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Analysis: U.S. businesses back Tea Party Republicans after shutdown

Tea party buttons are displayed before a campaign stop for republican presidential candidate and former Pennsylvania Senator Rick Santorum a
Tea party buttons are displayed before a campaign stop for republican presidential candidate and former Pennsylvania Senator Rick Santorum a

By Andy Sullivan

WASHINGTON (Reuters) - Business groups waged a fierce lobbying campaign last month to convince Republicans to re-open the government and raise the debt ceiling, but many of the most influential U.S. corporations have not cut off support to lawmakers who did not heed their appeal.

Eight of the most active business PACs wrote checks totaling $84,750 to 56 Republicans in the Senate and the House of Representatives after they voted against an October 16 deal to re-open the government that had been shut down since October 1 and avert an imminent debt default, according to a Reuters analysis.

They also gave $246,190 to Democrats and Republicans who voted for the deal.

Political action committees of companies like Honeywell Inc and Northrop Grumman contributed to Republican lawmakers who defied the wishes of the business community during last month's government shutdown, according to disclosure documents filed with the Federal Election Commission.

Along with Honeywell Inc and Northrop Grumman, Reuters analyzed PACs at AT&T, General Electric, Deloitte & Touche LLP, New York Life Insurance Co, United Parcel Service Inc and the American Bankers Association.

Corporations are forbidden from contributing directly to federal candidates under U.S. law, but they can set up political action committees, so-called "PACs," to direct contributions from employees and other individual donors to candidates supportive of the company's interests as determined by a board that oversees the giving. Such boards typically are composed of company executives and government-relations staff. PACs can donate up to $5,000 per election to any candidate.

Last month's fight widened a split between Republican lawmakers associated with the grassroots Tea Party movement and the party's more pragmatic business allies.

Some business groups are now mulling an effort to push the most uncompromising Tea Partiers out of office in next year's congressional elections.

But many of the PACs of the biggest corporate players appear reluctant to punish lawmakers who, if they had prevailed in the October 16 vote, could have pushed the United States into default. Many of those lawmakers are in a position to push regulations or new laws that could affect their operations.

"What you're seeing is the natural tension between the interests of a publicly held company to its shareholders ... and the desire of the people that may be running that company to want some kind of fundamental change in the way we do politics," said Steve Bell, a former Republican staffer now with the Bipartisan Policy Center.

GOVERNANCE VS. CORPORATE GOVERNANCE

Last month's confrontation pushed those tensions to the fore.

As Republicans said they would not raise the debt ceiling and keep the government open without concessions from the Obama administration, business leaders like Honeywell CEO David Cote urged them to step away from the fight.

"Don't throw away a credit history that's been built up since George Washington," Cote said at a news conference at the end of September, three days before the shutdown took effect.

But Cote's company, a sprawling conglomerate that makes everything from helicopter electronics to thermostats, has more practical concerns as well.

The company earned $2.4 billion from federal contracts in the 2012 fiscal year. It has spent $4.11 million on lobbying this year - not an unusual amount for a large company - on subjects as varied as nuclear power, corporate tax reform, and financial regulations.

Honeywell also runs the biggest PAC in the United States, contributing $1.17 million to federal candidates through the end of September, according to the Center for Responsive Politics. Republicans have collected 58 percent of that money.

Those contributions at times undercut the message from Cote, who is a member of a group of business leaders and politicians called Fix the Debt that has campaigned in Washington for a long-term, bipartisan solution to the country's debt.

Three days after he urged lawmakers to find common ground, Honeywell donated $2,500 to Georgia Representative Tom Graves, who had led a successful effort by rank-and-file Republicans to reject a compromise supported by party leaders.

Honeywell did not urge Graves to change his stance, a spokesman for the congressman said.

Honeywell did not significantly change its giving patterns after the crisis was resolved. At the end of October, the company contributed $43,000 to Democrats and Republicans who voted to end the shutdown, and $8,000 to Republicans who voted against the deal.

"Our political action committee supports those who support the policies that are most important to our business and that are good for the economic growth of the country," the company said in a prepared statement.

The second-largest corporate PAC, operated by defense contractor Northrop Grumman, contributed $14,500 to Republicans who voted against the October 16 deal. Northrop spokesman Randy Beloite said it supports lawmakers who oversee national security and represent areas where the company operates or has a large number of employees. Political affiliation is not a factor, he said.

Lockheed Martin, another large defense contractor, donated $914,000 to federal candidates through September of this year but made no contributions in October. The company declined to comment.

UPS, which contributed $5,750 to lawmakers who opposed the deal and $20,690 to those who supported it, said the October 16 vote was not a factor.

The American Bankers Association gave $9,000 to those who opposed the deal and $17,000 to those who backed it. "When it comes time to determine whether to continue contributions to any incumbent, we'll do so in a thoughtful and deliberative manner," spokesman Jeff Sigmund said.

Of the other PACs analyzed:

- AT&T contributed $13,000 to lawmakers who voted against the deal, and $47,000 to those who backed it;

- Deloitte gave $23,000 to opponents and $30,500 to supporters;

- New York Life gave $2,000 to opponents and $16,000 to supporters;

- General Electric gave $9,500 to opponents and $23,500 to supporters.

None of those companies responded to a request for comment.

(Additional reporting by Fred Barbash and John Whitesides; Editing by Vicki Allen)

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