"As Microsoft executives have said internally to employees, this is not a normal year," Microsoft wrote in a blog post Saturday. "The company believes that opposition to the Electoral College undermined American democracy and should have consequences."
The decision to halt all political giving was first announced internally to employees on Jan. 8, following the Jan.6 riot at the Capitol by pro-Trump protesters that left five dead.
Microsoft was one of many giants in corporate America who publicly condemned the violence, and who previously told FOX Business that while it regularly pauses political giving in the first quarter of a new Congress, it would take "additional steps this year to consider these recent events and consult with employees” on PAC donations going forward.
During a meeting with employees on Thursday, Microsoft president Brad Smith explained how the PAC process works.
According to Smith, 91 percent of the Fortune 100 has a PAC and 75 percent of the Fortune 500 has a PAC. A political action committee can contribute up to $5,000 for a primary election and $5,000 for a general election which must be funded through donations by shareholders, employees and their family members.
"The decisions about who to donate to are made by a steering committee," Smith added. "And then there’s an employee advisory committee, and there’s a broad network because we want everybody who donates voluntarily to be a part of an ongoing conversation."
Smith noted that the four criteria Microsoft takes into account when making a political contribution to a candidate or lawmaker is whether they have a role that impacts the company's business, whether they represent a geography with a significant employee presence, whether they advance policy goals that align with Microsoft's business policy objectives and whether they share the company's values around diversity and inclusion.
In addition, Smith defended the political contributions made by Microsoft thus far, arguing that writing a check plays an important role, "not because the checks are big, but because of the way the political process works."
"Politicians in the United States have events, they have weekend retreats. You have to write a check, and then you’re invited, and you participate," Smith said. "So, if you work in the Government Affairs team in the United States, you spend your weekends going to these events. You spend your evenings going to these dinners, and the reason you go is because the PAC writes a check. But out of that ongoing effort, a relationship evolves and emerges and solidifies."
Smith noted that he has made phone calls to lawmakers that the company has contributed to asking for their help on "green cards, or on visa issues, or help to get an employee or family member who’s outside the United States, or on the issues around national security, or privacy or procurement reform, or the tax issues that our finance team manages."
"I can tell you there are times when I call people who I don’t personally know. And somebody will say, “Well, you know, your folks have always shown up for me at my events, and we have a good relationship, let me see what I can do to help you,”" Smith added.
While Smith believes its important for Microsoft to make political contributions, he acknowledged that its also important to "take stock of the recent events, get feedback, have a conversation, and make decisions that will continue to reflect where we stand, and the values that we believe are important."
"You’ll see all of that unfold with dialogue with employees," Smith concluded.
According to data from the nonpartisan Center for Responsive Politics, Microsoft's PAC donated a total of $820,500 in the 2019-2020 election cycle, with $355,500 going to Democrats and $465,000 going to Republicans.
The company donated to three Senators who voted to overturn the Electoral College certification: $3,500 to Wyoming Sen. Cynthia Lummis, R-Wyoming, $3,500 to Sen. Roger Marshall, R-Kansas, and $2,500 to Sen. Josh Hawley, R-MO.