Simone Lawson
Political campaigns are expensive affairs, and they are funded by a variety of sources. In the US, taxpayers can opt to contribute $3 of their taxes to the Presidential Election Campaign Fund, which provides public funding for presidential primary and general-election campaigns, as well as national party conventions. However, the percentage of taxpayers choosing to contribute has been declining over the years. Candidates also receive funding from individual contributors, corporations, trade associations, labor unions, and other advocacy groups. These contributions can be in the form of donations to the candidate's campaign committee or to outside groups such as super PACs, which can spend unlimited sums on election ads. The largest individual contributors are often wealthy individuals, including billionaire financiers and entrepreneurs, who may contribute to both Democratic and Republican causes.
| Characteristics | Values |
|---|---|
| Year | 2022 |
| Total amount spent by 10 wealthy individuals | $540 million |
| Percentage of donations that went to Republicans | 62% |
| Largest individual donor | George Soros |
| Soros' total donation amount | $128.5 million |
| Soros' profession | Hedge fund manager |
| Soros' donation recipient | His own outside group, Democracy PAC |
| Amount Eychaner donated to House Majority PAC | $9 million |
| Amount Eychaner donated to Senate Majority PAC | $8 million |
| Schwarzman's profession | Runs Blackstone Group, one of the world's largest private equity firms |
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What You'll Learn
Individual donors
These mega-donors often channel their money through outside groups, such as super PACs, which can raise and spend unlimited funds on election advertising. This allows them to exert considerable influence on the political process. In the same 2022 midterm elections, about 62% of their donations went to supporting Republicans, marking a shift from previous elections where Democrats were more favored by big-money donors.
One notable example of an individual donor is George Soros, a Hungarian-born Holocaust survivor who made his fortune as a hedge fund manager. Soros donated a substantial sum of $128.5 million to his own outside group, Democracy PAC, which then distributed millions of dollars to various super PACs backing Democratic candidates. This showcases how individual donors can shape the political landscape by strategically directing their financial contributions.
Another prominent individual donor is Fred Eychaner, a longtime Democratic mega-donor and supporter of LGBT causes. Eychaner owns the Newsweb Corporation, which operates several radio stations and newspapers in the Chicago area. He consistently donates the maximum allowed amount to the Democratic National Committee and other Democratic campaign committees. In one instance, he gave $9 million to the House Majority PAC and an additional $8 million to the Senate Majority PAC, showcasing his significant financial support for Democratic causes.
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Billionaire entrepreneurs
In the 2024 election cycle, just 100 extremely wealthy families invested $2.6 billion, more than double what billionaire donors contributed in the previous cycle. This surge in spending can be attributed to the creation of Super PACs, which can accept unlimited sums from individuals. The steep upward trend highlights the growing political power of the affluent.
Elon Musk, the CEO of Tesla, set new standards of financial influence by bankrolling candidates and causes. His Super PAC spent approximately $200 million to secure Trump's second term. Musk was joined by several Silicon Valley executives, including Linda McMahon, who collectively added over $194 million to campaign coffers.
Other notable billionaire entrepreneurs who have made significant contributions to political campaigns include George Soros, a liberal billionaire and philanthropist who has funded PACs supporting liberal causes, and Marc Andreesen and Ben Horowitz, co-founders of a venture capital firm who have predominantly funded pro-crypto Super PACs.
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Political action committees (PACs)
There are two main types of PACs: connected and non-connected. Connected PACs, also known as corporate PACs, are established by businesses, non-profits, labour unions, trade groups, or health organisations. They receive and raise money from a restricted class, typically consisting of managers and shareholders in corporations or members of non-profit organisations. Non-connected PACs, on the other hand, are formed by groups with ideological missions, single-issue groups, and members of Congress or other political leaders. These committees are not connected to any specific entity and can solicit contributions from the general public.
Additionally, there are Super PACs, which are independent expenditure-only political committees. Super PACs can raise unlimited amounts of money from individuals, corporations, unions, and other groups. However, they are not allowed to coordinate with or directly contribute to candidate campaigns or political parties. Hybrid PACs, also known as Carey Committees, are a variation of Super PACs, as they can make unlimited independent expenditures while also contributing limited amounts of money directly to campaigns.
PACs have been a part of the political landscape since 1944, when the Congress of Industrial Organizations (CIO) formed the first PAC to support the re-election of President Franklin D. Roosevelt. Over the years, the influence of PACs has grown significantly, with campaign donations from PACs increasing from $333 million in 1990 to $482 million in 2022.
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Super PACs
Political action committees (PACs) are tax-exempt 527 organizations that pool campaign contributions from members and donate those funds to campaigns for or against candidates, ballot initiatives, or legislation. PACs have become increasingly prominent over the past 30 years, with donations growing from $333 million in 1990 to $482 million in 2022.
The influence of Super PACs has been a subject of debate, with some arguing that they provide a way for special interests to exert disproportionate influence on elections and policy-making. At the same time, others argue that they enhance political participation and free speech. The debate around Super PACs highlights the complex nature of campaign finance reform and the challenges of balancing various interests in a democratic system.
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Dark money groups
"Dark money" refers to funds used to influence political outcomes and elections without disclosing the source of the money. In the United States, some types of nonprofit organizations, such as 501(c)(4) social welfare organizations, can spend money on political campaigns without revealing their donors. This lack of transparency makes it challenging for voters to make informed decisions, as they are unaware of who is trying to influence them.
The term "dark money" entered the political landscape following the 2010 Citizens United v. FEC case, which marked a surge in dark money contributions. Since then, powerful groups have poured over $1 billion into federal elections, focusing on competitive races. Dark money has infiltrated executive, legislative, and even judicial elections, posing a threat to the impartiality of state supreme courts.
One notable example of a dark money group is the Kentucky Opportunity Coalition, which played a significant role in the 2014 Kentucky Senate election. The group raised over $21 million and was described as a "poster child" for the rise of dark money. The group relied heavily on political consultants and received grants from Crossroads GPS, with political operative J. Scott Jennings as the only name formally associated with it.
The influence of dark money in politics has raised concerns about the integrity of the democratic process. Critics argue that recipients of dark money become beholden to their funders, while voters are left in the dark about the connections between donors and politicians. Efforts have been made by organizations like the Brennan Center to advocate for greater transparency and propose reforms to improve campaign spending transparency.
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Frequently asked questions
The largest contributors to political campaigns are often wealthy individuals, corporations, trade associations, labor unions, and advocacy groups. These "mega-donors" may contribute to political action committees (PACs) or outside groups, such as super PACs, which can spend unlimited sums on election advertising.
Yes, George Soros, a Hungarian-born Holocaust survivor and hedge fund manager, donated $128.5 million to his own outside group, Democracy PAC, which supported Democratic candidates in the 2022 midterm elections. Another example is Eychaner, a longtime Democratic mega-donor who consistently gives the maximum allowed donation to the Democratic National Committee.
No, organizations and special interest groups also contribute significantly. According to OpenSecrets, hundreds of millions of dollars are raised and spent by presidential candidates, with big donors seeking to influence US House and Senate races.
PACs are groups that pool campaign contributions from individuals, corporations, unions, or other organizations to support or oppose political candidates. Since 2010, companies have been able to donate directly to super PACs, which can raise and spend unlimited amounts as long as they do not coordinate with specific candidates or campaigns.
Yes, there are regulations in place, such as expenditure limits and restrictions on the use of contributor information for solicitation. Presidential candidates may receive public funds to match contributions from individual contributors up to a certain amount, and there are eligibility requirements to receive these funds, such as limiting private contributions and spending limits.
