Chief executives no longer want to appear in photo-ops with President Donald Trump following his race comments about Charlottesville, but that doesn’t mean they’re giving up on trying to shape his agenda.
There’s simply too much money at stake with tax reform, infrastructure, and health care in play — billions of dollars in a tax overhaul alone — for corporations to disengage entirely with the White House or official Washington.
So while companies will rely less on direct access to Trump through advisory councils and meetings at the White House, their advisers and lobbyists still plan to engage with top White House aides such as Vice President Mike Pence or National Economic Council Director Gary Cohn, political appointees at agencies, and Congress to make their case for rolling back regulations, keeping specific tax breaks, or cutting the corporate tax rate.
This will, in effect, push corporations’ lobby efforts more underground than a public listening session at the White House, covered with fanfare by photographers and reporters. That’s an ironic twist, eight months into the administration, for a president who promised to “drain the swamp” during his campaign.
For now, the only part of the White House that is toxic to business leaders and companies is the businessman-turned-president himself.
“Businesses will continue to engage on the issues important to the American economy, just through different venues,” said Michael Steel, managing director at Hamilton Place Strategies, a public affairs firm that represents a number of financial services clients. “Many people in the business community are frustrated by the president’s words and tweets on Charlottesville, but that does not change the importance of policies that make life better for the economy and the American people.”
And one Republican lobbyist said he isn’t confident that legislative successes would quickly turn around many CEOs’ skittishness about being captured on film shaking Trump’s hand. “Imagine if we start passing legislation,” the lobbyist said. “In a few months, let’s say we pass a tax bill. Normally, we’d have a big rah-rah at the White House, but would CEOs even show up for a victorious event? Maybe not.”
A White House official downplayed the significance of the disbanding of the two business councils earlier this week, saying that the formal meetings in recent months had become less valuable.
In the months ahead, the administration plans to do calls and outreach to CEOs or companies on specific issues, the official added, similar to recent private calls it did this spring on STEM education, or modernizing government information technology.
The White House scrapped two of its business advisory groups, filled with CEOs, manufacturers, and trade association and labor union leaders, after several members dropped out or threatened to leave following Trump’s comments on Tuesday in which he blamed the Charlottesville violence on “both sides” and said that not all white supremacists were bad people.
On Thursday, the White House also said that its advisory council on infrastructure would not move forward.
For the president, the loss of public support from the business community knocks off another chunk of his base at a time when his approval ratings in the polls are dropping.
“The president needs friends, and one of his friends has dropped out of the room. In terms of political legitimacy, this has been a bad week for the White House,” said Michael Useem, director of the Center for Leadership and Change Management at the Wharton School.
And by distancing themselves from the president over his failure to fully condemn hate groups, CEOs miss the chance to visit the Roosevelt Room to make subtle or nuanced suggestions on their pet issues, be it tax reform or health care or regulations.
“Historically, those sorts of visits and a spot on a presidential business council was considered coveted and a big deal,” Useem added. “Now, companies will not want to be seen with him.”
There’s no doubt that companies will continue to keep a firm toehold in Washington’s policy machinations, especially with tax reform on the horizon, a long-held Republican dream.
Groups like the Business Roundtable, which has pledged to spend millions of dollars in 2017 to push for a tax overhaul, are keeping their advocacy plans in place. “It is a priority of Business Roundtable to get tax reform done this year, and we remain committed,” said Jessica Boulanger, senior vice president at BRT.
This week, the level of angst among CEOs spiked after Trump called out the CEO of Merck on Twitter for dropping out of one of his business councils following the president’s handling of Charlottesville. Jeffrey Sonnenfeld, a professor of management at the Yale School of Management, said he’d spoken to 26 chief executives over the last three days, and they largely expressed the feeling that “they had a moral compulsion to act,” he said.
The business leaders’ decision to distance themselves from the president was made much easier by the fact that so few knew him personally, Sonnenfeld said. Nor did they consider him a peer, despite his boasts of his wealth and success in building his family real estate business.
“He was not a Fortune 500 CEO. The truth is: They don’t know him. He is not in their social circles,” Sonnenfeld added.
One lobbyist said the biggest loser is clearly Trump, given that CEOs and companies were the one constituency well-positioned to execute for him and help his agenda. Now, they too are off-limits. That is a hard truth for a president who has centered much of his campaign promises on increasing wages, growing the economy, and bringing jobs back to the U.S. – all the while going to war with major U.S. employers like Intel, 3M, and GM.
For many of the blue-chip corporations caught up in the maelstrom this week, they’re simply catching up to the Silicon Valley tech companies that struck up a complicated relationship with the president and administration almost immediately, dating back to the January roll-out of the immigration and travel ban that infuriated these companies that employ many workers on special visas.
Moving ahead, CEOs’ major worry is not wanting to get called out by the president in a tweet, or publicly criticized at a press conference. One D.C.-based crisis communications expert said that companies have had contingency plans in place since the election for that exact scenario.
In the meantime, the only thing that really changes between CEOs and Trump is that they’re no longer willing to “be the potted plant in the White House’s public relations campaigns,” Sonnenfeld said.