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What you need to know

  • Microsoft President Brad Smith discussed Microsoft's donations to politicians through its MSPAC.
  • Smith says "you have to write a check and then you're invited and participate" when speaking about political donations.
  • Microsoft recently paused donations through the MSPAC in response to criticism from its employees.

Updated Jan. 25, 7:00 a.m. ET: Microsoft released the transcript of President Brad Smith's comments and clarified that it will announce a decision regarding further donations on February 15, 2021.

Microsoft President Brad Smith defended Microsoft's donations to political campaigns through its Microsoft Political Action Committee (MSPAC) in a meeting with employees on Thursday, January 21, 2021. These statements come from a meeting that has been transcribed by Pinboard and reviewed by CNBC. Smith states that donating to politicians is "the way the political process works" and that working with politicians benefits Microsoft in several areas.

Microsoft employees can donate some of their income to the MSPAC, but don't directly influence where funds are donated. It came under fire from several Microsoft employees who criticized the company for donating to politicians that had gone against the certifying the Electoral College results of President Biden. Smith shared a tweet on January 4, 2021 about the importance of the peaceful transition of power, but people accused Microsoft of hypocrisy.

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Following criticism, Microsoft announced that it is pausing political donations through the MSPAC. Microsoft normally pauses donations during the first quarter of a new U.S. Congress, but in this case, Microsoft is also taking time to consult with employees and consider recent events.

In a meeting with Microsoft employees that has been transcribed and saved by Maciej Ceglowski on Pinboard, Smith discussed why Microsoft donates to politicians.

He said to employees at the meeting, "The questions that are being considered are exactly I think what you would expect. Should the PAC suspend donations to the members who voted against the Electoral College? If so, for how long?"

He also gave a long answer that bluntly explains how donating to politicians helps Microsoft:

I can tell you it plays an important role. Not because the checks are big, but because 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 participate. 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, and I can tell you as somebody who sometimes is picking up the phone, I'm sometimes calling members and asking for their help on green cards, or on visa issues, or help to get an employee or family member who is outside the United States during Covid back into the country because of an immigration restriction.

Or the issues around national security, or privacy, or procurement reform. Or the tax issues that our finance team manages. And I can tell you, there are times when I call people who I don't personally know, and somebody will say '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.'

Microsoft has not issued a statement or comment in response to Smith's statements at this time.

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