Super-wealthy individuals receive outsize attention in presidential politics. And virtually every prospective candidate wants the support of a well-funded super PAC and the vocal backing of the mega rich. The defection of a disenchanted billionaire is treated as bad news for any candidate. But what difference does all this make?
Just last week, Americans for Prosperity, part of the political network of billionaire industrialist Charles Koch, endorsed Nikki Haley in her bid to become the Republican nominee. The endorsement was heralded as a major coup for the former United Nations ambassador and South Carolina governor, who has been gaining in the polls.
It is also considered news that billionaire Jamie Dimon, the chairman of JPMorgan Chase, spoke with her on the phone, and that Larry Fink, the chairman of BlackRock, attended a small gathering for her. When hedge fund billionaire Ken Griffin said he would back Florida Gov. Ron DeSantis (R), it garnered headlines, and again when he stopped short of doing so and declared himself “still on the sidelines.”
DeSantis has enjoyed the support of a sizable super PAC called Never Back Down. Now he has another newly formed super PAC that was established amid infighting among the leaders of Never Back Down. His campaign so far has failed to meet the expectations of his donors and break away from the pack to become the principal challenger to former president Donald Trump that many at the start of the year thought he would be.
The goal of these rich Republicans is to find a credible candidate and consolidate behind that person to avoid a repeat of the 2016 primaries, when Trump was able to win against a divided field. That may be commendable but so far they have been no more successful in slowing Trump than the Republican establishment was in 2016. Billionaires influence Democratic presidential politics as well. Candidates have courted them assiduously as they competed for their party nominations in recent campaigns. But this dynamic on the left is not as pronounced as it has become in the Republican Party.
What all this says about the nature of politics today is far more concerning. Citizens — voters — do have a larger voice in the selection of presidential nominees than they did many decades ago, but billionaires get special treatment. The richest among us can influence who runs and who does not, who has the money to stay in the race and who does not. No one planned this. The system today is an accident of several seemingly unrelated changes.
The influence of the old bosses, including powerful governors, mayors and other party leaders, began to wane over half a century ago when, after the tumultuous 1968 Chicago convention, the Democratic Party revamped rules to give more power over the selection of national convention delegates, and therefore the eventual nominee, to voters.
Congress, too, had a hand in the changes. After the Watergate scandal, Congress enacted new campaign finance laws designed to limit both individual contributions and overall spending by candidates. A system of federal-matching funds provided candidates with money from a voluntary taxpayer-funded pool to match smaller contributions. It was built on a bargain: In return for getting those federal funds, candidates agreed to abide by spending limits.
That system began to erode about two decades ago as candidates with the capacity to raise money far beyond the spending limits opted out of the system. That allowed them to spend freely in the nomination contest. Over time, the whole system collapsed, putting candidates who could not raise huge amounts of money through individual contributions at a disadvantage.
In 2012, the Supreme Court issued its decision in Citizens United v. Federal Election Commission, which along with related court rulings that followed, once again changed the structure of campaign financing. One result was a new breed of entities called super PACs, typically backed by billionaires and multimillionaires, including “dark money” groups which do not report the names of their contributors. Some of these committees operated independently. Others were designed to supplement the work of national party committees or individual presidential candidates, though coordination was to be limited. Today, the super PACs supporting a candidate coordinate more closely than ever.
Why are super PACs funded by the super-wealthy so attractive to candidates? Federal rules limit contributions from individuals to candidates for federal office, including the presidency, to $3,300 per election. So an individual can give a candidate $3,300 for the primary election and $3,300 for the general election. If candidates seek out people who can give the maximum, that means every $1 million raised requires finding roughly 300 individuals to donate.
Candidates like Barack Obama and Bernie Sanders were able to use the rules to produce a gusher of grass-roots money. They showed that by generating passion and enthusiasm among the masses, the money would follow, $15 or $25 or $50 at a time. Some small donors even reached the maximum legal limit. For most candidates, however, raising individual contributions under the federal rules is laborious and sometimes produces minimal revenue.
The system also leads to distortions. The Republican National Committee has set terms to qualify for the presidential debates this year with a combination of strength in public polls and numbers of individual donors. Those who do not reach the threshold cannot participate in the debates, and the threshold rises with each debate.
This fall, North Dakota Gov. Doug Burgum (R) was struggling to qualify for one of the debates. He has plenty of personal money to fund his campaign. What he lacked was individual donors, so his campaign offered $20 gasoline cards to new donors who gave $1. Burgum made it to the first two debates but failed to make it to the third one last month in Miami.
Few viable candidates run for president without a flush super PAC backing them up, which enhances the power of the mega-rich donors. They are courted by candidates, their family members and their top strategists, and sought out by political reporters as sources of inside information. Their opinions should carry no more weight about the strengths and weaknesses of a candidate than those of voters in Iowa or Michigan or Arizona. But their voices are amplified because they speak with dollar signs.
This fall, Thomas Peterffy was looking to entice Virginia Gov. Glenn Youngkin (R) to make a late entry into the party nomination battle. At the time, he told Robert Costa of CBS News that, if Youngkin were to declare his candidacy, “the money would be there.” He meant that a super PAC would be assembled quickly to provide support.
The story in The Washington Post carried the headline, “Alarmed Republicans are preparing to draft Glenn Youngkin.” But there was no evident groundswell of voters trying to draft the governor and former private equity executive. It was some nervous billionaires conspiring to flex their muscles. And all that talk faded after Republicans suffered setbacks in the Virginia legislative elections last month.
Would those major donors have made a difference had Youngkin decided to run? The evidence is mixed. Jeb Bush, the former Florida governor, learned the limits of this new system when he ran for president in 2016. He had a super PAC funded for the long haul. The voters had other ideas. All that money failed to produce the support of voters, and Bush ended his campaign in defeat after the South Carolina primary.
Candidates still must do the work of campaigning, of knowing why they are running, honing their message and making a persuasive case to voters. Money alone does not do that. Those with the biggest bank accounts had the best seats at the table of democracy in this year. But voters will begin to make their voices heard next month when the primary and caucus season begins.
