In the money race between America’s billionaires and small donors, the emerging political oligarchy is showing staying power. Both parties have megadonors, but Republicans have far more.
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Samuel Bankman-Fried is the Democrat who made arguably the biggest splash for his party. His $37 million in giving helped fund the Democrats’ two main super PACs.
Fueled by an expanding class of billionaires, political spending on the 2022 midterm elections will shatter records at the state and federal levels, with much of it from largely unregulated super PACs financed with enormous checks written mainly by Republican megadonors.
“We’ve broken records with our broken records,” said Sheila Krumholz, executive director of the nonpartisan Open Secrets, which estimated on Thursday that total spending in 2021 and 2022 would reach $16.7 billion when tallied after Election Day, easily surpassing the previous midterm record of $14 billion set in 2018.
The total spent on federal races, currently $7.5 billion, has already passed the inflation-adjusted record of $7.1 billion in 2018 and is expected to reach $8.9 billion when all is tallied. Of that, 15.4 percent has come from billionaires, up from 11.9 percent in 2020 and 15.3 percent in 2018. Beyond billionaires, the top 1 percent of donors, measured by income, has given 38 percent of the total.
The American campaign finance system increasingly mirrors American society, with hundreds of thousands of small donors trying to keep pace with a billionaire class whose spending appears nimble and bottomless. Democrats have largely kept up on the airwaves by constantly hectoring rank-and-file supporters to pitch in.
But billionaires from high finance, Silicon Valley, media and old-line manufacturing have given party-aligned ideological groups — mainly conservative ones — an easy way to surge forward. And as inflation pinches small donors, megadonors are becoming all the more important.
“This is a crucial sector of the contribution base because they are able to nimbly put in whatever amounts are needed at any moment,” Ms. Krumholz said Thursday. “It’s a highly volatile source, and it could change rapidly, even in the next few days.”
While both parties have their billionaires, Republicans have many more. Of the 25 top donors this cycle, 18 are Republican, according to Open Secrets, and they have outspent Democrats by $200 million. Billionaires make up 20 percent of total Republican donations compared with 14.5 percent of Democratic donations.
Even that may understate the disparity.
The largest donor of 2022, by far, was a Democrat, George Soros, whose contributions of at least $126 million were nearly double the roughly $67 million that the next two largest donors, the Republicans Richard Uihlein and Kenneth C. Griffin, ponied up each.
But the Soros total is deceptive. Virtually all of Mr. Soros’s contributions, $125 million, went to his political action committee, Democracy PAC, which in turn disbursed only a small fraction of it, about $15 million.
In contrast, the $135 million from Mr. Uihlein, head of the Uline packaging giant, and Mr. Griffin, founder of Citadel, one of the largest hedge funds in the world, has flooded the Republican ecosystem with political advertising that may soon help secure Republican control of Congress.
The State of the 2022 Midterm Elections
Election Day is Tuesday, Nov. 8.
- Biden’s Speech: In a prime-time address, President Biden denounced Republicans who deny the legitimacy of elections, warning that the country’s democratic traditions are on the line.
- State Supreme Court Races: The traditionally overlooked contests have emerged this year as crucial battlefields in the struggle over the course of American democracy.
- Democrats’ Mounting Anxiety: Top Democratic officials are openly second-guessing their party’s pitch and tactics, saying Democrats have failed to unite around one central message.
- Social Security and Medicare: Republicans, eyeing a midterms victory, are floating changes to the safety net programs. Democrats have seized on the proposals to galvanize voters.
Mr. Griffin made his hopes clear in a statement Thursday. “Tragically, we have all seen majestic cities such as Chicago and San Francisco devastated by progressive leftist policies,” he said, citing more than a dozen deaths on Halloween in the city he recently abandoned, Chicago. “In a few days, I believe American voters will say we’ve suffered enough from these misguided policies.”
ImageKenneth C. Griffin, founder of Citadel, one of the largest hedge funds in the world, has given $67 million to the Republican ecosystem.Credit…Cnbc/NBCUniversal, via Nbcu Photo Bank Via Getty Images
Beyond such well-known megadonors are billionaire contributors of far less renown. Jeff Yass, a Philadelphia-based trader who founded the Susquehanna International Group hedge fund, is hardly a household name, but his contributions of nearly $50 million made him the fourth-largest donor of the cycle.
Timothy Mellon, the quiet heir of the Mellon banking fortune, ranked fifth after writing checks worth $15 million to the Congressional Leadership Fund; a $5 million check on Sept. 15 to the Wisconsin Truth PAC, which is blistering Democrats in the state; checks totaling $6 million this fall to the Sentinel Action Fund, a new super PAC run by the Heritage Foundation’s political arm; and a $4 million check in September to the opaque American Policy Fund, which has spent more than $5 million attacking Senator Michael Bennet of Colorado.
“Is this consistent with democratic — ‘little d’ — principles when you have billionaires dropping millions of dollars and they are having such an effect?” asked Kenneth R. Mayer, a campaign finance expert and political scientist at the University of Wisconsin. “We’re breaking records every cycle.”
The sixth-largest donor is a Democrat who made arguably the biggest splash for his party this cycle, Samuel Bankman-Fried, a 30-year-old cryptocurrency billionaire. His $37 million in giving helped fund the Democrats’ two main super PACs, the Senate Majority Fund and the House Majority Fund, as well as the party’s official House and Senate campaign arms.
But Mr. Bankman-Fried’s biggest giving, at least $27 million, went to Protect Our Future PAC, ostensibly devoted to backing candidates who would champion pandemic protection. It in turn sank more than $11 million on a failed Democratic primary candidate in Oregon, Carrick Flynn, as well as other primary efforts in solid Democratic districts.
Unlike Republican megadonors, Mr. Bankman-Fried is also trying to maintain relations in both parties, giving at least $45,000 to the National Republican Congressional Committee and thousands more to Republican senators like Bill Cassidy of Louisiana, John Boozman of Arkansas, Susan Collins of Maine and John Hoeven of North Dakota.
Rounding out the top 10 donors of the 2022 midterms are Stephen A. Schwarzman of the Blackstone Group, a giant investment firm; Peter Thiel, the technology investor who personally bankrolled the Senate campaigns of two protégés, J.D. Vance in Ohio and Blake Masters in Arizona; Fred Eychaner, a media executive and major Democratic donor; and Larry Ellison, the billionaire founder of the software giant Oracle, who channeled millions of dollars into Republican campaigns through the super PAC Opportunity Matters.
Only Mr. Griffin returned requests for comment among the top 10 donors.
Campaign finance numbers are notoriously difficult to track precisely. An adviser to former Mayor Michael R. Bloomberg of New York said his total giving for Democrats for the 2022 cycle was around $70 million, which would put him near the top of the list. But because Mr. Bloomberg saw threats to democracy concentrated at the state level, his donations have focused on races for governor and secretary of state in battlegrounds like Pennsylvania, Michigan, Wisconsin and Nevada. Those contributions do not appear in the federal campaign database.
Indeed, none of the figures tabulated by The New York Times or Open Secrets can be considered complete; all of them are likely to underestimate total contributions. That is because a complicated shell game — giving to political organizations that in turn give to other political organizations — masks exactly who is giving how much to whom.
Since some of those organizations are considered tax-exempt “social welfare” organizations — groups organized under Section 501(c)(4) of the tax code — they may never disclose their donors. And because much of the spending is on highly targeted online advertising that is far less regulated than television ads, total spending may be impossible to determine, Ms. Krumholz said.
For a state like Wisconsin, where two megadonors, Mr. Uihlein and Diane Hendricks of Hendricks Holding Company, are spending heavily to re-elect Senator Ron Johnson, a Republican, and oust Gov. Tony Evers, a Democrat, voters may feel besieged by impenetrable political forces, said Eleanor Neff Powell, a political scientist at the University of Wisconsin.
“To be honest, I don’t think the vast majority of folks in Wisconsin are aware at all of what’s going on,” she said. “The system so opaque, it’s hard for the average voter to put all these pieces together.”
Out of Mr. Uihlein’s nearly $70 million in spending, at least $26.4 million went to the conservative Club for Growth, which has pummeled Democrats with negative advertising. Another $13 million went to the Illinois-based Restoration PAC, which has spent against Mr. Evers and Mr. Johnson’s Democratic challenger, Lt. Gov. Mandela Barnes, as well as against Senator Raphael Warnock, Democrat of Georgia.
ImageThe largest donor of 2022 was a Democrat, George Soros, but virtually all of his contributions, $125 million, went to his political action committee, which in turn disbursed only a small fraction of it.Credit…Fabrice Coffrini/Agence France-Presse — Getty Images
But Restoration PAC also funneled $15 million to yet another organization, Americas PAC, which then went after Mr. Barnes, Mr. Warnock and the Democratic senators Maggie Hassan in New Hampshire and Catherine Cortez Masto in Nevada, as well as Lt. Gov. John Fetterman, the Democratic Senate candidate in Pennsylvania.
The multitude of money flows makes following dollars difficult. Mr. Yass appears intent on keeping it that way. More than $6 million of his money went to Club for Growth, in keeping with his past giving, but he also gave $15 million to something called the School Freedom Fund, virtually its lone source of money.
The School Freedom Fund then spent more than $1.5 million of Mr. Yass’s money to sink the Senate primary run of former Gov. Pat McCrory of North Carolina; $654,000 in a failed bid to secure the Republican Senate nomination for Representative Mo Brooks in Alabama; and nearly $2 million to win a House nomination in a deep-red Oklahoma district for the newcomer Josh Brecheen.
Mr. Yass also wrote a single $5 million check to the Kentucky Freedom PAC in March 2021, which then transferred that amount to another of Mr. Yass’s favorite recipients, the Protect Freedom PAC, to which he had already given $4.5 million. Much of the latter group’s money went to failed far-right candidates, but it also spent generously to defeat Representative Liz Cheney of Wyoming in the Republican primary in the summer.
By shuffling money from one group to another until one of them finally spends it, candidates and donors alike have deniability for how it is used.
“Everybody can wash their hands of the nastiness,” Professor Powell said.
Some of the most incendiary ads of the campaign have cropped up in the last few days, from new groups with titles like Citizens for Sanity, a nonprofit that does not have to disclose its donors, and America First Legal, a group started by Stephen Miller, a former adviser to Donald J. Trump, that has yet to disclose any donors.
Problematic for Democrats was who ended up below the top 10. Mr. Bloomberg was the 11th-largest federal spender, with more than $27 million in contributions, including $11 million to the Democrats’ House Majority PAC. But his other big checks went to more narrowly focused groups like the League of Conservation Voters and his own Independence USA PAC, which focuses on gun laws, the environment and education. Its only expenditures this cycle appeared to be aiding Representative Lucy McBath, a longtime ally on gun control, in a Georgia primary against a fellow Democrat.
More noticeable was the absence of S. Donald Sussman of the hedge fund Paloma Partners, who went from one of the biggest political givers in the Democratic Party and the nation to a no-show in the top 50, after he told party officials he would pause his giving until Congress advanced voting rights legislation.
Shane Goldmacher contributed reporting.
Source: nytimes.com
