Tuesday, November 19, 2024
Year : 2, Issue: 12
by Frank Vogl
The 2024 presidential election was flooded with money – but it doesn’t look like it was money that bought President-elect Donald Trump glory.
Vice President Kamala Harris raised about $1.65 billion in direct donations and contributions from political action committees by October, according to OpenSecrets, a research group that tracks money in politics, against Trump’s $1.09 billion; in other words, she lost the race despite significantly outspending Trump. So it’s fair to say that money in politics was not the deciding factor in this presidential election. That’s the good news.
The bad news is that the impact of campaign cash extends well beyond Election Day in ways that are deeply troubling, so we must do everything we can to limit its role in our political system.
An estimated $16 billion was spent across the nation on the November elections; in some state or local races, money may have influenced voters, whereas elsewhere voters flatly rejected candidates with big wallets. Indeed, vanity, enhanced by mountains of vast wealth, can lead individuals into the folly of seeking prominent public offices only to discover that voters may be swayed by other factors.
For example, in the 2024 Democratic Party primary for one of Maryland’s Senate seats, well-known county executive Angela Alsobrooks faced business tycoon David Trone, owner of the Total Wine & More beverage chain. Trone spent approximately nine times more than Alsobrooks on the race, diving deep into his own personal resources to the tune of more than $60 million. It was the most ever spent in a Senate primary, according to a report in The American Prospect – but Trone lost badly: Alsobrooks won 53.4% of the vote to Trone’s 42.8%.
Trone failed to learn from the failures of past tycoons, such as former New York City Mayor Michael Bloomberg, who entered the 2020 presidential race for the Democratic ticket and spent over $1 billion of his own cash on his failed campaign, which only lasted about 3 ½ months.
Of course, money can be used wisely to educate voters on issues, and funding can help an otherwise low-profile figure turn into a true competitor against an entrenched incumbent or big celebrity.
In Pennsylvania’s Senate matchup this year, the personal wealth of little-known Republican David McCormick enabled him to launch a successful challenge to longtime incumbent Democrat Bob Casey. McCormick, who was CEO of one of the world’s largest hedge funds, benefitted from very wealthy friends and PACs to further raise his profile. Altogether, the McCormick campaign and GOP groups spent around $150 million, while Casey and Democratic groups spent about $133 million.
As with the presidential campaign, so much cash went into the Pennsylvania race that, in the end, spending by each side may have canceled each other out. Trump’s win in the state might have also helped tip the neck-and-neck Senate race the Republican’s way. (It’s currently headed to a recount, with McCormick up by just under half a point.)
No doubt the staggering hauls amassed by the candidates in 2024 were aided by Supreme Court decisions in 2010 (Citizens United v. Federal Election Commission) and in 2014 (McCutcheon v. Federal Election Commission), which opened the floodgates to cash pouring into elections. Pushing aside the 100-plus-year history of assorted limits on campaign contributions, the Supreme Court’s decisions lifted virtually all restrictions on the amounts of cash that corporations, individuals and interest groups could spend by establishing PACs that had no formal ties to individual candidates.
Even if the outcome of these decisions wasn’t that money swayed the voice of the public in the elections this cycle, they pose another problem. There is a bad smell to a system of elections in which extraordinary amounts of cash can be deployed for the sole purpose of promoting a particular business goal.
Take Ohio this year, where longtime incumbent Democratic Sen. Sherrod Brown was defeated. He has advocated greater regulation of the cryptocurrency industry, which poured approximately $40 million into the coffers of Bernie Moreno, his Republican opponent, in the final weeks of the campaign.
Across the country, a super PAC called Fairshake and two related organizations spent about $135 million in this election cycle, financed by donations from two major crypto companies, Coinbase and Ripple, and the venture capital firm Andreessen Horowitz, which has backed more than 100 crypto startups, according to The New York Times.
Trump also benefitted from support from this industry, and many crypto-traders and investors seem to be betting that their activities will be largely free of governmental oversight under a Trump administration. After Trump’s victory was declared, the value of one Bitcoin soared from around $69,000 on Election Day to a record $93,000 on Nov. 13. That’s a handsome immediate payoff for crypto bros who backed his campaign.
Interest groups and big individual donors often gamble that large financial support for a candidate can bring rich rewards if their candidate wins. It can buy White House access – and they’re usually not wrong.
Billionaire Elon Musk, a major beneficiary of government contracts to his SpaceX company and of tax breaks to his Tesla car company, plowed at least $119 million into Trump’s campaign. Trump has already announced that Musk will help lead an important new government entity to promote “efficiency.” Already Musk joined Trump’s post-victory phone call with the president of Ukraine and reportedly met with Iranian officials. His White House access and ability to help place business associates in the new administration could be significant, and his influence on policies and government contracts beneficial to his numerous companies may be highly profitable. Even before Trump has taken office, Musk is much wealthier than he was before the election. He owns about 22% of all outstanding shares in Tesla. The company’s shares rose by almost $70 in the three days after the election, to $321.26. The gain, reflecting investor confidence that Trump will be very good for Tesla, added over $230 billion to the company’s overall market value, taking it above $1 trillion. That means that, for Musk personally, the rise in the Tesla share prices calculates to a personal gain of more than $46 billion.
So while vast amounts of cash deployed by candidates may not have been the deciding factor in who won, the wealthiest contributors to Trump’s campaign are likely to reap outsize financial rewards and to enjoy significant influence in his administration.
As former Supreme Court Justice Stephen Breyer declared in his dissent to the 2014 McCutcheon decision, “Where enough money calls the tune, the general public will not be heard.”
Author Frank Vogl is the co-founder of Transparency International and the Partnership for Transparency Fund. He is an adjunct professor at Georgetown University and author of “The Enablers: How the West Supports Kleptocrats and Corruption – Endangering Our Democracy.”
Courtesy by USA Today
