cross Blue Shield, after the Black Panther Party. “It represents being Black and being strong,” he said.Today, in Mr. Jackson’s office, there is a photo of his son breaking a tackle as a running back on the Duke University football team and also a large painting of four men — Martin Luther King Jr., Malcolm X, Nelson Mandela and Barack Obama — gathered around a table, smiling.“I have always wanted people in this neighborhood to see what is possible,” he said.But Panther Graphics is the product of a complicated legacy. The company is one of the few sizable, Black-owned employers operating in Rochester, a city of 200,000 people, 40 percent of whom are Black.There was a time, though, when Rochester was on the cutting edge of Black “community capitalism” — an effort to create companies owned, staffed and managed largely by Black people that could lift up the broader community.Just as giant corporations have pledged billions to help combat racism and support Black Americans in the wake of George Floyd’s murder, corporate investments in Black businesses were seen as an antidote to racial unrest in the 1960s, a way to ease the tensions that threatened the reputations of burgeoning corporate hubs like Rochester.Some of those efforts in Rochester were quite bold and innovative at the time. Looking back now though, the long term challenges of achieving those ambitions shows the limits of social activists partnering with big business and how such efforts may not make a substantial dent in the systemic issues of poverty and racism affecting the broader Black community. It is a disheartening case study for the many companies that have made public commitments to promote equity and inclusion this year.Nearly 60 years ago, Xerox teamed up with a Black power group to create a factory that made vacuums and other parts for copying and film processing and was partly owned by its work force.For decades, Kodak and Xerox — both with large operations in Rochester — dominated the city’s business landscape.Recently, Rochester has dealt with a rising murder rate and municipal unrest.That company, which was eventually called Eltrex Industries, provided hundreds of manufacturing jobs to Black residents, including Mr. Jackson, who credits his experience there with providing the skills and connections he needed to start his own business.As part of an effort to promote more racial equity, Xerox also recruited Black engineers and technicians to Rochester, including Ursula Burns, who rose to become the first Black woman to lead a Fortune 500 company as chief executive officer.Eventually, Eltrex shut its doors in 2011. Its challenges were blamed on a mixture of racism and its reliance on winning contracts from Xerox and Kodak, which were fighting for their own survival in a digital age and whose ability to support the venture became more limited.Some community leaders say the company and its corporate sponsors veered from its mission by focusing on profit while shedding its Black activist identity.“With as many corporate entities as Rochester has, you wouldn’t think it would have such a large poor Black population,” said Dennis Bassett, a former executive at Kodak and Bausch + Lomb, who is Black and moved to Rochester in the 1970s.That contrast seems even more stark these days, after a particularly tumultuous time for the city, which is the nation’s third poorest, by one measure, after Detroit and Cleveland.Lovely Warren, the first woman and second African American to be the city’s mayor, was indicted in July on weapons charges after her 10-year-old child was left alone in her home where police found a pistol and rifle. Ms. Warren pleaded not guilty.The city was also roiled last year by the death of a Black man, Daniel Prude, who was handcuffed on a frigid street by Rochester police officers and had a mesh hood put over his head because they said he was having a psychotic episode. Video of the confrontation, which led to Mr. Prude’s death, came out months later, prompting protests in Rochester. In February, the police pepper-sprayed a nine-year-old Black girl at her home, setting off more protests that joined a larger national conversation about race and policing.The widespread protests throughout the country led corporate America to pledge billions of dollars in investments to Black-owned businesses and to ramp up hiring of African Americans.But following through may be a challenge, the way likeit was in Rochester.Tony Jackson owns Panther Graphics, one of the few sizable, Black-owned companies in Rochester.Malik Evans, who won the Democratic nomination for mayor, said the city needs to create more small- and medium-size businesses.Despite decades of investments, Eltrex failed to grow to its fullest potential and spawn a large number of other community-owned companies as many had hoped it would.“This could have been the nation’s first billion dollar Black-owned business and the start of many others,” Mr. Jackson said of Eltrex. “But it failed to adapt.”‘We wanted a factory’When the head of Xerox Joseph Wilson drove up to the headquarters of the organization in 1964, the Rev. Franklin Florence remembers there was still smoke in the air from the protests erupting around Rochester over the lack of affordable housing for Black people.The F.I.G.H.T. organization was an umbrella group made up of Black churches, tenant associations and even book clubs that used their collective strength to organize protests around any issue affecting the membership.Many of Rochester’s corporate leaders were shaken by the protests, but it was Mr. Wilson who took the step in 1964 of reaching out to Mr. Florence, the head of F.I.G.H.T. — short for Freedom, Independence, God, Honor, Today — to ask how Xerox could help.“Joseph Wilson asked what we wanted,” Mr. Florence recalled in an interview. “We told him we wanted a factory.”Mr. Florence had gained national attention during the civil rights movement with his campaign against Eastman Kodak, the city’s largest and most influential company, which had employed relatively few Black residents.He was a polarizing figure in Rochester who led protests at Kodak’s annual shareholder meeting, an embarrassment to the founding Eastman family and a warning to other companies about the power of social activism to disrupt their businesses.Eltrex’s original factory building was torn down a decade ago after a vehicle smashed into the first floor and burst into flames.A photo of the Rev. Franklin Florence at Central Church of Christ. He gained national attention in the early days of the civil rights movement with his campaign against Eastman Kodak.Mr. Wilson of Xerox assigned one of his executives in Europe to set up the plant. The company that would run it would be called Fighton.Some of Fighton’s first products were vacuums and parts for electrical transformers. A portion of the company was owned by the employees and the rest by the F.I.G.H.T. organization which ran a neighborhood housing project called F.I.G.H.T. Village, near the factory. Xerox lent managers to help train the workers.Among the efforts to support Black business amid the unrest of the 1960s, Fighton represented something new.“They wanted to try capitalism, but they wanted it to happen in a socialist way,’’ said Laura Warren Hill, a history professor at Bloomfield College in New Jersey, and the author of “Strike the Hammer: The Black Freedom Struggle in Rochester, NY 1940-1970.” “They wanted it to have a human face and to help the underserved.”The role of the city’s big corporations in this initiative also stood out.“You have Xerox working with a Black power group,” Ms. Hill said, “to shape what Black capitalism is going to look like.”Matt Augustine, Eltrex’s longest serving chief executive, said his approach to hiring was to give employees first and often “second chances.”Changing leadership and a nameOutside of Rochester, though, Fighton was not always so well received. The name seemed to be a big part of its problem.“The people we were trying to do business with would ask ‘What does this Fight mean? Fight who?’” recalled Matthew Augustine, the company’s longest serving chief executive.In 1976, Mr. Augustine was recruited to become C.E.O. by a friend from Harvard Business School who was on the board of Fighton.The F.I.G.H.T. organization had gone through an internal power struggle, with Mr. Florence eventually losing his leadership role. At the time, the factory was not profitable and in danger of shutting down, Mr. Augustine said.The Fighton board wanted Mr. Augustine, a native of Louisiana, to shift the business model to be “more personal profit orientated” and less focused on the community benefit, he said.Residents of F.I.G.H.T. Village, a housing project near where the old Eltrex factory stood.The board agreed to give Mr. Augustine ownership of most of the company and he eventually amassed an 80 percent stake.One of his first moves was changing the company’s name from Fighton, which was seen as too militant in the business community, to Eltrex Industries — a mashup of Electrical, Transformer and Xerox.In addition to manufacturing, the rebranded company started selling office supplies and offering snow removal and mail processing services. Under Mr. Augustine’s watch, Eltrex was meant to be a one-stop shop for companies seeking to fulfill their minority-owned business goals.Mr. Augustine said his approach to hiring was to give many employees first and often “second chances.” Some workers were still incarcerated and came to and from the factory from jail each day.Rochester had other Black-owned businesses but many tended to be restaurants, barbershops and other service-focused enterprises. At its height, Eltrex employed 350 people, mostly Black and Hispanic workers, in “prideful jobs” Mr. Augustine said. It generated $20 million in sales and was profitable.Kodak, which had been initially reluctant to get involved because of its contentious relationship with the F.I.G.H.T. organization, also agreed to do business with Eltrex, Mr. Augustine said.Despite it financial success, Mr. Florence’s son Clifford Florence said Eltrex was straying from its original mission.“They lost sight of the advocacy that they should be doing for the poor and began to look at the money,” he said.Mr. Jackson went to work at Eltrex in the late 1980s. He got the opportunity to supervise employees and to work in sales, where he made valuable connections. He looked enviously at Mr. Augustine’s office, his Mercedes and house in the suburbs. “That’s what inspired me to start my own business,” Mr. Jackson said.In 1993, Mr. Jackson left Eltrex to start Panther Graphics. One of his biggest accounts came from Xerox. In a few years, Mr. Jackson also had a house in the suburbs and a cabin on Lake Ontario with a pontoon boat.Several years ago, Mr. Jackson drove his Porsche to visit a friend in north Rochester and handed him cash to buy them beer. A few minutes later, the police surrounded Mr. Jackson and his sports car. An officer threatened to search him, suggesting that the cash was for a drug deal. The police eventually left, he said, but did not apologize for their mistake.“I am not going to cry about it because what good does that do?” Mr. Jackson said.‘I bit my tongue more than I wish’In her memoir published in June, Ms. Burns describes how the very top executives at Xerox and the longtime board member Vernon Jordan mentored her throughout her career. She praised Mr. Wilson, who is credited with founding Xerox, for taking an “enlightened” approach to diversity.Some community leaders say the Eltrex company and its corporate sponsors veered from their mission by focusing on profit and deliberately shedding its Black activist identity.“Why is it that we have none of these people working here?” Mr. Wilson said, according to Ms. Burns’s book. Mr. Wilson remarked that he could not run a “great company” where Black people and women he saw outside his window were “literally not here.”While Mr. Wilson and other executives set a supportive tone at the top, these efforts by Xerox and the city’s other large companies did not always change attitudes across the broader Rochester community, some local leaders say. Ms. Burns, who is retired from Xerox, declined to comment.Eltrex was regularly recognized with awards for the quality of its products. Yet, Mr. Augustine would hear rumblings from people in the local business community about the need to improve quality control at Eltrex.Eltrex was also paying a higher interest rate than other companies — something Mr. Augustine learned after he was appointed to the board of a local bank.“People ask, ‘Why weren’t you a billion dollar company?,” said Mr. Augustine. “But they don’t understand the environment we were operating in.”“When you hear about the folks burning down Black Wall Street. This stuff is real. There are people who are absolutely threatened by any kinds of success for Black people and they work to keep you from being successful.”Dennis Bassett spent 50 years in corporate America, including at Kodak and Bausch + Lomb. He wishes the companies would have done more to help the city.Dennis Bassett spent 18 years at Kodak and 17 at Bausch + Lomb. He remembers flying with a top Kodak’s executive on the corporate jet, talking about the need for more diversity. Kodak “did a good job putting people of color in executive positions,” Mr. Bassett said.But those hiring initiatives did not always reach down into the company’s middle management, where many key decisions were made, he said.And even as Xerox and Kodak “were printing money,” the city’s poorest Black residents continued to slide further into poverty, he said. Mr. Bassett faults himself for not pushing the companies to do more to help the city.“Back then, I was chasing the brass ring,” said Mr. Bassett, 73. “I was doing the things I needed to be successful for my career and my family.“I look back and say I bit my tongue more than I wish I had bit my tongue,” he added.In a statement, a Xerox spokesperson said the company has spent millions over many decades supporting science programs for Rochester students and organizing mentorships and other volunteer activities to “help close the poverty gap.”“Giving back to communities throughout the world, particularly underserved communities, is ingrained in our company’s values,” the spokesperson said.Kodak did not respond to requests for comment.Mr. Bassett faced some barriers in Rochester that seemed intractable.Mr. Bassett remembers that when he put his five-bedroom house in an upscale Rochester suburb on the market in the 1980s, the realtor recommended that he take down all the family pictures or any artwork that could indicate that a Black family lived there.“The realtor was matter-of-fact,” Mr. Bassett said. “And guess what? We complied. I just wanted to sell my house.”Clifford Florence, a minister at Central Church of Christ in Rochester, has been trying to get Plymouth Avenue, on which his church resides, named after his father, the Rev. Franklin Florence.A new mayorRochester will have a new mayor in January, most likely a City Council member named Malik Evans.Mr. Evans, who defeated Ms. Warren in the Democratic primary this summer, said the city needs to let go of its identity as a company town dominated by Kodak and Xerox, and become a “town of companies.”“We have older African American residents who had graduated from high school and were getting jobs at Bausch + Lomb and Kodak, and then buying property,” said Mr. Evan. “But then that fizzled.”Mr. Evans said the city should focus on creating more small- and medium-size businesses and that corporate commitments cannot fade as the protests against racism recede.“It can’t become just another flavor of the month,’’ he said. “We always look back a few years later and say, ‘Whatever happened to that.’”A statue of Frederick Douglass, who escaped slavery and became a prominent Black abolitionist. He lived in Rochester for 25 years and was buried there.A mural called “I Am Speaking” featuring John Lewis in downtown Rochester. It was painted by local artists and based on a photograph by the Civil Rights era photographer Danny Lyon.Mural painted by Ephraim Gebre, Darius Dennis, Jared Diaz and Dan HarringtonA forgotten legacyToday, there are no grand monuments to Franklin Florence or the company he helped create. Eltrex’s original factory building was damaged in 2010 after a vehicle smashed into the first floor and burst into flames. The vehicle’s occupants were killed in the crash and the building was demolished.“If you walk down the street in Rochester, not many people know who Franklin Florence is, and I think that is a crime,” said Ms. Hill, the historian. “Whether you love or hate him, he is an important figure.”Even today, there is debate about Eltrex’s legacy. Mr. Augustine, the former C.E.O., said he regretted that he was not able to grow the company’s customer base before Xerox and Kodak began to struggle. But he often found that other companies were not sincerely interested in engaging Black-owned businesses, but only looking like they were.Kodak filed for bankruptcy in 2012., while Xerox restructured its business which resulted in a series of large lay offs at its Rochester facilities. Mr. Augustine said some of Eltrex’s assets were sold and its employees transferred to Cannon Industries, a metal fabricator and one of the other large minority-owned businesses in Rochester.“Could we have done more? Yes,” said Mr. Augustine. “But I am proud of what we accomplished.”Mr. Jackson said Eltrex failed to adapt to life beyond Kodak and Xerox and its problems should not be blamed on racism. “I have to reinvent myself every five years or I die,” he said.For his part, Franklin Florence said he had hoped the original concept of Fighton could have been expanded. He urged the protesters who are pushing to end systemic racism today to keep up the pressure.“There were people back then who said we had to get out of the street and into the boardroom,’’ Mr. Florence said. “Our folk went into the boardrooms and we suffered. And that is where we are today.”Malik Evans, a City Council member, said Rochester needs to let go of its identity as a company town dominated by Kodak and Xerox, and become a “town of companies.” More

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    Who Discriminates in Hiring? A New Study Can Tell.

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    Applications seemingly from Black candidates got fewer replies than those evidently from white candidates. The method could point to specific companies.Twenty years ago, Kalisha White performed an experiment. A Marquette University graduate who is Black, she suspected that her application for a job as executive team leader at a Target in Wisconsin was being ignored because of her race. So she sent in another one, with a name (Sarah Brucker) more likely to make the candidate appear white.Though the fake résumé was not quite as accomplished as Ms. White’s, the alter ego scored an interview. Target ultimately paid over half a million dollars to settle a class-action lawsuit brought by the Equal Employment Opportunity Commission on behalf of Ms. White and a handful of other Black job applicants.Now a variation on her strategy could help expose racial discrimination in employment across the corporate landscape.Economists at the University of California, Berkeley, and the University of Chicago this week unveiled a vast discrimination audit of some of the largest U.S. companies. Starting in late 2019, they sent 83,000 fake job applications for entry-level positions at 108 companies — most of them in the top 100 of the Fortune 500 list, and some of their subsidiaries.Their insights can provide valuable evidence about violations of Black workers’ civil rights.The researchers — Patrick Kline and Christopher Walters of Berkeley and Evan K. Rose of Chicago — are not ready to reveal the names of companies on their list. But they plan to, once they expose the data to more statistical tests. Labor lawyers, the E.E.O.C. and maybe the companies themselves could do a lot with this information. (Dr. Kline said they had briefed the U.S. Labor Department on the general findings.)In the study, applicants’ characteristics — like age, sexual orientation, or work and school experience — varied at random. Names, however, were chosen purposefully to ensure applications came in pairs: one with a more distinctive white name — Jake or Molly, say — and the other with a similar background but a more distinctive Black name, like DeShawn or Imani.What the researchers found would probably not surprise Ms. White: On average, applications from candidates with a “Black name” get fewer callbacks than similar applications bearing a “white name.”This aligns with a paper published by two economists from the University of Chicago a couple of years after Ms. White’s tussle with Target: Respondents to help-wanted ads in Boston and Chicago had much better luck if their name was Emily or Greg than if it was Lakisha or Jamal. (Marianne Bertrand, one of the authors, testified as an expert witness in the trial over Ms. White’s discrimination claim.)This experimental approach with paired applications, some economists argue, offers a closer representation of racial discrimination in the work force than studies that seek to relate employment and wage gaps to other characteristics — such as educational attainment and skill — and treat discrimination as a residual, or what’s left after other differences are accounted for.The Berkeley and Chicago researchers found that discrimination isn’t uniform across the corporate landscape. Some companies discriminate little, responding similarly to applications by Molly and Latifa. Others show a measurable bias.All told, for every 1,000 applications received, the researchers found, white candidates got about 250 responses, compared with about 230 for Black candidates. But among one-fifth of companies, the average gap grew to 50 callbacks. Even allowing that some patterns of discrimination could be random, rather than the result of racism, they concluded that 23 companies from their selection were “very likely to be engaged in systemic discrimination against Black applicants.”There are 13 companies in automotive retailing and services in the Fortune 500 list. Five are among the 10 most discriminatory companies on the researchers’ list. Of the companies very likely to discriminate based on race, according to the findings, eight are federal contractors, which are bound by particularly stringent anti-discrimination rules and could lose their government contracts as a consequence.“Discriminatory behavior is clustered in particular firms,” the researchers wrote. “The identity of many of these firms can be deduced with high confidence.”The researchers also identified some overall patterns. For starters, discriminating companies tend to be less profitable, a finding consistent with the proposition by Gary Becker, who first studied discrimination in the workplace in the 1950s, that it is costly for firms to discriminate against productive workers.The study found no strong link between discrimination and geography: Applications for jobs in the South fared no worse than anywhere else. Retailers and restaurants and bars discriminate more than average. And employers with more centralized personnel operations handling job applications tend to discriminate less, suggesting that uniform rules and procedures across a company can help reduce racial biases.An early precedent for the paper published this week is a 1978 study that sent pairs of fake applications with similar qualifications but different photos, showing a white or a Black applicant. Interestingly, that study found some evidence of “reverse” discrimination against white applicants.More fake-résumé studies have followed in recent years. One found that recent Black college graduates get fewer callbacks from potential employers than white candidates with identical resumes. Another found that prospective employers treat Black graduates from elite universities about the same as white graduates of less selective institutions.One study reported that when employers in New York and New Jersey were barred from asking about job candidates’ criminal records, callbacks to Black candidates dropped significantly, relative to white job seekers, suggesting employers assumed Black candidates were more likely to have a record.What makes the new research valuable is that it shows regulators, courts and labor lawyers how large-scale auditing of hiring practices offers a method to monitor and police bias. “Our findings demonstrate that it is possible to identify individual firms responsible for a substantial share of racial discrimination while maintaining a tight limit on the expected number of false positives encountered,” the researchers wrote.Individual companies might even use the findings to reform their hiring practices.Dr. Kline of Berkeley said Jenny R. Yang, a former chief commissioner of the E.E.O.C. and the current director of the Office of Federal Contract Compliance Programs, which has jurisdiction over federal contractors, had been apprised of the findings and had expressed interest in the researchers’ technique. (A representative of the agency declined to comment or to make Ms. Yang available.)Similar tests have been performed since the 1980s to detect discrimination in housing by real estate agents and rental property owners. Tests in which white and nonwhite people inquire about the availability of housing suggest discrimination remains rampant.Deploying this approach in the labor market has proved a bit tougher. Last year, the New York City Commission on Human Rights performed tests to detect employment discrimination — whether by race, gender, age or any other protected class — at 2,356 shops. Still, “employment is always harder than housing,” said Sapna Raj, deputy commissioner of the law enforcement bureau at the agency, which enforces anti-discrimination regulations.“This could give us a deeper understanding,” Ms. Raj said of the study by the Berkeley and Chicago researchers. “What we would do is evaluate the information and look proactively at ways to address it.”The commission, she noted, could not take action based on the kind of statistics in the new study on their own. “There are so many things you have to look at before you can determine that it is discrimination,” she argued. Still, she suggested, statistical analysis could alert her to which employers it makes sense to look at.And that could ultimately convince corporations that discrimination is costly. “This is actionable evidence of illegal behavior by huge firms,” Dr. Walters of Berkeley said on Twitter in connection with the study’s release. “Modern statistical methods have the potential to help detect and redress civil rights violations.” More

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    Global Tax Overhaul Gains Steam as G20 Backs New Levies

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    The approach marks a reversal of years of economic policies that embraced low taxes as a way for countries to attract investment and fuel growth.VENICE — Global leaders on Saturday agreed to move ahead with what would be the most significant overhaul of the international tax system in decades, with finance ministers from the world’s 20 largest economies backing a proposal that would crack down on tax havens and impose new levies on large, profitable multinational companies.If enacted, the plan could reshape the global economy, altering where corporations choose to operate, who gets to tax them and the incentives that nations offer to lure investment. But major details remain to be worked out ahead of an October deadline to finalize the agreement and resistance is mounting from businesses, which could soon face higher tax bills, as well as from small, but pivotal, low-tax countries such as Ireland, which would see their economic models turned upside down.After spending the weekend huddled in the halls of an ancient Venetian naval shipyard, the top economic officials from the Group of 20 nations agreed to forge ahead. They formally threw their support behind a proposal for a global minimum tax of at least 15 percent that each country would adopt and new rules that would require large global businesses, including technology giants like Amazon and Facebook, to pay taxes in countries where their goods or services are sold, even if they have no physical presence there.“After many years of discussions and building on the progress made last year, we have achieved a historic agreement on a more stable and fairer international tax architecture,” the finance ministers said in a joint statement, or communiqué, at the conclusion of the meetings.The approach marks a reversal of years of economic policies that embraced low taxes as a way for countries to attract investment and fuel growth. Instead, countries are coalescing around the view that they must fund infrastructure, public goods and prepare for future pandemics with more fiscal firepower at their disposal, prompting a global hunt for revenue.“I see this deal as being something that’s good for all of us, because as everyone knows, for decades now, the world community, including the United States, we’ve been participating in this self-defeating international tax competition,” Treasury Secretary Janet L. Yellen said on the sidelines of the G20 summit. “I’m really hopeful that with the growing consensus that we’re on a path to a tax regime that will be fair for all of our citizens.”The agreement followed a joint statement last week that was signed by 130 countries who expressed support for a conceptual framework that has been the subject of negotiations at the Paris-based Organization for Economic Cooperation and Development for the better part of the last decade. The O.E.C.D. estimates that the proposal would raise an additional $150 billion of global tax revenue per year and move taxing rights of over $100 billion in profits to different countries.The backing of the broad framework by the finance ministers on Saturday represented a critical step forward, but officials acknowledged that the hardest part lies ahead as they try to finalize an agreement by the time the leaders of the Group of 20 nations meet in Rome in October.Among the biggest hurdles is an ongoing reluctance by low-tax jurisdictions like Ireland, Hungary and Estonia, which have refused to sign on to the pact, potentially dooming the type of overhaul that Ms. Yellen and others envision. Hungary and Estonia have raised concerns that joining the agreement might violate European Union law and Ireland, which has a tax rate of 12.5 percent, fears that it will upend its economic model, siphoning the foreign investment that has powered its economy.Absent unanimous approval among the members of the European Union, an accord would stall. Establishing a minimum tax would require an E.U. directive, and directives require backing by all 28 countries in the union. Ireland had previously hinted that they would object to or block a directive and Hungary could prove to be an even bigger hurdle given its fraught relationship with the union, which has pressed Hungary on unrelated rule-of-law and corruption issues.Prime Minister Viktor Orban of Hungary has stated that taxes are a sovereign issue and recently called a proposed global minimum corporate tax “absurd.” Hungary’s low corporate rate of 9 percent has helped it lure major European manufacturers, especially German carmakers including Mercedes and Audi.Bruno Le Maire, France’s finance minister, said on Saturday that it was important that all of Europe supports the proposal. G20 countries plan to meet with Ireland, Hungary and Estonia next week to try and address their concerns, he said.“We will discuss the point next week with the three countries that still have some doubts,” he said. “I really think the impetus given by the G20 countries is clearly a decisive one and that this breakthrough should gather all European nations together.”Policymakers also have yet to determine the exact rate that companies will pay, with the United States and France pushing to go above 15 percent, and negotiations are continuing over which firms will be subject to the tax and who will be excluded. The framework currently exempts financial services firms and extractive industries such as oil and gas, a carve-out that tax experts have suggested could open a big loophole as companies try to redefine themselves to meet the requirements for exemptions.Domestic politics could also pose hurdles for the countries that have agreed to join but need to turn that commitment into law, including in the United States, where Republican lawmakers have signaled their disapproval, saying the plan would hurt American firms. Big business interests are also warily eyeing the pact and suggesting they plan to fight anything that puts American companies at a disadvantage.“The most important thing is understanding that if there is going to be an agreement, that there cannot be an agreement that is punitive toward U.S. companies,” said Neil Bradley, the chief policy officer at the U.S. Chamber of Commerce. “And that, of course, is of great concern.”A report this month from the European Network for Economic and Fiscal Policy Research found that only 78 companies are expected to be affected by the overhaul but nearly two-thirds of them are American. The researchers estimated that the new taxes would raise $87 billion in revenue and that Apple, Microsoft, Alphabet, Intel, and Facebook would pay $28 billion of that total.At the heart of the proposal is the idea that, if countries all agree to a minimum tax, it will prevent businesses from seeking out low-tax jurisdictions for their headquarters, depriving their home countries of revenue. Ms. Yellen has criticized what she calls a “race to the bottom” in global taxation.Ms. Yellen said that she would be working in the coming months to address the concerns of countries with reservations but that the deal could still proceed even if some countries did not join. She pointed to an enforcement mechanism that would raise U.S. taxes on corporations that have headquarters in countries that continue to be tax havens but do business in America.Still, changing domestic tax laws will not be quick or easy, including in the United States, whose success in ushering in a new tax regime is being closely watched as a harbinger of whether a global overhaul can come to pass. Senior officials at the G20 meetings said that approval of the agreement within the United States was crucial to its broader acceptance.Republican lawmakers have suggested they will put up a fight.Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee and one of the architects of the 2017 tax cuts, said that the Biden administration’s tax proposals would never pass.“Certainly in Congress there’s a great deal of skepticism,” Mr. Brady said in a telephone interview this week. “My prediction is that at the end of the day, even if an agreement is reached, what the president will bring back to Congress is an agreement that advantages foreign companies and workers over American ones.”Ms. Yellen indicated that Democrats were prepared to pass as many of the tax changes as they can through a budgetary procedure called reconciliation that would alleviate the need for Republican votes. She assured her international counterparts that the Biden administration was ready to deliver its end of the bargain and pushed back against the idea that the new tax system would harm American workers.“For the United States, it’s going to be a fundamental shift in how we choose to compete in the world economy,” Ms. Yellen said. “Not a competition based on rock-bottom tax rates, but rather on the skills of our work force, our ability to innovate and our fundamental talents.”Policymakers continue to grapple with what the global minimum tax rate will be and what exactly will be subject to the tax.A separate proposal calls for an additional tax on the largest and most profitable multinational enterprises, those with profit margins of at least 10 percent. Officials want to apply that tax to at least 20 percent of profit exceeding that 10 percent margin for those companies, but continue to debate how the proceeds would be divided among countries around the world. Developing economies are pushing to ensure that they will get their fair share.Mr. Bradley, of the Chamber, said that the details of a final agreement would determine how punitive it would be for companies. Representatives from Google and Facebook have been in touch with senior Treasury officials as the process has played out.American businesses are also worried about being put at a disadvantage by a 21 percent tax that President Biden has proposed on their overseas profits, if their foreign competitors are only paying 15 percent. The Biden administration also wants to raise the domestic corporate tax rate from 21 percent to 28 percent. Democrats in Congress are moving forward with legislation to make those changes to the tax code this year.“If a U.S. company is trying to compete globally with a significantly higher tax burden because of this significantly higher minimum tax on its operations, that’s a competitive issue for being able to be successful,” said Barbara Angus, a global tax policy leader at Ernst & Young.Washington and Europe also remain at odds over how to tax digital giants like Google and Amazon. At the G20 summit, finance ministers expressed optimism that such obstacles could be overcome. In his closing news conference after the deal was reached, Daniele Franco, Italy’s finance minister, hailed the agreement as historic and called on the countries that had yet to join to reconsider.“To accept global rules is, for each country, difficult. Each country has to be prepared to compromise,” Mr. Franco said. “To have worldwide rules for taxing multinationals, for taxing the profits of big companies is a major change, is a major achievement.”Liz Alderman More

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    Looking for Bipartisan Accord? Just Ask About Big Business.

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    In surveys and political discourse, Republicans are increasingly critical of corporations, but not for the reasons Democrats have long held that view.Republicans in Washington and around the country have soured on big business, joining Democrats in expressing concern that corporations wield too much influence. The shift has left corporate America with fewer allies in a tumultuous period for American society and the global economy. More

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    Health Advocate or Big Brother? Companies Weigh Requiring Vaccines.

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    It is a delicate decision balancing employee health and personal privacy. Some companies are sidestepping the issue by offering incentives to those who get shots.As American companies prepare to bring large numbers of workers back to the office in the coming months, executives are facing one of their most delicate pandemic-related decisions: Should they require employees to be vaccinated?Take the case of United Airlines. In January, the chief executive, Scott Kirby, indicated at a company town hall that he wanted to require all of his roughly 96,000 employees to get coronavirus vaccines once they became widely available.“I think it’s the right thing to do,” Mr. Kirby said, before urging other corporations to follow suit. It has been four months. No major airlines have made a similar pledge — and United Airlines is waffling.“It’s still something we are considering, but no final decisions have been made,” a spokeswoman, Leslie Scott, said.For the country’s largest companies, mandatory vaccinations would protect service workers and lower the anxiety for returning office employees. That includes those who have been vaccinated but may be reluctant to return without knowing whether their colleagues have as well. And there is a public service element: The goal of herd immunity has slipped as the pace of vaccinations has slowed.But making vaccinations mandatory could risk a backlash, and perhaps even litigation, from those who view it as an invasion of privacy and a Big Brother-like move to control the lives of employees.A United Airlines vaccine clinic at O’Hare Airport in Chicago. Employers are using on-site vaccinations to encourage workers to get shots.Scott Olson/Getty ImagesIn polls, executives show a willingness to require vaccinations. In a survey of 1,339 employers conducted by Arizona State University’s College of Health Solutions and funded by the Rockefeller Foundation, 44 percent of U.S. respondents said they planned to mandate vaccinations for their companies. In a separate poll of 446 employers conducted by Willis Towers Watson, a risk-management firm, 23 percent of respondents said they were “planning or considering requiring employees to get vaccinated for them to return to the worksite.”That discrepancy, said Mara Aspinall, who led the Arizona State poll, may have to do with the timing of the surveys and the pace at which executives are growing comfortable with the vaccines. Arizona State conducted its survey in March, while Willis Towers led its survey between Feb. 23 and March 12.Despite what surveys have found, few executives have taken the step of mandating vaccines. It seems that most are hoping that encouragement, whether forceful or subtle, will be enough.“While legally in the United States, employers can mandate vaccines while providing accommodations for religious and for health reasons, socially, in terms of the social acceptability of these decisions, it’s much more tenuous,” said Laura Boudreau, a professor of public policy at Columbia University. “And so the reputational risks to these companies of getting this wrong are really high.”Douglas Brayley, an employment lawyer at the global law firm Ropes & Gray, warns clients of the implications of following through on a mandate, he said.“What if 10 percent of your work force refuses? Are you prepared to lay off that 10 percent?” he said he asked clients. “Or what if it’s someone high-level or in a key role, would you be prepared to impose consequences? And then they sometimes get more nervous.”He added, “Anytime you would have them putting out a mandate, but then carrying through the consequences unevenly, that would create a risk of potentially unlawful unfair treatment.”Companies that require vaccines may also be concerned about any side effects or medical issues that an employee might claim were caused by the vaccine.“They could be held liable for any sort of adverse effects that might happen a year or two down the road,” said Karl Minges, chair of health administration and policy at the University of New Haven.Some companies are sidestepping the problem and trying incentives instead. Amtrak is paying employees two hours’ worth of regular wages per shot upon proof of vaccination. Darden, which owns Olive Garden and other restaurants, told employees it would offer hourly employees two hours of pay for each dose they receive, while emphasizing it would not make doses mandatory. Target is offering a $5 coupon to all customers and employees who receive their vaccination at a CVS at Target location.For restaurants, making vaccinations mandatory could make hiring workers even more difficult.Philip Cheung for The New York TimesIn the United States, there’s nothing new about vaccines being required for participation in public life. The Supreme Court ruled about a century ago that states could require vaccinations for children attending public school. And universities like Rutgers have instituted mandatory Covid-19 vaccinations.But the pandemic brings up a host of complications that companies typically prefer to avoid, involving the private lives, religious preferences and medical histories of employees, such as whether an employee is pregnant, breastfeeding or immuno-compromised, information they may not want to reveal.Major union groups, like the A.F.L.-C.I.O., have not aggressively pushed the issue either. They are facing dueling forces — standing up for individual worker’s rights on the one hand and protecting one another on the other. Unions have also been arguing for stronger workplace safety measures, efforts that could be complicated by companies’ arguing that mandatory vaccinations reduce the need for such accommodations. The return to work protocols negotiated between the Alliance of Motion Picture & Television Producers and Hollywood’s unions, for instance, will not include mandatory vaccinations.“There are going to be some people who may have legitimate reasons for not getting the vaccine or for not wanting to talk about it,” said Carrie Altieri, who works in communications for IBM’s People and Culture business. “It’s not an easy issue at this point.” IBM is working with New York State on a digital passport linking a person’s vaccination records to an app to show businesses, like performance venues, that may require vaccination. It is not, though, requiring vaccinations for its employees.For some businesses like restaurants, which are already struggling to hire workers, mandating vaccinations could make hiring even more difficult. And there are questions of logistics and execution. How can companies confirm the veracity of those who say they’ve been vaccinated?Companies may need to hire additional staff, potentially with medical training, to handle such tasks, which could saddle businesses — particularly small ones — with burdensome costs.Vivint, a home security company based in Utah with 10,000 employees, began offering vaccines in its on-site clinic this week, after the state approved the company to distribute 100 shots a week to its staff. It paid $3,000 for the necessary medical-grade freezer.“We’re not requiring employees to get vaccinated, but we’re highly encouraging it,” said Starr Fowler, senior vice president for human resources. “For a lot of our employees, particularly those that are younger, the easier that we make it for them, the more likely they’re going to do it.”At Salesforce Tower park in San Francisco, up to 100 fully vaccinated employees can volunteer to work on designated floors.Jason Henry for The New York TimesOthers are experimenting with splitting up their work forces. Salesforce is introducing a policy in certain U.S. offices, including Salesforce Tower in San Francisco, where up to 100 fully vaccinated employees can volunteer to work on designated floors. The New York Stock Exchange issued a memo to trading firms saying they would be allowed to increase their staff on the floor, provided all the employees have been vaccinated.The Equal Employment Opportunity Commission issued guidance in December stating that employers were indeed legally permitted to require employees to be vaccinated before they return to offices. But the threat of litigation still looms.“To be concerned about the possibility of litigation seems to me to be a perfectly legitimate concern,” said Eric Feldman, a law professor at the University of Pennsylvania. He added, “It would seem to me that employers are going to find themselves in a fairly strong position legally — but that doesn’t mean they’re not going to get sued.”Legislation that would limit the ability to require vaccines for students, employees or the public in general has been proposed in at least 25 states, according to the National Conference of State Legislatures. Some of those restrictions pertain only to vaccines that, like those for Covid-19, have yet to be granted full approval by the Food and Drug Administration. (The coronavirus vaccines have been granted conditional approval for emergency use.)Pfizer is expected to file for full approval of its Covid-19 vaccine soon. Others are expected to follow.Speaking at a Wall Street Journal conference this week, Jamie Dimon, the chief executive of JPMorgan Chase, mentioned “legal issues about requiring vaccines” when asked about bringing workers back to the office. A press officer for the bank, which plans to open its offices on May 17 on a voluntary basis, said it strongly encouraged vaccines for employees — barring any religious or health restrictions — but would not require them. A spokeswoman for Goldman Sachs, which has not guided employees either way, declined to comment.One potential path for companies seeking a middle ground is to mandate the shots only for new hires. Still, there is a fine line between encouraging and requiring shots — sometimes resulting in conflicting messages to employees.The investment bank Jefferies sent a memo to employees in early February stating “verification of vaccination will be required to access the office.” On Feb. 24 came a follow-up memo. “We did not intend to make it sound as if we are mandating vaccines,” it said.Reporting was contributed by More

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    Biden Tax Plan Charts New Path to Economic Growth

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    The president sees public spending, rather than relying on businesses to turn tax cuts into investment, as the key to competitiveness.President Biden’s ambitious plan to increase corporate taxes does more than just reverse much of the overhaul pushed through by his predecessor. It also offers a profoundly different vision of how to make the United States more competitive and how to foot the bill.When President Donald J. Trump and a Republican Congress rewrote the tax code in 2017, most of the benefits went to the wealthiest Americans, with lower rates on businesses and on profits from investments. The guiding principle, proponents argued, was that cutting taxes on corporations and investors would encourage businesses to expand, creating more jobs and generating more wealth for everyone.By contrast, the animating idea behind the tax plan put forward by the Biden administration on Wednesday is that the best way to increase America’s competitiveness and foster economic growth is to raise corporate taxes to finance huge investments in transportation, broadband, utilities and more.The Business Roundtable, the U.S. Chamber of Commerce and the National Association of Manufacturers all welcomed the idea of pumping money into repairing and building the nation’s infrastructure, but recoiled at raising corporate taxes to do so.“We strongly oppose the general tax increases proposed by the administration, which will slow the economic recovery and make the U.S. less competitive globally — the exact opposite of the goals of the infrastructure plan,” the chamber’s chief policy officer, Neil Bradley, said in a statement.The biggest and most eye-catching proposal is to trim the sizable reduction in the corporate tax rate enacted under Mr. Trump. In 2017, Republicans shrank the rate to 21 percent from 35 percent. Mr. Biden wants to nudge the rate part of the way back — to 28 percent.The increase will “ensure that corporations pay their fair share of taxes,” and fund critical investments “to maintain the competitiveness of the United States and grow the economy,” the White House stated in outlining the plan.The other provisions are primarily intended to ensure that multinational corporations cannot avoid taxes on profits generated overseas. The hope is that this will reduce the temptation to set up operations or offices in foreign tax havens.The plan, which still lacks detailed provisions, is “both an undoing and a pushing in new directions,” said Mihir A. Desai, an economist at Harvard Business School. “The more novel aspects relate to how it changes the way we think about foreign operations and global income.”Through a series of complex and arcane provisions, the Biden administration would essentially treat profits earned abroad more like those earned at home — raising rates and requiring that taxes be paid on time rather than pushed far into the future. It would also establish what would in effect be a minimum tax on foreign income.The proposals hew closely to what Mr. Biden promised on the campaign trail, and the immediate reactions mostly fell along predictable lines. Republicans, business groups and conservative economists said they worried that the rate increases would discourage investment. Progressive groups and liberal economists hailed the announcement, saying it would fix some glaring loopholes.Wall Street has been wary of possible tax increases since the presidential election and has hoped that gridlock in Washington would moderate Mr. Biden’s agenda. On Wednesday, a spokesman for JPMorgan Chase said the bank’s chief executive, Jamie Dimon, believed that “the corporate tax rate for companies in the U.S. has to be competitive globally, which it is now.”Supporters countered that the changes would do much more to promote growth and go a long way in curbing excesses of the 2017 tax legislation. Democrats have argued that the low-tax approach has failed to deliver broad economic gains, with only those at the very top benefiting. Targeted government spending on workers, students and infrastructure, they argue, would offer much more bang for the buck. What’s more, businesses base their decisions on a range of factors besides tax rates.Even economists favoring low rates on business acknowledge that the 2017 tax cuts did not produce much of an increase in investment. Gross domestic product grew at a rate of 2.4 percent in the two years leading up to the law and 2.4 percent in the two years after it passed.“There’s essentially no evidence that the tax change boosted investment,” said William Gale, co-director of the Urban-Brookings Tax Policy Center. He argued that investment went up in 2018 only because oil prices rose. And while the tax law favored investments in equipment and structures, it turned out that the biggest investments were not in those areas but in intellectual capital.Supporters also argue that the proposed changes are much fairer.“The cut in the rate was overdue but may well have been overdone,” Mr. Gale said of the Trump tax cuts. “It gave massive windfall gains to corporations,” rewarding them for investment decisions made in the past instead of providing new incentives to plow money back into their businesses, he said.Debates about the tax code are really debates about who should bear the burden of paying for what society deems important — highways and bridges, clean water and high-speed broadband, basic research and development.By shifting the tax burden, the Biden administration is saying corporations — among the biggest winners the last time around — should pick up more of the tab this time.“We have pressing infrastructure needs, and the fairest way to fund those is to claw back some of the giveaways” to corporations and shareholders contained in the 2017 law, said Steve Rosenthal, a senior fellow at the Tax Policy Center.Mr. Rosenthal also pointed out that a large chunk of the increased tax payments would fall on foreigners, who own 40 percent of stocks.The advertised tax rate — whether on corporations or individuals — is often much higher than what many actually pay.The Institute on Taxation and Economic Policy, which has long criticized American businesses for managing to avoid paying what they owe, conducted a study of Fortune 500 companies that were profitable and that provided enough information to calculate effective tax rates. The institute found that those companies on average paid 11.3 percent on their 2018 income.And 91 of those companies, including Amazon, Chevron, Halliburton and IBM, paid no federal income tax that year.Existing exemptions and deductions are not evenly distributed. Industrial machinery, gas, oil, electric and chemical companies tend to have the lowest effective rates, often less than 5 percent.Economists have debated who actually bears the cost of higher corporate taxes — shareholders and owners or workers. Research by the Congressional Budget Office, the Treasury Department and the Brookings Institution has concluded that those who own the business generally pay about three-quarters of a tax increase, with workers picking up the rest.Mr. Desai at Harvard applauded the infrastructure investment but was put off by the impact of the tax increase on workers. “In a populist moment, it’s good politics but bad economics,” he said. He would prefer taxing individuals’ capital income. He also pointed out that the laserlike focus on corporations — as opposed to other businesses that may be organized differently — tended to penalize large successful companies.It is still unclear how much would be paid by other groups favored by the current tax code, including the richest Americans and businesses that pass through income to their owners or shareholders. (They pay taxes at the ordinary rate on their individual returns.)The Biden administration has indicated that tax increases for the wealthy will help fund the second phase of the infrastructure plan, which is expected to be announced next month and will focus on priorities like education, health care and paid leave.Gillian Friedman More

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    ‘We Need to Stabilize’: Big Business Breaks With Republicans

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    #masthead-section-label, #masthead-bar-one { display: none }Capitol Riot FalloutInside the SiegeVisual TimelineNotable ArrestsCapitol Police in CrisisAdvertisementContinue reading the main storySupported byContinue reading the main story‘We Need to Stabilize’: Big Business Breaks With RepublicansLow taxes and light regulation made the party popular with corporate America for decades. President Trump and his supporters have frayed those bonds.After the deadly Capitol rampage by President Trump’s supporters, corporate America is flexing its political muscle like never before.Credit…Kenny Holston for The New York TimesJan. 15, 2021The longstanding alliance between big business and the Republican Party is being tested as never before.As President Trump and his allies sought to overturn the election results in recent months, chief executives condemned their efforts and called on Republicans to stop meddling with the peaceful transfer of power.Now, in the aftermath of the deadly Capitol rampage by Mr. Trump’s supporters, corporate America is turning its back on many senior Republicans, and flexing its political muscle.One major trade group called on Mr. Trump’s cabinet to consider removing him from office. Dozens of companies, from AT&T to Walmart, have said they will no longer donate to members of Congress who opposed the Electoral College certification of President-elect Joseph R. Biden Jr.And a senior House Democrat asked big banks and other financial services companies on Friday to stop processing financial transactions for people and organizations that participated in the Capitol riot.Tim Ryan, the chief executive of PWC, who said his firm was among those suspending donations to members who voted against certification, called for the country to come together. “I believe this is the best country in the world, and we can’t let all that go to hell in a handbasket,” he said. “We need to stabilize. We need certainty.”He added, “If we can’t come together, can’t stabilize, or if it got worse, it wouldn’t be good for business.”The proclamations of chief executives might not normally matter much in political discourse, and there are some who are skeptical that their motives are anything beyond self-interest. But in a fractured moment, the unified voice of the mainstream business world carries a great deal of symbolic heft.A recent study by Edelman found that the public trusts business more than nonprofit organizations, the government or the media.“This thing was a little different. I mean, we had sedition and insurrection in D.C.,” said Jamie Dimon, the chief executive of JPMorgan Chase.Credit…Sarah Silbiger/The New York Times“They’re not just the money,” said Nancy Koehn, a historian at Harvard Business School. “They’re also this collective seal of approval. They carry an enormous amount of weight, regardless of your political loyalties.”For decades, the Republicans were seen as the party of big business. Their support for low taxes and light regulation was manna to executives eager to raise profits and avoid government entanglements, and chief executives and big companies were reliable funders of Republicans up and down the ballot.Mr. Trump has frayed those bonds. Four years ago, few major chief executives supported Mr. Trump during his first campaign. And throughout his time in the White House, executives from many of the company’s biggest brands publicly sparred with the president on everything from gun control to climate change to immigration.“I can’t remember a time when the business community has spoken out so strongly in opposition to an administration on so many important issues,” said Rich Lesser, chief executive of Boston Consulting Group.“It’s not just a break with Trump but potentially with the Republican Party,” said Richard Edelman, chief executive of the global corporate communications firm Edelman. “It’s not OK what’s going on in America, and businesspeople are going to hold you to account.”Even as they objected to some of Mr. Trump’s stances, however, business leaders continued to take seats at the table, working with the Trump administration on issues including taxes and trade policy.But last week seemed to be a breaking point. Big business could evidently tolerate working with Mr. Trump despite his chauvinism, his flirtations with white nationalism and his claims of impunity, but the president’s apparent willingness to undermine democracy itself appeared to be a step too far.“This thing was a little different. I mean, we had sedition and insurrection in D.C.,” said Jamie Dimon, the chief executive of JPMorgan Chase. “No C.E.O. I know condones that in any way, shape or form. We shouldn’t have someone, you know, gassing up a mob.”The fallout has been swift. After the president exhorted his supporters to march on the Capitol, chief executives used their strongest language to date to repudiate Mr. Trump, and some of his longtime allies have walked away. Ken Langone, the billionaire co-founder of Home Depot and an ardent supporter of the president, renounced Mr. Trump, telling CNBC, “I feel betrayed.”Twitter, Facebook and YouTube have banned or suspended Mr. Trump’s accounts. Amazon, Apple and Google have cut ties with Parler, a messaging app popular among his supporters.Charles Schwab, the brokerage firm founded by a Republican who supported Mr. Trump, said it would shut down its political action committee altogether. And many companies, along with the U.S. Chamber of Commerce, have sought to punish Mr. Trump’s supporters in Congress by depriving them of crucial funds.“For those members of Congress that were involved in helping to incite the riot, and support the riot, there’s going to be consequences, no question about it,” said Ed Bastian, chief executive of Delta Air Lines.Senator Ted Cruz fist bumped with a House member after a joint session of Congress to confirm the Electoral College presidential votes on Jan. 6.Credit…Erin Schaff/The New York TimesA total of 147 members, or more than half of Republicans in Congress, voted to overturn the election results, including Senators Ted Cruz and Josh Hawley, and the House minority leader, Kevin McCarthy.Corporate giving represents a small but important part of overall campaign contributions. Company PACs gave $91 million to members of the House of Representatives in the last election cycle, accounting for 8 percent of that chamber’s total funds raised, according to figures compiled by the Center for Responsive Politics. In the Senate, the figure was smaller, accounting for just 3 percent of donations..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-c7gg1r{font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:0.875rem;line-height:0.875rem;margin-bottom:15px;color:#121212 !important;}@media (min-width:740px){.css-c7gg1r{font-size:0.9375rem;line-height:0.9375rem;}}.css-rqynmc{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.9375rem;line-height:1.25rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-rqynmc{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-rqynmc strong{font-weight:600;}.css-rqynmc em{font-style:italic;}.css-yoay6m{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}@media (min-width:740px){.css-yoay6m{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;margin-bottom:15px;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cs27wo{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;}@media (min-width:740px){.css-1cs27wo{padding:20px;}}.css-1cs27wo:focus{outline:1px solid #e2e2e2;}.css-1cs27wo[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-1cs27wo[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-1cs27wo[data-truncated] .css-5gimkt:after{content:’See more’;}.css-1cs27wo[data-truncated] .css-6mllg9{opacity:1;}.css-k9atqk{margin:0 auto;overflow:hidden;}.css-k9atqk strong{font-weight:700;}.css-k9atqk em{font-style:italic;}.css-k9atqk a{color:#326891;-webkit-text-decoration:none;text-decoration:none;border-bottom:1px solid #ccd9e3;}.css-k9atqk a:visited{color:#333;-webkit-text-decoration:none;text-decoration:none;border-bottom:1px solid #ddd;}.css-k9atqk a:hover{border-bottom:none;}Capitol Riot FalloutFrom Riot to ImpeachmentThe riot inside the U.S. Capitol on Wednesday, Jan. 6, followed a rally at which President Trump made an inflammatory speech to his supporters, questioning the results of the election. Here’s a look at what happened and the ongoing fallout:As this video shows, poor planning and a restive crowd encouraged by President Trump set the stage for the riot.A two hour period was crucial to turning the rally into the riot.Several Trump administration officials, including cabinet members Betsy DeVos and Elaine Chao, announced that they were stepping down as a result of the riot.Federal prosecutors have charged more than 70 people, including some who appeared in viral photos and videos of the riot. Officials expect to eventually charge hundreds of others.The House voted to impeach the president on charges of “inciting an insurrection” that led to the rampage by his supporters.Some companies said they were only temporarily stopping their corporate giving, but executives were sending a clear message that they were fed up with Washington.“It’s just a sad time for our country,” said Chuck Robbins, the chief executive of Cisco, which is also halting donations to members who voted against certification. “At a time where we have so many challenges, the partisanship is astounding.”With political rancor worsening by the day and few politicians enjoying bipartisan support, business leaders have emerged as a uniquely potent force, the rare constituency whose pleas for stability and national unity are largely untainted by allegiance to one party or the other.“C.E.O.s have become the fourth branch of government,” said Jonathan Greenblatt, chief executive of the Anti-Defamation League, which has pressured big companies to take stands on social issues. “They’re trying to hold the country together.”Executives are confronting their newfound authority with a mix of swagger and reticence. “There’s no question that our voice is seen as more important than ever,” said Mr. Bastian of Delta, which said it was reviewing its political giving and has banned some pro-Trump protesters from its flights.But the impulse to speak out is tempered by a wariness about becoming too prescriptive. “Companies don’t want to take partisan points of view,” Mr. Dimon said. “I don’t want to tell my employees what to think.”At stake is much more than just the fortunes of Mr. Trump. With the democratic process itself appearing in jeopardy, executives are confronting broader concerns about what that might mean for the economy.“The erosion of norms and the destabilizing of democracy is bad for business,” Mr. Greenblatt said.Yet with many Republicans still aligned with Mr. Trump and more unrest on the horizon, companies may be forced to reckon with this version of the Republican Party for years to come.Cisco said it would no longer donate to members who opposed the election certification, for instance, but Mr. Robbins said that did not represent a wholesale split from Republicans. “There are plenty of members in the Republican Party who stood up and did the right thing last week that we’ll continue to support,” he said.But for those who interfered with the certification of the election, there are no signs that big business is prepared to forgive and forget. JPMorgan said it was pausing all political contributions for six months, and Mr. Dimon, who has flirted with a run for president in the past, was unsparing in his critique.“No one thought they were giving money to people who supported sedition,” he said.AdvertisementContinue reading the main story More