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Plutocrat Politics: How Financial Sector Wealth Fuels Political Ad Spending

Hedge fund managers, bankers and other financial bigwigs wielded massive influence on the 2018 midterms by supplying more than half of all donations to outside political groups set up expressly to influence elections, a Public Citizen analysis has found.

Public Citizen analyzed contributions by the 100 individuals who contributed the most to outside political organizations that reported their donors during the 2017-2018 election cycle, including super PACs and other nonprofits that advocate for or against candidates.

These groups, which are not formally connected to candidates’ campaigns, can accept unlimited donations from individuals, nonprofits and corporations. They have dramatically increased their election spending in recent years following the U.S. Supreme Court’s 2010 Citizens United v. Federal Election Commission decision, which kicked off an unprecedented era of big-money influence in American politics.

The analysis found that political donors whose wealth comes from the financial sector, including several prominent hedge fund billionaires, were the largest reported funders of outside political groups. The top 100 individual donors gave a total of nearly $690 million to outside spending groups, with $359 million, or 52 percent, benefiting Democrats and $312 million, or 45 percent, benefiting Republicans. About $19 million, or 3 percent, benefited outside election groups that did not favor one party over another.

By far the largest source of reported funding for outside election spending efforts was the financial industry. About $344 million, or nearly half of the top 100 individuals’ donations, came from 36 donors with fortunes earned in private equity, hedge funds, investments and banking. Outside the financial industry, gambling, technology, inheritance and industrial supply companies were the most significant sources of wealth for the top 100 individual funders of outside spending efforts.

Out of the top 100 individual political donors to outside spending groups, 74 were men, 18 were women and eight were couples.  In addition, 97 out of the 100 largest individual donors to outside spending groups were white. This finding is consistent with research showing that whites make up more than 90 percent donors who give more than $5,000 to congressional campaigns.

During the 2017-2018 election cycle, spending by outside groups surged to more than $1 billion, the highest-ever for a midterm election, second only to the $1.4 billion spent during the 2016 presidential election, according to the Center for Responsive Politics.  Outside spending favoring Democrats exceeded outside spending favoring Republicans in last year’s elections for the first time in the post-Citizens United era.

The Public Citizen analysis of data from the Center for Responsive Politics highlights how the influence of outside spending groups funded by mega-donors has surged over the past decade. The Citizens United decision opened the floodgates for corporations and wealthy individuals to spend money to directly influence elections, as long as such spending is deemed independent of political candidates and parties.  Months after the Citizens United decision, the U.S. Court of Appeals for the D.C. Circuit allowed unlimited contributions to outside groups, paving the way  for super PACs to become a major force in American politics.

Individual donors are the primary funders of super PACs, which are required to disclose their donors, unlike “dark money” nonprofits, which are not. Individuals provided more than 70 percent of super PAC funding in the 2018 election cycle.  Trade associations and corporate donors have tended to fund dark money groups that do not disclose their donors and whose activities are much harder to trace.

Public Citizen’s analysis of the top 100 individual contributors to outside spending groups during the 2017-2018 election cycle also found that:

  • Pro-Democrat outside spending efforts were highly dependent on financial industry wealth. The financial industry represented 74 percent of funding for pro-Democrat outside spending efforts, followed by inherited wealth (8 percent), technology (6 percent) media (5.5 percent) and real estate (3 percent).
  • The sources of funding for pro-Republican outside spending efforts reflected far more industries, including gambling (41 percent), finance (25 percent), industrial supply and distribution (13 percent) , energy (6 percent) and technology (2.6 percent).
  • Individual political donors from just four states – New York, California, Nevada and Illinois – made up nearly 78 percent of the top 100 individuals’ donations to outside spending groups. Groups supporting Democrats were highly reliant on donors from New York, California, Illinois and Massachusetts, while Republican-leaning groups tapped donors in Nevada, Illinois, New York and Texas.

The Public Citizen analysis found that the financial industry’s biggest individual donors to outside spending groups tended to support Democrats. Major donors to groups that backed Democrats included Michael Bloomberg, founder of financial data firm Bloomberg LP, who donated more than $90 million, and Tom Steyer, the billionaire hedge fund founder and climate activist, who donated nearly $70 million.  Other major financial industry donors of groups backing Democrats include the hedge fund founders Donald Sussman and James Simons.

While four out of the five largest financial industry donors to outside spending groups supported Democrats,  the 20 largest financial industry individual donors were evenly split between supporters of Democrats and Republicans. Prominent Republican outside spenders included prominent hedge fund, private equity, trading and investment executives including Kenneth Griffin, Steven Schwarzman, Jeffrey Yass, Charles Schwab and Paul Singer.

This high concentration of Democratic and Republican donors from the finance industry, and particularly from founders of hedge funds, private equity firms and of high-speed trading firms, may hinder efforts to enact important reforms. For example, Public Citizen has long called for a Wall Street sales tax on financial transactions like stock, bond, and derivative trades, much as individuals pay a sales tax on our everyday purchases. Such a tax would be so small that ordinary investors would hardly notice it but would raise substantial revenue, largely from high- volume traders. Yet this sort of sensible policy change is far less likely if wealthy traders are the biggest political benefactors.

Illustrating how difficult challenging the financial industry can be, President Donald Trump campaigned on a promise to eliminate the “carried interest”  tax loophole that benefits private equity executives and hedge fund managers, even saying in 2015 that “the hedge fund guys are getting away with murder.” But despite Trump’s criticism, administration officials sent mixed messages on the issue, and the loophole was not closed during tax legislation signed by Trump in 2017.

Outside the financial industry, Public Citizen’s analysis found that megadonors from the gambling industry supported Republicans exclusively, including Sheldon Adelson, CEO of Las Vegas Sands Corp., who donated more than $122 million to conservative political spending groups. Adelson was followed by casino executive Cherna Moskowitz, who donated about $2 million, and brothers Frank and Lorenzo Fertitta, Las Vegas casino billionaires who each donated $1.5 million.

The second-largest donor to groups that supported GOP candidates was Richard Uihlein, founder of packaging and supply company Uline Inc,, who donated nearly $38 million. Other major backers of groups supporting Republican candidates included Home Depot founder Bernard Marcus, who donated $6.5 million, and Arkansas poultry magnate Ronnie Cameron and his wife Nina, who donated nearly $5.7 million.

To end the massive influx of corporate and special interest money into our elections, Public Citizen has long championed a constitutional amendment to overturn Citizens United and supports public financing of campaigns. In February, the U.S. House of Representatives passed H.R. 1, a sweeping set of important democracy reforms. This bill, the For the People Act, takes a three-pronged approach to reforming our democratic process:

  • Voting Rights and Election Security: The For the People Act implements automatic voter registration across the country; ensures that individuals who have completed felony sentences have their full rights restored; expands early voting and simplifies absentee voting; modernizes the U.S. voting system; prohibits voter roll purges and ends partisan gerrymandering to prevent politicians from picking their voters.
    Campaign Finance Reform: The For the People Act upgrades online political ad disclosure; creates a publicly funded matching system for small-dollar donations; tightens rules on super PACs and restructures the Federal Election Commission to break the agency’s gridlock.
    Congressional and Executive Ethics: The For the People Act breaks the influence economy in Washington, D.C., by expanding conflict of interest law and divestment requirements; slows the revolving door; and requires presidents to disclose their tax returns.

100 Largest Donors and Sources of Wealth for Top Individual Donors to Outside Spending Groups, 2018

DonorCityAffiliationBioPolitical lean of donorSource of WealthTotal
Adelson, Sheldon G.Las VegasLas Vegas Sands/Adelson Drug ClinicCEO of Las Vegas Sands/GOP DonorRepublicanGambling$122250000
Bloomberg, Michael R.New YorkBloomberg LPFounder of Bloomberg LP, former NY MayorDemocraticFinance$94955032
Steyer, ThomasSan FranciscoNextGen America; Farallon CapitalBillionaire hedge fund founderDemocraticFinance$72416712
Uihlein, RichardLake ForestUline IncFounder of Wisconsin packaging and supply companyRepublicanIndustrial Supply/Distribution$37721968
Sussman, S. DonaldRye Brook, NYPaloma PartnersHedge fund investor and founderDemocraticFinance$22445000
Simons, James H. & MarilynNew YorkRenaissance Technologies/Simons FdtnBillionaire hedge fund founderDemocraticFinance$20716000
Griffin, Kenneth C.ChicagoCitadel Invest Group/Aragon Global MgtBillionaire hedge fund managerRepublicanFinance$18400000
Soros, GeorgeNew YorkSoros Fund ManagementBillionaire hedge fund manager; founder of Open Society FoundationsDemocraticFinance$16655886
Schwarzman , Steven A.New YorkBlackstone GroupCEO of private equity/investment firm Blackstone Group LPRepublicanFinance$11750000
Bezos, JeffSeattleAmazon.comFounder and CEO of AmazonNonpartisanTechnology$10129170
Eychaner, FredChicagoNewsweb CorpFounder of printing company NewswebDemocraticMedia/Publishing$10050000
Mellon, TimothySaratogaInvestorHeir to Mellon family fortuneRepublicanInheritance$10010000
Marcus, George M.Palo AltoMarcus & MillichapFounder of commercial real estate brokerageDemocraticReal estate/Construction$8500000
Hoffman, Reid GarrettSan FranciscoLinkedInFounder of LinkedInDemocraticTechnology$7998000
Yass, Jeffrey SBala CynwydSusquehanna International GroupFounder of trading firmRepublicanFinance$7450000
Tuna, CariSan FranciscoAsanaFormer WSJ reporter and wife of Facebook co-founder Dustin MoskovitzDemocraticTechnology$6797730
Simon, DeborahCarmelPhilanthropistDaugher of Simon Property Group Inc. founder Melvin SimonDemocraticInheritance$6768025
Jurvetson, KarlaLos Altos HillsKarla Jurvetson MDEx-wife of venture capitalist Steve JurvetsonDemocraticInheritance$6764928
Bekenstein, JoshuaWaylandBain CapitalCo-chairman of private equity firm Bain CapitalDemocraticFinance$6650000
Marcus, BernardAtlantaMarcus FoundationCo-founder of Home DepotRepublicanConsumer Goods$6505700
Schwab, Charles R. & Helen O.San FranciscoCharles Schwab & CoFounder of investment firm Charles SchwabRepublicanFinance$6350000
Cameron, Ronnie & NinaNorth Little RockMountaire CorpCEO of poultry companyRepublicanConsumer Goods$5665000
Klarman, Seth A.Chestnut HillBaupost GroupCEO of hedge fundDemocraticFinance$5175000
Beal, D. AndrewPlanoBeal BankBanker/energy investorRepublicanEnergy$5088447
Cynthia Simon-SkjodtCarmelSamerian FoundationDaugher of Simon Property Group Inc. founder Melvin SimonDemocraticInheritance$5046000
Singer, Paul E.New YorkElliott ManagementHedge fund managerRepublicanFinance$5044001
Laufer, Henry B.LantanaRenaissance TechnologiesFormer VP of research at hedge fundDemocraticFinance$4450500
Tierney, Daniel V.ChicagoWicklow CapitalFounder of high-frequency trading firmDemocraticFinance$4331831
Mercer, Robert L.East SetauketRenaissance TechnologiesFormer co-CEO of hedge fundRepublicanFinance$4327100
Sandler, Herbert M.San FranciscoHerb & Marion Sandler/Sandler Foundationformer co-CEO of Golden West Financial Corporation and World Savings BankDemocraticFinance$4100000
Palmer, GeoffLos AngelesGH Palmer AssocLos Angeles real estate developerRepublicanReal estate/Construction$4100000
Ricketts, John JoeOmahaHugo EnterprisesTD Ameritrade FounderRepublicanFinance$3940000
Bass, Robert M.Fort WorthKeystone IncHeir to Texas oil fortune; investorDemocraticEnergy$3900000
Jacobs, Irwin MarkLa JollaQualcomm IncCo-founder of QualcommDemocraticTechnology$3725000
Johnson, Charles B.Palm BeachFranklin ResourcesMutual fund billionaireRepublicanFinance$3716000
Goldman, AmyNew YorkSolil ManagementNew York real estate heirDemocraticInheritance$3600000
Hendricks, Diane MsBeloitAbc SupplyCo-founder of building supply companyRepublicanReal estate/Construction$3500000
Saban, HaimLos AngelesSaban Capital GroupTelevision and media entrepreneur and investorDemocraticMedia/Publishing$3315000
Cohen, Steven A.GreenwichPoint72 Asset ManagementHedge fund billionaireRepublicanFinance$3100000
Abraham, S. DanielWest Palm BeachSlim FastFounder of Slim-Fast diet product companyDemocraticConsumer Goods$2900000
Stephens, Warren A.Little RockStephens IncChairman of investment bank Stephens Inc.RepublicanFinance$2885000
Heising, Elizabeth D.AthertonMedley PartnersDaugher of James Simons; wife of investor Mark HeisingDemocraticInheritance$2815000
Wexner, Leslie H.ColumbusL BrandsFounder of retail company that owns The Limited, Victoria's Secret, PINK, Bath and Body Works (left Republican party)NonpartisanConsumer Goods$2800000
Childs, John W.WalthamJW Childs AssocFormer chairman of private equity firm JW Childs Associates; Charged in prostitution stingRepublicanFinance$2587553
MacFarlane, Seth W.Los AngelesFuzzy Door ProductionsCreator of Family Guy and other TV shows and moviesDemocraticMedia/Publishing$2500000
Humphreys, David C.JoplinTAMKO Building ProductsCEO of roofing companyRepublicanReal estate/Construction$2343190
Dunn, Timothy M.MidlandCrownquest OperatingCo-founder of oil and gas companyRepublicanEnergy$2331000
Scully, William P.Vero BeachRetiredFormer partner of investment firm Twin Oaks PartnersRepublicanFinance$2250000
Grantham, RobertBostonGrantham, Mayo et alCo-founder of asset management firm GMODemocraticFinance$2250000
Schwartz, Bernard L.New YorkLoral Space & CommunicationsFormer chairman and CEO of satellite firmDemocraticTechnology$2225000
Oberndorf, William ESan FranciscoOberndorf EnterprisesFounder of hedge fund SPO Partners & Co.RepublicanFinance$2200000
Rosenthal, Richard H.CincinnatiRosenthal FoundationRetired CEO of publishing firmDemocraticMedia/Publishing$2175000
McNair, RobertHoustonHouston TexansDied in November 2018. Owned Houston Texans and founded energy firmRepublicanEnergy$2100000
Faison, Jay W.CharlotteClear Path FoundationFounder of audio-video firm, conservative clean energy think tankRepublicanTechnology$2058000
Moskowitz, ChernaMiami BeachIrving Moskowitz FoundationCasino executiveRepublicanGambling$2040000
Soros, AlexanderNew YorkPhilanthropistSon of billionaire George SorosDemocraticInheritance$2036127
Bezos, Miguel A.Mercer IslandBezos Family FoundationJeff Bezos' stepfatherNonpartisanTechnology$2004324
Bergan, Mary A.FargoFargo AssemblyFormer owner of electrical assembly companyRepublicanTechnology$2000000
Quillin, PattySanta CruzPhilanthropistWife of Netflix CEO Reed HastingsDemocraticTechnology$2000000
Foster, Paul L.El PasoWestern RefiningChairman and Founder of Western RefiningRepublicanEnergy$2000000
Ansary, HushangHoustonStewart & StevensonFormer Iran ambassador to US; chairman of oil and gas equipment firm Stewart & Stevenson LLC; chairman of Parman Capital Group LLCRepublicanEnergy$2000000
Duchossois, Janet J.Oak BrookDuchossois GroupWife of CEO who runs an automatic door/gate company and investment firmRepublicanVarious$1835000
Epstein, MarkPotomacQualcomm IncQualcomm executive,funded wife's unsuccessful campaign for HouseRepublicanTechnology$1800000
Hostetter, Amos B. Jr. & BarbaraBostonPilot House Assoc/Barr Foundationfounder of Continental CablevisionRepublicanMedia/Publishing$1750000
Soros, AndreaNew YorkTrace FoundationDaughter of George SorosDemocraticInheritance$1750000
Bacon, Louis MooreNew YorkMoore Capital ManagementHedge fund manager; Founder of Moore Capital ManagementDemocraticFinance$1750000
Lauder, Ronald S.New YorkEstee Lauder CompaniesHeir to Estee Lauder companiesRepublicanConsumer Goods$1675000
Fish, John F.BostonSuffolk ConstructionCEO of Boston construction firmDemocraticReal estate/Construction$1640000
Wright, Karen A.Mt. VernonAriel CorpCEO of Ariel Corp., a maker of natural gas compressorsRepublicanEnergy$1620000
Schuler, Stephen G.Oak ParkWicklow CapitalHigh-speed trader; board member of marijuana companyDemocraticFinance$1560017
Spielberg, StevenLos AngelesDreamWorks SKGFilm directorDemocraticMedia/Publishing$1510000
Angelos, Peter G.BaltimoreAngelos Law OfficesTrial lawyer and owner of Baltimore OriolesDemocraticLaw$1500000
Fertitta, Frank J. IIILas VegasStation CasinosCasino/Ultimate Fighting Championship billionaireRepublicanGambling$1500000
Fertitta, Lorenzo J.Las VegasZuffa LLCCasino/Ultimate Fighting Championship billionaireRepublicanGambling$1500000
Headley, MarkSan FranciscoMatthews International Capital ManagementPortfolio manager; chairman of Matthews International Capital Management LLC.DemocraticFinance$1435000
Shaw, David E.New YorkDE Shaw ResearchHedge fund founderDemocraticFinance$1400000
Bonderman, DavidFort WorthTPG CapitalFounder of private equity firmDemocraticFinance$1372500
Mandel, Stephen Frank Jr. & Susan Z.GreenwichLone Pine CapitalHedge fund managerDemocraticFinance$1358333
Rowling, Robert B.DallasTRT HoldingsFounder of holding company that owns, Omni Hotels, Golds Gym, oil and gas, other investmentsRepublicanVarious$1325000
Chazen, StephenBellaireOccidental PetroleumFormer CEO of Occidental PetroleumRepublicanEnergy$1290000
Sonnenfeldt, MarkNew YorkMuus & CoFounder of investment club for wealthy investors, alternative energy investorDemocraticFinance$1250000
Sacks, Michael J. & CariHighland ParkGrosvenor Capital ManagementCEO of investment advisory firmDemocraticFinance$1215000
Reinsdorf, JerryChicagoChicago White SoxOwner of Chicago Bulls, Chicago White Sox, real estate lawyer and investorDemocraticReal estate/Construction$1200000
Hull, MeganWashingtonConsultantDaughter of Wall Street trader Blair HullDemocraticInheritance$1196500
Reyes, J ChristopherWest Palm BeachReyes HoldingsCo-chairman of food and beer distributor Reyes HoldingsRepublicanIndustrial Supply/Distribution$1165000
Stavis, RobertLarchmontBessemer Venture PartnersVenture capitalistDemocraticFinance$1160000
Deason, Darwin A.DallasAffiliated Computer ServicesFounder of IT outsourcing firmRepublicanTechnology$1150000
Reyes, M. JudeWest Palm BeachReyes HoldingsCo-chairman of food and beer distributor Reyes HoldingsRepublicanIndustrial Supply/Distribution$1140000
Earhart, Anne G.Corona Del MarInvestorGranddaughter of oil baron J. Paul GettyDemocraticEnergy$1125000
Hayden, Marilyn J.BarringtonRetiredWife of former CEO of food packaging firm Peacock EngineeringRepublicanIndustrial Supply/Distribution$1111500
Hale, Robert & KarenHinghamGranite TelecommunicationsFounder of telecommunications firmDemocraticTechnology$1109600
Mary MoriartyChathamRetiredWife of investment executive Donald Moriarty, who died in 2009RepublicanInheritance$1100000
Thiel, PeterSan FranciscoThiel CapitalCo-founder of Paypal and Palantir technologiesRepublicanTechnology$1100000
Hillman, Tatnall Lea & Roberta W.ChilmarkRetiredSon of John Hartwell Hillman Jr, an energy and steel billionaire RepublicanEnergy$1092570
Pritzker, SusanSan FranciscoTao Capital PartnersWife of bilionaire Nicholas Pritzker, member of Pritzker family, which started the Hyatt hotel chainDemocraticReal estate/Construction$1055000
McInerney, Thomas E.WestportBluff Point AssocCEO of Conn. private equity firmRepublicanFinance$1050000
Stephens, Jackson T. Jr.Little RockExoxemis IncSon of investment firm founder; founder of biotech firmRepublicanInheritance$1050000
Loeb, Daniel S.New YorkThird Point LLCHedge fund founderRepublicanFinance$1030000
Gilliam, Richard B.KeswickCumberland ResourcesFounder of coal companyRepublicanEnergy$1025000
Herro, David G.ChicagoHarris AssocInvestment managerRepublicanFinance$1025000