Billionaire donors’ cash proves indispensable for White House hopefuls

Over the first weekend in August, the four top-funded GOP presidential candidates arrived at the St. Regis resort in Southern California to make the case for their White House bids. Amid the stump speeches and Q&As lay the event’s real attraction, the chance to meet privately with more than 400 of the country’s wealthiest conservative donors.

The invitation-only summit was hosted by Freedom Partners, an umbrella organization led by billionaire businessmen Charles and David Koch. The group, whose tax status as a nonprofit trade association doesn’t require it to disclose its funders, has committed to spending $889 million of its donors’ money during the 2016 election cycle. Much of that money is earmarked for conservative causes and issues rather than specific candidates, so this summer retreat was a golden opportunity for candidates like Jeb Bush, Scott Walker, Ted Cruz, Marco Rubio and long shot Carly Fiorina to press the flesh with attendees who can write seven-figure checks of their own.

Not so long ago, being summoned to a meet up with billionaire donors would have had little practical appeal for most candidates — especially those trying to woo middle-class voters — because federal campaign finance laws limit individual contributions to $2,700 in a primary race. But five years after the Supreme Court’s Citizens United decision and subsequent federal court rulings created a tidal wave of unlimited contributions to outside groups, the situation has changed dramatically.

According to FEC filings, super PACs for at least 11 of the 16 candidates have received individual contributions of $1 million dollars or more. Contributions of $3 million to $5 million are becoming commonplace. Cruz has been especially proficient at wooing multimillion-dollar donations, with one of his super PACs reporting an $11 million contribution from an ultra wealthy hedge fund magnate.

Super PACs are the technically independent outside groups that can accept unlimited contributions. By law they are barred from coordinating directly with the candidates they support. In practice, super PACs are now functioning as shadow campaigns, headed by longtime political advisers of the candidates and even taking on traditional campaign roles like voter outreach and national media strategy.

“The contrast between a campaign and a candidate’s super PAC is a distinction without a difference,” said Lauren George, the associate director of government watchdog nonprofit Common Cause New York. “They’re clearly just arms of the campaign.”

In the 2016 race, most Republican candidates have handed off the bulk of the fundraising duties to their super PACs, providing wealthy donors with a direct means to fund their White House bids. With this unprecedented reliance on super PACs, it’s estimated that as much as $10 billion will be raised in this presidential race.

Recent FEC filings confirm nine Republican candidates with super PACs that have outraised their own campaigns. A number of them have done this with just a handful of donors. One of Cruz’s four super PACs is funded by a single donor, Toby Neugebauer, head of a private equity firm, to the tune of $10 million. All told, $36 million of the $37.8 million Cruz has raised through his Super PACs has come from just six donors; Neugebauer, Long Island hedge fund titan Robert Mercer, Daniel and Farris Wilks, two billionaire Texas brothers who made their fortune in fracking, and their wives Jo Ann and Staci Wilks.

Bush has brought in a whopping $108 million through his super PACs, the majority of it raised before he even officially announced his candidacy. Among his record haul are 20 individual donations of at least $1 million, led by Miguel “Mike” Fernandez, a Miami billionaire health care investor who gave $3 million.

Half of the $16 million raised by Rubio’s super PAC comes from the billionaire Miami auto dealer Norman Braman and Oracle founder Larry Ellison, whose $50 billion net worth makes him Forbes’ fifth wealthiest person in the world.

While Democratic front-runner Hillary Clinton is, for now, raising the overwhelming majority of her money through her campaign, her super PAC counts million-dollar donations from billionaire hedge fund giant George Soros, former banker Herbert Sandler, newspaper owner Donald Sussman, entertainment moguls Steven Spielberg, Jeffrey Katzenberg and Haim Saban, along with his wife, Cheryl Saban.

Democratic rival Bernie Sanders has raised $15 million through his campaign and has promised not to use a super PAC, making him the only candidate other than the self-financed Donald Trump who doesn’t currently have one.

Super PACs have quickly become the preferred platform for the megarich donors who’ve now become an essential part of any successful run for national office. “[Candidates] are getting around all of the campaign contribution limits and prohibitions,” said Larry Noble, senior counsel for the Campaign Legal Center, a nonprofit which has asked the U.S. Department of Justice to investigate Bush’s super PAC fundraising. “They’re an avenue for wealthy donors to give money ‘indirectly’ to the campaign and the candidate.”

As a result, critics argue, candidates are catering to just a handful of ideologically driven multimillionaires and billionaires who have a greater say than ever before over how their contribution dollars are spent. 

Casino magnate Sheldon Adelson, with a net worth of more than $30 billion, hosts an annual spring conference in Las Vegas that pundits have dubbed the Adelson primary because of the number of Republican White House contenders who attend vying for the chance to impress the country’s single largest political donor and ultimately secure some of the millions he plans to spend in the 2016 race.

They no doubt recall how, in the 2012 Republican primary, Adelson’s last-minute $5 million donation to Newt Gingrich’s super PAC singlehandedly kept the former House speaker in the race when his campaign would otherwise have died a natural death after Gingrich was rejected in January by Iowa and New Hampshire primary voters. With subsequent Adelson donations, Gingrich remained in the race until May, winning primaries in South Carolina and Georgia along the way.

Anyone who doubts the degree of policy allegiance that Adelson, a hard-line supporter of Israel, expects from his suitors need only look back to Adelson’s 2014 get-together, when Chris Christie was forced to personally apologize to Adelson for using the term “occupied territories” while referring to the West Bank. In the last two years Adelson’s conference has brought Bush, Cruz, Walker, Christie, Rick Perry, John Kasich and Lindsey Graham to audition for Adelson’s support, though insiders believe the casino owner is more inclined to ultimately throw his millions behind Rubio.

The political leanings of these megadonors is less troubling to campaign finance reform advocates than the amount of influence they so openly wield and its ability to drown out the voices of ordinary citizens. “Who’s phone call are you going to answer when you’re in office?” asked Noble. “The one who gave you $500 or the one who gave you $1 million?” Others note that such a prominent donor class only deepens public cynicism. “How do you convince somebody there’s a $2,700 limit on donating to a presidential candidate, when you read about someone writing a hundred million dollar check?” said Kenneth Gross, an election lawyer and former FEC counsel.

A recent New York Times poll showed 84 percent of Americans across the political spectrum believe money has too much influence in elections, with 46 percent agreeing that the way we currently fund campaigns is so flawed it should be completely rebuilt.

“We need to change the way we pay for our elections,” said Lauren George of Common Cause, who favors a national system of publicly financed matching funds. “Public financing would encourage candidates to talk to actual constituents to raise money. It would change the priorities of what gets discussed in Washington back to the interests of everyday Americans rather than just the donor class.”

For now though, candidates see only upside in wooing large donations. At the Freedom Partners summit, Bush, when asked about the propriety of raising so much money through a super PAC, was unapologetic. “Money helps,” he said. “I’m playing by the rules of the game, the way it’s laid out. And if people don’t like it, that’s just tough luck.”