Tuesday, December 15, 2015
Republican billionaires demand value for money in Presidential race
There is an interesting article here on the role of big money in American politics and how the failure of Mitt Romney to seal the deal last time has led to several big political donors going their own way in terms of how they support political activity this time around.
The article says that in the 2012 contest between Mitt Romney and Barack Obama, celebrated political strategist Karl Rove assured a host of Republican mega-donors that, with enough funding, his super-pac could put Romney in the White House:
“I had every expectation we would be the victors,” says Home Depot co-founder Kenneth Langone, who gave half a million dollars to Rove’s American Crossroads. In the closing weeks of the campaign, Crossroads circulated a top-secret presentation to a small group of billionaires that projected Romney could win a “mandate” if they contributed an additional total of $25 million to fund a “surge” of negative ads. A handful ponied up, and on Election Night, they assembled in Boston certain they would be watching their investment pay off.
Instead they watched Rove’s infamous Fox News meltdown as their $117 million grubstake went up in smoke. To many of the billionaires it felt like a mugging. A few days after the election, New York hedge-fund manager Daniel Loeb, who’d helped finance Rove’s surge, tried to sue Crossroads and Fox News for misrepresenting the facts. “Loeb felt this was like an investment bank committing fraud on a road show,” a friend of his told me. After conferring with a securities lawyer, Loeb discovered that there are no investor protections in politics. He never filed a suit. (And Loeb declined to comment).
This of course underlines the point that those who donate big money to political campaigns want something in return. Sometimes it is influence, at other times a seat at the table, occasionally they do it because they want to be associated with a winner or just like to be seen to know key players so as to influence other business contacts. Every now and again money is donated because the donor has no other motive other than to support the cause or the candidate.
The New York magazine says that donors have now woken up to the realisation that top-flight consultants can earn millions from campaigns regardless of whether they win:
“It bothers a lot of people that politics has become a cottage industry. Everyone is taking a piece of this and a slice of that,” says California winemaker John Jordan, a former Rove donor. “Crossroads treated me like a child with these investor conference calls where they wouldn’t tell you what was really going on. They offered platitudes and a newsletter.”
Many are now working under the assumption that they can support a campaign better themselves, and are building their own organisations, staffed by operatives who report to them. And some of the Republican candidates have adapted accordingly. Ted Cruz’s campaign fund-raising apparatus is designed to let donors get involved. His contributors can specify how they want their money spent, much in the way universities allow benefactors to earmark their donations for a new science wing. The nature of how Republican politics is funded is changing:
The new billionaire-backed operations style themselves as models of superior sophistication. During the last Republican primary, Sheldon Adelson bankrolled Newt Gingrich’s campaign essentially by writing blank checks with little or no oversight. Compare that to the super-pac funded by Chicago Cubs owner Joe Ricketts, who has his own political staff and demands accountability. “I’m used to saying the Ricketts’ spend their super-pac money like it’s their own money — because it is,” the family’s political adviser, Brian Baker, told me.
Or look at the network being built by Elliott Management founder Paul Singer. In 2014, Singer created the American Opportunity Alliance, a group of roughly 40 Republican financiers who gather regularly for secret meetings with candidates. This fall, Singer threw his weight behind Marco Rubio and urged his members to do the same. In the general election, Singer will be a player with America Rising, the opposition-research firm headed by Romney’s dark-arts wizard Matt Rhoades. Instead of funding TV ads, Rhoades’s group offers Singer more predictable returns: It is narrowly focused on digging up dirt on Democrats, for example by sending video trackers to events in order to build a library of unflattering material.
It’s all about retaining control. In October, billionaire investor Carl Icahn announced he was launching a $150 million super-pac to lobby for corporate tax reform. “At the risk of being immodest, we have one of the best records on Wall Street. And I like doing things myself,” he told me. “Too many cooks spoil the soup.”
The article concludes that the most important lesson the billionaires are learning this year is that they aren’t much better at politics than Karl Rove. Except that with Trump leading the polls and doing all the running it seems that some are better at it than others.
The article says that in the 2012 contest between Mitt Romney and Barack Obama, celebrated political strategist Karl Rove assured a host of Republican mega-donors that, with enough funding, his super-pac could put Romney in the White House:
“I had every expectation we would be the victors,” says Home Depot co-founder Kenneth Langone, who gave half a million dollars to Rove’s American Crossroads. In the closing weeks of the campaign, Crossroads circulated a top-secret presentation to a small group of billionaires that projected Romney could win a “mandate” if they contributed an additional total of $25 million to fund a “surge” of negative ads. A handful ponied up, and on Election Night, they assembled in Boston certain they would be watching their investment pay off.
Instead they watched Rove’s infamous Fox News meltdown as their $117 million grubstake went up in smoke. To many of the billionaires it felt like a mugging. A few days after the election, New York hedge-fund manager Daniel Loeb, who’d helped finance Rove’s surge, tried to sue Crossroads and Fox News for misrepresenting the facts. “Loeb felt this was like an investment bank committing fraud on a road show,” a friend of his told me. After conferring with a securities lawyer, Loeb discovered that there are no investor protections in politics. He never filed a suit. (And Loeb declined to comment).
This of course underlines the point that those who donate big money to political campaigns want something in return. Sometimes it is influence, at other times a seat at the table, occasionally they do it because they want to be associated with a winner or just like to be seen to know key players so as to influence other business contacts. Every now and again money is donated because the donor has no other motive other than to support the cause or the candidate.
The New York magazine says that donors have now woken up to the realisation that top-flight consultants can earn millions from campaigns regardless of whether they win:
“It bothers a lot of people that politics has become a cottage industry. Everyone is taking a piece of this and a slice of that,” says California winemaker John Jordan, a former Rove donor. “Crossroads treated me like a child with these investor conference calls where they wouldn’t tell you what was really going on. They offered platitudes and a newsletter.”
Many are now working under the assumption that they can support a campaign better themselves, and are building their own organisations, staffed by operatives who report to them. And some of the Republican candidates have adapted accordingly. Ted Cruz’s campaign fund-raising apparatus is designed to let donors get involved. His contributors can specify how they want their money spent, much in the way universities allow benefactors to earmark their donations for a new science wing. The nature of how Republican politics is funded is changing:
The new billionaire-backed operations style themselves as models of superior sophistication. During the last Republican primary, Sheldon Adelson bankrolled Newt Gingrich’s campaign essentially by writing blank checks with little or no oversight. Compare that to the super-pac funded by Chicago Cubs owner Joe Ricketts, who has his own political staff and demands accountability. “I’m used to saying the Ricketts’ spend their super-pac money like it’s their own money — because it is,” the family’s political adviser, Brian Baker, told me.
Or look at the network being built by Elliott Management founder Paul Singer. In 2014, Singer created the American Opportunity Alliance, a group of roughly 40 Republican financiers who gather regularly for secret meetings with candidates. This fall, Singer threw his weight behind Marco Rubio and urged his members to do the same. In the general election, Singer will be a player with America Rising, the opposition-research firm headed by Romney’s dark-arts wizard Matt Rhoades. Instead of funding TV ads, Rhoades’s group offers Singer more predictable returns: It is narrowly focused on digging up dirt on Democrats, for example by sending video trackers to events in order to build a library of unflattering material.
It’s all about retaining control. In October, billionaire investor Carl Icahn announced he was launching a $150 million super-pac to lobby for corporate tax reform. “At the risk of being immodest, we have one of the best records on Wall Street. And I like doing things myself,” he told me. “Too many cooks spoil the soup.”
The article concludes that the most important lesson the billionaires are learning this year is that they aren’t much better at politics than Karl Rove. Except that with Trump leading the polls and doing all the running it seems that some are better at it than others.
