Election Reflections 2024: The Donor Class at War (sort of...)

Part 5

Election Reflections 2024: The Donor Class at War (sort of…)

Let’s start with a few statistics off the top. Who gives money to make the political machine go round and round?

1%—Just 0.97% of the United States population contributed more than two hundred dollars to federal candidates, PACs, parties and outside groups in 2023-2024. These 3,189,435 donors gave a hefty 78.46% of all contributions, or about $9 billion in the most recent cycle. The contributions that make up the other 21.54% of the money come from people who give under $200.¹

393,650—The number of donors who give at or above the maximum limit for any one single candidate (about $3,300 per cycle) is around the size of the 50th largest city in the United States.

~80,000—The number of donors who give more than $10,000 is equal to a crowd size that would fit into the 20th largest football stadium in America. They gave about $5.5 billion to political action this cycle.

5,500—The very select donors who give more than $100,000 to candidates, parties, and political action committees (PACs) for a total value of nearly $4 billion. These are the skybox donors of politics!

0.024%—The fraction of the U.S. population that gives serious money ($10K+) in a presidential election cycle. THIS IS THE DONOR CLASS!

0.0017%—The fraction of the U.S. population that gives the big money ($100K+) in a presidential election cycle. THIS IS THE MEGA-DONOR CLASS!

What is the donor class doing? Much of it looks like buying privilege of one sort or another: personally, broadly, by industry, by locality, by ideology, etc. It’s table stakes to guide the political economy toward favorable outcomes. In the language of political science, this is plutocracy.

How Did the Donor Class React to the 2024 Election Cycle?

Before the final stretch of the election, many key donors lined up for their preferred side. Donald Trump and Republicans netted typical donors on the right. Kamala Harris and Democrats picked up where President Joe Biden left off, raising huge sums of money in the final months of the campaign.

Interestingly, a few very wealthy donors got activated in new ways, or changed sides, to try to tilt the race. Let’s look at several donor takes on the election.

Touring Around with the Skybox Donors

Billionaire Democrats

A New York Times article on December 1st ran with the headline: “What’s a Democratic Billionaire to Do Now?” The article intro opens:

The party’s donor class is still wrestling with Donald Trump’s victory, worried about retribution and sluggish liberal energy. Some rich Democrats are even pondering leaving the country.²

Who was leading the Democratic charge for the billionaires? LinkedIn co-founder Reid Hoffman. He was personally thinking of leaving the country. Having funded big litigation against Donald Trump, he had reasons to suspect retribution would be coming for him.

In late November, major donors attended the biannual meeting of the Democracy Alliance in Washington, D.C. A couple of attendees described the atmosphere as a “funeral.” Many eyes focused on one key billionaire in attendance, Alex Soros, the son of financier George Soros. He is now the lead in carrying forward the work of the liberal world’s most famous donor. Alex made it clear that he was concerned that many donors would pull back after having spent gobs of money to lose, but he would continue to press forward with funding progressive causes. The young Soros also poured some shade on Barack Obama for not being more tightly aligned with his father.

A major takeaway from Skybox Democrats was the need to rebuild their media ecosystem. Apparently, getting left behind by the rise of podcaster Joe Rogan is now a concern. Another major thread of conversation tried to emphasize unity within the “anti-MAGA majority.” This looks like a pipe dream. Other views considered a “complete rejection of race- and group-based identity politics.” This sounds more promising.

Elon Musk and the Tech Bros

Musk officially endorsed Trump shortly after the assassination attempt in Butler, PA, tweeting his full support for Trump's recovery and his candidacy. Musk committed substantial financial resources to Trump's campaign. By October 2024, he had donated $75 million to back Trump, making him one of the largest financial supporters of Trump's reelection efforts through his political action committee, America PAC. He appeared at Trump rallies, notably in Pennsylvania in October 2024, where he was seen wearing a "Make America Great Again" hat and expressing strong support. He also engaged in activities like hosting town halls and using his social media influence on X to promote Trump's candidacy.

Musk criticized the Biden administration for what he perceived as an overreach in regulation and misuse of government contracts. He felt that federal agencies like the FAA and FCC were making "insane absurd demands" on SpaceX and had gone back on their own agreements or decisions, such as rejecting Starlink for rural broadband despite significant funding for such projects. Generally, he criticized the administration for being “extremely and recklessly FOOLISH AND WASTEFUL WITH ‘OUR TAX MONEY’,” particularly in relation to what he saw as virtue signaling and divisive racial policies.

And some tech bros worthy of note?

David Sacks: A tech investor and co-host of the “All-In” podcast, Sacks hosted a major fundraiser for Trump in June 2024 at his San Francisco home, raising significant funds. He also spoke at the Republican National Convention, highlighting his commitment to Trump's campaign.

Peter Thiel: Although initially disillusioned with Trump, Thiel’s protégé, JD Vance, was selected as Trump’s running mate, which indirectly bolstered support from Thiel. Thiel did not donate directly to Trump’s 2024 campaign but had previously supported Vance and was part of the broader network of tech investors backing Trump.

Joe Lonsdale: Co-founder of Palantir Technologies and a member of the “PayPal mafia,” Lonsdale contributed to America PAC, a pro-Trump political action committee, and was involved in fundraising efforts.

Marc Andreessen and Chamath Palihapitiya as Silicon Valley Free Agents

Marc Andreessen began openly supporting Donald Trump in July 2024. Here are the key reasons behind his decision.

Announcement and Motivation:

• Andreessen announced his support for Trump on July 16, 2024, via a podcast episode of “The Ben & Marc Show” with his co-founder Ben Horowitz. His reasons were primarily centered around policies that he believed would benefit the tech sector, especially the startup ecosystem.

Policy Concerns:

• Crypto Regulation: Andreessen was particularly vocal about his opposition to the Biden administration's approach to cryptocurrency regulation, which he described as a “brutal assault on a nascent industry.” He believed Trump would provide a more favorable environment for cryptocurrencies.

• Taxation: The proposal by Biden to tax unrealized capital gains was described by Andreessen as “the final straw” leading to his endorsement of Trump. He argued that this would make startups “completely implausible,” as it would impose significant tax burdens on venture capitalists’ equity stakes.

Meetings with Administration:

• Andreessen cited “alarming” meetings with the Biden administration where officials suggested that there would be no room for new AI companies due to regulatory capture similar to practices by the Chinese Communist Party (CCP). This prompted his decision to support Trump.

Political Shift:

• Although historically a Democrat, Andreessen’s support for Trump marked a significant shift, which he attributed to the Biden administration’s policies being detrimental to tech innovation and entrepreneurship. He contrasted this with Trump's potential to foster an environment more conducive to tech growth.

Andreessen’s endorsement was not just a personal choice but part of a broader trend among some Silicon Valley leaders who felt that the Biden administration’s policies were stifling innovation. His decision was also influenced by a dinner with Trump where they discussed tech-related issues like AI and crypto, which he viewed more favorably under Trump’s potential policies.

Chamath Palihapitiya: Another host of the “All-In” podcast, Palihapitiya co-hosted fundraisers with Sacks for Trump, despite previously supporting Democrats. His actions indicated a shift towards supporting Trump due to policy disagreements with the Biden administration.

The Wall Street Bankers

Several key Wall Street bankers and financial figures played significant roles in supporting Donald Trump during his 2024 presidential campaign. Here are some of the most influential.

Stephen Schwarzman (Blackstone): Schwarzman publicly endorsed Trump, citing concerns over rising antisemitism and dissatisfaction with Biden’s economic policies. His support was also influenced by Trump’s business-friendly stance, including promises to reduce regulations.

Bill Ackman (Pershing Square Capital Management): Ackman, once a Democratic donor, supported Trump due to policy disagreements with the Biden administration, particularly around economic regulation and tax policies. He believed Trump’s policies would be more beneficial for business. He also fought the ideology on the left that he felt was damaging key higher education institutions, particularly Harvard University. To his credit, Ackman gave a huge open welcome to Robert F. Kennedy Jr. to make his case about why America needed an Independent president.

Howard Lutnick (Cantor Fitzgerald): Lutnick’s support was driven by the anticipation of less stringent regulations and a more favorable business environment under Trump. He was also noted for organizing fundraising events for Trump. He became so close that he was tapped to co-lead the transition team and is now a nominee for U.S. Secretary of the Department of Commerce.

Ken Griffin (Citadel): Initially critical of Trump, Griffin later expressed support, citing Trump’s potential to bring stability and strength to foreign policy. His endorsement was part of a broader trend of Wall Street executives warming to Trump due to economic policy promises like tax cuts and deregulation.

Jamie Dimon (JPMorgan Chase): Although privately supportive of Kamala Harris, Dimon was pragmatic about Trump’s victory, focusing on business interests. His congratulations to Trump post-election, despite Trump’s cold response, showed an attempt to maintain influence in the Trump administration.

And what about the Wall Street bankers who backed Harris?

Marc Lasry (Avenue Capital Group): Lasry, a billionaire investor and CEO of Avenue Capital Management, backed Harris, continuing his history of supporting Democratic candidates. He was involved in fundraising efforts for her campaign.

Peter Orszag (Lazard): Orszag, CEO and President of Lazard, also supported Harris, bringing his experience from previous government roles under Democratic administrations. He played to the side of his team, which is understandable.

Blair Effron (Centerview Partners): Effron, co-founder of Centerview Partners, praised Harris's leadership and had been a supporter since her earlier political campaigns, contributing to her finance committee.

Roger Altman (Evercore): Altman, founder of Evercore, expressed his support for Harris, appreciating her economic policy approach and her potential to maintain a stable economic environment.

Robert Rubin (Former Goldman Sachs Co-Chairman): Although not in an active executive role, Rubin’s support for Harris was notable due to his influential past on both Wall Street and in government, indicating a preference for her economic policies.

It should be noted that Wall Street is just playing to win. Whether Democrat or Republican, the game goes on. As evidence of this, we need only look at the role of Gary Cohn, former president and COO of Goldman Sachs. Cohn's phone started to ring off the hook about Donald Trump during the campaign and especially after Trump’s victory in the 2024 presidential election. This surge in calls was noted after Trump’s assassination attempt in July 2024, as people sought Cohn’s insights and connections due to his previous role as Trump’s chief economic adviser. Additionally, following Trump’s win, there was a significant increase in interest from Wall Street and tech leaders looking to understand the implications or to position themselves for opportunities in a new Trump administration.

The Crypto Kings

The biggest crypto backers supporting Donald Trump in the 2024 election (who have not been already listed) include some of the following people.

Tyler and Cameron Winklevoss: Each donated $1 million in Bitcoin to Trump’s campaign. They also contributed $250,000 each to the America PAC and about $350,000 each to MAGA Inc. super PAC. Their total support was significant, reflecting their interest in a crypto-friendly administration.

Kenneth Howery (Founders Fund): Howery contributed $1 million to America PAC through multiple donations. His involvement with Founders Fund, which invests in crypto and blockchain technology, aligns with his support for Trump’s pro-crypto stance.

It should be noted that Crypto Kings played politics across the board to get anyone favorable to lighter industry regulation into Congress. Several crypto-focused Political Action Committees (PACs) were actively supporting candidates for Congress in the 2024 election cycle. Let’s look at the biggest one this cycle.

Fairshake:

• Funding: Backed by major players like Coinbase, Ripple, and Andreessen Horowitz, Fairshake has been one of the most significant crypto super PACs. Fairshake raised over $200 million, making it the largest super PAC in terms of funds raised in the 2024 election cycle, surpassing even major political super PACs like those supporting Trump or Harris.

• Spending: Spent over $139 million in the 2024 election cycle, focusing on congressional races to secure lawmakers supportive of crypto innovation.

• Strategy: Aimed at promoting legislation that fosters a favorable environment for blockchain and crypto technologies. They supported candidates from both parties but with a lean towards Republicans.

• Notable Support: Spent significantly opposing anti-crypto candidates like Rep. Katie Porter (D-Calif.) in the California Senate primary, and supported candidates like Rep. Tom Emmer (R-Minn.), a key figure in crypto legislation.

Jeff Bezos and the Washington Post

Jeff Bezos managed his involvement in the 2024 presidential election through several notable actions and decisions. Similar to Elon Musk, Bezos has a channel for media influence and a business effort focused on space exploration. He displayed a rational choice of self-protection, albeit with some fallout.

Washington Post Endorsement Decision:

• Bezos, as the owner of The Washington Post, made the controversial decision to block the newspaper from endorsing Kamala Harris for president. This was announced just 11 days before the election, marking the first time since 1976 that the Post would not endorse a presidential candidate. Bezos argued that endorsements create a “perception of bias” and do not significantly influence election outcomes, aiming to boost the newspaper’s credibility amidst declining public trust in media.

Public Congratulation to Trump:

• After Donald Trump’s victory, Bezos took to X to congratulate Trump, which was seen by some as an endorsement or at least an acknowledgment of the new political reality. This act was criticized by some as hypocritical, given his decision to block the Post’s endorsement of Harris.

Business Interests and Political Neutrality:

• Bezos’s actions were potentially influenced by the need to maintain political neutrality for his businesses, especially Amazon and Blue Origin. His companies have significant interests in government contracts and regulatory environments. The timing of his decision not to endorse Harris coincided with meetings between Blue Origin executives and Trump, leading to speculation about a quid pro quo, though Bezos denied any such arrangement.

Backlash and Response:

• The decision not to endorse led to significant backlash, including subscription cancellations and staff resignations at The Washington Post. Bezos defended the decision in an op-ed, emphasizing the need for media outlets to be seen as unbiased and credible. This move was part of a broader strategy to manage the narrative around his influence in politics while safeguarding his business interests.

Financial Contributions:

• While Bezos did not personally endorse candidates financially, employees from his companies, Amazon and Blue Origin, made substantial donations to Kamala Harris’s campaign, with Amazon employees contributing over $1 million. This shows a level of political engagement from his workforce, though not directly from Bezos himself.

Bezos’s involvement in the 2024 election was characterized by a complex balancing act between maintaining business interests, managing public perception, and navigating political influence through his ownership of The Washington Post. His actions were scrutinized for potential conflicts of interest, especially given the timing and implications of his decisions.

And Where Did the Skybox Donors Find Agreement?

Apparently, the mega-donors in politics don’t like antitrust enforcement. Here’s an overview of the major political donors from both the left and the right who expressed a desire for Lina Khan to be removed from her position as Chair of the Federal Trade Commission (FTC).

On the Left:

Reid Hoffman: Hoffman publicly called for Kamala Harris to replace Khan if she won the presidency. He criticized Khan’s approach, suggesting she was not helping America with her aggressive antitrust enforcement. His opposition was partly motivated by his position on the board of Microsoft, which faced FTC scrutiny over mergers.

Barry Diller: A billionaire and Democratic donor, Diller also expressed his hope for Khan’s removal, calling her a “dope” in public statements. His companies, including IAC and Expedia, might have been impacted by Khan’s regulatory actions.

Mark Cuban: While not directly calling for Khan’s firing, Cuban has been critical of the regulatory environment under Khan, particularly regarding SEC policies, which could extend to his views on FTC actions. His frustration with the regulatory approach was evident in his calls for change in the SEC, hinting at a broader dissatisfaction with regulatory policies.

On the Right:

Wall Street and Tech Investors: While not individual donors, there was a collective sentiment among conservative-leaning investors and business leaders in Wall Street and Silicon Valley who were against Khan’s tenure due to her aggressive antitrust policies. This group’s influence was more about the environment they wanted rather than direct calls for her firing.

House Republicans: Although not donors in the traditional sense, Republican members of Congress, particularly those on the House Oversight Committee, were vocal critics of Khan, accusing her of mismanagement and ideological bias. Their actions, including reports and hearings aimed at discrediting her, reflect a significant political push from the right to see her removed.

Major Business Leaders: Various business leaders from sectors like pharmaceuticals, tech, and finance have privately or publicly expressed frustration with Khan’s approach, aligning with conservative critiques of regulation. However, specific names from this group calling for her removal are less directly documented.

The opposition from both sides largely stemmed from Khan’s aggressive antitrust enforcement, which impacted major mergers and acquisitions, potentially affecting the interests of these donors and their associated industries. Of course, it was Khan who led the FTC to win the largest antitrust case of the 21st century by attacking Google for its dominance in internet search.

Which Tech Titans are Donating to Trump’s Inaugural Skybox Fund?

Jeff Bezos (Amazon): Amazon committed to donating $1 million to Trump’s inaugural fund, following a significant shift in Trump’s relationship with Bezos.

Mark Zuckerberg (Meta): Meta, under Zuckerberg’s direction, donated $1 million to the fund. This came shortly after a private dinner between Zuckerberg and Trump at Mar-a-Lago.

Sam Altman (OpenAI): Altman pledged a personal donation of $1 million to the inauguration fund, signaling his support for Trump's administration’s approach to AI policy.

Conclusion

The donor class virtually owns the political theater going on in the United States of America. Trump led the charge against government regulation to satisfy typical Republican donors and court other former Democrats to his team. It worked. He has already surrounded himself with about a dozen billionaires who want to work within his administration. He waged a fiery comeback with such ferocity that savvy former enemies kept their peace and offered olive branches once the writing was on the wall.

The political donor skybox wars may continue depending on the success or failures of the Trump administration. How the Billionaire Democrats regroup will be an interesting story. For now, all eyes are on Elon Musk and the power of DOGE (the Department of Government Efficiency) to reshape the contours of the federal government. There will be winners and losers—the mega-donor class will be playing to win.

Notes:

The Common Sense Papers are an offering by Common Sense 250, which proposes a method to realign the two-party system with the creation of a new political superstructure that circumvents the current dysfunctional duopoly. The goal is to heal political divisions and reboot the American political system for an effective federal government.

1. https://www.opensecrets.org/elections-overview/donor-demographics?cycle=2024

2. https://www.nytimes.com/2024/11/27/us/politics/democratic-donors-reid-hoffman-democracy-alliance.html